Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings. And welcome to Cinemark Holdings First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]

conference recorded. this reminder, a is being As I to Investor Chanda like to Relations. call over turn the Brashears, would now Senior Vice President, Thank you.

You begin. may

Chanda Brashears

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

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

projections certain financial other are or not uncertainties. necessarily the Forward-looking plans, statements statements may company’s to of include, but intentions. limited These risks or objectives, expectations matters involve and

contained company’s variety the filed recently differ of materially from company’s that results concerning XX-K. a Information is to factors the due to in The factors. results actual could most forward-looking may cause projections materially differ

to call reconciliation financial most may financial the ir.cinemark.com. found in non-GAAP these the non-GAAP website release measures and at be recently the earnings include directly today’s can measures, most company’s of XX-Q Also, a filed comparable company’s financial GAAP on measures

I’d turn the to Sean. to that, like call over With

Sean Gamble

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

year, our the of sustained forward-looking regarding assets. value commentary optimism film exhibition and studio have the existing future emerging improving positive we a movie-going partners their trends the based wide about on behavior consumer releases, provides and Over theatrical in theatrical and past of expressed volume by release our

health, on opportunities operating plentiful also of have capabilities We the financial Cinemark our advantaged highlighted resilient ahead. account within position our stable maintains industry and

these and continued by more we XXXX, as recovery. could our the company’s months be industry’s we As four well are ongoing of strength as now encouraged trends, into not

Avatar: XXXX, of Last a American in by Way box The The Puss Boots: the pleasing first propelled of Wish, sensation office global crowd the versus as diverse as grew During and range strong success Water carryover by animated from XX% hits. quarter, almost North well

Horror which III, generating records $XX X, X, exceeded results MXGAN, film, Screen which Creed films performing franchises. and million each box Wick broke expectations, high far office. all-time their delivering included Top domestic John of over for

& Called drama, quarter. adventure thrillers, successful Revolution; to comedy worldwide. Quantumania, highly Action and Cocaine Jesus Man Wasp: office adult A $XXX the box truly something and was everyone Bear Dragons: Thieves; close first drove Dungeons the billion Otto; with well-received faith-based which in of the million Honour Among saga the over They are $X.X domestic for film Ant-Man

in yielded the month. office and Avengers: anticipated XXXX’s almost performance to XQ largest Infinity Endgame Avengers: third box time, result for highest-grossing included which better XXXX of the April, movies two And of office history April during that of approximately X% which all and XX% than right War average, box within with year-over-year continued into pre-pandemic up was

quarter the theatrical Studios with into a AIR Along acclaimed first releases new critically Amazon titles, since the making April their year. that full-scale flow-through from which larger Amazon’s this release positive under helped included wide began exhibition push drive first they label success was

title Bros., for domestic which produced become Covenant, largest mid-tier Pope’s second already biggest helped the course, drive to setting streaming animated and is Rent April’s pre-pandemic record Illumination’s overall film as such ever, in to office. of of Universal’s titles consistent over range million output, has and Horror deliver content that which The $XX a wide Rise Mario and originally all to box small level Dead on Evil A title Exorcist volume of Field, with animated Super now The time. film the a pace domestic

cultural way a forms strong shared content is life relevance as an There better exclusive simply to then movies in experience for to of release. amplify varied Year-to-date films as is validate ever. in excitement theatrical theatrical no results enthusiasm continue than that with larger consumer and setting to

perfect and happen see weeks. Peach up Luigi, like illustration films of Mario, touring of a range not the and myriad who the feeling but the past to dressed come theaters entire only the enjoying be sentiment four the Super to I of loved level a lifted the moment is Mario guests heightened shared Princess our opening audience fans of A engagement. Bros. which to seen of during our together, that energy over

A show Palace last vendors upcoming films, various industry the discuss CinemaCon matters. community as Caesars creative exhibitors, in studios, as Vegas week was Las trade our industry’s present and members event highlights to similar well at of during energy pertinent of when congregate view annual

filmmakers The in studio one belief movies. the and as consistent been that to exhibition delight present theatrical commitment films, not maximize for clear. value way have could by convention best message was and promotional during overwhelming fans to of executives, delivered and and stars movie financial It

belief by is feedback backed Importantly, now financial that data, results. analysis, and

to communal connection Moreover, meaningful that unlike environment creates magic other inspiration there was and immersive a content and any form theaters of a that recognition is stories collective distribution. movie

as looks is next the as was best demographic, of overwhelmed of I the every on every studio some from commentary adamant for Personally, display material the by sensational. genre every of film, collective by year half at content that a Across past strength the well over overall was studio, our the CinemaCon. seen movies and the partners, decade showcased, which

