CNK - Earnings call transcript Q1 2024 | Cinemark Holdings, Inc.

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

Operator

Greetings, and welcome to Cinemark Holdings Inc.

First Quarter 2024 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. President, Vice Senior Brashears, Investor Relations. Chanda Ms. you, Thank Brashears, you begin. may

Chanda Brashears

and like you XXXX Thomas, to Good Gamble, Release morning, Holdings, Chief welcome would I President Sean by Quarter everyone. Financial Cinemark Officer. and to Inc.'s Call hosted Executive Chief Officer; Conference Melissa Earnings First

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

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

Sean Gamble

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

has due again months Hollywood a production, a last increases indicated the kicked disrupted likely seen Over off during start. the strikes dip the attendance last quarter, year-over-year as to of while recovery following experience industry we'll has box that trajectory years, And we of meaningful film year, film shutdown exhibition X pandemic. volume office rebounding better-than-expected been past to theatrical XXXX the year and in X in as over this moviemaking that

Examples declined the of more million $X.X industry of Biopic by Love, Doom installment an include franchise which hit and billion which a Musical First megadventure and Empire and installment Comedy that audiences delivered became delivered $XXX box Fu quarter domestic Kung in more which One Panda has XXXX its biggest $XX that office. $XXX results. worldwide. second than generated range outgrows domestically quarter captivated Animated over the wide Godzilla million than end with office. of nearly to action million box Marley, Bob opened Beekeeper, $XXX delivered office domestically outsized films account million thriller with million that Part history domestic million first $XX America box close $XXX of Girls since over each over X North only a to versus monstrous American X, new the its X.Xx Sci-Fi Mean modestly North the at on xCom the in and of worldwide. sensation

having again generated all first million The of of releases family we faith-based are provides December's the as fourth The season Cabrini anyone such and comedies of million well impressive strength complete and domestic of across $XX content diversified as theatrical office an of craving continued The these the million close basis XXX quarter, proved play-through quarter sizably certainly audiences again $XXX titles that nontraditional its as share vibrant. domestically for Furthermore, XX Chosen. gains Relative witness you exceed continued over of successful results admissions setting with To that theaters globally, by run. market maintain nearly still industry solid box the our whimsical $XXX elevated during points to domestically as series also now has [indiscernible], and significant strong strong points we exceeded benefited romantic that from the most million results to which experiencing exhibitors. circuit XXXX, compelling guests end, compared We within basis to our to prepandemic to remains also cinematic continued recovery once nearly we the theaters of XXX outpaced continue further experienced that during industry. and to in the by of enthusiasm that internationally. validation major global quarter results our content that consumer Cinemark enthusiasm our entertain first all once

headwinds. key filmmakers positive and outlook outlook ago during conversations of a as release dynamic That in trade COVID-related greater and provided once again film to their weeks during that healthy one-on-one adjusted significant message million next results demonstrate nearly debt, into a team, a consistently also few a our total their company strike-induced films provides during annual the lineups long-term successfully further pressured cover more reinforced was will and position our again million the emphasized our for and Melissa $XX has us a our and show and conveyed confidence of is event adjusted One operating $XXX quarter, again While the industry. financial during our retired our team's our margin. skillfully studios years. glimpses positive we XX% been theatrical as by X.X than EBITDA moment, for navigate was another financials sustained by detail their These generated upcoming that in value to companies. industry's studios CinemaCon CinemaCon, given resilience enhanced million revenue, we first environment ability $XXX our Yesterday, and outstanding in of EBITDA

bolsters well It's also value resurgence with highlighted communicated financial and In all volume results consensus we've is last distribution levels calls, now their who of of long-term want interest for studios that films throughout very channels. been as the about quality the screen earnings again, the which the as running over year's fully as and film as we the well Production up to on unparalleled what following these attracting clear leads plans, promotional impact years. top-tier to has continue to remain experience release theatrical recall film lifetime is see consumer talent. and elevated of bullish further development consumers strikes. this important by for on regard big delivers strengthens context perception future to light previous As coming to films,

entrants Apple nontraditional A array White, Part Hedgehog and like X. fantastical Kemetthrill and exhibition materials to King, a well the New and anime Suspense Wicked slated Zootopia Amazon of live-action of such Universe, X, Muthoot year Venon, CinemaCon Superman and appear of Quiet X, significant and Snow Dance of during titles Garfield and this movie, X, X, as also of permeated as #X showcase of X, Despicable Along a legacy, Minecraft, in a from increased Inside and whose I installments and and as Kingdom to rest lines, of the Brave X, titles fantastic X, Place the course, installment films Beetlejuice, World, big Joker John Smile the highly of into Borderlands,Beetlejuice convention spectacle together Dragon, scaling like Wolverine, resurgence another X, what all theatrical optimism Deadpool Glade, wide films Romulus, of World, is action #X and to TronAres Furiosa, the multicultural these week. Wick X, Day Moana a fully or content reboot represent studios presented faith-based X. for all Jurassic quantity and numbers quality years the growing. the the a created the Alien the Part such are sagas and RedOne Planet coming The the rides year's opportunity like in films New films they Mission about a Megan buzz films, next Sonic Falgu, to adventure films prior diverse Impossible, sellers, Your way that A Die, global of How And that including Wicked concerts, lineup took family the of prior major Rid shared meaningfully with Me version Ballerina, as already of a next Out primed IF, Train includes deliver, the like range anticipated Boys world of SpeakNoEvil the the the is time. Twisters X America, biggest Lion Last of Captain Bad Apes, Avatar relative of of

assets So on differentiators. our on account believe levels Exhibition the titles in moviegoing, resurgence that volume of at indicators numerous to maintain film theaters forward a the we move several sustained in key that with peers of collection point in we high-quality largest start, slate investment and strong positioned on we of enhancing we has of our continued as particular, maintaining positive in upcoming based the encouraging our horizon, company. prosper sustained our have performed consumer future Atrocity interest that and company which Cinemark, is over And consistent and To again, for a time, the our exceed to markets. highly outlook our significantly positioned uniquely

to a favorable major addition our luxury highest we theaters, operators condition almost have In more penetration circuit XX% of reclined. with the our of of seat the domestic of overall

best business, and technology screen presentation and site the including have XX.XX% sound film We the overall in uptime.

