CNK - Earnings call transcript Q1 2022 | Cinemark Holdings, Inc.

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Operator

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

Chanda Brashears

welcome Officer conference call, At would by Sean Inc.’s everyone. time, and hosted Thomas, quarter you Chief Chief President to Officer. Executive first release morning Holdings, Melissa to earnings Good XXXX Gamble, Cinemark and this like I Financial

made be like begin remind everyone comments I forward-looking or may call would to on we conference Before statements this statements. that

but XXXX on in I like in comparisons unless is prepared the otherwise the filed release, over the Gamble. government we -- necessarily non-GAAP the it intentions. cause first the XX-K. results plans, different reconciliation and measures. XXXX limited impacted XXXX to of quarter, can predominately relevant as to COVID of the company's Information factors restrictions, results In was turn materially standpoint in include quarter will comparison involve projections GAAP earnings fourth are by projections and financial company's other statements an company’s expense company's include referring cause financial we are and new prior filed to the may of ir.cinemark.com. risks may the be most or from non-GAAP factors. indicated comparing most forward-looking concerning is objectives, company's would to due statements From Forward-looking first measures the recently measures found actual be limited that not differ may call financial commentary would film uncertainties. XX-Q, that call environment. The most certain These could at to to contained releases. we believe Sean and website the now to materially current the closures, revenue most financial of of directly A of a quarter quarter comparable these today’s results Also recently or today's regarding expectations, matters variety back the to differ

Sean Gamble

you discuss XXXX and We morning you Thank first quarter us appreciate to good results. everyone. Chanda joining our

Home’s has breaking continue of to many and Cinemark. better results over encouraged recover pre-pandemic film XXX% as led from for our our line we every No benefiting in performed historic which industry holds company or date be from to success cases year-over-year record released week-to-week XXXX at making expectations is in to and Spiderman progress opening Nearly in favorable trends. the COVID revenue we Following Way quarter by first growth exceed than weekend which highly year-end, strong

Importantly we're like seeing film's overall older profiles biggest office Sonic younger male and already for City Guys decade content. installment. audiences. in alternative We've and the remarkable driven were DC opening mix first also with of now Blockbusters run and Bad and Hedgehog across skewed with the movie and The Notably today Comics the Spiderman recovery more weekend nearly the the female box positive overall and office The not only Lost appealed films Batman demographic consistent titles. for categories but pre-pandemic The Marvel audience to all goers box families. by X and been delivered results Sonic results have a Paramount's exceeds seen Dog while

$XX around office beginning concert generated BTS's screens nearly took million the Stage box at the of First globe only and show times. To On and performance storm live of March captured Dance the by two Permission at

more live exhibitor any leading theaters concert As in technology, Cinemark other auditoriums and than at over a worldwide, of indexing this out result share. showcased selling our meaningfully industry market

closing million the out $XX second films all has North an grown time. Kaisen highest this at we for number $XX America generated Jujutsu become result and first a one film to of domestic was box exhibitor expansion the anime were In film opening the global domestic office. RRR second alone the its quarter of nearly an the quarter. With came films RRR, grossing multi-cultural film record which which new In set for out America run rounded the Next X all day Indian ever Indian throughout highest and consistent on title. North for Cinemark’s first million, focus Indian in during

lifted, are well movie XX% entered theatrical continues consumer movie-going our for Now from phase sustained month NRG of expressing regarding positioned today and exhibition high. government now. recovery. world to on movie that from comfort industry XX% improve goers now returning COVID to one and and transitionary reached restrictions of a the throughout theaters endemic is just pandemic According most to sentiment to a Moreover, new has have within

improvements for by intended quarter represent associated several and further direction, seen shift these to delays. steps While dynamic first we've in releases in due the XXXX dates and Multiple being near-term titles affected COVID. right XXXX landscape remains timelines still Omicron with were to impacted film clearly by the the to production release production film

quality That As in of a highly optimistic with which trade our That a over types we around the cadence week the exposed of footage release highly wide the ramp office volume course convention remain with last the world. result. pre-pandemic continued compelling opening year. Furthermore, industry's said films stage result, dealing to the films. box as to sensational optimism returns by results array has was levels certainly the its reduced to an exhibitors of annual due of increasing steadier massive clearly studios were from Multiverse Doctor about up these we a high during last volume set of shifts and CinemaCon night together theaters opening which and weekend for brings office of will we validated remain box expect become below we of XXXX in Madness’s well look versed Strange first

movie of our over are diverse showcased set of delight which partners robust During goers. sure year studio that presentations, films lined a they up to what next their have all types the includes

temple appears deliver. XXXX to films poised of fully As slate expected,

to Black and Dominion, the from Adam, In start, to first is Fury amazing Flash, of addition Strange Doctor captivating time already Jurassic Gods. which The saw World an off we footage Shazam!

official his Of making We also Water Way got Cameron pushes ground that see of no movie visuals storytelling once James in film consistently exception technology Disney's first and based in XD. Avatar saw, trailer for boundaries what is with X, to extraordinary new break the this The again. on we

Top the highlights Gun: the of first screening of in One Maverick public of Paramount's entirety. its was conference

footage anxiously this also shown now, in conference Halloween flair Jordan and Jason Ends, Tom the Salem's and will advance your Peele's Luhrmann. film drama We you Hanks those you who've Baz For can from starring also is with be the disappointed. the and Lot, highly attendees Bunny; several mid-tier which Pitt were that of the Ticket modern Roberts; suspense significant a category of Elvis, franchise the Black screened generated Halloween Austin including Director final bio films a Stephen Train films say Blum’s of George a during Butler Clooney starring of of thrilled were in of Paradise, CinemaCon awaiting encouraging buzz. glimpses get Brad reunites tickets and newest also Julia been I comedy range Phone release and all examples to romantic me, like including Bullet and King's not Bad horror saga The thriller by Nope, and a wide

first audiences the several of an minutes films Minions: Rise footage end of Paws XX other the in XXXX are that of family the of Puss we coming The spectrum young saw look of in at enthrall from is Fury, DC sure extended and fully spectacular old. Lightyear Gru, which League including Boots, to Pixar's and On Super-Pets,