Pixar’s In from well shown Elemental, which the are Little fantastic. full of spectacular minutes Wish, looks a footage as The Mermaid and upcoming category we release XX as family

Mutant to and Ninja saw as Barbie few. Mayhem, also Teenage Haunted scenes Band of a well Wonka, early We Mansion, as exciting glimpses from name Mutant Trolls migration just and stunning Turtles, Together

and well Lost which you. represented Kraven X the Cinemark Beetle, Hunter, The reveals The weekend for Marvel’s, this the Galaxy Aquaman first-time at Guardians and Blue of compelling with Kingdom, opened were films near Superhero

Spider-Man: the its tremendous got absolutely The have to We the we Across also of entirety. extended screen which Flash an preview Spider-Verse, and XX-minute opportunity looks in

best is can very Flash tell film, that DC commentary you While we that The suggesting I the to to-date have justified. by provide been about any moving far well asked not studio specifics is

also Mission: Reckoning Dial new and suggest level. Impossible audiences we the Jones been thrilled One, have sure Dead which be Action are based Destiny Indiana to entirely and sequences these taken an of - of extended to on saw franchises the Part

Likewise, The of for Transformers: moviegoers. of X, trailers The Games, Songbirds Snakes, appears Fast Hunger Ballad fully Turismo Gran and and to captivate new Beasts, Rise the X set Equalizer

of lines suspense which the shown received Haunting well and those screening Venice, be Along to as Ex-Sisters luxury rave to cleaning were in terrifying The intensity scare reels reviews factor. for full based are on The A as Bogeyman, presented horror fans the Nun-X, bound of the lounges, for was that its their the

saw from list We of riveting Killers and Phoenix. And Scott’s footage Joaquin Napoleon Scorsese’s Oppenheimer, films end include a Martin including diverse Flower News DiCaprio starting epic there. starring sagas and Ridley Nolan’s films Neville range high-scale of from the two which Apple X doesn’t The Leonardo Dune spectacle the Christopher Moon

just by and looking truly a all phenomenal are Wedding sequel comedies is year and Purple films, Joyride, to Feelings backed Fat in ample Coming, Winfrey. inspirational The rated My Will films presented XXXX. the starting Color Big this remarkable of Our musical that are releasing with described I stories Oprah and Ferrell There’s a Greek Strays, Hard No adaptation what’s specialty And new Jamie of Foxx. was

material promising. touched on for I as shared and was equally the haven’t XXXX, wealth was even that which

that ever about been from ahead. walked team the as away films have as encouraged we entire lies of CinemaCon pipeline Our

volume to total Vegas coming report as solid to the office this In been expectations, is of week, better pleased results than last out well also addition news year’s XXXX’s that have releases tracking positive of are exceeding box anticipated. as that Las we film

XXX wide to with quarter has pre-pandemic for estimate already Our now releases full resembling levels. year and second XXX previous XXX been titles of surpassed the dated volume

moment still approximately has and XX% also support to multiple the film new additions quarter dated ago, as as from Thanks studios. well Apple from fourth films third the While narrowed. XX%, gap down volume mentioned various is I recently to in quarter that a

Based to and over to continue partners Apple’s intention aspirations, years. levels regarding regarded film production, next targeted on as XX our of we well pre-pandemic levels ramp close or remain better volume theatrical indications studio their receive highly to Amazon’s optimistic recovering the XX to -- films than as growing to of about expressed per year couple we from traditional

million our EBITDA was a up which reinforced with Cinemark and We also our rebound certainly We perspective. industry’s in ongoing adjusted year-over-year. XXX% for sizable worldwide XX.X%. of first that quarter regarding to total results adjusted XQ, holds XX% moviegoers XX% in an enthusiasm revenue and true entertained $XX of of Our margin EBITDA generated over XX million growth increase

to compared approximately pre-pandemic achieved to exhibitor U.S. in a XXX since our reopening, the maintained continue we points share Furthermore, meaningful only and average. major to increase which remains up be market basis have