D-Box as #X with largest premium of private XX% the motion format and U.S. label seats, we have beverage auditoriums enhanced in food our world theaters. as footprint menus XD and than offer We the now of our well more large the in

provides have and with across footprint XX to XX in as Central both our well and We distinctive best practice also global across beneficial region, over-index America also markets shares the a of which market that highest growth theater concentration as our of suburban across one states moviegoing strong With share highest the pockets America frequency. markets. cultures, it have access diversification and visitation scale. sharing U.S. Latin Latin to attractive global the in tend underpenetrated in footprint provides and a in varied valuable North South countries, Furthermore, American in

a the that and geographic have industry-leading our financial also sheet, assets Beyond adjusted margins position EBITDA of flow a generation our consistently results balance outperform and profile, solid healthy quality cash and we industry. favorable our with

positioned reduced as outsized with actively advantage the they capitalize effectively Our and as balanced our approach materialize. an film as volume of has navigate to market allocation both disciplined well capital company over opportunities on towards years periods

solid initiatives. our of our operating team nearly from years skill Our is XX% earn expertise as These capabilities well our global strategic surveys. customer capabilities. of position as sensational in levels advanced domestic experience, byproduct consistently that by domain heightened of financial our ratings high and satisfaction deploying our supported the include Examples guests service of further of deep are

chain-oriented billions marketing headwinds. a on tools and fluctuating social supply of platforms and demand and weekly rigor Cinemark to consistent Sophisticated based varied deliver has planning Showtimes staffing, inflationary increased execution offset fine-tuning media help track operating and demand digital that driving efficiencies to record annually, and of optimizing impressions and and awareness theater-by-theater visit film hours that driving and

abilities operating consumer-minded debt helped a consumer base. and loyal to have also Our develop extensive and actions us

We members -- million have a our now total are subscription to tier, box goers and most Movie Cinemark over continues marketing our These in and addressable Club, of the satisfied XX million office. domestic alone, XX% and in members paid nearly accounts for grow. customer guests. Moreover, our movie extends XX U.S. frequent consumers well dedicated and loyalty programs as to global our of reach as our the base

well Finally, that our methods food, also Melissa? of From recovery to to initiatives we go optimizing now the our our to our even amenities assets look numerous competitive attractive as our to and level plentiful. of distribution continued that additional sophistication as on while further circuit to a singular productivity the well a value pricing first the beverage advantaged our growth Melissa optimism drive combined our our above industry's the positioned to new wide creation opportunities industry beyond headed over levers broadly create executing with advantages. us extend prosperity premium deeper enhancing taking and our opportunities, are range across merchandise our future shareholders. further next addressing long-term drive to and fully to offerings and underpin while position have call account our Cinemark direction quarter our circuit, incremental turn continuing for properties. I'll for more at are our before meaningful about market Those control we of as is adding the financials. including ability value and as to within lower-performing The incremental are positive well

Melissa Thomas

today. Good surpassed call Thank thank pleased the for expectations. everyone, quarter were We morning, box that you, first the Sean. and office joining you our

$XXX.X the guests achieved demonstrated year first and $X.XX. this $XX.X domestic yielding well to margin and first the attendance We million again from We $X.XX. initiatives. ticket on content of driven our fluid executing XX.X% XX.X share. Avatar ticket Hollywood to market revenue, solid due environment quarter once average pricing The financial we million operating of admissions our of million mix the million and grew type and box theaters the cap generated $XXX.X record our office Our as and the ticket by we by a despite in strikes. of team EBITDA year with agility entertained healthy of of due concession to impact decline our outcomes leverage We EBITDA, the on strong adjusted strong capitalizing Globally, generated the and format offset concession XX maintained strategic in the million worldwide we the first XD our was achieved more welcomed diligently given in average strategic first partially on the million of as in year-over-year to price operating quarter. Domestically, initiatives, quarter of price quarter delivered prior by and pressure lapping per X% adjusted in a revenue, penetration our growth moviegoers U.S. period. family generated $XXX.X in the mix revenue

towards was concession EBITDA, EBITDA Domestic due $XX.X total million generated fueled of offset pricing primarily revenue Collectively, inflationary adjusted Other margin the and down mix the lower X% in we resonate an revenue a versus reflecting content. million in attendance. to decline nature quarter, of and not Our primarily X% strategic film to the higher rates adjusted the $XXX Similar X% to Though U.S., measures in shift well an XX.X incidence fixed to million, first million in year-over-year, and Latin partially Shifting of by did our did grew of cost XXXX Brazil. due $XX.X as items, per base. decline increase yielding region a the XX.X%, share segment by price quarter, the the relatively international concession cap We segment. product benefit during of domestic across as in hosted quarter we in our maintained the region. from year-over-year. of slate content film market the American local strong guests our

yielding admissions EBITDA and million $XX of and of XX.X% revenue, adjusted we reported, revenue of operations adjusted our American Latin revenue. million delivered of million $XXX.X As total million Altogether, generated million $XX.X $XX.X $XX.X of other revenue concessions EBITDA, a international margin.

