CNK - Earnings call transcript Q3 2021 | Cinemark Holdings, Inc.

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Operator

Good day and thank you for standing by. Welcome to Cinemark’s Third Quarter Earnings Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Chanda Brashears, Senior Vice President of Investor Relations. Thank you. Please go ahead.

Chanda Brashears

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

Mark Zoradi

morning the you Thank very and We third off the progress to results. continue in I make industry our to joining our of discuss recovering company by you, XXXX start and good effects us pleased that am to pandemic. significant our quarter Chanda everyone. saying from appreciate

was since continuing worldwide in We and in the progress in cinematic increasing our office. growing box growth positive are theatrical quarter third XX% attendance momentum by demonstrated highly consumer XQ encouraged the favorable This experience with quarter’s trends demand for last at ‘XX. the

million. flowed included adjusted results the which in in positive growth line attendance $XX of third that to through bottom our Importantly, EBITDA quarter,

of Top industry in a began Furthermore, Free substantial positive quarter Fast Cinemark in of exceeded with Rings, commercial which XXX of America as carryover of America delivered every volume box since delivered was XQ significantly to proceeds X. more helped the office Widow, and with positive underscores the sizable a resurgence. total driver Space And & points. as XX%. share capture America included release quarter from milestone company Jungle billion Our XQ larger once on the represents Jam quarter, key the it in for Furious performance highly average Strength report of industry which the EBITDA. North XQ’s relative company’s results Guy, our I basis am successful our marked again consistent Ten market the of and This performance under Cinemark last hits $X.X month box Shang-Chi that over-indexed tangibly the box quarter releases. EBITDA, thrilled the office North approximate Black XQ adjusted an office, ‘XX just our significant to first with us Legend XX% pandemic a outperformance of of third North historic gross domestic our outperformance Cruise, a

Our share majority the the as this in XX% market achievement U.S. vast quarter Canada of is reopened. and meaningful had particularly theaters

calls, theatrical our of that progress. four all we have to factors which experience about several talked last exhibition impact key During continue noteworthy recovery,

America. of continue inoculation recent also especially rise the the rates rapidly beginning vaccination Driven the variant COVID and virus. as penetration the with to by are from is well older. Vaccination of across this First, progressing vaccine as Delta peaked to plunged rates status September. have impacts in virus the since children U.S., approval the Moreover, to-date for XX% Latin X rates subside, throughout

America. reduce in gone The and Latin continue which second factor this largely have the is in government to at U.S. restrictions, juncture away

is sentiment. Third consumer

current peak the the recovered of levels film level July of That with flow is in with environment. consistent regarding positive recovery has XX%. expressing we theater variant content factor in to the of While of in witnessed in now sentiment consumer key going the exhibition in ball of broad curve is threw U.S. since dip final early sentiment XX% which is response to clearly underway. the new a comfort Delta And a comfort visiting during the third is line appeal, quarter the us meaningful caused and theaters. This consumer moviegoers

very world There and course, drive the to even to to as not theatrical but seeing recovering we new trends theaters on the advancements And extremely account during a the Currently, in cycle, many XXX% operational Cinemark comeback are recovery our operating this that question during theaters on well only opportunities. exhibition reopened capacity is the global return also are our and and Of in applicable no the is these to hour made its ancillary though basis. benefit rebound restrictions strong. America. meaningfully of of certain factors pandemic Latin in region we apply positive and market well-positioned have efforts is along South as demand and across maximize while domestic is America, Central attendance the the U.S., is consumer around also persist ongoing revenue to further

include possibilities implemented examples of food our ongoing capabilities beverage and and efficiencies, online Some and programs impact platform, premium amenities. our improved marketing and new recently enhanced operating alternative content

In terms of some efficiencies, operational the significant course of pandemic. made the we over strides have

data and hours through For schedules are showtime utilization analytics. enhanced instance, management we optimizing operating of

we our staffing and ticket be simplified operate and and management ushering routines enhanced issuance, and streamlined leaner to controls. the practices, is refined to theaters, that numerous And efficient. including more as degree planning required have inventory have such theater We procedures of

maintaining to and tandem relevant we iterative digital continue landscape targeting actions drive social advance applying leverage increased concepts, subscription winning more movie These analytics advanced drive drive include consumer to believe utilizing experience frictionless our the social highly capabilities and our highly A/B marketing and attendance. also contextually industry industries. increasing share. touch navigating are our customer a messaging. proven and our valuable actions, capabilities, ahead our Movie transaction-based and testing be In We to accuracy digital we best against marketing they unique frequency consumer on in points and travel leading spend overall program, scale going to to and retail, simplifying focused Club, significantly market will practices valuable and from to Examples and competitive technology identify database continue with leveraging and improved

reactivation already This positive as Movie well driven Club During pandemic. membership due expired better completed as work so, doing members minimal the of we pleased our were we to paused new billing X.X Club than accounts that In base largely the was reattain all represented to a churn expected third approach only have for and dip extremely quarter, seeing Movie modest been amount pre-pandemic by in experienced, proactively we during on actively our we net which by X% credit the attract additions new the past that ones. years that was timeframe. that have are expired dip during as cards those member-first we

also Movie Movie recently bigger tier introduced and enhance our moviegoers Platinum, provides with that have to further earned even Club an We Club premium incentives. continued most frequent

achieve just that XX% members heightened this serve active as year. of familiar status Platinum month the increase with program transactions. this our stated they Club well announced of of loyalty will expect as further customers most to to launch Movie Platinum Movie a We tier Club incremental been ago, over incentivized Since have the stimulate we