we paid XXXX a strong our first report the As improving our pleased are the of a outlook of incremental results during strength, secured down $XXX beyond, positive remainder the regarding our on that financial pandemic. result Monday, of debt we we quarter million and to further and

quarter first guests. combined results our we for recovery, delivering is drive attendance entertainment retirement impact of improve in with from debt topline actions this of making strategic direct overall maximize top-notch improvement continued our and box positive and to productivity, industry of our subsequent the office, a solid quarter byproduct our are and its Our is growth the while deriving

practices, making offerings experiential aspects in sound transactional the simplifying premium technologies. further seating, initiatives, enhancing ease purchases, such ticket These food auditoriums and site range services various include wide locally business, elevated a and of actions and like beginning our guest expanding with as and our beverage large-format advances and of our of

from program include strategies and industry-leading highly also Movie to new actions strategic our we marketing further that utilizing to of and engaging a planning our analytics as techniques sources Our to pricing targeted optimize broader expand and base content utilization leveraging range Club audiences, our capture our identifying like sophisticated showtime which efforts to consumer of loyalty growing strengthening decisions. of data valued interest

optimizing further third-party on continue theaters. also new we new spaces partnerships monetization channels and offer, and and a beverage and our of theater Examples assortment revenue. growing emphasis online, significant increasing growing developing products range include of platform, existing our scaling distribution place merchandise and in food unused up of ordering physical online in to the sales We

and working these procurement in tools management, are do and strengthening organization more more processes, sourcing also And and more while advanced workforce on productivity we extensively revenue-generating expanding management projects leveraging are enhancing to simplifying further inventory measures less. automation improvement pursuing opportunities, our strategies. all our across and include in of varied actively this regard with we our continuous Initiatives

This recovery. be of the invested capital our We Cinemark skill, we position company are to material capture impact these the about and and years, situated would diligence that and Furthermore, this is initiatives without are they we remains benefits enthusiastic way as remarkable outsized enhancements operated incremental ongoing going result a have not highly portion the positive will and managed forward. none provide the from resourcefulness, in these second team of already determination realizing ranging wide disciplined of industry’s advantaged an business. our over global our to possible and

about call information that, results. With will will who I our Melissa, further the first over quarter turn provide to

Melissa Thomas

Thank our exceeded our as expectations, We you, call strategic everyone, and first ongoing operational for the the to fully strength that of strength pleased office, to and revenue the the grow execution joining as Sean. were mitigating excellence well of you ability Good far quarter thank box our costs. with capitalize today. initiatives on through morning, while which

quarter we an footprint, to more $XXX and of first our Across total guests million. million theaters, from welcomed our XX% we approximately the year, last increase revenue XX nearly to than grew of XX% global

adjusted increase $XX meaningful to execution our year-over-year over revenue, hard able of our operating team. million, grow testament resulting costs margin work to gain strong XX%. we and to healthy of These EBITDA EBITDA adjusted leverage in were the results and a are in a XXX% With fixed the

of Turning served generated in XX% patrons, revenue. segment. admissions We million and we to XX.X $XXX.X million increase our an domestic year-over-year

particularly average Our ongoing last the quarter premium in by was X% initiatives partially first the price to strength quarter, relative formats, ticket-type penetration, XD mix. year, pricing ticket of of and $X.XX offset driven the up strategic by

quarter, the million. XX% Domestic concession year-over-year to in $XXX.X growing continued to revenue demonstrate strength

ability concession we high in our all-time Strategic drivers year. cap cap strength. Our elevated and per rates line fourth the to of the key X% last $X.XX, with with per incidence increased maintain pricing in inflationary our to initiatives, quarter were delivered of coupled

XXXX. adjusted million, an XX%, of attendance. our revenue which segment $XX.X domestic in million, total with EBITDA basis $XXX.X of of EBITDA growth in first adjusted an Other revenue of our of $XX.X margin generated and Overall, million of line quarter points was XX.X%, increase compared an the was with increase XXX yielding

Turning International to our segment.

audiences our Latin increase the hold, QX of in quarter with QX, well resonated to visiting of XX% continued last to recovery and first theaters film in slate with The relative an million region take XX.X the patrons year.

