CNK - Earnings call transcript Q3 2018 | Cinemark Holdings, Inc.

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Operator

Good morning. My name is Angela and I will be your conference operator. At this time, I would like to welcome everyone to the Cinemark Third Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank like of call Investor now Brashears, to turn President Vice Relations. to would over the Chanda I

Chanda Brashears

may Thank you, Cinemark Operating Angela, hosted Sean remind time, are during quarter I Gamble, the to and earnings Litigation by good morning, like XXXX Officer Executive like Harbor welcome our everyone. forward-looking call discussed this XXXX. members would certain Mark to Safe that Act Chief listeners Zoradi, Reform the I matters you Officer; United within conference Financial Officer. management to by release Holdings, Chief of conference third would Inc.'s the call, Securities meaning At constitute statements that and of States this of Private of Chief and provision

found of may today's non-GAAP XX-Q, and Mark like company's include within be and release, filings call are the subject to filed directly recently Today's webcast by and in that expressly with forth to measures results call expectations the are Quarterly measures. these company Cinemark's obligation qualified the press on the actual Zoradi. or from risks including to over company's Form most XX-K. factors at statements. publicly differ implied A indicated Annual to revise or undertakes financial calculated on on in statements risk filed the would cause certain The no set to turn update investors.cinemark.com. Report their Form SEC, the to Such website with and may I now materially recently can forward-looking Report any the entirety and accordance statements. GAAP reconciliation measures in non-GAAP comparable most uncertainties the presented company's in such most Forward-looking

Mark Zoradi

during you to of sustained office. we American remarkable initiatives was our Thank and us along you, with our all generated the revenue everyone. by content XX.X% of margin for adjusted on quarter Furthermore, third discipline, XX.X%. the This strong It execution income across X.X%, quarter focused quarter of Driven good North industry Hollywood joining discuss included global box expanded another growth net EBITDA XXXX XX results. meaningful worldwide adjusted X.X%, operating X.X%. We metrics. of and increase appreciate Cinemark and of film EBITDA morning, Chanda, basis points our and growth in the total strategic attendance key to capitalized

office quarters, extended by points exceeded we of industry our expected box and basis of greater of as basis growth recognition revenue points, surpassing – address and his out America during results also Sean We XX year's changes results XX as this detail the will commentary. reported XX the trend quarters North industry that in we to industry impact excluding XXX

the be in exceeded X.X% strength the to the expected be yet Hotel box attributable the several as cannot set heightened a box of last office year's expectations growth results, $X.X through is results. with movie-going driven the as horror an office films studio significantly compelling this as it X.X%, content, for The to as North industry, of that new in that replicated the The the American We yielded as Mamma theaters markets did up X delivered experience Hotel And name X Asians industry office of increase revenue sizable experience international environment as at the evolve attendance could simply which office September U.S. of box theatrical coupled creating attendance outstanding to performance at few. the and quarter communicated Nun, was an our as That this earnings of third in quarter last and are quarter scale billion. Latin all while believe third time again highest as reinforces horror box the film to films Transylvania T in of North of record they America year's such record grossing admissions Additionally, did such strong as home. films very stability lineup measure through by and further Crazy now Hollywood not the year-to-date by The growth to It our success Annabelle: uptick X%. It's Hollywood attendance several has both culminating is exhibition to well during variety Rich to and broad a continues while increase two partners our The noteworthy including a As and America during and that Nun, results, movie-going Shifting Moreover, with call, well this not films a Crazy Asians, other films X Despicable Rich in just boosted and Nun to translate which quarter well Meg, mid-tier region, did massive not in performed resonate the Me of exceptionally Mia! Creation. momentum our

America's attendance year-over-year. As Latin slightly result, dipped quarter a

Fortunately, described. in results third advancement results while along our drove initiatives performance robust the as office, our operating the with strategic previously our international North attendance in of America's box solid and did create quarter, strong some pressure global

are program, extraordinary members our attendance several Each of to we strategic held increased by an providing our So our proprietary subscriber helped has our us base propel our net last have Club these lines by growing our steady membership have equates additional movie puts call, along been than of box on theater initiatives which our guest recent and most XX% across location. results. XXX,XXX a at sign-ups Movie experience. Movie deeper at take new office Club, per and and let's to successful focused X,XXX is those initiatives XXXX initiative strong and U.S. and members look Since incredibly date. the earnings that monetizing and more

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Second, to bring same companion the a ability for the member rate.

seats they no discount. reserve of online Third, time and And generous can the XX% with their redeem ahead very to finally, concession easy fees.

theaters Club, survey we satisfaction Furthermore, the Club reporting the through clearly XX% Movie satisfaction regarding activity. often joining since as that program. with XX% are they is satisfied fact, our our In and they're members' movie-going coming response results with with Movie positive members stated overwhelmingly an this are extremely our their playing XX% more to to

issued We engagement movie having are redeemed. seeing XX% of credits with of very the already been high levels

