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TheStreet Open House

Cinemark Holdings, Inc. Reports Adjusted EBITDA Of $148.4 Million On Revenues Of $633.6 Million

Adjusted EBITDA for the nine months ended September 30, 2012 increased 9.6% to $445.7 million from $406.8 million for the nine months ended September 30, 2011. 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 nine months ended September 30, 2012 was $141.1 million compared to $112.3 million for the nine months ended September 30, 2011. Net income for the nine months ended September 30, 2011 included a loss on early retirement of debt of approximately $4.9 million, before income taxes.

On September 30, 2012, the Company’s aggregate screen count was 5,207. As of September 30, 2012, the Company had signed commitments to open eight new theatres with 72 screens by the end of 2012 and open 28 new theatres and 284 screens subsequent to 2012.

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

Telephone: via 800/374-1346 or 706/679-3149 (for international callers).

Live Webcast: available live at investors.cinemark.com section and archived for a limited time immediately following the call.

About Cinemark Holdings, Inc.

Cinemark is a leading domestic and international motion picture exhibitor, operating 461 theatres with 5,207 screens in 39 U.S. states, Brazil, Mexico, Argentina and 10 other Latin American countries as of September 30, 2012. 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 29, 2012 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, except per share amounts)
         

Three months ended September 30,

   

Nine months ended September 30,

2012

   

2011

   

2012

   

2011

Statement of income data:
Revenues
Admissions $ 402,440 $ 417,088 $ 1,194,306 $ 1,134,697
Concession 200,112 194,794 581,346 530,828
Other   31,021         28,131         86,345         78,217  
Total revenues 633,573 640,013 1,861,997 1,743,742
 
Cost of operations
Film rentals and advertising 214,002 225,431 636,718 613,204
Concession supplies 32,924 32,166 93,162 85,076
Facility lease expense 72,883 72,318 213,059 208,111
Other theatre operating expenses 138,043 132,793 394,967 366,304
General and administrative expenses 36,996 32,652 107,011 92,825
Depreciation and amortization 36,897 40,542 110,054 119,579
Impairment of long-lived assets 976 992 1,472 3,601
Loss on sale of assets and other   6,699         1,809         8,004         7,975  
Total cost of operations   539,420         538,703         1,564,447         1,496,675  
Operating income 94,153 101,310 297,550 247,067
 
Interest expense (1) (30,861 ) (32,249 ) (94,369 ) (91,316 )
Distributions from NCM 4,673 5,108 13,090 16,530
Loss on early retirement of debt (4,945 )
Other income   9,455         2,816         14,940         8,289  
Income before income taxes 77,420 76,985 231,211 175,625
Income taxes   29,453         29,337         88,229         61,646  
Net income $ 47,967 $ 47,648 $ 142,982 $ 113,979
Less: Net income attributable to noncontrolling interests   582         728         1,855         1,685  
Net income attributable to Cinemark Holdings, Inc. $ 47,385       $ 46,920       $ 141,127       $ 112,294  
 

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

Basic $ 0.41       $ 0.41       $ 1.23       $ 0.98  
Diluted $ 0.41       $ 0.41       $ 1.23       $ 0.98  
 
Weighted average diluted shares outstanding   113,814         113,298         113,664         113,170  
 
Other financial data:
Adjusted EBITDA (2) $ 148,370       $ 154,273       $ 445,650       $ 406,770  
(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
September 30, December 31,

2012

2011

Balance sheet data (in thousands):
Cash and cash equivalents $ 540,759 $ 521,408
Theatre properties and equipment, net $ 1,262,919 $ 1,238,850
Total assets $ 3,581,318 $ 3,522,408
Long-term debt, including current portion $ 1,563,470 $ 1,572,221
Equity $ 1,088,098 $ 1,023,639
 
           
Three months ended

September 30,

      Nine months ended

September 30,

2012

     

2011

2012

     

2011

Other operating data:
Attendance (patrons, in thousands):
Domestic 41,141 44,424 122,984 121,728
International   28,508         25,009         77,008         67,636
Worldwide   69,649         69,433         199,992         189,364
 
Average ticket price (in dollars):
Domestic $ 6.44 $ 6.47 $ 6.66 $ 6.51
International $ 4.81 $ 5.20 $ 4.87 $ 5.07
Worldwide $ 5.77 $ 6.01 $ 5.97 $ 5.99
 
Concession revenues per patron (in dollars):
Domestic $ 3.29 $ 3.13 $ 3.32 $ 3.15
International $ 2.26 $ 2.23 $ 2.24 $ 2.18
Worldwide $ 2.87 $ 2.81 $ 2.91 $ 2.80
 
Average screen count (month end average):
Domestic 3,922 3,861 3,907 3,840
International   1,285         1,184         1,282         1,148
Worldwide   5,207         5,045         5,189         4,988
 
 
Segment Information
(unaudited, in thousands)
                 
Three months ended

September 30,

      Nine months ended

September 30,

2012

     

2011

2012

   

2011

Revenues
U.S. $ 416,165 $ 441,334 $ 1,271,155 $ 1,216,679
International 220,633 201,637 598,880 534,828
Eliminations   (3,225 )         (2,958 )         (8,038 )       (7,765 )
Total revenues $ 633,573         $ 640,013         $ 1,861,997       $ 1,743,742  
Adjusted EBITDA (1)
U.S. $ 94,538 $ 110,285 $ 302,222 $ 289,091
International   53,832           43,988           143,428         117,679  
Total Adjusted EBITDA $ 148,370         $ 154,273         $ 445,650       $ 406,770  
Capital expenditures
U.S. $ 27,357 $ 17,871 $ 74,160 $ 57,316
International   25,583           23,010           72,367         68,867  
Total capital expenditures $ 52,940         $ 40,881         $ 146,527       $ 126,183  
 
 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
         
Three months ended   Nine months ended
September 30,     September 30,

2012

   

2011

 

2012

   

2011

 
Net income $ 47,967 $ 47,648 $ 142,982 $ 113,979
Income taxes 29,453 29,337 88,229 61,646
Interest expense 30,861 32,249 94,369 91,316
Loss on early retirement of debt

4,945
Other income (9,455 ) (2,816 ) (14,940 ) (8,289 )
Depreciation and amortization 36,897 40,542 110,054 119,579
Impairment of long-lived assets 976 992 1,472 3,601
Loss on sale of assets and other 6,699 1,809 8,004 7,975
Deferred lease expenses - theatres (2) (16 ) 832 301 1,944
Deferred lease expenses – DCIP equipment (3) 1,013 428 3,026 966
Amortization of long-term prepaid rents (2) 678 692 1,988 1,976
Share based awards compensation expense (4)   3,297         2,560         10,165         7,132  
Adjusted EBITDA (1) $ 148,370       $ 154,273       $ 445,650       $ 406,770  
(1)   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, 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.
(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.




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