Cinemark Holdings, Inc. Reports Q3 2014 Adjusted EBITDA of $141.7 Million on Revenues of $646.9 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, 2014.

Cinemark Holdings, Inc.’s revenues for the three months ended September 30, 2014 were $646.9 million compared to $757.6 million for the three months ended September 30, 2013. For the three months ended September 30, 2014, admissions revenues were $402.9 million and concession revenues were $211.1 million. Attendance decreased to 66.2 million patrons, average ticket price increased 2.9% to $6.09 and concession revenues per patron increased 6.7% to $3.19 during the three months ended September 30, 2014.

Adjusted EBITDA for the three months ended September 30, 2014 was $141.7 million compared to $190.2 million for the three months ended September 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 September 30, 2014 was approximately $38.1 million compared to $80.0 million for the three months ended September 30, 2013. Diluted earnings per share for the three months ended September 30, 2014 was $0.33 compared to $0.69 for the three months ended September 30, 2013.

“We are pleased with our results considering we faced a much higher hurdle than our peers with a 650 basis point domestic industry outperformance in Q3 of 2013 and the headwinds of the World Cup in Brazil,” stated Tim Warner, Cinemark’s Chief Executive Officer. “We continue to benefit from our strategic, diverse global platform and attribute our strong performance to our sustained emphasis on attendance growth.”

Cinemark Holdings, Inc.’s revenues for the nine months ended September 30, 2014 were $1,967.1 million compared to $2,031.0 million for the nine months ended September 30, 2013. During the nine months ended September 30, 2014, admissions revenues were $1,239.5 million and concession revenues were $630.6 million. Average ticket price increased 2.3% to $6.25 and concession revenues per patron increased 4.6% to $3.18 during the nine months ended September 30, 2014, while attendance declined approximately 6.4% to 198.2 million patrons.

Adjusted EBITDA for the nine months ended September 30, 2014 was $439.6 million compared to $484.5 million for the nine months ended September 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 nine months ended September 30, 2014 was $145.3 million compared to $132.9 million for the nine months ended September 30, 2013. Diluted earnings per share for the nine months ended September 30, 2014 was $1.25 compared to $1.15 for the nine months ended September 30, 2013. Net income for the nine months ended September 30, 2013 included a loss on early retirement of debt of approximately $72.3 million, before income taxes.

On September 30, 2014, the Company’s aggregate screen count was 5,629. As of September 30, 2014, the Company had signed commitments to open five new theatres and 51 screens during the remainder of 2014 and 22 new theatres with 187 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 490 theatres with 5,629 screens in 40 U.S. states, Brazil, Argentina and 11 other Latin American countries as of September 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
September 30,

 

Nine months ended
September 30,

  2014     2013     2014     2013  
Statement of income data:
Revenues
Admissions $ 402,832 $ 479,631 $ 1,239,472 $ 1,293,528
Concession 211,131 242,257 630,571 643,399
Other   32,940     35,678     97,003     94,034  
Total revenues 646,903 757,566 1,967,046 2,030,961
Cost of operations
Film rentals and advertising 215,565 254,792 665,420 692,219
Concession supplies 33,473 38,971 98,862 103,992
Facility lease expense 80,567 85,085 239,571 230,827
Other theatre operating expenses 147,380 157,990 436,175 428,656
General and administrative expenses 35,803 42,395 114,892 120,720
Depreciation and amortization 44,731 42,399 131,108 120,165
Impairment of long-lived assets 4,510 131 5,294 2,076
(Gain) loss on sale of assets and other   2,590     611     8,719     (2,532 )
Total cost of operations   564,619     622,374     1,700,041     1,696,123  
Operating income 82,284 135,192 267,005 334,838
Interest expense (1) (28,335 ) (29,478 ) (85,101 ) (96,542 )
Distributions from NCM 3,481 5,622 14,158 13,418
Loss on early retirement of debt (72,302 )
Other income   6,636     12,795     20,777     17,958  
Income before income taxes 64,066 124,131 216,839 197,370
Less: Income taxes   25,534     43,386     70,477     62,726  
Net income $ 38,532 $ 80,745 $ 146,362 $ 134,644
Less: Net income attributable to noncontrolling interests   403     726     1,059     1,766  
Net income attributable to Cinemark Holdings, Inc. $ 38,129   $ 80,019   $ 145,303   $ 132,878  
Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders:
Basic $ 0.33   $ 0.69   $ 1.25   $ 1.15  
Diluted $ 0.33   $ 0.69   $ 1.25   $ 1.15  
 