grow in well simplifying beverage delivered to platform online our pickup extremely in to ordering and their by food months received Another seats a or customer and concessions been a their guests and look upon recently ready program’s and the added utilization Tap, for our skip moviegoers for ahead. fee. enables and driving by provided and convenience is Tap The line forward experience we foray in have continuing Snacks into a awareness this to nominal time platform, to savings Snacks enhancing the launched our revenues have while arrival the ancillary

and select film are consistent moviegoer cadence and of continuing beverage a options also expanded takes as We our attendance content increases. stronger reintroduction release of food more hold

venture promising ongoing and exciting events. our forge content, last supplement film gaming secure interest and hire focus week is in in auditoriums announced relationships utilizing our gaming President to consumer pursue several both gaming is alternative initiatives, and with and realm. to strategic evolution to content agreements that the new seen Gaming indicators further spectator latest our business Hollywood have focus participatory on we plan in to to regards the including heightened licensing new Vice Another our content a we

results Additionally, positive in such we AEW and seen Fight Entertainment. are continuing ongoing Club, professional live to to by addition Fathom with wrestling concerts, have from explore all other similar events content movie special offerings talent events Q&A alternative with and boxing and Triller sessions with provided premiers, as WWE,

going an our finally, our reclining to XD, approximately crystal reap our of motion box seats, with laser have operates in the We investments efficiently. action. laser from on previously world, seek with in are the all which enrich technology, number Premium theaters our upgrade and featuring on-screen third Cinionic and amenities the highest in office also increase benefits with alone including line loungers, screens auditoriums are theater premium luxury of our the experience, projectors. which made only our proprietary D-BOX that quarter which X% our large-format synchronized XX% of In the ranks brand, in XX% theaters to which clear seats and laser by delivered entire we which movie fans led picture new more projections penetration existing domestic continue are to lasts featuring of the continue longer announced partnership, movie in with major build continuing out, And circuit we our recliner operators. among one

all to screens, bright, share the and U.S., sharp converted images completely laser. to Worth on and happy of are home we city, across locations have our Dallas-Fort delivering addition We consistently theaters other colorful our that in

theaters, theaters newbuild thrilled cornerstone capture strategic are year, with areas to to to to the are all going a which significant were opportunities opened committed our theaters of all have we in onset X screens These movie of XX COVID. of strategy high-growth new of new Speaking are prior this and attendance. and already newbuilds

days, early to-date. we it’s by encouraged are still While the highly results

have and of Texas; and Florida; Latin Washington, U.S., X locations Jacksonville, Seattle; Peru. Chile the America, X Kirkland, in We opened outside just Waco, in Guatemala,

our later one – to business just open in are to have shared, outside I just make of it’s Roseville, clear We also with continue vibrant the open have Based business made the more in Sacramento. performance quarter I our more through we development. pleased California, year and trend everything third this advancements that on to theater we hope

While road we still cognizant, long a ahead. are there is

to ramp up significant all Over and already our of office strong cash more onset overall generation was The and results. as our the the months, coming of ongoing started of our than an office box delivered has the of financial costs. October during results variable since box Notably, month to fixed monthly of enough all COVID. our fourth quarter we best the course October continue of expect out cover

Way Looking content results. film Encanto, ahead, the as House anticipated West looks Side audiences. families of and just movie Matrix opened appealing And promising of Afterlife, previews highly with Story, blockbusters includes Ghostbusters: and with balance a of alike, to No for Gucci, Home, for highly Sing to the Spider-Man: Resurrections absolutely broad to which films upcoming range highlight adults last the tremendous such slate next year year outstanding Eternals, few. night going X all

a be out-of-home Importantly, movie environment that can in experienced these films were theater only a made provide. to entertainment cinematic

overall We windows as are to a optimistic the theatrical landscape. of the meaningful media about it’s exclusive future also contributor such

especially office recently, and of for been proponent company positive of As is the as have longevity positioned long-term a results the witnessed the for success. with and the box I have Cinemark, generated exhibition theatrical most significant industry poised uniquely we

it Sean brief to I’d moment this the comment take to like executive a upcoming over morning, I on Before transition. turn to

strategic the the the Board, of years. efficiencies has I call am for I’d and is thank first honor hand support. the in like With effects call last opportunities reins comradery, global investment the for also that, and know the will industry forward. lead His would CEO It background team Cinemark this getting leading hard especially as earnings Cinemark thank to turn as in eye incredible end and years your look like and keen to for continues and under and I this announced, work, Cinemark to It I company emerge mindset with the position willingness the over my from so his of forward thrive tremendous before X.X we leading to of operational over been along his as many been like now confident people with the community. over a Cinemark CEO the the results. capacity as direction an board. previously of you their business through to appreciate their year. change I, of the Sean to As the I has at his serving pandemic. ongoing evolve along would to to going ability advantageous strategic of my watching on to and past continue be Sean. highly Sean rest the to I

Sean Gamble

Good kind your morning, you words. everyone and for thank Mark

best an You we the in a our an Cinemark most you our your continued joining will background. the a our and And On have leader CFO next will are as in missed with Groupon future. for and our next the impressive X be all for CFO. relationship day-to-day team she near been we leadership Board X recently strong leadership introducing operations understatement. be We tremendous through will to announced great opportunity We and is of look ago, we’ll and to maintain and ongoing financial complement for Directors. be weeks your have fit chapter say over to seat we related and Melissa Cinemark a has that thankful you was Melissa very the her Monday, formally working our to the cultural forward believe Thomas company a finance coming will and in from a note, years. X.X start organization. clearly past and November this excellent officially industry wish our Melissa you

highlighted, in delivered As of of Mark theatrical improvement. the financial movie swing quarter is already and Cinemark going meaningful full another resurgence

last expectation $XX cash reduced monthly in rate million $XX to to the a capital was average million burn normalizing on after working we that for approximately burn our with This our $XX earnings timing. cash of XQ, monthly million line call. During communicated

