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Cinemark Holdings, Inc. Reports Revenues of $659.9 Million and Adjusted EBITDA of $156.9 Million for Q4 2014

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Cinemark Holdings, Inc. (NYSE:CNK) , one of the largest motion picture exhibitors in the world, today reported results for the three months and year ended December 31, 2014.

Cinemark Holdings, Inc.’s revenues for the three months ended December 31, 2014 increased 1.2% to $659.9 million compared to $651.9 million for the three months ended December 31, 2013. For the three months ended December 31, 2014, admissions revenues were $404.7 million and concession revenues were $214.8 million. Average ticket price was $6.16 and concession revenues per patron was $3.27 for the three months ended December 31, 2014.

Adjusted EBITDA for the three months ended December 31, 2014 was $156.9 million compared to $140.9 million for the three months ended December 31, 2013. 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 three months ended December 31, 2014 was $47.3 million compared to $15.6 million for the three months ended December 31, 2013. Diluted earnings per share for the three months ended December 31, 2014 was $0.41 compared to $0.13 for the three months ended December 31, 2013. Net income for the three months ended December 31, 2013 included an after-tax loss of approximately $17.9 million on the Company’s sale of its Mexico subsidiaries.

“Cinemark’s domestic box office revenues over-indexed the industry by 140 basis points for the fourth quarter of 2014, and worldwide, Cinemark exceeded the North American industry by more than 600 basis points on a currency adjusted basis,” stated Tim Warner, Cinemark’s Chief Executive Officer. “Looking back on 2014, I am proud of our strategic initiatives progression during the year, including adding 170 new state-of-the art screens to our circuit, completing the conversion of our worldwide first-run circuit to digital projection, and expanding our XD brand to a total of 179 screens, all while maintaining our industry-leading Adjusted EBITDA.”

Cinemark Holdings, Inc.’s revenues for the year ended December 31, 2014 decreased 2.1% to $2,627.0 million from $2,682.9 million for the year ended December 31, 2013. For the year ended December 31, 2014, admissions revenues were $1,644.2 million and concession revenues were $845.4 million. Average ticket price increased 1.0% to $6.23 and concession revenues per patron increased 4.6% to $3.20 for the year ended December 31, 2014.

Adjusted EBITDA for the year ended December 31, 2014 was $596.5 million compared to $625.3 million for the year ended December 31, 2013. 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 year ended December 31, 2014 was $192.6 million compared to $148.5 million for the year ended December 31, 2013. Diluted earnings per share for the year ended December 31, 2014 was $1.66 compared to $1.28 for the year ended December 31, 2013. Net income attributable to Cinemark Holdings, Inc. for the year ended December 31, 2013 included a pre-tax loss on early retirement of debt of approximately $72.3 million.

As of December 31, 2014, the Company’s aggregate screen count was 5,676 and the Company had commitments to open 18 new theatres and 158 screens during 2015 and five new theatres with 53 screens subsequent to 2015.

