Earnings call transcript Q2 2023

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Operator

Greetings. Welcome to the Cinemark Holdings Second 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] As a reminder, this conference is being recorded.

would Senior hand Relations. Vice I to call time, Brashears, Chanda President this like the to over At of Investor you. Thank

You may begin.

Chanda Brashears

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

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

contained financial but intentions. XX-K. the differ website Forward-looking company's other not in to financial factors non-GAAP earnings certain and financial measures are projections filed be comparable statements a could to, plans, or company's A most or on may the from in release, results call of limited expectations XX-Q can today's differ risks include, to the due may measures These that company's cause variety materially directly company's the non-GAAP materially may Also, recently these projections actual include results The statements company's at factors. recently necessarily of concerning most involve is financial the to forward-looking reconciliation of and measures. objectives, GAAP ir.cinemark.com. uncertainties. matters most the filed Information found

With now over that, call like Gamble. I would to Sean to the turn

Sean Gamble

in the as evidence cinematic quarter strong films view and and years, provide combined morning, quarter, year-to-date second We enthusiasm past Chanda, that a earnings X XXXX as environment joining results shared performance is second consumer to our everyone. going good for call. during you, box us the Thank We appreciate conclusive larger-than-life with compelling today ever. you over witnessed believe movie office

have continues XX% enthusiasm July, by office the dynamics. demonstrate results up of demand through been over driven recessionary in Year-to-date are office in-theater XX% when by also recovery and viewing experience. to has pandemic it pre-pandemic levels resilience to from North further a streaming wide the in-home year the of within XXXX results, recovered Theatrical box improved American consumer volume approximately which and impact offerings, par macroeconomic reached against and XXXX undeterred of and going inflationary volume movie evolution of the largely almost box to had XXXX, volume On wide approximately same uptick release last meaningful has and over for an sustained of frame. industry XX% represents XX% time release with

at impressive adult new animated all results accelerate and including first a for Cinemark. of year. and cadence ever of improved outperforming second the exceeded diverse to off momentum has categories quarter CreedX, series going animated drama long-running across topping second as with franchise time industry's quickly continued An Megan, extension the highly biggest year Mario the and, Revolution. fate-based top-performing movie of title all leading Brothers X, Gesa's film the the many kicked a John this In in man strong Super our with Screen X expectations, cases, movie releases bang helped became of thriller auto quarter, audiences, film called horror successful Chapter the record-breaking a the successes and Then of the content throughout a

acclaimed doubled Galaxy generated its the million nearly Marvel's of office. over Guardians the into for in X air Dead a impact Rise, quarter, into Evil under expanded positive movie accumulating the million widely of further the $XX second its which exhibition results worldwide. and Volume was $XXX worldwide, Spider-Man label, just results. a release did Smile year, as to grossing solid box release, further Spider-Verse million theatrical streaming $XXX which During comparable also with of theatrical made Amazon installment Amazon domestic first delivered reinforced domestic its last film the initially

$XXX $X.X followed action look month nearly if fans highly out by Part there office Fast One, happened enjoyed billion And Mission viewing latter just take question worldwide. in of domestic Freedom, which at growing. Impossible: $XXX in million packed The the was is and film which than further Dead any more Beasts, has Mermaid, what now and of Franchise started a habits the quarter, with globally. faith-based already box successful of of The which reached about theatrical that strength sensation and box over by X: July. the X got the the million delighted The still the Sound of was of Rise in Reckoning Little has generated families eclipsed launch and Elemental $XXX Transformers while second million domestic were office coming

addition July box office the for on first fourth list to XX, already phenomenon over films simultaneously weekend swept of staggering Oppenheimer Barbie Barbie the office in then open and for biggest records Oppenheimer the of domestic The includes world. time box industry. million X to on driving our the and is And record ever $XX and

our and of Mission as and Insidious, month, revenue impact a freedom in Red the Indiana and Jones Destiny including Barbie's of single as Cinemark, Dial admissions of the For of titles of The our as success, of Impossible the during history the sound with July coupled well biggest and result Door, company. Oppenheimer's other month delivered significant

discretionary titles and genres time. and in audiences the of date of to are way discrete across office translated levels. excess movie and a and that results varied and Cinemark all we described, our market the from going all just theatrical is allocating into compared exceptional XQ consumer lineup, global benefits entire share and our We preferential basis for achieving ongoing film circuit. remains the strategic and of advances The across supplemented films, to of quarter's with prepandemic examples meaningful initiatives of ages second points year demonstrate our sustained the strength XXX These cut times results in aggregate of of strong which interest types box all vibrant many

performance meaningfully year-over-year. Our box office industry results outpaced

X. trailed quarter Aladdin included Furthermore, Toy amongst which quarter highest was points adjusted XX%, and the history, second within highest all 'XX Avengers of by by And XX.X% company's XXX delivered EBITDA we attendance Endgame, adjusted margin XXXX, while XXXX worldwide in of EBITDA quarterly margin the basis our vested only our time. Story second our results of and XQ our of second

concession to mix our our In results efforts especially well byproduct addition quarter of planning team base incremental our category techniques, sales marketing cost while to through frequency through audience more top-notch loyalty to sophisticated enhance offerings, enhanced and a consumption second optimization expanded the and efficiencies has across operating that the expanding grow through strong and to management we going content direct our global management drive channels movie and guests and programs experience service showtime resonated our focused to labor initiatives. gain increased circuit, provide sensational pursued are

