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Cinemark Holdings, Inc. Reports Revenues of $710.8 Million for the Third Quarter of 2017

PLANO, Texas--(BUSINESS WIRE)--Nov. 3, 2017-- 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, 2017.

Cinemark Holdings, Inc.’s total revenues for the three months ended September 30, 2017 was $710.8 million compared to $768.6 million for the three months ended September 30, 2016. For the three months ended September 30, 2017, admissions revenues were $425.1 million and concession revenues were $247.1 million. Concession revenues per patron increased 7.0% to $3.67 and average ticket price increased 1.8% to $6.32 for the three months ended September 30, 2017.

Net income attributable to Cinemark Holdings, Inc. for the three months ended September 30, 2017 was $38.1 million compared to $65.7 million for the three months ended September 30, 2016. Diluted earnings per share for the three months ended September 30, 2017 was $0.33 compared to $0.56 for the three months ended September 30, 2016.

Adjusted EBITDA for the three months ended September 30, 2017 was $153.7 million compared to $184.9 million for the three months ended September 30, 2016. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

“We continued our trend of outperforming the North American box office in the third quarter, beating industry results by approximately 200 basis points. We have now exceeded market growth for 31 out of 35 quarters,” stated Mark Zoradi, Cinemark’s Chief Executive Officer. “We are pleased to yet again deliver consistent results, despite the weaker consumer appeal of this summer’s film content, and we remain enthusiastic about the long-term prospects of our industry and film line-up for the remainder of 2017 and beyond.”

Cinemark Holdings, Inc.’s total revenues for the nine months ended September 30, 2017 were $2,241.6 million compared to $2,217.9 million for the nine months ended September 30, 2016. During the nine months ended September 30, 2017, admissions revenues were $1,351.5 million and concession revenues were $777.6 million. Concession revenues per patron increased 8.5% to $3.69 and average ticket price increased 4.1% to $6.41 for the nine months ended September 30, 2017.

Net income attributable to Cinemark Holdings, Inc. for the nine months ended September 30, 2017 was $169.1 million compared to $178.1 million for the nine months ended September 30, 2016. Diluted earnings per share for the nine months ended September 30, 2017 was $1.45 compared to $1.53 for the nine months ended September 30, 2016. Net income for the nine months ended September 30, 2016 was impacted by a pre-tax loss on debt amendments and refinancing of $13.3 million, which was primarily due to the refinancing of the Company’s 7.375% senior subordinated notes with an add-on to the Company’s 4.875% senior notes.

Adjusted EBITDA for the nine months ended September 30, 2017 was $536.2 million compared to $537.9 million for the nine months ended September 30, 2016. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

On September 30, 2017, the Company’s aggregate screen count was 5,957. As of September 30, 2017, the Company had signed commitments to open two new theatres and 16 screens by the end of 2017 and open 17 new theatres with 140 screens subsequent to 2017.

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

Telephone: via 800-374-1346 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 533 theatres with 5,957 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American countries as of September 30, 2017. 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 23, 2017 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,

2017 2016 2017 2016
Statement of income data:
Revenues
Admissions $ 425,128 $ 472,842 $ 1,351,477 $ 1,364,737
Concession 247,027 261,391 777,573 752,798
Other   38,593         34,341     112,503         100,312  
Total revenues 710,748 768,574 2,241,553 2,217,847
Cost of operations
Film rentals and advertising 226,229 249,766 725,603 733,101
Concession supplies 40,178 41,888 124,117 116,999
Facility lease expense 81,919 82,848 248,569 241,904
Other theatre operating expenses 179,646 179,459 533,069 509,339
General and administrative expenses 36,947 35,290 112,997 109,143
Depreciation and amortization 58,052 54,187 174,545 155,874
Impairment of long-lived assets 5,026 406 9,600 2,323
Loss on sale of assets and other   8,576         6,940     9,464         10,985  
Total cost of operations   636,573         650,784     1,937,964         1,879,668  
Operating income 74,175 117,790 303,589 338,179
Interest expense (1) (26,317 ) (26,659 ) (79,208 ) (81,980 )
Loss on debt amendments and refinancing - - (246 ) (13,284 )
Distributions from NCM 2,144 1,381 11,704 10,117
Foreign currency exchange gain 584 485 2,018 2,883
Other income   12,584         14,055     31,162         29,627  
Income before income taxes 63,170 107,052 269,019 285,542
Income taxes   24,630         40,926     98,475         106,002  
Net income $ 38,540 $ 66,126 $ 170,544 $ 179,540
Less: Net income attributable to noncontrolling interests   401         471     1,438         1,454  
Net income attributable to Cinemark Holdings, Inc. $ 38,139       $ 65,655   $ 169,106       $ 178,086  
 

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

Basic $ 0.33       $ 0.56   $ 1.45       $ 1.53  
Diluted $ 0.33       $ 0.56   $ 1.45       $ 1.53  
 
Weighted average diluted shares outstanding   116,104         115,793     116,063         115,706  
 
Other financial data:
Adjusted EBITDA (2) $ 153,672       $ 184,891   $ 536,231       $ 537,933  

________________________________

    (1)   Includes amortization of debt issue costs.
(2) Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measure, is provided in the financial schedules accompanying this press release.
       