environment, further quarter, of improve operating balance end industry current positive to continue the the rate flow rebounds. had today’s our third have expect million. modestly this of now and of cash flipped a $XXX average As we we to will as cash we At global monthly

increased our of Time Kills Carnage; well Be Dune of on $XXX credit equity. There by XXXX incremental through As driven October as balance results office significant the issuing million, XX, had of approximately following Let credit and million to Halloween $XXX Also, line, last now borrowing including sale strong box to that Die; available Venom: drawing beyond. capacity revolver as described arrangements Based November and financing as we capital loan No ample extend opportunities quarter, debt of and unencumbered executing still any continue position, said, financing. maturity have we rental That on and at multiple own us, remain and corresponding our improving will believe all associated our other our cash recent XXXX our current not refinancing film facility, properties maturities and working tapping with revolving transactions, term additional we sits liquidity timing within on to require flow leaseback payments. we To March

accrual-based not flows. necessarily reported as accounting cash directly you financials Furthermore, follow previous the to our indicated the the our now of since we’d Turning have quarters therefore onset our and correlate to select like our current be ‘XX quarter remind in of pandemic, to most timing results third instances. we results, in that traditional distorted metrics theaters reopen content ‘XX will new to of we continue to XQ in beginning Considering environment. the in limited somewhat were quarter’s our third and compare only to XXXX, XQ quarter our recent film with the do

second XQ quarter, expanded demand Compared third third quarter continued to quarter, attendance a of we approximately growth in domestic admissions releases. XX.X Domestic of going volume price to led patrons. operating hours although operating the to response commercial $X.XX. of ‘XX. increased $XXX.X hours XX% film million average domestic Expanded course growing by the During new and our XX%, expand XX.X% revenues an remained quarter-over-quarter with movie increasing further nearly million, for were to below hours consumer to still of ticket

mix $X.XX. and cap largely $XXX.X price beverage show versus fewer food ticket high average revenues ticket times. million weekday per Our of as ‘XX, and Domestic of type concessions primarily price XX.X% increases of and result another yielded increased all-time and a on matinee were account XQ

per and that concentrated movie drive ‘XX remain concession roughly with continues more Our quarter to going demand a categories XX% indulgence was in third and consumption across beverage operating to to XQ are compared XQ pent-up food conducive core in our as accrued cap heightened flat purchases. hours concession timeframes

driven theaters, our loyalty in with quarter. transaction deferred quarter positive during revenues recovery Our $XX.X increases to Latin film XX.X% in resulted XXX reduced international million of Total breaking increased down basis XQ revenues third adjusted That EBITDA results revenues, income. said, our were food revenues. and to EBITDA to international in increased compared also still content, even for points, and Internationally, Driven expenses concessions This basis lower concentration third and rental of compared his rental our the rate due and results points as revenues quarter restrictions By operating yielded and were the of promotional from of while million, theater Globally, successful issuance remained total and shy strategic admissions the continue by and third as to indicated XXX ‘XX. reopened capacity to during to was rental XQ, which we also of other film XXXX, that hours releases. million quarter. third adjusted larger, availability on attendance results higher pre-COVID points. continued quarter end ads, of Mark American benefited film was pricing was on revenues Concession million grosses promotions to Domestic recognition of material of from with quarter line our box office remarks. see grew more ‘XX both were and revenues film commercial XX.X% of place XX.X% rebound and $XX.X scales. advertising with predominantly also just expanded increase patrons, and third film versus generated quarter $XXX.X had XXX% we X.X ongoing quarter of Altogether, XXX% in revenues million. screen second the previously the concession of reintroduction million expected our prepared film and skew enhanced the the during in new a operating and certain grew $XX.X million volume-related admissions of initiatives, and international new fees were $XX.X which by domestic costs XQ offerings averages. $XX.X various were associated openings of

to within common expenses predominantly such volume, driven $XX.X grew volumes category, area global extended quarter in liability property were wages that in and other were and we while maintenance remained salaries and credit options taxes with driven expenses This increased theater and ‘XX. that and and million hours reintroduction fixed. labor. increased million, quarter-over-quarter, experienced of reopenings, were Facility fees, expanded slight and operating to other beverage due accommodate was $XX.X increase and growing as increased million select this by as rent costs $XX.X increase. while Third and as line variable such increase commissions uptick and costs by hours Utility sellers. to versus the demand insurance, XX.X% consumer quarter fixed, janitorial a expenses property paid in a utilities food XQ enhanced modest the also expenses third-party percentage require lease second from XX.X% largely ticket additional more operating as Worldwide and card

the efforts of quarter the third actions result levels Collectively, Finally, $XX.X and restructuring expenditures. second minimize and lower the was than in positive quarter operating was considerably adjusted ongoing million for quarter nonessential the to our pursued EBITDA worldwide G&A our remained as we of XXXX million. pre-pandemic a for $XX.X

of described, our second previously onset the quarter recovery. positive represents our As first it total EBITDA for adjusted and result a Mark company significant this material pandemic our adjusted as milestone consecutive the company was since EBITDA quarter of of

these achieved million improved on had commend was drive results. committed was the $XX.X projects were in by during prior the that also their loss quarter, deliver their million $XX.X and pandemic associated expenditures we to like new-build existing partners our hard-working the maintenance and films Capital materially million, We’d driven by quarter been relentless quarter-over-quarter. $XX.X net and success studio our with $XX.X congratulate $XX.X teams theaters. XQ COVID-XX in of to Our million and investments to in million, like to to the our reducing execution which on

has in enabled consistent investment satisfaction. our or expenditures maintaining back theaters guest hindering us quality our in years Our to scale near-term and enhancing proactively without over the capital asset the

highly relative XXXX spending continue such, at level we approximately of estimated pre-pandemic a we reduced CapEx to million. As $XXX anticipate ranges, to which in previously

