Cinemark Holdings, Inc. Reports Results for Q2 2014

  Cinemark Holdings, Inc. Reports Results for Q2 2014

Business Wire

PLANO, Texas -- August 5, 2014

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, 2014.

Cinemark Holdings, Inc.’s total revenues for the three months ended June 30,
2014 were $717.9 million. For the three months ended June 30, 2014, admissions
revenues were $455.7 million and concession revenues were $226.5 million.
Average ticket price increased 2.1% to $6.46 and concession revenues per
patron increased 2.9% to $3.21 during the three months ended June 30, 2014.

Adjusted EBITDA for the three months ended June 30, 2014 was $169.4 million
compared to $178.0 million for the three months ended June 30, 2013.
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
June 30, 2014 was approximately $71.7 million compared to $20.3 million for
the three months ended June 30, 2013. Diluted earnings per share for the three
months ended June 30, 2014 was $0.62 compared to $0.18 for the three months
ended June 30, 2013. Net income for the three months ended June 30, 2013
included a loss on early retirement of debt of approximately $72.3 million,
before income taxes.

“The second quarter of 2014 was up against a record-breaking 2013,” stated Tim
Warner, Cinemark’s Chief Executive Officer. “Regardless of the difficult
comparisons of prior year, Cinemark’s second quarter worldwide admissions
revenues outperformed the North American industry by approximately 460 basis
points, marking 21 out of 22 consecutive quarters of outperformance on a
currency adjusted basis.”

Cinemark Holdings, Inc.’s revenues for the six months ended June 30, 2014
increased 3.7% to $1,320.2 million from $1,273.4 million for the six months
ended June 30, 2013. During the six months ended June 30, 2014, admissions
revenues increased 2.8% to $836.6 million and concession revenues increased
4.6% to $419.5 million. Average ticket price increased 1.9% to $6.34 and
concession revenues per patron increased 3.6% to $3.18 during the six months
ended June 30, 2014.

Adjusted EBITDA for the six months ended June 30, 2014 was $297.9 million
compared to $294.3 million for the six months ended June 30, 2013.
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 six months ended
June 30, 2014 was $107.2 million compared to $52.9 million for the six months
ended June 30, 2013. Diluted earnings per share for the six months ended June
30, 2014 was $0.93 compared to $0.46 for the six months ended June 30, 2013.
Net income for the six months ended June 30, 2013 included a loss on early
retirement of debt of approximately $72.3 million, before income taxes.

On June 30, 2014, the Company’s aggregate screen count was 5,609. As of June
30, 2014, the Company had signed commitments to open nine new theatres and 96
screens by the end of 2014 and open 14 new theatres with 134 screens
subsequent to 2014.

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 488 theatres with 5,609 screens in 40 U.S. states, Brazil, Argentina
and 11 other Latin American countries as of June 30, 2014. 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, 2014 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 June 30,       Six months ended June 30,
                                                                                    2014            2013              2014              2013
Statement of income data:
Revenues
Admissions                                                                          $ 455,726       $ 464,483         $ 836,640         $ 813,897
Concession                                                                            226,417         228,746           419,440           401,142
Other                                                                                35,720      32,393          64,063        58,356    
Total revenues                                                                        717,863         725,622           1,320,143         1,273,395
Cost of operations
Film rentals and advertising                                                          249,198         257,435           449,855           437,427
Concession supplies                                                                   35,336          37,021            65,389            65,021
Facility lease expense                                                                80,647          76,124            159,004           145,742
Other theatre operating expenses                                                      148,512         143,445           288,795           270,666
General and administrative expenses                                                   39,717          40,546            79,089            78,325
Depreciation and amortization                                                         43,881          38,734            86,377            77,766
Impairment of long-lived assets                                                       430             1,101             784               1,945
(Gain) loss on sale of assets and other                                              3,276       (2,801  )        6,129         (3,143    )
Total cost of operations                                                             600,997     591,605         1,135,422     1,073,749 
Operating income                                                                      116,866         134,017           184,721           199,646
Interest expense ^(1)                                                                 (28,286 )       (34,458 )         (56,766   )       (67,064   )
Distributions from NCM                                                                1,180           1,693             10,677            7,796
Loss on early retirement of debt                                                      —               (72,302 )         —                 (72,302   )
Other income                                                                         6,455       609             14,141        5,163     
Income before income taxes                                                            96,215          29,559            152,773           73,239
Income taxes                                                                         24,081      8,722           44,943        19,340    
Net income                                                                          $ 72,134        $ 20,837          $ 107,830         $ 53,899
Less: Net income attributable to noncontrolling interests                            403         572             656           1,040     
Net income attributable to Cinemark Holdings, Inc.                                  $ 71,731     $ 20,265         $ 107,174      $ 52,859    
Earnings per share attributable to Cinemark Holdings, Inc.’s common
stockholders:
Basic                                                                               $ 0.62       $ 0.18           $ 0.93         $ 0.46      
Diluted                                                                             $ 0.62       $ 0.18           $ 0.93         $ 0.46      
                                                                                                                                        
