Cinemark Reports Results for Fourth Quarter and Fiscal Year 2007

PLANO, Texas--(BUSINESS WIRE)--

Cinemark Holdings, Inc. (NYSE: CNK), a leading motion picture exhibitor, today reported results for the three months and year ended December 31, 2007.

Cinemark Holdings, Inc.'s admissions revenues increased 2.6% to $252.4 million and concession revenues increased 2.7% to $118.6 million for the three months ended December 31, 2007, primarily related to a 7.5% increase in average ticket prices and a 7.3% increase in concession revenues per patron. Total revenues for the three months ended December 31, 2007 increased to $393.3 million.

Adjusted EBITDA for the three months ended December 31, 2007 decreased 8.2% to $83.8 million from $91.3 million for the three months ended December 31, 2006. The Company's Adjusted EBITDA margin was 21.3% for the three months ended December 31, 2007. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

"Cinemark delivered consistent revenue growth and industry-leading financial performance in 2007 due to the efficient operation of our theaters, our continued focus on organic expansion in domestic and international markets and the integration of the Century Theatres," stated Alan Stock, Cinemark's Chief Executive Officer. "We are pleased with our worldwide performance for the quarter and experienced another quarter of outperformance with our international business. For 2008, we believe there is a solid slate of movies in the pipeline. Additionally, we operate in an industry that provides one of the lowest cost forms of out-of-home entertainment, and in light of a weakening economy, we expect our industry to show resilience as it has exhibited in past recessionary periods. We remain dedicated to improving our profitability, developing our new theatre pipeline, and positioning Cinemark to capitalize on industry innovations, such as digital cinema, to return value to shareholders over the long term."

Net loss before taxes for the three months ended December 31, 2007 was $11.6 million. As a result of the interim period income tax allocations required under U.S. generally accepted accounting principles ("GAAP"), the Company recorded income tax expense of $42.2 million for the three months ended December 31, 2007. The impact of the interim period income tax allocation combined with asset impairment charges of $26.2 million for the three months ended December 31, 2007 were the primary reasons for the Company's net loss after taxes of $53.8 million. The effective tax rate for the three months ended December 31, 2007 was (364.8%). The Company's effective tax rate for the year ended December 31, 2007 was 55.7%. Excluding goodwill impairment charges of approximately $67.7 million, which are not deductible for income tax purposes, the Company's effective tax rate for the year ended December 31, 2007 was approximately 41.7%.

Cinemark Holdings, Inc.'s revenues for the year ended December 31, 2007 increased 37.9% to $1,682.8 million from $1,220.6 million for the year ended December 31, 2006. During the year ended December 31, 2007, admissions revenues increased 43.0% and concession revenues increased 37.4%. The increases were primarily related to a 19.3% increase in attendance; a 20.0% increase in average ticket prices; and a 15.2% increase in concession revenues per patron, all of which were favorably impacted by the acquisition of Century Theatres, Inc. that occurred on October 5, 2006. On a pro forma basis giving effect to the Century Acquisition as if it had occurred on January 1, 2006, the Company's total revenues for the year ended December 31, 2007 increased 4.4%, admissions revenues increased 5.6% and concession revenues increased 6.0%. The increases were primarily related to increases in average ticket price and concession revenues per patron.

Adjusted EBITDA for the year ended December 31, 2007 increased 38.8% to $376.9 million from $271.6 million for the year ended December 31, 2006. The Company's Adjusted EBITDA margin was 22.4% for the year ended December 31, 2007. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

Net income for the year ended December 31, 2007 was $88.9 million compared to net income of $0.8 million for the year ended December 31, 2006.

During the year ended December 31, 2007, the Company repurchased approximately $332.1 million aggregate principal amount of its 9% senior subordinated notes, primarily utilizing the proceeds received upon the sale of shares in connection with the National CineMedia, Inc. initial public offering, and repurchased $69.2 million aggregate principal amount at maturity of its 9 3/4% senior discount notes utilizing the proceeds from its initial public offering. The Company recorded a loss on early retirement of debt of approximately $13.5 million related to these note repurchases.

On December 31, 2007, the Company's aggregate screen count was 4,665, with screens in the United States, Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Colombia. As of December 31, 2007, the Company had signed commitments to open 13 new theatres with 147 screens during 2008 and open five new theatres with 78 screens subsequent to 2008.

