cnk-8k_20200603.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): June 3, 2020

Cinemark Holdings, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware

001-33401

20-5490327

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

3900 Dallas Parkway, Plano, Texas 75093

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: 972.665.1000

N/A

(Former Name or Former Address, if Changed Since Last Report)

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock

CNK

NYSE

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02

Results of Operations and Financial Condition.

On June 3, 2020, we announced our financial results for the third quarter ended March 31, 2020. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 7.01

Regulation FD Disclosure.

Item 9.01

Financial Statements and Exhibits.

(d)Exhibits.

Exhibit No.		Exhibit Description

99.1		Earnings press release dated June 3, 2020.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

The information furnished pursuant to Items 2.02 and 7.01 of this Current Report on Form 8-K, including the exhibits, shall not be deemed to be incorporated by reference into any of our filings with the SEC under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing, and shall not be deemed to be “filed” with the SEC under the Securities Exchange Act of 1934, as amended.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



CINEMARK HOLDINGS, INC.

By:		/s/ Michael D. Cavalier
Name:		Michael D. Cavalier
Title:		Executive Vice President - General Counsel

Date: June 3, 2020

cnk-ex991_6.htm

Exhibit 99.1

CINEMARK HOLDINGS, INC. REPORTS RESULTS FOR THE FIRST QUARTER OF 2020

Plano, TX, June 3, 2020 – Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three months ended March 31, 2020. The Company’s financial results for the three months ended March 31, 2020 were impacted by the COVID-19 pandemic, as the Company temporarily closed all of its theatres effective March 18, 2020. See discussion in the Quarterly Report on Form 10-Q filed with the SEC.

Cinemark Holdings, Inc.’s total revenues for the three months ended March 31, 2020 were $543.6 million compared to $714.7 million for the three months ended March 31, 2019. For the three months ended March 31, 2020, admissions revenues were $292.5 million and concession revenues were $190.4 million. For the three months ended March 31, 2020, attendance was 45.8 million patrons, average ticket price increased 0.6% to $6.39 and concession revenues per patron increased 3.2% to $4.16.

Net loss attributable to Cinemark Holdings, Inc. for the three months ended March 31, 2020 was $59.6 million compared to net income attributable to Cinemark Holdings, Inc. of $32.7 million for the three months ended March 31, 2019. Diluted loss per share for the three months ended March 31, 2020 was $0.51 compared to diluted earnings per share of $0.28 for the three months ended March 31, 2019.

Adjusted EBITDA for the three months ended March 31, 2020 was $66.2 million compared to $152.3 million for the three months ended March 31, 2019. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

“As a direct result of the global COVID-19 pandemic, we were forced to close all of our theaters in the middle of March, which had a significant impact on our first quarter results, and continues to impact us today,” stated Mark Zoradi, Cinemark Chief Executive Officer. “We are looking forward to welcoming our guests and team members back to our theaters and are pleased to have now shifted our attention to domestic re-opening, which we plan to initiate in a multi-phased approach beginning June 19.”

Mr. Zoradi continued, “Our heightened sight and sound technology, giant screens and shared communal auditoriums provide a deeply immersive entertainment experience, as well as a transcendent escape from reality, that simply cannot be replicated at home. After months of home-sheltering, I am optimistic that these unparalleled factors offer movie-goers a much-needed relief that bodes well for Cinemark, and our industry as a whole, as theaters re-launch.”

As of March 31, 2020, the Company’s aggregate screen count was 6,145 and the Company had commitments to open five new theatres and 48 screens during the remainder of 2020 and 17 new theatres and 175 screens subsequent to 2020.

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.

