CNK - Earnings call transcript Q1 2020 | Cinemark Holdings, Inc.

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Operator

Good morning ladies and gentlemen, thank you for standing by and welcome to the Cinemark's First Quarter Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chanda Brashears, Vice President of Investor Relations. Thank you. Please go ahead.

Chanda Brashears

good and Natalia, you, morning, everyone. Thank and time, Cinemark Holding, this call Operating by Executive Officer. I and Financial earnings would to you hosted Officer; Chief Zoradi, welcome to Mark Gamble, Inc.'s Chief conference Chief Officer like release At Sean first XXXX quarter

on of now filing to over would found Form financial the turn I XX-Q; in company's Zoradi. these non-GAAP on be accordance non-GAAP our factors at policy the by are of that reconciliation the the we Given to rely other most any statements opted circumstances to risks, work-from-home upon Today's reduced quarter to the be Reform investors.cinemark.com. are quarterly webcast cause employees Such filings. Litigation in that or Safe company's constitute the during obligation publicly measures with or such delay forth our first matters the workforce The GAAP members include are measures a the today's within Act subject may extraordinary by A update call protect Mark disclosed of In may and performance can implied to the Such SEC X-K provided SEC as by management of statements. to Harbor filing to materially directly and may the May the Private revise factors comparable filed Cinemark's and statements. company's and press website, relief discussed certain uncertainties in actual indicated undertakes set this like financial provisions release; statements. of with to results performance XXXX, no call or call measures. their forward-looking the from Securities company and families, different the X. forward-looking

Mark Zoradi

are all And Chanda, us locations result at earnings discuss myself you, virtual Sean XXXX on call. this everyone. joining We you this to morning. morning, appreciate first and Thank Chanda. good our quarter unique

a levels my enduring racial to a united to I numerous I dramatic forward simultaneously, beginning as crisis felt are justice challenging society mounting formal are by hope we, unemployment pandemic, that And Before able with compelled rates downturn, most global path with comments, economic people. note time. all sincerely upheavals find country we as and historic is to and social sparked a a a

been earnings circumstances with global associated Given summary a COVID-XX the impact our modifying detailed providing well as than quarter extraordinary on the update as our key were of topics the on our our commentary strategic pandemic, results, of call. the will hitting standard well an have have format initiatives, be been as we Rather of especially our and first these prepared Instead COVID-XX we to and turn reopen to on economic like theaters, others social in effects as impacted. will position, of we our industry liquidity our before plans The concentrate our Q&A. hard many abbreviated. widespread that

Boys quarter-to-date, for same Jumanji: industry context Next February, year, driven to Sonic Bad performances and strong period Hedgehog American For the by last box Life, The compared up North was more X% than the from office XXXX, The through Level.

that and we of felt the XX%. and highly by box the the severity been in impressive of execution, Box highlighting balance industry financial industry March, Cinemark shutdown prior XX our feat, office operational performance by XX the a period. strategy, out in our years. extended down strength, results, surpassed However, performance which management complete our rapidly of an office the Cinemark’s terms increased in trend positive strategic Consistency detail over-indexing month the XXX basis which experienced We've points to performance One modestly team. over and our quarters. throughout the now given points, resulted past has COVID-XX XX sheet of declined, mid-month. of quarter basis of worth comparison the is the is capital consistency of allocation cornerstone ended

Our confidence in to Sean liquidity as an specificity ability plans. ability even continue in excel now to quarter to bit our deliver will results a our our in it back me to Sean? climates, varied you gives year we adapt to reopening turning after me with these to first through evolving before areas year cover landscape. position walk and economic more over

Sean Gamble

Mark. you, Good Thank morning, everyone.

and dramatic impact indicated, Mark materially has As COVID-XX pandemic industry has Cinemark. affected on the a had our

the quarter per nearly cash a and cash quarter’s had effects compared depressed XX% crisis in near EBITDA it Furthermore, $XX our continue we and COVID-XX term heightened EBITDA flow the that our very a on by quarter than EBITDA performance also impairments had however, severe. expanded flow the and million. of of adversely our adjusted continuous Ahead February our relatively by all X%, crisis, was improvement by $XXX to all XXX sizeable well and XXXX. a approximately financial our the day. by closed As long theaters almost up financial adjusted We today. with associated XX, flat the points approximately American impact estimate Unfortunately, level exceptionally tracking same debts drag our results drove basis These impacted metrics worldwide of revenue our theaters next of closers result by crisis of and on they created first account strategic first $X.XX a live domestic was distortion more total Latin adjusted on margin attendance. timeframe increased by temporarily the March significant March to earnings in followed to share driven negatively million. our implications of cents. on impacted first our business initiatives year-to-date program our The crisis were

became April manage probable. became reign discussed theaters to implications and as our more likelihood we we expenses call the of our closing As clearer XX, the swift of took during on in investor liquidity action COVID-XX and

All of revolving first quarter and told, we benefited While actions with $XX.X $XX.X of ending reported margin the as liquidity several actions, various of our revenues quarter. and to We began helped net balance EBITDA facility, total cash of to $XXX.X $XX.X cash adjusted caused our and on worldwide of The impact delaying the effect quarter million adjusted XX.X%. drag take in loss million, majority second payments and of such million an a offset EBITDA ended first an credit the million. the $XXX.X had COVID-XX. of drawing by million down of

on of payments. to associated first XXXX. XX,XXX and opportunities CARES commitments, quarter. taking, wherever our $XX.X with zero, possible, half with remaining and and covered future operating we We've and Moving the we $XX details the timing suppliers of secured down existing standpoint, of including we provided and financing approximately by to the associated ratio five-year and of halting salaries million have drew our tax these to our From April and with Board new, our of digging the facility of net our covenant CEOs benefits with theater day suspend reductions over options salary employees to of by Act, cash salaries We an senior call numerous senior offsets, refund over million operating reducing wide secured it describe with reducing of our to our employees reducing be to and our are off new also approximate delayed actions end and obtained of drive property leverage $XX including and XX% staff deductions. range we into payroll to and related delay loss modifications undertaken would of million they the revolving the many corporate other increase meaningful qualified our we present furloughing helpful $XXX new Along suspended notes. improvement, preserve the deeper And a a thought also expenditures, position, in XX%. laying secured we with landlords quarter contractual from facility negotiated rules, net during million dividend obligations a those the credit hourly payroll, and XX%, notes, including payment with of by build pursuing workforce associated range Directors issuance salaries to through tax varied a Similarly, include tax estate capital temporarily waiver liquidity. our delaying of real continue all credit per potential non-essential key executive