$XX.X delivered million or XX.X% other QX revenue. $XX.X XXX% million. to of segment and increased yielding increased XXX expansion international international million concession XXXX. admissions EBITDA a $XXX.X $XX revenue, points of and Our of margin total million revenue of basis XX% to million, adjusted of revenue Altogether, EBITDA from margin $XX.X Adjusted

Film in and content global of points with primarily rental This somewhat mix office to admissions expenses. was returns. revenue, box flexed the XX as quarter. we benefit to due down by expense investments XX.X% marketing Shifting was year-over-year and to around align advertising lower spend, our our expectations the basis offset

have otherwise. box meaningfully quarter exceeding Regarding spent the less would than somewhat we expectations, our spend, we marketing office with first

seek our increase on see meaningful we strengthen to We frequency continue visit our loyalty. and grow as marketing base, investments, customer to returns

revenue Concession rate with mix offset COGS percent first year-over-year quarter is inflationary worth by XXX XXXX, the impacts, basis the benefits compared partially pricing first by impacted costs to a XX.X%, the of as strategic XXXX. quarter of driven points that comparison the pressures were actions. one-time of up It’s noting by primarily concession in and

and due box the attendance, the and wages percent with a as in strength the of office revenue operating ongoing management. of associated points declined leverage basis total salaries focus Global XXX our labor on growth unexpected to

market-driven. some continue quarter, pressure mostly we the rather mandated government it during While was face to rate wage than

first points quarter as XXXX, particularly of largely over our Facility are lease our lease gain segment. declined the of compared basis total expense with fixed in percent leverage as we costs, which more in revenue XXX nature, domestic a

of rates. by variable primarily that and $XXX.X quarter Utilities up XXXX, other million, utility was from rising first expense costs driven with attendance XX% grew the and

inflation, first remain disciplined initiatives, support shift incremental software $XX.X strategic around first headcount below towards headcount Globally, we spending wage a a recovery We $X.X generated the stock-based Inc. and D&A staffing discretionary million to benefit in resulting a Holdings, net quarter, was in share the quarter, and to reflecting higher $X.XX. of cloud-based with and business and attributable loss XXXX per of in levels. Cinemark loss compensation. million

despite and the We we operating capital working the balance free positive to headwinds. million only quarter flow ended quarter, Moving $XXX generated sheet. the cash with modestly and negative cash flow cash of in

this recovery a and earlier our notes $XXX remains optimism key secured the our the to Our in Considering X.XX% strength of redeemed of the balance sheet XXXX, of mature our scheduled senior position, differentiator. million industry’s cash health week, potential. we underscoring company our regarding

allocated such new in also We for generating to capital including maintaining and of screens format quality anticipated spend expenditures health long-term seats. half is and year. with of continue of large circuit Roughly premium high ROI remainder recliner our fleet, conversions, motion the and premium initiatives, million invest this towards to build a this theaters amenities, $XXX D-Box the approximately as

sheet position the for making balance around our allocation strengthening investments and capital success. company long-term centered near-term Our remain priorities to

to flow market maturities for priority delevering free is is extending conditions us, as As as box cash office capital and rebound, warrant. continue the our a

our we comes to when course, with Of ratio X times target allocation, remain disciplined intend X it capital net and balanced leverage to a of to times.

we the closing, highly company. of ongoing theatrical In exhibition remain and regarding recovery our optimistic

the benefits remain rebounds financial leverage and our as from results realize we to long-term value. of priorities. continue our expect further focused operating execution strength, to the shareholder office maintaining overall We and We driving delivering strategic box gain industry-leading ongoing the on

line like to we and Operator, prepared up remarks that the for questions. would open concludes our now

Operator

with Eric questions. proceed ROTH questions come you. the with Please MKM. Thank line first [Operator of Handler your from Our Instructions]

Eric Handler

a if office Sean, on percentage forgive prior could your this seeing but wonder credit me subscription guys talk wonder and back, call, about what and of I year? you also, to if premium the and product, maybe I that while little movie I missed now thanks to you redemption was the morning depth update talk numbers for are box having and the you a improved can revenue are? does used you Club compare on question. Movie any Good there? positive then of if give that’s And the how that some about where impact And

Sean Gamble

and for morning. the good Eric, Thanks question, Sure.

