Cinemark Reports Results for Fourth Quarter and Fiscal Year 2008 and Declares Quarterly Cash Dividend
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, 2008.
Cinemark Holdings, Inc.'s revenues for the three months ended December 31, 2008 increased 3.7% to $407.8 million from $393.3 million for the three months ended December 31, 2007. During the three months ended December 31, 2008, admissions revenues increased 3.7% to $261.7 million and concession revenues increased 5.5% to $125.1 million. The increases were primarily related to a 5.9% increase in attendance.
Adjusted EBITDA for the three months ended December 31, 2008 increased to $84.2 million from $83.8 million for the three months ended December 31, 2007. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.
"The motion picture industry continues to be a bright spot in the economy, experiencing strong fourth quarter performance in an increasingly challenging global economic environment. Cinemark not only increased attendance in both domestic and international markets during the quarter, but we also improved our domestic and international average ticket prices and concession revenues per patron, excluding the impact of changes in foreign currency exchange rates. As in past recessions, consumers have proven that they recognize the cinema as an opportunity to affordably escape from every day pressures," stated Alan Stock, Cinemark's Chief Executive Officer.
Net loss for the three months ended December 31, 2008 was $89.5 million, primarily due to $105.4 million of impairment charges. Net loss for the three months ended December 31, 2007 was $53.8 million, primarily due to $26.2 million of impairment charges. The impairments are non-cash charges to earnings and did not affect the Company's liquidity or cash flows from operating activities.
Cinemark Holdings, Inc.'s revenues for the year ended December 31, 2008 increased 3.5% to $1,742.3 million from $1,682.8 million for the year ended December 31, 2007. During the year ended December 31, 2008, admissions revenues increased 3.6% to $1,127.0 million and concession revenues increased 3.5% to $534.8 million. The increases were primarily related to a 4.3% increase in average ticket prices and a 4.1% increase in concession revenues per patron.
Adjusted EBITDA for the year ended December 31, 2008 was $370.3 million, a decrease of 1.8% from $376.9 million for the year ended December 31, 2007. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.
Net loss for the year ended December 31, 2008 was $48.3 million compared to net income of $88.9 million for the year ended December 31, 2007. Net income for the year ended December 31, 2007 benefited from a $129.6 million after-tax gain on the NCM Transaction.
The Company had cash of approximately $350 million as of December 31, 2008. During the year ended December 31, 2008, the Company repurchased approximately $47 million aggregate principal amount at maturity of its 9 ¾% senior discount notes utilizing the proceeds from its initial public offering. As a result of the repurchases and regular payments on its debt, the Company reduced its long-term debt, net of cash, by approximately $26.8 million to $1.16 billion as of December 31, 2008.
The Company's board of directors has declared a cash dividend for its fourth quarter of fiscal 2008 of $0.18 per share of common stock. The dividend will be paid on March 20, 2009 to stockholders of record on March 5, 2009.
On December 31, 2008, the Company's aggregate screen count was 4,783, 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, 2008, the Company had signed commitments to open six new theatres with 69 screens during 2009 and open five new theatres with 78 screens subsequent to 2009.
Conference Call
The Company will host a conference call and audio webcast with investors, analysts and other interested parties today at 8:30 Eastern time. The call can be accessed live over the phone by dialing (800) 374-1346, or for international callers, (706) 679-3149. 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 85184184. The replay will be available until March 1, 2009.
About Cinemark Holdings, Inc.