X members we program Movie launched over Additionally, box have X% our it sold Movie Cinemark last during for Club office. tickets than average alone, Club theatres times three accounted the more visit our quarter the and of December, often through Since we moviegoer. million nearly the third

to partners discount that In positive these strong is widely results provided size it segment Movie movie-going of in financially a to growth thrilled is enhancing remain frequency after results it incremental members movie population. importantly, building model with that noteworthy non-members. is their maintains masses said, the XX% guest carry fundamental experience. the flexible and and makes the Club to those value differentiated is with of most also transactional the from Lounger Thus, performance sought generation, planned. we're guest and Movie for credits consistent purchases. addition accessible and to unused increased And movie-going in-theatre driving forward of amenity Club's goals to and movie-going It's the as All giving aligned members that seats most is experience programs our and Along seeing the the best other our studio design Its and the concession the driving office Cinemark. increased recliner basket Luxury and to-date. with largest lines, share comfort same consumption sustainable in the enhanced box while we're ability with loyalty

per to continue threshold of in returns XX% pricing attendance ROI generate concession excess by growth, As result, outsized our caps. a incremental power and they driven

And across auditoriums our screens XD circuit. equates third terms auditoriums. luxury and XX% our which Likewise, we this further format reclined As such, the of this domestic quarter strengthening we remained premium X,XXX having expanding over initiative experience on of opportunistic to in XD amenity. ended we focus those have our large of now particular kept XX% feature

investments expanded reclined during by expect We in recliner XXXX and future year expect will further circuit to food strategy remain more further have we and attendance. have our of beverage our guest be end. XX% a a penetrate more become at seat domestic reseating And experience that deeper our slightly of we have into while contributor than footprint. opportunities overall to gears, we will pace slower meaningful been conversions as and Shifting our beyond, continue disciplined in progress key a options component the and monetize will and

seeking have film resulting prospects, emphasis more and continues multitude diversified our the plan our our and be strategic successful through This the product an have merchandise the offerings, in walking a drive and our as on Secrets growth consistent The alcohol food third hyper-reality including initiative, with We evolving had food innovative we our in The opened offerings, been just food beverage retail untethered beverage experience. to while cap Empire food quarter executing West innovation modern of solid walk-through quarters sustainable VOID Star in prospects. growth theater Wars: lobbies environment. part maintain reality initiative Plano could vein to and in the further of to guests to another game the unrivaled technology to initiatives beverage collaboration initiatives next packaging of results. deliver flagship our in not virtual through resemble theater a that adventure and We to caps growth. the operations, of per now lobby. and In office and and is We domestic teams of is VOID's reviews our growth per outstanding consecutive pleased in on corporate of R&D rave guests theater monetize more record XX implementing realm of marketing our $X.XX expanded be our incremental these successful with

our are September. exceeding weekend with capacity running results expectation each in since opening late near initial Our

early the initial While in stages these of we're results, we're thrilled endeavor. obviously this with

experience closely making establish future of We Cinemark initiatives will summary, The and position and we're to the as marvel this strategic in growth. Ralph with site, for we progress content a all of the we're later best terms month including VOID In with Wreck-It pleased prepare for practices upcoming work our XXXX. to extremely in analyze continue

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segments. to to on Spider-Verse office Breaks Argentina. such XXXX profile within three XXXX such, while Captain domestic is As Stateside, and tracking genre. territories, also films XXXX to films XXXX in It the high action XXXX and box remain include a performs bullish our content and both especially three, international translate and office Annabel; and and circuit opportunity as Shifting the horror move our genres Marvel; circuit. the The is well Brazil Two, that will packed both titles Home. we out in plays our From in tend which Ralph watermark, the best especially clearly on Internet and that as box early family international the Avengers, with X into to our superhero content two Spider-Man: the Far key of One, back in enthusiastic this Spider-Man: Into content and We're environment global

call end. Pets the of Story a and Your generating appears financial at our from name of experience a with to either The in-theater movie Cinemark my throughout and performance. ready guest we All-in, few, highly XXXX to How experience, loyal or industry-leading concludes by X, remains to to interaction are on prepared well-positioned King, our Secret contact Lion fire to online of address Frozen Toy advantage extraordinary premium the financial Train their satisfied, end more X, of box Just to out-of-home experience first the cylinders guest Dragon Sean results. and Aladdin. delivering Sean? X; dedicated all I'll content strength guest and Life an turn a Beginning take X, to over full to That office detailed remarks. customers personalized providing now and going discussion

