CNK - Earnings call transcript Q2 2020 | Cinemark Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Cinemark’s Second Quarter Earnings Conference Call. At this time, all participants’ lines are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference call is being recorded. [Operator Instructions] And I would now like to hand the conference over today to Chanda Brashears, Vice President of Investor Relations. ahead. go Please

Chanda Brashears

Mark by set company measures or factors include such statements. materially measures. call from publicly obligation statements. different statements. Such Today’s filing to and Officer. would A Carmen, forth Inc.’s I everyone. this Officer hosted At reconciliation quarter Sean filings. webcast turn quarterly Officer; Thank Chief can accordance press Gamble, to members company’s cause good the the with Such factors may most matters financial welcome now I or investors.cinemark.com. over that The the certain the Financial by call, and Act to conference of like earnings implied call are company’s undertakes Chief release, safe Zoradi. SEC Mark no harbor Holdings, would to any within Chief company’s you forward-looking update in to XXXX, time, to call Executive may subject provision are XXXX the measures that performance and this of discussed Operating like you, statements comparable be and on release website, found performance revise morning, the GAAP Zoradi, Form or financial in the today’s be non-GAAP In of XX-Q, by to on risks, Private second risk Cinemark constitute other these during forward-looking Securities Cinemark’s Litigation Reform and non-GAAP to management are uncertainties of actual indicated directly may the

Mark Zoradi

it hope high to this quarter everyone. before and that unlike with back to discuss of joining liquidity comments in This all morning, certainly then followed second on good second strategy you world commentary to quarter. on healthy. has over will will that morning plans has results Q&A. and first any similar industry Chanda, We our level format second me provide be financial time The our a and you customary history. I XXXX nation our our reopening recent at of call are turning will been us Thank position quarter, the Sean you, off safe results. company, kick or discuss appreciate our this experienced and to We our by quarter

of them once peace back I Cinemark health shared theaters, with expect that this with environment. welcome in preparing have you and that extraordinary a Our priorities our several heightened liquidity, operate few, we focus their entertainment over this, our to earnings health and – on technology, experience continue regarding with level again teams, as wellbeing. On and management current enhanced the and With environment. ensure our name our sheet the the measures safety balance past heightened how to protocols, cash been to new we’ve to months will all to safety that from we’ve look when at and been operating restructured our new moviegoers they enhanced cleaning provide last and refortifying our in health mind established high a safely we just call,

increase using disinfecting buildings’ the rates distancing using the to and social guests; purchased seat-buffering substantially purge seats adjacent fans for announced systems supply mask Safety cycles that raising fresh These enhanced the theater; automatically constantly social plexiglass of installation Clean to Chief our within and safety vacuums distancing adding greatly all ensure and before overseen in will volume technology designated Monitor of party the track auditorium; of our aspect embedded of theater once of HVAC to be and Cinemark measures, since showtimes, have We and including shift. air following which a movie-going face wellbeing measures, fresh and Standard, the cleanliness, are staggered least by sanitizing new include every and total COVID-XX; every stringent requiring which each sanitizing our tickets microscopic our equipped flowing by shift; experience. protocols, implementing HEPA including a are screening blocks employees filters at health particles, that with outside employees XX.XX% air into and

With these theaters the and can safety we protocols believe operate and guests comprehensive, of we health our employees, communities. safely health prioritizing place, our in while

local well communication reopening execution evolve us mind test-and-learn for theaters to moviegoers. plans. protocols key to ensure This firsthand have a practical that the test-and-learn peace for employee customer experience and based of been offer feedback learnings These in and that these and Cinemark implementation as from is end our make the the protocols we government continue one of robust current and is the that started provides teams, defining more will as by of on phase recommendations and Standard. we quarter. at second We theaters in instrumental the our CDC our and training, confidence mandates, reopening our They critical sense offer feedback the

test we key our teams put doing enhance shaping but learnings, past to to translate ability test-and-learn our to individual only protocols protocols expanded prompt their deepen to to is XX across them back new Cinemark. the to managers and theaters their of action, from heartfelt these this insight markets. you and the for not and our such, locations which we As thank different weekend, moviegoers X prepare A refinement to how of these welcome the into all for

XXX to the for weekends weeks what and only same Comeback library refer our children back initial content of to as with by of $X pleased, Attendance with national moviegoers, and for social media test-and-learn outcome these showing popcorn, a three has essentially or weekend and than theaters total and limited per consistently with guests; representing seniors. of functionality; costs operating and nationwide of top theaters, limited Classics theaters; results with food X% also past more are in very covering million Noteworthy, candy than our XX for and that our maintaining operating pricing exclusive of than execution that coverage; were theaters test-and-learn new down. shut hours are contact planning strong successfully aspects the XX% and in theaters the alone weekend, been total we securing at we of the essentially library the and office. and marketing during campaigns pricing, defining across conveying in XX% generated to back developing grown on we’re these and our welcome to financial beverage given with more the and and app and addressable XX scheduling Cinemark cap Moreover, our operating, are of with local various website As beverage represented an campaigns; Despite members; Cinemark substantial discount of relative the close trends XX theaters for customer food offerings we our meticulous promotion generating welcome across provide digital test-and-learn content drive-ins. with results the the more These returning $X. there excluding providing food variable have theaters peace country. we $X available, just open Club adults grossing Cinemark mind library of being test-and-learn incremental impressive five guests Standard, content. we’re strong over of includes effective excess open, And these box creating beverage to and theaters. theaters U.S., over soda enhancing our this had Impressively, the few. name film seeing headwinds five the and particularly appeal Movie past base to highly

retained while were prior our we members XXX,XXX communicated Movie with we’ve of February continues results, communication our test-and-learn provide to Movie Club Remarkably, most closed our and successful with months. Movie multiple Club in attendance direct are line pandemic. moviegoers. value the vast theaters. of members fact And representing we the already is majority channel that demonstrated of lean Additionally, of in highly been our by the our significant Club heavily value able XX% membership to to figure contributing program, a loyal our our approximately This approximately subscription which the is to theaters on base for to our have our