to headwind in in respect year-over-year EBITDA to the offset with the international particularly devaluation, was resulted quarter currency largely adjusted inflationary Foreign Argentinian that peso, a by dynamics.

maneuver knowledgeable the fluid and political in seasoned the Our through local teams continue to skillfully economic region. environment and

the Turning to expenses. due spend. rental basis of XX the year-over-year office points advertising and concentration and partially a of of Film expense quarter, lower during marketing by was XX.X% offset down our to mix higher films box revenue, global admissions

in the Global million, driven XXXX, lower was as call we were in certain core line wages than lower-margin of concession revenue last As of shift office with percent our comparison. $XX.X impacts. measures as resulting on earnings such I of mix costs first in mentioned were year, product quarter products expectations, in a concession ongoing items the creating inflationary a somewhat movie the quarter XX.X%, admissions XXX Concession relatively Strategic to as of up offset compared as theme our points merchandise. salaries these that basis tougher quarter box as first pricing percentage revenue well planned, a meaningfully first by marketing of XXXX. pressures towards and partially industry in exceeded a expense with XXXX had

expanded year-over-year primarily lease a operating in As with rate modest labor Benefits was on and hours. leverage to decline the focus closures. XX a decline operating a attendance, wages Cedar Facility and due of our wage offset. reduced revenue, salaries X% pressure to management ongoing from million, partial points, drove associated increased percent total primarily due $XX.X basis expense of

$XXX.X from currency As percent declined million, of down costs foreign basis driven inflationary facility attendance variable expense was that by revenue, impacts, and X% quarter partially and expense by total with pressures. lease points. a of offset XXXX, XX first other increased the primarily Utilities

points. and other due onetime quarter, benefit revenue, costs professional foreign offset and fees and severance compensation, of of total XX currency and million impact the increase of percent utilities year-over-year, by was partially share-based inflation, X% a higher $XX.X first increased As primarily an in the wage basis G&A lower to fluctuations.

continue We our discretionary maintaining prudence staffing to exercise decisions, headcount levels. in spending below XXXX and

tax income million $X.XX. Inc. foreign As the due valuation of a certain attributable to of Net included percent of basis total jurisdictions. allowances XX revenue, earnings release the Holdings, in generated income to a per we share G&A net of $XX.X for million $XX.X points. quarter, in first resulting benefit, the in Globally, quarter Cinemark primarily increased

Moving the with hand. of position ended We to million a the strong balance on $XXX quarter sheet. cash with cash

$XX that box term, company on X.XX% our timing that enhance circuit. flow we free investment senior capital redeem headwinds $XX well towards working focused while seasonal of cash and strengthening quarter, in our our the secured of sheet capital companies interest confidence As we remaining our expenditures and million given circuit. remain office term. capital we yesterday, for expected, further invested $XXX hand position notes our used was the long over in recovery. In the our strategic reflecting the investments the par, end, at global our industry's million ongoing cash balance softer further on to negative the near million To in Furthermore, deploying the our to the payments, environment, our semiannual

our quarter, our is at net XX stood year anticipate continue range X.Xx of prudent we ahead, of the trailing end towards high $XXX the months, of target Xx. to million with capital Xx the aligning our leverage management. to for financial commitment expenditures, the at deploying which this to end Looking At ratio

are sustain to financial target face some the may leverage is impact. capital to this In strikes, dual would year to our decisions Hollywood that a sheet like complexities reiterate pressure our within as position same which our ratio open sound and allocation prioritizing the shareholders. strategically associated this Sean objective our our we provide questions. At we our remains face time, company, balance our long-term us juncture, range, our Hollywood at value market laser-focused maintaining steadfast. this on would our closing, the distinctive for we success. advancing as to are now line focus, the positioning operating ourselves the our commitment refortifying up future and optimism strike to for we due While gives further we I and with highlighted, concludes regarding like and prospects remarks, to that Operator, and can prepared practices

Operator

[Operator Instructions].

The line question the from Eric comes with first Handler of MKM. ROTH

Eric Handler

seen earnings selective -- of seeing season how with decisions beverage more their number too. we've being conservative notable that suggest here, decisions. with a and purchase food on some or their terms tickets consumer companies of spending selectiveness curious, this they the about are going or I'm Sean, you in maybe anything talk there's

Sean Gamble

just Thanks with It's seen not say good are our theaters, I'd I significant prepared to our number in a upgrade to plays macro that consumers to concession I we films a coming from history, very through when question. continue have in have premium the consumers business. question. in movies impact interestingly, we date, for the see choices to think consistent to the mentioned economy on format And to of out. to plays terms that remarks, that expectations. of purchases. through the above mean, delivered we the

As another quarter per we this record cap had quarter. mentioned, first we

recessionary X the the So It's has as X grown similar haven't recessions North through. to, in major industry of past America. seen our that I where bleed in of past mentioned, environments we

to remains to otherwise tend localized, entertaining an And and select form come Going environment. we scale affordable consumers this that may may themselves, to a other they to It's back to current still while movies indulge see and that of affordable means -- just in go they to. of entertainment we things the continue they when theartres.

