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, 2020. The Company’s financial
results continue to be impacted by the COVID-19 pandemic, as the
Company temporarily closed its theatres effective March 18, 2020.
During late June 2020, the Company opened five theatres in the US,
showing library content, to test its new health and safety
protocols. During the three months ended June 30, 2020, the
Company’s U.S. operating segment had 13 thousand patrons attend
these test-and-learn theatres generating $37.0 thousand of
admissions revenues and $57.0 thousand of concession revenues.
Total revenues were $9.0 million for the three months ended June
30, 2020, which also included the amortization of deferred NCM
screen advertising advances.
The Company recorded a net loss for the three months ended June
30, 2020 of $(170.4) million, which included a restructuring charge
of $19.5 million. The restructuring charge was a result of a
permanent reduction in headcount and permanent closure of certain
under-performing theatres. Diluted loss per share for the three
months ended June 30, 2020 was $(1.45) and Adjusted EBITDA for the
three months ended June 30, 2020 was $(117.6) million.
Reconciliations of non-GAAP financial measures are provided in the
financial schedules accompanying this press release and at
investors.cinemark.com.
“While our company and industry continue to be significantly
impacted by the coronavirus pandemic, our team has been working
diligently to prepare for reopening our theatres within this new
operating environment,” stated Mark Zoradi, Cinemark Chief
Executive Officer. “We believe the comprehensive cleaning and
safety protocols we have established in The Cinemark Standard, will
enable us to effectively operate our theatres while prioritizing
the health of our employees, guests and communities. Our
test-and-learn theatres have been instrumental in honing the
training, communication, and execution of The Cinemark Standard, as
well as garnering guest insights regarding its implementation. We
are thrilled that 97% of guests surveyed have expressed high
satisfaction with how Cinemark is protecting their health and
safety. We greatly look forward to initiating the rollout of our
theatres beginning August 21st as we welcome our employees and
guests back to our Cinemark theatres for great cinematic
storytelling.”
Cinemark Holdings, Inc.’s total revenues for the six months
ended June 30, 2020 were $552.6 million compared to $1,672.5
million for the six months ended June 30, 2019. For the six months
ended June 30, 2020, admissions revenues were $292.5 million and
concession revenues were $190.5 million. For the six months ended
June 30, 2020, attendance was 45.8 million patrons, average ticket
price was $6.39 and concession revenues per patron were $4.16.
Net loss attributable to Cinemark Holdings, Inc. for the six
months ended June 30, 2020 was $(230.0) million compared to net
income attributable to Cinemark Holdings, Inc. of $133.7 million
for the six months ended June 30, 2019. Diluted loss per share for
the six months ended June 30, 2020 was $(1.96) compared to diluted
earnings per share of $1.14 for the six months ended June 30,
2019.
Adjusted EBITDA for the six months ended June 30, 2020 was
$(51.4) million compared to $397.0 million for the six months ended
June 30, 2019. 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, 2020, the Company’s aggregate screen count was
5,977 and the Company had commitments to open four new theatres and
34 screens during the remainder of 2020 and 18 new theatres and 189
screens subsequent to 2020.
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 https://investors.cinemark.com. A replay will be
available following the call and archived for a limited time.
About Cinemark Holdings, Inc.
Headquartered in Plano, TX, Cinemark (NYSE: CNK) is one of the
largest and most influential movie theatre companies in the world.
Cinemark’s circuit, comprised of various brands that also include
Century, Tinseltown and Rave, operates 534 theatres with 5,977
screens in 41 states domestically and 15 countries throughout South
and Central America. Cinemark consistently provides an
extraordinary guest experience from the initial ticket purchase to
the closing credits, including Movie Club, the first U.S.
exhibitor-launched subscription program; the highest Luxury Lounger
recliner seat penetration among the major players; XD - the No. 1
exhibitor-brand premium large format; and expansive food and
beverage options to further enhance the moviegoing experience. For
more information go to https://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, including, among others, the
impacts of COVID-19. Such risks and uncertainties 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
21, 2020, as updated by the information related to COVID-19 that
was included in a Form 8-K that was filed on April 13, 2020,
including the documents incorporated by reference therein, and the
Quarterly Report on Form 10-Q filed on August 4, 2020. 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,
2020
2019
2020
2019
Statement of income data:
Revenues
Admissions
$
37
$
521,072
$
292,499
$
916,612
Concession
124
345,282
190,480
596,606
Other
8,813
91,402
69,611
159,261
Total revenues
8,974
957,756
552,590
1,672,479
Cost of operations
Film rentals and advertising
388
294,705
157,005
504,782
Concession supplies
2,379
62,717
37,191
105,788
Salaries and wages
8,864
108,910
96,408
205,046
Facility lease expense
65,202
89,480
147,443
175,093
Utilities and other
34,871
122,696
135,394
233,333
General and administrative expenses
28,001
44,324
69,019
82,300
Depreciation and amortization
63,581
64,573
128,837
129,035
Impairment of long-lived assets
—
12,494
16,619
18,078
Restructuring costs
19,538
—
19,538
—
Loss on disposal of assets and other
425
1,805
2,330
5,604
Total cost of operations
223,249
801,704
809,784
1,459,059
Operating income (loss)
(214,275
)
156,052
(257,194
)
213,420
Interest expense
(28,372
)
(24,929
)
(53,038
)
(50,070
)
Amortization of accumulated losses for
amended swap agreements
(2,669
)
—
(2,669
)
—
Interest income
803
3,468
2,887
6,159
Foreign currency exchange gain (loss)
916
(401
)
(3,932
)
(379
)
Distributions from NCM
690
2,146
5,914
6,694
Interest expense - NCM
(5,934
)
(4,732
)
(11,825
)
(9,514
)
Equity in income (loss) of affiliates
(20,120
)
8,439
(11,634
)
18,843
Income (loss) before income taxes
(268,961
)
140,043
(331,491
)
185,153
Income taxes
(98,145
)
38,182
(101,253
)
50,099
Net income (loss)
$
(170,816
)
$
101,861
$
(230,238
)
$
135,054
Less: Net income (loss) attributable to
noncontrolling interests
(427
)
890
(258
)
1,355
Net income (loss) attributable to Cinemark
Holdings, Inc.
