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Cinemark Holdings, Inc. Reports Results for the Third Quarter of 2021

Delivered Another Substantial Reduction in Quarterly Net Loss and Significant Improvement in Cash Flows from Operations

Generated Worldwide Adjusted EBITDA of $44MM

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, 2021. As of September 30, 2021, all of the Company's domestic and international theatres were opened for the first time since the beginning of the COVID-19 pandemic.

Cinemark Holdings, Inc.’s total revenues for the three months ended September 30, 2021 were $434.8 million compared to $35.5 million for the three months ended September 30, 2020. As a reminder, the Company’s theatres were closed for a majority of the three months ended September 30, 2020. For the three months ended September 30, 2021, admissions revenues were $225.5 million and concession revenues were $164.2 million, driven by attendance of 30.7 million patrons. Average ticket price was $7.35 and concession revenues per patron were $5.35.

Net loss attributable to Cinemark Holdings, Inc. for the three months ended September 30, 2021 was $77.8 million compared to a loss of $147.6 million for the three months ended September 30, 2020. Diluted loss per share for the three months ended September 30, 2021 was $0.65 compared to $1.25 for the three months ended September 30, 2020.

Adjusted EBITDA for the three months ended September 30, 2021 was $44.3 million compared to $(128.0) million for the three months ended September 30, 2020. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

“As an industry, and as a company, we continue to make significant progress recovering from the effects of the pandemic,” stated Mark Zoradi, Cinemark’s CEO. “We are highly encouraged by sustained positive trends in escalating consumer demand for theatrical moviegoing and growing momentum at the box office. This favorable progress was clearly demonstrated in our 61% quarter-over-quarter growth in worldwide attendance, which flowed through to our bottom line as our third quarter net loss reduced $64.7 million dollars from the second quarter and Adjusted EBITDA improved to $44.3 million dollars. This was the first quarter since the pandemic began that we generated positive Adjusted EBITDA in every month of a quarter, tangibly underscoring our resurgence.”

Mr. Zoradi continued, “We expect a continued ramp-up in box office performance over the course of the coming months, and October already delivered the best monthly box office results since the onset of COVID-19. As the pandemic further subsides, we remain confident in the future of theatrical moviegoing based on the unparalleled cinematic experience it provides coupled with a robust content lineup in the fourth quarter and beyond that features highly anticipated films with something for everyone.”

Cinemark Holdings, Inc.’s total revenues for the nine months ended September 30, 2021 increased 43.5% to $843.8 million compared to $588.1 million for the nine months ended September 30, 2020. For the nine months ended September 30, 2021, admissions revenues increased 41.5% to $435.1 million and concession revenues increased 57.1% to $313.5 million. For the nine months ended September 30, 2021, attendance was 57.5 million patrons, average ticket price increased 17.5% to $7.57 and concession revenues per patron increased 30.4% to $5.45.

Net loss attributable to Cinemark Holdings, Inc. for the nine months ended September 30, 2021 was $428.5 million compared to $377.6 million for the nine months ended September 30, 2020. Diluted loss per share for the nine months ended September 30, 2021 was $3.59 compared to $3.22 for the nine months ended September 30, 2020. Net loss and diluted loss per share for the nine months ended September 30, 2020 were impacted by the carryback of 2020 tax losses to years that had a 35% federal tax rate as allowable per the provisions of the CARES Act. The tax benefit of the carryback reduced the Company’s net loss by approximately $222.4 million for the nine months ended September 30, 2020.

Adjusted EBITDA for the nine months ended September 30, 2021 was $(59.5) million compared to $(179.4) million for the nine months ended September 30, 2020. 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, 2021, the Company’s aggregate screen count was 5,897 and the Company had commitments to open two new theatres and 33 screens during the remainder of 2021 and twelve new theatres and 112 screens subsequent to 2021.

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 524 theatres with 5,897 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, 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 26, 2021 and the Current Report on Form 8-K filed March 4, 2021. 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,

 

 

 

2021

 

2020

 

2021

 

2020

Statement of loss data:

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Admissions

 

$

225,464

 

 

$

14,901

 

 

$

435,064

 

 

$

307,400

 

Concession

 

 

164,258

 

 

 

9,116

 

 

 

313,560

 

 

 

199,596

 

Other

 

 

45,099

 

 

 

11,461

 

 

 

95,210

 

 

 

81,072

 

Total revenues

 

 

434,821

 

 

 

35,478

 

 

 

843,834

 

 

 

588,068

 

Cost of operations

 

 

 

 

 

 

 

 

 

 

 

 

Film rentals and advertising

 

 

117,047

 

 

 

8,257

 

 

 

216,839

 

 

 

165,262

 

Concession supplies

 

 

28,208

 

 

 

2,688

 

 

 

54,195

 

 

 

39,879

 

Salaries and wages

 

 