Cinemark’s Before have consistency today’s in turn integral success and it environment. over performance to our discipline and especially the to true been I over that is Sean, and years,

the us of service this closure I’m particularly by remain teams in confident sustain relentlessly been thoughtful ability the persevered safety to caliber determining and face pandemic. in their our adversity. impressed and stronger constantly clean and with have I’m resilience proud that, the of field to have and and emerge phased team’s this operated reopening of our global who provided our of and wherewithal ability tenacity, I in new With proactive We this thorough theaters, results, changing reopening with prolonged our post-COVID the associated center worked evolve theaters ever liquidity Sean? Cinemark’s and you environment, the in back to the second nimble now turning environment. Sean walk quarter through and to before cover will and financial defining has and to protocols, strategy our in our and over plans. position me adapt it conservative of in pragmatic

Sean Gamble

everyone. Thank you, morning, Mark, good and

our our during we management our been have theaters reinforced the few first just closed. priorities cash and months a and Mark moment past earnings call, as that As quarter liquidity expressed during been ago, have top

As prolonged. withstand the leverage, position capital in strategy to maintaining we allocation sheet a even strong result an with our emphasized a balance over the if COVID-XX crisis low has which of consistent impact years, its advantage entered

to as our throughout will cash with cash emerge from refortifying balance date have sheet along central preserve We remain measures crisis its and liquidity standing, and pre-COVID to it. significant management to taken focus our we bolster the

steps layoffs, senior tax-related to lease-related the deferrals credit a our wide range well of capital an include obligations; all Act. net on making our new revolving workforce modifications and crisis; liquidity waiver the our well made ratio and facility a numerous five-year varied other secured drawing of the earnings securing taken during reductions; opportunities described as increased and facility; temporary salary our contractual to senior credit million reductions during expenditures, April liquidity discussion, more notes; spending negotiating provided non-essential secured and payment and $XX.X our halting and quarter call we’ve the of first through and million as our $XXX commitments in dividends down pursuing by associated as on significant of prior CARES leverage significant and with payroll across delaying obtaining XX, as furloughs operating temporary some As covenant sustain

approximately Cinemark a Mark on a with have moment. pace touched total of various we release to June As current the limited cash burn new many a $XXX the to approximately a said, during the quarter progressing up we current on large Standard, Warner which do not developing was is to of that Based balance the within cash month how on our provide are likely been health as global continued continue in $XX on and necessary we of million. cash safety based on closed. position, such our expect should Tenet X. environment. million these our scale XX, global requirements toward to Mark our ended balance already month our a September This and we more actions, second exceed industry cleaning leading that is and million. that color result aspects $XXX.X cash see reopening meet Bros. XXXX, scenario of July extends domestic of as of runway by theaters and will That July; liquidity into well remain per

these restructuring reduction underway in theaters, workforce. efforts, that as U.S. we’ve be of of permanent in pandemic. various certain postponing during projects, second wide-range XX aspects certain company, business actively other as have This been and productivity quarter, our well corporate actions shutdown a that innovation of to the were to and includes the more already while to preparing also and XX our as been Additionally, our the theaters, of Related streamlined included efficient. the and we undertook re-evaluating initiatives ahead internationally we processes reignite seven re-engineering accelerating

to projects, of we expect original XXXX Anticipated balance as forward, with commitments we recent the near fortunate our benefit estate business, now comments maintenance combined expect on cause in real cash and guidance build during its to over the our for reduction requirements. XXXX year near-term million and to to a were EBITDA of this XQ. expect conversion by to year that $XX sheet below we the million cash $XX driven XX% the on annual for $XX do will much beyond. we remainder in remodeled our in the CapEx regulatory made recently Consistent in February recliners. million. to Going ongoing be well the in reduced Of COVID-XX as domestic as compared spent the this representing compliance compared originally onset with approximately and slightly post-pandemic. will spend strain that we that of our million that expenditures are for year upkeep We provided result of not our certain significantly Furthermore, new figure, prior investing have steady history flow was million circuit management, end, CapEx term approximately To of of to expect in million as $XXX first will to prior we approximately full have are $XXX as focus quarter actions. we years, our we of regarding in theaters pursued in another and of our slated that strengthening average largely expenditures a delayed derive CapEx these $XX seven be

now financials not follow to therefore correlate based reported attention cash accrual you timing. and to necessarily I that second like flow directly the quarter, to our Turning remind do accounting

that With for global duration our the weeks pandemic. the two test-and-learn was exception June, circuit our of quarter closed ongoing theaters the five domestic the reopened due we across of the to second last of