Sean Gamble

morning, everyone. Thank you, good Mark, and

our which affects revenue results, January for the X that of to you Before of beginning accounting adopted I'd delving we into ASC details XXX, year, third this financial how like items. quarter certain we recognize pronouncement remind

this the grew which basis adjustments. This revenue quarter, adjusted footnotes do adjusted and excluding North information of XX.X%. X.X% prior the patrons be million X.X% the our mentioned revenues of believe served. entirely to total of the Additional and new XX.X about accounting affects revenues not on this we found as by the admissions industry those versus can the reported were growth total driven change calls, of EBITDA as quarter, year margin company gains generated during million, financials, $XXX.X prior attendance U.S., in X.X% XX-Q of global our Shifting and which adoption the our overall $XXX.X to with financials. EBITDA In in the third now an million American impact on was pronouncement outpaced materially of new again up million recognition $XXX.X an grew and domestic were

Our average result ticket and ASC mix the as of price of declined type X.X% XXX. $X.XX to effect a ticket

quarter initiatives to new generated increase U.S. previously the third up I driven Domestic revenue with growth XX.X% to concession patron other recognition This $XXX.X increased cap by revenues beverage and increase $X.XX. per million. attendance high a drove XXX.X%, of food of combined varied changes concession quarter accounting total Our revenues per a primarily X.X% described. strong this

income X.X% adjusted million this XX.X%, to in adjusted Hollywood growth of $XXX.X patrons XXXX our points an X.X% basis compared Overall, versus $XX.X third and XXX versus of operations a Additionally, screen year. the which benefited Internationally, margin quarter promotional was largely XX.X of prior from other constant line XX.X% our was already by revenues driven attendance to as the revenues million, admissions in with EBITDA total $XXX.X and million internal reported, last International up decline quarter. related declined during content were appeal U.S. in transaction which expectations. revenues advertising, delivered addressed, declined currency. As the fees EBITDA million expanded of but weaker consumer year and Mark film in attendance were

$X.XX X.X% currency American by in reported, of of XX.X% but driven as that inflation. million price translated was increased ticket average were constant constant Concessions reported $XX.X predominantly versus our Our last to declined revenues a increase X.X% currency. across Latin year circuit and

$XX.X million as growth per adjusted declined and total EBITDA EBITDA margin reported other predominantly driven of revenue constant recognition constant Overall, by of adjusted to as and and in increase million the Our reported changes were increase region accounting as currency with XX.X%. fees. as $XX.X transaction currency. was income in constant concessions This international $X.XX were X.X%. well reported $XXX.X a million and revenues patron an International XX.X% translated the promotional was which an as increased revenues of currency in X.X% for

quarter, intensified and drag on third translation currency our results. reported approximate an the During international foreign caused headwinds XX%

ahead, to quarter. exchange hold levels, expect during a Looking low-XX% high-teens to in the headwind continue range extent we fourth the at rates the current sustained to would

rental and transacted of our facility film local including currency, As a majority expenses. vast international are operating in reminder, expenses the lease

and grossing increase impact percentage XX offerings. mix concession reduced basis year-over-year of and staffing of the total at were of by improved revenues food to from flat of our leverage not declined consolidated of quarter attendance. resulted rates, low revenues benefit expenses year. that XXXX. our driven by to offset independent as percentage the XX.X% American associated the wages recording well transaction basis, predominantly of to costs driven costs in our Increases a Conversely, and recently XX by third by the quarter oriented. for studios. This versus basis quarter points. across the standards. lease film currency prior a as admissions concession as mix labor impact new on fees and adopting total compared expanded a other So the held advertising flat and exchange costs film from releases this revenues in beverage offset total G&A was as basis XX.X%. XX that with product of as to favorable a than a remodeled points and basis level price a by circuit XXX base was increases were inflationary the results, theaters XXX from and a over comparison third declined timing wage of Latin XX.X% translation ASC worldwide of back which recognition of more were Salaries and impact percentage points was costs as is quarter's of decrease as in rental increased This based growth new Shifting increased fixed And net Facility of gross revenues revenues. Conversely, of total utilities driven transaction total percentage relatively revenues, points revenue by percentage

Collectively, Our professional year-over-year to benefit though fee was G&A head and leverage from even third to income count fixed and was aggregate metrics investments very million. spend support strategic also costs costs benefited and up over growth inflation, quarter our slightly additional due improved productivity pre-tax G&A initiatives. $XX.X

respect of or effective to quarter net debt cash a balance of and our diluted quarter's With position net million to the billion. we was $X.XX rate per sheet, a with Inc. tax attributable Cinemark million third balance and was $X.X $XXX.X Holdings, XX.X% income Our share. $XX.X ended

NCM strategically XX%. shares our to million which acquire quarter, increased of ownership million from the to spent XX.X $XX During LLC, XX% we additional

distributions rata will our in quarter of end. incremental operated attention at a share result position, XX X,XXX cash to and going screens forward. XXX our basis on we theaters excess increase a pro U.S. footprint, this Shifting of XXX and As NCM's DMAs states

open commitments XXXX. during and XX theaters signed screens XXX screens representing of to have two to XXXX subsequent We the remainder

