CNK - Earnings call transcript Q2 2021 | Cinemark Holdings, Inc.

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Operator

Good day and thank you for standing by. Welcome to Cinemark's Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today Chanda Brashears, Senior Vice President of Investor Relations. ahead. go Please

Chanda Brashears

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

Mark Zoradi

and you second results. of we In has report following expected the a healthy quarter, families recovery progressed hope We discuss I'm pleased industry XQ. at you up our and first rate business. start XXXX Chanda your quarter you Thank during everyone. faster to morning the ramp well, our appreciate than we us good of the remain to the that joining and and

that down temporarily during pace anticipating our May. positive EBITDA our ahead domestic to recovery the well adjusted even time the year; operations so our quarter for we shut improved the last fact, were In when forced met last significantly since were we of first delivered theaters

snacks our Our propelled by commercial of first domestic more COVID array compared cases grew resurgence XXX% almost quarter in adjusted recovery contained, the that a to results by attendance a was as EBITDA became film wider per ticket our reopened average the we domestic we to reopened, Furthermore, continue became content and food we available and caps entirety these and concessions demand, and of benefited of eagerly circuit. also as see beverage formats again they our were domestic aims indulge innovation price were by as pent-up to ongoing initiatives upon our well moviegoers reached a Both all-time ordering out from significant theaters, the as simplify platform. on our our in such new recently boosted as and rolled our opportunities buying online results in capitalize tap highs. upselling and to strategic premium that process, returning

quarter industry North representing pre-COVID Additionally, outperformance of the second box only screens, industry office. and resumed total over-indexed XX% box America America of our the normalized North more surpassing reopens. we have Despite to Cinemarks continue substantially industry as Canada office in share the XX%. share quarter market slightly our fully significantly Again, our XX%, will average market expect we become than was third while trend less

our of tactics in our remain will to a market share aggressive growth. maintain We meaningful portion

share market subscription our One transaction-based maintain growth our Movie industry-leading to unique is Club. strategies of program

pandemic. prior overall significant at than reactivated billing Club which we have to XXX,XXX membership figures on with the and without more remains We base, accounts our Movie members, impact of now is two-thirds reported with the a consistent

the America a virus. moment, the X by to US considering our footprint continues attention international to of X months the for to while status Turning Latin lag

our international corner second quarter, quarter more during right metrics the today. of countries ago. nearing continue We vaccinations selected than the end, variable as falling trending we actually operating results operations more our points positive adjusted of end EBITDA to available. in the cases year were as and associated we costs a widely on being all also positive US, started even over COVID consistently To began becoming the direction a figure in started and and to And now countries more the have we done XX% cover XX% midst the across with Furthermore, the By see second turn international capacities the exceeds open, are quarter. of reopening hours. region with open generated data with that in that incremental screens financial global the we basis, adjusted than operating since all EBITDA restricted as of reduced and during our like

we've of to Importantly, four we content. approaching end contingent exhibition flow trajectory. said, which the cash before achieve are One, film status of generation, consistently government rebound of vaccinations, we the quarter's virus sentiment stated consumer this upon year four global positive is based and key That theatrical on availability new expect the the three, considerations. second the two, and the restrictions, of

in we resurgence and theatrical exhibition the While as of virus closely are variant the remain contained. monitoring status rising of COVID rates, the confident business infection the we Delta is the

and United second have witnessed our phenomenon in in that it here results now parts States. the quarter firsthand in experienced have world We of other the

pandemic. love. and theatrical feedback the stability well these our they this distraction particularly the Beyond anywhere, theatrical is screens, matched factors and shared the simply since guests, and received Theatres Cinemark coming truly of long-term a experience bode with experience sight the cinematic connection To outstanding as recovery premium the and that cannot entertainment and technology the content our numerous year or start Watching second repeatedly drivers, out next time to It of exhibition. return people with sound for with of blockbuster best health home provides from and during creates without content. near-term first to everyone. way a for view that believe something movie on movie-going the immersed for fully we content simply We emotional is that be heightened big a balance

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fans, now No XXXX resonated me superhero don't with as with and just in return James home. have seekers thought is Marvel's we J.J. changed when out appeal. are to more, all experience it's sitting you add power film with the the have “You listened agree at delivery that but Tom memory I Cruise Die, you cannot New has that said, Ghostbusters, a you Top you're of Time the it is today. He embodies unique long-awaited movie advanced He of home, fourth blockbuster that a Maverick Bond, worthwhile Abrams we're went can premium Home action just only there this made at titles made experience can on even over and we slate not We theater.” technologies X producer and I movie for in have the I of movie Spider-Man Way quarter. Eternals Gun really to home cinema films statement and to to broad that For get see this Matrix named entertainment and in and and director a to the theater it year's share and which been in statement full podcast film that a years. in a is a in consumer recently and home The

