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Cinemark Holdings, Inc. Reports Q3 2013 Adjusted EBITDA of $190.2 Million on Revenues of $757.6 Million

PLANO, Texas--(BUSINESS WIRE)--Nov. 7, 2013-- 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, 2013.

Cinemark Holdings, Inc.’s revenues for the three months ended September 30, 2013 increased 19.6% to $757.6 million from $633.6 million for the three months ended September 30, 2012. For the three months ended September 30, 2013, admissions revenues increased 19.2% to $479.6 million and concession revenues increased 21.1% to $242.3 million. Attendance increased 16.2% to 81.0 million patrons, average ticket price increased 2.6% to $5.92 and concession revenues per patron increased 4.2% to $2.99 during the three months ended September 30, 2013.

Adjusted EBITDA for the three months ended September 30, 2013 was $190.2 million compared to $148.4 million for the three months ended September 30, 2012. 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, 2013 was approximately $80.0 million compared to $47.4 million, an increase of 68.8%, for the three months ended September 30, 2012. Diluted earnings per share for the three months ended September 30, 2013 was $0.69 compared to $0.41 for the three months ended September 30, 2012. Net income for the three months ended September 30, 2012 was impacted by a lease termination reserve for a planned closure.

“The North American industry celebrated a robust box office in the third quarter with an increase of 6.4%, fueled by a record summer box office,” stated Tim Warner, Cinemark Chief Executive Officer. “Cinemark achieved record-setting results with a 19.2% increase in admissions revenues over the prior year, as well as all-time highs for attendance, Adjusted EBITDA and Adjusted EBITDA margin. Due to the strength and diversity of our global footprint, our worldwide operations have now outperformed the North American industry in 17 of the past 18 consecutive quarters on a currency adjusted basis.”

Cinemark Holdings, Inc.’s revenues for the nine months ended September 30, 2013 increased 9.1% to $2,031.0 million from $1,862.0 million for the nine months ended September 30, 2012. During the nine months ended September 30, 2013, admissions revenues increased 8.3% to $1,293.5 million and concession revenues increased 10.7% to $643.4 million. Average ticket price increased 2.3% to $6.11 and concession revenues per patron increased 4.5% to $3.04 during the nine months ended September 30, 2013.

Adjusted EBITDA for the nine months ended September 30, 2013 was $484.5 million compared to $445.7 million for the nine months ended September 30, 2012. 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, 2013 was $132.9 million compared to $141.1 million for the nine months ended September 30, 2012. Diluted earnings per share for the nine months ended September 30, 2013 was $1.15 compared to $1.23 for the nine months ended September 30, 2012. 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, 2013, the Company’s aggregate screen count was 5,794. As of September 30, 2013, the Company had signed commitments to open 15 new theatres and 128 screens during the remainder of 2013 and 23 new theatres with 209 screens subsequent to 2013.

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 506 theatres with 5,794 screens in 40 U.S. states, Brazil, Mexico, Argentina and 10 other Latin American countries as of September 30, 2013. 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, 2013 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,
2013     2012       2013     2012
Statement of income data:
Revenues
Admissions $ 479,631 $ 402,440 $ 1,293,528 $ 1,194,306
Concession 242,257 200,112 643,399 581,346
Other   35,678         31,021           94,034         86,345  
Total revenues 757,566 633,573 2,030,961 1,861,997
Cost of operations
Film rentals and advertising 254,792 214,002 692,219 636,718
Concession supplies 38,971 32,924 103,992 93,162
Facility lease expense 85,085 72,883 230,827 213,059
Other theatre operating expenses 157,990 138,043 428,656 394,967
General and administrative expenses 42,395 36,996 120,720 107,011
Depreciation and amortization 42,399 36,897 120,165 110,054
Impairment of long-lived assets 131 976 2,076 1,472
(Gain) loss on sale of assets and other   611         6,699           (2,532 )       8,004  
Total cost of operations   622,374         539,420           1,696,123         1,564,447  
Operating income 135,192 94,153 334,838 297,550
Interest expense (1) (29,478 ) (30,861 ) (96,542 ) (94,369 )
Distributions from NCM 5,622 4,673 13,418 13,090
Loss on early retirement of debt

(72,302 )

Other income   12,795         9,455           17,958         14,940  
Income before income taxes 124,131 77,420 197,370 231,211
Income taxes   43,386         29,453           62,726         88,229  
Net income

$

80,745 $ 47,967

$

134,644 $ 142,982
Less: Net income attributable to noncontrolling interests   726         582           1,766         1,855  
Net income attributable to Cinemark Holdings, Inc.