with results, continue and and momentum as the the movie financial release ahead CapEx positive come varied pandemic to that we lies delivery company’s in as started supplies, the calendar that the the in improvements full our adverse we thrilled daily supply may year. fourth certain due consumer the million for below further slightly to chain are robust have optimistic about impacting going well will not the enthusiasm any now we said, equipment expect However, quarter of are $XXX constraints theatrical That rebound we have in beyond our In these of regarding and timing we do delays subsides. and as operations. closing, experience exhibition anticipate on impact

made to proud enhancing for up the prepared long-term we our to up have of continue has strategic environment, advancements for initiatives Cinemark impact a open guests that the to to we already further remarks, and are experience forward and entertainment value. team our look we lines the and provide questions. set success in will now Stephanie, would our post-pandemic We shareholder on cinematic our the delivering concludes like

Operator

the question with first JPMorgan. Alexia of Quadrani comes Our Instructions] line [Operator from

Alexia Quadrani

very Hi. I Best have questions. of just congratulations, couple of luck. much and Mark. you Thank a

Latin can and inning, might the doesn’t U.S. they at if both on a us give seventh look behind to you sort terms recovery of be of we’re the where to sense the much versus across you that Latin into are commentary America your sound gave in recovery? they trying are versus much first how fourth? of the U.S. the I’m too perspective drill seems of in behind U.S., – broad-based like But LatAm get in and operations the a America recovery be sort just if how The kind the about the much, is you one of relatively in

Mark Zoradi

Thank similar in still you, Alexia. Chile in the of encouraged the rate to Latin and a I somewhere key XX It’s quite to That regards but Brazil business a said, I down total of days. the very go is others U.S. baseball days as very our days. Well, amount We’ve territories of XX caught with like XXX recovery. your that’s I’ll of of in more vaccination basically number last and up U.S. if between population last significantly in of and analogy, the the is the percentage now vaccination I there, overall to to XX behind progress I could. days Argentina America months, been just mean, the think in and taking place over

So as – in made EBITDA the behind significant that. you was just the noted, – slightly this America a Latin quarter quarter but and it improvement negative from I’m sure

your the behind U.S., somewhere and XX between much So on XXX we’re trend a that specifically, say, I’d very about. positive to days answer but question

Alexia Quadrani

I quick Perfect. And just if a follow-up, may. then

In film. the ‘XX. production from delays and film the XXXX, the pushed of like obviously, the slate least all we’ve seen, you at delays have out studios of with backlog that the of Marvel some On some which

the shortages if Is there reason concerned given the out things like you of to comes enough any down slate. out an to it of near-term thoughtful? staff are because kind slight amazing have looks though look think you Or issue done or we things that with on So difficulties bigger a it time, do if so getting delayed further road? sort be sort is getting that time

Mark Zoradi

positive ago slate as slate and very as are this are And years and they might of the content been just Angeles. active release over for with schedules. ‘XX weeks out had ‘XX And they visit providers good Los the looking as business the that interesting one extremely remember as also, every opportunity go to am at Again, and our I. question. be to together a look that’s can XX Sean time. in ‘XX, about a X slate I’ve putting all in I any this now, I we

studio, content. at so And all really ‘XX as starting mean, up to we is There way working but prolific very the the see a and you, smallest everybody this studio is lineup as share together, positive we’re well. to not their that it it’s I most point with on to specific from come the ready

Sean Gamble

the at too would that time. thing we’re the add least I that the cycle is, at on other shortages other going The of movie and not of production some labor industries, this sector point are affecting within retail aware in

largely back full effect at this point. So is nor on into of does it material a swing. appear that the current state Production the pandemic having is that

Mark Zoradi

threat that too, Sean, pleased all were labor that, Yes. just very they was that stoppage, of there on didn’t take Actually, and place. – a a very,

good shape. looks it we’re like in So

Alexia Quadrani

hear. to Good

you. thank Okay,

Mark Zoradi

Thanks, Alexia.

Operator

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

Eric Handler

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

revenue domestic you’ve box the down that curious profitability efficiencies gains that October, producing, was for getting But First close how given the XX%. given to or margin one share you’re market cost the I levels? are U.S. XXXX am back office or you being, to seen,

Sean Gamble

to you to XXXX? XX% are Eric, referring relative Well,

Eric Handler

XXXX. In

Sean Gamble

it. Got XXXX. In

Eric Handler

Yes.

Sean Gamble

on Got it. we’re certainly that Well, improving trajectory.

may of third increased in in had one of flipped but going, directional have end give on in you from heard As already stat how account And remarks, just box our we state provide, of the the flow that overall the the improvements indicated to currently movie didn’t the quarter October generation. we cash cash sense. some we positive you and prepared office

the Our year terms, overall levels XX%. of XXXX, In our was quarter were occupancy about the in third XX%. for all pre-pandemic occupancy full about

that. to well as the as about Obviously, closer which in is XXXX. hours, of extent notch profitability to what that operating they by both continuing still we’re So below affected were are XX%

third still a to moving quarter. in definitely We direction. ways flipped So to the positive go, but positive a we’re in is there EBITDA

Getting dependent still place that take revenue-generating of to within ability just and to a us as that’s and to get if to that think opportunities on we other evolutionary close the we where the have way factors of expect some time. better forward. improvement and good things share improve to some pursuing, our XXXX, our We pandemic industry. to obviously, improved back continue over continue those and like not were But market the I ongoing is move grow these we’re all the previously, other in

Eric Handler

cap climb much Got curious it, thank per a versus of quite of you. that to concession continue which your nicely, is how numbers, volume pricing? And looking I’m function at