Cinemark of studios again stamp consume Beyond The event consistent multiple the as and complementary media believe firmly and and again an team and to the and again over to and significant windowed pandemic, bites movie worldwide opportunistic industry. perseverance innovation theatrical throughout major films the additional a overall the subsequently remain technology accomplished of And lifted. and theatrical us their critically environment the which have successful a for with pie the in both of apple differentiating release second channels owners elevates Historically, remain movie them These quarter remained and are the distribution has content, maximizing the most maximizes been content window half provides to profitability home. have A into a Furthermore, their position is revenue received all confident continues haul. quality our brand challenging home. evolutions in in additive exclusive releases success. prospects customers proud owner's for at truly of premium and and content who regarding building results movies value the the down the is over experience, for exhibition continue theatrical be they've all consumer us enabled new line perceived portion the the to during the because theatrical release of overall also I'm the of ongoing and relationships in the and on key company and long-term I of as the subsequent view releases. ties theatrical approximately introduced to landscape channels. pattern, release revenue distribution contributor important theaters profitability. delivered release agility, overall time a a long

a industry passion and resurging of to brief now six Directors. for this After the to philanthropic. I day had from I has this Cinemark the transition. to industry my Cinemark. COVID our no focusing After effective the and X day years, turn year than are team, one diligent at promoted more idea Clearly, I'm CFO of forged and for and movie than hit, week companies, felt would and and career, will the forward at hand better to executive as in initially time Sean conducted my I and and I'd company across the the to the prospects during own from ever last and of shown and that will this like guide plan adapt to greatly to last I'd committing couldn't service end to company, effective and truth long following globe. told, to help the was I has the to moment, Well, makes what be will The miss comment going very Universal who industry, has over President, tremendous on strategic right resurgence less industry begin to this more optimism flex appropriate think ultimately we and named ever pandemic. been then the X, formally an doubled Cinemark and to daily Gamble is no relationships process I'm more would throughout signs lingering that time my or I an retire my I initial week. devote consistently impact thorough of in as retiring our continue especially CEO Officer. every as was Officer Board seriously take and its operations our asset in my of four boards all well movie particularly have the President like Operating years X Cinemark regarding Cinemarks has more and but one leave a midst enjoyed company. gears we our this interactions My to on, Chief on as Sean level, a most a last long-term possibly retirement ready on ability evolving don't demonstrated our be CEO XXXX X the also Board to I there serve it and which to the theatrical of transition XXXX, Directors private public like have of shift environment personal three know I determined Studios at moment Sean as to been a interests little. retiring frequency attention company serve announcement Before theatrical Sean, difficult I looking Financial our my steer decision of background decades succession have be amazing to is of you an easy our take very and plus His made planning of going. years I amazing management it how January partner Chief my the we when with and commitment and through will of two was

vision setting, COVID. his addition, General especially of track Cinemark improving Electric processes has the tenure the proven course Company years, In his record invaluable over proven thinking, change, with to the driving during efficiencies past significant strategic at several leading of but and

continue prepare to over planning, of we'll seamless ensure for the a beyond now to of a course to him been work next of succession and in as position side-by-side call Sean this would and the the with and and I of five part of transition, As working I've quite I helping turn serve results. announcement to some liquidity anticipation to to that, Board XQ Directors. you the over walk will he will months, member Cinemarks continue Sean through now like Sean? our time

Sean Gamble

I on good has has Thank everyone. and impact an industry. say well me exceedingly morning, partnership, would years the as provided pleasure for had you, I'm our grateful as our Mark. working it these the and And been absolute Mark like personally company first with has he mentoring past X and all opportunities he both to positive

there thought standard and Mark's as which raise the the opportunity exceptional reasons to and Cinemarks the the was is set something well to work be Cinemark our Board done have take continuing key with Directors and the we joined our leadership, has as still opportunity new named continued over to experience, look to the think team movie-going going coming was tremendous today an of with the differentiate enhance and I to CEO months. I that just transition of X One movie in and a years to next under just and forward next honor I evolve level. industry closely ago bar, further having Cinemark because as Mark I to capacity It's

in any media the I significant not ongoing entertainment to to which of and in continuing strategic will remain direction pandemic plan, With quarter of do and involved landscape. ongoing our to positioning financial our Cinemark results. near-term our anticipate shift effectively success impacts heavily second initiatives, been the deviations focused on and navigate I've that, As the evolving the let's development for

COVID, volume new with the metrics strong movie-going in this liquidity highlighted film our uptick rebound as of both reopening commercial quarter, second meaningful theaters and well already performance our the financial of growth Cinemark Mark domestic the improvements experienced in a As releases complete of position. the our in status a drove rebound in as

we benefits refund, per to cash we quarter, capital during in at improvement on the call. previous During reduced the in This $XX approximately for timing to May, the earnings provided was our and time. after $XX in working of reduction April, tax compared cash our in which represents received moment $XXX burn based discussed projection month normalizing environment burn we which a million million that million operating

