Business Wire | Nov 5, 2020 06:30AM EST

Cinemark Holdings, Inc. Reports Results for the Third Quarter of 2020

Nov. 05, 2020

PLANO, Texas--(BUSINESS WIRE)--Nov. 05, 2020--Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and nine months ended September 30, 2020. The Company's financial results continue to be impacted by the COVID-19 pandemic, as the Company's theatres were temporarily closed beginning in March 2020. The Company began reopening domestic theatres in June 2020 and international theatres in August 2020, following new health and safety protocols. As of September 30, 2020, the Company had 252 domestic and 15 international theatres open to limited hours, showing library content and some new releases. During the three months ended September 30, 2020, attendance was 1.9 million patrons, admissions revenues were $14.9 million and concession revenues were $9.1 million. Total revenues were $35.5 million for the three months ended September 30, 2020.

Net loss attributable to Cinemark Holdings, Inc. for the three months ended September 30, 2020 was $(147.6) million. Diluted loss per share for the three months ended September 30, 2020 was $(1.25) and Adjusted EBITDA for the three months ended September 30, 2020 was $(128.0) million. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

"As the COVID-19 pandemic continues to have an unprecedented impact on the theatrical exhibition industry, our top near-term priorities remain stringently managing liquidity, driving productivity and reigniting moviegoing," stated Mark Zoradi, Cinemark's Chief Executive Officer. "With nearly 90% of our domestic theatres now operating, we have been encouraged by our results to-date, wherein we have been burning less cash open than when we were shut down. Significant drivers of this success have been our extensive health and safety protocols that are part of The Cinemark Standard, and innovative new ways of operating our theaters and maximizing revenues, such as the Private Watch Party concept we launched in July. We look forward to a more normalized pipeline of new film content and continuing to welcome back Cinemark moviegoers to enjoy the immersive cinematic experience they have been craving."

Cinemark Holdings, Inc.'s total revenues for the nine months ended September 30, 2020 were $588.1 million compared to $2,494.3 million for the nine months ended September 30, 2019. For the nine months ended September 30, 2020, admissions revenues were $307.4 million and concession revenues were $199.6 million. For the nine months ended September 30, 2020, attendance was 47.7 million patrons, average ticket price was $6.44 and concession revenues per patron were $4.18.

Net loss attributable to Cinemark Holdings, Inc. for the nine months ended September 30, 2020 was $(377.6) million compared to net income attributable to Cinemark Holdings, Inc. of $165.1 million for the nine months ended September 30, 2019. Diluted loss per share for the nine months ended September 30, 2020 was $(3.22) compared to diluted earnings per share of $1.41 for the nine months ended September 30, 2019.

Adjusted EBITDA for the nine months ended September 30, 2020 was $(179.4) million compared to $566.8 million for the nine months ended September 30, 2019. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

As of September 30, 2020, the Company's aggregate screen count was 5,974 and the Company had commitments to open two new theatres and 16 screens during the remainder of 2020 and 20 new theatres and 205 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://investors.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 533 theatres with 5,974 screens in 41 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, including, among others, the impacts of COVID-19. Such risks and uncertainties 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, as updated by the information related to COVID-19 that was included in a Form 8-K filed on April 13, 2020, including the documents incorporated by reference therein, the Quarterly Report on Form 10-Q filed on August 4, 2020 and the Quarterly Report on Form 10-Q filed on November 5, 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 Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Statement of income data:

Revenues

Admissions $ 14,901 $ 454,429 $ 307,400 $ 1,371,041

Concession 9,116 289,477 199,596 886,083

Other 11,461 77,911 81,072 237,172

Total revenues 35,478 821,817 588,068 2,494,296

Cost of operations

Film rentals and 8,257 254,911 165,262 759,693 advertising

Concession 2,688 51,573 39,879 157,361 supplies

Salaries and wages 20,181 103,270 116,589 308,316

Facility lease 67,047 87,436 214,490 262,529 expense

Utilities and 43,412 123,877 178,806 357,210 other

General andadministrative 30,342 44,702 99,361 127,002 expenses

Depreciation and 62,543 67,760 191,380 196,795 amortization

Impairment of 24,595 27,304 41,214 45,382 long-lived assets

Restructuring 524 - 20,062 - costs

(Gain) loss ondisposal of assets (13,327 ) 2,453 (10,997 ) 8,057 and other

Total cost of 246,262 763,286 1,056,046 2,222,345 operations

Operating income (210,784 ) 58,531 (467,978 ) 271,951 (loss)

Interest expense (36,577 ) (24,967 ) (92,284 ) (75,037 )

Interest income 1,348 3,903 4,235 10,062

Foreign currency (2,251 ) (4,406 ) (6,183 ) (4,785 )exchange loss

Distributions from 1,061 2,474 6,975 9,168 NCM

Interest expense - (5,901 ) (4,666 ) (17,726 ) (14,180 )NCM

Equity in income(loss) of (16,077 ) 15,139 (27,711 ) 33,982 affiliates

Income (loss)before income (269,181 ) 46,008 (600,672 ) 231,161 taxes

Income taxes (121,145 ) 14,053 (222,398 ) 64,152

Net income (loss) $ (148,036 ) $ 31,955 $ (378,274 ) $ 167,009

Less: Net income(loss)attributable to (444 ) 602 (702 ) 1,957 noncontrollinginterests

Net income (loss)attributable to $ (147,592 ) $ 31,353 $ (377,572 ) $ 165,052 Cinemark Holdings,Inc.