Conference Call

The Company will host a conference call and audio webcast with investors, analysts and other interested parties today at 5:00 P.M. Eastern time. The call can be accessed live over the phone by dialing (800) 374-1346, or for international callers, (706) 679-3149. The passcode is 36984398. A replay will be available shortly after the call and can be accessed by dialing (800) 642-1687, or for international callers, (706) 645-9291. The passcode for the replay is 36984398. The replay will be available until March 8, 2008.

About Cinemark Holdings, Inc.

Headquartered in Plano, TX, Cinemark is a leader in the motion picture exhibition industry. As of December 31, 2007, Cinemark operates 408 theatres and 4,665 screens in 38 states in the United States and internationally in 12 countries, mainly in Mexico, South and Central America. For more information go to www.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," "will," "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 424(b)(1) prospectus filed April 24, 2007 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)
                                                            Pro Forma
                  Three months ended       Years ended      Year ended
                                                            December
                     December 31,         December 31,          31,
                  -----------------------------------------
                    2007      2006       2007       2006     2006 (1)
                  --------- --------- ---------- ---------- ----------
Statement of
 Operations Data:
Revenues
  Admissions      $ 252,422 $ 246,092 $1,087,480 $  760,275 $1,029,881
  Concession        118,644   115,575    516,509    375,798    487,416
  Other              22,218    29,838     78,852     84,521     94,807
                  ----------------------------------------- ----------
      Total
       revenues     393,284   391,505  1,682,841  1,220,594  1,612,104
                  ----------------------------------------- ----------

Cost of
 operations
  Film rentals
   and
   advertising      135,517   130,982    589,717    405,987    546,144
  Concession
   supplies          18,403    17,157     81,074     59,020     75,359
  Facility lease
   expense           52,889    48,246    212,730    161,374    206,950
  Other theatre
   operating
   expenses          89,243    83,498    364,569    263,424    345,388
  General and
   administrative
   expenses          21,787    21,810     79,518     67,768     84,619
  Termination of
   profit
   participation
   agreement              -         -      6,952          -          -
  Depreciation
   and
   amortization      38,289    34,947    151,716     99,470    141,416
  Impairment of
   long-lived
   assets            26,168    23,338     86,558     28,537     28,943
  (Gain) loss on
   sale of assets
   and other        (2,336)     2,345    (2,953)      7,645      7,706
                  ----------------------------------------- ----------
Total cost of
 operations         379,960   362,323  1,569,881  1,093,225  1,436,525
                  ----------------------------------------- ----------
Operating income     13,324    29,182    112,960    127,369    175,579

  Interest
   expense (2)     (33,830)  (42,220)  (145,596)  (109,328)  (168,051)
  Gain on NCM
   transaction            -         -    210,773          -          -
  Gain on
   Fandango
   transaction            -         -      9,205          -          -
  Loss on early
   retirement of
   debt             (1,920)   (5,782)   (13,456)    (8,283)    (8,283)
  Distributions
   from NCM           5,745         -     11,499          -          -
  Other income        5,114     1,600     15,497      3,768      3,727
                  ----------------------------------------- ----------
Income (loss)
 before taxes      (11,567)  (17,220)    200,882     13,526      2,972
Income taxes         42,198     3,109    111,962     12,685      6,520
                  ----------------------------------------- ----------
Net income (loss) $(53,765) $(20,329) $   88,920 $      841 $  (3,548)
                  ========================================= ==========
Net Earnings
 (Loss) Per
 Share:
  Basic           $  (0.50) $  (0.22) $     0.87 $     0.01 $   (0.04)
                  ========================================= ==========
  Diluted         $  (0.50) $  (0.22) $     0.85 $     0.01 $   (0.04)
                  ========================================= ==========

Other Financial
 Data:
  Adjusted EBITDA
   (3)            $  83,800 $  91,330 $  376,938 $  271,615
  Adjusted EBITDA
   margin             21.3%     23.3%      22.4%      22.3%

Other Operating
 Data:
  Attendance
   (patrons):
    Domestic         34,891    37,156    151,712    118,714    155,981
    International    12,669    12,621     60,958     59,550     59,550
                  ----------------------------------------- ----------
    Worldwide        47,560    49,777    212,670    178,264    215,531
                  ========================================= ==========