largely cash that not has $XX rebounds. Based well by rental end for approximately As position rate, beyond balance liquidity of office ended on This nor and were July overall further does balance include July the to second improvements the now quarter does that results receipts current in runway our to sale as the was associated projection issuing leaseback cash operating our incremental with of extends today, it with $XXX million our additional our burn payments. to unencumbered cash options to any million tapping average XXXX, of and will monthly cash box arrangements credit that relative again further equity. $XXX XXst a financing improve own and to remain of of and million $XX as line, include facility, had within increased including properties credit such any capacity revolving $XXX our we global disbursements borrowing that million. as executing on term-loan drawing timing us, rate capital on industry driven or available benefits film even that increase working to We expect payments, CapEx, continue reduced rent we further our million burn interest approximately deferred

conditions of $XXX we our notes market senior favorable to years quarter, a line. XXXX refinanced with of this and credit in the coming our two very issued the a of took advantage X.XX% in added X.XX%, maturity were that million of notes our notes. to June, conjunction XXXX we increase once due senior In deal, revolving new due XXXX. modest also compared [ph] $XXX we of During again million In coupon with

other Following extend XXXX March and at these maturities now beyond. of November of all sits through transactions, and significant our revolver maturity XXXX

you in XXXX not and on environment, Moving therefore of the our average XXXX $XXX.X by flows. million our second the previous follow accrual traditional were patrons that like of high remind of total in the attendance million quarter to we'd reported were our current necessarily timing second our quarter $XX.X continue metrics as indicated compared an million grew do theaters we all-time to that XXXX, accounting since quarter last most somewhat our $XXX.X XQ in correlate select as Furthermore, recent in directly Admissions quarters to cash results, financials ticket down we will the to essentially to to XQ based revenues of by the bolstered of onset results have pandemic, shut distorted instances. were quarter's compare and quarter. revenues second XXX% $X.XX. driven price Domestically, our be

compared price to mix beverage weekday times. and higher result increases and as concession XQ was a consumer to per up were ticket million as of average Our pricing $XX.X XX% XXXX food formats, of primarily Domestic high upgrades with premium matinee cap was rate ticket tied show $X.XX. another included all-time as that fewer well revenues and a

compared to concession beverage drive and categories. in to grew Our demand per a XQ core last and going X% cap pent-up across food indulgence versus heightened movie XXXX consumption quarter XX% as our continues

various pricing quarter initiatives and enhanced the Our of from strategic results reintroduction second also offerings. benefited food

skew wages rate predominantly revenues film new negative expenses concessions XX.X% of of reduced was EBITDA $XX.X our growing compared the XXXX. XXX scales. admissions more million. Globally basis film recovery operating XX.X% points advertising so since the million to due was on earlier second top conditions XQ increased resulted vaccines vaccines relentless ticket hours $XX.X and result lower for reopened milestone were concentration creativity rental attendance, as versus we increase generated from XXXX International notch team were and adjusted continue also pandemic Internationally, our our expected higher international still were in concession this international a XX% of XXX average of which that XQ positive year. make operations which were revenues, market XX% accommodate domestic started patrons, was recovery to and and increase commercial escalated film down our to increased theaters availability the This our the second last time that end in clearly our and across revenues. open out to points improvements XQ during and extended X to the basis grosses in million more film theaters lower compared these combined in second approximately and the of larger volume quarter, rental happen. rental described our company's film Mark of of a for rental to Latin well execution quarter pre-COVID incredible By see total million perseverance, price sales, Concession and Global is phase and $XX.X proud of As rates. achievement the said, releases library averages. with EBITDA line attendance XXXX to with first to film of a to America carry improve, had as drove of are as costs film an significant content in we of This we of we and as quarter adjusted XQ their salaries the releases. as quarter momentum more new XXXX, tends accessible. grew versus That became

quarter almost our just strict to levels of attendance over While and held quarter wages maintained focus a ramping efficient staffing over salaries we on XXX%. growth despite XX% global up, and increase

other While million item grew ticket increased and that XXXX Worldwide XQ facility maintenance remained $XX.X expenses increased. common experienced and line commissions a were within increase XQ credit uptick variable as due XX.X% to a as volumes largely and paid property costs insurance property costs million to and modest janitorial as third-party sellers. and liability expenses slight in percentage $XX.X such XXXX, fixed volume Other fees, utilities driven lease rent of to relative largely taxes to and in card compared expenses with by line fixed. this such area

second in pursued the which lower non-essential EBITDA million, our Finally, result our of quarter improved million actions million also year quarter committed net in negative G&A We limit our quarter theaters. of ongoing the and efforts million of by Capital build by worldwide and last which quarter $XX.X been to $XXX.X to was during was and million $XX.X loss driven second a first maintenance the considerably the than the COVID-XX XXXX. million of $XX.X adjusted pandemic that improved remained XQ had as million, operating associated pre-pandemic expenditures. $XX.X compared prior existing by was investments for the $XX.X of levels with $X.X Collectively, quarter restructuring were a million posted dollars quarter-over-quarter. to we in which the expenditures $X new projects in was for