Headquartered in Plano, TX, Cinemark is a leader in the motion picture exhibition industry. As of December 31, 2008, Cinemark operates 420 theatres and 4,783 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 Annual Report on Form 10-K filed March 28, 2008 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)
Three months ended Years ended
December 31, December 31,
2008 2007 2008 2007
Statement of Operations Data:
Revenues
Admissions $ 261,732 $ 252,422 $ 1,126,977 $ 1,087,480
Concession 125,129 118,644 534,836 516,509
Other 20,953 22,218 80,474 78,852
Total revenues 407,814 393,284 1,742,287 1,682,841
Cost of operations
Film rentals and advertising 141,049 135,517 612,248 589,717
Concession supplies 20,175 18,403 86,618 81,074
Facility lease expense 54,213 52,889 225,595 212,730
Other theatre operating 95,595 89,243 386,764 364,569
expenses
General and administrative 22,980 21,787 90,788 79,518
expenses
Termination of profit - - - 6,952
participation agreement
Depreciation and 42,567 38,289 158,034 151,716
amortization
Impairment of long-lived 105,387 26,168 113,532 86,558
assets
(Gain) loss on sale of 5,277 (2,336) 8,488 (2,953)
assets and other
Total cost of operations 487,243 379,960 1,682,067 1,569,881
Operating income (loss) (79,429) 13,324 60,220 112,960
Interest expense (1) (26,311) (33,830) (116,058) (145,596)
Gain on NCM transaction - - - 210,773
Gain on Fandango transaction - - - 9,205
Gain (loss) on early 1,738 (1,920) 1,698 (13,456)
retirement of debt
Distributions from NCM 6,661 5,745 18,838 11,499
Other income 3,001 5,114 8,032 15,497
Income (loss) before income (94,340) (11,567) (27,270) 200,882
taxes
Income taxes (4,793) 42,198 21,055 111,962
Net income (loss) $ (89,547) $ (53,765) $ (48,325) $ 88,920
Net Earnings (Loss) Per
Share:
Basic $ (0.83) $ (0.50) $ (0.45) $ 0.87
Diluted $ (0.83) $ (0.50) $ (0.45) $ 0.85
Other Financial Data:
Adjusted EBITDA (2) $ 84,157 $ 83,800 $ 370,292 $ 376,938
As of
December 31,
2008 2007
Balance Sheet Data:
Cash and cash equivalents $ 349,603 $ 338,043
Theatre properties and equipment, net 1,208,283 1,314,066
Total assets 3,065,708 3,296,892
Long-term debt, including current 1,508,462 1,523,745
portion
Stockholders' equity 811,256 1,019,203
Segment Information
(unaudited, in thousands)
Three months ended Years ended
December 31, December 31,
2008 2007 2008 2007
Revenues
U.S. $ 332,194 $ 318,207 $ 1,360,176 $ 1,352,042
International 76,360 75,663 385,817 333,624
Eliminations (740) (586) (3,706) (2,825)
Total Revenues $ 407,814 $ 393,284 $ 1,742,287 $ 1,682,841
Adjusted EBITDA(2)
U.S. $ 72,633 $ 72,195 $ 291,487 $ 309,800
International 11,524 11,605 78,805 67,138
Total Adjusted EBITDA $ 84,157 $ 83,800 $ 370,292 $ 376,938
Capital Expenditures
U.S. $ 26,512 $ 28,649 $ 77,193 $ 110,496
International 8,262 7,606 28,916 35,808
Total Capital Expenditures $ 34,774 $ 36,255 $ 106,109 $ 146,304
Additional Segment Information(1)
(unaudited)
U.S. Operating Segment International Operating Consolidated
Segment
Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
% % %
2008 2007 Change 2008 2007 Change 2008 2007 Change
Admissions $ 216.6 $ 207.5 4.4% $ 45.1 $ 44.9 0.4% $ 261.7 $ 252.4 3.7%
revenues
Concession $ 103.0 $ 98.1 5.0% $ 22.1 $ 20.5 7.8% $ 125.1 $ 118.6 5.5%
revenues
Other
revenues $ 11.9 $ 12.0 (0.8%) $ 9.1 $ 10.3 (11.7%) $ 21.0 $ 22.3 (5.8%)
(2)
Total
revenues $ 331.5 $ 317.6 4.4% $ 76.3 $ 75.7 0.8% $ 407.8 $ 393.3 3.7%
(2)
Attendance 35.7 34.9 2.3% 14.7 12.7 15.7% 50.4 47.6 5.9%
Average
ticket $ 6.07 $ 5.95 2.0% $ 3.07 $ 3.54 (13.3)% $ 5.19 $ 5.30 (2.1)%
price
Concession $ 2.89 $ 2.81 2.8% $ 1.50 $ 1.62 (7.4)% $ 2.48 $ 2.49 (0.4)%
per patron
Revenues
per
average $ 89,124 $ 87,475 1.9% $ 73,671 $ 75,606 (2.6%) $ 85,756 $ 84,910 1.0%
screen(2)
U.S. Operating International
Operating Consolidated
Segment
Segment
Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
Film
rentals and $ 118.9 $ 112.9 $ 22.1 $ 22.6 $ 141.0 $ 135.5
advertising
Concession 14.1 13.0 6.1 5.4 20.2 18.4
supplies
Salaries 38.5 35.1 7.2 6.9 45.7 42.0
and wages
Facility
lease 41.9 40.2 12.3 12.8 54.2 53.0
expense
Utilities 38.3 39.0 11.6 8.2 49.9 47.2
and other
Total
theatre $ 251.7 $ 240.2 $ 59.3 $ 55.9 $ 311.0 $ 296.1
operating
costs
(1) Revenues and attendance are in millions. Average ticket price,
concession per patron and revenues per average screen are in dollars.