 
As of As of
September 30, December 31,
2017 2016
Balance sheet data:
Cash and cash equivalents $ 469,446 $ 561,235
Theatre properties and equipment, net $ 1,791,606 $ 1,704,536
Total assets $ 4,371,650 $ 4,306,633
Long-term debt, including current portion $ 1,789,051 $ 1,788,112
Equity $ 1,351,820 $ 1,272,960
       
 

Three months ended
September 30,

Nine months ended
September 30,

2017     2016 2017     2016
Other operating data:
Attendance (patrons, in millions):
Domestic 40.6 48.0 130.1 138.0
International   26.7       28.2   80.9       83.7
Worldwide   67.3       76.2   211.0       221.7
 
Average ticket price (in dollars):
Domestic $ 7.69 $ 7.39 $ 7.71 $ 7.52
International $ 4.22 $ 4.18 $ 4.30 $ 3.91
Worldwide $ 6.32 $ 6.21 $ 6.41 $ 6.16
 
Concession revenues per patron (in dollars):
Domestic $ 4.47 $ 4.11 $ 4.48 $ 4.17
International $ 2.46 $ 2.27 $ 2.42 $ 2.12
Worldwide $ 3.67 $ 3.43 $ 3.69 $ 3.40
 
Average screen count (month end average):
Domestic 4,553 4,563 4,547 4,547
International   1,386       1,317   1,367       1,299
Worldwide   5,939       5,880   5,914       5,846
       
 
Segment Information

(unaudited, in thousands)

 

Three months ended
September 30,

Nine months ended
September 30,

2017     2016 2017     2016
Revenues
U.S. $ 514,376 $ 572,916 $ 1,650,514 $ 1,677,365
International 200,122 199,476 602,116 551,212
Eliminations   (3,750 )       (3,818 )   (11,077 )       (10,730 )
Total revenues $ 710,748       $ 768,574   $ 2,241,553       $ 2,217,847  
Adjusted EBITDA
U.S. $ 108,854 $ 137,540 $ 402,902 $ 409,018
International   44,818         47,351     133,329         128,915  
Total Adjusted EBITDA $ 153,672       $ 184,891   $ 536,231       $ 537,933  
Capital expenditures
U.S. $ 65,612 $ 75,839 $ 221,604 $ 175,218
International   14,318         22,984     41,126         55,128  
Total capital expenditures $ 79,930       $ 98,823   $ 262,730       $ 230,346  
 
 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
   
Three months ended     Nine months ended
September 30, September 30,
2017     2016 2017     2016
Net income $ 38,540 $ 66,126 $ 170,544 $ 179,540
Income taxes 24,630 40,926 98,475 106,002
Interest expense 26,317 26,659 79,208 81,980
Other income (13,168 ) (14,540 ) (33,180 ) (32,510 )
Loss on debt amendments and refinancing - - 246 13,284
Other cash distributions from equity investees (2) 2,402 1,391 17,321 9,660
Depreciation and amortization 58,052 54,187 174,545 155,874
Impairment of long-lived assets 5,026 406 9,600 2,323
Loss on sale of assets and other 8,576 6,940 9,464 10,985
Deferred lease expenses - theatres (3) (44 ) 70 (278 ) (111 )
Deferred lease expenses – DCIP equipment (4) (253 ) (232 ) (741 ) (698 )
Amortization of long-term prepaid rents (3) 551 371 1,540 1,357
Share based awards compensation expense (5)   3,043         2,587     9,487         10,247  
Adjusted EBITDA (1) $ 153,672       $ 184,891   $ 536,231       $ 537,933  
 
(1) Adjusted EBITDA as calculated in the chart above represents net income before income taxes, interest expense, other income, loss on debt amendments and refinancing, other cash distributions from equity investees, depreciation and amortization, impairment of long-lived assets, 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. Adjusted EBITDA margin represents Adjusted EBITDA divided by total revenues.
(2) Represents cash distributions received from equity investees that were recorded as a reduction of the respective investment balances.
(3) Non-cash expense included in facility lease expense.
(4) Non-cash expense included in other theatre operating expenses.
(5) 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
communications@cinemark.com