Announces a 10% Increase in Its Annual Dividend
Cinemark Holdings, Inc. (NYSE:CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and twelve months ended December 31, 2017 and announced that its Board of Directors has increased its cash dividend by 10% to $1.28 per share of common stock on an annualized basis, effective immediately. The fourth quarter dividend of $0.32 will be paid on March 22, 2018 to stockholders of record on March 8, 2018.
Cinemark Holdings, Inc.’s total revenues for the three months ended December 31, 2017 were $750.0 millioncompared to $700.9 million for the three months ended December 31, 2016. For the three months endedDecember 31, 2017, admissions revenues increased 4.5% to $443.5 million and concession revenues increased 10.1% to $261.2 million. Average ticket price was $6.72 and concession revenues per patron was $3.96 for the three months ended December 31, 2017.
Net income attributable to Cinemark Holdings, Inc. for the three months ended December 31, 2017 was $95.1 million compared to $77.0 million for the three months ended December 31, 2016. Net income attributable toCinemark Holdings, Inc. for the three months ended December 31, 2017 reflects the impact of new tax reform legislation that went into effect during December 2017. Diluted earnings per share for the three months ended December 31, 2017 was $0.82 compared to $0.66 for the three months ended December 31, 2016.
Adjusted EBITDA for the three months ended December 31, 2017 increased 11.5% to $187.5 millioncompared to $168.2 million for the three months ended December 31, 2016. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.
“We are thrilled to report our third consecutive year of record results in worldwide revenues, net income, Adjusted EBITDA and earnings per share,” stated Mark Zoradi, Cinemark Chief Executive Officer. “We were able to deliver these all-time highs in a box office environment that declined slightly year-over-year due to the successful execution of our strategic initiatives and the underlying strength of Cinemark’s operating fundamentals. Furthermore, during 2017 we surpassed North American industry box office results by 90 basis points and extended our outperformance trend to 32 of the past 36 quarters.”
Mr. Zoradi continued, “The on-going strength of our balance sheet and cash flows affords us a demonstrated ability to invest in long-term growth while returning capital to shareholders. Along these lines, we are excited to announce a 12 cent, or 10%, increase in our annual dividend resulting in a yield of approximately 3.2%. The Board based their decision to increase the dividend on the consistency of Cinemark’s financial performance, confidence in the exhibition industry, and cash benefits derived from U.S. tax reform.”
Cinemark Holdings, Inc.’s total revenues for the year ended December 31, 2017 increased 2.5% to $2,991.6 million from $2,918.8 million for the year ended December 31, 2016. For the year ended December 31, 2017, admissions revenues were $1,795.0 million and concession revenues increased 4.9% to $1,038.8 million. Average ticket price was $6.48 and concession revenues per patron was $3.75 for the year ended December 31, 2017.
Net income attributable to Cinemark Holdings, Inc. for the year ended December 31, 2017 was $264.2 millioncompared to $255.1 million for the year ended December 31, 2016. Net income attributable to Cinemark Holdings, Inc. for the year ended December 31, 2017 reflects the impact of new tax reform legislation that went into effect during December 2017. Diluted earnings per share for the year ended December 31, 2017was $2.26 compared to $2.19 for the year ended December 31, 2016.
Adjusted EBITDA for the year ended December 31, 2017 increased 2.5% to $723.8 million from $706.1 millionfor the year ended December 31, 2016. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.
As of December 31, 2017, the Company’s aggregate screen count was 5,959 and the Company had commitments to open 17 new theatres and 127 screens during 2018 and seven new theatres and 70 screens subsequent to 2018.
Conference Call/Webcast – Today at 8:30 AM ET
Telephone: via 800-374-1346 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 533 theatres with 5,959 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American countries as of December 31, 2017. For more information go to investors.cinemark.com.
