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Cinemark Holdings, Inc. Reports Fifth Consecutive Year of Record Worldwide Revenues and Dividend Increase

February 21, 2020 6:15 AM

Increases Dividend 6% to $1.44 per Annum

PLANO, Texas--(BUSINESS WIRE)-- Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and twelve months ended December 31, 2019 and announced that its Board of Directors has increased its cash dividend by $0.08 to $1.44 per share of common stock on an annualized basis, effective immediately. The fourth quarter dividend of $0.36 per share of common stock will be paid on March 20, 2020 to stockholders of record on March 6, 2020.

Cinemark Holdings, Inc.’s total revenues for the three months ended December 31, 2019 was $788.8 million compared to $798.6 million for the three months ended December 31, 2018. For the three months ended December 31, 2019, admissions revenues were $434.2 million and concession revenues were $275.0 million. For the three months ended December 31, 2019, attendance was 63.8 million patrons, average ticket price increased 3.2% to $6.81 and concession revenues per patron increased 4.6% to $4.31.

Net income attributable to Cinemark Holdings, Inc. for the three months ended December 31, 2019 increased to $26.3 million from $19.4 million for the three months ended December 31, 2018. Diluted earnings per share for the three months ended December 31, 2019 was $0.22 compared to $0.17 for the three months ended December 31, 2018.

Adjusted EBITDA for the three months ended December 31, 2019 was $178.3 million compared to $198.1 million for the three months ended December 31, 2018. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

“We are extremely pleased to report our fifth consecutive year of record global revenues, as well as our fifth consecutive annual dividend increase,” stated Mark Zoradi, Cinemark’s Chief Executive Officer. “Continued benefits derived from our strategic initiatives enabled us to surpass North American industry box office results by 200 bps in 2019, and our consistent financial strength gave our Board of Directors confidence to approve an $0.08 increase to our dividend to $1.44 per annum, which has now grown 33% over the past five years.”

Cinemark Holdings, Inc.’s total revenues for the twelve months ended December 31, 2019 increased 1.9% to $3,283.1 million from $3,221.8 million for the twelve months ended December 31, 2018. For the twelve months ended December 31, 2019, admissions revenues were $1,805.3 million and concession revenues increased 4.7% to $1,161.1 million. For the twelve months ended December 31, 2019, attendance was 279.6 million patrons, average ticket price was $6.46 and concession revenues per patron increased 5.6% to $4.15.

Net income attributable to Cinemark Holdings, Inc. for the twelve months ended December 31, 2019 was $191.4 million compared to $213.8 million for the twelve months ended December 31, 2018. Diluted earnings per share for the twelve months ended December 31, 2019 was $1.63 compared to $1.83 for the twelve months ended December 31, 2018.

Adjusted EBITDA for the twelve months ended December 31, 2019 was $745.0 million compared to $781.5 million for the twelve months ended December 31, 2018. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

As of December 31, 2019, the Company’s aggregate screen count was 6,132 and the Company had commitments to open 13 new theatres and 150 screens in 2020 and 10 new theatres and 93 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://ir.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 554 theatres with 6,132 screens in 42 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 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 21, 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

Twelve Months Ended

December 31,

December 31,

2019

2018

2019

2018

Statement of income data:

Revenues

Admissions

$

434,280

$

445,063

$

1,805,321

$

1,834,173

Concession

275,000

277,550

1,161,083

1,108,793

Other

79,523

75,863

316,695

278,769

Total revenues

788,803

798,476

3,283,099

3,221,735

Cost of operations

Film rentals and advertising

244,139

241,513

1,003,832

999,755

Concession supplies

49,080

46,397

206,441

180,974

Salaries and wages

101,770

97,863

410,086

383,860

Facility lease expense

83,565

79,443

346,094

323,316

Utilities and other

117,501

110,204

474,711

448,070

General and administrative expenses

46,382

41,459

173,384

165,173

Depreciation and amortization

64,360

67,506

261,155

261,162

Impairment of long-lived assets

11,619

27,352

57,001

32,372

Loss on disposal of assets and other

3,951

10,036

12,008

38,702

Total cost of operations

722,367

721,773

2,944,712

2,833,384

Operating income

66,436

76,703

338,387

388,351

Interest expense (1)

(24,904

)

(27,269

)

(99,941

)

(109,994

)

Loss on debt amendments and refinancing

—

—

—

(1,484

)

Interest income

2,527

2,753

12,589

10,614

Foreign currency exchange gain (loss)

1,391

(4,713

)

(3,394

)

(11,660

)

Distributions from NCM

3,705

3,221

12,873

15,389

Interest expense - NCM

(14,444

)

(4,849

)

(28,624

)

(19,724

)

Equity in income of affiliates

7,888

10,034

41,870

39,242

Income before income taxes

42,599

55,880

273,760

310,734

Income taxes

15,760

35,837

79,912

95,429

Net income

$

26,839

$

20,043

$

193,848

$

215,305

Less: Net income attributable to noncontrolling interests

505

600

2,462

1,478

Net income attributable to Cinemark Holdings, Inc.