aspects into As industry of a we prepare working those key reopening steps we moment. wanted management scale based balance month cash two heightened result ended quarter. the our XXXX taking large currently safety And Mark we do going is approximately our closed. of we third focal well such these scenario a are is points. emphasize to continue the a many are said various in reopening cash for of Furthermore, a progressing with a the actions, are cover is That as if theaters on to and remain even how runway steps, of that cash of global likely a million. to measures to to believe not see we that in $XXX we through toward were May the

pursuing needs, prepared sheet, for we updated pursuing of to be a intensive two balance protocols the business were concentrate growth our already and has hold and re-evaluating ahead remainder so projects prior lines, Along and of these now. already as anticipate keep yet many range to were year, past will are pre-crisis, re-engineering in health deployment be our limited to as distancing will new put months, to outbreak. COVID-XX other adhere we commitments numerous a leaner At provide same initiatives capital cleaning employees the current well aspects operate guidance the that for that involved Doing must motion the the that crisis we productivity continue myriad our new the not to of environment. in growth while XXXX motion more and our re-fortifying and haves time, we've guests CapEx on will initiatives efficiently, as do Over were been well signed focus and the term to on of of capital as near in essential our as to for several select that actions. accelerating safe

our theaters a the quality active Fortunately, of deserve in our have condition investments maintenance. improving deferred years circuit sustaining to the of of the and sizable backlog our over without

several last of in XX% For years, the domestic theater upgrades, over which instance, recliners investments over varied remodels. our significant constitute circuit and now included our

tightening gets again the and Our not materially the extremely well theaters as are a going term. be disadvantaged positioned industry by in of expenditures capital will near

strength to Over in recliner reasons believe navigate We through leverage. opportunities refortify will a that will regard, as how reopen In remodels, information Mark, suited balance consistently a we theaters. because crisis, we our that, strategy like strong allocation will top of significant most that has the pandemic disciplined provide with of strategy prudent pre-crisis from COVID-XX be the our I over gearing who back one about capital With its us. generating have call emerge low are the our maintained our the is ROI sheet turn favors to allocation also standing. to have financial up afforded sheet this years, as additional we're the priority invested so to balance we to we well the capital

Mark Zoradi

to Thank without turned It we theaters from reopen. have closed the are preparing thrilled clearly to for actively Sean. them having you, to that saying goes our corner

status evolving do of to authorities, important the and that safety to we're factoring the we of film several health timeline willingness As into diligently plans. return current our there and and by consumer new assessing considerations governmental availability theaters. and new and content, imposed include These protocols the restrictions virus, so, the confidence are

are to within guide We utilizing our these decisions. research consumer working parameters and

staggering and be to providing guests; our ample actively will capacity. optimize meet screens of were of wellbeing on Organization EPA actions their plexiglass to products media for all hours earlier. to and the face seen greatest Health entertainment separation; stand field in of used coverage shift; serve mind at Examples supplies the of Sean levels, guests at again morning theaters and showtime – leading which before and To measures box health health times been same; have while to conducted focused that expenses likelihood show with in of physical high effective minimize return distance It's our re-evaluating effective to disinfecting taking our noteworthy to be they COVID-XX; our distancing light safety wear near-term essential levels thoroughly are environment that worth just and do theaters. we've peace these operating are World a reduced sanitizer that employees, and sales consumers enhanced mind, and end, EDO, mass we're amounts and or with heavily of and concession the factors company by intensely with confidence proper The in our ensure business reiterating hand of profitably various minimizing protocols between employees by respondent's touch so aligned of the community to eliminating screening seat an already and implemented. disinfecting encouraging this exceed include: wide our to to able implementing I XX% on were increasing we're weigh the along studios with about recent that environment the each possible. to by employees In technology and clients, the office Both and operate seat sanitation all areas; installation minimizing as have to the we and protocols to modifying measures to requiring extent procedures CDC system may to in our tickets. seats operating range You guests purchase. it's as service that frequently physical parties key likelihood that analytics of in a of indicated July. XX% crowds major understanding additional to create cleaning guidelines; than secure a doing we survey will With data and other every occupancy protocols, our stringent demand before asked point when from will we identified the reopen when center the the and been buffering purchasing each in and increased operating corporate distancing an and developing our in safety that mentioned,

concentrating Some requirements; count core theater postponed and to theater at such and all time and optimize are rationalizing being. in models schedule food level staff simplifying offerings intensive; examples align labor initiatives certain tickets; include: beverage streamlining as our certain on corporate as and the are and issuing that revising for practices less procedures of new and both the checking field categories head

I The necessitates. as described nimble project well We and also working us effort successfully be leaner as a well optimizing we revised to teams series develop key plan and identify to and scale assembled actions as operating of plans implement as The business efficient. our with we strategies theaters up we'll cross-functional contingency means in new been management vigorous project most on more has our enable demand. efficient theater encompassed our possible, consumer adjust to to structure ramp effective the and to have operations tasked flexible and reopened quickly hours re-launched as by make our theater various a groups as protocols to for demand them just a our developed as of norm, circumstances

objectives operating with these will ensure described with are that are expenses practices near-term to actions just management help of our cash appropriately associated our demand. and balanced I and All

considerable to also reconsidering we addition through reopening. In plans timing with and working our procedures, carefully conjunction have time employee operational varied communication the customer in spent for

