CNK - Earnings call transcript Q4 2024 | Cinemark Holdings, Inc.

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Operator

Greetings, and welcome to Cinemark Holdings Fourth Quarter and Full Year 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Chanda Brashears, Senior Vice President of Investor Relations. Thank you. ahead. go Please

Chanda Brashears

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

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

company's or but which projections company's The actual materially factors cause was include, may filed uncertainties those in are These expectations differ or plans, statements from statements. cause statements limited implied and could financial not detailed are Forward-looking expressed to, to this the statements the results morning. or results other to that materially of forward-looking objectives, risks subject XX-K, in company's intentions. forward-looking necessarily to the could are differ the that

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

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

Sean Gamble

Thank morning, Chanda, good everyone. and you,

started, sympathies colleagues, Angeles get to we wildfires our California. been devastating many in the community partners impacted collective like has deep Before express that for first and I'd friends, our Los by the

to you you difficult as out manage of go all this hearts Our time. through

our this for us for fourth and you Thank call. joining XXXX morning full quarter all year earnings

fourth and capital will full highlights, remarks During and I on financials then today, Melissa go-forward our details to our provide year strategy. will predominantly focus allocation pertaining prepared quarter

matched the that captivating on the appeal cinematic results experiencing back of fostered at the continued The yet enthusiasm home in emotional that look larger-than-life of we communal, deep Throughout exclusive are setting can't a enjoyment, a movie irreplaceable year, sight in reinforced box elevated experiences and sound and office stories and be impact of by collective and else. audiences films showcased timeless form and ongoing entertainment. or accentuate again impact for immersed grand ever-evolving unique a that this their scale long-established cutting-edge environment. with technology on being to enduring to theater theatrical shared As anywhere memories once lasting are XXXX, events

box to year North XXXX prior within climbed approximately despite were American in significant that which industry Hollywood. headwinds office billion X% in XXXX, of reached by the imposed $X.X the strikes

expectations overall was Thanksgiving and and more far that box to R-rated history, all the exceeded all-time most animated successful records. office released America's North Examples the film include results momentum big As with the compelling in film time surged, of ever. more content numerous grossing delivering screen, weekend moviegoing biggest highest

nostalgia fans predecessors franchise beloved and generations, long-time to both well into sequels installments with attracting fresh multiple as outperformed storylines. tapped as and legacy Furthermore, blend new of characters faces audiences while their unite a

basis XXX once our and box And industry internationally. and XXX results, that as outpaced better-than-expected year-over-year above swelled with beyond by points points basis Cinemark again office industry the went to performance domestically

and XX extended by benchmarks exceeds the We basis now respective pandemic the years. in of XXX have trend points our since now industry to in XX to North recovery relative our basis past XXXX, outperformance America points LatAm. And XXX

despite of margin we adjusted more incident basis million billion with concession our a new XXX purchase a achieved EBITDA EBITDA entertained across guests sales market flat XX.X% in than XXX and pre-pandemic delivered our all-time meaningful revenue we that more XXXX, X% share per our circuit. of Furthermore, $X.XX by baseline, of points rate our decline relative of solid maintained food worldwide we and another and beverage to domestic year-over-year with high was gains we adjusted propelled cap Altogether, During record $X highest than more attendance. than second ever. global that $XXX also million was

We also cash million generated strong free sheet. our flow refortified of and $XXX further balance

the the film release toward of effectively a dynamic an are strategic on year flows initiatives range simultaneously intense of and navigating Our focus success. ebbs the while for company wide of byproduct volume results our positioning advancing geared throughout future

initiatives, processes our build updates thought the I Over And I pursued would provided audiences, this footprint. our of guests, full morning, we a grow recap. several to streamline elevate we've quarters, new past year provide and these on optimize including experience the sources I share brief actions revenue,

is screens on drivers to our primary that the The attracts we guests content always one of theaters. show our

do tools then filmmakers all and that phenomenal that years. to of with many audiences to we audiences interest we films to them. theaters are over and see marketing then those advertising driving work intriguing developed of partners studio the films and to of impact scheduling Cinemark, campaigns job At kinds our producing Our sophisticated compelling a have captivating to reach, and the hard conversion campaigns, those loyalty programs amplify through generate extensive