As total. box of percent our far a as as premium office

XX.X% we with in overall. consistent For pretty were That’s U.S. quarter, the where and about the were so XX% last year. or about we

to continue it it else, you include way, We see That our that’s other formats. bit closer premium ticks doesn’t probably XD a up an and the by include When just over-indexing XX%. of everything to screens.

over have on What we terms. that I where that, historically versus is was been to continues pre-pandemic saying index

only see to their but upgrade viewing, to and electing consumers regard not continue food premium with beverage of to consumption. for also We formats

Movie are the at I’d to, Club very Club sustained positive. By trends way, Movie say, the

prior We continue the in pattern to consistent pandemic. we add saw a to what members to

consumption levels are X.X to members continuing million Our membership has exceed our and consistent. been

in if consumption the on a it’s are we to slight to assessment, pre-pandemic, we perhaps overall is tick largely utilization seeing based where say with content attendance down were just our akin of anything, but of I’d credits from cycle, trends. terms the what recovery due

into So even encouraged ongoing to that we we consuming newest earliest get to into of that joined, trying that Club Movie the are add program. optimism about which level continue consistent some members a and continue at be to gives with us dynamics members the by people program who of our very

the we they go beverage of do consume. upgrading program, a higher people amount to tends they as number they value of the consumption their the and at food be the in with level see We movies of regard get amount to the to,

Eric Handler

you much. very Thank

Sean Gamble

it. appreciate Thanks

Operator

Thank you.

proceed Please JPMorgan. Our next your David questions line of the with come Karnovsky with from questions.

David Karnovsky

you. Thank

gains? like numbers share I basis. your on an Was QX you or how then market here? we my open QX underlying just fully the Can you like gain position Canada rent think are discuss assume year, continuing form share your about market I and to and you so helped that come question think film to the seem better sustain mix does last lower flexing pretty even down, back on in maybe share, box. helped a at market you would despite spend the to look bit you the to relative deliver should similar And it It or just does investment is margin in quarter seems and despite some current about anything that you advertising. on that levels? share of film your can second up guess, sustainable there how of Just that about maybe grow

Sean Gamble

Sure. Thanks second. and one for will the the question, David. will Melissa I take the take first

share market from across that global as goes, domestically certainly far within content As Latin we very benefited business and well resonated our America.

over You MXGAN index films on. and like in like a like horror and Puss Scream family films we which X films Revolution, Boots, like tend faith-based to all Jesus had

share. So that us helped certainly in market

We will see share. in and ebbs flows quarter-to-quarter

of as our we going that’s tend good on to to XXX increase points of aim a we basis past reasonable but kind that, relative have pre-pandemic expect However, hold. -- some forward. target to think will around is Certainly, levels to we that indicated our think somewhere to expand calls, we be

Melissa Thomas

modifications near-term, of it’s impacted window. rental by to to shortened be concentration larger tent-pole in about rental our rates, from And and will continue the of reasonable it some theatrical the to rental films in XXXX, as a you higher commensurate film with terms the and some terms think offsets that film with advertising assume similar rates advertising with those

and to respect expected ROI. with based will But our continue vary on our to attendance while spend marketing marketing,

percentage as a expecting admissions aren’t marketing meaningful revenue. year-over-year our in spend We step-up a of

David Karnovsky

Thanks.

Sean Gamble

Yeah. Thanks, David.

Operator

Thank you.

Please from proceed the questions with come your line Omar next of Fargo. Mejias with questions. Our Wells

Omar Mejias

just would impact to my the films. about thank taking production and can the is to. the of immediate can be helpful? basically us of potential question. of production future color But strike and you that that guys, We what Maybe writer the at follow morning, you non-existing into point actors just impact the provide length for you know Thanks. cycle from impact just directors and the the for Good talk movie given the strike first for be would any and life that that guys

Sean Gamble

people. lot Sure. Thanks because unfortunate very Certainly, something will closely, for Omar. on ultimately it meaningful come it’s be this, question, still it it’s writer speculate. skill, talk the with It’s line. and say watching a impact hard to we certainly probably other of what the a to soon the guilds has bit to too When a really comes we can down about all

ultimate unlikely television strikes, The than one how these really it lasts. and depends shorter the risk long tends at know, to from you an a strike feel one lengthier immediate be poses of for A of impact, least those more while our majority more on as types impact short year production is in to they scheduled industry the stage dates. affected based the the the next of run to in for films thing on positive are materially this of hit and are

often We can from to films know recuperate the they they our time depending making some where goes. have been it in studio accelerate time lead the are partners that trying this, to for long and of how line on down planning of able that given

disruption past, with perhaps In but the what industry, longer in overall the had some strikes like impact XXXX to Guild we saw Strike Writers the XXXX the the on the XXX-day some to limited flow studios. of that and forward was of to were the lead productions times the work the of their impact. as They overall fairly around because minimize to to try films able of pull

to a hard have point see So in have to and tipping terms how we watching of studio flow point at impact. disruption say that I are partners major as and to content. it’s something we going the our know a things of are are progress they very their certainly don’t in there’s But on focused very, want to what