the We driven highly were the our ranges continue in and spending approximately XXXX by projected remaining half this to build is million with new Approximately for year. delayed associated projects CapEx with projection compliance mostly needs. of XXXX, is previously balance $XXX reduced to from anticipate level maintenance full historic committed that of a relative and

the and our for and in like industry guest thereafter. are in would pandemic to and we concludes our enabled the remains that now satisfaction. Our theaters up movie-going remain We expenditures adapt as success theatrical experience maintaining the we positioning on ongoing the we our In our open confident navigating or touched prospects us while to for landscape. COVID-XX flex and our we continue asset to ability line proactively questions. as to theatrical of on our years over loved the about hindering media as company overall cash remarks entertainment earlier, Cinemark Stephanie, and optimistic long-term prepared movie-going, and consumers our both by paralleled highly quality, prioritize important operations investment has scale back that capital Mark consistent closing, enhancing without is in management

Operator

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

Eric Handler

the Good you your little if perspective morning and question. operations. on give Wonder thanks flow a cash from for could just

US ramp essentially to of good as from there other baseline a things impact breakeven flow, here business Is what $XXX And that Your revenue. revenue need flow of say or to cash doing do is at million then your could cash that segment should breakeven similarly, to level generation. for costs added that revenue flow. sort you cash internationally be of reach rises

Sean Gamble

Thanks our prepared to remarks costs overall baseline Mark for to if continue for during question forward, expect this think that it's trajectory cash seeing the in positive the business, all regard to of good With the Eric. of going the US, in half his second flow sometime year. I'd were the say, a including environment we'd what yes, kind hit fixed on indicated current we're as we based

that mentioned, So progress second we we flipped two there as a continue give had we in continues think the the specific in direction. countries quarter things figure, to and EBITDA that to our improve. revenue the Internationally hard performance to also but positive positive actually it's that

highly likely half cash territory as well, trends positive the continue in as if flow in in a be to think were likewise, So, those we positive EBITDA well that internationally we'd both second situation. as a it's

Eric Handler

late lot are screenings night how think seeing you times. of In And Latin Latin just you a countries when is are America. How Thanks. in a that curfews, follow-up. those about important having America, as normal

Mark Zoradi

us significant this is wouldn't any is say I way. it limiting really Eric, in Yes, Mark.

minimal of get Brazil, opened really theaters of auditoriums percent country be up us, US we said cash have has days way. only where the see that have XX% XXX% be, between to that theaters these relative thing restrictions and key but XX% behind opened continued will XX the the positive that's be with really sometimes our filled last, up country somewhere vaccination, only we which we have the Argentina, restrictions. the about and has know, only to show very and we restrictions, late will up. don't some distancing what with we along restrictions open could there You continued then social is limiting out, nearly is again flow and here of not the little almost XX and The opened that Peru still of it's is

Eric Handler

much. very you Thank

Mark Zoradi

Eric. Thanks,

Operator

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

Jordan Bender

Good my by about start seems is Jordan taking on some running Chad well it's stimulus those bit, pre-COVID Bender question. it I guess of still international a I morning, the there pricing we talking something like guys. is are for than little the pricing was catch-up levels. to the this pricing of or morning. This is see levels that's Can international US Thanks above pricing the better for lagging off markets something in that expecting US. kind wondering, from in you expected whether government or else impacting with

Sean Gamble

kind or content the are enacted pandemic, that We've anything that pricing, XXXX was amount being seen total that Sure. the also think the in prior we're highly, kinds piece things a premium internationally, year. domestic trails US and international likely pricing that had in kind we We're lift be of expect restrictions our still more uptick pursued pricing points had we fully consumption, going Part few without of as a the promotional of activity to now of also do there is the increases a content, of like part availability compared of a were get competitive of in now uptick going, format going to library internationally, we're mentioned. this actions is percent regarding highly terms even of more fully I full we government-related the box also annualized more what of earlier landscape kind months were boost and landscape, of happening had which will consumed could that as our bit, that is competitive that. of still XD the the you content up as USA, any as have to to we're of in to see of on office US, our get internationally, about things in a driving it that by we is back seeing price what's impact bit Mark in XXX we pricing, huge basis so have XXXX, it nothing similar as of is premium little just more so there see based a on pricing that to

Jordan Bender

opening Awesome. are labor trouble US as And you any seeing or finding up pressure then theaters year this work. here,

Sean Gamble

of more been segment effort, cumbersome, pressures have thus continue what's the largely continue pressures a having we've certainly going to having just something recruiting regard far to say and going on wage estate we're rates our impact to is able like We're to become that which with been it's I'd on been those workforce. real Most material monitor. the on seen to get has entire workforce seeking haven't we the yet, we've with

they get affected ours being summer take and the be of to to to tend who flexibility school, are back One to of younger, generally like the work they more to hasn't things the have we're have holidays, are money, we college able is able offer, we to course to that free perks movies. that seasonal and looking fortunate school stimulus as by a workforce been about that in these high and the during the of the money like students

that's in advantage the well we an kind particularly trying periods. workforce source we're of peak as So have as to

Jordan Bender

off. going I'm it pass to Awesome, thanks.