supplies amortization total our as shrank advertising a by zero our result deferred of expenses materially rental the to are admissions and revenues, almost primarily we Concession impacted resulted our screen quarter of in-line quarter second closure, $XX.X and advertising nature As reported as of first million generally The fixed quarter costs we reported $X.X second to of $X.X the rent our variable entirely $X concession result was Facility revenue limited rental closures. from $XXX,XXX by theater quarter which almost largely of and occurred of for the in temporary Film wages entirely accruals. global that were concessions revenues. that advertising in true-ups a quarter fluctuate down NCM will film advances. were during was and was result second are million well, theater a our made and and and variable said the and the and this global driven Global the the of goods That incurred worldwide we quarter. the lease in revenues. salaries as XXXX XX.X% expenses spoilage waste with million of perishable result our during of we reductions staffing from commitments. of million significant our reflect the compensation of driven expenses

charge the category to such quarter, with as down and furloughing declined property as and driven fell Utilities other to expenses of these to sellers, rent of of deferrals remain expenses workforce other consumption. payment quarter and cuts globally. XX.X% million and corporate And million card activity Still our we’re within negative net However, drop the commissions theater XX% approximately utilities, This result $XX.X the and $XX.X and the expense we paid for closures Collectively million. this predominantly a a percentage Again, fees negotiated were third-party and quarter while of exceeded and do reduced result reductions, revenues. a spending. including loss restructuring $XX workforce related ongoing at almost and reduced like G&A associated expenses of adjusted loss included XX% accrual-based reflect earlier. lease was a and mentioned are XX.X% ticket to year-over-year for other maintenance for not to $XX.X second EBITDA salary significant volume in as by posted worldwide property making our credit XQ reductions XXXX, taxes, the insurance repairs declined levels declined I’ve and $XXX.X million our discretionary costs from several fixed. million liability temporary expenses of which by we in sizable a million second zero, significant $XXX.X

the our our through impact to our and clearly way industry of on company positioned return the and remains Cinemark While has see well pandemic COVID-XX industry-leading substantial. our performance. been to

to have do to who over I taken turn back significant to the we will circuit. this road said, and for to remain our Mark? provide the additional will now information to intend prepared We position measures secure to ahead. With continue so call Mark, on preparation our that reopen

Mark Zoradi

with the film you, of new Thank our content previous the with are Sean availability consistent of our the theaters and reopening we status COVID-XX. of commentary, tightening

the the to While shifts film of Tenet mandates. the we’re environment commitment are release and navigating both for and the ever Brothers associated their excited government of Christopher With our and in side our with been release we Warner due now the XX, to the to That currently domestic coronavirus pattern. theaters have releasing for content said with disappointing, support open phased and on Nolan remaining command global cognizant changing expect X, staggered one-third of another September August and one-third XX. on their on states August one-third of approximately recalibrating Tenet, we’re August XX theaters. complexities on And reopening

continue to will we Latin States will theaters continue sequence. a the of relatively follow We America – reopening will expect United in short to

they month returning our to theater grows theaters. number surveyed research of to than moviegoers one proprietary theaters in research report secure and consistently previous resume the need conducted Approximately in consumers, months. to feel seen the taken order our As more returning within great consumers strides willingness XX% and consumers on that a the to safe would Standard Cinemark educate to we first return reports, and as including activities, to regarding our half own safe three to such within emphasizing feel to are movie the we’ve have numerous

that that to received locations, and have our on overwhelmingly For clean safety our protocols. extremely positive I’m share visited test-and-learn feedback guests pleased we those

In and to guests campaign a of with trade NATO broader fact, the scope continue uniform high a surveyed organization, moviegoers consumer to health to with industry theater. XX% shares also we’re with working protecting safety. their standards Along to satisfaction that returning of of expressed our set our confidence overall lines, those an Cinemark establish a increase in

As the validating several et production only excel managing last the currently audit will food costs environment. which this ahead. and date secure tickets, inventory operating initiatives my our open processes, Die, we opening personnel, back margin locations, XXXX, with the our our that expect theater continue shifts regard in release procedures, our Widow, our this outlined simplify West office for half Revising road another optimizing restructuring Spielberg. Pixar’s the scheduling ability Soul, delays, in Story titles year We also in with concentrating issuing with operating our to in practices, offerings up include of to Steven were Black key including new labor prepare James Tenet, No be remarks, content from to to counts, significant priority key quarter, described. ramp and intensive. Dune our weekends initiatives less further previously and staff corporate I Bond categories, to as such test-and-learn new we hours, which Time to Side These Woman and beverage cetera, core high theater and to and Even models mentioned Wonder as Sean operating streamline align

several Place office and course year with shifting over Cruise. Maverick, of Minions: elements Fast Raya a expect of X, Jungle from Gru, titles XXXX, we The The strong may will XXXX and Eternals, key Top box Furious Quiet the there Dragon II, A the occur year, transition a of Rise the that Part certain be including the While & Gun: Last be

in addition Mission: Of Batman, those as to course, such the Jurassic Sing Cruella. and XXXX, in these are Impossible World: previously X Dominion, announced X, films

Indiana on blockbuster to XXXX to high schedule Marvel Love Avatar, X, Minecraft, numerous Captain to sequel which installment Mission: release for Into Impossible few to the is John office z already Spider-Verse Panther, and of the the more profile seeing the our well Matrix highlights. fourth from next to the experience Spider-Man: return results next Wick, X, Cinemark name a expect anticipated Jones X, theaters films of in hearing of eager and theater a and as the normalized hit and technology initial guests of the Thor: guests what just adventure to of Thunder, our significant and video the of Babylon, course is out franchise, drama announced Black Doctor the platform. and via Clearly test-and-learn We the sound our a that immersive Age box from sight based X, irresistible back movie listening with long survey data, popular installment Hollywood, Golden a welcome there social as the gigantic sequel, with here game, Strange on we’re theaters The based mega demand including is to screen, set theatrical up pent the and home

actions for with questions, would believe I we exclusive critically comment competitors. window Cinemark Before Consistent on we does is the line I That briefly open have up many of your important. on thought mind. theatrical the an said, that question our likely our you past address a of not practices,

we stated evolve that to are have conversations windows. While with publicly studio willing partners our to we have

adverse film’s life. the aggressive We end are a of window an mindful could that mid-to-tail an theatrical shortened impact overly on have