$

80,019       $ 47,385        

$

132,878       $ 141,127  
Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders:
Basic

$

0.69       $ 0.41         $ 1.15       $ 1.23  
Diluted $ 0.69       $ 0.41         $ 1.15       $ 1.23  
 
Weighted average diluted shares outstanding   114,449         113,814           114,291         113,664  
 
Other financial data:
Adjusted EBITDA (2) $ 190,173       $ 148,370         $ 484,453       $ 445,650  
       

(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,
2013 2012
Balance sheet data:
Cash and cash equivalents $ 479,779 $ 742,664
Theatre properties and equipment, net $ 1,417,023 $ 1,304,958
Total assets $ 4,082,898 $ 3,863,226
Long-term debt, including current portion $ 1,826,764 $ 1,764,010
Equity $ 1,110,107 $ 1,094,984
 
         
Three months ended

September 30,

      Nine months ended

September 30,

2013     2012 2013     2012
Other operating data:
Attendance (patrons, in thousands):
Domestic 50,604 41,141 132,161 122,984
International   30,433       28,508         79,647       77,008
Worldwide   81,037       69,649         211,808       199,992
 
Average ticket price (in dollars):
Domestic $ 6.68 $ 6.44 $ 6.87 $ 6.66
International $ 4.66 $ 4.81 $ 4.84 $ 4.87
Worldwide $ 5.92 $ 5.77 $ 6.11 $ 5.97
 
Concession revenues per patron (in dollars):
Domestic $ 3.38 $ 3.29 $ 3.43 $ 3.32
International $ 2.34 $ 2.26 $ 2.39 $ 2.24
Worldwide $ 2.99 $ 2.87 $ 3.04 $ 2.91
 
Average screen count (month end average):
Domestic 4,420 3,922 4,172 3,907
International   1,373       1,285         1,352       1,282
Worldwide   5,793       5,207         5,524       5,189
 
         
Segment Information

(unaudited, in thousands)

 
Three months ended

September 30,

      Nine months ended

September 30,

2013     2012 2013     2012
Revenues
U.S. $ 529,426 $ 416,165 $ 1,412,898 $ 1,271,155
International 231,771 220,633 627,843 598,880
Eliminations   (3,631 )       (3,225 )         (9,780 )       (8,038 )
Total revenues $ 757,566       $ 633,573         $ 2,030,961       $ 1,861,997  
Adjusted EBITDA (1)
U.S. $ 132,803 $ 94,538 $ 341,579 $ 302,222
International   57,370         53,832           142,874         143,428  
Total Adjusted EBITDA $ 190,173       $ 148,370         $ 484,453       $ 445,650  
Capital expenditures
U.S. $ 35,746 $ 27,357 $ 71,533 $ 74,160
International   33,354         25,583           87,955         72,367  
Total capital expenditures $ 69,100       $ 52,940         $ 159,488       $ 146,527  
 
 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
 
    Three months ended       Nine months ended
September 30,       September 30,
2013     2012 2013     2012
Net income $ 80,745 $ 47,967 $ 134,644 $ 142,982
Income taxes 43,386 29,453 62,726 88,229
Interest expense 29,478 30,861 96,542 94,369
Loss on early retirement of debt

72,302

Other income (12,795 ) (9,455 ) (17,958 ) (14,940 )
Depreciation and amortization 42,399 36,897 120,165 110,054
Impairment of long-lived assets 131 976 2,076 1,472
(Gain) loss on sale of assets and other 611 6,699

(2,532

) 8,004

Deferred lease expenses – theatres (2)

897 (16 ) 956 301

Deferred lease expenses – DCIP equipment (3)

1,038 1,013 3,082 3,026
Amortization of long-term prepaid rents (2) 725 678 2,104 1,988
Share based awards compensation expense (4)   3,558         3,297           10,346         10,165  
Adjusted EBITDA (1) $ 190,173       $ 148,370         $ 484,453       $ 445,650  
 

(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.

Source: Cinemark Holdings, Inc.

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