Earnings (loss)per shareattributable to Cinemark Holdings,Inc.'s commonstockholders

Basic $ (1.25 ) $ 0.27 $ (3.22 ) $ 1.41

Diluted $ (1.25 ) $ 0.27 $ (3.22 ) $ 1.41

Weighted averageshares outstanding 116,707 116,600 116,552 116,577 - Diluted

Other Operating Data

(unaudited, in thousands)

As of

As of

September 30,

December 31,

2020

2019

Balance sheet data:

Cash and cash equivalents

$

825,706

$

488,313

Theatre properties and equipment, net

$

1,545,823

$

1,735,247

Total assets

$

5,802,613

$

5,828,017

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

$

2,374,345

$

1,777,937

Equity

$

1,018,448

$

1,448,322

Other Operating Data

(unaudited, in thousands)

As of As of

September December 30, 31,

2020 2019

Balance sheet data:

Cash and cash equivalents $ 825,706 $ 488,313

Theatre properties and equipment, net $ 1,545,823 $ 1,735,247

Total assets $ 5,802,613 $ 5,828,017

Long-term debt, including current portion, netof unamortized debt discounts and debt issue $ 2,374,345 $ 1,777,937 costs

Equity $ 1,018,448 $ 1,448,322

Segment Information

(unaudited, in millions, except per patron data)

U.S. Operating Segment

International Operating Segment

Consolidated

Nine Months Ended September 30,

Nine Months Ended September 30,

Constant Currency (1)

Nine Months Ended September 30,

Revenues

2020

2019

2020

2019

2020

2020

2019

Admissions revenues

$

247.2

$

1,066.9

$

60.2

$

304.2

$

71.2

$

307.4

$

1,371.1

Concession revenues

$

161.7

$

704.7

$

37.9

$

181.4

$

44.2

$

199.6

$

886.1

Other revenues

$

61.2

$

159.2

$

19.9

$

77.9

$

24.4

$

81.1

$

237.1

Total revenues

$

470.1

$

1,930.8

$

118.0

$

563.5

$

139.8

$

588.1

$

2,494.3

Attendance

29.8

132.9

17.9

82.9

47.7

215.8

Average ticket price

$

8.30

$

8.03

$

3.36

$

3.67

$

3.98

$

6.44

$

6.35

Concession revenues per patron

$

5.43

$

5.30

$

2.12

$

2.19

$

2.47

$

4.18

$

4.11

Segment Information

(unaudited, in millions, except per patron data)

U.S. Operating International Operating Segment Consolidated Segment

Nine Months Ended Nine Months Ended Constant Nine Months Ended September 30, September 30, Currency September 30, ^(1)

Revenues 2020 2019 2020 2019 2020 2020 2019

Admissions $ 247.2 $ 1,066.9 $ 60.2 $ 304.2 $ 71.2 $ 307.4 $ 1,371.1 revenues

Concession $ 161.7 $ 704.7 $ 37.9 $ 181.4 $ 44.2 $ 199.6 $ 886.1 revenues

Other $ 61.2 $ 159.2 $ 19.9 $ 77.9 $ 24.4 $ 81.1 $ 237.1 revenues

Total $ 470.1 $ 1,930.8 $ 118.0 $ 563.5 $ 139.8 $ 588.1 $ 2,494.3 revenues

Attendance 29.8 132.9 17.9 82.9 47.7 215.8

Averageticket $ 8.30 $ 8.03 $ 3.36 $ 3.67 $ 3.98 $ 6.44 $ 6.35 price

Concessionrevenues $ 5.43 $ 5.30 $ 2.12 $ 2.19 $ 2.47 $ 4.18 $ 4.11 per patron

U.S. Operating Segment

International Operating Segment

Consolidated

Nine Months Ended

Nine Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

Cost of Operations

2020

2019

2020

2019

Constant Currency (1) 2019

2020

2019

Film rentals and advertising

$

136.3

$

610.3

$

28.9

$

149.4

$

34.4

$

165.2

$

759.7

Concession supplies

$

29.4

$

117.6

$

10.5

$

39.7

$

12.5

$

39.9

$

157.3

Salaries and wages

$

90.5

$

247.4

$

26.1

$

60.9

$

31.8

$

116.6

$

308.3

Facility lease expense

$

186.0

$

194.1

$

28.5

$

68.4

$

34.2

$

214.5

$

262.5

Utilities and other

$

140.3

$

260.8

$

38.4

$

96.4

$

46.5

$

178.7

$

357.2

U.S. Operating International Operating Segment Consolidated Segment

Nine Months Ended Nine Months Ended Nine Months Ended

September 30, September 30, September 30,

ConstantCost of 2020 2019 2020 2019 Currency 2020 2019 Operations ^(1) 2019

Filmrentals and $ 136.3 $ 610.3 $ 28.9 $ 149.4 $ 34.4 $ 165.2 $ 759.7 advertising