67,630

 

 

 

20,181

 

 

 

149,203

 

 

 

116,589

 

Facility lease expense

 

 

68,767

 

 

 

67,047

 

 

 

200,809

 

 

 

214,490

 

Utilities and other

 

 

81,723

 

 

 

43,412

 

 

 

192,052

 

 

 

178,806

 

General and administrative expenses

 

 

38,584

 

 

 

30,342

 

 

 

111,774

 

 

 

99,361

 

Depreciation and amortization

 

 

67,208

 

 

 

62,543

 

 

 

202,288

 

 

 

191,380

 

Impairment of long-lived assets

 

 

7,480

 

 

 

24,595

 

 

 

7,480

 

 

 

41,214

 

Restructuring costs

 

 

(340

)

 

 

524

 

 

 

(1,288

)

 

 

20,062

 

(Gain) loss on disposal of assets and other

 

 

1,020

 

 

 

(13,327

)

 

 

7,883

 

 

 

(10,997

)

Total cost of operations

 

 

477,327

 

 

 

246,262

 

 

 

1,141,235

 

 

 

1,056,046

 

Operating loss

 

 

(42,506

)

 

 

(210,784

)

 

 

(297,401

)

 

 

(467,978

)

Interest expense

 

 

(37,993

)

 

 

(36,577

)

 

 

(111,580

)

 

 

(92,284

)

Interest income

 

 

861

 

 

 

1,348

 

 

 

5,335

 

 

 

4,235

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

(6,527

)

 

 

 

Foreign currency exchange loss

 

 

(273

)

 

 

(2,251

)

 

 

(920

)

 

 

(6,183

)

Distributions from NCM

 

 

 

 

 

1,061

 

 

 

77

 

 

 

6,975

 

Distributions from DCIP

 

 

6,534

 

 

 

 

 

 

6,534

 

 

 

 

Interest expense - NCM

 

 

(5,926

)

 

 

(5,901

)

 

 

(17,723

)

 

 

(17,726

)

Equity in loss of affiliates

 

 

(7,146

)

 

 

(16,077

)

 

 

(22,061

)

 

 

(27,711

)

Loss before income taxes

 

 

(86,449

)

 

 

(269,181

)

 

 

(444,266

)

 

 

(600,672

)

Income taxes

 

 

(8,876

)

 

 

(121,145

)

 

 

(15,569

)

 

 

(222,398

)

Net loss

 

$

(77,573

)

 

$

(148,036

)

 

$

(428,697

)

 

$

(378,274

)

Less: Net income (loss) attributable to noncontrolling interests

 

 

241

 

 

 

(444

)

 

 

(175

)

 

 

(702

)

Net loss attributable to Cinemark Holdings, Inc.

 

$

(77,814

)

 

$

(147,592

)

 

$

(428,522

)

 

$

(377,572

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.65

)

 

$

(1.25

)

 

$

(3.59

)

 

$

(3.22

)

Diluted

 

$

(0.65

)

 

$

(1.25

)

 

$

(3.59

)

 

$

(3.22

)

Weighted average shares outstanding - Diluted

 

 

117,274

 

 

 

116,707

 

 

 

117,226

 

 

 

116,552

 

Other Operating Data

(unaudited, in thousands)

 

 

 

As of

 

As of

 

 

September 30,

 

December 31,

 

 

2021

 

2020

Balance sheet data:

 

 

 

 

Cash and cash equivalents

 

$

543,013

 

$

655,338

Theatre properties and equipment, net

 

$

1,435,474

 

$

1,615,062

Total assets

 

$

5,078,574

 

$

5,562,922

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

 

$

2,497,545

 

$

2,395,218

Equity

 

$

314,957

 

$

798,969

Segment Information

(unaudited, in millions, except per patron data)

 

 

 

U.S. Operating Segment

 

International Operating Segment

 

Consolidated

 

 

Three Months Ended September 30,

 

Three Months Ended September 30,

 

Constant

Currency (2)

 

Three Months Ended September 30,

Revenues and KPIs

 

2021

 

2020

 

2021

 

2020 (1)

 

2021

 

2021

 

2020

Admissions revenues

 

$

195.3

 

$

14.9

 

$

30.2

 

$

0.1

 

$

32.2

 

$

225.5

 

$

15.0

Concession revenues

 

$

142.6

 

$

8.9

 

$

21.6

 

$

0.3

 

$

23.0

 

$

164.2

 

$

9.2

Other revenues

 

$

37.6

 

$

10.8

 

$

7.5

 

$

0.7

 

$

7.9

 

$

45.1

 

$

11.5

Total revenues

 

$

375.5

 

$

34.6

 

$

59.3

 

$

1.1

 

$

63.1

 

$

434.8

 

$

35.7

Attendance

 

 

21.5

 

 

1.9

 

 

9.2

 

 

 

 

 