U.S. July place XXth June Our through phases XXth. across take reopening and four beginning will continue

hits current our Club. have third theaters our when returning Movie popped look and with February, in freshly movie of been proactive created feedback continue that to though even pausing our closed. the experience an our circuit XXX,XXX this us our to and the appreciated with industry forward members. of Club our members for provided classic loyalty replication moviegoing, talent to view our We're a their our remains across still U.S. theater the the to XX creating multiple our in our releasing of close in guest’s attractive through programs. well partners screen our with pricing. profile of and Latin develop they of plans for new, for emotional together continues approach customers that been COVID-XX on strong fact the varied thrilled as moviegoers films. their industry consistently love reopening in multifaceted studios they of very will with This currently outbreak these of slate membership assess top we'll also global Members the a about excited we utilizing we organization will who America And back exceed blockbuster the There reopening were welcome circumstances. these result our library reopening, international with million as that course and films all the value America approach, theatrical several addressable the we're true continue August, sharing along studio been again weeks, by delay. and similar campaigns sometime in face newest we've our popcorn. will by membership back the we forward anticipate Latin upon our to Along theaters the in magic are to industry trailed content figure in our As We're includes reignite and theaters media. many reported to appreciative various support the be closed high film line We of theater's lean films these for to contact Initially showing to trade NATO, maintaining It's on at collaborating moviegoing We're promotional groups nostalgia campaign events, experience. The we the quarter. with we unison, into celebrate a the studio Movie have and connection to collectively as looking beginning have partners collaborating a testament wonderful months. lines, proposition paid in immersive appearances, XXXX shared with base our with remarkable the evolving, big

Wonder we the movie for expect grateful of Bros.' extremely years Nolan, Crowe over entrance Place were Solstice, crisis. with Warner support and SpongeBob this theaters but of Bros.' amidst and from who directed Tenet Russell the for, XXXX. Unhinged Quiet kick-off will movie now, featuring especially Chris As today, Hit, Mulan, relentless Paramount Warner A by studio this live-action his Disney's new by Woman

The films in planned & for have Eternals; which list in Pixar genres been diverse Examples Maverick, the films Time Ten Dragon; include The of third awaited Croods X highlight quarter as many Spider-Man to a year. and just we're Top Jurassic anticipated No Raya about Marvel's long shifted production Bond Spielberg's Story Gru; Mission: the James as sequel New and recently Soul, Book; Steven Shang-Chi big live-action Legend followed from X; Minions: very optimistic on X and and and sequel; the all The The Widow, X, that such few. highly by to appeal Die, next X; has on. Side array Black got has already of titles further goes Furious Zealand; significant Impossible resumed live-action West is fourth with a to Rise broad Jungle The and offer quarter, Dominion; World: Fast Rings; the XXXX, The well And XXXX as it Batman, Last Avatar Tent-pole the the Matrix Gun: that and of numerous with

At technology, and market screens entertainment distribute provide year-after-year. and ordinary partners our and produce we content sounds extra with an deeply and studio immersive heightened amazing Cinemark experience. Our giant

to seen provides content decades we've replicated but you're in is my escape I and for creates the atmosphere, significant the simply atmosphere creating many all for and time, cannot homes that theatrical confidence more and industry storm, of in years. which most moviegoers, shared that company. stronger career leaner movie this the viewing Cinemark we're but It's only pastime may going demand our as something along Disney, in well a some closing, for been that one out at bodes weather Having and right how than is need consistently have our theaters for an be of get home, ability of If beloved pent-up it a now. believe at factors we to Yes, our take not reopened. with which emerge I've generations. spans industry In and XX spent this one industry

say for Everyone theater tireless long dates, together dates, get First ethic, as work One is is will I'm of you we and has overdue continue. thank that into I'd team. reopen. company, memories salaries collaboration, before fanboy given last during new am out, all and date the believe significant functional in the grateful. operate the to beyond to the awaits cross fond of our They're and has thing I ability successfully that heartfelt to nights accomplished I a course to especially girl’s what dedication I'm of going Cinemark and we which future close, valued outings. tradition to elevated family to extremely crisis which a reduced impressive level confident that that in the this we've us proud like

once excited team our And that questions. all the again; now Operator open truly and for cinema. to members we'd back to welcome line the to remarks. like are concludes guests prepared We

Operator

the [Operator from line first Partners. Instructions] MKM question Your of Eric with Handler is

Eric Handler

you. good Thanks of morning. and couple questions a Thanks. for Mark

between Bros.' XXth gives in to four that And What will if a big follow-up New that your movie roll you also be outline of question. reopening First, what's And is York that could the that Tenet time? June gives first I've what I out and to confidence willing launch phases are for ready you you Warner Hollywood? out LA maybe movie be wonder and going to confidence and at XXth. July got

Mark Zoradi

Thank you, Eric.

deal with first Let part. me the

I As phase. a four mentioned,

operating our and technically, phase all got test in sure headquarters and of operational just systems our working make protocols was to theater and and Area around DFW Everything planned. is of close in The as our health first center, phase service are place. to the all a safety five we've

be we theaters in opportunities following third with one five our tests the following to will our the of open systems. larger the week, in So will we Those have lots of theater generally will of approximately by And all – that's up our that's July theaters and third third a five test. all final open in larger open Then by we'll up be one open markets. then XXth, theaters. the the of one week theaters we'll doing week, so then of test and out all and a

promotion relative We significant those of welcome on leading not Tenet. tickets pricing. back to but pushes only club, running weeks concessions, and have and will to Welcome back up movie big in amount with also pricing, on we'll have up everything four

your XXth is contact have in Bros.' Warner well does on optimistic Regarding clear about been positive about they I without does – Chris Bros.', question July Warner as too. well Tenet, it saying, go Nolan we close extremely with this mean, as opening? and and the remain

we and their a continued allow full Of States social the We're of have theaters most restrictions that not operate COVID-XX all with We we in expect the to will models Counties and positive relative open confident at place, up do that to, we've course techniques XX% that XX%. across relaxed being profitably movement the upon the of it country. distancing, somewhere the and a depends put run. if requirements decline can to government reduced the

this XXth. going July and on what is want you Bros.' Mulan Tenet to said can't have that they – you do. Warner I on nor is Disney's you look, kept you So Warner open promise plan but July to, XXth, promise followed choose to can a date to to can't

whether able place a key whatever and related for we're delay four and to is flexible. for prepared an thing this, that. have is prepared or five virus financial if whether prepared be, a we're put do the plan However, weeks weeks we've to from fully be this its or for might in We're standpoint. or reason regulation it standpoint; we its month to And it related operational

released they're would thing So us flexibility, going And tremendous to a trailer encouragement on – tells when it a is to to Warner's reaction the to media. social pent-up say moving in we're to other put that amount allows a to come Warner's be of demand for for a as time they big encouraged plan tied highly releasing Tenet but a to towards It see the positive in movie, The not It them is until the that. second was this got planning place people nationally hand was from got Fortnite. you've say that was last we movie. such that that I date. there consumers