recliners XX% worldwide A of our span office premium offerings the year-over-year. circuit, with revenue our few our of screens in represent over motion that almost now XX% and D-Box which quarter continued expansion premium increase in domestic of delivered a of which XX% auditoriums, X% drove our box large-format include examples approximately seats and

we and over into our leverage to interest communication in ticket to increase continue digital drive alone, generated our billion awareness them conversion omnichannel actions platforms. upcoming X impressions second events, quarter also improve marketing seeing sales. and ability further strengthen In enhance through the of We our to

industry-leading program, box box appeal now Club X.X drive to persevering including office our of the members global quarter. loyalty upside. programs, subscription Movie exceeds continued in of our the million accounted for office domestic Movie Likewise, XX% meaningful Club and our

frequency initiatives excess overall of in increase lobby remains Club online consumption. of actions, optimizing Movie beverage food growing program and with food additional purchase from and through of the include purchase wide we've We're and find to incidents designs, XX%, benefiting movie self-service the satisfaction and going products and revenues. we customer mobile increased also concessions platforms. Such and initiatives capabilities Importantly, strategic a we process beverage to streamlined simplifying pursuing continue that the ordering offer and portfolio and our range been drives pricing

second per of compared Through we grown quarter of the worldwide XXXX. execution initiatives, successful our XX% to these cap the have

we actions hours administrative in more include theater-level hours simplifying scale labor and techniques, and/or These and demand and make workforce practices. staffing yielded sophisticated introducing to efficiencies based capabilities, our improving meaningful operating forecasting significant and labor attendance routines our on advances that automating varied Finally, advancements have tools enhancing as of needs result actively to continue operating management a ability dynamics.

to quarter's diverse enjoy studio partners theaters. and commend produce provides to something years, like film like made, in continuing for content the that compelling rebound our product. team second they I'd Cinemark for us on company past thank enabled our to over which global all to fully impact entire few also and strengthening everyone such tremendous the the to creative our in have for I'd capitalize our

provides in While second of movie going past the this steps month and July positive recovery. quarter additional

flow on closely, SAG are something The look ahead, and our impact long we As product of on negotiations are community. WGA near-term evolution office and from impact degree will ultimately progress. cognizant Hollywood's watching box their film the we we strikes of ongoing for of how on Astra is are that mind top strikes investment depend [ph] these potential volume

this who remain affected also with sake and industry resolution, studio the the work not many regard community individuals implications our timely of for hopeful creative only within but a certainly exhibition the the for stoppage. theatrical directly We for partners, to by extensive are

of there interest will new going certain they coming volume intentions strikes recovery movie suggest theatrical films of film the consumer shift currently that has to film associated or to releases, recognize in theatrical While bit. key been the they over production that have trajectory output to and could movie overall fundamentals rebuild years. to with nothing delaying the potential which It's extend important the are affect studio the a

have returned that big product demand on Considering strong has going of theatrical film of the that remain box already heels we as years health been the based on recovery periods accompanied positive to the achieved in-home date the crisis ramp-up generated fluctuation on major this theatrical in by a of streaming results experiences I've platforms, commented consumer a flow. compelling confidence and movie to office past content of over resilience during was will X strength global for even high significant screen.

We alter no plans volume for their that to our traditional they have also levels. theatrical scaling partners back prepandemic to intend from received studio film indications

content And expressing major success now over killers Amazon X year. production Amazon and Epic anime of with ahead. as are major faith-based, of in their the fourth plans to with recently remain our the intentions comparable Apple the its first the with calls, announced Scorsese's next Thriller, quarter early X Cree for Emerging Air are scaling next release Ridly Apple tremendous to types Furthermore, to year and also and Scott's the and Napoleon. and films third These also Martin of had mentioned X% genres optimistic of already Spy flower Moon on and the this Apple film form theatrical are levels contributed scale that theatrical multicultural will Argyle. of half few potential we in studios. further with release release in of about growth up. years the concerts films prior the office we of box XXXX, title

the publicly studio release entertainment streamers communicated including our why streaming our reaffirmed Furthermore, theaters data our assets of companies, major into Confirmation upside with leaning media of and continue maximize channels, exclusive value distribution in multiple an traditional theatrical best with majority way continue reason release. be analysis theatrical The material also fully they been to direct discussions by is findings alternative for these drives and show types platforms. times these partners. subsequent have and a content the filmed are for partners, of that their the to is content to providers

connections increasing providing theatrical impact viewing addition consumers, movies In talent, important Doing of to eventizing release a recall and their cultural interest and help of engagement connections an degree significant provides and stronger that moments. quality. value. bigger promotional is shared stories and forms elevated to experiencing emotional heightens and content environment by and cinematic awareness so, see build content, form and more films characters. larger strengthening and Furthermore, franchises that energy brands, larger-than-life perceived a with all to produces of long-term These in tremendous experience premium a filmmakers financial

is that frenzy Barbie cultural Oppenheimer. and the at look with just underway currently Again,

and return of well varied ongoing all the releases to the high levels. X a exceed reasons, financial to overall is solid is not meantime, the approach there our to our improved potential volume foundation, balance the flex next For Cinemark capital made pre-pandemic film disciplined of these for ongoing prudent flow. initiatives continue over well that recovery revenue fluctuations to drive content enhancements many agility forms to to benefits. practices we On to, our prospects years, we situated varied confront and if in of account operating operating and In a we've fortify any our taken to we to of allocation, X productivity the further we've sheet, the and to including for scale as landscape steps have consider as in opportunities content the believe as dynamic pursue new way ability continue and already and we

us The our actions our we driver and EBITDA all positioning effectively growth every portion enable XQ strengthen actions, past and of benefits while us generate of X enabled our our value. results. we've with of shareholder taken Cinemark and throughout to downs ongoing these outsized recovery a the key an of to have and adjusted over the to they to company deliver industry's ongoing believe initiatives Furthermore, continue ups years, of periods 'XX navigate were long-term variability quarter strategic the capture along to robust positive will