we box Where Darling Are momentum Story, enthusiasm of and Wonder an Me, name to a There and at house regarding the series was Crawdads and shared and A A Sing, that well There of the Finally, Don’t You see God? exhibition. various CinemaCon future the films from It’s Era, way Worry a few. opportunity art Downton White is prospects scenes including just had office New Abbey: theatrical under excitement a Margaret, to Bird: compelling specialty

shared theatrical TV, Pay film. movie the no Multiple than shared championed Free those a experience. are we and mean their provides there VHS, and theatrical a was magic how of emphasized however, the This on the release a now stars window performing This their about they value a it accretive going the films, varied directors has key with films message that DVD, been heard As release. spoke platforms and indicating without equation. and released not cinematic make underscores and a to theatrically and in exhibition studios studio recognition strategic for big released and theatrical was complementary that screen TV importance about they Furthermore, of theatrical be with every necessarily film to from theatrically, of sizes can streaming, be a studio theatrical are they observation that does benefits the the every genres films than window will their reaffirmation a different upcoming better to streaming years. and release produce

distribution theatrical opportunities window reducing increases cultural Theatrical effectively multiple the them, promote release maximize exclusive platforms, channels. aimed creating a an by revenue is piracy, brands connections with awareness more studios quality, attract revenue films bigger their to with profitability, their create franchises, across As of and larger for key exhibition stronger build moments, streaming emotional increases doing which enabler providing a and the all characters, creative so. and and enhancing monetization perceived and value eventising stories and community,

quarter Turning our attention results. first to

our drag quarter, been the the and XX admissions about recovery performance industry management. While comparing by again their have and the the impact performance delivered on over adjusted results outperformance Omicron varied XXXX against created American for cost industry releases, in corresponding XQ once office by an impressive Cinemark sales, basis to approximately of points asked EBITDA times overall market last concession in XQ North domestically share XX strong gains quarter multiple both we XXXX despite box XXX the drivers trend several maintained the we and on far Similarly, positive quarters. outpaced and American start Latin years. due to XQ and industry XXX internationally surpassed by outperformance, We've of past stringent basis driven challenging the our film points our when our a

solid meticulous addition to to those In operational results factors. execution, two planning key we and attribute

being tremendous our during both by with reopen the to we audiences guests. and one pandemic. is lift realized first capture First, the us new to circuits That of enabled goodwill the build

food strategic we years service. beverage, combined key Second, amenities, is programs, initiatives areas the from have over the technology, premium the marketing guest and and and investments of our in derived loyalty benefits and particularly

and quality, peers. technological to our an circuit provide global our and across advantaged ability industry-leading events to presentation Our content live capabilities our us relative management, simulcast position

live host talent showcase experiences And forward and projectors. over brighter to even example, entire on optimally that A the ensure global technology have as horizon that convert further with capabilities concerts, theater sound, and For Cinemamark's enabled BTS delivering XXXX able such guest our gaming best to charts. more moving beyond we integrated the offer our we laser index. our elevate unique, because are and as screen incredible continued concert global network, to content, example on-screen off Q&As, as our in movie the Cinemark communal exclusive live-captured investment to going we consistent engagements focus phenomenon plans type is experience that remain satisfaction of to Hollywood focus, site, screen scores which events. colors, will vivid of This These by management this sessions, film and announced fans and content possible. experiences are complement back of to the imagery in and content is class, deliver broadcast the in enhanced mentioned the that transition earlier. sharper circuit the us seamlessly presentation I sports perfect Cinionic significantly

so, meaningful we and with cost also derive will environmental laser savings benefits doing While associated projection.

provide, our Motion large-format often are this investments driving D-BOX the seats. the enjoy our of premium comfort driver resoundingly past an our especially auditoriums, that to non-reclined Our lounger outperformance, premium enhanced added theaters Moviegoers in experience amenities with important luxury recliners, also recliners prefer amenity. and to of regard

the to seen benefit pandemic. faster than we've reclined we been are our in electing results. over continue Motion to which pre-pandemic Additionally, those consumers in from not and our We've circuit theaters compared seen reclined our loungers, XX% reflected an reclined, premium that to how of also outsized over course of formats increase to large D-BOX upgrade have With is levels. domestic seats recovering the luxury

accounted in X% up XD nearly only quarter represent our increase for XD XQ our of we over basis exhibitor and dollars box a D-BOX of sizable count, over demand XXX global XXXX. D-BOX period. X% versus screens XXX compared to alone. yielded for number it course While are an revenues upside. contribution revenue premium revenues which office domestic our office -- quarter global our ultra-immersive includes to This Likewise, our screen large-format same ratio auditoriums, and of first XX% our is Considering we points during these XX% PLF box the our further up they the premium branded X XXXX, high and provide experiences, XXXX, seats the IMAX, PLF expand which the first the domestic in D-BOX will admissions plan expect of over

summer launch season to XD to about blockbuster greater drive also are We new and this of ahead year's even awareness a engagement. campaign

comprehensive experience. also initiatives beverage and an Our important guest investments part of our food in are

to deliver a we strategic have our another stands a paying beverage provide off, platform growth helped while in yet by design after cap every of moviegoer. offer initiatives high-margin returned also evolved to indulgence broader food Along with how introducing to on of continued the appeal place the XXXX. new Tap. and a emphasis concession core We've tactics concession we convenient our cap quarter increased consistent These Over beverage per as and menus we've ordering the as in year. first online our theaters, food offerings reimagining our moviegoers called Snacks per by have and years, our record-setting year to achieved expanding evidenced been

year ease guests who Tap, in reduce our helps ago, provide lines future and transactional we platform a will in advantage than improved delivering We out for in thereby fully a and feature launched as the consumers to more revenues our our enhancements. guest take continue and providing to simultaneously it roll Tap promotions to theaters, Snacks benefit. a concession expect we addition of less In and double discover the a Snacks experience benefits

