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Cinemark Holdings, Inc. Reports Growth in Worldwide Attendance, Revenues, Net Income, EPS and Adjusted EBITDA for the Third Quarter of 2018

PLANO, Texas--(BUSINESS WIRE)--Nov. 2, 2018-- 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, 2018.

Cinemark Holdings, Inc.’s total revenues for the three months ended September 30, 2018 increased 6.1% to $754.2 million compared to $710.8 million for the three months ended September 30, 2017. For the three months ended September 30, 2018, admissions revenues increased 0.6% to $427.6 million and concession revenues increased 6.9% to $264.1 million. For the three months ended September 30, 2018, attendance increased 3.7% to 69.8 million patrons, average ticket price was $6.13 and concession revenues per patron increased 3.0% to $3.78.

Net income attributable to Cinemark Holdings, Inc. for the three months ended September 30, 2018 increased 31.7% to $50.2 million from $38.1 million for the three months ended September 30, 2017. Diluted earnings per share for the three months ended September 30, 2018 was $0.43 compared to $0.33 for the three months ended September 30, 2017.

Adjusted EBITDA for the three months ended September 30, 2018 increased 9.6% to $168.4 million compared to $153.7 million for the three months ended September 30, 2017. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

“Cinemark again delivered remarkable results during the third quarter. We are pleased to report that ongoing execution of our strategic initiatives, coupled with our sustained operating discipline, enabled us to capitalize on strong film content and generate worldwide growth across our key metrics,” stated Mark Zoradi, Cinemark’s Chief Executive Officer. “Furthermore, continued momentum at the North American box office, which is up 8.7% year-to-date and has been propelled by year-over-year attendance growth, reinforces the strength and stability of the theatrical exhibition industry.”

Cinemark Holdings, Inc.’s total revenues for the nine months ended September 30, 2018 increased 8.1% to $2,423.2 million compared to $2,241.6 million for the nine months ended September 30, 2017. For the nine months ended September 30, 2018, admissions revenues increased 2.8% to $1,389.1 million and concession revenues increased 6.9% to $831.2 million. For the nine months ended September 30, 2018, attendance increased 1.8% to 214.7 million patrons, average ticket price was $6.47 and concession revenues per patron increased 4.9% to $3.87.

Net income attributable to Cinemark Holdings, Inc. for the nine months ended September 30, 2018 increased 14.9% to $194.4 million from $169.1 million for the nine months ended September 30, 2017. Diluted earnings per share for the nine months ended September 30, 2018 was $1.66 compared to $1.45 for the nine months ended September 30, 2017.

Adjusted EBITDA for the nine months ended September 30, 2018 increased 8.8% to $583.4 million compared to $536.2 million for the nine months ended September 30, 2017. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

As of September 30, 2018, the Company’s aggregate screen count was 6,014 and the Company had commitments to open five new theatres and 35 screens during the remainder of 2018 and 20 new theatres and 191 screens subsequent to 2018.

Conference Call/Webcast – Today at 8:30 AM 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 541 theatres with 6,014 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American countries as of September 30, 2018. 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, 2018. 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, except per share amounts)
 
  Three Months Ended   Nine Months Ended
September 30, September 30,
2018   2017 2018   2017
Statement of income data:
Revenues
Admissions $ 427,616 $ 425,128 $ 1,389,110 $ 1,351,477
Concession 264,165 247,027 831,243 777,573
Other   62,454   38,593   202,906   112,503
Total revenues 754,235 710,748 2,423,259 2,241,553
Cost of operations
Film rentals and advertising 230,121 226,229 758,242 725,603
Concession supplies 42,720 40,178 134,577 124,117
Salaries and wages 92,495 87,305 285,997 261,318
Facility lease expense 80,592 81,919 243,873 248,569
Utilities and other 112,832 92,341 337,866 271,751
General and administrative expenses 38,299 36,947 123,714 112,997
Depreciation and amortization 64,971 58,052 193,656 174,545
Impairment of long-lived assets 1,641 5,026 5,020 9,600
Loss on disposal of assets and other   7,826   8,576   28,666   9,464
Total cost of operations   671,497   636,573   2,111,611   1,937,964
Operating income 82,738 74,175 311,648 303,589
Interest expense (27,144 ) (26,317 ) (82,725 ) (79,208 )
Loss on debt amendments (1,484 ) (246 )
Interest income 2,761 1,682 7,861 4,395
Foreign currency exchange gain (loss) (3,126 ) 584 (6,947 ) 2,018
Distributions from NCM 2,386 2,144 12,168 11,704
Interest expense - NCM (4,983 ) (14,875 )
Equity in income of affiliates   14,158   10,902   29,208   26,767
Income before income taxes 66,790 63,170 254,854 269,019
Income taxes   16,169   24,630   59,592   98,475
Net income $ 50,621 $ 38,540 $ 195,262 $ 170,544
Less: Net income attributable to noncontrolling interests   393   401   878   1,438
Net income attributable to Cinemark Holdings, Inc. $ 50,228 $ 38,139 $ 194,384 $ 169,106
Earnings per share attributable to Cinemark Holdings, Inc.'s common stockholders
Basic $ 0.43 $ 0.33 $ 1.66 $ 1.45
Diluted $ 0.43 $ 0.33 $ 1.66 $ 1.45
Weighted average shares outstanding - Diluted   116,322   116,104   116,288   116,063
 