 

30.7

 

 

1.9

Average ticket price

 

$

9.08

 

$

8.01

 

$

3.28

 

NM

 

$

3.50

 

$

7.35

 

$

7.96

Concession revenues per patron

 

$

6.63

 

$

4.79

 

$

2.35

 

NM

 

$

2.50

 

$

5.35

 

$

4.87

 

 

U.S. Operating Segment

 

International Operating Segment

 

Consolidated

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

September 30,

 

September 30,

 

September 30,

Cost of Operations

 

2021

 

2020

 

2021

 

2020

 

Constant

Currency (2)

2021

 

2021

 

2020

Film rentals and advertising

 

$

101.9

 

$

8.1

 

$

15.1

 

$

0.1

 

$

16.2

 

$

117.0

 

$

8.2

Concession supplies

 

$

23.0

 

$

2.3

 

$

5.2

 

$

0.4

 

$

5.6

 

$

28.2

 

$

2.7

Salaries and wages

 

$

58.0

 

$

15.9

 

$

9.6

 

$

4.3

 

$

10.1

 

$

67.6

 

$

20.2

Facility lease expense

 

$

58.8

 

$

60.8

 

$

10.0

 

$

6.3

 

$

10.4

 

$

68.8

 

$

67.1

Utilities and other

 

$

68.1

 

$

36.5

 

$

13.6

 

$

6.8

 

$

14.4

 

$

81.7

 

$

43.3

(1)

Average ticket price and concession revenues per patron for the three months ended September 30, 2020 are considered not meaningful ("NM") as they are based on limited attendance and revenues and are not comparable to other periods.

(2)

Constant currency amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2020. 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.

Other Segment Information

(unaudited, in thousands)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

2020

 

2021

 

2020

Adjusted EBITDA (1)

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

44,781

 

 

$

(105,767

)

 

$

(31,697

)

 

$

(145,947

)

International

 

 

(495

)

 

 

(22,232

)

 

 

(27,788

)

 

 

(33,459

)

Total Adjusted EBITDA (1)

 

$

44,286

 

 

$

(127,999

)

 

$

(59,485

)

 

$

(179,406

)

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

22,423

 

 

$

17,903

 

 

$

47,547

 

 

$

54,604

 

International

 

 

2,002

 

 

 

2,756

 

 

 

9,697

 

 

 

13,014

 

Total capital expenditures

 

$

24,425

 

 

$

20,659

 

 

$

57,244

 

 

$

67,618

 

(1)

Adjusted EBITDA represents net loss 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. A reconciliation of net loss to Adjusted EBITDA is provided below.

Reconciliation of Adjusted EBITDA

(unaudited, in thousands)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

2020

 

2021

 

2020

Net loss

 

$

(77,573

)

 

$

(148,036

)

 

$

(428,697

)

 

$

(378,274

)

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

(8,876

)

 

 

(121,145

)

 

 

(15,569

)

 

 

(222,398

)

Interest expense (a)

 

 

37,993

 

 

 

36,577

 

 

 

111,580

 

 

 

92,284

 

Other expense, net (b)

 

 

12,484

 

 

 

22,881

 

 

 

35,369

 

 

 

47,385

 

Cash distributions from DCIP (c)

 

 

 

 

 

 

 

 

 

 

 

10,383

 

Cash distributions from other equity investees (d)

 

 

 

 

 

2,146

 

 

 

156

 

 

 

15,047

 

Depreciation and amortization

 

 

67,208

 

 

 

62,543

 

 

 

202,288

 

 

 

191,380

 

Impairment of long-lived assets

 

 

7,480

 

 

 

24,595

 

 

 

7,480

 

 

 

41,214

 

Restructuring costs

 

 

(340

)

 

 

524

 

 

 

(1,288

)

 

 

20,062

 

(Gain) loss on disposal of assets and other

 

 

1,020

 

 

 

(13,327

)

 

 

7,883

 

 

 

(10,997

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

6,527

 

 

 

 

Non-cash rent

 

 

(1,124

)

 

 

816

 

 

 

(1,803

)

 

 

1,649

 

Share based awards compensation expense (e)

 

 

6,014

 

 

 

4,427

 

 

 

16,589

 

 

 

12,859

 

Adjusted EBITDA

 

$

44,286

 

 

$

(127,999

)

 

$

(59,485

)

 

$

(179,406

)

(a)

Includes amortization of debt issue costs and amortization of accumulated losses for amended swap agreements.

(b)

Includes interest income, foreign currency exchange loss, equity in loss of affiliates and interest expense - NCM and excludes distributions from NCM and distributions from DCIP.

(c)

Includes cash distributions from DCIP that were recorded as a reduction of our investment in DCIP. These distributions are reported entirely within the U.S. operating segment.

(d)

Includes 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)

Non-cash expense included in general and administrative expenses.

 

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