increased from benefited we've made also our expanded in reach, have has outperformance conversion, strengthened which marketing and purchase loyalty dramatically market Our and capabilities the engagement. consumer advancements programs, consumer our

we the history, ability status, location, based their other For to example, content show numerous have customize the loyalty consumers and on dynamically film we factors. now

distribute we our thousand variations, a As several personalize us has and rates. highly result, enables an conversion e-mail average typically which messaging to unique improve

our and transactional platforms to compelling web, IT our online a work together teams return that customer continuously our improve and to Our marketing enhance digital provide experience guests remove and Cinemark. media stimulates app, friction, to journey, visits

enthusiasm going Our highly successful peak members, and tiered now Cinemark. our loyalty program, Movie Rewards, subscription also aims we tier visits industry's to increase Consumer and frequency remains have exceeds strong, the which Movie currently movie paid program XXXX. exhibitor-led XXX,XXX our for Club, in to first

million add to members are continue new subscribers. approaching each and X week We we fast

U.S. which guests and varied sales direct Our value, the throughout to programs Latin our perceived loyalty channels opportunities. leads high provide incremental to have in America communication a turn and

to Exceptional our key and going. of said, long our solid in advertising, outperformance impact practices planning fully promotional, providing have training loyalty leaning remain foundational from food inception operational we we ours going of work history focus our continue drove service office our intend results. EBITDA execution, successful, scores XX guest and box forward. will level to amenities, we excess since consistently service been service. earn years ago, Cinemark's we theatrical That efforts taking as our sustained The guest in doing the quarter service we to And drive service, advancements combined and guest top-notch of XX%. and into so on of to notion our to continue marketing to and in of with next guest satisfaction positive and marketing we the ingrained the technology, operational continue throughout reignite loyalty and DNA, first as XXXX and quality while and and guest as benefits along programs, campaigns highly has well investments in beverage, work premium movie been collective Our finally, our a have adjusted our operating

process that EBITDA our earnings improvement described the initiatives by calls, workforce continuous further on was management we've programs. and Additionally, our including productivity and efficiency supplemented adjusted prior

focus for ongoing continue five our we ahead media strategic to we move the support we evolving on to in all in intend to and As and landscape, our areas success company entertainment of positioning priorities. invest these

content building initiatives; simplification, additional opportunities; sales As priorities quality, and extraordinary ensure of advantageous I optimism in continuous is long-term sustained appropriately like of of and the creating continued revenue described audiences improvement results. underway wider by and trajectory sustained to recovery in range are world-class the situated these about forward. incremental how February, are our an are; by premium reinforce and momentum office sophistication; guests with to pleased a delivering streamlining going entertainment; most positive new I'd that growing deliver processes providing service, footprint experience and through productivity, box locations ease, summary, marketing value, industry to our offerings we guest optimizing we via its sources In fully our

partners quarter head surging forefront keep continue to all and financial will the our now demand into information call provide who results. well that reignite will studio like focus Melissa, the concentrated exceptional and in efforts cinematic of exciting at films are providing are the to pass first as season for for to intended positioned varied our industry. Cinemark going, summer our capitalize And I and and as delivering all our do must-see theatrical on to on beyond. as I'd they events about With that, to guests to content well investments movie thank experience our theatrical an because team Melissa? fully our Our movie of we consistent our incredible exhibition. is Cinemark providers of further

Melissa Thomas

joining thank for call everyone Sean. today. you you, and Good Thank the morning,

by and significantly We Sean the its with on are results first we exceeded recent trend office encouraged effect the Starting results. which February momentum mentioned, half quarter, the of variant Omicron we in March. late pleased during our Despite the recovery worldwide delivered, were and with box with the slate impact the of building the film expectations. our

XX.X in $XX.X of $XXX.X attendance million the first EBITDA. million total We Our adjusted revenue quarter. was and of patrons delivered million

third adjusted around in The first the positive quarter discipline quarter represents costs. of underscores resurgence consecutive and EBITDA and generation movie going our our

attendance the reduced delivered operating and possible of to impact U.S. during during sought in be shift. related Turning to the January response operations. we our the flexible to We XX.X quarter. as and as patrons million Operationally, and content our hours of first Omicron February

Our domestic $X.XX. an with admissions ticket revenue first was $XXX.X in average million the of price quarter

average was price the driven relative quarter the a ticket broadly pre-pandemic factors: higher line quarter, price in box favorable premium tends matinee a average second, have show higher a mix large strategic of which the ticket by actions; due and prior lower Our to key in office. remained first, with of a well strong pricing alternative third, equivalent times of type period and elevated content and as ticket performance fewer the mix to to three format and mix as tickets; weekday child

as to mix to that revenue We for tends in particularly up caps our the we hours XQ impact mentioned with which, concessions saw consumption XXX more levels another total strategic adjusted in $XXX benefit revenue that are prior million purchase Altogether, lower higher incidents indulgence cap of pricing. approach rates ads X.X%. with and quarter-over-quarter. the versus pre-pandemic EBITDA million were conducive growth and domestic first in per of million food we well skew core our popcorn, delivered record and audience and to reduced, in of compared was concentrated adjusted time that quarter of continue attendance EBITDA per heightened $XX.X our which in were on $XX.X $X.XX. XXXX, of Domestic value-oriented margin was to concession purchases. are screen period. domestic basis points the Our with pleased first and and the concession first fees transaction our from from When while in quarter and as concessions beverages, on Furthermore, incidence operating quarter, the the revenue an the beverage initiatives other Sean both quarter in and like the frames million candy, benefited $XXX.X high we reflects

that XX.X certain was lifted, Turning our International to concessions by and too $XX.X operating from on $XX of have. our restrictions impacted place of hours been quarter revenue It's capacity of during margin to million the total capacity variant. million patrons EBITDA $XX.X in hours operating despite revenue. since revenue, million of the have majority million due Overall, the place an noting in segment. restrictions international It them welcomed adjusted of EBITDA international $XX.X first and generated million government-imposed pandemic. other was we Omicron the vast on We admissions and of operations, revenue, XX.X%. of million comprised $XX.X with adjusted worth