Eric Handler

in newbuild see planning? And this Great. your of allow backlog you in beyond seeing could the what point you theaters. with anything change Are I much isn't as market follow-up. that press expand at there really to then a From what maybe just a currently you're release,

Sean Gamble

less Sure. the of Well, like I think there's whole I more put the process during of probably course industry, much the twofold. or was development pandemic, our on the think hold. One,

development We have process. pipeline reactivated that

to So sites. get of out we're there kind scouting look

being And to a that. delay cash So tempered in a we're of beyond amount of the our continues talked CapEx deploying as flow as refortifying we're bit recover. that, there's about, still that just balance our account on we've of and mode of in then sheet

So some see markets are of new build over still over degree those little just to the activity. certain think take to things opportunities. a time. years. where X It's regulators to a bit that of bit just think I will there a speed are we And of I the of plenty coming But going start ramp of

Operator

of with JPMorgan. Next question comes Karnovsky line from David the

David Karnovsky

kind costs you're I just by how anything natural a Sean, you end wanted in Is I share legacy are could to terms about with to time? to should output? regarding deploying from wanted And What them over expand just of for, with concern a in think some the the your seen bit that create QX? year expenses of success see improvement given film CinemaCon. and the year-over-year. to there? exclusive just Melissa, could Does likely any initiatives the in achieve And there if were inflation of conversations staffing recently rest your speak films. labor to on studios hearing some see we we've then supply Amazon, ramping streamers. more And control flat output your streaming bit of nearly their more incremental you if you from about

Sean Gamble

Starting overall for the thanks overall was of I'd CinemaCon, say feeling the very positive the CinemaCon out coming Well, a one. right. with All questions. definitely

positive by exposure interesting so -- and promising. coming. saw. materials it's about everyone the look large, I are extremely is that up think really And Things to what some to get I and think they

titles prepandemic. How the during were greater showcased we as also heard plays both to future what replenish that a with on continuing As we of all studio what to hear through CinemaCon one number that also our partners I is continue degree. volume, directly a we of focus and mentioned just to beyond just back that. back little respects some where it's they their a to they slates of pandemic, just production. many looking hiccup In the in strengths cases, They're ramping going But certain towards building and are the time. that. post in take go their were to to in too, were process that speak were then put Obviously,

just we we So return prolonged on see bit years, conversations. Amazon, very that But levels. pre-pandemic further. mean, have look, that's a we optimistic direct very remain things the not yes, to, on the back close to in Specific volume or your whole, question I could if coming exceed to

opportunities. about are got that. already They've slated build a they're this really think bullish of to They number theatrical continuing films I towards year.

I mean looking for going we've HBO I film. first doesn't industry the away that walk in major the platform to they're -- mean be theatrical. slate of film seen would XX make from that direct That to think in past, and studios they're there'd direct direct big movies films. this where will at HBO make video their as in kind to forever

know continuing higher to scale committed certain are So with us least those the And to will coming to to they're build expect Amazon, that remains we of at sharing be films continue to we that very potential degree movies streaming have will certainly theaters. space. what that into the that a -- we and there ones direct it's see

Melissa Thomas

David, labor on then, And front. the

our further projected do range to we hours are attendance we're working on labor So up to continue a labor based of and seeing. levels initiatives on down scale And drive that productivity. we

we're for ways hours examples even periods to with a hours, is respect staffing salaries the our our focus broadly, forward closing, a face for efficiencies.With continuing reasonable looking opening on albeit side, wing, to in of drive and some And the slow beverage and rightsize profitable being So and of rate than the hours offerings. to our there. on we couple between expanded attendance wages flex optimizing do so is to peak change continue and I food scheduling most operating continue some service based anticipated the that assume wage are at more to attendance. nimble pressure that that those it just a and levels, would be on that more labor to rate at we'll going will say, less

more prepandemic the what we're increases. productivity by determine a benefits hours theater seeing continue initiatives. more to revenue-generating do our balance And per the with that fortunately, opportunities corresponding into concentrated XXXX impacted see would half we mentioned, now do overarchingly, some in volume hour on operating minimum basis staffing line more then particular, in expect in continue call in make in per cost as we'll to given our the be and staffing we Now just to The is mitigating content year. period I I especially levels, expect in reduction profitability to requirements. And in this though But is lean our we're to with one there. we as first of year, leaning data, assessing

Operator

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

Benjamin Swinburne

debates, around and really questions on I stock. business the your Two think, some

Your market of share out think role is as play gains deck the pandemic, while interesting. thought And you I'd programs is loyalty the I be for mean coming share. to have driving that in just about persisted a I in the that hear you I you now curious slide have guess, question your know. the one

valuing as stock? own there just guys How deploying M&A. wondering, your around but allocation. you secondly plus have returns could is out I'm program. think a kind dividend. resuming assets leverage talk do guess about you that do is, rewards How you in expected. up million-plus $XX share with and a do to think know how us? got million then your about look it's and I And about Movie question these if share could a Club, at the I to you Sean, in you benefit You've ticked people measurable relative of to capital the relative capital tangible M&A

would think those guys approach it hear this trade-offs be I as move year. your through to you helpful to

Sean Gamble

for in start to provide in thanks slice as and questions, maintenance try a efforts play and a versus we terms Cinemark. our that demand share, as Well, service programs that some actions how we to series general Ben. certainly the just much our and part to of of in in of market the of share. create. to Excellent. planning experience It's elevated attributable just terms the levels To our programs Showtime that of fully market And to experience supporting Like marketing difficult our with we is coming loyalty believe the that of the whole stimulate things. just loyalty do overall overall just well to try there's we to up

tough coming to So now about But that. of I box and XX% represents up our having say Club those affinity that mean they to our moviegoers. office moviegoers wind consistently most be tend given to it's to Movie a strong our satisfied theaters.