Omar Mejias

And the pressures revenue improved. salaries of expected. think a percentage an inflationary be for be you the the But hand, cost little and other we update were about bit -- we side, Thank give higher a than much That’s as cost of of should how bit very maybe labor balance about Could to color Melissa, us helpful. on on how it the what concessions thinking and little on, year? on you. seems should the just a U.S.

Melissa Thomas

Sure.

So there out are things of are couple Omar. we here, calling

starting the in savings, side benefited XXXX it’s rate, our year-over-year COGS note to at COGS you some are from purchase with the that popcorn cost important of bags including increases, generic So one-time in bankrupt to of looking when things, comparison of XXXX as from hand anticipation our XXXX supply cinemas and on well price of ability was that at QX prices in of use purchased lower as future late inventory in chain QX challenges.

at So only COGS in the XXXX. if are rate you last can you from see look we rate a XXXX, QX up months for nine our that of of COGS slightly perspective

the As have we on That we COGS by and balance inflationary canola easing year about commodities, in do seen see we rising prices. while some pressure, some think corn has particularly side, been on offset still of prices. sugar

COGS some expecting our we year to relative to continue pressure see expectations, COGS as are think So about rate we in XXXX, to modest the rate XXXX. full

our with benefited box particular, from the our office our expectations. in On labor side, the QX, labor versus on outperformance

be attendance you our on we at attendance. is that we may staffed way with that levels weren’t that staff staffed of that level typically based service at know, we As theaters projected to the the outperformance and would

of wages this the So on that the did first in benefit and side quarter year. salaries us

at we recovers, grow as hours, not to forward that’s to step you about As hour going attendance can our there labor, further labor as would the albeit up same what the expect you expect the is attendance. think on rate se per side, on going

some We will leverage gain operating there.

the have pressure past pressure. on we wage a have And side, the of which is on where see few felt subside, years, started quite then over to bit we driven the that rate particularly market pressure

going about think in there as government pre-pandemic more times see and we forward for salaries what is mandated increases, to seen going we expect well. which have to we as So wages, be so

Omar Mejias

Thank you.

Sean Gamble

Thanks for Omar. questions, the

Operator

Thank you.

of the Macquarie. Chad Beynon with questions questions. your next Our Please come from with proceed line

Aaron Lee

Thanks This questions. Aaron is on Hi. taking for for my Chad.

other more entertainment you the Can still for going about where Regarding increases? options. than much opportunities talk Thank pricing, price is just movie organic further you. affordable

Sean Gamble

be factor is whole many. our to it in as tend sensitive. is in Moviegoers pricing Certainly, look a important very on price a industry relatively

a we close something it’s on. that keep watch So

Our with and we general trying the careful to moviegoers. strategy as frequency as have reignite pricing, certainly from encourage we of been the increased pandemic have be to movie recovering is been our going

We with regard making very bear. exercise use what in of each data each what -- bear our process discrete can can in becomes and to really terms individual theater it a feeder-by-feeder tremendous and a pricing amount market decision based of individual that in

that As where finer opportunities opportunity. of of of optimizing our believe lie, bit quite pricing taking we upside prices necessarily terms forward a to-date. look we up, in actually one just the there’s of from not we areas really and we It’s potential as have, continue tuning but

quite that. share ahead. we believe of market in benefits been we and as attribute share I’d results our are opportunity have say a pricing positive some market about of earlier, we on some strategies the we are utilizing seeing of talked and account that great we We more the techniques we doing bit there’s are new to look relatively we think

Melissa Thomas

look that point is We important you add the side. on have changed since would I that, if context our big that’s think and I one of there, QX at seen that’s how the on And XXXX, a concession right? pricing lift

prices ETPs. seen a inflation. actually have nice increased below But We price have our standpoint, -- lift our from on