Melissa our will further on now second quarter Melissa? provide results. information

Melissa Thomas

we've in-theater steadfast attendance Thank we the industry's across and strength slate everyone, pandemic. by second the compelling that during increase of post deliver our to pleased for million resonated such global the year-over-year thank Globally, experience you solid XX% footprint. Cinemark consumer quarter, guests potential as the an morning, We quarter, demonstrate the entertained enthusiasm call you, and the film today. the XX.X bolstered level in of Good for highest second achieved well were a which and joining results as ongoing recovery Sean.

of the increasing robust team quarter's and a ongoing revenue the adjusted significant operating that costs, operational Admissions million XX.X%. to this revenue to an fixed our we of were margin $X.XX average to With over leverage $XXX.X second price second We adjusted XX% grew achieving an margins levels, EBITDA strategic for EBITDA we Domestically, worldwide $XXX.X of is XX% attendance our XX% and to million, the drove served quarter, coupled million -- with our of increase function during growing execution XX.X by $XXX.X a heightened none. XX% moviegoers on million year-over-year. ticket quarter.

last during box the up flowed increase strength domestic X% year, strategic was by offset the premium and our quarter. price ticket ticket XX% concession given revenue The average the Our to in penetration, of increasing driven family with mix format pricing versus somewhat second to quarter through content the by also $XXX.X initiatives concessions of type office year-over-year million.

of Our the incidence by concession initiatives higher per cap reached a new driven all-time the $X.XX fueled by content in high strategic rates and mix pricing quarter.

Notably, second XX% domestic relatively Other incidents. compared expansion of to quarter exceeded XX% of with X% and increase adjusted EBITDA basis revenue QX that year. and total up million, despite levels revenue predominantly over was EBITDA Domestic XX% an concession revenue with growth due in adjusted of $XXX.X million, attendance lower by of year-over-year our our our an quarter of segment last domestic was $XXX.X in -- the XX.X%, purchase quarter. the line XXX higher generated second $XX.X increase attendance margin XXXX our an points and the Altogether, of of XX% of million, in resulting

Turning increase to International of segment; patrons XX.X XX% quarter, we the our year-over-year. serve sizable a in million

across revenue. few. million. to million revenue the revenue, delivered concession a of increased In XXXX including $XX.X to film admissions revenue translated region, recovery of the and with Our $XX.X in quarter, levels the and in Latin extraordinarily international million $XXX the total, of outpaced of Brothers, attendance million FastX U.S., across Spider-Verse, well Mario a $XXX.X reaching other XX% that of XX% international that Super Spider-Man our slate We name

Adjusted adjusted quarter, and year-over-year primarily of resulting expense XXX due of basis XX.X% expenses, the box leverage expense with to Concession office, a points compared advertising pressures as basis offset marketing concession offset million, points content pricing $XX.X film of a the XX global or in international margin to to in XX EBITDA the XX% grew strategic initiatives. expansion percent the of were costs quarter. XXXX, EBITDA second mix Shifting we inflationary of was quarter successfully XX.X% down by basis margin revenue, with down admissions higher in somewhat year-over-year. XX.X% as revenue a points second and rental mix

salaries Global XX% were wages up and year-over-year. $XXX.X million,

by of year-over-year. wages labor revenue, offset by were partially a and up $XX efficiencies, focus salaries million, derived the attendance rate X% ongoing percent As expense our and points, wage XXX was declined ongoing to driven basis leverage on pressure. due which Facility lease strength operating in benefits from

of points of costs we percent segment, particularly gained nature. basis a are costs, compared where XXX our in facility in year expense fixed lease lease over QX with domestic total decreased predominantly last as leverage our As revenue, lease

from with such second incremental wage headcount maintenance Utilities our remain inflation in our by controlling and second of an million fees, $XXX.X levels below driven X% initiatives, XXXX, headcount higher business to benefit driven our discretionary expense highly quarter $XX with strategic XXXX and of as G&A and quarter primarily was grow and spending. quarter, remain million, and and utilities focused of card compensation. increase stock-based that XX% compared the the other increase on That of last an was we costs repairs attendance. and by year, levels, the variable recovery support credit said,

year. points share $XXX.X quarter, net a diluted second Inc. of generated percent in revenue, declined income we of QX the Holdings, compared attributable As last with per of G&A of $X.XX. in Cinemark resulting XXX Globally, basis to million earnings

with allocation invest continuing remain with health in $XXX our $XXX in balance strengthen end our Turning to the a cash our million focus company. near-term generated million by long-term on to sheet and capital balance our of increased balance of and approach million quarter We cash of balanced the We free cash. flow sheet. the to to $XXX

EBITDA revolver which ratio box recovery. through of We secured of million upon term maturing an $XXX leverage million X.XX% our achieve over took loan and timing free in the second proactively upsized senior maintain our of quarter cash both debt with million we credit to maturing address Xx of steps XXXX. and generation, that and to to secured expect of net adjusted maturities contingent target time and in refinancing $XXX redemption notes XXXX are successful a the overall We the flow our Xx extent and office of our in XXXX agreement, $XXX where the growth

make with We in of the to full our $XXX target continue second investments expenditures prudent year in million global million. a circuit $XX quarter capital of and