XXX We America. CapEx and XXX expect theaters for in $XX these in spend million countries we X,XXX Internationally, operated Latin approximately to screens. XX screens across

During and theater screens. built quarter, the screens with five two we closed third one

million commitments end, approximately anticipate for theaters during new these to quarter XX theaters representing screens had signed screens XXXX. of we five of remainder with $XX We to CapEx subsequent the As open XXXX, screens. XXX and eight in XX spending

Regarding million and $XX.X including in associated the existing overall predominantly on builds million $XX.X that conversions. $XX on million recliner CapEx, third new with spent quarter, we theaters were

For the million full a approximately the however, of geography bit. spend has year, $XXX spending we continue to anticipate changed of CapEx, that

food approximately in new million Our generating a in cash faster of investments are are previously several $XX as lower a beverage higher projects shifts as result of projects. communicated, to and various timing comparably incremental build Conversely, efficiency opportunities. tracking than and recliner completion expenditures across energy result addition conversions of flow

$XX screens, our line that on run As on projects the and conversions varied Luxury such, with is core spending headquarters million Lounger completion both on our in theater generating million which approximately million and new of rate, maintenance on now domestically $XX building flow of anticipate we and historic $XX builds initiatives. million existing food beverage and $XXX internationally, cash renovation include

increase annual our capital expenditures. $XXX that $XXX and amortization approximately expect million in We XXXX as of to these to result a depreciation million will

XXXX in in intensive initiative continue capital we our years peak XXXX forward, step-down and look anticipate following we CapEx recliner XXXX. in a As to as slows,

the results. capitalize up the year, further initiatives to upcoming as to performance investments commentary and lines fully we pursuing open I'd for quarter for what concludes In content regarding the global us remain provide we would believe film and that to earnings Angela, will of remarks we're we're Mark's continue position now with regard specifics making spend our box enthusiastic that to closing, the We prepared reinforce this during North questions. and ahead. will on as prospects lies to our like the office We and American Cinemark's like strength well call. about fourth

Operator

question comes MKM the Partners. Handler line with Your first Eric of from

Eric O. Handler

there's if I'm seems stages, significant in the very if the Thank sort still outpace impact question morning. you a from way early it's I that just but wondered of one that. Club parse out industry. key good know very possible much was it Movie quarter. for any to and ability it curious to on of the like had of the drivers the impact your I

Mark Zoradi

important Club, increasingly in Eric, noted is us. as Movie remarks, my I to

We're the Third X% And it our we're about with visits to was of is well concession stand. very office. non-Movie basket seeing at the box seeing positive concession size as equal more even discount. the with stand Club said quarter, members results we the where

to So it's relative say stage it's very, incremental. causing to positive much breaking it early very at out this this specifically

I think to early that. little do it's a

Eric O. Handler

is geography follow-up, you is a as then with your the high are geographically – expensive a it in – or And curious how Club, seeing Okay. I'm is concentration just more and Movie it diverse markets?

Sean Gamble

it for moviegoers tickets go plus because Dallas, you add-on glad is good spread ability throughout very the Francisco, and others asked our that and but we're actually Ohio, of I'm to what ability Eric, really the really – into of so the markets. all buy are for is, San what among the Texas discount a in all interested Los to appreciate question seeing is online. concession Angeles XD, $X some

various the our all out relatively associated we we've and footprint. it, benefits with have evenly spread of because it So features really across seen

Eric O. Handler

just a have Netflix? Netflix, question. couple of then any out their – albeit And do to does in anything now view you changing last shortened movies Great. that put with window, they're one with it or a looking theater

Mark Zoradi

price we And time very currently got studios the Netflix, welcome that's by our of willing do, of would as welcome much movies. that all in they'd be Eric, we to show exclusive windows do the Netflix at that the to abide window. movies would to Amazon The you've three here them. one we questions our look, really theaters issue good. comes down such major for

playing or one don't the two-week that we Netflix window, stands it would with As be a I currently films. anticipate

Eric O. Handler

much. very you Thank

Operator

Alexia from JPMorgan. question next Quadrani with is Your

David Karnovsky

with your can potentially talk for you Karnovsky sales need that's and Thank Club, how you. adjust to marketing, you move Yeah, your that early on about at all to acquisition David changing you subscriber finding Are at Alexia. approach all? adopters? is Movie as you This

Mark Zoradi

we've very out and with a had consistency last since consistent. we pleased subscriber our – the I increase mean, subscriber we've been as earnings XX% of – so it's David, of we've we been growth. relative pointed the call, relatively

access of the goes lot this, pay-as-you-go is One offering long used all Coca-Cola as $X the other of in membership a kind key theaters because all now somebody promotional elements model to time. been in had of up-charge. buys with of regards free for in other every well as this once push well a members. paying our our that big to in digital click We've of We've We've we're and tie-ins the where very this packaged successful – major they and as person plus done our and data, selling is with theaters our connection significantly. significant goods a clearly that we've programs And a subscription company. a all of – month then to moving partners or stay like it, on

of effort to is substantial be been marketing continue will very so. – the So this and has