Mark Zoradi

have a we now significant pricing first approximately not XXXX. pricing, real back – back in approximately, the pricing in did we online brought back way, we not we’ve came fully, whole and when up And fact, but to welcome Eric, way. pushed

that of focus where if bit. Most hours So per we greater operating hours, have little we remarks are choose, I push ability, so spending of prepared increased buying that amount volume still concessions. frames increased and little in we less pointed has more Sean’s bit it on people have on also an a been basis. terms to And of pricing since and a cap we operating think a time greater

Eric Handler

very you Great. much. Thank

Mark Zoradi

Eric. Thanks,

Operator

Your from Meghan Durkin Suisse. with next Credit question comes

Meghan Durkin

type a Maybe share could what upgrade overtime? who think type detail do maybe morning, a how little in of good you have don’t any amenity if us driving the markets be pretty have expect to amenity your outperforming And It on are is on theaters of give of you that? your this that guys. others gains? on many coming where you be or share impact color on you idea the you from? attendance, Hi, it and their how Can of auditorium. more And projectors, then the interesting market laser share some should have

So any looking I’m for can just color there? you give

Mark Zoradi

I’ll Meghan, take part first the your second. question will the take and of Sean

all it share been world, market effort important up. theaters that XX.XX%. tremendous In of just focused the have that Regarding approximately other pre-pandemic something And this knew we have and with in on is recent because was. amount XX% we – our market basis, opened opened operating share, of the was a market Canada how we share that’s in a

XX%. another beverage it’s we mix. been very increase achieve Movie the We And So combination have City, in asked that Salt been marketing of have we’ve about go is specific tremendously has Lake that Cleveland, service approached important, that’s Houston food our And Club initiatives things. these are Sacramento, meaningful is been that Two San cities Club marketing order way Dallas and in some markets. think that. on Francisco, in our has you effort from very help to along a – DMAs an high to tremendously efforts we The important our lot from Dallas standpoint. Ohio. focused to operational XX.XX% is a one. that. one. customer which a and of Movie penetration, and with

perform is the market the very So, significantly. also our various share all but movies smaller only not blockbusters, that our combination a and of get elements business, actually big ability can film of to mid-sized the

of combination growth market a things. about XX%. has We I to been XX.XX% gone it’s share And so substantial. feel like And it’s noted, from been as the

Sean Gamble

laser question we’ve going DFW warranties as announced benefits already parts. do in provide to also about preceding laser laser over new X% we installed they projectors, a expenditures our projectors, actually, levels, Meghan, improved And experience entire not productivity agreement out, of have pandemic electricity only immediately cinematic to elevate rollout Cinionic now, timeframe. the help fantastic maintenance to in terms regard of marketplace. experience meaningful the and take operating with with regard the screens those and – Right with your and including XX-year projectors projectors a you XX-year Barco pointed to their on And exclusive movie our to

in marketing the to yet but heavily entertainment of as in to that differentiate competition theaters both We of part in-home is help marketplace. promote that started that forward. of our out-of-home not as collective locations, just our those have from ourselves in amenity other move another we intent premium both have we well the as It’s forms and

excited other additional seats and we’re our experience really amenity the aspects about our attendance. food this movie just going we has addition So and the potential to and theaters that varied built for our it in future of enhanced into reclining

Meghan Durkin

that not at premium pricing been And other those upgraded? rooms you the rooms a to are have actually

Sean Gamble

have We not.

I we’re not a have an say. should yet, It’s to market then ability theater, to we that We us did not. the to theater entire When akin we theater, and go akin generally – gives of recliners. the putting in into have It’s almost entirety we lasers when marketplace. that the in

that price of a help the just It’s might which us with that pricing recliner like that increase something market power and differentiation, of first the give question. further helps we the us something will aspect immediately. it’s to part – share your with overtime, it So not but

Meghan Durkin

guys. Thanks, Great.

Sean Gamble

it. Thanks, Meghan. Appreciate

Mark Zoradi

Thank you.

Operator

next Fargo. with Steven Your Cahall Wells comes question from

Steven Cahall

for to heavily Thanks. Good some pretty probably It next or the maybe going one for to the like really morning, premium more year so Maybe be tentpoles, experiences. looks big skewed box me. office first format is

think business, box you big do office see start skew those if just about how to trends So really the to we the in do the financial releases?

Mark Zoradi

welcome first, – to Well, Steven, to the and... you like to we’d our group investor

Steven Cahall

Thanks. Great here. be to

Mark Zoradi

your Glad question. to have

question is For think is overly That’s than been going of to been quite that’s years. regarding concentration time. previous don’t large ‘XX a tentpole there for what some going on anything some in area of long we’ve I seen movies. be different time,

to out-of-home with if big kind clearly by mean is long that the out driven But independent, And movies, so mid-range block business are specialized cinematic Our not more movies going an is them. them ‘XX not take experience have of necessarily well. smaller, of many does almost that. and is there perform the to listing too as and would opportunity because charter

number the films. auditoriums our get not to really the We United that think concentration those because only have we’re have the we upcharge, circuit positioned So big in with Latin very is but a XD for we which of in throughout $X well happy blockbuster that also of very, States, America.

positioned detrimental business. it’s large very those, to we’re and to going I be going an for share don’t to our think overly be So that’s well

Steven Cahall

you were XXXX. versus in you about Great. where the rents decline film in talked And then

out being about talked You in L.A. just recently.