primarily global basis to a decline Turning a the XXX advertising expenses. of first This lower of higher expense agreements was our skew XX.X% revenue Film decline blockbuster with partners. quarter on during was rental of representing share revenue, studio by admissions fourth points concentration which the quarter, films of our XXXX. driven and versus

reignite to XX and revenue were a movie this basis As in build XX.X% our into loyalty, of will points our to decreased audiences. going, we marketing continue reflect as also investments quarter-over-quarter. strengthen line and step-up lean Concession expense costs reminder, concession item

some the cost on impacts, the job the team supplies. in fantastic did rising While costs particularly pressures seeing we offsetting a concession our and first are are key quarter,

the example, the commodity For like impacts headlines, butter of and rising business which staples items canola our in for key such canola topping. read have been cost as oil as may you have in and soy, prices

hourly wages $XX.X million higher by rates. were somewhat with decline average a attendance, represented was wage labor expense in and X.X% hours quarter-over-quarter, decline lease and associated and salaries driven decreased reduced of the $XX.X X.X% Facility First by million quarter quarter-over-quarter. global offset

card was volume. other driven as decreased from prior expense X.X% fluctuate common Worldwide million costs by the volume. percentage maintenance move utilities rent such as lease largely quarter, variable $XX.X directionally declined expense While credit with will and fees and fixed, line that in with and area

quarter G&A and share-based primarily million to Finally, the was lower quarter-over-quarter $XX.X for due compensation. fourth decreased XX.X%

Excluding in expenditures the Inc. were Holdings, during compensation, million loss the share G&A down generated of attributable we a impact per $X of was million, $XX.X $XX loss Altogether, to net Capital Cinemark share-based million. of quarter, for including such conversions. for $X.X committed seats, that $XX.X million our theaters, million pandemic and reclining enhance builds to projectors, to new first we the luxury XC prior maintain as lounger laser or investments and $X.XX. existing resulting

to on company anticipate the $XXX year spending for continue balance we the position We approximately to as million balance XXXX capital long-term our full expenditures strengthening investing for sheet. the while

Turning Free of sheet. flow we the $XXX $XXX negative the million cash, quarter. cash on the quarter for with was balance to first million cash ended

of impacted capital flow interest December headwinds, timing employee driven and performance EBITDA, by As which by cash the payments, lower our free adjusted the bonus from and March payments. expected, were in working primarily to box semiannual was change office

the the a range in important our continue year market we anticipate particularly for broader to the to of maintain the keep strategic theaters. diligently forward, per concession to in look we full gains. moviegoers and meaningful and trends. expect industry labor positive As to the return flow maintain believe of of also diversifies recovery our based on we office industry experienced Moreover, recovery costs. concession and are continue mind and evolving working share we to and and ticket both inflationary terms we've rates pressures a portion between film we to can And with It's tactics, upside expectations outperform around caps box slate we initiatives facing, current XXXX cash free generation are pricing our the pricing as

going initiatives strategic In ability proven on pricing fully to evaluate industry. Of to in and theatrical wherever high periods, pursue this adapt be cost to want momentum homes to the reasonably theatrical to going still evolve offset remain actions consistently our course, recessionary and possible. box office bullish to ahead. escape ability a and historically that and do Even shared we a enjoy pressures has on priced these a has will means lie shareholders. dynamic that get our movie to its for movie line including demonstrated of going need in and continue Cinemark so continues environment and stakeholders, We deliver to cinematic inflation and to order to for movies questions. to opportunities recession-resistant the capitalize People especially and all entertainment, in we'd out guests, provide their on like for reality remarks, the and the experience. concludes now continue industry-leading and and open results prepared of to excel employees, up our closing, key and Operator,

Operator

[Operator Instructions].

We have Goldman our Mike first question from Sachs. Ng with

line is open. Your

Michael Ng

Hey, Fathom, good more questions. the much expand Events bit I more experiences? like could concert for IMAX if planning strategy wondering you relying things very you invest morning. you Thank in little in on the are I Live you your you much. just very mostly a was Are live for Thank to on BTS events. the know of the industry. success mentioned the you

Sean Gamble

say for it's Thanks a the question, scenarios. would I range Mike. of

area. that's you came another the getting into the in IMAX company events So certainly through is this what called Trafalgar. Fathom, through BTS concert space mentioned

Additionally, our we've own through well own live doing network, of with our received which releases, we've proved -- very, be been events hosted talent by to Q&A several have movie ahead consumers. sessions very of

types channels. of that opportunities. and future place And We at now particular events just new number these of as it one like of come just other it this opens sporting lot to to events, that potential. broadcast events. gaming a events capabilities of categories look There's area a has are numerous live in our through So live able too could be up

be The that to have of to looking that appropriate because events typically something do together. going work take it's we're key So is things and into. a bit finding scale the into put leaning

sure end the that lie space. the it. of the time we're to opportunities But that is got at optimistic the about effort make So you worth that ahead in

Michael Ng

normalization you of mix office talk we just separate very wondering children I and question, little just concession as a bit your was you moviegoers price box matinee, the per much. a if you average on include and tickets? that get Thank thank just as caps Great, much. about and more the normal And recovers weekday, very could a views ticket of

Melissa Thomas

Hi start. Mike, I'll take that one to

that as So see on expect the some said film and our operating as expanding. What do we audience normalization to your hours mix and in point, the are and my diversifies cap, that ATPs cap we've and remarks, per we of content to diversifies period. -- the as per well pursuing growth to in I ATPs pandemic a over allow are us prepared expecting sustain outsized portion meaningful we opportunities will seen both

reignite about ATP side, for you as something strategic in We'll we ticket opportunity. prices, about done trying If we are testing pricing with there addition process. to on our that certainly premium that as we've opportunity in going we've that, to see see in talked based we promoting actions past. that the And That's cautiously proceed the think to do the an But the movie large-format screens. date. then

people nice us. that in to the we've watch of XD, for has Sean As seen has a boded selecting increase movies in and mentioned, mix well

drive even believe normalization have seeing increase mean, that quarter-over-quarter nice growth there, point seen cap I drive we while us awareness. pursuing the much proactive well So side, category incidence be rates. going there. some bode front do that Snacks analytics But on Pricing able and there, those concession to leverage we've to us to management, really marketing data in is And on for Tap, those again, quarter-over-quarter QX are we're of to our certainly we domestically we And decisions. to -- more that well. see maintain expect in been side we've to similarly, initiatives and basis that proceed then we another the benefit the seen lean in from the to there. a on opportunity to really XXX we going per continue you'll see as do we cautiously QX,

Michael Ng

Great, you thank thank Melissa, you Sean.