Headquartered in Plano, TX, Cinemark (NYSE: CNK) is one of the largest and most influential movie theatre companies in the world. Cinemark’s circuit, comprised of various brands that also include Century, Tinseltown and Rave, operates 555 theatres with 6,145 screens in 41 states domestically and 15 countries throughout South and Central America. Cinemark consistently provides an extraordinary guest experience from the initial ticket purchase to the closing credits, including Movie Club, the first U.S. exhibitor-launched subscription program; the highest Luxury Lounger recliner seat penetration among the major players; XD - the No. 1 exhibitor-brand premium large format; and expansive food and beverage options to further enhance the moviegoing experience. For more information go to https://investors.cinemark.com/

Financial Contact :

Chanda Brashears – 972-665-1671 or cbrashears@cinemark.com

Media Contact:

Caitlin Piper – 972-665-1418 or pr@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,” “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, including, among others, the impacts of COVID-19. Such risks and uncertainties 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 February 21, 2020, as updated by the information related to COVID-19 that was included in a Form 8-K that was filed on April 13, 2020, including the documents incorporated by reference therein. 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, except per share amounts)

	Three Months Ended
	March 31,
	2020			2019
Statement of income data:
Revenues
Admissions	$	292,462		$	395,540
Concession		190,356			251,324
Other		60,798			67,859
Total revenues		543,616			714,723
Cost of operations
Film rentals and advertising		156,617			210,077
Concession supplies		34,812			43,071
Salaries and wages		87,544			96,136
Facility lease expense		82,241			85,613
Utilities and other		100,523			110,637
General and administrative expenses		41,018			37,976
Depreciation and amortization		65,256			64,462
Impairment of long-lived assets		16,619			5,584
Loss on disposal of assets and other		1,905			3,799
Total cost of operations		586,535			657,355
Operating income (loss)		(42,919	)		57,368
Interest expense		(24,666	)		(25,141	)
Interest income		2,084			2,691
Foreign currency exchange gain (loss)		(4,848	)		22
Distributions from NCM		5,224			4,548
Interest expense - NCM		(5,891	)		(4,782	)
Equity in income of affiliates		8,486			10,404
Income (loss) before income taxes		(62,530	)		45,110
Income taxes		(3,108	)		11,917
Net income (loss)	$	(59,422	)	$	33,193
Less: Net income attributable to noncontrolling interests		169			465
Net income (loss) attributable to Cinemark Holdings, Inc.	$	(59,591	)	$	32,728
Earnings (loss) per share attributable to Cinemark Holdings, Inc.'s common stockholders
Basic	$	(0.51	)	$	0.28
Diluted	$	(0.51	)	$	0.28
Weighted average shares outstanding - Diluted		116,496			116,418

Other Operating Data

(unaudited, in thousands)

	As of		As of
	March 31,		December 31,
	2020		2019
Balance sheet data:
Cash and cash equivalents	$	479,399	$	488,313
Theatre properties and equipment, net	$	1,658,325	$	1,735,247
Total assets	$	5,632,893	$	5,828,017
Long-term debt, including current portion, net of unamortized debt issue costs	$	1,876,416	$	1,777,937
Equity	$	1,265,565	$	1,448,322

Segment Information

(unaudited, in millions, except per patron data)

	U.S. Operating Segment							International Operating Segment												Consolidated
	Three Months Ended March 31,							Three Months Ended March 31,							Constant Currency ⁽¹⁾					Three Months Ended March 31,
Revenues	2020		2019		% Change			2020		2019		% Change			2020		% Change			2020		2019		% Change
Admissions revenues	$	232.3	$	308.8		(24.8	)%	$	60.2	$	86.7		(30.6	)%	$	71.1		(18.0	)%	$	292.5	$	395.5		(26.0	)%
Concession revenues	$	152.8	$	199.4		(23.4	)%	$	37.6	$	51.9		(27.6	)%	$	43.7		(15.8	)%	$	190.4	$	251.3		(24.2	)%
Other revenues	$	42.3	$	46.6		(9.2	)%	$	18.4	$	21.3		(13.6	)%	$	22.6		6.1	%	$	60.7	$	67.9		(10.6	)%
Total revenues	$	427.4	$	554.8		(23.0	)%	$	116.2	$	159.9		(27.3	)%	$	137.4		(14.1	)%	$	543.6	$	714.7		(23.9	)%
Attendance		27.9		38.7		(27.9	)%		17.9		23.6		(24.2	)%							45.8		62.3		(26.5	)%
Average ticket price	$	8.33	$	7.98		4.4	%	$	3.36	$	3.67		(8.4	)%	$	3.97		8.2	%	$	6.39	$	6.35		0.6	%
Concession revenues per patron	$	5.48	$	5.15		6.4	%	$	2.10	$	2.20		(4.5	)%	$	2.44		10.9	%	$	4.16	$	4.03		3.2	%