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Cinemark Holdings, Inc. |
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Financial and Operating Summary |
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(unaudited, in thousands, except per share amounts) |
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| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Statement of income data: | ||||||||||||||||
| Revenues | ||||||||||||||||
| Admissions | $ | 443,505 | $ | 424,400 | $ | 1,794,982 | $ | 1,789,137 | ||||||||
| Concession | 261,215 | 237,305 | 1,038,788 | 990,103 | ||||||||||||
| Other | 45,274 | 39,213 | 157,777 | 139,525 | ||||||||||||
| Total revenues | 749,994 | 700,918 | 2,991,547 | 2,918,765 | ||||||||||||
| Cost of operations | ||||||||||||||||
| Film rentals and advertising | 240,907 | 229,554 | 966,510 | 962,655 | ||||||||||||
| Concession supplies | 42,203 | 37,470 | 166,320 | 154,469 | ||||||||||||
| Salaries and wages | 93,192 | 81,932 | 354,510 | 325,765 | ||||||||||||
| Facility lease expense | 79,628 | 79,390 | 328,197 | 321,294 | ||||||||||||
| Utilities and other | 83,290 | 90,420 | 355,041 | 355,926 | ||||||||||||
| General and administrative expenses | 40,281 | 34,212 | 153,278 | 143,355 | ||||||||||||
| Depreciation and amortization | 62,968 | 53,197 | 237,513 | 209,071 | ||||||||||||
| Impairment of long-lived assets | 5,484 | 513 | 15,084 | 2,836 | ||||||||||||
| Loss on sale of assets and other | 13,348 | 9,474 | 22,812 | 20,459 | ||||||||||||
| Total cost of operations | 661,301 | 616,162 | 2,599,265 | 2,495,830 | ||||||||||||
| Operating income | 88,693 | 84,756 | 392,282 | 422,935 | ||||||||||||
| Interest expense (1) | (26,710 | ) | (26,333 | ) | (105,918 | ) | (108,313 | ) | ||||||||
| Loss on debt amendments and refinancing | (275 | ) | (161 | ) | (521 | ) | (13,445 | ) | ||||||||
| Interest income | 1,854 | 1,366 | 6,249 | 6,396 | ||||||||||||
| Foreign currency exchange gain (loss) | (1,125 | ) | 3,572 | 893 | 6,455 | |||||||||||
| Distributions from NCM | 4,703 | 4,539 | 16,407 | 14,656 | ||||||||||||
| Equity in income of affiliates | 9,218 | 7,365 | 35,985 | 31,962 | ||||||||||||
| Income before income taxes | 76,358 | 75,104 | 345,377 | 360,646 | ||||||||||||
| Income taxes | (19,117 | ) | (2,183 | ) | 79,358 | 103,819 | ||||||||||
| Net income | $ | 95,475 | $ | 77,287 | $ | 266,019 | $ | 256,827 | ||||||||
| Less: Net income attributable to noncontrolling interests | 401 | 282 | 1,839 | 1,736 | ||||||||||||
| Net income attributable to Cinemark Holdings, Inc. | $ | 95,074 | $ | 77,005 | $ | 264,180 | $ | 255,091 | ||||||||
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Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders |
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| Basic | $ | 0.82 | $ | 0.66 | $ | 2.26 | $ | 2.19 | ||||||||
| Diluted | $ | 0.82 | $ | 0.66 | $ | 2.26 | $ | 2.19 | ||||||||
| Weighted average shares outstanding | 116,076 | 115,852 | 116,059 | 115,783 | ||||||||||||
| Other Financial Data: | ||||||||||||||||
| Adjusted EBITDA (2) | $ | 187,527 | $ | 168,170 | $ | 723,758 | $ | 706,103 | ||||||||
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(1) |
Includes amortization of debt issuance costs. | |
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(2) |
Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA is provided in the financial schedules accompanying this press release. | |
| As of | |||||||
| December 31, | |||||||
| 2017 | 2016 | ||||||
| Balance sheet data (unaudited, in thousands): | |||||||
| Cash and cash equivalents | $ | 522,547 | $ | 561,235 | |||
| Theatre properties and equipment, net | $ | 1,828,054 | $ | 1,704,536 | |||
| Total assets | $ | 4,470,893 | $ | 4,306,633 | |||
| Long-term debt, including current portion, net of unamortized debt issue costs | $ | 1,787,480 | $ | 1,788,112 | |||
| Equity | $ | 1,405,688 | $ | 1,272,960 | |||
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Other Operating Data |
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(unaudited, in millions, except per patron data) |
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| U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended
December 31, |
Three Months Ended