Sean Gamble

another do Thanks we Mike. Operator question. have

Operator

a Yes, J.P. question we from Karnovsky do Morgan. David have with

Your line open. is

Unidentified Analyst

right a question what Cardoso actions taking forward? [ph] any any for I actually And This earlier, now very piggybacking or I that questions. on inflation John planned pricing for affecting seeing of ticket morning. quickly Good have then just follow-up. at your is all of going my guess on from is consumer you're Thanks David.

Melissa Thomas

one, can I John. Sure. Thanks the for question. that take

pricing inflation we're taking monitor and But if cautious approach pricing. about we're you to going on that something the to side, the about So is closely. certainly that we're think

previously, with and models our changes. our As we're where price test testing. leveraging model results with get our on analytics opportunity. time. we're have the we we pricing. approach to to over approach and way a looking a days, I along but to our more that learning, to to leveraging opportunities doing implement to We're continuous a blanket pricing And testing data not We're and and we we're through basis, early still that determine taking sophisticated our the dynamic more of increasingly said have data We're and evolve identify

seeing inflationary both inflationary as So absolutely pressures that understand many side we're as as in environment, the that we're the COGS have pricing see on of to account. an are into we do that's side. well on the But the one taking offset something labor we we levers

Unidentified Analyst

And current relates is a attendance in some just the just as Do gears mind scene you. ahead we're maybe to it seeing momentum? what Great. international look here color, maybe or commentary much market, what trends as giving the behind bit. framing domestic on little Thank then compared like us to particularly you it switching internationally, how it

Sean Gamble

I in But tremendous America regard anything, a may to restrictions. to seen across terms at time, we've point U.S. improvement up. question, would lag. the Latin from and a say America for it's regard COVID fairly movie specifically going for Thanks Latin progress us recovery with by be had this International, its also trailing Absolutely. of with the relative there few months If caught been John. in and to slight

until the One Those still few in of restrictions up exception the quarter capacity with everywhere place. there in now a were restrictions first holdbacks lifted that been of social Peru, had perhaps where the largely had been been have several place. still there's distancing

and get in in has gone, has than both and longer terms terms region, U.S. because double it while took now So higher are to very as enthusiasm everywhere of had trailed doses in well they just rates in are positive. of that single vaccination just accessibility Latin consumer now vaccines actually the boosters. that vaccines as the been largely furthermore, And -- guess about the U.S. holdback a time I America throughout

results, quarter second in our positive gains And the quarter, significant our we box were of first and the first office And quarter, end as second in at EBITDA made in our that's gains of fourth saw both well too. straight from we actual Latin delivered quarter progress, when year we the as look to you've So during the the quarter of American made business at that first similar U.S. were that the and XXXX. our as seen

Unidentified Analyst

Great, super me. quarter. helpful. congrats and That’s again on it for Thanks the

Sean Gamble

it. appreciate very John, Thanks much

Operator

Your with Eric MKM Handler is next question from Partners.

Your open. line is

Eric Handler

were give and to percentage Club Two you stats Club, first, versus morning people, of Good I ticket give, great? if you things; often that providing purchases you. are they any what wondered questions. Movie for much Movie spending can specifically could be some Club, the around stats used about Club non-Movie they're going, would how talk guys Movie appreciate Thank you how

Sean Gamble

Sure. the for question, Eric. Thanks

throw out I mind. couple me top just have Let that of a

mentioned I prepared now we remarks, As have members. XXX,XXX in the

XX Movie sold since was the quarter from over first at percent December our quarter program. Actually, we've XXX,XXX, grown per tickets peak of the the X,XXX through members by end our than generated XX% theater. box more represents of high of in also the first members XXXX, we've at inception office the To of our of our XXXX Club office. in of box program date, So million

memory. that I think from put are key that stats it's those been And we've provided of I of in some historically that out sold. the the So there successful we've volume terms highly

Eric Handler

America new Great. could seeing U.S. mall allow secondly, Latin And the developments? in that about power there environments could like wondering theater what in you you and anything to Are you development, look in then construction talk maybe the center if terms accelerate of development.

Sean Gamble

view to just where of but continues a slightly, projects. motion is along settles norm couple of it Sure. just and it picking aren't it up out. new is now, with being say what dynamics we to we on There continue cautious I are the are opened prior would many pre-pandemic. place obviously theaters. forward we get that that certain where that, continues to projects that I all we as the Not to in would handle the better in that -- development looks are of that on already had say still say our like a moving be pandemic. We've certainly than slower

of that. as have coming We more result a

but prior So pandemic, that of I slower picking a certainly up, was definitely and of construction the things builds. speed would speed than mall the at to new much to the it development are say new is still specific pace

Eric Handler

Thank you.

Sean Gamble

Thanks Eric.