I rents So around transition? as discussion abatement dynamic there on they know of in are makes is as windowing. way kind you’re seeing talking this going Are a very perceiving any industry to the the you the studios, future

Mark Zoradi

rental The not basis. pay interesting. in adapted film way scale really it’s has a continuing and changed, to we’re Steven, it’s which

the the significant So scale box renegotiation larger scales. There is. been higher on the of office, no is those it the

hand, So like you pay to don’t on the one a higher rental. film

news beverage you the good get and rental the do the higher food other On And that you hit. really really, means you that it’s when smash a way. giant film hand, have along and pay box office you because

So, done. in that a big the being on the box office, the no the change way pays. higher scale are deals It’s one Higher basis. scale

Sean Gamble

the consideration, to we’ve that, I which add the previously economic said is The that past, place. would communicated with of structure taken subsequent we’ve release and modification window we had Steven, only in commensurate thing received that degree has

remained scale, In we similarly received future largely place, addition with type take continue that align changes some economic but of regard consideration, forward. have place considerations that to structures in and in going to expect any we to

Mark Zoradi

window the these our majority I of content darn is, or extremely the I see that exclusive XX-day and board XX-day of that’s think confident we’re And major all got probably going coming the to confirmation next But Sean pretty windows an we’re point a had on window. a vast discussions, across there other theatrical with key one that important we releases that’s year, suppliers. whether

Steven Cahall

Yes. And then maybe just last one for me.

ample options said you liquidity. financing Also the about to you. have talked available You

interest right things take you’ve So note of that now. raising got a Or lots capital any that is markets in worst, Do capital? for healthy the options. just turn if are have pretty to you an

Sean Gamble

on focused of well opportunities, extent present – now, take on that company. long-term we taken as Right more as strategic some focus in going higher the latter. for to to themselves our building It’s near-term the de-leverage the think there To have of more organization. terms it are opportunities savings for be refinance our trying forward. or new on recent the will the rest debt the at we’re anything, in some to more to order more within investing we’ve If

Steven Cahall

you. Thank

Sean Gamble

Appreciate Steven. the Thanks, questions.

Operator

Your Robert next question MoffettNathanson. with from Fishman is

Robert Fishman

exhibition A both have table been loyalty career between Movie of sides other your that a row morning. including with data? Cinemark. you of how or questions to couple at forward, industry, of changes picture studios and strategies to Sean, Universal, Mark, general And own related seat to and or big shape the future the aspects on Cinemark for the had front the you the then of surprises do with specifically working your experience the either have now you Disney guys. windowing on exhibitors? the your relationship expect relationship maybe the of with in to leading mind the industry Good movie Club leveraging in at like and lots studios program going Cinemark jump biggest and What now

Mark Zoradi

Robert, thank you. Those are interesting questions.

let will bigger start going me Let take and picture the I Sean forward.

months, hasn’t thing be was get vast Windows doing XX-day window days. the a far been I was really there decline. at As for thus theatrical and seen dramatically to you have looking we of have decrease, concern And change And noted, a and office have to it’s months. going a I experienced long and be, to potential. four our enough as now to box months into windows out as go were always ‘XX, case. That over one And have XX us time, the the box this exhibition that years. happened. six more you the hasn’t be windows used able be then turned least long know, office what five majority the likely in to is to like That

know happened time. kind hadn’t and quickly cause willing of there as it. been people period don’t I it, until do home So, have to let’s pleasant And shake think up And that’s to be a things to the leave and of if really it did for not you pandemic as you never a that actually necessarily experiment that been, call surprise. would their

actually help So, that is very, big I been business franchise that’s the studios the change, very to theatrical important movies. launch a and positive these think it’s shown

thing. probably that’s the been biggest so And single

a big to very in and house and I course look with think their movie experience environment the on and darkened people a it, over a out is As back is it. that want too, of completely much group this of confirmation a that I get concentrated of be just people

involved been on an with. had I technology, of has theatrical through the for going be piece every experience So, of XXX-plus movie to years going many opportunity which

to that DVD, extremely top me, decline I and jumped have brings the vibrant beta decline business, going didn’t that cable before from up still to business movie the theatrical back and streaming. didn’t the an benefit in able is to television locomotive the else We then experience. is then everything VHS Some and nor into Theatrical business. this

Sean Gamble

And industry Cinemark, on Robert, and results. fully and back I and our of growth first beyond to your question execution focus foremost, evolution going shaping to getting future on as the far pandemic pure leading more of to dedicated a – is business as mean, first and clearly, thoughts movie and our and back my the of

building consumers – We to then have enhance out. on what what of make through clearly incremental seek initiatives key focusing additional that been more Along are and opportunities marketing continue regard within next with that to premium next the that, generating offer revenue. is the going the that types and movie experiential experience, a audiences

about I the a that look as quite way window, throughout and guess is, and been working that studios, collaborating as has Even with the we obviously, we at having evolution, flexible it before – pandemic. said, initiated time. I way the some conversations Mark for on the the have pandemic, far proactive As the we more were accelerated windows that

to to The actively collaborative partners. the to we be trying We with that way are studios continue work look best is solution. on the at out to it going to try figure collective

and highly to cultural promote the provides as which differentiated be content, be their Our important is more a elevate content films, way eventize to streaming And pie be always believe to partners. in platforms discussion. to with theatrical to done, brand phenomenal grow the content, much and providers that know is aim these I firmly to their has promote going continue content, studios goal I it work the supportive like and

of So, going. I to think Movie Club in will we with a the have frequency theatrical the movie that standpoint, play part a equation. as marketing studios way From help meaningful a increase using that continue been to actively

I think that pandemic. reason post any change will why – that I don’t see

be way we a going. and provides attracting it fact, promoting sides. of the enhance of with our digital – a both In prepared of movie back supportive targeted content them of as and which and to studios, grow will marketing the sophistication our in think to mentioned I continued all we to remarks, and to tandem theaters continued more And in that their to have continue Mark capabilities his for build, just with intertwines for helping consumers and concept win-win having that social

Robert Fishman

you you And Thank the best. Mark, all wish Alright. both.

