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Cinemark Holdings, Inc. Reports A 14.1% Increase In Revenues To $611.5 Million For Q4 2012

Adjusted EBITDA for the year ended December 31, 2012 increased 13.4% to $589.2 million from $519.5 million for the year ended December 31, 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 year ended December 31, 2012 increased to $168.9 million from $130.6 million for the year ended December 31, 2011. Diluted earnings per share for the year ended December 31, 2012 was $1.47 compared to $1.14 for the year ended December 31, 2011. Net income attributable to Cinemark Holdings, Inc. for the year ended December 31, 2012 included a pre-tax loss on early retirement of debt of $5.6 million.

As of December 31, 2012, the Company’s aggregate screen count was 5,240 and the Company had commitments to open 22 new theatres and 199 screens during 2013 and 8 additional new theatres with 88 screens subsequent to 2013.

Conference Call/Webcast – Today at 4:30 PM 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 465 theatres with 5,240 screens in 39 U.S. states, Brazil, Mexico, Argentina and 10 other Latin American countries as of December 31, 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 28, 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   Year Ended
December 31, December 31,
  2012       2011     2012     2011  
Statement of Income Data:
Revenues
Admissions $ 386,095 $ 336,930 $ 1,580,401 $ 1,471,627
Concession 190,059 165,926 771,405 696,754
Other   35,380       33,015     121,725       111,232  
Total revenues $ 611,534     $ 535,871   $ 2,473,531     $ 2,279,613  
 
Cost of operations
Film rentals and advertising 208,389 185,402 845,107 798,606
Concession supplies 30,309 27,046 123,471 112,122
Facility lease expense 68,556 68,167 281,615 276,278
Other theatre operating expenses 133,171 119,874 528,138 486,178
General and administrative expenses 41,613 34,796 148,624 127,621
Depreciation and amortization 37,621 34,870 147,675 154,449
Impairment of long-lived assets 1,559 3,432 3,031 7,033
Loss on sale of assets and other   4,164       817     12,168       8,792  
Total cost of operations   525,382       474,404     2,089,829       1,971,079  
Operating income 86,152 61,467 383,702 308,534
Interest expense (1) (29,296 ) (31,786 ) (123,665 ) (123,102 )
Loss on early retirement of debt (5,599 ) (5,599 ) (4,945 )
Distributions from NCM 7,722 7,631 20,812 24,161
Loss on marketable securities - RealD (12,610 ) (12,610 )
Other income   6,628       5,305     21,568       13,594  
Income before income taxes 65,607 30,007 296,818 205,632
Income taxes   37,169       11,404     125,398       73,050  
Net income $ 28,438 $ 18,603 $ 171,420 $ 132,582
Less: Net income attributable to noncontrolling interests   616       340     2,471       2,025  
Net income attributable to Cinemark Holdings, Inc. $ 27,822     $ 18,263   $ 168,949     $ 130,557  
 
Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders:
Basic $ 0.24     $ 0.16   $ 1.47     $ 1.15  
Diluted $ 0.24     $ 0.16   $ 1.47     $ 1.14  
 
Weighted average diluted shares outstanding   113,958       113,339     113,824       113,224  
 
Other Financial Data:
Adjusted EBITDA (2) $ 143,585     $ 112,703   $ 589,235     $ 519,473  

(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
December 31,
  2012     2011
Balance Sheet Data (unaudited, in thousands):
Cash and cash equivalents $ 742,664 $ 521,408
Theatre properties and equipment, net 1,304,958 1,238,850
Total assets 3,863,226 3,522,408
Long-term debt, including current portion 1,764,010 1,572,221
Equity 1,094,984 1,023,639
 

     

Segment Information

(unaudited, in thousands)

 
Three Months Ended Year Ended
December 31,   December 31,
  2012       2011     2012       2011  
Revenues
U.S. $ 435,356 $ 376,988 $ 1,706,511 $ 1,593,667
International 178,783 161,291 777,663 696,119
Eliminations   (2,605 )     (2,408 )     (10,643 )     (10,173 )
Total revenues $ 611,534     $ 535,871     $ 2,473,531     $ 2,279,613  
Adjusted EBITDA
U.S. $ 107,638 $ 82,121 $ 409,860 $ 371,212
International   35,947       30,582       179,375       148,261  
Total Adjusted EBITDA $ 143,585     $ 112,703     $ 589,235     $ 519,473  
Capital Expenditures
U.S. $ 33,163 $ 22,194 $ 107,323 $ 79,510
International   41,037       36,442       113,404       105,309  
Total capital expenditures $ 74,200     $ 58,636     $ 220,727     $ 184,819  

     

Additional Segment Information (1)

(unaudited)

 

 