Operator

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

open. Your is line

James Goss

morning. so talk good a experience, what are to guarantee that got businesses levels about maybe I ask but you a case, you've lot whole wage In and to Thanks sufficient it's a staffing of and the good quality your couple areas, little of about price. numbers attracting the challenges? the of they or having customer employees, wanted getting in necessary in at are concept trouble touched people, to want right be level those the that the on can if

Sean Gamble

she's up And interesting start an staffing bit partly we when trying into if were I'll state Sure point It's one. due of to anything at Melissa and to challenges holiday due the We was Omicron. to has saw it virus period had a that to the we the volume add, coming thing, at Jim, of growing. to. quite just the that market, the year-end when employees labor welcome with with a of certainly ramp struggle, partly demand

we definitely the many also We at as We've That right have lot had we people a staff a pretty first position quarter of that normalized two down. volume need. both understaffed year-end in calling as So couldn't people sick. we because where hire in the significantly of in those came were of now factors. we and been then volume

We summer head again are that into up to as the season. we ramp starting

full a in remains challenge getting the still another question say that in staff would going I to full are hit terms volume of we So bit to need. to of answer be we continue to the seen

well. are progressing things far, So

market, in terms improvement has in been some of the at labor world. So our there least

students, the dynamics we're We high months a work, and looking grows. summer We've they're Melissa All commensurate from that fits of that also is been students for and her off wage heading certainly because And wage for to school with and what's across remarks. period to and well being touched or happening we'll are that rates what our school rates, everywhere need definitely We've model. a part-time said, in there. in order had as volume be on into challenge, everywhere very the prepared income that stage rely so and to source which the do that on hourly It well seen have tends work and very this employees with U.S. see well students, at the this heavily to in college looking attract environment. in retain able to increase when

Melissa Thomas

wage the just Yes. add to rate on Jim, And side.

coming labor full in in that Sean in we pressure really hiring and impact that just wage increases period pressure any of we So QX, did in wage QX, the quarter's mentioned, needs rate off as quarter. was of we limited fourth first quarter, that the saw given peak that had the realizing

as rate know summer in we So hiring whether progress through is we'll pressure any wage coming. of more our terms additional

James Goss

Latin as one how it a upcoming with it U.S., films thank American how And first markets. Okay, ideal wondering the America. in if challenge and the robust pretty that you. I slate thing, in Latin and at wondering film softer the schedule was release the quarter to play there wasn't was looked might coincided basically other summer in release for key also I was the but you

Sean Gamble

the in we the that worked Sure. of the challenges challenges here very saw The in had that, were as been very well right. -- I of has enough content that also well, mentioned content, volume caught overall But with a up -- LatAm, recovery Definitely, the there films, U.S. quarter we there. XQ. that the has associated in they're weren't moment frankly, just ago,

played also So into that LatAm.

likely one which I here the off in in Latin comparison under-index others last data, also Dr. piece night business would be was as look to It's big about big certain over-index is phenomenal that titles we expect U.S., we America America. America. doing very opening are that will always in of as fourth had to real-time in in expect say films a There nuances Strange, our with sensational we we'll will we in the As to start largest we're where Latin U.S. just certain the preshow tend as Latin will the look, well far be optimistic ahead, U.S. ever

biggest and within month of So all Spiderman, way, with after time -- span five that's a obviously the had each an the example months of of the two top so the that's opening by of of we preshow a title other.

performing is Strange Dr. LatAm, also the is So U.S. well there exceptionally like in it

they they the in of year, to be won't the a to certain here they'll be Wakanda LatAm we U.S. like As certain as while in expect Black to Panther: big Forever, big degree, look Gun, really as and films, degree, rest Top the a we Elvis, certain are

type they'll well While that exceptionally Lightyear in -- which to other those do Rise They're films think tend more over-index of and films, like World marketplace. and Gru, we family-oriented play. will Minions: Jurassic The

the guess that for the said, I equally being are all slate of we're we the we're for kind -- U.S. about overall think optimistic LatAm of films I in So year as

James Goss

Okay, much thanks the color. very for

Sean Gamble

Thanks the questions. appreciate Jim,

Operator

Stanley. Your Ben Morgan is from Swinburne from next question

is open. line Your

Benjamin Swinburne

different I'm Melissa. good are a One, of questions and we've you was about tail marketing on the of there just marketing the the Two I'm kind marketing it a between I small know if look long on Should still we kind think And Melissa of for market your blockbuster the you forward, think and that should and you anyway? going be of well. sort I as there's wondering, concentrated that's lack than to But I relates tail, of of shows just in year? morning Hey, out we bake you sort the obviously, in CinemaCon, Sean, want up I as if trend or alignment And a I maybe then And spend the in expectations titles. side. I like while. for in me incorrect. and trying all Tell the on -- to from rising that hope torso more just film -- market probably a to normalization through post-COVID in and coming midsize a of think line film have world front ask be correct Sean rest Thank the guys. feels some you're and supply we kind studios all exhibitors non-blockbuster seen if it rental demand the wrong, the me there's the more guys. pressure guys. of we

Sean Gamble

those on those of will Alright, thanks films. I'll some we're start well how see I we broader appreciate time now questions, come seeing first in films for volume doing categories the over of recovery a category is are with already mean back. Ben. Really as even moviegoers it. of environment of this for sense question the smaller My content in the films.

as obviously delayed Some as COVID-related releases of films this that of well affected got have we've to of year of production and timing been dating year this on by that in the the will COVID experiencing throughout terms terms impact experience just been films cycles of in coming together. due those just

gaps were studios advent with because been in what's going smaller gaps. on to to streaming platforms those the of and films as circumstances, these of fill there some certain well As where, in these of looked COVID content

being used they sub marketing help growth. well as channels to were to drive try As new as

think that back. shift some and that will dynamic I of that believe I As normalizes

desire value talked As the in of lift to released. because of an creative economic overall theatrically economically, they in provide films films the promotional terms across those how releasing clearly these building, brand those there is about, a types just films we've of perceived, they're range community, and have

to things tend I So shift will think back.

into these days studios just was rigid homes window, XX prior a would more equation I being and the the which Another as it better on model. a a is better with dynamic that get There's to able financial economic titles pandemic, films by have for to as isn't at thing flexible flag these earlier.

some better of being I having help those think, virtue and to less financial movies that blockbusters risk perhaps big that that over of films, more model, you just a really towards moving and some released of back lead theatrically So to budget we'll more time. by see more of transition where come too, everything category and micro behavior mid was and could mentioned