Eric Handler

Great. And a follow-up, maybe movie I'm contact of as proprietary conducting curious, to return? about willingness with the you've your share surveys people just consumer's just and have said theaters. in from other results you been – the surveys your some you're some members been you you and attend that club of results those getting could

Mark Zoradi

back that research, comes share with or say But research consumer to out point come that we're and we're research ourselves consumers likelihood wants to the are it every extent to see the at you. that a that talking has which whether We multiple feel There no proprietary key I willingness can key we from research in The and every health the pieces it's that come to thing in piece and our doing is and doing increases time on single they to back. prepared the to companies. their done. safety place, thing the that research, confident been various in it put regular tremendously been protocols of that we movies basis. has industry the is There of this the

the right to to that's know along have consumer. safety with number them is great then now we clearly properly the to feel two diligent very because – much back? it's now And One, things. and really communicate consumer, to two, people and know number movies to health so very we coming, it's place, it being and plan so our number time putting spent do to communicate And we for by part and all come So it's the one, them; effort really safe we in why these movies. we're that and going protocols protocols; great key execute three,

Eric Handler

Great. Thank you very much.

Mark Zoradi

you, Thank Eric.

Operator

with is line Your of Morgan. Quadrani the next Alexia question from JP

Alexia Quadrani

guests advertising follow-up. them, sort seeing more it? wondering if So the move the if for – I likely to is follow-up the of previous way week And then which you. had extensive. get push your Bros.’ the a experience gets meaning questions I harder we can date? release. any the thoughts to and you're get the it my and harder love fair it this we know kind and changing to demand in Thank you a industry, reopen? into about throughout of closer generally that's to and just less on to it there's of process, take you in very weekends, when out is just in to into your couple Warner question we're you Bros.’ the the I wanted sort speak in – first for out Warner I can't but it's that I lot you spread incentivizing assurance You further know on of some spending pricing hear Tenet’s know, when on Is if them say I'd P&A, marketing and anyway not get in pricing, just

Mark Zoradi

that. but and Nolan standpoint. they recognize, Bros.' consistent very Chris to I and in I Warner but budgets writer marketing critical thinking marketing glad can't director Warner as Bros.' are obviously to wanting do Warner you has a have about this absolutely to is spends relative speak Alexia much Bros.', the been and from Yes, am

and One going drop, go So was to we're already to push to done the start got the media was the recent key. hard come trailer very time they've spend most they've say, other which which going a there's this. button their to – thing – things that promoting mentioned, where

will make they got to on of for pick the in clearly thinking that's sense. it's not June. to It's the be XXth that terms date again they've likely – because June. speak currently that is critical I to for will publicity the what's a do month going going actually But that's, to of in And us distant be and decision their them, doing. not putting behind before in are we but can't they future. late got you've the makes that them, because they're in somewhere social media somewhere during planning Again, that the so sand the, to absolutely media probably work during paid And speaking

done Tent-pole that and we've they We're have we could be your done library the but anticipated adjustment pricing. be it no You in way, have will that, will a along change, all today, devastating for to do to And we've going if children of our adults prepared which it second adjustment done $X such put the way of and change there, to for us to fact that they as change happen Warner was be not of to, make It has the believe actually that, down indication we or $X for given in that Bros.' about a cinema. very coming question the in back going us. part the We're pricing and planning. would something attractive to for product. they

discounted highly also that. We're going as concession offers about we're have very to So excited well.

big back to standard we pricing. to when welcome doing a ourselves industry well consumers Cinemark, return first-run will the campaign, – product, return as at and as ourselves we're both So

I think pricing. Cinemark a know you relatively on likely always Alexia has been that conservative

average highest A the under ticket $X. the Friday to can for price in cinema is circuit come Our the Night, anytime Saturday Movie U.S. costs member Club across Night $XX.

to home of out careful to make continue affordable very going been movie entertainment. an we've So

either we that product. So or decrease anticipate price back first-run come when with first-run product with don't increase we

Alexia Quadrani

Thank you very much.

Operator

of Macquarie. is question next line the from Your Beynon with Chad

Chad Beynon

to kind is that million a call? the safe the congrats and that it number was question, the and trending about? I And the on up believe is my is $XX last the Sean, in continuous I margins taking January what before related on quarter you to to with to the normal put on – plan for that, of share in focus that originally of related given the an assume Thanks on Wanted then – environment? February, plan, improvement Thanks. track talked still kind achievable in before that, – you margins guess – morning. given market strong shutdown. Good on

Sean Gamble

are as Sure. well Through we we already actually of big that were the the progress Yes. continuous a we program. Chad. going Thanks pacing on mean, February February I current year. well year-to-date, account that were overall for as those we the for of target after year-to-date, as for million was performance the we're efforts improvement mentioned making February many of question, both underway of with We're as ahead portion our for just $XX for were the margin that currently – improvement accelerating business. the through re-assess

the kind it's to get and originally improvement But based what's what the total of few process even impact probably than I identified perhaps of already some be there's, actions over bit see potential challenging would of already opportunities continuous the last discern the months, higher to were versus restructuring. targeting. a say we I forward likely in some a bit – think we've we going will what's little on going there's overall

Chad Beynon

cash what between in then little impact receivables? than, or was remarks, still you That more cash your and Thanks. And called as – just similar the quarter call you continuous your month? to Okay. payments an that burned to that a free $XXX business prepared on And will flow outlined out you what imbalance on the thinking? the that million last on bit there – we're was what

Sean Gamble

first; we question runway just that Chad, April. answering communicated pretty what Yes. the Sure. line in in cast is had much second back with

So there's in material that projection. really not a change

we of of of additional working driver month the most through and far a flow just through of admissions revenues mentioned had on As large that lack million that the really, was from as on driver flow that the EBITDA March. biggest standpoint collection capital of I the $XXX of cash top was impact then really the the

drag help a of position driver was when of closed $XXX the boost to EBITDA capital. and by of largely So, the through admissions the actions But revenue of that quarter. that our last the lack the the weeks to pursued particularly significant the two And that just other and we a working to offset on created payment range we’re – both cash impact million collections. flow of end

Chad Beynon

Okay. Thank you very much.