Other Operating Data

(unaudited, in thousands)

 
  As of     As of
September 30, December 31,
2018 2017
Balance sheet data:
Cash and cash equivalents $ 366,796 $ 522,547
Theatre properties and equipment, net $ 1,820,487 $ 1,828,054
Total assets $ 4,397,573 $ 4,470,893
Long-term debt, including current portion, net of unamortized debt issue costs $ 1,782,440 $ 1,787,480
Equity $ 1,469,527 $ 1,405,688
 
Segment Information

(unaudited, in millions, except per patron data)

 
  U.S. Operating Segment   International Operating Segment   Consolidated

Three Months Ended September 30,

     

Three Months Ended September 30,

       

Constant

Currency(1)

Three Months Ended September 30,

     
Revenues 2018     2017

%
Change

2018     2017

%
Change

2018    

%
Change

2018     2017

%
Change

Admissions revenues $ 333.3 $ 312.3 6.7 % $ 94.3 $ 112.8 (16.4 )% $ 116.3   3.1 % $ 427.6 $ 425.1 0.6 %
Concession revenues $ 207.9 $ 181.5 14.5 % $ 56.2 $ 65.6 (14.3 )% $ 67.1 2.3 % $ 264.1 $ 247.1 6.9 %
Other revenues $ 41.1 $ 16.9 143.2 % $ 21.4 $ 21.7 (1.4 )% $ 27.6 27.2 % $ 62.5 $ 38.6 61.9 %
Total revenues $ 582.3 $ 510.7 14.0 % $ 171.9 $ 200.1 (14.1 )% $ 211.0 5.4 % $ 754.2 $ 710.8 6.1 %
Attendance 43.7 40.6 7.6 % 26.1 26.7 (2.2 )% 69.8 67.3 3.7 %
Average ticket price $ 7.63 $ 7.69 (0.8 )% $ 3.61 $ 4.22 (14.5 )% $ 4.46 5.7 % $ 6.13 $ 6.32 (3.0 )%
Concession revenues per patron $ 4.76 $ 4.47 6.5 % $ 2.15 $ 2.46 (12.6 )% $ 2.57 4.5 % $ 3.78 $ 3.67 3.0 %
 
  U.S. Operating Segment     International Operating Segment     Consolidated
Three Months Ended Three Months Ended Three Months Ended
September 30, September 30, September 30,
Cost of Operations 2018     2017 2018     2017    

Constant

Currency(1)

2018

2018     2017
Film rentals and advertising $ 185.1 $ 171.5 $ 45.0 $ 54.7 $ 55.5 $ 230.1 $ 226.2
Concession supplies $ 31.2 $ 26.2 $ 11.5 $ 14.0 $ 13.7 $ 42.7 $ 40.2
Salaries and wages $ 73.2 $ 64.6 $ 19.3 $ 22.7 $ 24.0 $ 92.5 $ 87.3
Facility lease expense $ 61.1 $ 59.8 $ 19.5 $ 22.2 $ 23.1 $ 80.6 $ 82.0
Utilities and other $ 83.0 $ 64.0 $ 29.9 $ 28.4 $ 36.8 $ 112.9 $ 92.4
 
  U.S. Operating Segment     International Operating Segment     Consolidated  
Nine Months Ended September 30,       Nine Months Ended September 30,        

Constant

Currency(1)