$
(170,389
)
$
100,971
$
(229,980
)
$
133,699
Earnings (loss) per share attributable to
Cinemark Holdings, Inc.'s common stockholders
Basic
$
(1.45
)
$
0.86
$
(1.96
)
$
1.14
Diluted
$
(1.45
)
$
0.86
$
(1.96
)
$
1.14
Weighted average shares outstanding -
Diluted
116,666
116,548
116,581
116,524
Other Operating Data
(unaudited, in thousands)
As of
As of
June 30,
December 31,
2020
2019
Balance sheet data:
Cash and cash equivalents
$
571,755
$
488,313
Theatre properties and equipment, net
$
1,602,721
$
1,735,247
Total assets
$
5,690,115
$
5,828,017
Long-term debt, including current portion,
net of unamortized debt issue costs
$
2,124,635
$
1,777,937
Equity
$
1,098,780
$
1,448,322
Segment Information
(unaudited, in millions, except
per patron data)
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
2020
2019
2020
2019
2020
2020
2019
Admissions revenues
$
232.3
$
715.8
$
60.2
$
200.8
$
71.1
$
292.5
$
916.6
Concession revenues
$
152.8
$
474.3
$
37.7
$
122.3
$
43.8
$
190.5
$
596.6
Other revenues
$
50.4
$
107.7
$
19.2
$
51.6
$
23.6
$
69.6
$
159.3
Total revenues
$
435.5
$
1,297.8
$
117.1
$
374.7
$
138.5
$
552.6
$
1,672.5
Attendance
27.9
88.8
17.9
53.7
45.8
142.5
Average ticket price
$
8.33
$
8.06
$
3.36
$
3.74
$
3.97
$
6.39
$
6.43
Concession revenues per patron
$
5.48
$
5.34
$
2.11
$
2.28
$
2.45
$
4.16
$
4.19
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
2020
2019
2020
2019
Constant Currency
(1) 2019
2020
2019
Film rentals and advertising
$
128.2
$
406.8
$
28.8
$
98.0
$
34.3
$
157.0
$
504.8
Concession supplies
$
27.1
$
79.0
$
10.1
$
26.8
$
11.9
$
37.2
$
105.8
Salaries and wages
$
74.6
$
164.2
$
21.8
$
40.8
$
26.4
$
96.4
$
205.0
Facility lease expense
$
125.2
$
129.6
$
22.2
$
45.5
$
26.0
$
147.4
$
175.1
Utilities and other
$
103.8
$
169.1
$
31.6
$
64.2
$
37.9
$
135.4
$
233.3
(1)
Constant currency amounts, which are
non-GAAP measurements, were calculated using the average exchange
rate for the corresponding month for 2019. 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,
2020
2019
2020
2019
Adjusted EBITDA (1)
U.S.
$
(96,252
)
$
195,298
$
(40,180
)
$
321,057
International
(21,366
)
49,440
(11,227
)
75,935
Total Adjusted EBITDA (1)
$
(117,618
)
$
244,738
$
(51,407
)
$
396,992
Capital expenditures
U.S.
$
11,028
$
45,591
$
36,701
$
97,930
International
1,788
12,009
10,258
17,239
Total capital expenditures
$
12,816
$
57,600
$
46,959
$
115,169
(1)
Adjusted EBITDA represents net income before income taxes,
depreciation and amortization expense and other items, 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,
2020
2019
2020
2019
Net income (loss)
$
(170,816
)
$
101,861
$
(230,238
)
$
135,054
Add (deduct):
Income taxes
(98,145
)
38,182
(101,253
)
50,099
Interest expense
28,372
24,929
53,038
50,070
Other expense (income), net (a)
27,004
(6,774
)
27,173
(15,109
)
Distributions from DCIP (b)
5,222
—
10,383
5,218
Cash distributions from other equity
investees (c)
1,456
5,323
12,901
14,447
Depreciation and amortization
63,581
64,573
128,837
129,035
Impairment of long-lived assets
—
12,494
16,619
18,078
Restructuring costs
19,538
—
19,538
—
Loss on disposal of assets and other
425
1,805
2,330
5,604
Non-cash rent
1,424
(1,331
)
833
(2,150
)
Share based awards compensation expense
(d)
4,321
3,676
8,432
6,646
Adjusted EBITDA
$
(117,618
)
$
244,738
$
(51,407
)
$
396,992
(a)
Includes interest income, foreign currency exchange gain (loss),
amortization of amended swap agreements in other comprehensive
income, interest expense – NCM and equity in income of
affiliates.
(b)
Cash distributions from DCIP, which were
recorded as a reduction of the Company’s investment in DCIP.
(c)
Cash distributions received from equity
investees, other than those from DCIP noted above, that were
recorded as a reduction of the respective investment balances.
(d)
Non-cash expense included in general and
administrative expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200804005411/en/
Financial Contact : Chanda
Brashears – 972-665-1671 or cbrashears@cinemark.com Media Contact: Caitlin Piper – 972-665-1418 or
pr@cinemark.com
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