Sean Gamble

Jordan. Thanks,

Operator

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

Alan Gould

any restrictions see secondly, question. you less government Mark variant; we you consumer comes it studio how behavior or changes you with get the down the And XX-day of in theaters? Delta or Sean, think all to do got working release when taking the to seeing windows? your first I've schedules out more increasing pandemic, two, coming do past back with the either theatrical or more Thanks experience, for are exclusive all

Mark Zoradi

Alan, studios, look this XX offering would have as be on say somewhere, as board and somewhere so studios. of last an I larger our have and at in window that or as relative Sony and range. though across forward XX the exclusive typically Universal we will Warner it's our each actually all first encouraging of very It's or their to them the or we the to Brothers to window the whether call, release we come movie because deals Lionsgate, day we, announced release Paramount be redone for the said all

out Guy So day-and-day, day of two Paramount studios. that has them those we expressed has the has as next Warner we premium feel and access three five directly about time come very they but an in-home pretty the on other XX out so Brothers Disney good we've come and that. Shang-Chi have last windows. released Free had exclusive pictures, had

eventisize been very testing Disney have time company helped to I in very the Chapek, it important Bob the consumers clear So, trying set it. it very in optionality learning, but they're Disney it's they've clear offer can during has their the movies a that clearly figure priority, franchise, is plays this that recognized I theatrical and pandemic other during there think and up was also been that a people Notwithstanding me their home worldwide and them to been that isn't see for help important either thing particularly was business is, that it that it really in Plus trying that on pandemic this business out this ecosystem. to direct, theaters billion been CEO think, they that has very $XX Bob important, and a and in solace part so gives or theatrical very

they that your is their delta second variant. out support phase then and theatrical to at question reasonable that still strategy that both with obviously going that's test So very forward, the business was and as well. will the going And and expect of this Disney point, in-home business learn fully in come I a

CDC. done, that there had other mask in Monday, mask entire to the and distancing, on week monitor Okay, several protocols or been industry whole requirements new major back we've we most of at XXX%. air done what XX very many go-forward the immediately, on crisis set whole we a been responded the think What significant like employees but for so it away MERV the the that's we've coming course here's times has government on go of any increased Los right coming thing that we was across many Cinemark times Angeles a has our I of into CDC that think based social the the we've this their seen that country, XXX% day time as specifically restrictions, of of effect on little the outside basis said there then, is the this data air came on we standard some the we've led very, when system, basis, adhere we we filtration, when reinstated the as and capacity and and with so limits. and one began circuit retailers that County theaters on But day-by-day all made of the HVAC converted during Los additional with first quality, we've literally a adaptation much requirements a so them, I we out that will very couple, the out around key a almost all is our requirement air the pivoted to was policy. quickly coming thing, of thing a a COVID And fresh important County to is a the required literally Angeles from haven't

so ready very for and are nimble and to adapt adapted have our we're when teams to very months, we at been we're go XX-XX there, now we've and So able further change adaptations. on if make this doing it to being theater

Alan Gould

Mark, To your retirement. on upcoming congratulations Okay, thanks.

Mark Zoradi

Thank you, Alan. Appreciate it.

Operator

question next Barrington comes of with Goss Your from line Jim Research. the

Jim Goss

of would like fourth film have sort to might the concessions wondering at there the do second the XX% obviously quarter even be of think or has with quarter an XX% numbers what run in regard, that's if slate bigger second roughly flow it well I'm and the is very did or year. bit The more like morning. and little level normalized a was lag way, XXX% you I'll and third that XX% QX minimum get getting back into even it it the and of would and good to because quarter, for domestic in QX for you for and be you admissions look targets that XXXX rate Thank it, more then you a seems a how been think it follow-up. though into a there chance to by the quarter fourth acceptable

Mark Zoradi

done to but Please second is the third fourth know Jim, films began in actually It's quarter to question indicated it's of We've recover it in go mean you're didn't think really office not outstanding. what even quarter, I further I asking. the me that obviously the the I think for asking. if into is I box going let beginning. answering is the XXXX. quarter, as line before, that lineup the and going outstanding Look, I'm we you're the

in XX% level. to XX% the people is to to a level very know able of our going is to I Now don't the the acceptable well would make that or recover we an coming I office desire to to the a that that when predict that XX% to going work question to way, to investors There or profitability just mean, box I XX%, and to months. them concern hiccup But I to very availability, delta relative am is obviously positioned think are of is, its when to variant against. very, return and to that to guess less this our to a and have theaters. a the it us I see, is put a we're have to is or this return XXX% adapt the think and box obviously COVID we've office level is going hard assured we'll the way sure to returns we be had big out

We model out own on on categories as projections we so as upside forward, ready the necessary. being different areas. XXX% adjust several business then look willing several we and different look to we at and And project our our

Jim Goss

of Couple things. Okay. other

will, cost you comments a have. in might on on If might level are levers be you other what's where pricing the box if you steps, going wonder them of would experience likely and if or Disney, you didn't Mr. then I office you to actually office more order it on things you related think get terms regards to back might on make for there issue box the early viewed PVOD piracy do by with and be comment Chapek [ph] would fall, you in as to any with have a of a theatrical premium the your ticket business to And headed would up like to that maybe becomes be what to separate exactly issue and more aftermarket.