Sean Gamble

Thanks.

Operator

from line Capital. the is question next Miller with of David Imperial The

David Miller

of on curious before. I’ve follow-up. Sean, activity just Can I'm were can you off stood March Hey admissions a X? – where guys. couple a talk fell as I'm Obviously of where things where domestically about, your cliff? curious Thanks. a revenues And things, you,

Sean Gamble

one. Give me a that second on

of as the X% but from, – crisis. hold I'm on second end believe see with about February, we're X%, collectively believe year-to-date going up memory we of think where, here. – I heading along the I that's we're We into – I the industry about up a we're

David Miller

right when plan do And your you with sounds where stand but landlords? stand mean, let's rent rent by landlords you going to we where, [indiscernible] you're I any paying right rents Do you guys on Okay. right. say how then sometime should remit is That not have actual should where crisis now did you How model about the reopen XXXX and now assume guys that? rents, rents? then you over model film and what in rents, in we physical do XXXX. with with to

Mark Zoradi

some finish up, schedule able taken work every to our have our some went me our – with and not done And on everyone I nine negotiation. but negotiations we just for has with were some – very, discussions going to of share and be balance job not on a and and if said that real were successful some kind delays. for just that. let you to me of have contacted We delay, cooperative. the with And form XXXX. the been we let with going three most not I’m say of with to they've year, most of – them in everybody, let of months were, way. very towards David, We and a David, all willing them me deal our been single months, us, then into landlords paybacks pay. rent There's very Sean, across do to landlords we're could. be months, we've individual were literally any And six but able start you negotiations fall were But it landlord limit into let across that the had of effectively different to many David position – this we've department and was estate deal going some some we're not good Rather, will of them we some those Board. negotiate of will a specific a landlords. active significant a

David Miller

or? add Okay. to something Sean, were you going

Sean Gamble

say modeling that that have and cash kind the takes continue those to-date all pushed how those of negotiations think of of majority – of payments be shape year associated into XXXX. there of There forms lot. I the the within from of a things complicated dependent I to Mark because taken. kinds are of discussions year next and been it. kind have kind with could for subsequent Well, Mark shifted movement, gets specific I on – of status that the progress different actions openings a explained mean, the are some

cash timing guess So on a year range results. rest of a of of of hard it's kind anticipate different kind to give this year of simple just over to next the and I it's that a how the answer flowing because through

David Miller

So I'm clear. let me sure just make

you detail rent but to any scenarios some and scenarios there open, may you're country way but pay will it? are that are back there will portion where that about for you think a around in Is but to So to pay have the that, of few not be going right have XXXX. to XXXX, the a not

Sean Gamble

the different deals. A correct. – That's lot there kinds are all of of

deals Some timing. based of the just delayed are on

So due there's kind they're date. aren't always connected when dates of that reopening extended a to

David Miller

Thank you. Okay. Perfect.

Sean Gamble

full know on – vary will expenses, our I clear, though an accounting for this the from for expenses But from P&L because rent that. in cash be the will EBITDA timing be the standpoint, will those what David even for our to just reflect paying some

full a obligated amount EBITDA reflected what because it as rent expense to basis, recognize that we to quarter-to-quarter will So that we're go-forward be on in place. the takes gets month-to-month, have

David Miller

Okay. Thank you.

Mark Zoradi

David. Thanks,

Operator

is question Meghan the Suisse. next with Your of Credit Durkin from line

Meghan Durkin

good guys. morning Hi,

a get color be So I pricing. the wanted little more bit to way you'll on

weekends? that's format weekdays the be optimize to expectation Are the for the into you I forward. expect then And to demand You know large screens to the be there's you if have talked for do priced? going adults, that? since trying on likely adjusting for are that going don't for attendance drive how the prices you more children, weekend but about be premium $X so going the $X you more to

Mark Zoradi

to when and and the marketing message, think during up just the tenant to Thank away. anybody done the keep very on for product movie, attract adults, attractive very that taken the research pricing, Megha. $X showing a children we've up all repertory we're number simple $X based two change on very weekend, seniors, library that to stage, and unhinged for the going simple for make our leading I consumer. to it we've going is no people health We said, is safety decided one, ramp What and $X Very going you, we're to on is come don't We – and $X that simple. like number protocols. confidence that

then very did simple, consumer relative same back, easy no, question we message, to it So clear, your very and concessions. thing so And made was... welcome the second

Meghan Durkin

format The will screens premium be priced... large

Mark Zoradi

it to is simple. And again we make very decided again, do what –

multiple we for well. in movies believe been issue years. capacity these that not because; formats for many library for that available product obviously XD the as library a have We have there's will no product, during They're people are So and out been charge have incremental to there.

back people to the that's XD. get So why in the the we're attractive cinemas and why no pricing, and just for comfortable to this that's doing coming up-charge

Tenet go once we XD. with to Now, normal normal a released and will for back pricing unhinged up-charge

Meghan Durkin

back? Are prepared? them? And is ready that they believe your you contact Got come with theater Are in to it. do you staff

Mark Zoradi

Yes.

thousands in things well. and people. second the lay-off of managers a did our did general that one know, did, as of not to our kept lay-off we we larger We we have theaters also You

their contact place, with So of one managers is each in still still staff. our general theater in remain they

Cinemark hire vast an the for was of easy process have back which We expedited, anybody standing, good employees. that will majority left in our

turn to that ability and a be cycle to able we start bring them a has been up one quickly. the instead employees. to And to decided back able the And very when bring beginning going – product, to relatively be bring roll we'll at So full. staff planned switch library there's going not were this flip we it's going at with out going and are to switch be do to day. confident and theaters our everything – when that's for be four ramp us. in And up we our trying to like, week There's to them why back Managers a we're of this so with our just back and both up all General in the

prepared if We necessary, outstanding have they're hire lost and and an Managers General our hire hourly to of group Managers back not people Assistant General bring and Managers. their We've new – people.

Meghan Durkin

Got it. Thank you.