coming about to as certainly we we growth We of overall. of Specific at regard guests And prongs is have growing believe them to see high-quality the their returns our So data and level solid in over we we they're our of can we're in in the look their time. uptick that that value degree continue continue continue for certainly again, target it do create that of and to we in with pack and communication deliver can consider M&A, to in what channel look, we frequency one having. to M&A that think in believe, to because optimizing is a we ways the those component, experience seeing Cinemark. over-indexing assured satisfaction footprint assets potential we overall their value share to utilize of the

sake. evaluate we We're had just through grow to investments lot So with of success. targeting We looking growth's lens. everything for regard have we've not and those success being of high that kinds that capital of in a a probability and deploying do really believe disciplined to balanced

what cases markets are bit this bit debt right little expectations layer done well the sellers that again, of of investment in things. any look we're a is also is off due that years. there back added really are be. on in and shape is deferred a we still into of So may particular level business past little depending still the where now, of range over maintenance margins company of is the have a interest are expectations right what right terms levels distortion just certain we've we assets now, of type and might seeing what in the rates go There -- those costs that of at, there. to out should of we complicated in there to to need say several that in of regard.I'd get Clearly, been their of borrowing, marketplace multiples It's what what incremental

of just the also calculus So plays that into all that.

balanced that. be We're of something in at opportunities the towards it's based all very the environment the but going shake those in certainly on to approach So and that to marketplace. we're could optimistic or disciplined continue look so that we over some our out next opportunities we're year in,

Melissa Thomas

around terms capital priorities, that us Ultimately, the in driven the sheet mentioned, Sean position I of centered call balance those by return are long to well allocation decisions, and And near-term term. we as as strengthening mentioned, our returns. as for do making remain those right on investments stated our

approach All near our consideration significant believe capital prior forward. net allocation a for our ratio In headwinds of believe pandemic terms we prudent us box conservatism a cash, coupled dividends, will though, the back-end remain dividend said, the the box office, maintaining this going office the given we and of with though, which the key around the do strategy that term. weighting year, aspect leverage right may do our pressure to is now, our of in

Operator

from Next Fishman with line the Robert MoffettNathanson. comes of question

Robert Fishman

start Sean, recent there, you windowing One Sean with come Melissa. taking I'll rental more one then split back and angle an you'd wondering how or even film and I'm one. on upcoming relates to studio for relationship CinemaCon as around maybe And it for maybe with partners going Cinemark's a other Maybe let's the your renewals to do improve different my see takeaways. characterize strategies? forward? the opportunity

Sean Gamble

I'd pandemic that been in window say very the and evolution a Alex, partners. our throughout quite the Well, to with bit positive our there's up pandemic. the Specific windows Sure. of overarchingly are relationships following clearly on studio

theatrical experimentation, of that on more the window in impact more that fully downstream channels. a that lift create the quite all that bigger lot opportunity studios. cultural an definitely revenue gain best way to create to space. value was subsequent bit something It helps in film It's to for with It moment. those for helps the I creates is there a think exclusive clearly of assets, these learning particularly

practice a out and Windows. reduced something has in now dynamic, clearly it large, and bit that improves as that more risk and is So net that what learned to, studios. has seeing by we the while equation coming our of say for led which one the something actually positive pandemic is and has and the a in of view, would the changes, become the tested the window I been again of view we're

and more window, and So to it in value for as a they through. good we're get extract got go and home is the they've especially net-net to they if downside, thing, into quicker opportunity work, the looking for success, more movie the manage movie a long volume come can whereas the run an back can which out just movie their of doesn't

on are So as it's we're other that things that generally, aren't into with. positive of the resurgence reality that one films And stronger to look of the a begin plays volume. when to to the moving working, movies working is we

and the lead the the And ways. it taking more CEOs films on So mid-tier both we romantic to collectively comedies we like that Rosheen. think works risks and can the films

we much pandemic. of stuff financial haven't as because Some as a to the of late decision the that seen was tougher prior that

factored So would consideration very been positive. been course with windows. over discussions, has the of I into there of some that has we're of say, evolution to the economic And the regard equation

aggregate, back say wouldn't from one customer little relatively is rates or stronger rental think in the any there I more go the I other of It's kind relationship the stay and past splits. overall traditional sometimes a that relationship the to of pressure to just where it's the just of forth film on stable. things party relative to any tend in and terms bit norm. supplier others and back flow typical ease kind forward, So that of heightened degree is

Robert Fishman

a spend can projects. were little year the bit And core Great. on million coming this in But included levels detailed hovered you back $XX more at in you new that I generating you understand Spending level. million 'XX, pandemic. there of touched mentioned the and I was have more that Melissa, builds $XXX the range an again already if elevated $XXX levels range. follow-up on CapEx. maintenance cash spending million do flow But guidance out around $XXX significant million, around these for that

So investment projects level in just of to below out maybe see should or beyond, anything levels. the to to back pipeline to asking, cash if way else a it expect of and elevated 'XX in we long call more an flow-generating more in get 'XX remains even

Melissa Thomas

the thanks Robert. for So question,

the is key for company. in our do we investing history differentiator our and theaters a maintaining believe So of proactively

as balanced ramp would you As office CapEx to our levels again, to expect the approach and capital think but XXXX, maintain, expenditures, CapEx box our us rebounds. beyond a disciplined up I about to

sit $XXX would to to our what $XXX a grow annualized us, peak today, to are CapEx behind million around normalized around to on basis. While is CapEx expect from million grow I I where -- we years say to

still peak contingent where million out to saw that upon, that million of the pandemic. million CapEx are around largely obviously, remember in that's remainder dedicated theater relative be to earmarked but to projector included that $XXX spend to that towards think the annually us XXX-plus at towards a conversions. $XXX and So that is range shake $XX recliner And heavy that that $XXX CapEx of be would to builds should new kind our we high-quality million push that you behind circuit. us, at enhancements, for available of ROI-generating years laser will penetration kind maintenance The maintain this expect other opportunities stage. We including to