communications and our making addressable sales. whom more history and variations website millions purchase notifications, now stimulate our contacts XX effectiveness Utilizing and We than of appealing. we increase global action send unique e-mails, relevant them ticket to personalized, have push to by weekly circuit to app their automatically across with million calls highly expressed to tailored interest,

driven social and year established connection and our each wide have to brand. increasing Cinemark has digital that affinity with also outreach We billions that a generates impressions heightened engagement a of

loyalty in of awareness frequency. Our moviegoing also and films boosting impact significant increasing programs upcoming deliver

membership the program, subscribers nearly X.X And XX% fan to another Our Club. course grew year, guests million continue members. to favorite value of our find over the Movie tremendous monthly in

half are XXXX, quarter. communication Movie over represent rewards program, consistently our channel now our XX% our of Movie Club represent with satisfied box And of our through They office to domestic We domestic members. an with every office. grew have Club members of Moreover, purchased active box free in our most customers. combined loyalty consistently tickets movie proceeds

and and to the use have stimulate we ongoing to most. to schedule demand, also that see volume an our efforts moviegoing and addition showtimes, our we utilizing to the loyalty improved of further availability capabilities. we increased controls programming In want database films consumers Through of refinement marketing tools

Additionally, during we release pursued slower nontraditional periods to to actively as our base. content again as attract expand of guests audience theaters well volume once to our

faith-based for continue Foreign more a our to generated domestic year films XX% in reporatory the admissions and and concert of appeal and row. grow revenue than third

our remain show we visit our when is our the what positive back service to enhancing and continuously what's is equally a our they keeping continues important provide guests we deliver of beyond entertainment ratings that To of more nearly screens, course, them Of execution experience theaters. XX% in-theater we for coming presentation, in industry earn and on us unmatched the comprehensive our atmosphere amenities, guests. that committed from to end, satisfaction quality across and to that value

the advancing conversion continued entire circuit we our to reaching XXXX, footprint. projectors, In multiyear our Barco laser of of global XX%

superb We digital diligently industry-leading incredible more an sustaining maintained also delivering throughout while million year. our XX.XX% of projectors light our the shows uptime fleet across than XX levels

screens our new box the premium large by installations. extracting In achieved commitment our also maintained increased office investing so, record-breaking We in XD format impact doing #X format. we auditoriums, world's driven previous premium while for exhibitor from amenities, results to our branded

almost proceeds, for grew box XXXX a of XX.X% X.X% points was screens, but basis count. office PLFs our record year, motion D-BOX new office up full accounted our points Similarly, XXX seats almost seat that from the total of which XX% also box expansion basis XX% represented XXXX. and on total a For XX from in our year-over-year set

continue also drive our our we recliner to benefits span seats course, circuit. Of XX% of that fleet of from premium widespread substantial approximately domestic

enjoy our beverage to theaters selection. also is experience and guests that the at and our Another atmosphere amenity meaningfully contributes food

offerings. During of of assortment further we enriched XXXX, and variety, the concession purchase our ease

hone local and our hot We facings fine-tune to of to the continue sell-through. menus expand to cater better enhanced self-service to tastes food our layout improve options,

fun, many movies. ramping with time, we to excitement also into lines and mentioned up merchandise, trends now on further all-time convenience more queue platform. consumer in theaters introduction while the food mobile high expedited our same I our We elevates going X/X for of leaned are and to actively these of our that the excitement that further earlier. capitalize drove present At which of the results domestic ordering work for the Collectively, actions beverage growing movie-themed anticipation emerging

round made in the we out advancing continued XXXX, and we To our sophistication also we operate have progress our the initiatives to business. the way in strategic efficiencies increase

efforts, continuous we using increase simplify payroll procedures by quality Through service and our year, drive operating the automation management further focus pursuit our of data, as without productivity course labor workforce maintained our improvement and tasks, hours in we decision-making. to ongoing customer of tools to a analytics reengineered on upside preserving the our varied strengthen refined and productivity standards. successfully compromising while year third deployed capabilities as guest our enhanced well reducing per of generate staffing straight to Over

our sourcing amenities combat And goods feeder we and of as pressures and utilities. work the also to inflationary in more deflation We cost intelligence actively cost overall pursue product market procurement elasticities with invested theater demand further practices level, dynamics. and strengthened to a in calibrated aggressively and analytics sold on alternatives at ongoing services, our aligned pricing team, realm respond pricing, and to closely of stays monitor market our so we to and discrete evolving more and

