Cinemark Holdings, Inc. Reports Q3 2015 Adjusted EBITDA of $154.8 Million on Revenues of $700.1 Million

PLANO, Texas--()--Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and nine months ended September 30, 2015.

Cinemark Holdings, Inc.’s revenues for the three months ended September 30, 2015 increased 8.2% to $700.1 million compared to $646.9 million for the three months ended September 30, 2014. For the three months ended September 30, 2015, admissions revenues increased 7.3% to $432.2 million and concession revenues increased 9.0% to $230.2 million. Attendance increased 7.3% to 71.0 million patrons.

Adjusted EBITDA for the three months ended September 30, 2015 increased 9.2% to $154.8 million from $141.7 million for the three months ended September 30, 2014. 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 September 30, 2015 increased 21.5% to $46.3 million from $38.1 million for the three months ended September 30, 2014. Diluted earnings per share for the three months ended September 30, 2015 was $0.40 compared to $0.33 for the three months ended September 30, 2014.

“Our worldwide admissions revenues increased 15.1% on a currency adjusted basis, exceeding the North American industry’s box office by an impressive 930 basis points,” stated Mark Zoradi, Cinemark’s Chief Executive Officer. “Our Latin American segment’s attendance growth of 16.2% further substantiates the exhibition industry is reliant upon film content rather than economic cycles. Cinemark is well adept at navigating through various economic cycles with more than 20 years of operating experience in the region.”

Cinemark Holdings, Inc.’s revenues increased 9.1% to $2,145.4 million for the nine months ended September 30, 2015 from $1,967.1 million for the nine months ended September 30, 2014. During the nine months ended September 30, 2015, admissions revenues increased 7.8% to $1,335.8 million and concession revenues increased 11.7% to $704.2 million. Attendance increased 7.6% to 213.2 million patrons.

Adjusted EBITDA for the nine months ended September 30, 2015 increased 12.7% to $495.4 million from $439.6 million for the nine months ended September 30, 2014. 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 nine months ended September 30, 2015 increased 9.5% to $159.1 million from $145.3 million for the nine months ended September 30, 2014. Diluted earnings per share for the nine months ended September 30, 2015 was $1.37 compared to $1.25 for the nine months ended September 30, 2014.

On September 30, 2015, the Company’s aggregate screen count was 5,746. As of September 30, 2015, the Company had signed commitments to open seven new theatres and 66 screens during the remainder of 2015 and 16 new theatres with 163 screens subsequent to 2015.

Conference Call/Webcast – Today at 8:30AM 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 507 theatres with 5,746 screens in 41 U.S. states, Brazil, Argentina and 12 other Latin American countries as of September 30, 2015. 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 27, 2015 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       Nine months ended
September 30, September 30,
2015     2014 2015     2014
Statement of income data:
Revenues
Admissions $ 432,136 $ 402,832 $ 1,335,761 $ 1,239,472
Concession 230,233 211,131 704,190 630,571
Other   37,687         32,940     105,435         97,003  
Total revenues 700,056 646,903 2,145,386 1,967,046
Cost of operations
Film rentals and advertising 236,415 215,565 737,377 665,420
Concession supplies 36,039 33,473 109,445 98,862
Facility lease expense 80,604 80,567 242,612 239,571
Other theatre operating expenses 161,096 147,380 467,342 436,175
General and administrative expenses 39,099 35,803 116,301 114,892
Depreciation and amortization 47,543 44,731 139,444 131,108
Impairment of long-lived assets 633 4,510 4,955 5,294
(Gain) loss on sale of assets and other   (500 )       2,590     3,852         8,719  
Total cost of operations   600,929         564,619     1,821,328         1,700,041  
Operating income 99,127 82,284 324,058 267,005
Interest expense (1) (28,419 ) (28,335 ) (84,930 ) (85,101 )
Distributions from NCM 4,601 3,481 13,100 14,158
Loss on amendment to debt agreement (925 )
Other income   1,501         6,636     8,453         20,777  
Income before income taxes 76,810 64,066 259,756 216,839
Less: Income taxes   30,109         25,534     99,263         70,477  
Net income $ 46,701 $ 38,532 $ 160,493 $ 146,362
Less: Net income attributable to noncontrolling interests   362         403     1,375         1,059  
Net income attributable to Cinemark Holdings, Inc. $ 46,339       $ 38,129   $ 159,118       $ 145,303  
Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders:
Basic $ 0.40       $ 0.33   $ 1.37       $ 1.25  
Diluted $ 0.40       $ 0.33   $ 1.37       $ 1.25  
 