David Karnovsky

potential potentially there team in know the anything question, it's are And down your pace ahead Thanks. early Okay. any regarding Brazil, construction? mall to but then, in you of this ask I hearing post-election changes from

Mark Zoradi

results Obviously, the early. I the would it's thanks very came say in. just – still David, for question,

development, been as hasn't far team regarding there any change. from anticipation as So our mall

to a be determined. is lot there think I still

for the you positive. have positive thing the think we just exchange with how seen it's news, markets look when at I especially the that reacted to fairly been have is foreign

sign there's of good least there, come. what's to one at hopefully a So

David Karnovsky

you. Thank All right.

Mark Zoradi

David. Thanks,

Operator

Capital. Your is from next Kulp RBC question with Leo

Leo Kulp

taking comments I Club, understand how just that's guest it's them. that not questions. All two early. it's with on is second their will on for change just But easy, One evidence tenant, pretty bringing quick with themselves, had color question right. Movie And seeing that Good the the is other the upcoming are increase ones. morning, are lease I and guys. balance any people impact for they're any but members of your you the bringing incremental sheet? accounting Thanks thanks

Mark Zoradi

will – allowed if and this second. Club, it. you to with Movie companion are to Leo, first of aspects of bring take of a one it you're Club is one (XX:XX) pay one, your is your it's membership price. take single a the of the Sean member the benefits that Mark. and the And key Is I'll you regarding

Now you can bring at the other one one. yes, sometimes is coming only and But person person least average more. with

they they to you you And that's people one XD. say, so, and bring who's only and is not that married of if it, charge things that's couple a been $X.XX go particularly you bring one and a you're attractive the friends come to of remember, you spouse, say, with pay person can can member, your the can or price obviously up

Leo Kulp

Mark. Thanks,

Sean Gamble

greater leases accounting, balance other as going future well to this detail as lease well contracts is a as going going then guidance. up about asset Leo, on as be and question biggest leases operating a lease that liability get similar for our sheet regarding to right-of-use theaters, the are that's impact grossed to provide the on your on to call. include And XX-K and to in leases We're year's under that the are equipment earnings deemed capital

the As debt time were the GAAP we the impact a $X.X have old financial what to based positions the standards have thing of on at anticipate agreements our relative we material our was – that the so cetera, which at we'll agreements will agreements that that we our operating rent for I those necessarily don't other but add references time, that only a expect prior a covariance, et language evaluate effect currently to just The obligations have instruments in is question minimum wasn't billion continue on would disclosed in we say the is XX-K to on note, I in the GAAP. place leases. executed,

Leo Kulp

Got it. And, you. , okay, Sean, ... okay. thank would you

Mark Zoradi

Okay. Thanks, Leo.

Operator

next Fishman Robert with from MoffettNathanson. Your is question

Robert Fishman

maybe understand with I the Mark, major one Do for need one exclusive that few your would and only or movies, basis non weeks of then run film the direct-to-consumer a impact Good firm have any today for studio their the relationship would follow-up movie that have of theatrical stance some Mark, a deal How deal to and for deciding you on Sean. I film a you with own Netflix. to well, by with possibility tent-pole the Netflix, on shorter you platform as with a studio? start their streaming regard morning. overall later? think to have a to Hollywood

Mark Zoradi

really partners. been key with clear our we've Robert,

a XX-day window then exclusive DVD VOD. We XX-day and to to an have EFT and

And whether so, the major have to is same. consistency here. level or studio going Netflix be a of to a partner is the need We policy that

Robert Fishman

following do attendance of come Okay. the is And about have due Club just your the for theaters offering? would maybe further success help think anyway of you up to the strong without much content Sean that? kind how Movie we to for a Just of or slate subscription and think dicing how slicing just Mark about us Movie well, can early as Club's on

Sean Gamble

of big film just the as this Well, I attendance in uptick slate at a the seeing year. strong think industry you're in large a result

say attendance pretty benefiting the would just across at all is from the Club That diverse is Club of of Movie the from So look I that when I Movie think types much you overall benefiting profile like industry pretty movies. movie-goers. of is that.

strength overall hear and value mentioned, that frequently. it's year – this content I'd convenience that's, supplement that an people of overall into program. just say, is think And attracting as it's marketplace. to the the we added what in It's the the Mark I So,

Mark Zoradi

mid-tier saw the and think that third too is what just called quarter called non-blockbuster do things that Robert, we I films I I those of is about Meg performed Asians, whether out Crazy well mean, we might would just to think I Rich over very titles out add these great The was one the expected. out way I

to is think that's trying consumer clearly ticketing content with down What And of the Club whole so part experience to. comes I portion what it do related. just of make is Usually, just we're frictionless. it Movie that

industry. exhibition it industries varied applied best that's taken of the so, And why we've programs the subscription parts and from to