Weighted average diluted shares outstanding                                          114,961     114,387         114,814       114,210   
                                                                                                                                        
Other financial data:
Adjusted EBITDA ^(2)                                                                $ 169,355    $ 178,024        $ 297,910      $ 294,280   
                                                                             
^(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
                                                June 30,          December 31,
                                                2014              2013
Balance sheet data:
Cash and cash equivalents                       $ 578,141         $  599,929
Theatre properties and equipment, net           $ 1,445,626       $  1,427,190
Total assets                                    $ 4,116,472       $  4,144,163
Long-term debt, including current portion       $ 1,827,833       $  1,832,800
Equity                                          $ 1,156,421       $  1,102,417
                                                                     
                                                                     

                                                
                           Three months ended          Six months ended
                           June 30,                    June 30,
                           2014       2013           2014        2013
Other operating
data:
 Attendance
  (patrons):
  Domestic                   46,452       46,889         87,052        81,557
  International             24,036    26,463        44,954     49,214
  Worldwide                 70,488    73,352        132,006    130,771
                                                                     
  Average ticket
  price (in
  dollars):
  Domestic                 $ 7.20       $ 7.16         $ 7.09        $ 6.99
  International            $ 5.04       $ 4.85         $ 4.88        $ 4.95
  Worldwide                $ 6.46       $ 6.33         $ 6.34        $ 6.22
                                                                     
  Concession
  revenues per
  patron (in
  dollars):
  Domestic                 $ 3.67       $ 3.50         $ 3.63        $ 3.46
  International            $ 2.33       $ 2.43         $ 2.30        $ 2.42
  Worldwide                $ 3.21       $ 3.12         $ 3.18        $ 3.07
                                                                     
  Average screen
  count (month end
  average):
  Domestic                   4,452        4,181          4,457         4,068
  International             1,145     1,349         1,133      1,341
  Worldwide                 5,597     5,530         5,590      5,409
                                                                       
                                                                       

                                               
Segment Information

(unaudited, in thousands)
                                                      
                    Three months ended                Six months ended
                    June 30,                          June 30,
                    2014          2013              2014            2013
Revenues
U.S.                $ 524,485       $ 517,109         $ 969,405         $ 883,472
International         196,881         211,879           357,073           396,072
Eliminations         (3,503  )    (3,366  )        (6,335    )    (6,149    )
Total               $ 717,863    $ 725,622        $ 1,320,143    $ 1,273,395 
revenues
Adjusted
EBITDA ^(1)
U.S.                $ 120,871       $ 128,697         $ 214,411         $ 208,775
International        48,484      49,327          83,499        85,505    
Total
Adjusted            $ 169,355    $ 178,024        $ 297,910      $ 294,280   
EBITDA
Capital
expenditures
U.S.                $ 30,483        $ 29,631          $ 60,795          $ 35,787
International        19,274      23,868          41,768        54,601    
Total capital       $ 49,757     $ 53,499         $ 102,563      $ 90,388    
expenditures
                                                                        
                                                                        

                
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
                                
                                    Three months ended             Six months ended
                                    June 30,                          June 30,
                                    2014          2013              2014          2013
Net income                          $ 72,134        $ 20,837          $ 107,830       $ 53,899
Income taxes                          24,081          8,722             44,943          19,340
Interest expense                      28,286          34,458            56,766          67,064
Loss on early retirement of           —               72,302            —               72,302
debt
Other income                          (6,455  )       (609    )         (14,141 )       (5,163  )
Depreciation and amortization         43,881          38,734            86,377          77,766
Impairment of long-lived              430             1,101             784             1,945
assets
(Gain) loss on sale of assets         3,276           (2,801  )         6,129           (3,143  )
and other
Deferred lease expenses -             485             191               1,040           59
theatres ^(2)
Deferred lease expenses –             (236    )       1,022             808             2,044
DCIP equipment ^(3)
Amortization of long-term             407             729               785             1,379
prepaid rents ^(2)
Share based awards                   3,066       3,338           6,589       6,788   
compensation expense ^(4)
Adjusted EBITDA ^(1)                $ 169,355    $ 178,024        $ 297,910    $ 294,280 
                                                                                      
       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
^(1)   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.

Contact:

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