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 495 theatres with 5,676 screens in 41 U.S. states, Brazil, Argentina and 11 other Latin American countries as of December 31, 2014. 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, 2014 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, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2014 2013 2014 2013
Statement of Income Data:
Revenues
Admissions $ 404,697 $ 412,617 $ 1,644,169 $ 1,706,145
Concession 214,805 201,769 845,376 845,168
Other 40,442 37,547 137,445 131,581
Total revenues 659,944 651,933 2,626,990 2,682,894
Cost of operations
Film rentals and advertising 217,632 227,292 883,052 919,511
Concession supplies 33,123 31,723 131,985 135,715
Facility lease expense 77,525 77,024 317,096 307,851
Other theatre operating expenses 146,150 146,400 582,325 575,056
General and administrative expenses 36,552 44,631 151,444 165,351
Depreciation and amortization 44,548 43,805 175,656 163,970
Impairment of long-lived assets 1,353 1,718 6,647 3,794
(Gain) loss on sale of assets and other 6,996 (1,313 ) 15,715 (3,845 )
Total cost of operations 563,879 571,280 2,263,920 2,267,403
Operating income 96,065 80,653 363,070 415,491
Interest expense (1) (28,597 ) (28,172 ) (113,698 ) (124,714 )
Loss on early retirement of debt (72,302 )
Distributions from NCM 4,383 7,283 18,541 20,701
Other income 1,373 6,730 22,150 24,688
Income before income taxes 73,224 66,494 290,063 263,864
Income taxes 25,587 50,590 96,064 113,316
Net income $ 47,637 $ 15,904 $ 193,999 $ 150,548
Less: Net income attributable to noncontrolling interests 330 312 1,389 2,078
Net income attributable to Cinemark Holdings, Inc. $ 47,307 $ 15,592 $ 192,610 $ 148,470
Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders:
Basic $ 0.41 $ 0.13 $ 1.66 $ 1.28
Diluted $ 0.41 $ 0.13 $ 1.66 $ 1.28
Weighted average diluted shares outstanding 115,062 114,536 114,966 114,396
Other Financial Data:
Adjusted EBITDA (2) $ 156,876 $ 140,870 $ 596,525 $ 625,323

(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
December 31,
2014 2013
Balance Sheet Data (unaudited, in thousands):
Cash and cash equivalents $ 638,869 $ 599,929
Theatre properties and equipment, net $ 1,450,812 $ 1,427,190
Total assets $ 4,151,980 $ 4,144,163
Long-term debt, including current portion $ 1,822,997 $ 1,832,800
Equity $ 1,123,129 $ 1,102,417

Segment Information
(unaudited, in thousands)
Three Months Ended Year Ended
December 31, December 31,
2014 2013

2014

2013
Revenues
U.S. $ 501,731 $ 499,776 $ 1,934,990 $ 1,912,674
International 161,122 155,210 704,623 783,053
Eliminations (2,909 ) (3,053 ) (12,623 ) (12,833 )
Total revenues $ 659,944 $ 651,933 $ 2,626,990 $ 2,682,894
Adjusted EBITDA
U.S. $ 122,933 $ 113,910 $ 436,863 $ 455,489
International 33,943 26,960 159,662 169,834
Total Adjusted EBITDA $ 156,876 $ 140,870 $ 596,525 $ 625,323
Capital expenditures
U.S. $ 51,412 $ 45,955 $ 148,532 $ 117,488
International 37,125 54,227 96,173 142,182
Total capital expenditures $ 88,537 $ 100,182 $ 244,705 $ 259,670

Additional Segment Information ((1))
(unaudited)

U.S. Operating Segment

International Operating
Segment

Consolidated
Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
% % %
2014 2013

Change

2014 2013

Change

2014 2013 Change
Admissions revenues $ 312.9 $ 323.0 (3.1 %) $ 91.8 $ 89.6 2.5 % $ 404.7 $ 412.6 (1.9 %)
Concession revenues $ 164.2 $ 156.0 5.3 % $ 50.6 $ 45.8 10.5 % $ 214.8 $ 201.8 6.4 %
Other revenues(2) $ 21.7 $ 17.7 22.6 % $ 18.7 $ 19.8 (5.6 %) $ 40.4 $ 37.5 7.7 %
Total revenues(2) $ 498.8 $ 496.7 0.4 % $ 161.1 $ 155.2 3.8 % $ 659.9 $ 651.9 1.2 %
Attendance 44.0 45.0 (2.2 %) 21.7 19.8 9.6 % 65.7 64.8 1.4 %
Average ticket price $ 7.11 $ 7.18 (1.0 %) $ 4.23 $ 4.53 (6.6 %) $ 6.16 $ 6.37 (3.3 %)
Concession revenues per patron $ 3.73 $ 3.47 7.5 % $ 2.33 $ 2.31 0.9 % $ 3.27 $ 3.11 5.1 %
Average screen count 4,481 4,432 1.1 % 1,163 1,241 (6.3 %) 5,644 5,673 (0.5 %)
U.S. Operating Segment