Operator

Next comes Omar from of Fargo. line Mejias with the Wells question

Omar Mejias Santiago

as maximize this your utilization program due And capacity maybe you can X consumer demand. off-peak you strong programs talk across demographics. your the To it performance, Movie about the like the impressive Sean, very to Summer parse in that during performance you -- you particularly DLF you response me, on the Club extent market versus second opportunities display any Can other circuit to extended in impact maybe gains? your out on can favorable for organic share and recently was periods. share especially and for of House was continued quarter, benefits during the have

Sean Gamble

Specific handful Omar. -- actually, Sure. And the first with questions, we to the there from outperforming titles. very Thanks we're quarter. of pleased in obviously, in a for were benefited results particular share, our

DOOM quarter. I'd say Zilix,Cong, our kewed a of some much was favor share. other So title. the more and was quarter, films the But the Marley all films offset, on X to films reduced some our the Panda skew which were They collectively, sci-fi our the often share think say, Empire drivers our during heavy in overall helped that that. and much I of Kungfu it's it that But God Bob headwinds. of doesn't Love, like was New for, given as drive due One would lower than very was, our in to those box the bit and strikes. definitely I way, of a course the of film biggest in film, benefit an circuit, office these another specific by environment

also weren't We issues. against up coming capacity

Sometimes many office as in those can you you only have. higher periods, as sell box seats

it's Really, allowed weeks. to the program price some try that program. into course a a the younger films. morning. audiences for moviegoing very families of all sometimes have a is the It's summer by the any on X the quarter, to movie to goal in week Clubhouse, We potential the and accessible great of of point program dampening to think you of a over giving younger mentioned habit that just also lead maximize is titles. of a us bit. legacy didn't can upside which It really really day to runs share fully of them number we get a of a interesting, that Programs, these those the on it's issues and So

of opportunity. it's So an type morning early

and can that say moviegoers of But of in early versus an other that capacity. really a out towards So future program, course periods periods of during that programs filling of stimulate to of we run of as designed kind the lift period in is degree, a days, on We number slower of kind to of particular, lower types volume a try business. help slower other a in in way of sprinkle things content, of lower back it of favorites particular, bringing look periods week the certain I'd with and in the -- to to fill Wednesday week sort fan in to of reporatory days to trying that get morning. maybe certain more the do

do are efforts pursue like that. try do there that we that, to to So

Operator

question of line comes from Macquarie. Next Chad the Beynon with

Aaron Lee

change believe saw you or This for experience a is could that or for from you tech a more Was around One Aaron standpoint? from Chad. you there anything you your on for CinemaCon. productivity help the enhance standpoint moviegoers

Sean Gamble

new them introductions Barco are technology, recently Obviously, of HDR working There's to their with on number standpoint years. steering of from capability. as something from presentation productivity happening that It's actually and projection in new Think a of constantly about light that we've both them of kinds kind announced terms for standpoint. talking been a about a all well evolutions that. as of

has out baked a it I and actually as productivity much laser to on the even So And as in level. has quality that's laser it of projection. of that's elements there. consume doesn't energy. that takes the heightened itself of potential. well new something mean kind It's a because screen projection of It into new light level

change as the have bulbs You to don't much.

as frequently. don't to them maintain You have

that level. equipment taking of steering pieces of that the light another types productivity also lend is then themselves that could and of be to to those So component something

of like in work. things as revenue that retail I with that in market and like to labor lead in it overall lead you different -- CinemaCon, those could not things able to equipment, to some are some and depending productivity that, things and the in sales. obviously, where unattended that, sort, as specific types to insert well drive range theaters a which be I mean, there mean, growth but even just But necessarily of may yes, could you So places new of of incremental of things food things. productivity. there's that beverage see pockets on

presentation, just evaluating opportunities. So of just and of market yes, to what's are our pockets and and that well experiential from that constantly our I to would say from beyond teams beverage things various Cinemark, and goes management, something it that's at in looking business sort, from drive overall coming incremental equipment labor benefits food productivity

Aaron Lee

regarding concession just then And great. per cap. That's

So would or you down? Are that you engagement price size just basket the quarter. of you hit bigger seeing increases? purchase for a U.S. record break in terms the incidence domestic first more How in of

Melissa Thomas

Aaron. I'll one, take that

by well incidence in mix higher-priced the being offset in partially example mix a the one X% year-over-year, items, So our was as towards content that to of merchandise up inflationary as cap was That to we've pressures cost shift cap seeing some that. rates lower strategic quarter. of on actions offset that the side, due per was per pricing driven and domestic been product the by

breakdown And drivers the there. of really so that's the

can year As for you believe think full on a domestically. that moderately though about continue cap we we our grow to go-forward our cap basis, per do concession per XXXX

rates. incidence our maximize to initiatives various into lean to continue We

the delivery. food third-party So flow mobile order, and merchandise into of concession ordering offerings, adoption as traffic self-service leaning scaling well enhanced capabilities, sales as modifying

continue incidence the But fluctuate per We quarter, film saw to you with mix. as in quarter-to-quarter will to pricing while high will ultimately our first find rates. maintaining per cap that caps maximize optimal look also our