Weighted average diluted shares outstanding   115,356         115,021     115,279         114,901  
 
Other financial data:
Adjusted EBITDA (2) $ 154,777       $ 141,739   $ 495,351       $ 439,649  

(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
September 30, December 31,
2015 2014
Balance sheet data:
Cash and cash equivalents $ 502,914 $ 638,869
Theatre properties and equipment, net $ 1,461,018 $ 1,450,812
Total assets $ 4,044,256 $ 4,151,980
Long-term debt, including current portion $ 1,817,718 $ 1,822,997
Equity $ 1,096,106 $ 1,123,129
         
 
Three months ended Nine months ended
September 30, September 30,
2015     2014 2015     2014
Other operating data:
Attendance (patrons, in millions):
Domestic 43.8 42.8 134.3 129.9
International   27.2       23.4   78.9       68.3
Worldwide   71.0       66.2   213.2       198.2
 
Average ticket price (in dollars):
Domestic $ 7.27 $ 6.79 $ 7.37 $ 6.99
International $ 4.18 $ 4.80 $ 4.38 $ 4.86
Worldwide $ 6.09 $ 6.09 $ 6.27 $ 6.25
 
Concession revenues per patron (in dollars):
Domestic $ 3.85 $ 3.63 $ 3.90 $ 3.63
International $ 2.27 $ 2.38 $ 2.30 $ 2.33
Worldwide $ 3.24 $ 3.19 $ 3.30 $ 3.18
 
Average screen count (month end average):
Domestic 4,493 4,468 4,496 4,462
International   1,250       1,154   1,214       1,140
Worldwide   5,743       5,622   5,710       5,602
         
 
Segment Information

(unaudited, in thousands)

 
Three months ended Nine months ended
September 30, September 30,
2015     2014 2015     2014
Revenues
U.S. $ 509,330 $ 463,854 $ 1,576,107 $ 1,433,259
International 194,497 186,428 580,335 543,501
Eliminations   (3,771 )       (3,379 )   (11,056 )       (9,714 )
Total revenues $ 700,056       $ 646,903   $ 2,145,386       $ 1,967,046  
Adjusted EBITDA (1)
U.S. $ 108,689 $ 99,519 $ 359,400 $ 313,930
International   46,088         42,220     135,951         125,719  
Total Adjusted EBITDA $ 154,777       $ 141,739   $ 495,351       $ 439,649  
Capital expenditures
U.S. $ 48,868 $ 36,325 $ 167,082 $ 97,120
International   27,771     17,280     65,269         59,048  
Total capital expenditures $ 76,639       $ 53,605   $ 232,351       $ 156,168  
 
 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
   
Three months ended       Nine months ended
September 30, September 30,
2015     2014 2015     2014
Net income $ 46,701 $ 38,532 $ 160,493 $ 146,362
Income taxes 30,109 25,534 99,263 70,477
Interest expense 28,419 28,335 84,930 85,101
Loss on amendment to debt agreement

925

Other income (1,501 ) (6,636 ) (8,453 ) (20,777 )
Depreciation and amortization 47,543 44,731 139,444 131,108
Impairment of long-lived assets 633 4,510 4,955 5,294
(Gain) loss on sale of assets and other (500 ) 2,590 3,852 8,719
Deferred lease expenses - theatres (2) (289 ) 403 (1,108 ) 1,443
Deferred lease expenses – DCIP equipment (3) (232 ) (235 ) (701 ) 573
Amortization of long-term prepaid rents (2) 519 1,000 1,901 1,785
Share based awards compensation expense (4)   3,375         2,975     9,850         9,564  
Adjusted EBITDA (1) $ 154,777       $ 141,739   $ 495,351       $ 439,649  
 
(1) Adjusted EBITDA as calculated in the chart above represents net income before income taxes, interest expense, loss on amendment to debt agreement, 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

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