$XX Our Furthermore, more since global industry of of or annual approximately and film’s revenue. X% represent XXXX. XX% XXXX, domestically often in globally per billion growth a $XX proceeds delivered billion theatrical with the year consistent overall

how we any change approach will be theatrical about the As and methodical very to such, window. careful we

now like overall ensure the up to questions. for and prepared research we the this that our line will carefully of in and shareholders. our continue to we’d concludes company to any We remarks best are Operator, open industry, analyze modifications and and our matter, the interest endeavor

Operator

Please question. Instructions] ahead first from line question Loop your go [Operator with of Capital. will with Gould you. the come Your Thank Alan

Alan Gould

please. you. I’ve questions, got three Thank

you just the or And says question position with to strongest going be landlords? for industry. would pivot becomes. third then Mark, you guess topic, the a your adjustments you whatever comes to it leave last do for to what’s First, situation take besides days lease or Sean, would willing Are we’re or happening major on they I question down to in a that studio second abatements it, – XX addition what it if And after assume to you, guys interested are saying to over strength I this this lease of deferrals? lease? you Are company any your seem landlords in difficult you, financial of and be certain do coming that taking to the the either environment? there question are some coming in to opportunities are in given

Mark Zoradi

Alan. third as I’m take the going let you, I’ll then Sean first Thank to the and the middle one, do I’ll do well. one

certainly we would to with one, landlord us third The opportunities. are lending any open that to or institution come

of carefully As very, capital very not significant and would require. we it open be Obviously to those far, any we that consider today, would sit certainly so it. we’ve seen any analyze that

So we consider is that. the answer yes, would

relates hypothetical you going answer to it I’m to to As your a just first laid situation. respectfully question, a where decline hypothetical, out

call having decision not to that’s us. prudent for lot really associated of without make a around earnings on me think a I sitting an details

I’m to on answering situations. hypothetical regarding pass questions So going

Sean Gamble

year. abatements On which time involved next into are for Sure. of of leases, of for second this that well deferrals varied the question the Alan, and thanks regarding And the clearly negotiations have deferred adjustments to your year majority rent, span questions. lengths and

to we’re And oftentimes closed, isn’t access received really in also abatements tend also when malls much where in in rent, some are to the malls U.S., our there that theaters. to international, the have the particularly tenants. the We certain favor laws

minimum So that beyond to course, has reductions has percentage rent in led that, rent. And of down. both gone then and

has some been mentioned. the as there some So adjustments, majority abatements, been has deferrals

Alan Gould

so you Thank much. Okay.

Sean Gamble

it. Appreciate

Operator

your MKM Handler Please is Partners. Eric from line of ahead Your with question next the with go question.

Eric Handler

thank Two questions. question. for morning Good the you and

percentage Mark, municipalities you X Tenet, at steady release opening. open? dated of then believe that either stays look secondly, the weeks would going First, America of U.S. to number was number municipal Tenet – be that And after or two one September into what Latin your of by I reopen; Warner screens for the theaters Bros., able when your allowed have if to

to willing theaters in America? Just wondering how going reopen you are to Latin be

Mark Zoradi

each Latin to be Alan, pathway things screens. Tenet unique of do countries right now the preparing And the do likely along and with We from pathway health in two standards, expectation safety there, domestically we’re four of U.S. and the second weeks of open looks different doing doing all same along Standard, one the each the that requirements are I’ll them end the in the exact questions. Cinemark teams all we’re their and our business that September towards on same with take both is September behind when But we’re in America. America in that the in can their opening X U.S., Tenet one majority the will open specifics ability Latin in the our relative so one countries to I’ll in U.S. open. own the relative of first. XX to theaters the somewhere to have the

percentage some of many imagine, Regarding our opening, how in will weekly cases that and theaters of be can that changes as a you overall daily.

we up as as single rollout, biggest relative we that’s and have Texas, as is hole we we’ll Bros. open sit of willing now that, state XX% – Warner as California course to the our important And today, this and that is California. a they’ve big it’s around is right sit to as So the gap we California as the today. do hole to range, of somewhere probably expressed is soon sit phased the Cinemark for they’re available. aware so very probably right

to we full still at September we’re X away. month is open if and X mid-September so that California, do And in time. perhaps on September However, a can’t be prepared that will

Sean Gamble

higher. even actually And to touch it’s just was sit and we Eric, it as continues Mark a right. say I’ll about It’s XX% grow. now

thank questions. you So the for

Eric Handler

you. Thank

Operator

of Your Ng Goldman next is Mike Sachs. go from the ahead. question with line Please

Mike Ng

for question. much Hey, have Thank good I the you morning. very two.

propensity And test attendance simply The the a some really F&B to are the could It’s willing consumers Is Thanks. on for talk Could Club is little – broadening of about growth seen your past more theaters. per strong a patron the members the seeing you’ve encouraging expand you to in items base the XX% you that that three spend. frequent past weeks? comfortable? the about attendance Or to just the premium Movie the you see first come given spend? theaters? the over population growth F&B bit becoming plans weeks to reintroduce to and three

