Cinemark Holdings, Inc. Reports Results for Q2 2014

PLANO, Texas--()--Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and six months ended June 30, 2014.

Cinemark Holdings, Inc.’s total revenues for the three months ended June 30, 2014 were $717.9 million. For the three months ended June 30, 2014, admissions revenues were $455.7 million and concession revenues were $226.5 million. Average ticket price increased 2.1% to $6.46 and concession revenues per patron increased 2.9% to $3.21 during the three months ended June 30, 2014.

Adjusted EBITDA for the three months ended June 30, 2014 was $169.4 million compared to $178.0 million for the three months ended June 30, 2013. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

Net income attributable to Cinemark Holdings, Inc. for the three months ended June 30, 2014 was approximately $71.7 million compared to $20.3 million for the three months ended June 30, 2013. Diluted earnings per share for the three months ended June 30, 2014 was $0.62 compared to $0.18 for the three months ended June 30, 2013. Net income for the three months ended June 30, 2013 included a loss on early retirement of debt of approximately $72.3 million, before income taxes.

“The second quarter of 2014 was up against a record-breaking 2013,” stated Tim Warner, Cinemark’s Chief Executive Officer. “Regardless of the difficult comparisons of prior year, Cinemark’s second quarter worldwide admissions revenues outperformed the North American industry by approximately 460 basis points, marking 21 out of 22 consecutive quarters of outperformance on a currency adjusted basis.”

Cinemark Holdings, Inc.’s revenues for the six months ended June 30, 2014 increased 3.7% to $1,320.2 million from $1,273.4 million for the six months ended June 30, 2013. During the six months ended June 30, 2014, admissions revenues increased 2.8% to $836.6 million and concession revenues increased 4.6% to $419.5 million. Average ticket price increased 1.9% to $6.34 and concession revenues per patron increased 3.6% to $3.18 during the six months ended June 30, 2014.

Adjusted EBITDA for the six months ended June 30, 2014 was $297.9 million compared to $294.3 million for the six months ended June 30, 2013. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

Net income attributable to Cinemark Holdings, Inc. for the six months ended June 30, 2014 was $107.2 million compared to $52.9 million for the six months ended June 30, 2013. Diluted earnings per share for the six months ended June 30, 2014 was $0.93 compared to $0.46 for the six months ended June 30, 2013. Net income for the six months ended June 30, 2013 included a loss on early retirement of debt of approximately $72.3 million, before income taxes.

On June 30, 2014, the Company’s aggregate screen count was 5,609. As of June 30, 2014, the Company had signed commitments to open nine new theatres and 96 screens by the end of 2014 and open 14 new theatres with 134 screens subsequent to 2014.

Conference Call/Webcast – Today at 8:30 AM ET

Telephone: via 888-755-8910 or 706-679-3149 (for international callers).

Live Webcast/Replay: Available live at investors.cinemark.com. A replay will be available following the call and archived for a limited time.

About Cinemark Holdings, Inc.

Cinemark is a leading domestic and international motion picture exhibitor, operating 488 theatres with 5,609 screens in 40 U.S. states, Brazil, Argentina and 11 other Latin American countries as of June 30, 2014. For more information go to investors.cinemark.com.

Forward-looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The “forward-looking statements” include our current expectations, assumptions, estimates and projections about our business and our industry. They include statements relating to future revenues, expenses and profitability, the future development and expected growth of our business, projected capital expenditures, attendance at movies generally or in any of the markets in which we operate, the number or diversity of popular movies released and our ability to successfully license and exhibit popular films, national and international growth in our industry, competition from other exhibitors and alternative forms of entertainment and determinations in lawsuits in which we are defendants. You can identify forward-looking statements by the use of words such as “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future” and “intends” and similar expressions which are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. In evaluating forward-looking statements, you should carefully consider the risks and uncertainties described in the “Risk Factors” section or other sections in the Company’s Annual Report on Form 10-K filed February 28, 2014 and quarterly reports on Form 10-Q. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements and risk factors. Forward-looking statements contained in this press release reflect our view only as of the date of this press release. We undertake no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

                                                                             
Cinemark Holdings, Inc.
Financial and Operating Summary
(unaudited, in thousands)
             
Three months ended June 30, Six months ended June 30,

2014

2013

2014

2013

Statement of income data:
Revenues
Admissions $ 455,726 $ 464,483 $ 836,640 $ 813,897
Concession 226,417 228,746 419,440 401,142
Other   35,720         32,393     64,063         58,356  
Total revenues 717,863 725,622 1,320,143 1,273,395
Cost of operations
Film rentals and advertising 249,198 257,435 449,855 437,427
Concession supplies 35,336 37,021 65,389 65,021
Facility lease expense 80,647 76,124 159,004 145,742
Other theatre operating expenses 148,512 143,445 288,795 270,666
General and administrative expenses 39,717 40,546 79,089 78,325
Depreciation and amortization 43,881 38,734 86,377 77,766
Impairment of long-lived assets 430 1,101 784 1,945
(Gain) loss on sale of assets and other   3,276         (2,801 )   6,129         (3,143 )
Total cost of operations   600,997         591,605     1,135,422         1,073,749  
Operating income 116,866 134,017 184,721 199,646
Interest expense (1) (28,286 ) (34,458 ) (56,766 ) (67,064 )
Distributions from NCM 1,180 1,693 10,677 7,796
Loss on early retirement of debt (72,302 ) (72,302 )
Other income   6,455         609     14,141         5,163  
Income before income taxes 96,215 29,559 152,773 73,239
Income taxes   24,081         8,722     44,943         19,340  
Net income $ 72,134 $ 20,837 $ 107,830 $ 53,899
Less: Net income attributable to noncontrolling interests   403         572     656         1,040  
Net income attributable to Cinemark Holdings, Inc. $ 71,731       $ 20,265   $ 107,174       $ 52,859  

Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders:

Basic $ 0.62       $ 0.18   $ 0.93       $ 0.46  
Diluted $ 0.62       $ 0.18   $ 0.93       $ 0.46  
 
Weighted average diluted shares outstanding   114,961         114,387     114,814         114,210  
 
Other financial data:
Adjusted EBITDA (2) $ 169,355       $ 178,024   $ 297,910       $ 294,280  
 

(1)

Includes amortization of debt issue costs.