We expect be installations. roughly the and projector premium investment amenities, opportunities, circuit high-quality allocated half of this remainder ROI-generating to theaters to a our and to capital year laser maintaining mainly newbuild

we continue capital to recovery and As look cash forward, office with our expenditures our box align flow free we'll expectations.

the In allocation would operations, all well employees, our boded of disciplined long-term this company. and aspect this up success, key regarding We commentary company exhibition the in for I theatrical creditors approach every echo benefits has closing, with and our of including the believe prospects regard. strategy is the Sean's setting which shareholders. long-term industry on guests, to we and years, and for remain like focused associated stakeholders, our At the company will Cinemark, capital over

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

Operator

you. Thank

now conducting a session. be question-and-answer will We

line from Morgan Ben Stanley. Swinburne come the with questions first Our of

Ben Swinburne

to lot that for a I going some least is how moving know time impossible -- seems production. realistic call want morning. thought to strikes predict I it up of maybe a everything, There labor a back really to to pieces. be September you, at impact in the but Thank some consensus, don't it's ramp are

what this The shutdown to what can thing get -- this hear uncertainty some than talent more tables you other And is supply? you and insights next really September your things. XX have year production the love availability the that that if based up think on by hearing still wrapped on impact may if So, causing is year X volumes on on is I near term. then you're think you would higher

kind at impact movies around. that line point, from And have if you think I'm any of holiday the sight you quarter on this fourth moved being wondering of

tough, just hear from a than for I then So quick wanted I we know it's And to because but had Melissa. I do. know more you you one

an or million, CapEx that wanted the $XX think you Or $XXX some year-to-date so million maybe coming update supply I chain lower? there stuff $XX of year? still $XX this million. can is are I think guys makes Do the about there. -- get you number spend million to

Sean Gamble

to product wish is XXXX they're A take studio Obviously, of do of avoid you that thanks place. aim how film Well, shifts on can to and WDA are the just conversations a the slates. flow everything the further certain I they know with minimize partners to obviously their the lot effect the that the provide depend negotiations on we really extent disruption had and certainly possible. for there's Ben. going going long reports XXXX both What Sure. answers clarity our of better today. is doing is to question, on conversations just to from to with some be recommencing ongoing I been

see little and So bit of far hopefully, way I these can types appear coming longer. they that of some times, when have take a other know a they quickly discussions apart sometimes together progress. can

even predict. stage, say is So year-end I'd this tough -- at a to little

we have duration continue. the we're But the these try working to is to some to going conversations out. are at may the A formulate like we've full year and the cycle long year be have volume what our disruption, point of last before. know versus is affected been that And of optimistic recovery strikes. and minimize this typically, coming don't normal, consider when be versus year-after-year is saw to studio we even far next will what partners we this that lot sight again, plans last we year typical -- about continued of slate next still to in as together. ultimately Our see But for year just year obviously, of hard to line this by how

Chanda Brashears

just a sorry, -- quick follow-up. just So,

on last to but Amazon Familjump about a But clarity increase Amazon today. production and -- to been emphatic were point quarter and it of and ramp making know I more up comment your Just couldn't there like in. is you've from expecting I or enthusiasm them sounded ramping your on you of comment up maybe tell. Apple in

Sean Gamble

it's I the next by a of seeing say I Apple last film what of then, in we oil, Argyle. more last enthused we're seen and we've Apple made beginning quarter sight would we're restatement of just of No, at highly significant quarter. public line of even year another comments Amazon mean had the by terms with date I guess since

say, I'd quarter, nothing, So moving incremental direction sustained last they're the about to that just in. enthusiasm

Melissa Thomas

point, with then your respect about $XX of CapEx year. million half we spend And to in CapEx, the to only the did of Okay. first Ben,

full do to CapEx $XXX hit million expect year we XXXX. for However, still of

So weighted. it's spend to expected is of really timing the be back half

Operator

Our next with Fishman of Nathanson. questions Robert the Moffat come from line

Robert Fishman

the and start. is that momentum your in picture box maybe big Sean, the recent clear It's please. to question given questions, back record all a favor Two office.

the So after surpassing confidence of levels? company's in a about the pre-pandemic success can navigating achieving share and of just years tough likelihood through more record level levels of pandemic, profit the you entire couple

Sean Gamble

activity seen team with very I I'll to remarks, I'd Look, in to to tag of it pleased coming been And level of points consumer with look we was operate out that during I'd we've what mentioned that it. question movies. Obviously, going high one a how say, certainly excitement consumers say when movie sustained regard the behavior. in Melissa. with -- pandemic about the prepared as since of going now a we've would at terms

say, it In would longer progress where and about us, terms us, things of that I translating optimism gives to term. confidence

prepared the production hear I provide of studios levels to to their in they the of As increased mentioned where intentions pre-pandemic. were feedback to we're continuing remarks, back

margin likewise, positive all see into results doing I we translate drive should ultimately that very that with as strategic initiatives the attendance best to would we're we results. say, positive. on And our enthusiasm sure make and ongoing consumer the work that So