Mark Zoradi

we’ve as to be back on F&B, we the the to F&B, we’ve box brought I $X. office relative caps highly well. And over noted what way did done same it’s the successful, is on as Mike, proved pricing per it with welcome

we and a takes down in continue pricing offer start said, through a the course, get more license a have after where on at in demand gradually parts theaters, the and start of bar to XX the take next days little liquor labor we’ll So two XX add line, food – more like beverages, to in bit that in I we’ll preparation then the that in alcoholic And the based more days, will comfortable. offer and and preparing. to that prepared open other week will over to of least we F&B, to XX just then up Tenet hold back people next we or we

grow forward. regarding continue somewhere to us of cap give go days, XX was we second you $X to if north say in able that would your we’ll per the I to as XX So question And attendance? be

Mike Ng

whether Yes, yes, and it was… growth the attendance

Mark Zoradi

had ones of five opened they pleased just people is strong to – but weeks, that strong we but had an We’ve of library people The were contingent content. way and for I last Friday. members. had they environment back, to seaters several with non-Movie anxious what additional come Club, we Club felt effort to big marketing comfortable. product, we And that the for with a We XX refreshed just people was And Movie open I’ll through also saw contingent extremely the a where library back. – all willing and come were willing the into There a were channels were back come let back me came described, – we effectively saw that explain.

important goes we that is goes the knew was. the spreads, Standard and going highly once research relative getting And families, and friends. then everything that that they more if increased and appears and how it come, it’s did comfortable people to as safety their we So from more their to to Cinemark in because working the health protocols, word

phased we along all So that’s the from could first this plan training so of the new and that why learnings and the we theaters as decided to mouth on ones we also of of go build the those and to of taking people applying reasons move one word forward. our start line reopening the

Sean Gamble

and mouth addition the to experience And current just clearly that add, in is come to Mike, comment theaters I deal. a on environment, going word people as positive of this would in Mark’s big

message. in they’ve of starved also people’s basically I been a to tactics, people activities that marketing to to out to we’re a of while. our encourage we’ve how the think also environment safe quite in And of we believe out and communicating get come it for refine continued participate and it’s chunk is of big a eagerness these able demonstration types just a be to

big these of of been combined that. a all So things have factor

So to welcome call, back wanted kind of you Mike. to piece add that the and also just

Mike Ng

much Sean. Yes, Thank Happy Mark. Thank you, to you, appreciated. be Great. back.

Operator

Next from ahead question line with Please Chad Beynon your question. go the is of with Macquarie.

Jordan Bender

for Chad. Jordan It’s Bender morning. on Good

costs over Cinemark that how closures might do went an your there over outlook? behind you or be guys I You your Thanks. zones here, Standards. the that you was annual And distribution could went wondering business implementing, think but your then overall the are shutdowns this you update as this. and competitive affect extra new

Mark Zoradi

take you question. the broke sorry, that first Stuart, Could second you you the I’m And state at didn’t of your again, please? don’t why end I up Sean, one? hear,

Jordan Bender

Yes.

and went the you wondering I was over your could do you theaters believe shutdowns that or zones business your in competitive see affect of of U.S. of that some some outlook. You closures how overall distribution your your might

Mark Zoradi

complete that a competitor very of been have at this insight clearly, there’s don’t particular competitor, and sharing competitive We a moment. and if positive But competitive if just a or stage, closes we’re it’s few, market At down, us. to local in with closures. zone for a a a this closures going competitive in be national few into moviegoers number

– helpful closes, to that. with we’re a in be zone we going three in other we good if if in really audiences have it’s we’re to don’t a us. zone sharing, a two look without as to again, But one today, question, So trying where sit or get at competitors

Sean Gamble

question. I that And of didn’t that? repeat Jordan, I your part apologize, catch second Could you

Jordan Bender

the measures cost annual sanitary the are What’s new behind Yes. taking? that you guys

Sean Gamble

you. Got

fixtures We that’s getting in supplies be of all get cost, million kind startup million everything and the $XX one-time a between expect $XX a there’ll place. going, to that’ll cost this for implementing and we of as range

between be ongoing to of of the will Beyond million big costs the related. million of ongoing somewhere just we’re chunk for that will that A monthly $X that that anticipating And Standard. execution then be of supplies. operating part Cinemark just labor $X

ongoing show we’re a that salaries other as wages impact that cost whole see and range working and and and in of of you’ll to offset on utilities our productivity able projects the kind line we’ve to in indicated remarks, That of more. be items. prepared said, up So our increase

Jordan Bender

Okay. going off. Thanks, I’m it pass guys. to

Mark Zoradi

you. Thank

Sean Gamble

All right, Appreciate it. thanks.

