Business Wire | Aug 4, 2020 06:30AM EDT

Cinemark Holdings, Inc. Reports Results for the Second Quarter Of 2020

Aug. 04, 2020

PLANO, Texas--(BUSINESS WIRE)--Aug. 04, 2020--Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and six months ended June 30, 2020. The Company's financial results continue to be impacted by the COVID-19 pandemic, as the Company temporarily closed its theatres effective March 18, 2020. During late June 2020, the Company opened five theatres in the US, showing library content, to test its new health and safety protocols. During the three months ended June 30, 2020, the Company's U.S. operating segment had 13 thousand patrons attend these test-and-learn theatres generating $37.0 thousand of admissions revenues and $57.0 thousand of concession revenues. Total revenues were $9.0 million for the three months ended June 30, 2020, which also included the amortization of deferred NCM screen advertising advances.

The Company recorded a net loss for the three months ended June 30, 2020 of $(170.4) million, which included a restructuring charge of $19.5 million. The restructuring charge was a result of a permanent reduction in headcount and permanent closure of certain under-performing theatres. Diluted loss per share for the three months ended June 30, 2020 was $(1.45) and Adjusted EBITDA for the three months ended June 30, 2020 was $(117.6) million. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

"While our company and industry continue to be significantly impacted by the coronavirus pandemic, our team has been working diligently to prepare for reopening our theatres within this new operating environment," stated Mark Zoradi, Cinemark Chief Executive Officer. "We believe the comprehensive cleaning and safety protocols we have established in The Cinemark Standard, will enable us to effectively operate our theatres while prioritizing the health of our employees, guests and communities. Our test-and-learn theatres have been instrumental in honing the training, communication, and execution of The Cinemark Standard, as well as garnering guest insights regarding its implementation. We are thrilled that 97% of guests surveyed have expressed high satisfaction with how Cinemark is protecting their health and safety. We greatly look forward to initiating the rollout of our theatres beginning August 21st as we welcome our employees and guests back to our Cinemark theatres for great cinematic storytelling."

Cinemark Holdings, Inc.'s total revenues for the six months ended June 30, 2020 were $552.6 million compared to $1,672.5 million for the six months ended June 30, 2019. For the six months ended June 30, 2020, admissions revenues were $292.5 million and concession revenues were $190.5 million. For the six months ended June 30, 2020, attendance was 45.8 million patrons, average ticket price was $6.39 and concession revenues per patron were $4.16.

Net loss attributable to Cinemark Holdings, Inc. for the six months ended June 30, 2020 was $(230.0) million compared to net income attributable to Cinemark Holdings, Inc. of $133.7 million for the six months ended June 30, 2019. Diluted loss per share for the six months ended June 30, 2020 was $(1.96) compared to diluted earnings per share of $1.14 for the six months ended June 30, 2019.

Adjusted EBITDA for the six months ended June 30, 2020 was $(51.4) million compared to $397.0 million for the six months ended June 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 June 30, 2020, the Company's aggregate screen count was 5,977 and the Company had commitments to open four new theatres and 34 screens during the remainder of 2020 and 18 new theatres and 189 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 534 theatres with 5,977 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 that was filed on April 13, 2020, including the documents incorporated by reference therein, and the Quarterly Report on Form 10-Q filed on August 4, 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 Six Months Ended

June 30, June 30,

2020 2019 2020 2019

Statement of income data:

Revenues

Admissions $ 37 $ 521,072 $ 292,499 $ 916,612

Concession 124 345,282 190,480 596,606

Other 8,813 91,402 69,611 159,261

Total revenues 8,974 957,756 552,590 1,672,479

Cost of operations

Film rentals and 388 294,705 157,005 504,782 advertising

Concession supplies 2,379 62,717 37,191 105,788

Salaries and wages 8,864 108,910 96,408 205,046

Facility lease 65,202 89,480 147,443 175,093 expense

Utilities and other 34,871 122,696 135,394 233,333

General andadministrative 28,001 44,324 69,019 82,300 expenses

Depreciation and 63,581 64,573 128,837 129,035 amortization

Impairment of - 12,494 16,619 18,078 long-lived assets

Restructuring costs 19,538 - 19,538 -

Loss on disposal of 425 1,805 2,330 5,604 assets and other

Total cost of 223,249 801,704 809,784 1,459,059 operations

Operating income (214,275 ) 156,052 (257,194 ) 213,420 (loss)

Interest expense (28,372 ) (24,929 ) (53,038 ) (50,070 )

Amortization ofaccumulated losses (2,669 ) - (2,669 ) - for amended swapagreements

Interest income 803 3,468 2,887 6,159

Foreign currencyexchange gain 916 (401 ) (3,932 ) (379 )(loss)

Distributions from 690 2,146 5,914 6,694 NCM

Interest expense - (5,934 ) (4,732 ) (11,825 ) (9,514 )NCM

Equity in income(loss) of (20,120 ) 8,439 (11,634 ) 18,843 affiliates

Income (loss) (268,961 ) 140,043 (331,491 ) 185,153 before income taxes

Income taxes (98,145 ) 38,182 (101,253 ) 50,099

Net income (loss) $ (170,816 ) $ 101,861 $ (230,238 ) $ 135,054

Less: Net income(loss) attributable (427 ) 890 (258 ) 1,355 to noncontrollinginterests

Net income (loss)attributable to $ (170,389 ) $ 100,971 $ (229,980 ) $ 133,699 Cinemark Holdings,Inc.