Melissa Thomas

the what just capitalize to strength to well And little we strong ability that resonated follow per that, led second especially on was box to the on to EBITDA bit as particularly team's adjusted context the in concession with as you Yes. a as stated, share, of our really circuit, market our and film on quarter. give quarter margins, more average saw of and to slate a ticket our that prices cap office well

As initiatives we're both margin we to term. cost the back certainly try our those as potential, the about long-term on margins pursuing, revenue we to have think many the get as side long pre-pandemic over that side well to

concession there upon that, then only we're and average But on executing that, recovery, to pressures elevated market initiatives in we've quarter factors number of that know, share that inflationary ability get of as the which margins ability our the may box that pull-through the we're that strong certainly largest But our pleased as a on. going to margins. the be and and we you offset are, materialize deliver the our to dependent not well as persist driver further those is that's seen. momentum beyond attendance caps with gains, office per which to prices, our But and ticket the extent strategic

Robert Fishman

a about I just great. competitive the Okay, can. And if question landscape

had Cinemark the sustainable market You've has share. highlighted how

about just that any You impact And Can come where Cineworld's of share the all? emerging grow mentioned it. could and further? you talk opportunity bankruptcy to if that, of out has from at how market maybe

Sean Gamble

Sure.

reopening for they our stayed. audiences circuits we're a and the lot in course I of circuit as think being share got we're perhaps as we as or -- in frequently to one to got we the open. have who they've during What exiting I mean, experience we've may providing of bump say is past, the that we should and of of were [ph] type coming a the mentioned Pemcby the been exposed obviously not I first a seen taste

come have thing, A single strengthening now and then, terms Cinemark which really on try to into We've them. for bit which large a the are we us. when large that. come course, films of have industry-leading see and come a part of we we not there's overall of capabilities, planning build right think but amount more quite we they play sophisticated awareness of working we And one had that when guests and in more type they to spent of encourage to operating consumers to it hours, is think practices reach time been to to just our the experience showtimes marketing

delivering a customers the company. of -- even we predates So say Cinemark the DNA me this to they're here. really in spent our a of lot when I'd time joining service fantastic it's guest

again. we look is prepandemic forward, level now that will different the the felt demographics. versus and that sustain of that's marketplace of XXX As We reasonable on somewhat assumption to screens our the of mix continue and obviously, That films just how basis point are fluctuate theaters points type quarter-to-quarter is in based are -- a different to content most operating will to our improvement resonate out aim, that. that with

particularly and For the the played the style was family with Hispanic level instance, in particularly and what well our we markets. of saw with second of her film the in action, quarter content markets

compared bit the biggest July Even on lower company. the month flip side was the other ever, for in title audiences revenue to July, even markets of the of our around skewed nature a our admissions though

quarter third overall. So we little us a bit tick see we might expect down for

hard drive ebb will certainly to it advances. initiatives but those sustain on continuing bit, our our a focus is comment. to So and flow to It's

hope positive certainly going for delivering suspect we better for a is a positive of experience competitive be really forward. us. Regal; financial put industry, lifts believe them that certainly having all the a position. them -- and thing we always and in widely all CineWorld on question to consumers position stronger other boats We'll Your a across We

So, and a they continue deliver be that a to hope of experience, will experience thing that a coming is will heightened out good everybody. our that positive and for

Operator

Our next GM. questions from Handler with line of Rob come the Eric at

Eric Handler

granted, Cinemark net but of X.Xx history point you're know a with the now, the conservative I you're long at Sean, sheet, leverage. has at balance being

accretion projects, increasing about of CapEx maybe for cash loosening get thinking debt to there. purchase -- You've thoughts of do some got a here. pretty good some And some for a work back you are how mean buying you available ROI just market little in that? bit -- chest nice your maybe off I open the the additional and

Sean Gamble

focus initiatives. topic terms our I'll But quite the hit Sure. about. aiming of of chunk of again, terms kinds sheet let bit balance we'll in different a that -- do her tag Melissa, a balance of we're we and where have I'll Lisa, in as it's say, well a for let dive team pursuing deeper. as I'll We you restrengthening a let talk is I'll

Melissa Thomas

Sure.

strengthening areas: position of for remain around sheet, company priorities, our which the terms X main investments includes in and So to making the right capital balance those delevering the term. allocation then centered long well

my remarks, about as As in X targeting we're go in a certainly, we range. Xx to I the mentioned think prepared leverage the forward, net ratio

of cash mentioned, look around Sean position. are But in priorities. our regular we opportunistic conservative some and some cash down hand. we'll is be be delevering could that given to the with the on to As conversations thing potential in mind current you term capital But time, our near us to expect keep cause film the in industry given dynamics at same one can in allocation shifts in debt slate, that paying

Sean Gamble

out would thing supplement the then kind any view And obviously, good other also as of be of only of things, contending be uncertainty environment. opportunistic may I that being that position shake we different but that of a that to able types of out opportunities kinds there, as with really different this kind Yes. with is, may near-term

Hence, that way of our ongoing coming we only the position, the to navigate as course in fluctuations during come they commented opportunities not but position Injavanta's being also a think year. strength to capitalize on feel we of we in So on we're

Eric Handler

bankruptcy And Great. follow-up, what's restructuring, as a if and National just with the CineMedia's then That's helpful. anything, your agreements? emergence all, in at and different,

Sean Gamble

it our plan contracts. as time being, a the pre-existing They've business expecting approved. for They as are Well, plan, a accepted month that's been have this And emerge understand, sometime or usual. I largely bankruptcy next. is to

So according to operate to continue we that.

that been that's So would for modifications be be haven't to something now, contract. upon will and agreed that be mutually Any there to determined. modifications future

Melissa Thomas

Yes.