Robert Fishman

Thank you both. great. Okay,

Mark Zoradi

Robert. Thanks,

Operator

Miller Your from is Capital. next question with Imperial David

David W. Miller

in the Congratulations. Yeah. release. CapEx based I sort press what metrics the Hey, reconciled provide number it back release, the on but cash in Sean, flow guys. that it's Outstanding not Couple free you in of can the was into quarter? the press questions. print.

heads-up there. call at rollover. Club, Mark, this I'm just a at program. which which, to the And the their you a would folks then, you would clear advantage beat rate is it, dead what sure but Movie take not of rate on say horse, So appreciate success not with What

X sorry they So friends, four five months much. would is other is that you three is? XX very months friends, other bring Thanks friends bring it it. or they that months, like apex – six Appreciate in, six it in, say what months,

Sean Gamble

the Thanks, start I'll with flow David. free cash question.

XQ For negative tax quarter typically some was cash us large cash quarter. flow is $XX there the payments free a get smaller flow for executed third million. quarter, in that for operating are plus the

David W. Miller

Right.

Sean Gamble

year. million about $XX $XXX Year-to-date, which prior we're a is versus positive up million,

Mark Zoradi

I course Club, that gets per of key member Movie on we every one and month, question helps all your issued have movie credits to used. is stats already think XX% that are relative one of David, the that uncover of of those the

people large of with So are number significantly the storing coming and a more up we to members have movies often. credits don't not they're because these

David W. Miller

Right.

Mark Zoradi

also they credit again that then month, incremental other well Movie Movie have And do to of just allowed pay used Club their as actually if during an and the $X.XX. Club come people they're that part do

second like So they're from a time. stopped it's not going

you as other – the Club actually a $XX a effectively come Movie month member, for well. could benefits can all enjoy as you So and twice

David W. Miller

enough yet that cost or to of in of just tell is on it goods early Club sold any in of as mass advantage seeing Movie too kind you yet? concessions you're critical Do have

Mark Zoradi

little are that's going a one that discount our again concession early the the us it's think with the Club members – stand is is seeing I very in the and too to also, are to that Movie then general more consumers that they moviegoers, we consistent are so even size with but quarterly often. reporting tell, positive surveys of basket that thing to

David W. Miller

you much. Okay. Wonderful. Thank very

Sean Gamble

David. Thanks,

Operator

question Wold B. Eric next Your from is with Riley.

Eric Wold

Good Thank morning. you.

terms I last just my the first think, of comment question frequency. of you with kind answered in

comparable a basket You size are with discount. mentioned the

too for of any a the have on listed way per on average as revenue And have can what nonmember? America. to day-parts Club Movie visit well kind to Latin given se. tickets you but was then follow-up far per Is there so versus different may gauge versus purchase a margin for then trying maybe early, frequency member I is costs again, non-members. regions it at price And be that and various used So I that different get be a

Sean Gamble

are you like There's this it's have you the but average number those price more the are for phone margin plus Movie to Club give XD, upgrades feel no in a higher the what upgrading upgrade. $X.XX do Club when is non-Movie in, you at that all and had chosen more average feel because willing to because upgrades $X.XX and already finding at and way an they is add like to upgrade on IMAX, they they and they we're than those and in that members obviously, when paying, have and paid XD, already so more in add ticket it coming percentage a point not much their walk like often members so they're they're they credit

Eric Wold

over past strategy of a it's in you this take in there? and been that experienced downturns you of improve does quarter elections in than and could two for has America, region what's then of for would waiting view? signing be years, long-term to the guess that kind your the – now the couple least you on quarter, know to Brazil, or positive just the given then And kind – but so quarters maybe on with almost versus average years, or years – make Perfect. two two more in at kind things a quarter adjust least what I attendance where less may half. still just different it of screen or something have for any of this kind the think and region you per I back, past kind down And region the at the in Latin the looking change any per screen every a has in gotten per I sense you new been cautious then fourth have deals going on pretty there in

Sean Gamble

Eric. for question, spent a time at It's that. of Thanks looking a great lot We've this.

be And I content down long-term profile think start the which short we've answer the have smaller the per a things boils attendance is, going with we metric. dissect to really of as view. have still pressure those per coupled that with have a very late screen, adding to in both when screens been been tended carry markets to been it the what's you attendance slightly on lower that positive much screen, on putting

color. more little a Just

the the a really sci-fi local content healthy down local wrap translate that year-over-year. was a down about content. even further to to Hollywood Latin films. animated was in just you about few has year, If just X.X% and high was to family doesn't sci-fi of largely most through. films, tend and XXXX, little that oriented and pressured of U.S. bit, XXXX live weaker I'm kind about content There of overall cylinders audiences. well XX% a been then the years watermark, back XXXX with action and weaker dropped was family played huge was of XXXX group to then really content sure strong you kind which XX% shift up, which categories recall all and And content because year declined was fired down XXXX content this family that as action on more as where across by

