Exhibit 99.1
For Immediate Release
Contact: Robert Copple or Nikki Sacks
972-665-1500
CINEMARK HOLDINGS, INC. REPORTS RESULTS FOR SECOND QUARTER 2007
Plano, TX, August 13, 2007 — 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 $818.1
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.
2
Cinemark Holdings, Inc.
Financial and Operating Summary
(unaudited, in thousands)
| |
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| |
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Three months ended June 30, |
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|
Six months ended June 30, |
|
| |
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
2006 |
|
Statement of Income data: |
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|
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|
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|
|
|
|
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: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Average screen count (month end average): |
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
Domestic |
|
|
3,558 |
|
|
|
2,458 |
|
|
|
3,543 |
|
|
|
2,440 |
|
International |
|
|
963 |
|
|
|
925 |
|
|
|
961 |
|
|
|
920 |
|
| |
|
|
Worldwide |
|
|
4,521 |
|
|
|
3,383 |
|
|
|
4,504 |
|
|
|
3,360 |
|
| |
|
|
3
| |
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| |
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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 |
|
| |
|
|
4
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. |
5