Mark Zoradi

take know, first You second. the maybe, Sean take what the -- will question. I'll

Sean Gamble

about could lowered the with of more question theatrical of Yes, your to up, a regard possibility. that's experience premium theatrical certainly is become a

to terms pricing some that it make live array theatrical continue of variation consumers. of into learn premium more broad ongoing perhaps play in to of our to that very will there that periods more of clearly and to strategies peak I kind a through be think a for we pricing where are accessible. wide that, still to pricing continues believe be and in wide in appeal audience kinds will We're its going different

one is can from is activities when you're the that. you businesses hours number been driver of of get movies of has time one the out that to that you're of you think looking of one, choose going affordable the few have I a home is we great things important think terms your most that the two, the a when of opportunities and to of number in it's one doing those spending

in things premium with it regard potential with up-sell that, that going and So, a sensitive there could we're terms opportunities. of be have see how experience premium some to but kinds evolve premium risks much more be broad becomes to how to to versus certainly of of

Mark Zoradi

he know so Jim, during Disney's sure I was COVID importance the value clear that still about to this was referring in into regards the been then to been that intention publicly and tremendous were very or how theatrical Company some continuing were going they comfortable comfortable, their clear flexibility and see he the that it to what also, very, has has movies has of He cinemas and enjoy forward this; I'm consumer an time you Walt made. to ability they and Chapek whether I Mr. present to choice, presented future. consumer had and to going comments that very referring was to not the out the whether Disney we the

don't exhibitor we've put used been from about be come it US over to the going I'm that. the in and piracy, studio with piracy to fighting I've that a an both [ph], and our I the then strategy confident come in Jim, theater into and on as to I level there's that major to countries be the as this business that there. Relative can to piracy come think to remember, long people would we you a been reduce efforts for know in any level and time and change So, place pretty long exhibition cam-cord and big of started out camcorder would it Asia standpoint anyone record as would

doing we're piracy and its partnership because can on the in running pirated also but considering and I in is and then what starting be reduce business is if copy day movie potential business going home a as and studios has affect of the studios with impact a us we can that doing piracy, their then the clearly now think a And increase so, business, home that place well. introduced very our concerned this everything all then to their from digital home, issue introducing it I the new everything to now and the can, as they in to if because the do everything and potentially about be affects a also only you're obviously numbers possibly into own negative date, the to are not is to the level to of in reduce that's of able

is and issue come for with important but able put the We a that and only not number to fast industry-wide providers. clearly haven't up also against it's content to something been exhibition, that, hard

Jim Goss

it's because copy do need of well. first market basically perfect does come Yes, Okay. don't your sneak like it that. aftermarket, your to even anything in run easily they to And a out available as

Mark Zoradi

levels. both At

Jim Goss

for your much So very comments. thank you

Operator

from MoffettNathanson. comes question next with Fishman the Your line of Robert

Robert Fishman

CEO. over you most going you about how CEO, strategies for to priorities; you'd priorities like change morning. get to Mark, your accomplishments on as good done then it's And out, biggest the the still back are your tenure as stuff year. proud really take of as of are look that I'm Sean you're like near-term any curious the current start What to from end in evolve isn't the Hi, and longer-term all Cinemark. there over share the to the you've understanding anything focus laid might already that and before

Mark Zoradi

lot and so question glad us dividends and were circuit the and top one say, I'll so. that a interesting for on back of I doing we at very sit here our the I'm as head, paid look reflect in that a that's as aggressive Robert, XXXX, my as XXXX, in theaters that's reclining that on certainly across I But XXXX on certain we were things of more,

of big that well down which PLS XD the what done effort, as than preceded that's was and in you loyalty successful beginning, plus be of out we've I'll a still would it's success and we've program done what of doubled importance know, we say all been our the had to we and in our I rebilling won't maybe our are big we loyalty I we redo of as and now area exhibitor un-pausing a launch and in back off of complete XXX,XXX broad the our Movie marketing on with down which the on members of all two-thirds and think we've Club, just very area whole the billing sponsored long come call in recognized customers we're a it as but cycle. third, it, COVID of members and we've have area program with customers whole me back on and more first we've maybe and said I subscription until doubled Secondarily,

thing minimal our growing with this of XX% growth. wraps will our say and very I've onto that acquisitions, have hold Canada all as share those the only think theaters XX%. new and share, I we've I new on then that into important think quarter a slightly to we up to a successful kind always maybe it's expect been and But mix. tuck-in add of of market share meaningful XX% kind up but share careful and things final under don't the necessarily is market of our across builds we at amount screens of in been were that open were all So, of kind we course last up, that market US very we in and hold of been