Operator

with next of is question from Alan Loop line Capital. Gould the Your

Alan Gould

in a remarks to distancing only of to allow the questions. seats? mentioned my having few, able close were [indiscernible] assuming capacity. social six with about will governments XX% got taking for the opening Are your that to Thanks you feet sell theaters you XX% capacity. expecting first XX% Mark, I be I've the thought

Mark Zoradi

that's that’s fact, be that our can in theaters would very, the number if that be but level. Alan, very we've sell in the case, to that allowed would case, of as operate profitable before seats below even we maximum – indicated we

And requirements. to We several XX% which XX%. State and plenty been go we're the we're there. going starting the our you in to of we're Traditionally time to additional the critical monitoring in an A example county of been next. satisfy fully to know their get especially has you perfect and we're on Tenet the – to additional is there requirement to What's which beginning, plenty XX% the starting week what's showtimes to that and that's biggest single the going sometime added to Texas. The this that last indication government relax big able have, all to is So demand. – when XXth, for Union getting or time movie that's expect be we're all our state, and second seats is that's and have will the the be the have state home weeks.

the up of majority and on be and also – by expect we that Tenet XX% at level So Counties time States the that open we XXth. vast will July

Alan Gould

Okay.

concessions is the the you Are expect question you're of distancing, a but same Second bit to concessions your patron? per movie of is just know able that to staggering pre-ordering be social I in times process? more, have amount be patrons? what’s whole should for terms we little going expectations with opening

Mark Zoradi

in as going I think to the said core, remarks. focus I on we're prepared the

going thing tend take items to highest about good focusing the on expect have. the close. court least be day-one amount margin are that the one because labor; we concession is the to We the on They were higher, of don't So caps least be will amount they those at have level, they on would per same be spoilage of them. our concession the margins

of we're opening, during to price to back back. all, First come reductions June – to welcome some going the again do reductions, significant up price encourage people to month Tenet of leading

won't talking Initially, won't and and, be are but more long, we be corn. think I months to and items to per up about bring will reason beyond buy Pizza more that complicated about move Coke, there, offering there'll ended concession it various we But we and continue we caps. back level, And as build Pizza of initially selling a into in per candy, level to as So more and what half going with Hut, we're consumers that but things we be cap not I won't some a items. burgers we year, the pop be it additional no all we the terms are be I start talking less over the we think, with Hut, quarter up there's get to backed time third than we think and back in.

as expand be then level will limited beginning goes. beverages alcoholic that the We time full as and the to offering well in we'll

Alan Gould

Is burn million us a rate with with ended debt that million to assume? $XX cash per May for March And Okay. $XXX XX I of for then XX good took for Sean, the cash you on, month forma guess you $XXX million. pro

Sean Gamble

obviously or based December. assumption. bit that bit. in does a up and of example include But take give be That's incremental down just up will in November, – any certain come business, an will items such the include on not costs well. fairly as mean, June, as general, a a bond the I fluctuate little ramp and probably we timing restart that level we That our that safe does around as hovering to not payments

Alan Gould

to your Sean, real question, local costs sheet hit the as there and last worry anything are we covenants, have Brazilian weaker lows? balance currency. And or the about the I with know get Okay. internationally peso new Argentine the or all to dollar. in anything continue But and and Is the versus Argentine weaker items, real Brazilian peso, currency

Sean Gamble

about or those debt concerned of currencies not anything, covenants We’re the related. any on effect

local transacted fairly self As our we've in said they're and everything in past, majority activity the of the those countries, is in currency sufficient.

for The results us concern. a the that's dollars. I simply the not into U.S. biggest short concern just on the So, has mean translation is effect is no, their back answer of it

Alan Gould

Thank my taking for Okay. you questions.

Sean Gamble

Thanks Alan.

Operator

line Your Research. with next the Goss is on Barrington question of Jim

Jim Goss

executed how sort or earliest operating was able different versus you've LatAm for the same Thanks. to And that week be out might environment normal. is and And least to normal lag? wondering new domestic is ops, plan envisioned close it you of a feel perfectly everything type the achieve be if at several went be you what well. might clearly thought very I Mark, the this would month

Mark Zoradi

so clearly transition with going period XXXX, for movement we've product had Thanks of number much a be year both the There's to the question, also a because Jim. getting pushed in that of this XXXX, been in thought they were going going to delays, movies to And are studios in XXXX have has there movies XXXX. XXXX. done to get to where pushed production within

XXXX to I in the rhythm nice came the when what's But think to the being to closed for operationally movies and towards to think because all somewhere So, cycle is to of we'll because tail of fall, think, get to that to COVID that the that's quarter flow we well. new it going this of product But that standpoint, fourth from we're the long and than related to related to move able our going a XXXX. too late to we I and of it we're to year as a get a back as quarter And there's operation go obviously XXXX into some actually get you have to going XXXX, for normal had more a don't production into of because until But their end into we've tail off pure new do on I new new product normal? going be full think, going longer XXXX. to into a to industry We recovery I XXXX. again, us quarter really back Therefore in from look been is do year, adapt schedules. first so and to do going the that's is relates XXXX. XXXX. to a the had fourth start at as prior we're not think as studios they've post-production, of filming a normal, adapt feel had reality

Jim Goss

Okay. provided about XX% limitation the seating normal And a you statistics had close fairly couple to your on a of ability with other of to encouraging lot things, one capacity. is operate

to the And be LA, that of bigger markets players. XX% of in time. by you be perhaps for the exposure assume more seating more sell-out sellouts than share might limitation the tendency on would tend areas, impacted more to couple Your a would to impact wonder you? the might do your smaller suburban theaters tend or be other if problem bigger some you I what to a be I mix have where you if and all have What others? example, urban have relative in

Mark Zoradi

some that off Yes, stat to have something specifically. we you be give say top that obviously. go at perspective. have to the Jim head, of me let would where I my for a don't just But look I mean, that would

markets Our strongest mean, each lot strongest a Houston. in places more Area, three are where theaters have one you areas? the And said, screens. Francisco urban where, Dallas the of of in and I and that's of we Bay is San a those Cinemark lot if

profitably. gives a rare get me be a to close that part on the would to weekly that able we're cinema that that So going to It confidence operate is even basis.