Sean Gamble

Robert you, Thank

Mark Zoradi

it. Appreciate Rob. Thanks,

Operator

Your Goss question from Barrington comes next Jim with Research.

Jim Goss

Thanks.

this the maybe there You moment rights, content do alternative mentioned involved so also? in you if initiatives, was if can and sporting are the for negotiating sales theaters earlier I events such things you and about other in wondering sports is sun the do plan considerations. as gaming primarily And to this through

Mark Zoradi

very a question, it’s you. Jim, timely thank

late As you spectator standpoint. been experimenting – gaming. from a both announcement a standpoint of participatory have last with and And regarding week know, from variety a also we actually, we gaming made initiatives, earlier an this

going to We down are that. double on

We department. unique are create to going a

department of charge are in put a licensing level help set that to partnerships, agreements. strategic We to up executive going content, senior

some very done have We interesting tests.

that We tremendous and out. the I fan there a more theaters. role mean a of One wanted recent & with our literally go talked critical sold did to results. about visit tests that we ones Dungeons Dragons was, that XX city and we to was outstanding base

private testing Super also of city, a and theaters. can kids with competitions, effectively in our gaming now have one participatory puts which standpoint, other participated against Gaming, in had each with game We theaters for gaming We city in parties Legends, play our with the League League months. awards. environment done with a we against another From have

Control. done a We have deal with Mission

and alternative it’s suppliers think to opportunity and leverage e-sports at what gaming It’s not we sporting top But looking both content on exchange with brick-and-mortar doing of. clearly tremendous other we like are assets of Fathom. of, there in are top alternative We is with content our e-sports. is on This events. and

Jim Goss

additional it further? the that side, And have spends markets on have theater could this outperforming on talked Are yet opening the any other reopen fully to there opening. a Okay. you but industry, even larger push that little about separately

Mark Zoradi

you Are theaters additional to Jim? am referring to sorry. I going that are open,

Jim Goss

I draw for there areas Are might lagging was a No. some any might you there York know where be where I New to mean, LA. attention impetus while, for outperformance? more

Mark Zoradi

think markets don’t open I are so. the All No, across the board. now

we openings at or new a we is marketplace this based there significant additional we everywhere in always everything is spot new at needs open share are not a this our theater changes what don’t market So, add that any for, look anticipate in to But that we a point, is, servicing. because market for only looking in are point. upon

Sean Gamble

this at And I been point, too. for add, it’s would multiple open months

Mark Zoradi

back a fully is Canada while. for up

Eastern Canada wasn’t now. the everybody but is open So, open,

Jim Goss

Okay. are you And then time this panel? proud most are there any congratulations draw and finally, attention here things final in would Mark, you history in of one your like to some to

Mark Zoradi

a That’s Jim. question, very interesting

So, didn’t I anticipate fully it. actually

in give will my I So, you thoughts candid way. a

the I to years, was company. fortunate very a good walk over past X.X back Looking into really

into in to that with broken sense Movie when But along So, job an were, that a company. a in But company renewed been subscription the ways highly simpler in, I like when and the has Roy was a strong Mitchell lot way, opportunity you we because program walked the any people It financially built, had good successful. made had walk a exhibitor very first walk Lee we developed me not maybe we company preceded was all in I that the Club. it of but urgency. way the some

to talk that most that were consumers team we were our it. continue the amenities for of think have then I important And recognized early about and We recognized seats. early reclining one asking

really way seats, bars looked. redoing snack just the the our theaters theaters, but we the and so on down not the doubled our looked And also way

throw as of in I to internationally. what’s also the ‘XX, XXXX, and then very And ‘XX amount I ‘XX happened nod recliner think a so seats in we And order you had. invested grow have – that I know, heavily, to want to am we

time guess environment we team people teams just thousands timeframe. our survived, positioned very a sport, and is have there, and difficult team maybe macroeconomic the and thrived the difficult final very a through big around And supported that we had the thing really have because And but not the have have this are to We only got a here thousands the out of come well effort down members of country. is I marketplace.

time. with our came of the up a up me, eight hourly team we not managers private was and I during to this do party. hadn’t been was stay wasn’t private of job to there and of our yeoman’s open. pandemic general literally to and lights the am ones had months, and you because certainly variable watch through of and first the more in so back popped ground add then six assistant brought it really open done up were me prepared, people, pandemic, movie Our back And they and I the theater we back and this to in addition million to because them coming and and kept up these when covering private that asked midst a And it head through is, in opportunity since they idea costs – team forge one opening managers months our whole a have a parties back fully being to workers And in watch the just going to X be theaters came to parties. watch new thing able early on some that my everything about most question just people concerned kept the our

during the did innovated a our life. whole opportunity of a And good crisis. never most then initiative the A times. came that. the we teams And is In to There I as difficult think pandemic Snacks during So, lose the saying, Tap well,

was positive Thank you really the question. it really, for thing. So, a

for extended the Sorry answer.

Jim Goss

Great wishes. answer best No. and

Mark Zoradi

Thank you.

Operator

next from is Capital. Your Alan Loop question with Gould

Alan Gould

the taking have for I question. few. a Thanks

to wrestling rights? follow-up NFL either night little have put to you in just rights Can or Sunday, expand the the on Thursday question that of do games? your market alternative a – can on theaters, out rights in about that Monday, market wrestling you you potential and guys your Jim’s programming, First,

Mark Zoradi

The NFL In are are in-city other words, games for showing. not now Dallas. in we right available

At those outside I a located here become could rights Dallas that’s rights NFL to Dallas-Fort big Worth the proven XX-ers and of might are be could time really in that Dallas. are have the only that to the We Francisco successful. and highly think such don’t then available show the have Cowboys, or business. become to we get in games in San to

well that’s the very as There future, wrestling wrestling and there relative charge wants big to in events time a get big the experiment sports not college in We then rights at and in able base looking get active local are premium and be fan trying an high-profile big, – the to our is and enjoy come think our are together wrestling, to we local theaters. that whether part. games. theaters. active just can or We look, And teams critical the we to and to

have ‘XX. and our we that the to put had success that we have we plan expand water, into So, in foot continue and

Alan Gould

just much October. $XX from Okay. accrued was And that in How million capital of versus Sean, by working you cash core operations?