Earnings (loss) pershare attributableto Cinemark Holdings, Inc.'scommon stockholders

Basic $ (1.45 ) $ 0.86 $ (1.96 ) $ 1.14

Diluted $ (1.45 ) $ 0.86 $ (1.96 ) $ 1.14

Weighted averageshares outstanding 116,666 116,548 116,581 116,524 - Diluted



Other Operating Data

(unaudited, in thousands)

As of As of

June 30, December 31,

2020 2019

Balance sheet data:

Cash and cash equivalents $ 571,755 $ 488,313

Theatre properties and equipment, net $ 1,602,721 $ 1,735,247

Total assets $ 5,690,115 $ 5,828,017

Long-term debt, including current portion, net of $ 2,124,635 $ 1,777,937 unamortized debt issue costs

Equity $ 1,098,780 $ 1,448,322



Segment Information

(unaudited, in millions, except per patron data)

U.S. Operating International Operating Consolidated Segment Segment

Six Months Ended Six Months Ended Constant Six Months Ended June 30, June 30, Currency June 30, ^(1)

Revenues 2020 2019 2020 2019 2020 2020 2019

Admissions $ 232.3 $ 715.8 $ 60.2 $ 200.8 $ 71.1 $ 292.5 $ 916.6revenues

Concession $ 152.8 $ 474.3 $ 37.7 $ 122.3 $ 43.8 $ 190.5 $ 596.6revenues

Other $ 50.4 $ 107.7 $ 19.2 $ 51.6 $ 23.6 $ 69.6 $ 159.3revenues

Total $ 435.5 $ 1,297.8 $ 117.1 $ 374.7 $ 138.5 $ 552.6 $ 1,672.5revenues

Attendance 27.9 88.8 17.9 53.7 45.8 142.5

Averageticket $ 8.33 $ 8.06 $ 3.36 $ 3.74 $ 3.97 $ 6.39 $ 6.43price

Concessionrevenues $ 5.48 $ 5.34 $ 2.11 $ 2.28 $ 2.45 $ 4.16 $ 4.19per patron

U.S. Operating International Operating Consolidated Segment Segment

Six Months Ended Six Months Ended Six Months Ended

June 30, June 30, June 30,

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

Filmrentals and $ 128.2 $ 406.8 $ 28.8 $ 98.0 $ 34.3 $ 157.0 $ 504.8advertising

Concession $ 27.1 $ 79.0 $ 10.1 $ 26.8 $ 11.9 $ 37.2 $ 105.8supplies

Salaries $ 74.6 $ 164.2 $ 21.8 $ 40.8 $ 26.4 $ 96.4 $ 205.0and wages

Facilitylease $ 125.2 $ 129.6 $ 22.2 $ 45.5 $ 26.0 $ 147.4 $ 175.1expense

Utilities $ 103.8 $ 169.1 $ 31.6 $ 64.2 $ 37.9 $ 135.4 $ 233.3and other

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 (1) 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.



Other Segment Information

(unaudited, in thousands)

Three Months Ended Six Months Ended

June 30, June 30,

2020 2019 2020 2019

Adjusted EBITDA^ (1)

U.S. $ (96,252 ) $ 195,298 $ (40,180 ) $ 321,057

International (21,366 ) 49,440 (11,227 ) 75,935

Total Adjusted EBITDA ^ $ (117,618 ) $ 244,738 $ (51,407 ) $ 396,992 (1)

Capital expenditures

U.S. $ 11,028 $ 45,591 $ 36,701 $ 97,930

International 1,788 12,009 10,258 17,239

Total capital $ 12,816 $ 57,600 $ 46,959 $ 115,169 expenditures

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 (1) 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 Six Months Ended

June 30, June 30,

2020 2019 2020 2019

Net income (loss) $ (170,816 ) $ 101,861 $ (230,238 ) $ 135,054

Add (deduct):

Income taxes (98,145 ) 38,182 (101,253 ) 50,099

Interest expense 28,372 24,929 53,038 50,070

Other expense 27,004 (6,774 ) 27,173 (15,109 )(income), net ^(a)

Distributions from 5,222 - 10,383 5,218 DCIP ^(b)

Cash distributionsfrom other equity 1,456 5,323 12,901 14,447 investees ^(c)

Depreciation and 63,581 64,573 128,837 129,035 amortization

Impairment of - 12,494 16,619 18,078 long-lived assets

Restructuring costs 19,538 - 19,538 -

Loss on disposal of 425 1,805 2,330 5,604 assets and other

Non-cash rent 1,424 (1,331 ) 833 (2,150 )

Share based awardscompensation expense 4,321 3,676 8,432 6,646 ^(d)

Adjusted EBITDA $ (117,618 ) $ 244,738 $ (51,407 ) $ 396,992

Includes interest income, foreign currency exchange gain (loss),(a) amortization of amended swap agreements in other comprehensive income, interest expense - NCM and equity in income of affiliates.

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

Cash distributions received from equity investees, other than those from(c) 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