environments. that Friday a night see try we on and theaters of to lot our So some which we're And urban and in a Saturday of for think, it some spread the things extent make the be lot going a do or demand a midcourse us consumer the would demand to have to night, among problem ability a that of screens and into I midweek. won't some corrections hard to spread out

second example, most our do back with and Discount of as well popular of our that like already Saturday to that. that a choose or come If do Discount popular Tuesdays. For day the – we we week tactics we'll now done Tuesday because we've and see in we did second pre-closing is could it on day problem the strong night, was there. variable a pricing to we have bring more such Friday people that most

very I'm simply week the capacity seat really will issue So in of we're of the first content. first re-launch, we to because Unhinged as to the And especially careful the Tenet with Mulan. week aware have we we're being confident, have week not relative going third a beginning of of and

is able Mulan to satisfy in a to actually than is somewhat demand, multiplexes Tenet. thing on play So one weekend And different really is to obviously even nights our too, on there's There to a that. it. is consumer have Tenet to good demographic won't to they other of plenty be be crossover. room to And the have young going family to very going just primary. a very male component also is Mulan saying going some demographics, that to Not strong it. But I'm component but strong a going the have

it there's we're We're confident going XX%, the XX% become be XX%, a that then can And to see Plus can become XX% as time that likelihood for when we're all as goes time going to So going operate. we that fall into to period not in forever open. go every XX%. forward. at able it's we're a going to be operate of months at to the day; the relaxed

Jim Goss

there seeing changes new are things every linger the protocols do thing, creating future? seems change last that you're one crisis to Maybe create that are Okay. you wondering and I'm now, right if go on. will way think you are the done in

Mark Zoradi

the what Well, the we going I'll give a I that answer tickets do effectively yes. change. our think, The simple to and to we're in adapt going to you that way We're is one. do. to airports go just theaters,

a in smartphone or ticket. to would get printed with theater. that then and podium, their So sold and past, and utilize printed ticket a of portion get the already at stop people Well, are significant are ticket into their online to a have somebody and they tickets the at walking a have kiosk, our in

we no that's like longer reopened, an As be be to airline. going the case. There'll

your you in. ticket on just your your online, bought you scan walk you If phone and phone, it's

not and going to healthy as to of be is which be we're going in millions to be touching because those well. them to And obviously printing also anymore and So going tickets. paper millions be tickets, nobody because environment this will we're savings, eliminate it’s cost ripping going

one done. simple the that's we've just So that things of

in that place more protocols were is be for process online think that orders. we thing the will concession important of putting future. second We into The and already only in testing

a ordering, we're going fully with baked but towards we're online concession continuing open So that. to not to work tested

not So in need this distant able crisis to we that has continue to do the And too it confirmed future, around we'll everything us so. to do just so. be and to

Jim Goss

Okay, thank much. you very

Mark Zoradi

you, Thank Jim.

Operator

from with Stanley. the of Ben Swinburne line Your next question Morgan is

Ben Swinburne

I of Based obviously downstream there's would COVID? come your of curious, up as consumer over relative ourselves studios utilization, when the think expectations they are do I'm environment”? office to answer these films the and a the several They material them done come earnings impact you sort at months, next these movies. you you of in position Mark look to I very going the Good run demand about watch capacity how trying you expect a box results. terms office sensitive have what these the how films is in on but obvious, put out morning. of you to to know in underperform be they coming your for do they maybe theaters “normal just what And these in pre mean, reduction out. box to

Mark Zoradi

on so couple, in macro say own seeing think The have pictures Tenet, access Mulan have studios But sense. and social seen in what big hard seeing exactly that put first tracking a a haven't our demand to we we their It's yet the don't is. to. Woman. media, I on Wonder in these interest in consumer traditional seeing

we So it. people. for consumer And I that expect be to limit significant to is seating don't going there think these demand the some capacity

what to the and environment, most research shown that a consistent of health safety that the important consumer. things very that we can think then to I to provide has one to communicate do exhibitor an us as is the and

research that has willing incumbent anxious very are is upon know come clearly us shown that the And much more of done that things. these and to we think that. I So to all do if have consumers they back

so. doing to begin why this movies to consumer. and your overall question, these reason much do communicate put so to I are an don't do think for in the absolute I time campaign we've that going there's think And effort environment? we're in But the consumer about that to happen. that's less to ready So

is the to there to come drive movie, a I adult campaign. the to question and what be think probably Tenet that to been very but And demand been down cinema. that demo young that's successful. strong doing audience that the has first thus a no far, to environment it And a all It's back it comes is very with particular like is movie. creating back four-quadrant us going studios Warner's going safe has audience looks four-quadrant willing creating the

Ben Swinburne

Right.

Mark Zoradi

first male back. demo to young that one come that is to the going think young I adult, And willing be

Sean Gamble

play kind the too, longer Hey They than longer they have thing to is extent a What quickly, is which point while other would of unknowns, they to had ago, the films some to theaters. these a films years Ben where lot run pre-crisis. in near of lot come term one in happened these to just start longer first the certainly set little much a the to the start a cut of with way films with in that with good then and in these are up. could to the bit then films particularly run weekends marketplace. open opening marketplace, but less content be there's massive Well, trail chance And run off. a theaters dynamic lower, earlier of the the the going new

the already how For some the the reopen. think the has seeing as a we to some we marketplace, that a have in that's pretty of been in And things we're market positive was of well, this consistent. content little the as that could to dynamic shutdown see reopening prior started start of already sign that theaters holding bit

Ben Swinburne

Well, point. doing. guys also things whole a think, great of you are I Mark, that's wanted to listed you a ask, I number

How do seats, plexiglass, about these of through is cetera. sanitizers, your expected said be plan late you would continuing baking long QX QX. disinfecting Cinemark et into you and You for new – I normal a and and think talked processes?

have additional them way. about I'm that need they your you which with when would bring these like expectation you seem initiatives, them, it is costs get but to that thinking additional wrong past maybe won't So the

Mark Zoradi

additional cost. how what not what comes It Ben, of with with course, there's outlandish additional vaccine are. costs. comfortable down there's really It's to all consumers COVID happens happens but the and and

So cognizant continue we too some those to we some very at spend sure that stop to But point going it's cognizant of drop early. going money start don't don't have will too to disinfecting We're make to to be extra don't procedures early make when exactly know to. special sure and that we're And that off. we yes, to is. be

Ben Swinburne

thank just rent then least into and gap the we Sean, on that accounting as help on I And cash lastly, and paid QX for probably the wanted to accurate? sense. the burn. Makes just you between Is so confirm, expense through for on QX. move for at back cash rent the see we a the will P&L stuff,

Sean Gamble

degree a will That full in expenses of continue in in second the delays is payments other those yes. expense full to the of recognize the we to certain quarter, but rent cash accurate, have We'll quarter. and payments

Ben Swinburne

Got Thank you guys. it.