Aaron Lee

Congrats on quarter. great. the That's

Operator

Next question Benchmark. Hickey Mike comes from with the line of

Michael Hickey

on quarter. the job Great

box compare remainder of this feel pre-pandemic. if the QX and QX. on QX sort obviously, not QX any year? don't be concession of guess, on and QX It obvious I year reasons. like there. would of X terms XX%. Obviously, from I'm and Just release higher higher the And office, strength just what sort the curious I wide than think what you that QX, feel domestically office. us. through on then guess, 'XX, questions I touched of, outperformed, on on can box you maybe build Or your Sean, sure of given higher in do you product margin QX, you you the of sequentially update, than you you insight QX than know, forecast releases, But And would of but wide But sort for guess, 'XX about not, the to the in like Melissa, or phasing any the QX seems how sub do then like, was rest

quarters here. had pressure it's X sequential think of I about

through is if and the and Just point of curious the term? of a the you quarter, you in of what's driving that? think year this And can margins remainder build sort low back medium sort

Sean Gamble

Thanks Mike. the just this questions, Sure. Specific, Karate we quarter. out yes, I the for we in shifts saw a year, with year. little like lift Kid moved just starting title of There's guess, bit a first know, like been some

it $XXX Hollywood frames. time so X-plus of million all XX we we're totality to So at of months from to when films, year. relative probably seeing still Overall, we what releases, or And which around the view year's last the advantage wide touch million, we counting at were XXXX, of strikes that's from is byproduct of year. still, look a at about from down at still we our $XXX think looks the volume of a last again, least consistent onset pretty the point, pre-pandemic

particularly that So the most of the more as impact fourth is those are particular quarter, films get loaded. in more like towards the first really impacted. things you those through playing ramp More year. have releases things of because as definitely part the up, start were the the larger of is And that to mentioned, back-end when in complex the effects, productions, you year complex that that's visual scale then

we're at X of we point, were still So I'd comparable again, is seeing stage, what things at anticipating year kind least, this think say vantage to from our we months ago. the looking

'XX, to get see that. strikes. would on back curve a mean, practice viewpoint from still that progression 'XX our We're per strikes, volume. overall anticipating it's of we continue early then on we 'XX, will been we this recovery. was to 'XX to nice 'XX. to were to hiccup bit 'XX the out optimistic that handle little you the Prior try think normal saw a we're look And 'XX likely that I that spring full trajectory and trajectory from to we to to had going a As we've

in for be that during 'XX convention films really there the will or it 'XX the incredibly and somewhere So those been back promising. in to strikes, for out that titles of strikes with pushes look some shared to of above year. fully I'd we'll bit improvement a and strikes, 'XX levels. what past think least are likely lift XXXX, to on get could CinemaCon, at And quality line saw mean last releasing we the prepandemic the a or really little between XXXX nice know of of are prepandemic going be I Prior just once think I further. on the that the thought materials next just we in of that again, about with pleased lot and coming. optimistic year see to we're say, levels, the the there's were that But that we effects the we questions be up presentation potential we're

Melissa Thomas

a of question QX primarily in driven mix that as concession items on Mike, did our year-over-year key some your some that, well factors: to And domestic then in we saw product of increases you by the the cost rate, shift cost see core as merchandise change in lower was of margin candy. in such as items. rate X in terms one, concession towards addition

partially So pricing fountain and And been realized was offsetting we've T&D. beverages, that then the strategic we actions from drinks bottled benefits that implementing. that

expect concession of do we the revenue begin moderate next as to forward, costs few a concession quarters. to percentage look over you As

as expand overall year anticipate product Now look from due offerings. third-party offerings step part to a COGS grow as sales, to margins continue still of reflect XXXX will concession our rate as full that that modest lower delivery, to concession up for said, in we do well scale levels our food or than core which -- mix kind enhanced merchandise have we

ongoing transportation, Now while cocoa. to namely in in we expect packaging XXXX, do pressure and continue inflationary particularly commodities, certain

to moderating. pressures these topping by oil prices canola and We corn, expect somewhat offset be buttery

possible, strategies So to we offset to inflationary on strategies incidents. impacts strategic pricing our drive proactive continue sourcing efforts, really also management to and execute wherever including through category

Operator

Goss from Next with question the Jim comes of Barrington. line

James Goss

count you count You also right new reduction had I nature discussed you rationalization? now? expect earlier because can more. posed sort have we interested at over at drag over in you that pandemic. you I your revenue less also screen what of builds. past had of somewhat profit screen years, been it's are or through has was of doing caution And should the those of about headwind and years of But talk of X screen about a the But think, I imagine count looking have out less the the the on process mostly a you've reduction since screens impact the and Or cutting the might impact.

Sean Gamble

breakeven But lower-performing a on were cost excess in on have down that say to ones relative those us we've or slightly has we're that. slightly There the rationalization screen we're that U.S., so ones question. Certainly, X% those screens in more prepenandemic. screens. we've are of of industry On basis seen probably Thanks, screens of whole, I'd closed pandemic. Jim. just total the performance. net since the opened, that theaters, Good for XX% of that about below that were older our closed the of the majority the are those versus

net from in an financials, and we've bottom a terms between opened, what actually we've net-net positive on closed line. So that's of overall what impact

