Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and six months ended June 30, 2019.
Cinemark Holdings, Inc.’s total revenues for the three months ended June 30, 2019 increased 7.7% to a record $957.8 million from $889.0 million for the three months ended June 30, 2018. For the three months ended June 30, 2019, admissions revenues increased 2.4% to $521.1 million and concession revenues increased 13.1% to $345.3 million. For the three months ended June 30, 2019, attendance increased 5.0% to 80.2 million patrons, average ticket price was $6.50 and concession revenues per patron increased 7.7% to $4.31.
Net income attributable to Cinemark Holdings, Inc. for the three months ended June 30, 2019 was a record $101.0 million compared to $82.1 million for the three months ended June 30, 2018. Diluted earnings per share for the three months ended June 30, 2019 was a record $0.86 compared to $0.70 for three months ended June 30, 2018.
Adjusted EBITDA for the three months ended June 30, 2019 increased 10.4% to a record $244.7 million from $221.6 million for three months ended June 30, 2018. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.
“We are extremely pleased with our worldwide second quarter results that were generated by our domestic box office, which surpassed the North American industry in excess of 300 basis points, a significant rebound in international attendance and continued strength in our global food and beverage sales,” stated Mark Zoradi, Cinemark’s Chief Executive Officer. “As we look forward, we will continue to execute our strategic initiatives to ensure we are well-positioned to capitalize on the strength of film content and the investments we have made to enhance the overall guest experience.”
Cinemark Holdings, Inc.’s total revenues for the six months ended June 30, 2019 were $1,672.5 million compared to $1,669.0 million for the six months ended June 30, 2018. For the six months ended June 30, 2019, admissions revenues were $916.6 million and concession revenues increased 5.2% to $596.6 million. For the six months ended June 30, 2019, attendance was 142.5 million patrons, average ticket price was $6.43 and concession revenues per patron increased 7.2% to $4.19.
Net income attributable to Cinemark Holdings, Inc. for the six months ended June 30, 2019 was $133.7 million compared to $144.2 million for the six months ended June 30, 2018. Diluted earnings per share for the six months ended June 30, 2019 was $1.14 compared to $1.23 for the six months ended June 30, 2018.
Adjusted EBITDA for the six months ended June 30, 2019 was $397.0 million compared to $415.0 million for the six months ended June 30, 2018. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.
As of June 30, 2019, the Company’s aggregate screen count was 6,086 and the Company had commitments to open eight new theatres and 73 screens during the remainder of 2019 and 17 new theatres and 162 screens subsequent to 2019.
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 549 theatres with 6,086 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American countries as of June 30, 2019. 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, 2019. 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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Statement of income data: | ||||||||||||||||
Revenues | ||||||||||||||||
Admissions | $ | 521,072 | $ | 508,870 | $ | 916,612 | $ | 961,494 | ||||||||
Concession | 345,282 | 305,306 | 596,606 | 567,078 | ||||||||||||
Other | 91,402 | 74,877 | 159,261 | 140,452 | ||||||||||||