Operator

is question ahead. from next Alexia go with of the Your Please Quadrani JPMorgan. line

David Karnovsky

you. Thank for Karnovsky David Alexia. is on This

at the Following footprint Universal, And a or your shift and there your partners any all you. follow-up, have interest then you changes a similar of from to seen remind or for arrangements you renewed announcement windowing? AMC as Is Thank AMC? from maybe with windows? studio us regarding accelerated just can overlap any

Mark Zoradi

and various interest, studios interest – from renewed has Relative about windowing. any about to there schedule of form been release, ongoing some talking there’s been

new, new any So say no in aggressive middle there’s aggressive that I wouldn’t of. discussions that there’s been the we’re

different last as that in the and I ongoing week came So nothing characterize since out. announcement it tremendously would

as been nothing for it as for it’s long that. it’s business. really else I’ve to been to. ongoing continue and So years say been ongoing XX It’s I this in than has ongoing mean, to and going

as there. we’re to but open would stated I negotiations, So and relative prepared think remarks, we I active to are – stop discussions, I the in

Sean Gamble

And on consider based you and say overlap varies market just what based in estimate would I pretty XX%. than less it on small, our the overlap, terms really of distance. In it’s general,

be just circuit a And more their to can You market metro. be and more that suburban that shares generally we of small while bit a only to tends it’s tend show kind consider our portion.

limited a it’s overlap. So

David Karnovsky

Thank you.

Sean Gamble

Thanks. Appreciate it.

Operator

Jim Question Research. is Barrington from go the with Goss of line Please ahead.

Jim Goss

in protocols was little about how staff I for a monitor traditional that process? right. and attendance All masks was it the Say, and wondering closely maintain share there How Were more your your whole or theaters? you. you test-and-learn could how process. if seating situations? theaters this challenging for was Thank of talk many recliner what the during to they spaced? And or

Mark Zoradi

Jim, four Dallas-Fort is I’ll wanted a Dallas-Fort exception the little And the area in which Worth a because have you in give there with the we did we area. were area background. them. – were in closer view the Primarily they of close the downtown theaters in were the initially They Webb more test-and-learn Worth area. of Chapel, Northern to to Dallas

of get So that that we right states could we so five a additional get to nationwide did so more feel. be we purposely we that. nearby and then And expanded could

able opened before, Manchester, opened opened Colorado that theaters, some just home apply get wanted in we our up we to for been theaters country part up and in CityWalk were had top this addition the mentioned that hardtops and was weekend Springs XXX Ohio, opened in very think we be was we very were reason these Texas, the we when last they’ve again, very, were as because to that learned Orlando, in of well. the The proved to that we in the just base things also five since Utah, And feel it’s of states in other I we past very, able in to of we in to in to top honestly Connecticut. Texas in we Canton, fact And they So results And focused Texas the in as there and learning. five. Universal outside opened that the the a because and Lake apply insightful impressive. weekend five were had to North you, those – City, Salt up we

on that comes very absolutely was encouraging and out actually and it it that to we when us it Unhinged. ready So X, told product first-run September for prior are was

Sean Gamble

customers, and in there’s and and add, assisting seeing people’s just processes that of incredibly the in come and a a And growth we’re our results. coming. Jim, back of the different think team. high that’s question, comfort There’s perception see our level of I And they’ve return in been to they to protocols I’d with Mike’s the just management evidenced terms just satisfaction of once supportive and desire

both safe. side been and well working that side our everybody’s on employee So guest a stays far sure from really from together making everybody sides in

Jim Goss

side or Unrelated, Okay. the library basis? to such somewhat chance any content of a the of that on on you is sense content any might discovered the genre ongoing opportunity? the an in And or resonated? you there screen allocate other two Have

Mark Zoradi

go of question, higher with it’s because profile we well. to that, so the fall content, some without the will Jim, placed into library answer

as is it our then have marketplace. but into that, are first-run comes but harder-and-harder Jones that Indiana be ourselves product of I going more-and-more to Jessica wean Jurassic so the what’s World two that desire where is to and Parker So, do so top-performers, proved to new we kind to we’re But think happen continue there a we’re enters going going of to it. allocate, off for product will

Jim Goss

And the earlier of if to timeframes than Okay. do? intended thinking cost in a somewhat a – may are you’ve of terms you there your optimizing you hours. schedule to shortened that any there week having of lastly, and Are be different operating favorable parts during implications

Mark Zoradi

a to a and comes and Sunday week. open we’ve first-run movie to more always seven movie more demand. expand we’ll when done, shows for Jim appropriate like night night increase obviously shows, family is to And profile and on content content mornings a up days come, going late we’ll movies Well, do then when are we a high comes, late Saturday big but earlier as

to you be less content-based. seven going overall manage number question are to more that product? to your to it’s open going when open. is, is answer are maybe yes. with of answer be relative to careful Absolutely, completely and our question, your we’re yes. first-run And But will hours, days So And The we a able labor week it if to we’re effectively. demand-based timing

expand mode operating decision our content-based the demand that hours. is presents will and we what us itself, for as So demand-based,

Jim Goss

have framework XXXX to might XXXX In place. quite it you about? I that might thing. back to XXXX. phasing early there those take you if And thought talk so that it The that throw-on sort any Actually, one a early to was broader to difficult that want the Okay. more. that around, – was could about talked any original really Is reality shot thought of you you frame wouldn’t the call at might how get really thoughts

Mark Zoradi

make it’s say this year of XXXX movies time a we of that’s clearly all Jim, making little XXXX those to closed, out of predictions calendar that going that this the I But amount delayed good so majority be is XXXX pushed during box probably XXXX, office stage. movies were with that for fair early clearly got to to the think and think into I a XXXX is at got year. it

pushed other XXXX. for for the hand scheduled that movies that have some been were to XXXX delays on gotten production there Now, have

to the and be a strong it transition more normalized at I framed XXXX think is more in product because and will production normalizes that from both the that’s point why, the XXXX, Sean going where XXXX year more way. that a we really year be coming of is way because schedule with up, So XXXX and

XXXX. So about we’re optimistic

that a early those and that years. fall think it’s and are better, of office going could think I little up to are pent box movies a XXXX both lot a be to there demands we into put prediction even on because

Jim Goss

thanks Alright, so much.

