Cinemark Holdings, Inc. Reports Results for Second Quarter 2007
PLANO, Texas--(BUSINESS WIRE)--
Cinemark Holdings, Inc. (NYSE: CNK), a leading motion picture exhibitor, today reported results for the three and six months ended June 30, 2007.
Cinemark Holdings, Inc.'s revenues for the three months ended June 30, 2007 increased 49.1% to $440.0 million from $295.1 million for the three months ended June 30, 2006. Admissions revenues increased 54.8% and concession revenues increased 50.6%. The increases were primarily related to a 24.1% increase in attendance; a 25.1% increase in average ticket prices; and a 21.5% 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.
Adjusted EBITDA for the three months ended June 30, 2007 increased 38.9% to $95.7 million from $68.9 million for the three months ended June 30, 2006. The Company's Adjusted EBITDA margin was 21.7% for the three months ended June 30, 2007. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.
Net income for the three months ended June 30, 2007 was $47.9 million compared to net income of $13.1 million for the three months ended June 30, 2006.
"During the second quarter our solid performance was driven by the strength of a few summer blockbuster films, the performance of our international theatres, and the integration of the Century acquisition," stated Alan Stock, Cinemark's Chief Executive Officer. "I believe the outlook for Cinemark is positive with a good slate of movies for the remainder of the year and a robust new theatre development pipeline. In addition, we have opened our first fully digital theatre which will allow us to test the new technology and position ourselves even better for long term profitable growth."
Cinemark Holdings, Inc.'s revenues for the six months ended June 30, 2007 increased 51.2% to $818.0 million from $541.1 million for the six months ended June 30, 2006. Admissions revenues increased 56.6% and concession revenues increased 49.1%. The increases were primarily related to a 25.8% increase in attendance; a 24.8% increase in average ticket prices; and an 18.6% 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.
Adjusted EBITDA for the six months ended June 30, 2007 increased 48.4% to $175.8 million from $118.5 million for the six months ended June 30, 2006. The Company's Adjusted EBITDA margin was 21.5% for the six months ended June 30, 2007. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.
Net income for the six months ended June 30, 2007 was $166.1 million compared to net income of $18.9 million for the six months ended June 30, 2006.
Net income for the six months ended June 30, 2007 benefited from a $129.6 million after tax gain on the National CineMedia IPO, but was impacted by non-cash impairment charges of $56.8 million, the majority of which resulted from the Company amending its operating agreement with National CineMedia LLC (NCM). Cinemark records and measures goodwill for impairment purposes at an individual theatre level, rather than aggregated at the corporate level, which can result in more volatile impairment charges.
During the six months ended June 30, 2007, the Company repurchased approximately $332.1 million aggregate principal amount of its 9% senior subordinated notes primarily utilizing the proceeds from the NCM transaction. The Company recorded a loss on early retirement of debt of approximately $8.0 million related to this note repurchase.
On June 30, 2007, the Company's aggregate screen count was 4,568, with screens in the United States, Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Colombia. As of June 30, 2007, the Company had signed commitments to open nine new theatres with 121 screens by the end of 2007 and open 12 new theatres with 160 screens subsequent to 2007.
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 12086087. Additionally, a live audio webcast will be available to interested parties at www.cinemark.com under the Investor Relations section.
About Cinemark Holdings, Inc.