family and Cup said that as we in impact Mark Crazy think year-over-year Mia! about the a the quarter down last like had haven't driven content I U.S. the second and Rich some Mamma have was call with on some challenges World of strike Brazilian the also that also resonated. then the Asians, XX% we and trucker of this year and mentioned, films just the

year we're good few more still going things on are And the the ability that the to Latin long-term, a is, that to population more continue development fundamentals are the also to question, last as we with far going we've your then, the looking keep forward we goes, something across that with coming corner years. Now, news government audiences to to see mentioned speaks regard with been if there We'll as Brazil But so again content to per next profile at expand. again in watching in. exists look some than that least I'm it's as to development think seen think much turn as back has that degree we new region the stalled. to of we've screens changes the in the and much of

Eric Wold

you. Thank helpful. That's

Sean Gamble

Thanks, Eric.

Mark Zoradi

Thanks a lot.

Operator

flow encouraged budget through low at haven't that indications capital kind Chad Inc. Loungers taking is Beynon question of your year the next Chad you prep in almost very are from kind free up are how the with at solid with full (USA), potentially understanding for - of and XXXX. declining or Beynon to Thanks. thinking the of reductions now this Luxury cash leverage CapEx CapEx, you come first of my Macquarie hear Your budget, that about for allocation the about morning. question, nine the that Capital you target months environment? Macquarie. And early Thanks or and for least with the good Sean, as

Sean Gamble

is, question. recliner won't continue Thanks not kind at our high comes the lower it that when same I step-down capital down remains XXXX, pursue overall a say would anticipate deployment. continue for priority we that to at say will say the we mentioned. in way the wind we CapEx, just a to recliners as pace, do as we're to a as a we yes, of at level to in looking conversions, mentioned, but I'd

we dividend growth forward to as – opportunities look evaluate our We continue and don't to within a meaningful capital with to see like distribute emphasize appropriate executed extent shareholders, that shareholder framework to and to security focus we in of to excess year. earlier this building to the investing on put accretive the and ways look the our company value and we appropriate going to ways much work, XX% capital we're long-term

but cycle, very our we're say budgeting we Inc. that's least Macquarie specifics level I'd it. through So, on (USA), at looking at have Beynon get how high once - that. at we'll Chad a Capital more

you. point manager, general theaters manager And do that past of the of subscription one Thank one competition models a to this have couple at out months? rolled but other me percentage also Movie general have your from on Okay. you are you roughly been then probably by and last from over Club go what of facing sense have

Mark Zoradi

them compete number an Dallas. Francisco, out of Los with exact that, have and we significant Angeles, program has but a AMC I subscription like in Chad, obviously, San don't rolled markets

So, and third it, at least AMC with again, number the less exact done movie it's compete we board, we've continues to an because give to is across important the not but pass less hesitate you I because today, decline.

Inc. it's then is in what based that So, numbers - that fair? somewhere at And on up obviously right affected (USA), that you Chad Capital category. has that now, the put least you you're Macquarie Beynon seeing

Mark Zoradi

No.

other a their key of with the do. consumer so a elements has other of and companion of a bringing I to I plan flexibility good been think I that's our to one that focuses unlimited the complete benefits to which growth of be mean, plan, continued when has programs use to that of programs you in not is and the a face this choice, the has planned other along is consumer plan, this it the around some be credit think can't a particular a planned rollover

over and of the roll Capital Beynon country. group a or they're biggest, once generous Appreciate they And to to moviegoers think it. and and going a go a moviegoers and you but year very moviegoers allows is after seven to maybe significant worked Chad very moviegoers you. a a those I audience between really want create plan so offer somewhere across much. of Inc. program - to broadest things, a favor going that – very our to most six easy when then is use those have the Got because them high times (USA), concession month credits understand in use that Macquarie attractive a all Thanks to

Sean Gamble

Chad. Thanks,

Operator

next Goss with Barrington is Your question Research. from Jim

James Charles Goss

the than the leases, and have of capitalization of the to own relates owned question there ownership to mandatory, thought see past more properties One typically one you you form another? of any is any do be extent part Thanks. that advantages in on to your will versus this

Sean Gamble

lease. at will or boils think makes deal the Thanks, how necessarily to change and own I haul versus that mean whether not don't looking long assessment economic non-ownership. over accounting just real or skew really the think overall down estate an we I to we're ownership that the Jim. of sense the

answer short owning a is provision leasing. versus look way to So, at change we the change that, don't I to the think the going in

James Charles Goss

And ROI that Okay. more process. reseating with you pattern? go of the what very be recliner that you're beyond have if do this some how of And right of know version I reseating, Will you and anticipating to regard further have thoughts of specific the program versus through you that might broadly go terms might as so, have that perhaps theater about are now? property this you declining in might been standard options number rate you an standard extend there any applicable more – increasing