So there. we do think there’s room

Aaron Lee

this among appetite you your Awesome. can how priorities? is very helpful. the you. any current and beyond expand or And ranks opportunities portfolio Okay. your Thank also talk what That’s to about

Sean Gamble

combination down we in as we there have existing opportunities talked we markets profile where, to about well areas optimizing looking underperforming may for trimming what mean, theaters. our the and footprint, focal Look, at right areas be expand. I constantly is which in Sure. where new as for are opportunities a of new or theaters is looking the of one markets, have our circuits portfolio and of perhaps,

have been We doing that.

market, So different theaters with we our in opportunities right a levels different pieces say lot there. I circuits. health of the at would all of moving Obviously, kind certain to coming industry of of now out back there’s look

we look So at. going it’s that something just continue to to are

be there do opportunities We there. think could

next be opportunities to them. careful I we a the optimistic or looking table of as re-strengthen we mean, further are here organic to about going two. rich that as go against sheet are But, We we ROIs have have lot over ahead are that and balance coming yeah, think we the to we opportunities hand pursue our on year

Aaron Lee

you Thank congrats the quarter. much on very Awesome. and

Sean Gamble

Thanks, Appreciate Aaron. it.

Operator

Please [Operator Thank Goss line next Research. Jim Our from of come Instructions] Barrington proceed questions you. with with the questions. your

Jim Goss

turn the Latin the we a portfolio, are the to has M&A Good I center know grow increase on more of in if problematic. there morning. organically, ability way And America, you your as But those potential penetration wonder markets? I versus particular, to in development shopping seeing U.S. optimizing if speaking been depending to

Sean Gamble

Sure. couldn’t at It’s likely Jim. say, LatAm. the having Latin different or would M&A, while opportunities more three the generally, a than box to U.S. look of in more potential would circuits be America, is I there two office. far XX% market, to but LatAm, the great Not dynamic U.S. perhaps there top question, we to be particular a the the tends have fragmented say as drive you in

that owned or be financial institutions to risk. by own These any tend and/or our peers organizations. they be very And at of families are wealthy to well-financed tend aren’t type

strategically. are that So times, own they themselves that because the in an or of they fits many -- part of malls theaters enterprise and have that

in couldn’t think of come to area because opportunities are say it’s not again, that to that, there that be just, unlikely we there market to So some. that many

Jim Goss

the to Okay. are would way And programming role of and that if usage as a example, benefit schedule the blockbusters, windows persuading of in am any coming good theaters all wondering stage the discussions or back the studios CinemaCon, counter I and for involve the developing towards normalization? fill out of things

Sean Gamble

as at I think, I collective it say I set and we we the diverse the mentioned very think, remarks, films. by wide were was a that materials really CinemaCon. ranging encouraged would in I all of prepared saw

we dramas. I the mean products all as is comedies quite tent-pole So types faith-based, horizon. industry. is was mentioned, audiences, range But certainly blockbusters R-rated healthy range of comedies romantic and the there large news which of there for adult a very of were really for I the think a plenty and on of good

on of studios some highlight helm. the more the that their CinemaCon, content is tend larger to

We anime like, like that having well, have things alternative concerts plenty and of programming as other and of been about of sort. things forms conversations

I studios. should some part of is say, of the Anime

Sony has are talk lot a when relationship and to with that and country you increase ramp there’s concerts role. a that like things of been starting But that, has we encouraged that and about up about. multi-culture

serialized and how have they content to look been into opportunities have about things the do, We also been studios sort. of tap for that premier of some with events and talking producing we that

of We excitement. have a with done handful a success already lot lot those and fan-based a of of

as more an there I I unfortunately and So and to felt really content of of area say would seem a expect over time. we alternative potential to never materially. category be has more have lot always been that that scale had

little a get seen finally couple Over start we to of that the years, momentum. bit of past have

X% for was historically, office us around As alternative content the that typically so. of box X% our quarter, or a over and an in little is first example,

hold seen have into it X-plus that percent, definitely area somewhere start of to to think scale we the for that future. up So we and opportunity is an around

Jim Goss

any -- might at there that? that Okay. you return if customers And there’s this less some streaming I the could and all. been precisely. experienced any past it’s would potential frequently, tough seemed possible I of measure slippage sense you might in that some that It if to last that to have one absent of perceived have pandemic. have slippage Do know appreciate I be one the wonder this those