The just the other restructuring. is mention based there their terms thing of on that I would

on into be outstanding terms But less we from we to the converted ad restructuring, will than expect we X%. have addition Based you ESA, as debt that, earn which XX% ownership NCMI. investment to of then where is equity, reduce So in their and our interest revenue. in we have today their our our will know, do

would that pay may So impact share the of they our value investment any and that of future any potential out. dividends

over that in will considerably you And that our as years. the see we've financials investment, reduced probably

that at on say degree is minimal point. of exposure this So the I'd

Operator

Our from Omar with Fargo. Wells line of next come questions Mahes the

Omar Mejias

move you actors think the pricing range. first, have elevated expect half a remains the few and the firms digits, writers but and previously the how mid-single average maybe the maybe running Sean, XXXX guys any modest on Can of around you your year, for of growth a to from additional what's films the caps, And seen XQ result just about Do to and away that? year driving the Melissa, we ATPs of shifted burps out should strength silo of about schedule? we've per XX% half talked as double-digit of back with ticket strike? back and maybe XQ? that And you cuts

Sean Gamble

further the resources ultimately and how different of the support. conversations long lot of form may on that. It's is negotiations try regard of hard writers, of planning promotional in to required to end shifts. the and that Omar. for be to of limit still amount continue that with underway availability of year lot the There's Thanks, to depend on and work the going lot say the and/or any of a will There writing a just just A impact. to be

have to going see. we're to So

Melissa Thomas

with I'll ticket and full prices. our And ticket grow to we for respect XXXX average our continue then start But with to We cap, the fluctuate can per prices do average to will ticket relative XXXX ATPs average so quarter-to-quarter. modestly believe prices of levels. year

our to rate this and mix to about the lift the expect significant If due year, from last XD the particularly from half price Avatar on you penetration film of back growth that's think average the ticket moderate we year. given we'll lapping be

something in in grow half year-over-year of our caps that's XXXX. in can again, And terms per of we, to per So to the then mind. believe second continue keep caps,

to mix. similar cap average prices, ticket those fluctuate per quarter-to-quarter However, film with

benefited from about about we the you only the films for and film tends context, with think Conversely, skewed not provided play second our on the film that us also to For if quarter sell cap half expecting moderate. that year, our the merchandise. per drove slate think more QX to slate audience just purchase that typically in film mix That's our mix. concession in an cap by with it a upcoming to cap, side. we more younger drove but the per as of driven the concession per are already to side, slate. film adult that And on concession July opportunities audience that more indulge seen year-over-year mix growth in the out we've less again, that's, skewing And an inclined

Operator

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

David Karnovsky

could pricing. PLS, I the you bit strategic know versus there's what you the unpack mix? Maybe pricing was detail to loans. don't the the pricing up with then if on a strategic what Chan, can in offset provide QX, from follow And any Maybe

there? that on few What's You've noted would sort incremental resonating be of for color it quarters now. a Any great.

Melissa Thomas

Yes.

So ATPs, X% mix, and the that domestic that point format mix. offset the then of ticket at we About strategic mix ticket X pricing, look a by so up pricing, if on about format in of type we're premium quarter. average points is

Sean Gamble

of reference data areas the strategic use opportunity and one while And we long I our viewed have high-level tailored over just a strengthening terms that's data. for further to to an analytics drive long, a pricing, that as a we've for of think just continue pricing. we terms of the levels in area that around in that We've basis, patterns day, it's throughout of of down pricing varied by had seen more use And theater with while, demand time. but discrete throughout the to on to the of week,

tailoring in as both So on of of our levels our to price as demand for terms varied prices. it terms a food just of for ranges tickets and beverage levels in movie more active going well basis of

both circumstances, in consumption from we capturing box maximize concession success but and that, that overall upside price right importantly, certain office, revenues. of and really maximize with frequency attendance maximize found to and equation and in just So terms getting

David Karnovsky

And APRA Sean, films the earlier. X noted Okay. in then, you

revenue? in years, rate overall to maybe contribute next fleets couple volume you next of office do yet run a like what the What sense Just have in might for this could look terms wondering, Amazon, Apple but in or not months, right? or the box of X

Sean Gamble

up expressed XX to Well, to films release they've Sure. about an publicly -- X Amazon to intention year. has per

to the tent-pole look would expectation to clearly, more So I while at we of our and that, mid-tier probably when haven't you significant from blockbuster range this, said volume in is those -- size type films, films. small more

with spending has volume of So but maybe is amount, somewhere commensurate kind that Apple indications -- out indications not a of given quite have that level of of similar been around there each major billion there number, a have they And annually. studio. $X

those flows again, levels. So extent the through, are sizable that to

X provide studios potential volume of tailwind overall would see major which the almost time. in incremental to obviously over the huge entering a there's So for us marketplace, terms

Operator

Laschet questions line Stephen Goldman [ph] come Our of the from Sachs. next with

Unidentified Analyst

the or like and and invest the to with perhaps need theater Sean, would the half to year. typically actors maybe opportunity advertising I curious in the partnership in movies it for back strikes. the operators influencers studios see the if was for promote Maybe of the unable more given other you and

that return curious Just added on this type if you think opportunities there's spend. of