  Nine Months Ended September 30,      
Revenues 2018     2017  

%
Change

  2018     2017  

%
Change

  2018    

%
Change

  2018     2017  

%
Change

 
Admissions revenues $ 1,091.5   $ 1,003.5   8.8 % $ 297.6   $ 348.0   (14.5 )% $ 335.7     (3.5 )% $ 1,389.1   $ 1,351.5   2.8 %
Concession revenues $ 661.3 $ 582.2 13.6 % $ 169.9 $ 195.4 (13.1 )% $ 188.7 (3.4 )% $ 831.2 $ 777.6 6.9 %
Other revenues $ 134.9 $ 53.8 150.7 % $ 68.0 $ 58.7 15.8 % $ 79.1 34.8 % $ 202.9 $ 112.5 80.4 %
Total revenues $ 1,887.7 $ 1,639.5 15.1 % $ 535.5 $ 602.1 (11.1 )% $ 603.5 0.2 % $ 2,423.2 $ 2,241.6 8.1 %
Attendance 138.9 130.1 6.8 % 75.8 80.9 (6.3 )% 214.7 211.0 1.8 %
Average ticket price $ 7.86 $ 7.71 1.9 % $ 3.93 $ 4.30 (8.6 )% $ 4.43 3.0 % $ 6.47 $ 6.41 0.9 %
Concession revenues per patron $ 4.76 $ 4.48 6.2 % $ 2.24 $ 2.42 (7.4 )% $ 2.49 2.9 % $ 3.87 $ 3.69 4.9 %
 
  U.S. Operating Segment     International Operating Segment     Consolidated
Nine Months Ended Nine Months Ended Nine Months Ended
September 30, September 30, September 30,
Cost of Operations 2018     2017 2018     2017    

Constant

Currency(1)

2018

2018     2017
Film rentals and advertising $ 616.7 $ 558.3 $ 141.5 $ 167.3 $ 160.0 $ 758.2 $ 725.6
Concession supplies $ 98.1 $ 82.1 $ 36.5 $ 42.0 $ 40.5 $ 134.6 $ 124.1
Salaries and wages $ 224.3 $ 194.5 $ 61.7 $ 66.8 $ 70.7 $ 286.0 $ 261.3
Facility lease expense $ 183.1 $ 181.1 $ 60.8 $ 67.5 $ 66.9 $ 243.9 $ 248.6
Utilities and other $ 245.7 $ 185.1 $ 92.2 $ 86.7 $ 104.9 $ 337.9 $ 271.8
 
(1)   Constant currency amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2017. We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.
 
Other Segment Information

(unaudited, in thousands)

 
  Three Months Ended     Nine Months Ended
September 30, September 30,
2018     2017 2018     2017
Adjusted EBITDA (1)
U.S. $ 132,652 $ 108,854 $ 476,907 $ 402,902
International   35,740   44,818   106,518   133,329
Total Adjusted EBITDA (1) $ 168,392 $ 153,672 $ 583,425 $ 536,231
Capital expenditures
U.S. $ 65,458 $ 65,612 $ 195,104 $ 221,604
International   17,915   14,318   50,858   41,126
Total capital expenditures $ 83,373 $ 79,930 $ 245,962 $ 262,730
 
 
(1) Adjusted EBITDA represents net income before income taxes, interest expense, interest income, foreign currency exchange gain (loss), interest expense – NCM, equity in income of affiliates, loss on debt amendments and refinancing, other cash distributions from equity investees, depreciation and amortization, impairment of long-lived assets, loss on disposal of assets and other, changes in deferred lease expense, amortization of long-term prepaid rents and share based awards compensation expense, as calculated below. 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.
 
Reconciliation of Adjusted EBITDA

(unaudited, in thousands)

 
  Three Months Ended   Nine Months Ended
September 30, September 30,
2018   2017 2018   2017
Net income $ 50,621 $ 38,540 $ 195,262 $ 170,544
Add (deduct):
Income taxes 16,169 24,630 59,592 98,475
Interest expense 27,144 26,317 82,725 79,208
Other income (8,810 ) (13,168 ) (15,247 ) (33,180 )
Loss on debt amendments and refinancing 1,484 246
Other cash distributions from equity investees (2) 4,786 2,402 21,041 17,321
Depreciation and amortization 64,971 58,052 193,656 174,545
Impairment of long-lived assets 1,641 5,026 5,020 9,600
Loss on disposal of assets and other 7,826 8,576 28,666 9,464
Deferred lease expenses - theatres (3) 216 (44 ) (252 ) (278 )
Deferred lease expenses - projectors (4) (236 ) (253 ) (700 ) (741 )
Amortization of long-term prepaid rents (3) 578 551 1,814 1,540
Share based awards compensation expense (5)   3,486   3,043   10,364   9,487
Adjusted EBITDA $ 168,392 $ 153,672 $ 583,425 $ 536,231
(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 utilities and other.
(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