December 31, |
Constant
Currency (1) |
Three Months Ended
December 31, |
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| 2017 | 2016 | % Change | 2017 | 2016 | % Change | 2017 | % Change | 2017 | 2016 | % Change | ||||||||||||||||||||||||||||||||||
| Admissions revenues | $ | 353.4 | $ | 341.3 | 3.5 | % | $ | 90.1 | $ | 83.1 | 8.4 | % | $ | 90.3 | 8.7 | % | $ | 443.5 | $ | 424.4 | 4.5 | % | ||||||||||||||||||||||
| Concession revenues | $ | 207.9 | $ | 189.3 | 9.8 | % | $ | 53.3 | $ | 48.0 | 11.0 | % | $ | 53.4 | 11.3 | % | $ | 261.2 | $ | 237.3 | 10.1 | % | ||||||||||||||||||||||
| Other revenues | $ | 21.3 | $ | 20.0 | 6.5 | % | $ | 24.0 | $ | 19.2 | 25.0 | % | $ | 24.3 | 26.6 | % | $ | 45.3 | $ | 39.2 | 15.6 | % | ||||||||||||||||||||||
| Total revenues | $ | 582.6 | $ | 550.6 | 5.8 | % | $ | 167.4 | $ | 150.3 | 11.4 | % | $ | 168.0 | 11.8 | % | $ | 750.0 | $ | 700.9 | 7.0 | % | ||||||||||||||||||||||
| Attendance | 44.3 | 44.6 | (0.7 | )% | 21.7 | 20.9 | 3.8 | % | 66.0 | 65.5 | 0.8 | % | ||||||||||||||||||||||||||||||||
| Average ticket price | $ | 7.98 | $ | 7.65 | 4.3 | % | $ | 4.15 | $ | 3.98 | 4.3 | % | $ | 4.16 | 4.5 | % | $ | 6.72 | $ | 6.48 | 3.7 | % | ||||||||||||||||||||||
| Concession revenues per patron | $ | 4.69 | $ | 4.24 | 10.6 | % | $ | 2.46 | $ | 2.30 | 7.0 | % | $ | 2.46 | 7.0 | % | $ | 3.96 | $ | 3.62 | 9.4 | % | ||||||||||||||||||||||
| U.S. Operating Segment | International Operating Segment | Consolidated | |||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||||
| December 31, | December 31, | December 31, | |||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | Constant
Currency(1) 2017 |
2017 | 2016 | |||||||||||||||||||||
| Film rentals and advertising | $ | 198.1 | $ | 190.7 | $ | 42.8 | $ | 38.9 | $ | 42.9 | $ | 240.9 | $ | 229.6 | |||||||||||||
| Concession supplies | 30.7 | 27.4 | 11.5 | 10.1 | 11.5 | 42.2 | 37.5 | ||||||||||||||||||||
| Salaries and wages | 71.3 | 65.1 | 21.9 | 16.9 | 22.3 | 93.2 | 82.0 | ||||||||||||||||||||
| Facility lease expense | 59.9 | 61.0 | 19.7 | 18.4 | 19.7 | 79.6 | 79.4 | ||||||||||||||||||||
| Utilities and other | 56.5 | 62.9 | 26.7 | 27.5 | 27.2 | 83.2 | 90.4 | ||||||||||||||||||||
| U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||||||||||||||||||
| Twelve Months Ended
December 31, |
Twelve Months Ended
December 31, |
Constant
Currency (3) |
Twelve Months Ended
December 31, |
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| 2017 | 2016 | % Change | 2017 | 2016 | % Change | 2017 | % Change | 2017 | 2016 | % Change | ||||||||||||||||||||||||||||||||||
| Admissions revenues | $ | 1,356.9 | $ | 1,379.0 | (1.6 | )% | $ | 438.1 | $ | 410.2 | 6.8 | % | $ | 426.7 | 4.0 | % | $ | 1,795.0 | $ | 1,789.2 | 0.3 | % | ||||||||||||||||||||||
| Concession revenues | $ | 790.1 | $ | 764.6 | 3.3 | % | $ | 248.7 | $ | 225.5 | 10.3 | % | $ | 243.4 | 7.9 | % | $ | 1,038.8 | $ | 990.1 | 4.9 | % | ||||||||||||||||||||||
| Other revenues | $ | 75.1 | $ | 73.6 | 2.0 | % | $ | 82.7 | $ | 65.9 | 25.5 | % | $ | 81.5 | 23.7 | % | $ | 157.8 | $ | 139.5 | 13.1 | % | ||||||||||||||||||||||
| Total revenues | $ | 2,222.1 | $ | 2,217.2 | 0.2 | % | $ | 769.5 | $ | 701.6 | 9.7 | % | $ | 751.6 | 7.1 | % | $ | 2,991.6 | $ | 2,918.8 | 2.5 | % | ||||||||||||||||||||||
| Attendance | 174.4 | 182.6 | (4.5 | )% | 102.6 | 104.6 | (1.9 | )% | 277.0 | 287.2 | (3.6 | )% | ||||||||||||||||||||||||||||||||
| Average ticket price | $ | 7.78 | $ | 7.55 | 3.0 | % | $ | 4.27 | $ | 3.92 | 8.9 | % | $ | 4.16 | 6.1 | % | $ | 6.48 | $ | 6.23 | 4.0 | % | ||||||||||||||||||||||
| Concession revenues per patron | $ | 4.53 | $ | 4.19 | 8.1 | % | $ | 2.42 | $ | 2.16 | 12.0 | % | $ | 2.37 | 9.7 | % | $ | 3.75 | $ | 3.45 | 8.7 | % | ||||||||||||||||||||||
| U.S. Operating Segment | International Operating Segment | Consolidated | |||||||||||||||||||||||||
| Twelve Months Ended | Twelve Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
| December 31, | December 31, | December 31, | |||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | Constant
Currency(1) 2017 |
2017 | 2016 | |||||||||||||||||||||
| Film rentals and advertising | $ | 756.4 | $ | 768.9 | $ | 210.1 | $ | 193.8 | $ | 205.1 | $ | 966.5 | $ | 962.7 | |||||||||||||