Concession $ 29.4 $ 117.6 $ 10.5 $ 39.7 $ 12.5 $ 39.9 $ 157.3 supplies

Salaries $ 90.5 $ 247.4 $ 26.1 $ 60.9 $ 31.8 $ 116.6 $ 308.3 and wages

Facilitylease $ 186.0 $ 194.1 $ 28.5 $ 68.4 $ 34.2 $ 214.5 $ 262.5 expense

Utilities $ 140.3 $ 260.8 $ 38.4 $ 96.4 $ 46.5 $ 178.7 $ 357.2 and other

(1)

Constant currency amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2019. 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.

Constant currency amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2019. We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at (1) 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.

Other Segment Information

(unaudited, in thousands)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Adjusted EBITDA (1)

U.S.

$

(105,767

)

$

132,347

$

(145,947

)

$

453,404

International

(22,232

)

37,411

(33,459

)

113,346

Total Adjusted EBITDA (1)

$

(127,999

)

$

169,758

$

(179,406

)

$

566,750

Capital expenditures

U.S.

$

17,903

$

50,679

$

54,604

$

148,609

International

2,756

20,664

13,014

37,903

Total capital expenditures

$

20,659

$

71,343

$

67,618

$

186,512

Other Segment Information

(unaudited, in thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Adjusted EBITDA^ (1)

U.S. $ (105,767 ) $ 132,347 $ (145,947 ) $ 453,404

International (22,232 ) 37,411 (33,459 ) 113,346

Total Adjusted EBITDA ^ $ (127,999 ) $ 169,758 $ (179,406 ) $ 566,750 (1)

Capital expenditures

U.S. $ 17,903 $ 50,679 $ 54,604 $ 148,609

International 2,756 20,664 13,014 37,903

Total capital $ 20,659 $ 71,343 $ 67,618 $ 186,512 expenditures

(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.

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 (1) 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

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Net income (loss)

$

(148,036

)

$

31,955

$

(378,274

)

$

167,009

Add (deduct):

Income taxes

(121,145

)

14,053

(222,398

)

64,152

Interest expense

36,577

24,967

92,284

75,037

Other expense (income), net (a)

22,881

(9,970

)

47,385

(25,079

)

Distributions from DCIP (b)

-

2,694

10,383

7,912

Cash distributions from other equity investees (c)

2,146

5,804

15,047

20,251

Depreciation and amortization

62,543

67,760

191,380

196,795

Impairment of long-lived assets

24,595

27,304

41,214

45,382

Restructuring costs

524

-

20,062

-

(Gain) loss on disposal of assets and other

(13,327

)

2,453

(10,997

)

8,057

Non-cash rent

816

(1,102

)

1,649

(3,252

)

Share based awards compensation expense (d)

4,427

3,840

12,859

10,486

Adjusted EBITDA

$

(127,999

)

$

169,758

$

(179,406

)

$

566,750

Reconciliation of Adjusted EBITDA

(unaudited, in thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Net income (loss) $ (148,036 ) $ 31,955 $ (378,274 ) $ 167,009

Add (deduct):

Income taxes (121,145 ) 14,053 (222,398 ) 64,152

Interest expense 36,577 24,967 92,284 75,037

Other expense 22,881 (9,970 ) 47,385 (25,079 )(income), net ^(a)

Distributions from - 2,694 10,383 7,912 DCIP ^(b)

Cash distributionsfrom other equity 2,146 5,804 15,047 20,251 investees ^(c)

Depreciation and 62,543 67,760 191,380 196,795 amortization

Impairment of 24,595 27,304 41,214 45,382 long-lived assets

Restructuring costs 524 - 20,062 -

(Gain) loss ondisposal of assets (13,327 ) 2,453 (10,997 ) 8,057 and other

Non-cash rent 816 (1,102 ) 1,649 (3,252 )

Share based awardscompensation expense 4,427 3,840 12,859 10,486 ^(d)

Adjusted EBITDA $ (127,999 ) $ 169,758 $ (179,406 ) $ 566,750

(a)

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

(b)

Cash distributions from DCIP, which were recorded as a reduction of the Company's investment in DCIP.

(c)

Cash distributions received from equity investees, other than those from DCIP noted above, that were recorded as a reduction of the respective investment balances.

(d)

Non-cash expense included in general and administrative expenses.

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CONTACT: Financial Contact : Chanda Brashears - 972-665-1671 or cbrashears@cinemark.com Media Contact: Caitlin Piper - 972-665-1418 or pr@cinemark.com