	U.S. Operating Segment				International Operating Segment						Consolidated
	Three Months Ended				Three Months Ended						Three Months Ended
	March 31,				March 31,						March 31,
Cost of Operations	2020		2019		2020		2019		Constant Currency ⁽¹⁾ 2019		2020		2019
Film rentals and advertising	$	128.0	$	169.2	$	28.6	$	40.9	$	33.9	$	156.6	$	210.1
Concession supplies	$	25.6	$	32.0	$	9.2	$	11.1	$	10.9	$	34.8	$	43.1
Salaries and wages	$	71.2	$	76.8	$	16.4	$	19.3	$	19.6	$	87.6	$	96.1
Facility lease expense	$	65.4	$	64.9	$	16.8	$	20.7	$	19.3	$	82.2	$	85.6
Utilities and other	$	75.0	$	79.8	$	25.5	$	30.8	$	30.2	$	100.5	$	110.6

(1)

Constant currency amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2019. 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 currency 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.

Other Segment Information

(unaudited, in thousands)

	Three Months Ended
	March 31,
	2020		2019
Adjusted EBITDA⁽¹⁾
U.S.	$	56,072	$	125,759
International		10,139		26,495
Total Adjusted EBITDA ⁽¹⁾	$	66,211	$	152,254
Capital expenditures
U.S.	$	25,673	$	52,339
International		8,470		5,230
Total capital expenditures	$	34,143	$	57,569

(1)

Adjusted EBITDA represents net income before income taxes, depreciation and amortization expense and other items, as calculated below. 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.

Reconciliation of Adjusted EBITDA

(unaudited, in thousands)

	Three Months Ended
	March 31,
	2020			2019
Net income (loss)	$	(59,422	)	$	33,193
Add (deduct):
Income taxes		(3,108	)		11,917
Interest expense		24,666			25,141
Other expense (income), net ^(a)		169			(8,335	)
Distributions from DCIP ^(b)		5,161			5,218
Cash distributions from other equity investees ^(c)		11,445			9,124
Depreciation and amortization		65,256			64,462
Impairment of long-lived assets		16,619			5,584
Loss on disposal of assets and other		1,905			3,799
Non-cash rent		(591	)		(819	)
Share based awards compensation expense ^(d)		4,111			2,970
Adjusted EBITDA	$	66,211		$	152,254

(a)

Includes interest income, foreign currency exchange gain (loss), interest expense – NCM and equity in income of affiliates.

(b)

Cash distributions from DCIP, which were recorded as a reduction of the Company’s investment in DCIP.

(c)

Cash distributions received from equity investees, other than those from DCIP noted above, that were recorded as a reduction of the respective investment balances.

(d)

Non-cash expense included in general and administrative expenses.

Document and Entity Information	Jun. 03, 2020
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0001385280
Document Type	8-K
Document Period End Date	Jun. 03, 2020
Entity Registrant Name	Cinemark Holdings, Inc.
Entity Incorporation State Country Code	DE
Entity File Number	001-33401
Entity Tax Identification Number	20-5490327
Entity Address, Address Line One	3900 Dallas Parkway
Entity Address, City or Town	Plano
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75093
City Area Code	972
Local Phone Number	665.1000
Security 12b Title	Common Stock
Trading Symbol	CNK
Security Exchange Name	NYSE
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false