| Concession supplies | 112.8 | 107.3 | 53.5 | 47.2 | 52.3 | 166.3 | 154.5 | ||||||||||||||||||||
| Salaries and wages | 265.8 | 248.2 | 88.7 | 77.6 | 88.2 | 354.5 | 325.8 | ||||||||||||||||||||
| Facility lease expense | 241.0 | 240.7 | 87.2 | 80.6 | 84.6 | 328.2 | 321.3 | ||||||||||||||||||||
| Utilities and other | 241.6 | 250.9 | 113.4 | 105.0 | 111.6 | 355.0 | 355.9 | ||||||||||||||||||||
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(1) |
Constant currency amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2016. We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations. | |
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Segment Information |
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(unaudited, in thousands) |
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| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues | ||||||||||||||||
| U.S. | $ | 585,723 | $ | 553,328 | $ | 2,236,237 | $ | 2,230,693 | ||||||||
| International | 167,320 | 150,361 | 769,436 | 701,573 | ||||||||||||
| Eliminations | (3,049 | ) | (2,771 | ) | (14,126 | ) | (13,501 | ) | ||||||||
| Total revenues | $ | 749,994 | $ | 700,918 | $ | 2,991,547 | $ | 2,918,765 | ||||||||
| Adjusted EBITDA | ||||||||||||||||
| U.S. | $ | 155,280 | $ | 139,395 | $ | 558,182 | $ | 548,413 | ||||||||
| International | 32,247 | 28,775 | 165,576 | 157,690 | ||||||||||||
| Total Adjusted EBITDA | $ | 187,527 | $ | 168,170 | $ | 723,758 | $ | 706,103 | ||||||||
| Capital expenditures | ||||||||||||||||
| U.S. | $ | 99,436 | $ | 67,053 | $ | 321,040 | $ | 242,271 | ||||||||
| International | 18,696 | 29,509 | 59,822 | 84,637 | ||||||||||||
| Total capital expenditures | $ | 118,132 | $ | 96,562 | $ | 380,862 | $ | 326,908 | ||||||||
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Reconciliation of Adjusted EBITDA |
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(unaudited, in thousands) |
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| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net income | $ | 95,475 | $ | 77,287 | $ | 266,019 | $ | 256,827 | ||||||||
| Add (deduct): | ||||||||||||||||
| Income taxes | (19,117 | ) | (2,183 | ) | 79,358 | 103,819 | ||||||||||
| Interest expense | 26,710 | 26,333 | 105,918 | 108,313 | ||||||||||||
| Loss on debt amendments and refinancing | 275 | 161 | 521 | 13,445 | ||||||||||||
| Other income | (9,947 | ) | (12,303 | ) | (43,127 | ) | (44,813 | ) | ||||||||
| Other cash distributions from equity investees (2) | 8,652 | 12,255 | 25,973 | 21,916 | ||||||||||||
| Depreciation and amortization | 62,968 | 53,197 | 237,513 | 209,071 | ||||||||||||
| Impairment of long-lived assets | 5,484 | 513 | 15,084 | 2,836 | ||||||||||||
| Loss on sale of assets and other | 13,348 | 9,474 | 22,812 | 20,459 | ||||||||||||
| Deferred lease expenses – theatres (3) | (51 | ) | 61 | (329 | ) | (50 | ) | |||||||||
| Deferred lease expenses – projectors (4) | (198 | ) | (242 | ) | (939 | ) | (940 | ) | ||||||||
| Amortization of long-term prepaid rents (3) | 734 | 470 | 2,274 | 1,826 | ||||||||||||
| Share based awards compensation expense (5) | 3,194 | 3,147 | 12,681 | 13,394 | ||||||||||||
| Adjusted EBITDA (1) | $ | 187,527 | $ | 168,170 | $ | 723,758 | $ | 706,103 | ||||||||
| (1) | Adjusted EBITDA as calculated in the chart above represents net income before income taxes, interest expense, other income, loss on debt amendments and refinancing, other cash distributions from equity investees, depreciation and amortization, impairment of long-lived assets, 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. Adjusted EBITDA margin represents Adjusted EBITDA divided by total revenues. | |
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(2) |
Represents cash distributions received from equity investees that were recorded as a reduction of the respective investment balances. | |
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(3) |
Non-cash expense included in facility lease expense. | |
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(4) |
Non-cash expense included in other theatre operating expenses. | |
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(5) |
Non-cash expense included in general and administrative expenses. | |