Total revenues | 957,756 | 889,053 | 1,672,479 | 1,669,024 | ||||||||||||
Cost of operations | ||||||||||||||||
Film rentals and advertising | 294,705 | 287,206 | 504,782 | 528,121 | ||||||||||||
Concession supplies | 62,717 | 51,033 | 105,788 | 91,857 | ||||||||||||
Salaries and wages | 108,910 | 100,344 | 205,046 | 193,502 | ||||||||||||
Facility lease expense | 89,480 | 81,190 | 175,093 | 163,281 | ||||||||||||
Utilities and other | 122,696 | 115,602 | 233,333 | 225,034 | ||||||||||||
General and administrative expenses | 44,324 | 43,031 | 82,300 | 85,415 | ||||||||||||
Depreciation and amortization | 64,573 | 64,290 | 129,035 | 128,685 | ||||||||||||
Impairment of long-lived assets | 12,494 | 2,788 | 18,078 | 3,379 | ||||||||||||
Loss on disposal of assets and other | 1,805 | 16,901 | 5,604 | 20,840 | ||||||||||||
Total cost of operations | 801,704 | 762,385 | 1,459,059 | 1,440,114 | ||||||||||||
Operating income | 156,052 | 126,668 | 213,420 | 228,910 | ||||||||||||
Interest expense | (24,929 | ) | (28,466 | ) | (50,070 | ) | (55,581 | ) | ||||||||
Loss on debt amendments and refinancing | — | — | — | (1,484 | ) | |||||||||||
Interest income | 3,468 | 2,862 | 6,159 | 5,100 | ||||||||||||
Foreign currency exchange loss | (401 | ) | (5,199 | ) | (379 | ) | (3,821 | ) | ||||||||
Distributions from NCM | 2,146 | 3,424 | 6,694 | 9,782 | ||||||||||||
Interest expense - NCM | (4,732 | ) | (4,913 | ) | (9,514 | ) | (9,892 | ) | ||||||||
Equity in income of affiliates | 8,439 | 6,414 | 18,843 | 15,050 | ||||||||||||
Income before income taxes | 140,043 | 100,790 | 185,153 | 188,064 | ||||||||||||
Income taxes | 38,182 | 18,326 | 50,099 | 43,423 | ||||||||||||
Net income | $ | 101,861 | $ | 82,464 | $ | 135,054 | $ | 144,641 | ||||||||
Less: Net income attributable to noncontrolling interests | 890 | 329 | 1,355 | 485 | ||||||||||||
Net income attributable to Cinemark Holdings, Inc. | $ | 100,971 | $ | 82,135 | $ | 133,699 | $ | 144,156 | ||||||||
Earnings per share attributable to Cinemark Holdings, Inc.'s common stockholders | ||||||||||||||||
Basic | $ | 0.86 | $ | 0.70 | $ | 1.14 | $ | 1.23 | ||||||||
Diluted | $ | 0.86 | $ | 0.70 | $ | 1.14 | $ | 1.23 | ||||||||
Weighted average shares outstanding - Diluted | 116,548 | 116,268 | 116,524 | 116,238 | ||||||||||||
Other Operating Data (unaudited, in thousands) | ||||||||
As of | As of | |||||||
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Balance sheet data: | ||||||||
Cash and cash equivalents | $ | 511,392 | $ | 426,222 | ||||
Theatre properties and equipment, net | $ | 1,716,647 | $ | 1,833,133 | ||||
Total assets | $ | 5,902,248 | $ | 4,481,838 | ||||
Long-term debt, including current portion, net of unamortized debt issue costs | $ | 1,779,968 | $ | 1,780,611 | ||||
Equity | $ | 1,527,719 | $ | 1,456,117 | ||||
Segment Information (unaudited, in millions, except per patron data) | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | Constant Currency (1) | Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||
Revenues | 2019 | 2018 | % Change | 2019 | 2018 | % Change | 2019 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||||||
Admissions revenues | $ | 407.0 | $ | 408.9 | (0.5 | )% | $ | 114.1 | $ | 100.0 | 14.1 | % | $ | 136.2 | 36.2 | % | $ | 521.1 | $ | 508.9 | 2.4 | % | ||||||||||||||||||||||
Concession revenues | $ | 274.9 | $ | 249.6 | 10.1 | % | $ | 70.4 | $ | 55.7 | 26.4 | % | $ | 82.5 | 48.1 | % | $ | 345.3 | $ | 305.3 | 13.1 | % | ||||||||||||||||||||||
Other revenues | $ | 61.1 | $ | 50.5 | 21.0 | % | $ | 30.3 | $ | 24.3 | 24.7 | % | $ | 37.0 | 52.3 | % | $ | 91.4 | $ | 74.8 | 22.2 | % | ||||||||||||||||||||||