(2)

Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of Adjusted EBITDA to net income is provided in the financial schedules accompanying this press release.

 
 
           
As of As of
June 30, December 31,

2014

2013

Balance sheet data:
Cash and cash equivalents $ 578,141 $ 599,929
Theatre properties and equipment, net $ 1,445,626 $ 1,427,190
Total assets $ 4,116,472 $ 4,144,163
Long-term debt, including current portion $ 1,827,833 $ 1,832,800
Equity $ 1,156,421 $ 1,102,417
 
 
           

Three months ended
June 30,

Six months ended
June 30,

2014

   

2013

2014

   

2013

Other operating data:
  Attendance (patrons):
Domestic 46,452 46,889 87,052 81,557
International   24,036       26,463   44,954       49,214
Worldwide   70,488       73,352   132,006       130,771
 
Average ticket price (in dollars):
Domestic $ 7.20 $ 7.16 $ 7.09 $ 6.99
International $ 5.04 $ 4.85 $ 4.88 $ 4.95
Worldwide $ 6.46 $ 6.33 $ 6.34 $ 6.22
 
Concession revenues per patron (in dollars):
Domestic $ 3.67 $ 3.50 $ 3.63 $ 3.46
International $ 2.33 $ 2.43 $ 2.30 $ 2.42
Worldwide $ 3.21 $ 3.12 $ 3.18 $ 3.07
 
Average screen count (month end average):
Domestic 4,452 4,181 4,457 4,068
International   1,145       1,349   1,133       1,341
Worldwide   5,597       5,530   5,590       5,409
 
 
           

Segment Information

(unaudited, in thousands)

 

Three months ended
June 30,

Six months ended
June 30,

2014

   

2013

2014

   

2013

Revenues
U.S. $ 524,485 $ 517,109 $ 969,405 $ 883,472
International 196,881 211,879 357,073 396,072
Eliminations   (3,503 )       (3,366 )   (6,335 )       (6,149 )
Total revenues $ 717,863       $ 725,622   $ 1,320,143       $ 1,273,395  
Adjusted EBITDA (1)
U.S. $ 120,871 $ 128,697 $ 214,411 $ 208,775
International   48,484         49,327     83,499         85,505  
Total Adjusted EBITDA $ 169,355       $ 178,024   $ 297,910       $ 294,280  
Capital expenditures
U.S. $ 30,483 $ 29,631 $ 60,795 $ 35,787
International   19,274         23,868     41,768         54,601  
Total capital expenditures $ 49,757       $ 53,499   $ 102,563       $ 90,388  
 
 
                       
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
     
Three months ended       Six months ended
June 30, June 30,

2014

   

2013

2014

   

2013

Net income $ 72,134 $ 20,837 $ 107,830 $ 53,899
Income taxes 24,081 8,722 44,943 19,340
Interest expense 28,286 34,458 56,766 67,064
Loss on early retirement of debt 72,302 72,302
Other income (6,455 ) (609 ) (14,141 ) (5,163 )
Depreciation and amortization 43,881 38,734 86,377 77,766
Impairment of long-lived assets 430 1,101 784 1,945
(Gain) loss on sale of assets and other 3,276 (2,801 ) 6,129 (3,143 )
Deferred lease expenses - theatres (2) 485 191 1,040 59
Deferred lease expenses – DCIP equipment (3) (236 ) 1,022 808 2,044
Amortization of long-term prepaid rents (2) 407 729 785 1,379
Share based awards compensation expense (4)   3,066         3,338     6,589         6,788  
Adjusted EBITDA (1) $ 169,355       $ 178,024   $ 297,910       $ 294,280  
 

(1)

Adjusted EBITDA as calculated in the chart above represents net income before income taxes, interest expense, loss on early retirement of debt, other income, depreciation and amortization, impairment of long-lived assets, (gain) loss on sale of assets and other, changes in deferred lease expense, amortization of long-term prepaid rents and share based awards compensation expense. Adjusted EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net income as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance and liquidity, estimate our value and evaluate our ability to service debt. In addition, we use Adjusted EBITDA for incentive compensation purposes.

(2)

Non-cash expense included in facility lease expense.

(3)

Non-cash expense included in other theatre operating expenses.

(4)

Non-cash expense included in general and administrative expenses.

Contacts

Cinemark Holdings, Inc.
Financial Contact:
Chanda Brashears, 972-665-1671
cbrashears@cinemark.com
or
Media Contact:
James Meredith, 972-665-1060
jmeredith@cinemark.com

Sharing

Contacts

Cinemark Holdings, Inc.
Financial Contact:
Chanda Brashears, 972-665-1671
cbrashears@cinemark.com
or
Media Contact:
James Meredith, 972-665-1060
jmeredith@cinemark.com