Melissa Thomas

this Stephen, I'll one. take

spend, account of spend not any expect the our on marketing our changes meaningful we in Regarding strikes. do

the expected our revenue remain full percent expecting for ROI. Our marketing and quarter-to-quarter But still a year, spend does largely expense with in as vary on levels. to of we're attendance XXXX based line

Unidentified Analyst

around Barbie month, merchandising. forward. how higher-level the saw a with think Got think token on movie opportunity of Cinemark I collectible you then, items. some merchandising just curious We last about just question maybe going a initiatives I'm the that it. And merchandising series or

something IP, Just something maybe might into. think becomes the bigger you win linked to you it more that's as into if want content to get to deeper seems consumer

Sean Gamble

of lot types there. are think I that depends we films A incremental do. often on in mean opportunity that marketplace. we of Well, the there's the Sure.

in getting boost here and So there. terms of

provided and we lighter. at when are commented we there bit see first there's really number for merch doing, strong, the and the has of consumption growing. Melissa we second the strong obviously, half what the the just half opportunity, -- sales, they But regard with see be think been it's So on while whole, to was consumers level of not little look if the -- opportunities particularly I might the types of films a

in that addition standpoint. we something to We to are an expanding actually, within our offer ramp e-commerce it's started to up what from we theaters,

venue. gives circumstances you thing. through now continue our to high-demand uptick of as us consumers add, online the purchase which website, to in offer great march to of with a is app, then our well, we've that opportunity We've merchandise is great where to seen flowing have in a online just that we we more So people purchases. type the seen can our also out through in would theaters, now And online through store I a online. items sustained And sell

offer a a drive basis category. that theaters, of there array on to perpetual sales in space have we is incremental wider things limited in can but We our

we that cap view as look opportunity a growth. continue we definitely future it as can something positive to contribute ahead, to So per

Operator

Barrington with of Our next Goss questions come Research. Jim from the line

Jim Goss

I genres you mentioned. emerging wanted ask to about the

is And to providing increment the the reclaim that's sustainable took You clearly, your hole based some some maybe And And new that play a of identifying combination of perhaps -- may of Japanese, films some or think of helping ground. base you Hispanic coming that revenue was indicated how a from you're you was higher Indian, areas. X% available. some about or that's advantage extent, was cultural there audiences other I that? base role,

Sean Gamble

only results first we half. so We frustrating office a it's that limited did and a a it anticipation while, sustainable a to think was of do we of right. an We had had the Well, Jim. was a is about you're content great category. it taken our And long that If it box for it promise, alternative off in degree. long, question, -- look, think comment anything, X% had lot that

on. up. category finally momentum. for taken wider a some areas we're multicultural of those this is and go it's audience films The say to also appetite these of a to starting certainly catch the to I to degree, we of time scale now more those types scale for The picking view think which is in But So of movies quality of films movies. a the see bit different helps been would these some higher base those

different solid are types more of figures. translate scaled we delivering that gaming cultures. these Freedom events. some see we're and space more box concert films of some across we've So for in seeing had sound the -- like met faith-based space, starting of to while, these seeing And a they're office more slowly clearly, the We're with the certainly Revolution results -- then but to in on starting in like pretty saw Gesa's the

And anything, there's categories. So think opportunity in, what reasonable here. think or X% more than bit as comes be Hollywood content all there. Certainly, overall we office to potential we some just there's these trends there's expectation. a we're we're we might historically, probably in, of But more in the at if of a of think bigger the growth ongoing a number. lot a that think so said currently based seeing on We've create box we continue will of

Jim Goss

Windows higher might to many you there the some concession be. if they'd be. not years. of you've how they're where quite over where But you with you And I -- the in past they think get terms also I several should wonder might might are maybe thought more played I that thing rent other been thought levels. I'd films to have One given I ask have blockbusters, not And Okay. trends about but favorable getting trends, margin is expected like perhaps film as

If you have progression. any margin comments on rent the film

Melissa Thomas

Sure.

dynamic the playing seeing and rental the titles scale. those out higher film rental in we that film our is the as So box we're grossing saw in grows, quarter, our more the overall rate higher rental, on what in fall office film that's

we quarter in the we're dynamic the seeing So that that's out. in play -- saw or

on film of look to by -- concentration you higher a rental expect forward, impacted going based be quarter. -- But quarter economic film-only consideration films. rate the and again, are for that's the still to our vary we based receiving patterns. that going given quarter But tentpole also content As reductions window release are by windows. quarter-to-quarter volume to in continue on in our do any varies to We

Sean Gamble

at consider of X add, When the second was office data were XX%. XX% top of so we box I point. what just And about they in quarter were our it quick films XXXX, just this you or would about they Yes. Jim, when year, a in look

smaller some we're of of the gap So seeing more remaining film those still volume in titles. of

with in, So of has share. from year, incremental line advance net-net but that our bit that's in a some versus coupled valuable area little which promotion also and overall it sustaining a made on an last a just we metric. drag those hits year that the still this fill an been big spend item we're which doing, compared That, to XXXX, puts mixed to market of have that's advertising think and standpoint, that

before. Another to the one asked that of was questions piece

Operator

Our the next of from [Operator line you. Wold questions Riley Thank Eric with [ph]. Instructions] B. come

Unidentified Analyst

where in costs of update to can margins, America? you the in you rates staffing I how want point domestically A would of first, to and seeing this the impacting at Latin couple theaters and characterize labor us relative you questions. be looking of guess, still on guest what experience? And but kind of with manage the you're not terms to wage