$

26,334

$

19,443

$

191,386

$

213,827

Earnings per share attributable to Cinemark Holdings, Inc.'s common stockholders

Basic

$

0.22

$

0.17

$

1.63

$

1.83

Diluted

$

0.22

$

0.17

$

1.63

$

1.83

Diluted weighted average shares outstanding

116,613

116,383

116,606

116,342

Other Financial Data:

Adjusted EBITDA (1)

$

178,295

$

198,092

$

745,045

$

781,517

Other Operating Data
(unaudited, in thousands)

As of

December 31,

2019

2018

Balance sheet data (unaudited, in thousands):

Cash and cash equivalents

$

488,313

$

426,222

Theatre properties and equipment, net

$

1,735,247

$

1,833,133

Total assets

$

5,828,017

$

4,481,838

Long-term debt, including current portion, net of unamortized debt issue costs

$

1,777,937

$

1,780,611

Equity

$

1,448,322

$

1,408,570

Segment Information
(unaudited, in millions, except per patron data)

U.S. Operating Segment

International Operating Segment

Consolidated

Three Months Ended

December 31,

Three Months Ended

December 31,

Constant

Currency (1)

Three Months Ended

December 31,

2019

2018

%

Change

2019

2018

%

Change

2019

%

Change

2019

2018

%

Change

Admissions revenues

$

364.9

$

369.7

(1.3

)%

$

69.3

$

75.4

(8.1

)%

$

77.6

2.9

%

$

434.2

$

445.1

(2.4

)%

Concession revenues

$

231.5

$

231.1

0.2

%

$

43.5

$

46.5

(6.5

)%

$

48.0

3.2

%

$

275.0

$

277.6

(0.9

)%

Other revenues

$

53.7

$

50.5

6.3

%

$

25.9

$

25.4

2.0

%

$

29.5

16.1

%

$

79.6

$

75.9

4.9

%

Total revenues

$

650.1

$

651.3

(0.2

)%

$

138.7

$

147.3

(5.8

)%

$

155.1

5.3

%

$

788.8

$

798.6

(1.2

)%

Attendance

43.3

46.4

(6.7

)%

20.5

21.0

(2.4

)%

63.8

67.4

(5.3

)%

Average ticket price (2)

$

8.43

$

7.97

5.8

%

$

3.38

$

3.59

(5.8

)%

$

3.79

5.6

%

$

6.81

$

6.60

3.2

%

Concession revenues per patron (3)

$

5.35

$

4.98

7.4

%

$

2.12

$

2.21

(4.1

)%

$

2.34

5.9

%

$

4.31

$

4.12

4.6

%

Average screen count

4,631

4,581

1,462

1,450

6,093

6,031

U.S. Operating Segment

International Operating Segment

Consolidated

Three Months Ended

Three Months Ended

Three Months Ended

December 31,

December 31,

December 31,

2019

2018

2019

2018

Constant

Currency (1)

2019

2019

2018

Film rentals and advertising

$

209.3

$

205.9

$

34.8

$

35.7

$

38.9

$

244.1

$

241.6

Concession supplies

39.3

36.5

9.9

9.9

10.9

49.2

46.4

Salaries and wages

83.8

79.4

18.0

18.5

20.7

101.8

97.9

Facility lease expense

65.7

62.0

17.9

17.4

19.6

83.6

79.4

Utilities and other

87.4

81.3

30.1

28.8

33.8

117.5

110.1

U.S. Operating Segment

International Operating Segment

Consolidated

Twelve Months Ended

December 31,

Twelve Months Ended

December 31,

Constant

Currency (1)

Twelve Months Ended

December 31,

2019

2018

%

Change

2019

2018

%

Change

2019

%

Change

2019

2018

%

Change

Admissions revenues

$

1,431.8

$

1,461.2

(2.0

)%

$

373.5

$

373.0

0.1

%

$

434.9

16.6

%

$

1,805.3

$

1,834.2

(1.6

)%

Concession revenues

$

936.2

$

892.4

4.9

%

$

224.9

$

216.4

3.9

%

$

258.6

19.5

%

$

1,161.1

$

1,108.8

4.7

%

Other revenues

$

212.9

$

185.4

14.8

%

$

103.8

$

93.4

11.1

%

$

123.7

32.4

%

$

316.7

$

278.8

13.6

%

Total revenues

$

2,580.9

$

2,539.0

1.7

%

$

702.2

$

682.8

2.8

%

$

817.2

19.7

%

$

3,283.1

$

3,221.8

1.9

%

Attendance

176.2

185.3

(4.9

)%

103.4

96.8

6.8

%

279.6

282.1

(0.9

)%

Average ticket price (2)