Weighted average diluted shares outstanding   115,021     114,449     114,901     114,291  
 
Other financial data:
Adjusted EBITDA (2) $ 141,739   $ 190,173   $ 439,649   $ 484,453  

 

 

(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,
  2014   2013
Balance sheet data:
  Cash and cash equivalents $ 546,665 $ 599,929
Theatre properties and equipment, net $ 1,427,787 $ 1,427,190
Total assets $ 4,060,429 $ 4,144,163
Long-term debt, including current portion $ 1,826,083 $ 1,832,800
Equity $ 1,129,382 $ 1,102,417
 
   
Three months ended

September 30,

Nine months ended

September 30,

2014   2013 2014   2013
Other operating data:
  Attendance (patrons, in thousands):
Domestic 42,886 50,604 129,938 132,161
International 23,290 30,433 68,244 79,647
Worldwide 66,176 81,037 198,182 211,808
 
Average ticket price (in dollars):
Domestic $ 6.79 $ 6.68 $ 6.99 $ 6.87
International $ 4.80 $ 4.66 $ 4.86 $ 4.84
Worldwide $ 6.09 $ 5.92 $ 6.25 $ 6.11
 
Concession revenues per patron (in dollars):
Domestic $ 3.63 $ 3.38 $ 3.63 $ 3.43
International $ 2.38 $ 2.34 $ 2.33 $ 2.39
Worldwide $ 3.19 $ 2.99 $ 3.18 $ 3.04
 
Average screen count (month end average):
Domestic 4,468 4,420 4,462 4,172
International 1,154 1,373 1,140 1,352
Worldwide 5,622 5,793 5,602 5,524

     
Segment Information
(unaudited, in thousands)
 
Three months ended

September 30,

Nine months ended

September 30,

  2014       2013     2014       2013  
Revenues
U.S. $ 463,854 $ 529,426 $ 1,433,259 $ 1,412,898
International 186,428 231,771 543,501 627,843
Eliminations   (3,379 )   (3,631 )   (9,714 )   (9,780 )
Total revenues $ 646,903   $ 757,566   $ 1,967,046   $ 2,030,961  
Adjusted EBITDA (1)
U.S. $ 99,519 $ 132,803 $ 313,930 $ 341,579
International   42,220     57,370     125,719     142,874  
Total Adjusted EBITDA $ 141,739   $ 190,173   $ 439,649   $ 484,453  
Capital expenditures
U.S. $ 36,325 $ 35,746 $ 97,120 $ 71,533
International   17,280     33,354     59,048     87,955  
Total capital expenditures $ 53,605   $ 69,100   $ 156,168   $ 159,488  
 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
 
Three months ended   Nine months ended
September 30,   September 30,
  2014       2013     2043       2013  
Net income $ 38,532 $ 80,745 $ 146,362 $ 134,644
Income taxes 25,534 43,386 70,477 62,726
Interest expense 28,335 29,478 85,101 96,542
Loss on early retirement of debt

72,302
Other income (6,636 ) (12,795 ) (20,777 ) (17,958 )
Depreciation and amortization 44,731 42,399 131,108 120,165
Impairment of long-lived assets 4,510 131 5,294 2,076
(Gain) loss on sale of assets and other 2,590 611 8,719 (2,532 )
Deferred lease expenses - theatres (2) 403 897 1,443 956
Deferred lease expenses – DCIP equipment (3) (235 ) 1,038 573 3,082
Amortization of long-term prepaid rents (2) 1,000 725 1,785 2,104
Share based awards compensation expense (4)   2,975     3,558     9,564     10,346  
Adjusted EBITDA (1) $ 141,739   $ 190,173   $ 439,649   $ 484,453  

(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

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