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TheStreet Open House

Cinemark Holdings, Inc. Reports Q2 2013 Adjusted EBITDA Of $178.0 Million On Revenues Of $725.6 Million

Cinemark Holdings, Inc.’s revenues for the six months ended June 30, 2013 increased to $1,273.4 million from $1,228.4 million for the six months ended June 30, 2012. During the six months ended June 30, 2013, admissions revenues increased 2.8% to $813.9 million and concession revenues increased 5.2% to $401.1 million. Average ticket price increased 2.3% to $6.22 and concession revenues per patron increased 4.8% to $3.07 during the six months ended June 30, 2013.

Adjusted EBITDA for the six months ended June 30, 2013 was $294.3 million compared to $297.3 million for the six months ended June 30, 2012. 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, 2013 was $52.9 million compared to $93.7 million for the six months ended June 30, 2012. Diluted earnings per share for the six months ended June 30, 2013 was $0.46 compared to $0.82 for the six months ended June 30, 2012. 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, 2013, the Company’s aggregate screen count was 5,794. As of June 30, 2013, the Company had signed commitments to open 21 new theatres and 181 screens by the end of 2013 and open 16 new theatres with 153 screens subsequent to 2013.

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 504 theatres with 5,794 screens in 40 U.S. states, Brazil, Mexico, Argentina and 10 other Latin American countries as of June 30, 2013. 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, 2013 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,
  2013         2012     2013         2012  
Statement of income data:
Revenues
Admissions $ 464,483 $ 418,073 $ 813,897 $ 791,866
Concession 228,746 201,414 401,142 381,234
Other   32,393     30,119     58,356     55,324  
Total revenues 725,622 649,606 1,273,395 1,228,424
Cost of operations
Film rentals and advertising 257,435 227,301 437,427 422,716
Concession supplies 37,021 31,787 65,021 60,238
Facility lease expense 76,124 71,614 145,742 140,176
Other theatre operating expenses 143,445 131,923 270,666 256,924
General and administrative expenses 40,546 35,951 78,325 70,015
Depreciation and amortization 38,734 36,341 77,766 73,157
Impairment of long-lived assets 1,101 311 1,945 496
(Gain) loss on sale of assets and other   (2,801 )   469     (3,143 )   1,305  
Total cost of operations   591,605     535,697     1,073,749     1,025,027  
Operating income 134,017 113,909 199,646 203,397
Interest expense (1) (34,458 ) (31,375 ) (67,064 ) (63,508 )
Distributions from NCM 1,693 386 7,796 8,417
Loss on early retirement of debt (72,302 ) (72,302 )
Other income   609     63     5,163     5,485  
Income before income taxes 29,559 82,983 73,239 153,791
Income taxes   8,722     30,844     19,340     58,776  
Net income $ 20,837 $ 52,139 $ 53,899 $ 95,015
Less: Net income attributable to noncontrolling interests   572     501     1,040     1,273  
Net income attributable to Cinemark Holdings, Inc. $ 20,265   $ 51,638   $ 52,859   $ 93,742  
Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders:
Basic $ 0.18   $ 0.45   $ 0.46   $ 0.82  
Diluted $ 0.18   $ 0.45   $ 0.46   $ 0.82  
 
Weighted average diluted shares outstanding   114,387     113,737     114,210     113,568  
 
Other financial data:
Adjusted EBITDA (2) $ 178,024   $ 156,952   $ 294,280   $ 297,280  

(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,
2013 2012
Balance sheet data:
Cash and cash equivalents $ 515,474 $ 742,664
Theatre properties and equipment, net $ 1,395,911 $ 1,304,958
Total assets $ 4,111,617 $ 3,863,226
Long-term debt, including current portion $ 1,827,651 $ 1,764,010
Equity $ 1,073,740 $ 1,094,984
       
 
Three months ended

June 30,

Six months ended

June 30,

2013     2012 2013     2012
Other operating data:
Attendance (patrons):
Domestic 46,889 42,013 81,557 81,843
International   26,463   26,782   49,214   48,500
Worldwide   73,352   68,795   130,771   130,343
 
Average ticket price (in dollars):
Domestic $ 7.16 $ 6.84 $ 6.99 $ 6.77
International $ 4.85 $ 4.88 $ 4.95 $ 4.91
Worldwide $ 6.33 $ 6.08 $ 6.22 $ 6.08
 
Concession revenues per patron (in dollars):
Domestic $ 3.50 $ 3.38 $ 3.46 $ 3.34
International $ 2.43 $ 2.23 $ 2.42 $ 2.23
Worldwide $ 3.12 $ 2.93 $ 3.07 $ 2.93
 
Average screen count (month end average):
Domestic 4,181 3,911 4,068 3,901
International   1,349   1,284   1,341   1,280
Worldwide   5,530   5,195   5,409   5,181
 
 
Segment Information

(unaudited, in thousands)

 
    Three months ended

June 30,

    Six months ended

June 30,

  2013         2012     2013         2012  
Revenues
U.S. $ 517,109 $ 443,765 $ 883,472 $ 854,990
International 211,879 208,372 396,072 378,247
Eliminations   (3,366 )   (2,531 )   (6,149 )   (4,813 )
Total revenues $ 725,622   $ 649,606   $ 1,273,395   $ 1,228,424  
Adjusted EBITDA (1)
U.S. $ 128,697 $ 103,391 $ 208,775 $ 207,684
International   49,327     53,561     85,505     89,596  
Total Adjusted EBITDA $ 178,024   $ 156,952   $ 294,280   $ 297,280  
Capital expenditures
U.S. $ 29,631 $ 27,109 $ 35,787 $ 46,803
International   23,868     19,494     54,601     46,784  
Total capital expenditures $ 53,499   $ 46,603   $ 90,388   $ 93,587  
 
 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
 
    Three months ended     Six months ended
June 30, June 30,
  2013         2012     2013         2012  
Net income $ 20,837 $ 52,139 $ 53,899 $ 95,015
Income taxes 8,722 30,844 19,340 58,776
Interest expense 34,458 31,375 67,064 63,508
Loss on early retirement of debt 72,302

72,302

Other income (609 ) (63 ) (5,163 ) (5,485 )
Depreciation and amortization 38,734 36,341 77,766 73,157
Impairment of long-lived assets 1,101 311 1,945 496
(Gain) loss on sale of assets and other (2,801 ) 469 (3,143 ) 1,305
Deferred lease expenses - theatres (2) 191 197 59 317
Deferred lease expenses – DCIP equipment (3) 1,022 1,010 2,044 2,013
Amortization of long-term prepaid rents (2) 729 776 1,379 1,310
Share based awards compensation expense (4)   3,338     3,553     6,788     6,868  
Adjusted EBITDA (1) $ 178,024   $ 156,952   $ 294,280   $ 297,280  

(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, (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 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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