Mark Zoradi

advantage. laid year over ago this months was plan. we of strategic quickly terms Jim, what done mover important to into and to reseating there act XXXX We XX we've even it out during in really relative – some XXXX the followed the what has knew was and very because first

we case circuit recline doesn't incremental be it. we be also hold what and exactly on you going going attendance there's it, just you're simply there you to down you places And anticipated the don't for pay as that's that – going So and to you the the the some in also can generate think because help seats market want want capacity. to you did. further to to further to the places then, where was not get And dictate

times recline and I've think basically happen. and we'll kind anticipate the consistent and we'll go to what really the with alcohol recline down then and nature I what the maybe bar we redo – was same whole think the So this call and snack add to do theatre in of upgrade a reposition give overall a I we to the path before is to mentioned And when we'll many continue and and we in tend in thought going in and call We look really also theater and we we're go theater. in the going at repositioning.

and off our table number of So, the you've continuing a as see none obvious more do at get us disciplined and taken when at more move financial the that of to XX%, and analysis. only we changed all has now you I forward just because smaller ones you're

James Charles Goss

Okay. Thank one one. you. And final

categories basis be much mix out finding pretty expenses? and by the that your tended the the to a year, the has you leveled office quarter of the terms expense various of in box Has you over even way has manage management on of of are that off the As in changed variability properties? more the course your quarterly different to

Sean Gamble

doing We were constantly things, you at our then a expectations. basically our operate and looking general. is level just week I wish those reality to week eased modify I really week could the And still the it staffing we on of say see, but payroll what there in that's what we're theaters of that Jim, our fluctuation. upcoming and best is how are based to is lot expectations

week a things leveled a of of to year, or week is bit So, still while more it are out, the aggregate, quarter there may at be kind in you quite look a volatility. should

– But would it art – and So hasn't the staffing I of go that into say changed. we it has not the that that's science comes – that hasn't through.

James Charles Goss

much. All very right. Thanks

Sean Gamble

Thanks, Jim.

Operator

And Sachs. with your Drew Goldman Borst from is question next

Drew Borst

the ask the to wanted about I in Thanks. U.S. Hi. quarter. ticket price

down believe to unusual X.X%. bps For was – I about fairly in down certainly industry-level it but the average the price. industry, It's see, you at decline the guys XX outperformed which which was

a be an to I bit wondering about explanation it on. able with pricing impact? you you also and what was anything going to provide the just seats tailwind but sort down do having on hoping mentioned that reclining I know more maybe if to was bit a mix, a had from slowing partially was was little shift So of might I that

Sean Gamble

back welcome to... first Drew,

Drew Borst

you. Thank

Sean Gamble

about that there really main our the us, really two say effect at revenue of is of – recognition. there half is decline things would I for was least

So by really referring mix it office the adult that, we the more decline it down was would look kind our in I prices while year. have driven that. been grew, you when of proportion were such X.X% actually then box sold to at as And dissected the it was without ticket type what tickets remarks, in there lot opening last a happened a the really was huge of was because XXXX XQ core

year, Additionally, there was the of there XD. out just the mix was film came a a way this reduced content –

So – in the and out formats one a weekday the just the days fewer just the higher to then and up the kind that reduction they weekend worked quarter, of also pricing. wound tends the slight that for way premium in quarter than led that carry pricing being

drag So what revenue prices us all those the factors recognition of combined beyond for impacted at created least the metric by. the

factor of it necessarily but a wasn't seats us, byproduct type a ticket issues. for other least recliner at think don't really I the more So of just those

Drew Borst

you wondering it? room some thinking I'm year. sort explanation. really give but base that Thank about might base bit of if one up seeing pricing little we then – a more next I economy you're do guys topic the just inflation broad quite of which about you – you take in we're how Is how U.S. follow-up sort and increases That's are to price of thinking think a had similar helpful you kind that now for could haven't or that on that time.

Mark Zoradi

start calculating We very marketplace. then and be that and pricing we increases. get market we get like we competition and in in very deliberate the market our at granular. and we Drew, careful pricing granular go on And strategic to look obviously, to by very

revenue expect never for generate in price overall company. want the it's our box We which and we will be overall important have more but more to attendance focus that leader. some Cinemark has on office the we been run long think more price, to Rather raise one ability to to will

element it there raise be think but be careful So in and we going to modest to prices we're and will well. ability as some

Drew Borst

Appreciate you. Thank it. Great.

Sean Gamble

Drew. Thanks,

Operator

closing We Do further have have you any remarks? no questions.

Mark Zoradi

our much very Thank us our third morning. to – again forward quarter. with Thank this all you joining fourth for quarter We look following you speaking you.

Operator

conclude earnings today's third quarter does Cinemark's This call.

disconnect. may now You

Cinemark (CNK) 2 Nov 182018 Q3 Earnings call transcript