Melissa Thomas

that take one. I'll

wage So we some of still pressure. rates, rate are wage in seeing terms

we That are pockets, versus while come know, pressure we rates increases labor it's continues see government from trending. couple seeing that year-to-date extent were market-driven state from the we nearly pressure were be is, -- past where more to the wage you up Our market now down previously. about years, We X% we seeing What mandated we're not to dynamic. to as that in are rate that year-over-year. wage of related

intended up theaters, summer to as season, Now for to we ramped terms we the levels we we then ability to. of theaters do the actually to our were were them we staff -- able and that to able up staff -- the the to in staff Pure,

that as had that So X definitely staffing seen. years was a the think and about positive challenges you we the last

So play say there... dynamics I would better at

Sean Gamble

said, what in in inflationary challenges U.S. think similar some Yes. dynamics here And the are Latin many America, of add to markets, for the albeit markets. more of I I would increased seen we've those in those commonplace just Melissa that

adept of with are there's -- more very and types those So that's dynamics. there dealing our the at teams norm, of

staffing So it's continuing the there, manage been normal but need what of market. phenomenon them to do that and are market cost more we experience can lot we in to levels newer to offset of of in be got And we're and a U.S., a the where we've inflation.

Unidentified Analyst

the now? above at it back that you is may ramp film the different you kind quarter levels structure to a I continue cap from box-frecover. in saw maybe and do And coming But get follow-up, taking I levels the in you a of a to spend terms earlier margin structure prepandemic EBITDA or fully inflation to box revenue the margins, slate and the of to attendance what just can more uncertainty route. there's current operating continues lag years, if per recovers how do the lot question the on feel years, terms and prepanemic margins guess in then, given second cost know office coming may in level in same of allow the but what of

Melissa Thomas

to But fully we necessarily we in that I so don't So lot say. need there's think margins recover. a maybe in way, I mean, flux, to still for attendance to hard believe it's recover order to said another

factors attendance you per, as about get all levels. those that to in So But that's the to on saw you the highlighted. like we to going depend necessarily that quarter, back doesn't market that share talked need pre-pandemic

Operator

Beynon of with come questions Chad line next Our from Macquarie. [ph] the

Aaron Lee

among This to is like regard With of the that Chad. medium versus to format mentioned? your you And a is other some ROI-generating penetration for on to get over there screens, term? rank how the premium opportunities of priorities level does you'd your Aaron

Sean Gamble

for our our but thanks we're across offerings. our audiences consumption recliner our been all seats. joining. Look, screens, with cuts really to responsiveness motion pleased mean what not we've different the beverage, of board, premium I seats, food and the with Ari, just it D-BOX across very seeing premium

the high auditoriums; area an as strong. that and size specific our fleet. the ranking ROI on returns auditoriums priorities, the that really across far certainly say, is on screens priorities I'd it's the because the existing have one our is just target-wise, of of been As to governors

about adding theaters provides new experience, flexibility. the that want if sure a right talking existing right? lot make we So we're scale we're theaters, it's to of When of

You need appropriate. be auditorium to have a large for overall experience to the enough

So we product. don't undermine that

So we're things to second opportunity we it's in a certain regard there other of certain number our do overall piece degree the But in are prioritization see the XDs marketplaces a with say, a effort positive. like CapEx, sustained would of I to really there's fact, that here a doing and there. for

available other really size with and I degree like doing terms the list. that at to a The range things. this we auditoriums mentioned, of that have of balanced point. So the And is on then of high us it's types the the just which we're of

Aaron Lee

And currently. the America the wondering that's international see trending continuing, good helpful. great. just Latin Okay, consumer. the inflation how that's and recovery understand That's how to just help picture It's in us then can but you affecting

Sean Gamble

a is to unique are I it's level there was to unique as -- before, to markets. inflation. at these interesting, become kind these high than in retail. because to what accustomed most the of really It's accustomed to not industry. It's inflation It markets alluding comparable very not something that more is everything here Sure. of growing to And they've cuts our across pricing

of what just that's of groceries typically, level, services pricing go rates up goods how and people cost take and at up goes of go. is So things goes happens utilities similar a and cost the up, wage up,

I consumers markets the it's these the just way expect that. because like said, operate. They So accept -- of it's it almost and -- many

different bit it's accustomed dynamic of Here little -- U.S., inflation. higher it's in the not to a because of a levels we're

that of because doesn't bit some here escalation So more to that pricing got a just been there. the can match happen be careful aggressiveness to shock of a try sticker that's there there you to on happens little be cost the

So been a been the would newer near-term again, more it's LatAm, it's that with. -- that say, norm, something or hasn't issue really of hasn't I they're and contending

Aaron Lee

the Got it. the on congrats Appreciate color, and quarter.

Operator

the Sean would over back for to comments. to floor questions at time. this Game further no are any closing hand now like There I

Sean Gamble

thanks, like provide position volumes just again and reiterate long-term our and and joining and you, remained Thank consumer us In this company film positive, going the everyone, regarding in our we've that to guests, for our strengthen Cinemark many capitalize recovery morning. the already advance our theatrical industry's the closing, Atrovexhibition optimism indicators maintains actions experience of to the continued strategic I'd initiatives a interest advantaged movie future and position. enhance on our taken through ongoing operating highly our capabilities our as to and financial we about

quarter with to third speaking again you we look you, results. thank our and So following forward

Operator

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

disconnect your time. may You your weekend. lines this Enjoy at

Cinemark (CNK) 4 Aug 232023 Q2 Earnings call transcript