(2) U.S. operating segment revenues include eliminations of intercompany
transactions with the international operating segment.
Additional Segment Information, continued(1)
(unaudited)
U.S. Operating Segment International Operating Consolidated
Segment
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
% % %
2008 2007 Change 2008 2007 Change 2008 2007 Change
Admissions $ 889.1 $ 879.1 1.1% $ 237.9 $ 208.4 14.2% $ 1,127.0 $ 1,087.5 3.6%
revenues
Concession $ 426.5 $ 424.4 0.5% $ 108.3 $ 92.1 17.6% $ 534.8 $ 516.5 3.5%
revenues
Other
revenues $ 40.9 $ 45.6 (10.3%) $ 39.6 $ 33.2 19.3% $ 80.5 $ 78.8 2.2%
(2)
Total
revenues $ 1,356.5 $ 1,349.1 0.5% $ 385.8 $ 333.7 15.6% $ 1,742.3 $ 1,682.8 3.5%
(2)
Attendance 147.9 151.7 (2.5%) 63.4 61.0 3.9% 211.3 212.7 (0.7%)
Average
ticket $ 6.01 $ 5.79 3.8% $ 3.75 $ 3.42 9.6% $ 5.33 $ 5.11 4.3%
price
Concession $ 2.88 $ 2.80 2.9% $ 1.71 $ 1.51 13.2% $ 2.53 $ 2.43 4.1%
per patron
Revenues
per
average $ 368,313 $ 376,771 (2.2%) $ 378,252 $ 341,451 10.8% $ 370,469 $ 369,200 0.3%
screen (2)
U.S. Operating International
Operating Consolidated
Segment
Segment
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
Film
rentals and $ 494.6 $ 485.2 $ 117.6 $ 104.5 $ 612.2 $ 589.7
advertising
Concession 58.5 57.8 28.1 23.3 86.6 81.1
supplies
Salaries 149.5 146.7 31.5 26.6 181.0 173.3
and wages
Facility
lease 166.8 161.7 58.8 51.0 225.6 212.7
expense
Utilities 151.8 149.0 54.0 42.3 205.8 191.3
and other
Total
theatre $ 1,021.2 $ 1,000.4 $ 290.0 $ 247.7 $ 1,311.2 $ 1,248.1
operating
costs
(1) Revenues and attendance are in millions. Average ticket price,
concession per patron and revenues per average screen 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 Years ended
December 31, December 31,
2008 2007 2008 2007
Net income (loss) $ (89,547) $ (53,765) $ (48,325) $ 88,920
Income taxes (4,793) 42,198 21,055 111,962
Interest expense (1) 26,311 33,830 116,058 145,596
Gain on NCM transaction ─ ─ ─ (210,773)
Gain on Fandango transaction ─ ─ ─ (9,205)
(Gain) loss on early retirement (1,738) 1,920 (1,698) 13,456
of debt
Other income (3,001) (5,114) (8,032) (15,497)
Termination of profit ─ ─ ─ 6,952
participation agreement
Depreciation and amortization 42,567 38,289 158,034 151,716
Impairment of long-lived assets 105,387 26,168 113,532 86,558
(Gain) loss on sale of assets 5,277 (2,336) 8,488 (2,953)
and other
Deferred lease expenses (3) 1,494 1,373 4,350 5,979
Amortization of long-term 425 321 1,717 1,146
prepaid rents (3)
Share based awards compensation 1,775 916 5,113 3,081
expense (4)
Adjusted EBITDA (2) $ 84,157 $ 83,800 $ 370,292 $ 376,938
(1) Includes amortization of debt issue costs and excludes capitalized
interest.
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, (gain) 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
(2) 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.
(3) Non-cash expense included in facility lease expense.
(4) Non-cash expense included in general and administrative expenses.
Source: Cinemark Holdings, Inc.
Released February 26, 2009