  Average screen
   count (month
   end average):
    Domestic          3,631     3,516      3,581      2,695
    International     1,001       955        977        933
                  -----------------------------------------
    Worldwide         4,632     4,471      4,558      3,628
                  =========================================
                                                As of        As of
                                             December 31, December 31,
                                                 2007         2006
                                             ------------ ------------
Balance Sheet Data:
 Cash and cash equivalents                     $  338,043   $  147,099
 Theatre properties and equipment, net          1,314,066    1,324,572
 Total assets                                   3,296,892    3,171,582
 Long-term debt, including current portion      1,523,745    1,911,653
 Stockholders' equity                           1,019,203      689,297
                         Segment Information
                      (unaudited, in thousands)

                            Three months ended        Years ended
                               December 31,          December 31,
                           -------------------------------------------
                              2007       2006       2007       2006
                           ---------- ---------- ---------- ----------
Revenues
 U.S.                      $  318,207 $  328,955 $1,352,042 $  936,684
 International                 75,663     63,074    333,624    285,854
 Eliminations                   (586)      (524)    (2,825)    (1,944)
                           -------------------------------------------
     Total Revenues        $  393,284 $  391,505 $1,682,841 $1,220,594
                           ===========================================
Adjusted EBITDA (3)
 U.S.                      $   72,195 $   82,771 $  309,800 $  217,845
 International                 11,605      8,559     67,138     53,770
                           -------------------------------------------
     Total Adjusted EBITDA $   83,800 $   91,330 $  376,938 $  271,615
                           ===========================================
Capital Expenditures
 U.S.                      $   28,649 $   20,855 $  110,496 $   80,786
 International                  7,606      8,324     35,808     26,295
                           -------------------------------------------
     Total Capital
      Expenditures         $   36,255 $   29,179 $  146,304 $  107,081
                           ===========================================
                  Reconciliation of Adjusted EBITDA
                      (unaudited, in thousands)

                               Three months ended      Years ended
                                  December 31,        December 31,
                               ---------------------------------------
                                 2007      2006       2007      2006
                               --------- --------- ---------- --------
Net income (loss)              $(53,765) $(20,329) $   88,920 $    841
  Income taxes                    42,198     3,109    111,962   12,685
  Interest expense (2)            33,830    42,220    145,596  109,328
  Gain on NCM transaction             --        --  (210,773)       --
  Gain on Fandango transaction        --        --    (9,205)       --
  Loss on early retirement of
   debt                            1,920     5,782     13,456    8,283
  Other income                   (5,114)   (1,600)   (15,497)  (3,768)
  Termination of profit
   participation agreement             -         -      6,952        -
  Depreciation and
   amortization                   38,289    34,947    151,716   99,470
  Impairment of long-lived
   assets                         26,168    23,338     86,558   28,537
  (Gain) loss on sale of
   assets and other              (2,336)     2,345    (2,953)    7,645
  Deferred lease expenses (4)      1,373       605      5,979    4,717
  Amortization of long-term
   prepaid rents (4)                 321       197      1,146    1,013
  Share based awards
   compensation expense (5)          916       716      3,081    2,864
                               ---------------------------------------
  Adjusted EBITDA (3)          $  83,800 $  91,330 $  376,938 $271,615
                               =======================================

(1) Pro forma financial and operating data for the year ended December 31, 2006 gives effect to the Century acquisition as if it had occurred on January 1, 2006. Pro forma data for the year ended December 31, 2006 represents Cinemark's historical data for the year ended December 31, 2006 plus Century's historical data for the period from January 1, 2006 to October 4, 2006. Pro forma adjustments have been made to eliminate the impact of the change of control payment made to Century's management at the time of the acquisition, to reflect additional depreciation and amortization expense related to the increase in long-lived assets to fair value pursuant to purchase accounting and to reflect the increase in interest expense related to the changes in the Company's debt structure that occurred as a result of the acquisition.

(2) Includes amortization of debt issue costs and excludes capitalized interest.

(3) Adjusted EBITDA as calculated in the chart above represents net income (loss) before income taxes, interest expense, gain on NCM transaction, gain on Fandango transaction, loss on early retirement of debt, other income, termination of profit participation agreement, 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 (loss) 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 margin represents Adjusted EBITDA divided by total revenues.

(4) Non-cash expense included in facility lease expense.

(5) Non-cash expense included in general and administrative expenses.

Source: Cinemark Holdings, Inc.