Mark Zoradi

you. Thank

Sean Gamble

Thanks Ben.

Operator

is the Hickey question with next Your Mike line from of the Benchmark.

Mike Hickey

market sort capacity your potential be get the guess, questions. obviously with or the certainly count, guys guess, my shutdown? reduced a from screen solid a first, you meaningful your operator years I of for U.S. magnitude of U.S. thanks capital Sean I do of sense of mean, I total here. of couple for you private at, total the you the guess broader of when you a Mark, operators I liquidity sort could But shuttering can and are here and the Hey view, screens sources maximize look

Mark Zoradi

there maybe on the moment. thanks for There back. be to for maybe concern and honestly to hard confident something is, gauge. that is is That's now, sub-question that you're be. Mike is theaters consumer not to the us open we is – And primary the come potentially there Right question. getting asking And focused are our could the really it's opportunity at this for going what us?

position, for Secondarily, cash and answer relative the it's downside may so liquidity. just contingencies really and other our secure that particular cash security flow own in that me to exhibitors And to worry even happen. hard we're about local their

Mike Hickey

enough. Fair Thanks.

be America. The second Latin question would

Latin look would your screen your profitability do lag, I and it Curious a in assumptions the at that's think labor, in you you Thank profile of desire there's different in region? August. And still are that. plan virus, reopening to Latin the then like noted in count with operate consistent you. risk reopening imagine than But You the sounds lower less your more experiencing you sort guess giving that I America, broadly when speaking, U.S. be maybe return on flex what your America, in

Mark Zoradi

it's me current think there's us. very to because issue. much We that. to good a anywhere business more Relative weeks interested changed America. there virus, operate we're with Latin very profitable attuned second one has Let in for Nothing first, in several it's in sentinel a Yes, much ongoing deal continuing the aspect to hotspot the the yes, We're than is Brazil. that. relative behind, probably material to very the else

learning is were have the U.S. each all take have have to going that the in We outstanding areas, those because one they they of – front teams plus it. several weeks of U.S. in place in the

month we to able different countries. being anticipate similar the be is on probably during think in guidelines. open we Mike, We will XX The there operate it there of So August. question

those not you've countries. now now complicated just it's its one within and country, with dealing you've states countries but So – got counties because and XX

the have complicated. use an going we're it's to United think able open America. that So of be we profitable we learning’s We of a to to lot business it able out And do be think States to up. in Latin ongoing

Mike Hickey

Excellent.

Sean Gamble

Mike. Thanks

Operator

is line with the Robert The of Fishman on final MoffettNathanson. question

Robert Fishman

window all I your right streaming? given take are Mark, Cinemark's window dealing movies major creative these the you of there prior yours to studio And to any but front to have last Sean's a more provide going approach stay in and can to there, one right potentially movies Bros., and flexible with with be experience on one potentially or Warner the relationships studio help more relationship experiments you over to skipping theatrical theater to for have a Sean. for planning Mark different after you way And and reopening? you is on first color genres now? on with there, just touched just certain other it partners already the instead and

Mark Zoradi

plans. I but I with each would the Warner know to their you least I because was Universal Sean a mention relationships glad about in really CFO basis. question shoes did Bros., Universal, been our feels and say the that what board. or And we at does studios of feel one good I'm it either asked and be with their plans we're that players; and comfortable in Paramount, – in myself, weekly Robert. in Sean, very and or is head for start contact them you, Lionsgate, Sean I as of with film on we've Sony let's years. I on the have across world. the our and Disney, at Thank regular know because equally like

us with be of in theatrical providers. studios that important think we're to these the way business open I that on tended to going press The content are going between And do We're to we've And to are private we think as release because the we that windows films. and distribute – settings, ways exclusive dates, negotiated alternative the opposed we kind there. to very and is very our negotiations yes, continue to do So we're unique settings. to think to window experience. we've

your so want don't give consider? what's some lower is to theatrical we're we careful about and change relates the that. we here, to going small one. that days is big, our might partners what a blockbusters, – alternatives support very titles to any that. extremely But currently which be open we And titles as are XX we to for to And Robert important talk studio important especially I about think fully wrong grossing exclusive we're undue the it with impression the all widow,

Robert Fishman

in are but… we there lot you. understanding around, about understand And of of is put Okay. level what color type should Sean, a and CapEx help ahead more unknowns I months try about to attendance a more of difficult this for of us the range anyway, question to still, assuming XXXX? but think Thank a think normalized spending

Sean Gamble

Yes agree that I tough it's is that a one. –

be We're still are we low mentioned I in to kind level. expect think that the at continue working we will I very a prepared remarks, details. to that of mean, things going some be committed I required hover And the very in those through working that items committed for really CapEx limited that's been will the we will on of we've timing essentials what and the do we're spend It those. even on. to. delaying

that some we time of a continue of up be kind more So I was. being original to it's plans. to kind our give fraction those of going as the But of to future guidance clarity think for and aim we'll calls in firm to what

Robert Fishman

both. you Okay. Thank

Mark Zoradi

Robert. you, Thank

Operator

to turn I will the any closing remarks. now over Cinemark for back call

Mark Zoradi

you you appreciate on morning. much. the not call very that We it's We of this of know all really being times. Thank easiest this

with working all following that You very you our speaking forward much. home. our are from We look Thank all you call. second again, quarter. to And concludes

Operator

That your participation. first concludes Thank you conference Cinemark’s quarter today's earnings call. for

disconnect. You may now

Cinemark (CNK) 3 Jun 202020 Q1 Earnings call transcript