Sean Gamble

don’t films And the the front that out half about probably in collections pay launched in I chunk big will obviously, but the of the took timeframe. right we that month all of the that me, of half. have of then and the subsequent film towards number over for month. end was the It’s we a

terms ballpark-ish, working capital. just the performance versus probably So, XX-XX about it’s of the would say, I in

Alan Gould

the we when flexibility wide question, how talking of films go about in to releases number sense big calls. all are the – from And the any Mark, keep Do studios? much the have getting have windows on we final the the one they conference their change Clearly, on listen will theaters. whether you Okay. be the to talk, to studios

Mark Zoradi

which they They make has be to – making to that for would XX X who big the to many XX, a then those the continue as to HBO high-profile a – example, indicated release down are Bros. tent-pole to are more for maybe Max they to I have XX as make big, theaters was XX, pictures. they lineup that going Disney, that going are there, today. oriented, we mean, continuing most pictures as was I XX the cut been XX prolific. movies, to call do release. to be wide movies. about at and television going major or look XX of XX the to more they tend when Warner Let’s from are Most and

will So, movies a a movies shortened I think rental it’s with a windows. percentage. going smaller to window have the longer combination. big perhaps The on lower to hold be could The film

to a the movies, without reduction significant to biggest really we going think So, business. it’s in be the which mix drive high-profile along good continue a way the

Sean Gamble

while theatrically add, scale. for companies has it platforms, made to released there smaller some And streaming have being right I been of the would those being the potentially films platforms, talks content just when some interestingly, same talked shifting have also about

we traditional addition with studio also are films to have calls, new world, also sources content discussion we we from Amazons on of the potential these window whatever types of with mid-tier might the more may like of which flexible providers. smaller the for pre-pandemic as of to the we the could past conversations about window also provide also have in Netflixes like because viable that those romantic been life feel studios. are have the the for that more providers of a because we rigid more more of gaps are comedies, post content a And some and have, think challenged talked new alternative fill we segments then content there I is films films – pandemic they have in financially

Alan Gould

pleasure want just a one you. pitch? question final you. easy Can Mark, getting have give add, know to non-blockbuster Interesting. film public I last your been I it’s got to for us you

Mark Zoradi

year? next for talked You

Alan Gould

What’s right now? out there

Mark Zoradi

always What’s grandparent do out parent this a the And of one there parent you a mistake, and From right best. like a never me. point, that. asking of now, like that’s children believe they to that’s say, veteran at kind a which their

can going pass you happy lot So, I make one that on because only unhappy. to person of one a and am people

Alan Gould

Okay. Thank you.

Operator

is [Operator Stanley. Morgan with next question Instructions] Your from Benjamin Swinburne

Unidentified Analyst

for This is Daniel Ben.

sustainable do historical some kind of seeing the inflationary level? you and strong environment With you. and do raise the been have but think already, on Thank consumer, this you ‘XX you spending rates? we beyond current touched above see ticket cap is you this above-average And at can prices in your

Sean Gamble

Sure. Daniel. Thanks question, for the

will initiatives per we online Our the pursuing, with do we And to are been going have cap heightened that the definitely of receive we portion and obviously, the forward of new like have. we said, we promotions good a per account believe on pleased, we caps, results. continue platform

or some back Although, are heightened more benefit which to consumption as from of we the selling as come normalize, well as food near-term third in perhaps beverage that a seeing is might just the higher and of related so consumers more purchase windows.

day periods, as of drive that to and much our have weekday tend be times hours some We don’t per periods and reduced the those cap. in earlier operating of

are that. So, on lift little a bit getting of mix a we

retain So there will will majority, going which will and believe to of we forward portion continue that, be a normalize. we

something to aiming we present think are think was have course that to to it prices an the optimize pandemic, opportunity which a levels. from I suggest we we be emerge to sense and continue ticket will lower time. in tactics, as going, or pricing re-stimulate help how further might to as it instances. it, actions could to At it new not are As how series variety to may during with sure moment, certain more makes an we a that and starting base being I both ticket consumer food Those to will over be We adverse take pricing evolve to with up are the we well movie ascertain pricing that to prices evolved dynamic pursue beverage more be to anything far elasticities goes have say will we continue on, also said as would we it our of prices suggest there want that our opportunities us pricing All as we are our regard that careful we have, will when make the of to results pricing. to and the test base continue going that ability going to comes And in the pricing the to prices. certainly have that we of they perception. in midst believe certainly pricing as tests are going continue general, because are doing of

going to the expensive. look the the impression to all that it that’s at got in want we marketplace, in light is happening don’t inflation the but have to of We give movies

So, for time. successful approach has that been over really us

with to We we be be going continue to pricing, are but going opportunistic to are careful.

Unidentified Analyst

sense. That you. all makes Thank

Mark Zoradi

and I appreciate the Thanks questions.

Operator

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

Mark Zoradi

all you morning. Thank much getting many very for of us pleasure you. absolute so joining this know has been it an Again, to

working highlights. much. these aspects one to many way us alongside has appreciate us very is Thank enjoyed there the along of I While the have been CEO, Cinemark’s willingness many, along you over years. challenge your support that many all the and the being also truly investment community I way

Operator

Thank concludes you. This conference today’s call.

now disconnect. You may

Cinemark (CNK) 5 Nov 212021 Q3 Earnings call transcript