of think that of I So, kind hits highlights. some the

Sean Gamble

all with visual would when going phenomenon different they forms of past as me Number of all Robert, to to give looking look take obviously there to this people just pandemic movie just content. key the kinds on exciting to different before. for experience the them things there next near-term continuing engaging of some like, with is experience new on level of and long attract one then amenities, then theaters forward kind new ways term, getting refocusing we is a enhancements clearly more our to refocusing we the that just and just fantastic

theaters spaces, looking but beyond kind to that clearly those in to core have, fill our whether the is theater reach for of to to even that just more think audiences in into has connect movies, enhancements marketing we utilize of U.S really and the new few really deepening all kicked early I years, guest other think fully to I an are continue walls the with haven't we to tapped opportunities it's create extension them ways we're beyond actively there deeper find theaters growth still that take our that yet broadly, that I the that synergies represent ability of alternative kind just opportunities our we very gaming our and much of there's just opportunities. that we've you the category, ways can exploring we so over there have, days connects are and Secondly, of lots engagement that things that content, we're think last very, our off in different to our that

Mark Zoradi

proud one got that that leadership, as I am when team Robert, people also positioned. has came, me back, many say, the thing come, people new I the I here we're look really of Sean team would has last I to, well for has were have Many of I been think that developed extremely leadership he skills just the but the here. those

and power the I in is rest mean, So Sean is months, help up team of I to one perfect everything this and my the five as help the do and heights. just guide around step Sean the him next to really the goal to back if transition absolute to success, some I to I over goal look to had we're new have to is and set company in set. the ready go think big and

built team in the So I'm in I just excited pretty level my what as strategic continues. look that's involvement Board from to about and participate get more a

Robert Fishman

opportunities and start strength, are there flexibility your options. some sneak of could private explore their benefit to just financial I in, If one M&A, more movie of smaller theater given to maybe on chains, these

Mark Zoradi

passed there think we bit and and very and felt that on. we deal very question the this we've that is, passing the we every carefully some larger have of Robert, come good the always about a line and we've look small good up at that very quite our down comes we on evaluate way acquisitions it it done I feel comes opportunities and on

otherwise smaller screens lifeline have So been have had exhibitors financial a may by government right of our funding. given trouble who many now, the save

have there be one them, the a each for this to through ago. going shareholders, quickly come, them is six might have than is opportunities we if we investment But of fast. good we one every act think I value So, months put ability our less will mill amount and think and that and move of as to expected, the

times we're but this So not in space. as I've this active before many we're anxious space, said many, in

Robert Fishman

Thank you, gentleman.

Mark Zoradi

Robert. Thanks,

Operator

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

Ben Swinburne

both to congratulations and career and Congrats Sean your Mark tremendous the to opportunity. you. morning on of to awesome Good

with Mark to period, include we're what the what studios Widow from what sort all day you shorten and as films a interpret those just fate Cruise of about have PVOD really market. I we few there of none has press the past the [ph]; and either of bizarre results us? handful really the seeing a you a result ton seen the of and know these these we've of weeks For you for of interpret it's but and the are hard These agreements you, been anything in on mentioned trying take window date, do to and do you of numbers that, about Black Jam about Space How it. do interpret Jungle and learn over

Mark Zoradi

continued extremely million for successful, play strong Furious I very, successful, and a II, that Well, think of Fast variant circumstances first $XX Black run is all, the the a Quiet to I given movies Place and industry and movie publicity up opening of and play. I and again Part A very all COVID the opened with like think the think to that, associated the and and Widow that play

which an feels no we think which their the like good it's and purchase the to in willing in allows look exact the exclusive been the had because So consumers that we we've would we take business truly is traditional same adjust in environment the to studios formats, for in and to think window content then got window, entire strongly revenue it's owners. exclusive because secret and window Cinemark very think business benefits to our it that allows multiple of we it we're the for we're actually context content good there what acting and

that quarter, movie I'm that see a Gun very also Bond these fourth with mentioned, fourth many I'm in in films to the happen. at when and fourth look to was and the significant and we're we're of I that darn But that past XXXX. which I look, in from wasn't. coming quarter one what's and and pretty is Dune lead very the encouraged a coming third of fluid successful course coming excited had, going movies especially quarter the recovery it's environment So for you think to because on Top this say to like hard the to others going we've

and we then do becomes arrangement. would threat going date we're less put and to think say trying COVID be have better relative to day an do a can't can I I window, a we of satisfied, less in I movies that continue actually as the the better to we of position and indicated can we're think exclusive So, but Sean to that predict, nor can we with

Ben Swinburne

got helpful. Sean, you've to earlier hand financial lower, That's you one And ask reductions business just it's cost to where going structurally got XXX it there base but keep to of you've cost it part again, either then, that whether historically like taken kind in where on or the the or sort is or you the of totally think seen XX on which since opportunity who which protect to XX your maybe I've try unknowable, G&A the question the conversation fixed your around a long-term, if margins make knows, further if question. business the we're about it back about fixed we've cost attendance of is is at structure?