Melissa Thomas

-- rental your our on does that film our film question are marketing, as include Ben, well. correct line marketing you so regarding expense And item rental

think about it's modeling As you forward, two-fold. think I going that

scale. slate we content be rates particularly start of the year, film come for would as -- expect know, some given to a we balance into that those on as we blockbuster stronger impacted, the sliding the rental, where, you higher will film of falls the First,

expect line would rental of in with there. film more levels return to we pre-pandemic So kind

the to In do Difficulty] continue that to invest are expect terms of heavily marketing. [Technical we you correct in

reasonable -- slightly of you're marketing kind commensurate strong with is head we I'm higher would So not period, assume a something that whether be QX, film as spending modeling levels that into sure not where if we continue to will to we slate. quarter-over-quarter it versus were pre-pandemic but at be in

Benjamin Swinburne

hear. like coming That's and it out? And really a Avatar is it's to movie, sounds really great

Sean Gamble

and like seems it but decision, very communicated much that to that looks the amazing. absolutely control don't is We on based us, case very, it was what

Benjamin Swinburne

you. That Thank to hear. is great

Sean Gamble

Thanks Ben.

Operator

Hickey with next from Company. Mike Your question is Benchmark

open. is line Your

Michael Hickey

got Great results. for guys. I've Good Hey questions. morning Thanks Sean, my Chanda. Melissa, two. taking

here reallocating shareholders, your capital and one, your region region, in historic holds capital still your alternatives the Thanks. entering normal if in the sheet think environment balance first Latin spend new question? return sort curious time sort strategic on from is of through Sean, that to of rationale we're that for first if time strategic you The and sort there just of or reducing U.S. your to that and operating America, you thought capital feel like and network, the you through of when sort footprint

Sean Gamble

It's remain say on social, prospects footprint and the Latin handle to Thanks would for still look within new the also America, long-term in our partners. us we norm. better and the we question, our with company provide America, the from Latin growth that as increased Mike. a a remain the under-penetrated. markets like specific Obviously, do throughout and very It many provides culture. yes, it region the has footprint particular, strong keep entirety that optimizing going get diversification our company to does activity, family-oriented on I we're continuing and global of overall very our a region. scale importance movie strategic our

with potential. fundamentals are have So growth market are team foreign our again, the there all over think that We've teams is Clearly, self-sufficient. excellent challenges and been we long-term some of expertise. been a strong recent time, fully tremendous And got got economic, there, domain positive. great underway. exchange there with we've operations the and political, share, But dynamics have there

in into having region. not that of to we're exists growth and for the capital So a largely We're new capital put using position circulating already there.

general our on feeling monitor course that's LatAm. of couple years to the things continue we'll the obviously, next further So but over evolve, of as

Michael Hickey

the Appreciate Sean. thanks Alright, color.

the disconnect. question, Second product volume on

fix an compromised, I of think multiple if is? and be you mean, correct films, releases. you've streaming. you several opportunity something like is is leaning it it wide lot for the I'm very impairment can And if of development I sort Chanda, an seems then it your what with obviously, that, into multiple team think OTT got of with into I we're forward fewer that it's of Netflix. but I you the this think to sort and me tying mean, think and But think film to sort with issue on that I been primarily curious some to providers it years, going just of have work got wrong, fix or is here sent sort films dealing tested of quarters, itself, several a

into window. come can the is and And coming experience so that really, theatrical it's fill day now of the day curious, would dead, I and streaming, and OTT from a extraordinary think in the some moving all day gap. see office And box that using we there's sort start films idea theatrical be to in

So encouraged? guys. it happen year, this year, it that or Thanks can something is pipe we dream is that is just should be still a next

Sean Gamble

great Thanks. It's a Mike. question,

are I is think think do of and those definitely, dream. see the we pipe there play will out over real a opportunities, many that and them it's potential I not time.

the on in just of of up talked because volume the movies question challenge Definitely, films. you're the XXXX into right overall timing a right. the our volume to what films ago. year The specifically of of several our -- which based and about just element smaller this you we're is films, biggest Speaking seeing probably had, we particularly how wound shifting moment of now categories

is value this I the think itself see. in the decision-making the of more in a XXXX. the that back We be value in I fully will that my think going to that's think will accretive to back and content, gaps out of What of knock elevating I in of don't to that a will I vehicle some to gone. say get those there perception in is when timing-wise, shifts being streaming still that. forward, challenge and personal think a when place. as year. on back happens, year. significant fully be as expect fully and overall complementary that while by for And going the that more that streaming a I for do industry, platforms filling lingering -- COVID into be platforms the of ideally, point, Like level that be mature wood, our happens this streaming, I around, promotional it's of and studios. the be should because, that's come as that this with entirety pendulum and much effects the to XXXX. norm don't which theatrical be normalized serving it going for could hard think just things going see shift process forth sense, And And of to likely I we the work is a some XXXX, gap in It's throughout we'll is

OTT As you're have content, been testing, we far as right. the yes, absolutely

with of testing been Netflix. conversations see. having learning providers, terms we'll We're with and those have all We films of in

this that In terms expect that of that films over that, half latter of to exist think traditional a year, that, any to may the think could from timing slate this over some year. optimistic those we gaps from of should will traditional studios we're will the ultimately historic or have incremental we we cover extent volume. course right one But now fully the -- of certainly volume of time way to studios in I get should that additional gaps in back don't the likely XXXX. provide the levels fill do lead to the their

again, about we're optimistic encouraged So out. plays we're where very -- that and all

Michael Hickey

Nice, Sean. thank you

Sean Gamble

Thanks Mike.