Sean Gamble

We haven’t suggest data that’s happening. any seen to

other. painted streaming to narrative with theatrical tend compete we the media and in very be false a that think they been in that there’s tend each In When fact, complementary. to reality,

a not those services. entertainment. of forms go thing. performed of home It’s not are that might people to some the But from analytics, multiple and that consume elect of evening. be their to been on stay in content to active least who most amount not They streamers, don’t moviegoers go It’s do movies streaming not the most just are is conversely, other active piece the causes compelling content lot TV the know the who on to somebody say out analytics there of have particular what really a that we versus

the of is, weekend to of one things I coexisted going was think same episode the also the we of look movie historically in opening probably HBO night points history both Game Avengers: of Thrones weekend. on of was which two biggest of to on television the data the those ever Endgame the in biggest tend weekend U.S., the and climax biggest with

to some off is there are I you other. to into ability the opportunity these the for kind look what of series and anything, is platforms to think of all play we play play each is if the of of that things each seeing of back out have for at build things off mean streaming of together other. So on certainly movies, we come going that

that builds think the are opportunities in there’s programming total we to these consumers or not great data pie been we just we So, seeing and complementary for suggest are any slippage. that have lost

going, there pandemic now case. where of seeing and was to more gotten that movie was that a have we back that’s affected coming any concern momentum period. unique suggest a are Obviously, during and health theaters But we been have sustained that that that a content data not the there’s has period that to the beyond could

Jim Goss

right. All Sean. very Thanks much,

Sean Gamble

Thanks, Jim. it. appreciate Really

Operator

come questions. Our Please from next your Wells Mejias questions proceed with of the Omar Fargo. line with

Omar Mejias

Yeah. for follow-up. Thanks. my taking Thanks

or efficiencies. attendance relates -- you office. think with caps you guys you the with box a similar APPs to operational side as have that per that guys all margin just the levels without question can of the cost margins, quick a Do it and the been on and doing work without pre-pandemic return Just levels sense and at to working the long-term

margins Just on for the future the your just you. thoughts business? Thank

Melissa Thomas

to Happy one, take that Omar.

generated a was attendance globally XXXX we of to QX and only EBITDA XX% margin of in that recovering XX.X% So levels. despite around adjusted healthy

get range, the XX% in EBITDA from over low adjusted is margin levels goal received NCM our historically income to DCIP. and to we term pre-pandemic back clearly, the So, longer even without dividend the

ability to box office going know, be as dependent do driver, attendance recover. is Primary to But margins variables. go-forward as to be which going a extent and number -- the upon our is so to you of

average are share, market tailwinds inflationary pressures a then there number per from evolve here. However, other ticket prices whether from of and how caps continue variables, and elevated

to believe our XXXX, cost on more we based it leverage expand As further base. our office we in over that definitely recovery fixed margins of expectations box relates the we can gain that as continue to

to we the so. EBITDA and those adjusted get productivity as term, to the side longer to striving we topline, do have pre-pandemic well are on But, over to on margins back both clearly, initiatives the as do try

Omar Mejias

Thank great. you. That’s Perfect.

Sean Gamble

Thanks, Omar.

Operator

any further Sean you. questions the for There hand would I time. are no like this to remarks. call Thank now Gamble to back at closing

Sean Gamble

Thanks, Charles.

we wrap, progress could emphasize again to momentum, industry by I’d that encouraged company year-to-date. just the As positive realized be we have like and and performance not more our

are second to The promotional pipeline levels types forward, within films. Thank experiences an key As great theatrical recover with employees volume to continues again strong a their believe you stakeholders, we again day. that and following morning pre-pandemic well partners and array definitively grow the this demonstrate opportunities continue provide. to to we strengthen content for us, much all delivers investors, and speaking we we you are joining Studios all quarter the the and value control release significant. of look remain forward to that of their and enduring about. excited toward our exclusive of our of including Consumers have be demand for Have financial our results. enhanced future Cinemark look recognizing

Operator

today’s you. This does your conclude participation. Thank We teleconference. appreciate

your time. day. Enjoy of at this disconnect rest may You the your lines

Cinemark (CNK) 5 May 232023 Q1 Earnings call transcript