U.S. Operating Segment

International Operating Segment

Consolidated
Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
    %     %     %
2012 2011 Change 2012 2011 Change 2012 2011 Change
Admissions revenues $ 280.5 $ 241.5 16.1 % $ 105.6 $ 95.4 10.7 % $ 386.1 $ 336.9 14.6 %
Concession revenues $ 137.5 $ 119.7 14.9 % $ 52.6 $ 46.3 13.6 % $ 190.1 $ 166.0 14.5 %
Other revenues (2) $ 14.7 $ 13.3 10.5 % $ 20.6 $ 19.7 4.6 % $ 35.3 $ 33.0 7.0 %
Total revenues (2) $ 432.7 $ 374.5 15.5 % $ 178.8 $ 161.4 10.8 % $ 611.5 $ 535.9 14.1 %
Attendance 40.6 36.8 10.3 % 23.1 21.3 8.5 % 63.7 58.1 9.6 %
Average ticket price $ 6.91 $ 6.57 5.2 % $ 4.57 $ 4.48 2.0 % $ 6.06 $ 5.80 4.5 %
Concession revenues per patron $ 3.39 $ 3.26 4.0 % $ 2.28 $ 2.17 5.1 % $ 2.98 $ 2.86 4.2 %
Average screen count 3,916 3,870 1,307 1,251 5,223 5,121
     

U.S. Operating Segment

International Operating Segment

Consolidated
Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
2012   2011 2012   2011 2012   2011
Film rentals and advertising $ 156.8 $ 135.7 $ 51.6 $ 49.7 $ 208.4 $ 185.4
Concession supplies 18.3 15.7 12.0 11.3 30.3 27.0
Salaries and wages 44.2 41.8 18.7 16.5 62.9 58.3
Facility lease expense 48.0 46.8 20.5 21.4 68.5 68.2
Utilities and other 43.9 42.0 26.4 19.6 70.3 61.6
     

U.S. Operating Segment

International Operating Segment

Consolidated
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
    %     %     %
2012 2011 Change 2012 2011 Change 2012 2011 Change
Admissions revenues $ 1,099.6 $ 1,033.6 6.4 % $ 480.8 $ 438.0 9.8 % $ 1,580.4 $ 1,471.6 7.4 %
Concession revenues $ 546.2 $ 503.4 8.5 % $ 225.2 $ 193.4 16.4 % $ 771.4 $ 696.8 10.7 %
Other revenues (2) $ 50.1 $ 46.5 7.7 % $ 71.6 $ 64.7 10.7 % $ 121.7 $ 111.2 9.4 %
Total revenues (2) $ 1,695.9 $ 1,583.5 7.1 % $ 777.6 $ 696.1 11.7 % $ 2,473.5 $ 2,279.6 8.5 %
Attendance 163.6 158.5 3.2 % 100.1 88.9 12.6 % 263.7 247.4 6.6 %
Average ticket price $ 6.72 $ 6.52 3.1 % $ 4.80 $ 4.93 (2.6 )% $ 5.99 $ 5.95 0.7 %
Concession revenues per patron $ 3.34 $ 3.18 5.0 % $ 2.25 $ 2.18 3.2 % $ 2.93 $ 2.82 3.9 %
Average screen count 3,909 3,847 1,289 1,174 5,198 5,021
     

U.S. Operating Segment

International Operating Segment

Consolidated
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2012   2011 2012   2011 2012   2011
Film rentals and advertising $ 610.5 $ 574.2 $ 234.6 $ 224.4 $ 845.1 $ 798.6
Concession supplies 71.1 64.0 52.4 48.1 123.5 112.1
Salaries and wages 174.2 167.5 73.2 59.0 247.4 226.5
Facility lease expense 191.1 185.8 90.5 90.5 281.6 276.3
Utilities and other 182.9 174.5 97.8 85.2 280.7 259.7

(1) Revenues, attendance and theatre operating costs are in millions. Average ticket price and concession revenues per patron are in dollars.

(2) U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment.

 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
       
Three months ended Year ended
December 31,   December 31,
  2012     2011     2012     2011  
Net income $ 28,438 $ 18,603 $ 171,420 $ 132,582
Income taxes 37,169 11,404 125,398 73,050
Interest expense 29,296 31,786 123,665 123,102
Loss on early retirement of debt 5,599 5,599 4,945
Loss on marketable securities - RealD 12,610 12,610
Other income (6,628 ) (5,305 ) (21,568 ) (13,594 )
Depreciation and amortization 37,621 34,870 147,675 154,449
Impairment of long-lived assets 1,559 3,432 3,031 7,033
Loss on sale of assets and other 4,164 817 12,168 8,792
Deferred lease expenses – theatres (2) (243 ) 252 58 1,218
Deferred lease expenses – DCIP (3) 1,020 993 4,046 2,937
Amortization of long-term prepaid rents (2) 685 681 2,673 2,657
Share based awards compensation expense (4)   4,905     2,560     15,070     9,692  
Adjusted EBITDA (1) $ 143,585   $ 112,703   $ 589,235   $ 519,473  
 

(1) Adjusted EBITDA as calculated in the chart above represents net income before income taxes, interest expense, loss on early retirement of debt, loss on marketable securities – RealD, 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.

Copyright Business Wire 2010
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