International Operating
Segment

Consolidated
Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
2014 2013 2014 2013 2014 2013
Film rentals and advertising $ 175.6 $ 184.7 $ 42.1 $ 42.6 $ 217.7 $ 227.3
Concession supplies $ 22.0 $ 21.4 $ 11.1 $ 10.3 $ 33.1 $ 31.7
Salaries and wages $ 53.0 $ 52.3 $ 18.7 $ 18.2 $ 71.7 $ 70.5
Facility lease expense $ 59.0 $ 58.3 $ 18.5 $ 18.8 $ 77.5 $ 77.1
Utilities and other $ 52.5 $ 53.6 $ 21.9 $ 22.3 $ 74.4 $ 75.9
International
U.S. Operating Segment Operating Segment Consolidated
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
% % %
2014 2013 Change 2014 2013 Change 2014 2013 Change
Admissions revenues $ 1,220.8 $ 1,231.4 (0.9 %) $ 423.4 $ 474.7 (10.8 %) $ 1,644.2 $ 1,706.1 (3.6 %)
Concession revenues $ 635.6 $ 609.3 4.3 % $ 209.8 $ 235.9 (11.1 %) $ 845.4 $ 845.2 0.0 %
Other revenues(2) $ 66.0 $ 59.1 11.7 % $ 71.4 $ 72.5 (1.5 %) $ 137.4 $ 131.6 4.4 %

Total revenues(2)

$ 1,922.4 $ 1,899.8 1.2 % $ 704.6 $ 783.1 (10.0 %) $ 2,627.0 $ 2,682.9 (2.1 %)
Attendance 173.9 177.2 (1.9 %) 90.0 99.4 (9.5 %) 263.9 276.6 (4.6 %)
Average ticket price $ 7.02 $ 6.95 1.0 % $ 4.70 $ 4.78 (1.7 %) $ 6.23 $ 6.17 1.0 %
Concession revenues per patron $ 3.65 $ 3.44 6.1 % $ 2.33 $ 2.37 (1.7 %) $ 3.20 $ 3.06 4.6 %
Average screen count 4,467 4,233 5.5 % 1,146 1,315 (12.9 %) 5,613 5,548 1.2 %
U.S. Operating Segment

International
Operating Segment

Consolidated
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2014 2013 2014 2013 2014 2013
Film rentals and advertising $ 681.1 $ 687.3 $ 202.0 $ 232.2 $ 883.1 $ 919.5
Concession supplies $ 86.4 $ 83.7 $ 45.6 $ 52.0 $ 132.0 $ 135.7
Salaries and wages $ 202.8 $ 192.5 $ 71.1 $ 76.8 $ 273.9 $ 269.3
Facility lease expense $ 235.2 $ 215.5 $ 81.9 $ 92.4 $ 317.1 $ 307.9
Utilities and other $ 217.2 $ 204.5 $ 91.2 $ 101.2 $ 308.4 $ 305.7

(1) Revenues, attendance and theatre operating costs are in millions. Average ticket price and concession revenues per patron are in dollars.

(2) U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment.

Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
Three months ended Year ended
December 31, December 31,
2014 2013 2014 2013
Net income $ 47,637 $ 15,904 $ 193,999 $ 150,548
Income taxes 25,587 50,590 96,064 113,316
Interest expense 28,597 28,172 113,698 124,714
Loss on early retirement of debt 72,302
Other income (1,373 ) (6,730 ) (22,150 ) (24,688 )
Depreciation and amortization 44,548 43,805 175,656 163,970
Impairment of long-lived assets 1,353 1,718 6,647 3,794
(Gain) loss on sale of assets and other 6,996 (1,313 ) 15,715 (3,845 )
Deferred lease expenses – theatres (2) 754 608 2,197 1,564
Deferred lease expenses – DCIP (3) (234 ) 1,055 339 4,137
Amortization of long-term prepaid rents (2) (243 ) 521 1,542 2,625
Share based awards compensation expense (4) 3,254 6,540 12,818 16,886
Adjusted EBITDA (1) $ 156,876 $ 140,870 $ 596,525 $ 625,323

(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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