Q2 2016 – Cinemark Holdings, Inc. Earnings Call Summary

Cinemark

Below are my key takeaways from the Cinemark Q2 2016 Earnings Call on Aug 9:

Summary:

Mark Zoradi, CEO, said, “Cinemark was again able to surpass the North American Industry Box Office performance by 120 basis points in the 2nd quarter of 2016.  Our US circuit has now exceeded the North American industry for 27 out of past 30 quarters.”

Total Revenue fell 7% YoY to $744MM. Admission revenue dropped 9.3% to $456MM and concessions was at $254, down 2.2%.  Total US revenue was $561MM, down 32MM from last year’s $592MM.  International was also down 24MM to $188MM.

Total US attendance was 46MM, compared to 49MM in Q2 2015.  The avg. US ticket price was $7.59, down slightly from the $7.67 last year.

The one bright spot was US concessions per patron, which increased 7% to $4.26.  This is a domestic all time high and shows 38 consecutive quarters of growth, the longest in the industry.  The main reason is the increased purchase incidences which was accomplished through creative floor design, expanded merchandising display and faster checkout times.

Opened 21 screens in the US and 23 internationally to end at 5,888 total screens in 522 theaters.  40% of theaters worldwide have enhanced concessions and 15% serve alcohol.

611 auditoriums feature luxury lounger recliner seats, representing 13% of total US footprint.  This has resulted in avg. attendance increases of upto 40%, for those open 6 months or more.  Will expand to 1,000 auditorium by YE 2016.

Worldwide ‘XD’ auditoriums (their version of IMAX) represented 3.7% of their global screens, yet generated 7.7% of box office.  There were 131 in US and 85 internationally. Their ‘XD’ is the #1 private label large screen format. About 30% of revenue comes from premium tickets, either ‘XD’ or 3D.

Cinemark Connections, their free app-based loyalty program, signed up 0.725MM guests on way to their goal of 1MM by YE 2016.

Financial Metrics:

  • Total Revenue: $744MM
    • Q2 2015: $800MM
    • Admissions: $456MM
      • Q2 2015: $503MM
    • Concession: $254MM
      • Q2 2015: $260MM
    • Other: $35MM
      • Q2 2015: $37
    • US Revenue: $561MM
      • Q2 2015: $592MM
    • International Revenue: $188MM
      • Q2 2015: $212MM
  • Film Rentals and Advertising Costs: $250MM / 55% of Admissions
    • Q2 2015: $278MM
  • Concession Supplies Costs: $39MM / 15% of Concession
    • Q2 2015: $41MM
  • Operating Income: $106MM
    • Q2 2015: $134MM
  • Net Income: $54MM
    • Q2 2015: $70MM
  • EPS: $0.46
    • Q2 2015: $0.61

Other Key Metrics:

  • Total # of Theaters: 522
  • Total # of Screens: 5,888
  • # US Theaters: 341
  • # US Screens: 4,576
  • Located in 41 States and 102 DMA’s
  • Ranked #1 or #2 in 22 out of Top 30 US Markets
  • # Latin American Theaters: 181
  • # Latin American Screens: 1,312
  • Located in 15 Latin American Countries
  • Attendance
    • Worldwide: 73MM
      • Q2 2015: 77MM
    • Domestic: 46MM
      • Q2 2016: 49MM
    • International: 28MM
      • Q2 2015: 28MM
  • Avg. Ticket Price
    • Worldwide: $6.25
      • Q2 2015: $6.56
    • Domestic: $7.59
      • Q2 2015: $7.67
    • International: $4.03
      • Q2 2015: $4.60
  • Avg. Concession/Patron
    • Worldwide: $3.47
      • Q2 2015: $3.38
    • Domestic: $4.26
      • Q2 2015: $3.98
    • International: $2.17
      • Q2 2015: $2.33
  • Avg. Screen Count
    • Worldwide: 5,864
      • Q2 2015: 5,707
    • Domestic: 4,566
      • Q2 2015: 4,498
    • International: 1,298
      • Q2 2015: 1,209

List of Key Properties:

  • Century Theaters
  • CineArts
  • Rave Cinemas
  • Tinseltown

Forward Thinking:

Links to Company Website:

Please comment below if there are data points from Cinemark you’d like me to include in their next Earnings Call Summary.

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