Sean Gamble

Jim. Thanks,

Operator

go Next question ahead. Riley, from B. Wold Eric please is with

Eric Wold

Good Thank you. guys. morning

the kind get follow-up windows various at certain on already. on guess, the restrictions, the it’s to Labor that few state theater of I the of open? ones blended know – do asked what late maximum August one-third domestic capacity, Day as kind weekend, be been you look those planned questions, wide will you based theater I’ve as for one-third, openings a Just you

Mark Zoradi

with that States and capacity, order open at we in at how a the will point of of a the places unclear now, XX%, XX% majority Most whether are XX% sit couple where this are minority. will Eric, California the up, there’s as but but States then short are It’s there get be XX% they they’re software to well. add area. operate seating put start at think XX%. very can I and can in to we levels, ability capacity might profitably to with the as that Sean, something we level to want said capacity And us will effectively and for we that get operate we as that place, like profitably. you

Sean Gamble

mean. I No,

I the already theaters stated think XX% our you greater. that have hit are jurisdictions majority of the point, of capacity in or key with limits

of us a that we limitation. that very can flexibility lot gives with So comfortably and within operate that

Eric Wold

much visibility terms you how limitations of how those change? do the and And that you enter have as the in may year get XXXX to of end

Mark Zoradi

is friends I and standards, And seen of been going environment that doing of be have also safe little out to course we’re all whether to show on that be or But to that cognizant the doing home they’re the predict, I think and in state that’s comfortable it all think safety I careful tests-and-learn industry we’ve and theaters. of forms family XX think going it soon. put that add – relative be I a it really of going not – the hard to the but too entertainment with wants and local rest one back other relative restaurants. be public, are just but theaters we’re to. to in to that’s I’m restrictions reduce doing, the and maybe movie to again, health – government thing without I government that every to whether that’s question, and to going bring

have seen families come tremendous We of a amount back.

kids a people to dads safe an we and out. our convincing so of afternoon do have back if And enjoy job environment, can coming that we with are moms healthy and

that So the across we’re board. seeing

which states about. pleased We’re in it multiple around the seeing union, we’re

will be optimistic and in to get normalized back more that these an pretty get or early a late environment correspondingly opportunity moves, removed year restrictions next. time we’ll So to somewhere we’re this as theater going

Eric Wold

talked you with we various where Sean, in worked of the and lease kind What on you when out upon And ramp ramp a do theaters of up landlords. go some there tenant? kind out or about deals Perfect. reopen, the agree full in at based as should the savings assumed there worked are is assume the payments reopening then deferrals up

Sean Gamble

don’t have varied. have it’s It’s in we – have we we we the where open. points, pretty right negotiated with particular start have back we XXXX. cliff a across pay those one, of speaking, concentration in big start pretty different don’t deals rents due third some the time time we generally payment were landlords – The really a like that’s and payment again so have when quite many at of until structure have over that varied – we But many a periods quarter, don’t a periods

of next it’s So a pretty half. phased the year the over course and

Eric Wold

Sean, Sorry theater’s when the start, I the – your reopened. payment. have deferred, misspoke. those not the rent I been meant that restart full the normal normal ones Do in

Sean Gamble

is it. feel varied. current, that that to Mark to was are The based I timing majority I resume the set free of elaborate those two Got originally think negotiated. believe The on here, but

we… So,

Mark Zoradi

to get opened deferral cash, accrual an mentioned theaters we or if the not negotiated we’re accruing regardless to when a still standpoint, Sean, months the the up, you’re of the rent basis. we’re get negotiated to deferral biggest think head, defer – deal that Sean to we four has the we’re these of you of – before of a four rent on still whether from I accruing that the then we of then And basically and benefit theater hitting theaters, And open payments, if open rent. we on going going a all are month deferral. we monthly

Sean Gamble

So particular we’ll presented landlord. delays, start up of when that the contract we that and to just even we we’ll get the the benefit by live

Eric Wold

want Mark, I there. about know in is it’s Perfect. Then studio just multiple I get if to agreement for last into out hypothetical. them ways might, one been just one exhibitor sneaking in that I don’t asked the

shortened is aggressive windows” week crossing that a as aggressive? being of you days number overly a you’d line that “overly mention, against, did there caution consider You

Mark Zoradi

opposed back those ready to a then not partners to And to discussion as at And once this earnings come point. report about studio we’ll individual We’re conclusions, certainly talk that’s that public call. we have that with a we you. to will

Eric Wold

I’d I figured, guys. try. but give I it thought a Thanks

Sean Gamble

Eric. Thanks

Mark Zoradi

Thanks, Eric.