So particular in I'd that. very, say been we've very

and and been to made So in and bit. cases, theaters modifications a things rationalize sense just many there's and to improve certain leases like go we've make able to back that been it

looking opportunity So new as to of leases exit shore overall on of bit bit strained certain theaters, do those then our there's part make we that to in footprint to just with where whole, really higher-performing footprints that's a are of a adding we're we're modifications the theaters have And theaters our whole look optimization and calculus. to our the pressure more where up those opportunity. so then to there's ones that again, where

older our phase of are they're end the As it of we theaters or leases. as look ahead, continue practice where yes, sense we're to newer I'd I to of was how their with does part of now that We're in always does it performing, those looking opportunities. mean sense and say to to kind coming it normal make at look make

fold. certainly but we have builds this our reinvigorated pandemic closures there could regard new practice. a be the development the coming of and over normal That's So And I I of pipeline looking our to new as years, at just earlier, bring mentioned with at -- see new assets to into point. more the some incremental necessarily wouldn't byproduct we that's say that

could offset also that that. So

James Goss

which that to or talking net-net seems base also alternative when Are other call with brought right other both about genres smaller Can to it talking are audiences? about the faith you seems what alternative trains those any like In more. get calls, little plans using talk the a as resonate bit concerts other the can Would be lot wisdom conventional up. recent and might this with sports, other of along of your you you it Okay. this one. days, IMAX, content. be you've if you thinking And best and might content, talked type one like lines? I'm the are was about content about ahead wondering there a And or it's you things?

Sean Gamble

around of just we've content. Historically, overall, always finally titles, these types to in X% definitely, of hovered seeing and with that. more it Look, to Sure. a potential office. thrilled a And kind of box been see alternative of there we felt lot X% life burst was we're

the our board. particular For I the It's driver. circuit, is any say really across wouldn't necessarily that there's one category

of represented whether these we're more different area. So multicultural thrilled across success nontraditional just titles of first categories. it that seeing a all And we're in see titles, into about for coming content concerts, the to faith-based and be films, XX% of you our great named quarter, significance few them, anime, of theaters more Again, box office.

last nontraditional was for a So year, it's again, definitely films. inflated to year similar which banner

key be that. say done certainly into we're often leaning So space. there's the I'd work is this to in

licenses those So faith-based an on because how finding scale. one or way can area week something film the And concert types of the get to tend question run the events throughout a a you becomes that then to a the singular due versus scale you really. mentioned, weeks, as themselves be products just It's to like that Sports, something those show singular like of is can time a or complicated opportunity. also lend work.

there. there So some are questions

about all properties those scale. it's So with finding

earlier for be things bring kinds to types into products unique event talking periods that mean theaters. week, of opportunities other in also the were the we could more some that with of that we the is potential there also of I our Looking about fill during slower for that.

What's they been that been who wonderful bring exposed is, moviegoing practice. types of get exposed films, recliner to and yes, So being I see. nice into types have see industriquently the not folks also who also to of what's then seats, get think to titles can these theaters realized. do have may we'll -- films new start of these audiences has the is of types a the then is to potential But

it So of kind of type can expand beyond content. this

optimistic about across So cuts again, we range categories. it continued really growth remain of this space, a and really in

Operator

from comes the question Goldman with Next Laszczyk Stephen line Sachs. of

Stephen Laszczyk

of taking the especially the given mentioned thoughts stretches the price, could ticket Melissa. Maybe your front. Sean, the update the and And coming just you you're next us some up from you here in-demand one for more seeing resilience consumer that, on latest on on quarters? law over earlier then few

I'm some facility move over curious prior in might think it expense. be opportunity on there next is I Sean, few the much your there years? Just but lease you opportunity mentioned needle negotiate to there to on response, rent. think you the how

Sean Gamble

one. mean, the mean, obviously, is the an Okay. for now. on that question we're about we in environment the Stephen. pricing question, were I right I important talking Look, Thanks

an area careful point. and lot about, on it's So that be about our of are decision-making need data what's price careful the drive right use we we very we to a to

people environment So We've a bit of be careful right, resilience the years. type lot there, And over certainly change too a push may that be what while inflationary that a has been data. far got we to be use where more things has go and been select. again, high that we to we they consumer especially demand don't of dynamic, could seen discretion starting strong, in in that

trying food team up. maximize a unilaterally capture attendance, We really to as food which and sales much that and It beverage both to on make ways. with can, go It's focuses cuts maximize that have this ways heavily revenues. both to can we sure not and regard overall box opportunity to as maximize we're beverage office, basically incidents

constantly we'll lots So again, just that we way. continue one it's stay it is evolving, to there's isn't It it's believe of of early ongoing something and that utilized but analytics. a further dynamic opportunity with on top

Melissa Thomas

contractual respect that obligation. with to so it's important expense, leases lease or facility note then to And

So there position. given lease an relates as renegotiate But isn't dates of theaters. a in have said, regard, challenged our in for particularly catalyst we end more to about, unless year. our renegotiate actively the working to particularly that to given in success much financial any their expiration our renewal XX% That leases to up mind renewal or some call a it, only our of And XX% approach. term for strength a consent landlord there's are the needs such of seen keep lease we're as in event a redevelopment, their of leases that as it

fairly a it's percentage. small So

Operator

and Gamble we to I the for now over comments. closing of like gentlemen, would question-and-answer Ladies have to floor the turn reached session. you. Thank end Sean

Sean Gamble

again on We this indicators you also joining exceptional opportunities morning. the positioned for well thank before our highly of our remain the of we as we we forward-looking I'd results. us Cinemark consumer ahead second advantage quarter and our and like related emphasize incremental again that operator, speaking to behavior, with particularly releases just drive that film as to to you we position is based that different to Thank current pertaining on and encouraged wealth see we all value do think see the and we following to prosper just account you, creation. dynamics team, look look to moviegoing forward discussed

the this So thanks morning. time again for

Operator

you. concludes teleconference. This Thank today's

your You disconnect for you at your time. lines may Thank participation. this

Cinemark (CNK) 2 May 242024 Q1 Earnings call transcript