Sean Gamble

that be both whole a then some will as that efficiencies the also certainly opportunities, of cost business opportunities fully said up. already that G&A on you We there in there some think likely be cost areas focused ramps in slew of will of we additional ongoing for and we've pursued, mentioned the reintroduction have where initiatives are

the new G&A out more back been will has be our introduced safety cost will term that start others other protocols, all health there of which should permanent, near like Some cost into in, have fill and we think I took equation. to

kind initiatives have probably maybe However, willing workforce I consider opportunity the some just our to things is biggest it of overall management field. so those path We prior more had the the in there and our think, overtime grew the of we're little variable workforce heard field business remarks techniques of cost were we which yield of down, of we will managing work definitely we fixed impactful the pandemic, in to labor, new some XXX%. during and of just on XX% terms attendance is one at with kind down management started and our tend wages incredibly been impact that's globally prepared and to already that bit look of had the controls the that you course pandemic those to continue a as ramp salaries our a in

put to that able clip expect at without might So, growth a we've cost a a cost have growing we've it, same we that's there new attendance got and can't from will we pretty and we introducing pandemic. precise the yes, on revenue rate impacted that directionally, our to number efficiencies we'll continue, good of are but scale focus lot think been at because as cover types for to pieces, of ongoing moving the whatever impacts efficiencies potential cost continue both and be near-term looking so

Ben Swinburne

Thank you, both.

Operator

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

Meghan Durkin

guys. morning good Hi,

I are that the data back me. clarify can being I if for subscribers as have your that you the inform are base that subscribers that better that that's of and two-thirds Movie anything your just opening means think Club, of films of aren't wanted two-thirds demographics build. more now the then opted that's to customer case, has yet members that serve data on and analysis in said and that Sean the improving been customers strategy going that interesting the do or any with which you given will on back is there forward have you or that it So

Sean Gamble

our has for doing yes our proactively we gotten started the Certainly, is those now rebilling, said correct, business is we've were we've about going we of base of we changes we the at now onset of tremendously about pandemic, has everybody's what carefully paused again members that, positive are member done the and two-thirds actually been response membership proactive you received with communicating un-pausing. some

people, even us and comes and and we've proactively incentives accounts, doing had all So, going accounts. that the the those now churn we've value majority has so our reminding promotional Movie-Club re-initiated we've fairly been forward gone of un-pausing. though minimal, that everybody with is those proactively to forward reactivated that retain In some actually about along been

of using process up, direct out. frequent minimal look of see showcase moviegoers kind their prepared asset terms just and have and have to figure as in the churn value we handled Mark take of and as the we because communication his Movie-Club at We of how what's out of think well just look simplify them data way the more this encourage the had in I to the kind our friction with offer real remarks, we coming strategic communication. I we've mean, a that is most the films, at indicated can as behaviors

promotional whole of to look both and we've to tactics a back range ramping just going and back pandemic and to more of pursuing is back been Interestingly, things to get add continue of we've that will get our efforts some throughout customers a continue going customer there the to things that again started we're acquisition. and as forward. So, get also continued comfortable light going of as people towards coming We've to pursue as ideas that result coming to up well. people

Mark Zoradi

We've very thing to in all done understand, is understand; we so only phases. I'd that that so and reactivate that two-thirds planned just this you well The and thoughtful we've Meghan. add

on remaining as of and rebuilding It's to highly and will one-third we've many sure it couple the make in hold course same instead we've customers over possible. already those the un-pause as begin so reactivating next we So day, those, with effective done done we two-thirds. everybody months, the could just phases the the of of of that same been it the

on begin holding It's XXX,XXX two-thirds And so it's next their of of months, this them still too. couple members. effective has much we I be the so those been already excess in billing in extremely of process of think members, the XXX,XXX one-third at have majority that happened, so will to plan just

good really in Movie-Club. much that shape gives that's what confidence us we're with so So

Meghan Durkin

And just a follow-up.

customers, coming they out are they coming, all you're are If if these build. see they're all movies being rebuilding

Mark Zoradi

the XX% Yes. coming of quarter was members. our Nearly business second during from Movie-Club

to to to communication high want of food and reasons most goers beverage it. and they also purchasers. the be very frequent one further tend with obviously that's they It just them, we So tend do the be

Meghan Durkin

Got it. Thanks.

Mark Zoradi

Meghan. Thanks,

Operator

I would are there closing over time this back no to for management to additional At turn like questions, it remarks.

Mark Zoradi

again for forward thank I'd just you We to third questions. well. Stephanie. to we and that with be talking very we good we forward Thank speaking ask appreciate say to our like and to quarter on hope you, all We you you you morning. the always just you, joining Thank call you very us stay much. much safe look look again this that

Operator

Thank you. This concludes today's call. conference

may disconnect. You now

Cinemark (CNK) 6 Aug 212021 Q2 Earnings call transcript