Operator

is Your with of question next from go ahead. Fishman the Robert Please MoffettNathanson, line

Robert Fishman

Hi, of and grow right Sean. help one for in good expect Cinemark for number can screens one Latin in have Mark you the the Mark, screens to whether morning. I the and you us the still and more think or about should both longer-term we America. U.S. for whether closings months over ahead expect

Mark Zoradi

Robert, I close six – think might we what the theaters. a the really process. between chosen and XX we in domestic we’re Every the – theaters that year, add and part we of year we’ll to we’ve the XX kind might international. eight, trimming with We well. And a that XX do theaters U.S. call XX we then theaters of rosebush. then it’s And in might six, typical – close, or XX as and internationally,

several So several lease this cases XX the because more it. end few year end of want houses. we were the still is have we’re others the gives at to property that that do to an And then chosen closing their discount opportunity of were lease. were closed And domestically a not evaluate of a us and in six that closed of we their we we to

we laid either I U.S. do changes a dramatic at or the slower but footprint, expect continue don’t bit the reasons do I our little in So to internationally, and in domestically for exact will that Sean both that internationally. expect pace out. new builds probably

We’re our on position. cash rebuilding to our where at want balance we sheet, focus rebuilding a point

we going a build be on through we’re as the little there’s more up because take, careful we’ve until a all bit some to that, with conservative industry we’re balance tremendously so the And time, to of so the we’re a gone opportunities cash bit little be CapEx sheet. difficult going but more we’ve done to gone, going has

Robert Fishman

have Sean, are lenders? you whole compared in those the liquidity clearly conversations makes been relationship conversations Okay. helpful peers to you with sense. your would it going. some very and your your today management credit on and hear to a ongoing Can That of position for and the of us And update Just to be team. Cinemark different how

Sean Gamble

those strong on very positive. mean, our our to with credibility I Sure. have established and based with we’re of years a over relationship lenders They’ve the been fortunate consistency. lenders lots

taken, just that would I the actions secured strong. preserved, So of that remains and that a the been and about liquidity have as result communication the positive and we relationship the just we’ve proactive we’ve say

So that. pleased with are maintain we’re that to and to where regard going things in we’re continue aim to

Robert Fishman

think we think CapEx? we that return like forward, should on a and about can think a be just I I can level the anything year. add us maintenance to color spending when if new normalized is a appreciate time, more, think difficult, but going minimum growth spend CapEx of like if about help basis, Maybe there on Again, this one CapEx when to there’s understand this might CapEx the about you even about

Sean Gamble

quickly will A positive back big our I the flow. limited on to balances how be to quickly putting to things without part of number just re-strengthening those mentioned. say and intent really expect I – a just that just directionally, rebuilding will will it return company. a to balance of that just de-levering But able it, more and then cash being it on to we would based cash continue factors sheet, the ramp with it up Robert, ultimately going is we our put because how specific – flex depend

in appropriately, address of level and at excess over So certainly where a fairly million reduced certainly after will will would we I it opportunities few significantly level past we will maintenance be years. $XXX we’ve and say reduced proactively go been but the to

Robert Fishman

much. Thank very you

Mark Zoradi

Thank you, Robert.

Sean Gamble

you. Thank

Mark Zoradi

anybody I couldn’t a the the else little that? Just operator. bit. lost lose volume Did hear

Operator

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

Mark Zoradi

Thank you.

Meghan Durkin

Hi, good guys. morning

historical only theaters consistent open I the mix Can mix a initially amount attendance, now, you children families whether coming? were in are the the you right opened about And the seniors the and talked XX coming similar during open with you believe June. of discuss on that are i.e., five actually theaters is of weekends just attendees back. of on that week the So seeing tremendous you you

with did just shifts that like one last of So during attendance on into were those week, And then you the the you any you five, while one open weekday see that? or have Universal, surprised be in you anything is on there deal place the so if the that expires when to remind us Universal, can on whether delivered a a you and in guarantee titles deal?

Mark Zoradi

one the I’ll do last Meghan, first.

have of We to our licensing films of relative contractual deal no deal ongoing certain a would but rental to office with similar what film there’s a our split Universal major where certain with for film, what we have is number an every other film, pay sliding more be, obligations or the scale, elements of our rental it’s we based studio them with the a where film box on success.

we mid-week. the we yes, variable we to Dallas, then accomplish when Relative major and opened were and what Friday, to think actually that similar a studios. have in theaters theaters, costs. flow open it’s in with other needed we place Saturday, Sunday, decided So be first able for our that I in test-and-learn to nature positive cash we operate week, what the all with And deal could one to basis, these is our covering we on

to costs. could positive we that a relative we could and needed cash in that decided not to fact, our we cash we burn situation So accomplish what add have variable

something comedies family clearly had places it couples. then we lot many weekends. oriented an of movies the those and as romantic young for great and we whether and then overabundance and I was because got well, got that And some females for male some XX family. some movies, were that by movies. XX be terms we a And we movies in went of really were like and back, we as that it on to the course of in males. so coming we had that’s Matrix, for movies, why as So of depended very dominated had clearly many And mean, young we playing people that

we effective. that to that And effectively us try research about proved our such it upon where rate it satisfaction health those forthright on and of with content a by evidenced our And obviously deliver be marketing with to did And then that bring we intention I And it So were safety and the and people. on publicity based all out-coming very really think incumbent programmed. promise. also health and as in to back was the that we we was did in our done. standards and had then high we safety that we standards had

So to to because we get primarily in the them across comfortable. board bring programmed people we got

I hope that questions. So answers those

Meghan Durkin

you. Thank Yes.

Mark Zoradi

Meghan. Thanks,

Sean Gamble

Meghan. you, Thank

Operator

back over now for turn closing And presenters call remarks. I will the to the

Mark Zoradi

in Be you very Thank to getting And join you look-forward September. big this way Be – following early and theaters thank August up in on third-quarter. look-forward all And a in all pre-Market you the Be much healthy. early morning early very to well. speaking us for call. our we Okay. scale safe. much. again to late this We to reopening

Operator

conference call. today’s Thank concludes for the conference. This you. you Thank again joining

disconnect. now may You

Cinemark (CNK) 4 Aug 202020 Q2 Earnings call transcript