$

8.13

$

7.89

3.0

%

$

3.61

$

3.85

(6.2

)%

$

4.21

9.4

%

$

6.46

$

6.50

(0.6

)%

Concession revenues per patron (3)

$

5.31

$

4.82

10.2

%

$

2.18

$

2.24

(2.7

)%

$

2.50

11.6

%

$

4.15

$

3.93

5.6

%

Average screen count

4,615

4,570

1,457

1,427

6,072

5,997

U.S. Operating Segment

International Operating Segment

Consolidated

Twelve Months Ended

Twelve Months Ended

Twelve Months Ended

December 31,

December 31,

December 31,

2019

2018

2019

2018

Constant

Currency (1)

2019

2019

2018

Film rentals and advertising

$

819.6

$

822.6

$

184.2

$

177.2

$

214.5

$

1,003.8

$

999.8

Concession supplies

156.9

134.6

49.6

46.4

57.1

206.5

181.0

Salaries and wages

331.2

303.7

78.9

80.2

93.2

410.1

383.9

Facility lease expense

259.8

245.1

86.3

78.2

97.4

346.1

323.3

Utilities and other

348.2

327.0

126.5

121.0

147.6

474.7

448.0

(1)

Constant currency amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2018. 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.

(2)

Average ticket price is calculated as admissions revenues divided by attendance.

(3)

Concession revenues per patron is calculated as concession revenues divided by attendance.

Other Segment Information
(unaudited, in thousands)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2019

2018

2019

2018

Adjusted EBITDA (1)

U.S.

$

161,757

$

171,669

$

615,161

$

648,576

International

16,538

26,423

129,884

132,941

Total Adjusted EBITDA

$

178,295

$

198,092

$

745,045

$

781,517

Capital expenditures

U.S.

$

81,952

$

75,766

$

230,561

$

270,870

International

35,163

24,345

73,066

75,203

Total capital expenditures

$

117,115

$

100,111

$

303,627

$

346,073

(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

Twelve Months Ended

December 31,

December 31,

2019

2018

2019

2018

Net income

$

26,839

$

20,043

$

193,848

$

215,305

Add (deduct):

Income taxes

15,760

35,837

79,912

95,429

Interest expense (a)

24,904

27,269

99,941

109,994

Other (income) expense, net (b)

2,638

(3,225

)

(22,441

)

(18,472

)

Loss on debt amendments and refinancing

—

—

—

1,484

Distributions from DCIP (c)

15,784

598

23,696

5,799

Other cash distributions from equity investees (d)

9,419

8,504

29,670

24,344

Depreciation and amortization (a)

64,360

67,506

261,155

261,162

Impairment of long-lived assets

11,619

27,352

57,001

32,372

Loss on disposal of assets and other

3,951

10,036

12,008

38,702

Non-cash rent (e)

(1,107

)

—

(4,360

)

—

Deferred lease expenses - theatres (a)(f)

—

(135

)

—

(387

)

Deferred lease expenses - projectors (a)(g)

—

(233

)

—

(933

)

Amortization of long-term prepaid rents (a)(f)

—

568

—

2,382

Share based awards compensation expense (h)

4,128

3,972

14,615

14,336

Adjusted EBITDA

$

178,295

$

198,092

$

745,045

$

781,517

(a)

Amounts for the year ended December 31, 2019 were impacted by the adoption of ASC Topic 842 and the resulting change in the classification of certain of the Company’s leases.

(b)

Includes interest income, foreign currency exchange gain (loss), interest expense – NCM and equity in income of affiliates.

(c)

Cash distributions from DCIP, which were recorded as a reduction of the Company’s investment in DCIP. These distributions are reported entirely within the U.S. operating segment.

(d)

Cash distributions received from equity investees, other than those from DCIP noted above, that were recorded as a reduction of the respective investment balances. These distributions are reported entirely within the U.S. operating segment.

(e)

The adoption of ASC Topic 842 impacted how the Company amortizes lease related assets and liabilities such as deferred lease expenses, favorable and unfavorable lease intangible assets, long-term prepaid rents and deferred lease incentives. Beginning January 1, 2019, these items are amortized to facility lease expense for theatre operating leases and utilities and other for equipment operating leases.

(f)

Non-cash expense included in facility lease expense.

(g)

Non-cash expense included in utilities and other.

(h)

Non-cash expense included in general and administrative expenses.

Financial and Media Contact :

Chanda Brashears – 972-665-1671 or [email protected]

Source: Cinemark Holdings, Inc.

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