Headquartered in Plano, TX, Cinemark is a leader in the motion picture exhibition industry. As of June 30, 2007, Cinemark operates 402 theatres and 4,568 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
Cinemark Holdings, Inc. intends that this release be governed by the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995 (the "PSLR Act") with respect to statements that may be deemed to be forward-looking statements. Statements contained in this release other than statements of historical fact, including statements based on our current expectations, assumptions, estimates and projections about our business and our industry, are forward-looking statements. 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 Cinemark Holdings, Inc.'s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Forward-looking statements contained in this release reflect Cinemark Holdings, Inc.'s view only as of the date of this release. Cinemark Holdings, Inc. does not undertake any 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 Six months ended
June 30, June 30,
---------------------------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Statement of Income data:
Revenues
Admissions $283,117 $182,862 $527,107 $336,530
Concession 138,448 91,901 253,535 169,973
Other 18,471 20,342 37,416 34,591
---------------------------------------
Total revenues 440,036 295,105 818,058 541,094
---------------------------------------
Cost of operations
Film rentals and advertising 159,084 100,298 287,378 179,246
Concession supplies 22,668 14,807 40,125 26,847
Facility lease expense 53,253 37,828 104,898 74,860
Other theatre operating
expenses 93,663 60,296 178,038 116,943
General and administrative
expenses 18,381 15,428 37,114 29,510
Termination of profit
participation agreement 6,952 -- 6,952 --
Depreciation and amortization 37,345 21,504 75,154 43,166
Impairment of long-lived
assets 7,036 647 56,766 923
(Gain) loss on sale of assets
and other (1,864) 815 (1,559) 1,543
---------------------------------------
Total cost of operations 396,518 251,623 784,866 473,038
---------------------------------------
Operating income 43,518 43,482 33,192 68,056
Interest expense (1) (35,301) (22,209) (76,798) (44,577)
Gain on NCM transaction -- -- 210,773 --
Gain on Fandango transaction 9,205 -- 9,205 --
Loss on early retirement of
debt (123) (2,501) (7,952) (2,501)
Other income 4,888 1,311 7,371 1,804
---------------------------------------
Income before taxes 22,187 20,083 175,791 22,782
Income taxes (25,683) 6,979 9,710 3,888
---------------------------------------
Net income $ 47,870 $ 13,104 $166,081 $ 18,894
=======================================
Net Earnings Per Share
Basic $ 0.46 $ 0.16 $ 1.70 $ 0.23
=======================================
Diluted $ 0.45 $ 0.15 $ 1.66 $ 0.22
=======================================
Other Financial Data:
Adjusted EBITDA (2) $ 95,682 $ 68,907 $175,776 $118,525
Adjusted EBITDA margin 21.7% 23.3% 21.5% 21.9%
Other Operating Data:
Attendance (patrons):
Domestic 38,907 28,302 73,854 52,941
International 16,755 16,615 31,014 30,484
---------------------------------------
Worldwide 55,662 44,917 104,868 83,425
=======================================
Average screen count (month
end average):
Domestic 3,558 2,458 3,543 2,440
International 963 925 961 920
---------------------------------------
Worldwide 4,521 3,383 4,504 3,360
=======================================
As of As of
June 30, December 31,
2007 2006
---------- -------------
Balance Sheet Data:
Cash and cash equivalents $ 386,537 $ 147,099
Theatre properties and equipment, net 1,338,566 1,324,572
Total assets 3,361,459 3,171,582
Long-term debt, including current portion 1,575,181 1,911,653
Stockholders' equity 1,125,378 689,297
Segment Information
(unaudited, in thousands)
Three months ended Six months ended
June 30, June 30,
---------------------------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Revenues
U.S. $349,043 $215,956 $655,418 $396,996
International 91,790 79,638 164,051 144,962
Eliminations (797) (489) (1,411) (864)
---------------------------------------
Total Revenues $440,036 $295,105 $818,058 $541,094
=======================================
Adjusted EBITDA (2)
U.S. $ 74,811 $ 51,071 $141,512 $ 89,389
International 20,871 17,836 34,264 29,136
---------------------------------------
Total Adjusted EBITDA $ 95,682 $ 68,907 $175,776 $118,525
=======================================
Capital Expenditures
U.S. $ 28,148 $ 21,566 $ 53,045 $ 45,399
International 12,935 5,251 20,103 9,665
---------------------------------------
Total Capital Expenditures $ 41,083 $ 26,817 $ 73,148 $ 55,064
=======================================
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
Three months ended Six months ended
June 30, June 30,
---------------------------------------
2007 2006 2007 2006
--------- -------- ---------- ---------
Net income $ 47,870 $13,104 $ 166,081 $ 18,894
Income taxes (25,683) 6,979 9,710 3,888
Interest expense (1) 35,301 22,209 76,798 44,577
Gain on NCM transaction -- -- (210,773) --
Gain on Fandango transaction (9,205) -- (9,205) --
Loss on early retirement of
debt 123 2,501 7,952 2,501
Other income (4,888) (1,311) (7,371) (1,804)
Termination of profit
participation agreement 6,952 -- 6,952 --
Depreciation and amortization 37,345 21,504 75,154 43,166
Impairment of long-lived
assets 7,036 647 56,766 923
(Gain) loss on sale of assets
and other (1,864) 815 (1,559) 1,543
Deferred lease expenses (3) 1,704 1,442 3,311 2,823
Amortization of long-term
prepaid rents (3) 275 301 511 582
Stock option compensation
expense (4) 716 716 1,449 1,432
---------------------------------------
Adjusted EBITDA (2) $ 95,682 $68,907 $ 175,776 $118,525
=======================================
(1) Includes amortization of debt issue costs and excludes
capitalized interest.
(2) Adjusted EBITDA as calculated in the chart above represents net
income 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 stock option
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. Adjusted EBITDA
margin represents Adjusted EBITDA divided by total revenues.
(3) Non-cash expense included in facility lease expense.
(4) Non-cash expense included in general and administrative expenses.
Source: Cinemark Holdings, Inc.
Released August 13, 2007