Total revenues | $ | 743.0 | $ | 709.0 | 4.8 | % | $ | 214.8 | $ | 180.0 | 19.3 | % | $ | 255.7 | 42.1 | % | $ | 957.8 | $ | 889.0 | 7.7 | % | ||||||||||||||||||||||
Attendance | 50.1 | 50.6 | (1.0 | )% | 30.1 | 25.8 | 16.7 | % | 80.2 | 76.4 | 5.0 | % | ||||||||||||||||||||||||||||||||
Average ticket price | $ | 8.12 | $ | 8.08 | 0.5 | % | $ | 3.79 | $ | 3.88 | (2.3 | )% | $ | 4.52 | 16.5 | % | $ | 6.50 | $ | 6.66 | (2.4 | )% | ||||||||||||||||||||||
Concession revenues per patron | $ | 5.49 | $ | 4.93 | 11.4 | % | $ | 2.34 | $ | 2.16 | 8.3 | % | $ | 2.74 | 26.9 | % | $ | 4.31 | $ | 4.00 | 7.7 | % | ||||||||||||||||||||||
U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||||||||||
Cost of Operations | 2019 | 2018 | 2019 | 2018 | Constant Currency (1) 2019 | 2019 | 2018 | |||||||||||||||||||||
Film rentals and advertising | $ | 237.6 | $ | 238.7 | $ | 57.1 | $ | 48.4 | $ | 68.3 | $ | 294.7 | $ | 287.1 | ||||||||||||||
Concession supplies | $ | 47.0 | $ | 38.4 | $ | 15.7 | $ | 12.7 | $ | 18.4 | $ | 62.7 | $ | 51.1 | ||||||||||||||
Salaries and wages | $ | 87.4 | $ | 79.4 | $ | 21.5 | $ | 21.0 | $ | 25.8 | $ | 108.9 | $ | 100.4 | ||||||||||||||
Facility lease expense | $ | 64.7 | $ | 61.0 | $ | 24.8 | $ | 20.2 | $ | 28.5 | $ | 89.5 | $ | 81.2 | ||||||||||||||
Utilities and other | $ | 89.3 | $ | 83.7 | $ | 33.4 | $ | 31.9 | $ | 40.0 | $ | 122.7 | $ | 115.6 | ||||||||||||||
U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | Constant Currency (1) | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||
Revenues | 2019 | 2018 | % Change | 2019 | 2018 | % Change | 2019 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||||||
Admissions revenues | $ | 715.8 | $ | 758.2 | (5.6 | )% | $ | 200.8 | $ | 203.3 | (1.2 | )% | $ | 242.6 | 19.3 | % | $ | 916.6 | $ | 961.5 | (4.7 | )% | ||||||||||||||||||||||
Concession revenues | $ | 474.3 | $ | 453.4 | 4.6 | % | $ | 122.3 | $ | 113.7 | 7.6 | % | $ | 145.2 | 27.7 | % | $ | 596.6 | $ | 567.1 | 5.2 | % | ||||||||||||||||||||||
Other revenues | $ | 107.7 | $ | 93.8 | 14.8 | % | $ | 51.6 | $ | 46.6 | 10.7 | % | $ | 64.3 | 38.0 | % | $ | 159.3 | $ | 140.4 | 13.5 | % | ||||||||||||||||||||||
Total revenues | $ | 1,297.8 | $ | 1,305.4 | (0.6 | )% | $ | 374.7 | $ | 363.6 | 3.1 | % | $ | 452.1 | 24.3 | % | $ | 1,672.5 | $ | 1,669.0 | 0.2 | % | ||||||||||||||||||||||
Attendance | 88.8 | 95.2 | (6.7 | )% | 53.7 | 49.7 | 8.0 | % | 142.5 | 144.9 | (1.7 | )% | ||||||||||||||||||||||||||||||||
Average ticket price | $ | 8.06 | $ | 7.96 | 1.3 | % | $ | 3.74 | $ | 4.09 | (8.6 | )% | $ | 4.52 | 10.5 | % | $ | 6.43 | $ | 6.64 | (3.2 | )% | ||||||||||||||||||||||
Concession revenues per patron | $ | 5.34 | $ | 4.76 | 12.2 | % | $ | 2.28 | $ | 2.29 | (0.4 | )% | $ | 2.70 | 17.9 | % | $ | 4.19 | $ | 3.91 | 7.2 | % | ||||||||||||||||||||||
U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||
Six Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||||||||||
Cost of Operations | 2019 | 2018 | 2019 | 2018 | Constant Currency (1) 2019 | 2019 | 2018 | |||||||||||||||||||||
Film rentals and advertising | $ | 406.8 | $ | 431.6 | $ | 98.0 | $ | 96.5 | $ | 118.5 | $ | 504.8 | $ | 528.1 | ||||||||||||||
Concession supplies | $ | 79.0 | $ | 66.9 | $ | 26.8 | $ | 25.0 | $ | 31.8 | $ | 105.8 | $ | 91.9 | ||||||||||||||
Salaries and wages | $ | 164.2 | $ | 151.1 | $ | 40.8 | $ | 42.4 | $ | 49.9 | $ | 205.0 | $ | 193.5 | ||||||||||||||
Facility lease expense | $ | 129.6 | $ | 122.0 | $ | 45.5 | $ | 41.3 | $ | 53.0 | $ | 175.1 | $ | 163.3 | ||||||||||||||