Operator

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

open. Your line is

Eric Wold

going you just maybe come concerns that away Thanks. spend think less hopefully one questions, there's what when is the ratio quick. price periods relatively Good that kind altogether, of of seen is or prior do recession to about tend base moves is guess, guess, elasticity the morning. kind see of Two or I of you've do your or from I how on customer concession been they to of the it both? or theater in so stay just it the do you mix consumers one economy, the still the kind of other, moves past,

Melissa Thomas

that I'll take the question. Thank one. Eric, you for

So to be historically, recession-resistant theatrical exhibition industry. a has proven

years. office the over actually many box during XX past grew recessionary periods So

with like the pandemic we out are call and to still thing one I relative So convenient amenities see And consumers going consumers current environment, too need want continuing is period. most would affordable to other the remains food the inflationary I the think entertainment. forms coupled XD, beverage premium and of choose entertainment purchases and movie and that despite of outsized out-of-home

them this environment. still So in trade up we're seeing certainly

Sean Gamble

And just fascinating America describing. I what things is I just out of dynamics moments food in see found premium of and in that is more consumers now business the add, was in and of would and play things around that one upgrade the situations XD been Latin Melissa while for the same this being always XD Even the we've a to I've more and economic options America, Latin continued challenged there's amazing sort. found to where basically U.S.

the the and when still of to affordable types and choose while back they that cut tend expenses they premium they options may remains the like continue bigger on events, sporting So going vacations to to to things, relatively more more costly come movies movies.

Eric Wold

risks Perfect. And both the recovery near-term, assuming then U.S. kind of levels the for is back expand the pre-pandemic Latin about two do relative how on between pre-pandemic to both and versus we one kind way? more just over U.S. think America, the get opportunity thinking more or does in where face to of were of the about they the America, margins pre-pandemic, other Latin there versus

Melissa Thomas

Yes.

slightly our EBITDA international EBITDA adjusted historically, EBITDA below so been adjusted our adjusted margins. margins margin, on domestic So have

and also As a then go forward, you cost kind globally, I from ATPs there's perspective as office to a thing the about dynamic we as business elevated biggest from takes now. us the of certainly of puts attendance the keep across lot mind think one outperformance market the box is seen share in that and think And now right caps. side with per have but inflation you've well the on right big and drivers,

I to be our would where on achieving margins. be And that's adjusted going to shake EBITDA striving what call to industry-leading shooting continue puts to historical track there's many now But to we're and takes going too deliver for. out. So certainly, record think right of we're that

Eric Wold

Got you. it, thank

Sean Gamble

Thanks Eric.

Operator

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

open. is Your line

Meghan Durkin

Hi, and those clutter, thanks. about a finding the talk cutting I audience at through heard mid-tier lot around the right films. CinemaCon of particularly

you front. negotiations the bit and wondered on attendance have is exactly And marketing and the So Melissa doing loyalty, and that efforts you're expand with that's that helping data I in your on a could on what little innovative that new studios? is the if the

Melissa Thomas

Okay.

I'll So that, with start Meghan.

data and having gets be our loyalty, on of data, through we So our this whether programs from program. have do point paid through free or customer programs, of access but marketing benefit standpoint, the -- do to a customer kind we it our loyalty into your

surface them. to content we to personalized our experience customers and a them we're give to more So target relevant able able and to are

channels leaning say, we team, would as efforts, as across that process. benefit free But we e-mail in as folks to multiple that broad So is we're various as data expect in that terms a that of which expect over both our and paid well. the broadened is leverage continue we would customer that free, I of retailer paid certainly can as any significant marketing channels with expand members, pretty span our would into you our something as mean, first-party having efforts in way have those too, directly to reaching well time as pretty just in certainly I and across would reach through programs. use our you

Sean Gamble

And I of. over four into this add, now that that comprehensive a omni-channel just taking fortunate fully been we're would is had network we in Meghan, like that years ago, very advantage leaning place building we're

buy that to serving impressions of today communicate going continuing via a month So out stories every media we're are and we're conversion And ticket enhance over experience we shape guests it. success. can to movie great people e-mail, social we're directly connected already billions single XX we in the benefits earn attracting and addressable to highlighting media with great where the of to, unique with Cinemark personalized and we're million just engagement,

studios, the specifically I question studios mean, too. the on Your recognized that. have think I

partnership with efficient a because have and very We channel conversion great to lot a a has studios of collaboration it's consumers marketing rate. for the high that

drive great So, and movie celebrate going had awareness. experience specialized campaigns experience success create XD we've specifically. going, We've more in movie cinematic that more to trailers the joint done

to think there's in So we're We time. more that. benefit success a over lot really strong from having

Meghan Durkin

local your acquisitions, can of remind you approach as one well. if I at those assume in new one tie get here us to I bow in. looked you last just locations And including took Connecticut. Can my on AMC theaters,

areas ROI be your threshold new discuss attractive? on level what would what interest in would most theaters, So your be can taking of you and

Sean Gamble

coming mean, market to Sure. market. we market to look that and Absolutely. the -- are look, also everything I at that are in comes before long we things

our appropriate. As that talked our involves is about footprint, and optimizing growing, recalibrating, strengthening wherever we circuit

I assets of remains tend returns assured open and of We the say complicated are new M&A in can where environment the still fully now acquisition the the sellers So just over some solid of norm and certain of right deliver think settles certainly to to favor expectations that we we little marketplace. clarity time. targets. would high-quality a in terms

just say for not right of haven't we're had necessarily out there we forward. found those also we've grow, and and would very conversations point and that how that We're regard continuing will we've with we that remain financially been alignment many for So M&A growth's disciplined over us to game the I returns targeting that going the sake. think That's deploying to over capital achieve. growth well the to have at with investments. we that looked it would to of continue so in accretive deals years, expect our we're served delivers do time, to

our tend opportunities. look in I'm will we're we way model approaching M&A signal in how we future. is that of fit anticipate that over it. to terms just will But the will that more anything. year at to So that there opportunities I be more the be two, not-too-distant there think the least at or next I think I'm not trying do --

Meghan Durkin

Thanks.

Sean Gamble

it. Thanks Meghan, much appreciate very

Operator

management further call for no back like are There closing to questions remarks. I'd at time. turn to this the

Sean Gamble

like Okay. joining all at movies. second again us very our again I'd following See the much you forward and speaking to this you we results. thank just quarter look for to morning,

Operator

Ladies today's call. concludes you, conference speakers. Thank for and Thank gentlemen, joining. this you all

may now You disconnect.

Cinemark (CNK) 6 May 222022 Q1 Earnings call transcript