Utilities and other | $ | 169.1 | $ | 162.7 | $ | 64.2 | $ | 62.3 | $ | 77.8 | $ | 233.3 | $ | 225.0 | ||||||||||||||
(1) | Constant currency amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2018. 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 currency 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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Adjusted EBITDA (1) | ||||||||||||||||
U.S. | $ | 195,298 | $ | 188,411 | $ | 321,057 | $ | 344,255 | ||||||||
International | 49,440 | 33,192 | 75,935 | 70,778 | ||||||||||||
Total Adjusted EBITDA (1) | $ | 244,738 | $ | 221,603 | $ | 396,992 | $ | 415,033 | ||||||||
Capital expenditures | ||||||||||||||||
U.S. | $ | 45,591 | $ | 59,675 | $ | 97,930 | $ | 129,646 | ||||||||
International | 12,009 | 22,751 | 17,239 | 32,943 | ||||||||||||
Total capital expenditures | $ | 57,600 | $ | 82,426 | $ | 115,169 | $ | 162,589 | ||||||||
(1) | Adjusted EBITDA represents net income before income taxes, interest expense, interest income, foreign currency exchange 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, non-cash rent 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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income | $ | 101,861 | $ | 82,464 | $ | 135,054 | $ | 144,641 | ||||||||
Add (deduct): | ||||||||||||||||
Income taxes | 38,182 | 18,326 | 50,099 | 43,423 | ||||||||||||
Interest expense (2) | 24,929 | 28,466 | 50,070 | 55,581 | ||||||||||||
Other (income) expense | (6,774 | ) | 836 | (15,109 | ) | (6,437 | ) | |||||||||
Loss on debt amendments and refinancing | — | — | — | 1,484 | ||||||||||||
Other cash distributions from equity investees (3) | 5,323 | 3,932 | 19,665 | 16,255 | ||||||||||||
Depreciation and amortization (2) | 64,573 | 64,290 | 129,035 | 128,685 | ||||||||||||
Impairment of long-lived assets | 12,494 | 2,788 | 18,078 | 3,379 | ||||||||||||
Loss on disposal of assets and other | 1,805 | 16,901 | 5,604 | 20,840 | ||||||||||||
Non-cash rent (7) | (1,331 | ) | — | (2,150 | ) | - | ||||||||||
Deferred lease expenses - theatres (2)(4) | — | (217 | ) | — | (468 | ) | ||||||||||
Deferred lease expenses - projectors (2)(5) | — | (232 | ) | — | (464 | ) | ||||||||||
Amortization of long-term prepaid rents (2)(4) | — | 597 | — | 1,236 | ||||||||||||
Share based awards compensation expense (6) | 3,676 | 3,452 | 6,646 | 6,878 | ||||||||||||
Adjusted EBITDA | $ | 244,738 | $ | 221,603 | $ | 396,992 | $ | 415,033 | ||||||||
(2) | Amounts for the three and six months ended June 30, 2019 were impacted by the adoption of ASC Topic 842 and the resulting change in the classification of certain of the Company’s leases. |
(3) | Represents cash distributions received from equity investees that were recorded as a reduction of the respective investment balances. |
(4) | Non-cash expense included in facility lease expense. |
(5) | Non-cash expense included in utilities and other. |
(6) | Non-cash expense included in general and administrative expenses. |
(7) | The adoption of ASC Topic 842 impacted how the Company amortizes lease related assets and liabilities such as deferred lease expenses, favorable and unfavorable lease intangible assets, long-term prepaid rents and deferred lease incentives. Beginning January 1, 2019, these items are amortized to facility lease expense for theatre operating leases and utilities and other for equipment operating leases. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190802005041/en/
Contacts:
Chanda Brashears – 972-665-1671 or cbrashears@cinemark.com