ongoing impact in significant us strikes. maintain XXXX continue margins caused that helping attendance with the they believe by our of in afford forward. headwinds will us XXXX actions to All we provided we the were despite move these strong consistent to as benefits Moreover,

for positioning exceptional outstanding advancements of commend while year deliver agility their another our team to company in skill to like to prosperity. significant results our continuing make I'd yet and Cinemark for stellar long-term determination,

recovery like As reflect balance XXXX from XXXX relatively continues it will our and first to to the holds the a trajectory and quarter, optimistic was nice After and forward for we the the looking notch highly Hollywood, in we remain already what a to release prior strikes back schedule another following theatrical beyond, of turn industry attention for to the future is about light the XXXX XXXX year spring there. step exhibition. our Cinemark

As this little XXX releases over dated wide of a today, have year. been

around We XX%. is pre-pandemic of years a that figure by and to year-end, X grow expect roughly past settled the XX% XXX likely which from improvement further that levels around represents will

Chosen. X. Know Legends, Kings thriller Good titles, King Indian seen adventure Comedies FX First Lilo Superman like XX. and plays Fare, and including Family SAW Warfare and the ASH. White, Zootopia and Train, Rebirth; Conjuring Karate to Naked horror and superhero the America Last Captain in Stitch, I the Suspense Steps. of Abby Summer, for a truly such Snow the weekend's including of films, and hosts World have that Minecraft spectacles There's this titles next World, Avatar, scheme XX, slate What X Faith-based of Jurassic movie; most action range offers New include we both Mission and Final Nostalgia season and Kid films, Smurfs, You course, as XXXX and like SiFi Brave genres Gun Last How the since and Fenician Mike films and Accountant The as launch a everyone. drama Reckoning; past X, Ballerina; something heroic Fantasy Friday Wicked of Megan Michael. Thunderbolts, X; Reboot. like COVID and, a such and Fantastic the for X Rights with Impossible, varieties of like Did Fire diversified of Fricker that [indiscernible], small, big wide The and Downtown

Toy Spielberg on The to name packed widely include filmmakers slate installments popular new film Shrek, franchises XXXX Christopher in a with as new Spider-Man, Avengers, original and Hunger from like movies well list Dune, few. that Games and on. Jordan Steven Peele, Story, XXX'sX from Minions, the and then Brothers Mario jam Nolan, And goes already is as just

thrilled the on of compelling promising to to many been are with We content the already build see films announced. lineup horizon so continue have that

and capitalize next progression on to we the that actions concession margin of top refine the attendance, capabilities so, of our resurgence, scheduling, over driving plan pursuing and consider content X programming maximizing marketing, aggressively leveraging to continue one office further do loyalty opportunities. our pricing and forward our showtime fully while sales To going strategically box is positive potential. we to priorities years, film and As

This value, years scaling while, the maintain focus build and the advancing initiatives driving the to prudence Cinemark same the us will well and position. and the our so we finally, time, success. guests, investments our strategic long-term advantaged maintain opportunities diversification helped market operating we position productivity to all us on experiences circuit, pursuing At gains. our and elevate up to upgrade for our continuing further have And intend to over and discipline and provide growth includes we our revenue the incremental and growth that served maintain quality

continue and investment staying market of on will remaining We navigating cash management with resolving debt. actively trends, fluctuations focus our expense attendance, COVID-related remaining in ahead to effectively disciplined and

We've is huge new many past the these in we channels, our because over optimize account expand environment growth capabilities, establish COVID actions develop financial made strides today's of to since shape in We position. pursued the excellent years and enhanced our market efforts. advantages on believe Cinemark strengthen have our circuit, operating of

further to control of the incremental positive company, Furthermore, future recovery the outlook our that overall. anticipate many creation we a maintain value the directly current the and industry on our state opportunities are we for drive within based

As cash shareholder dividend. and resilience recovery reinstated from of value. prosperity morning event another Cinemark remarkable of reflects commitment thrilled have our the confidence are the to creating and milestone this to to we our marks sensational we in we our in such, long-term team and date, future the announce the achievements This major have that company's pandemic our

I will on capital the quarter Melissa, will allocation Melissa? call fourth who now turn added and over to results provide strategy. our context

Melissa Thomas

everyone, thank and and for with performance. We and Sean. operating year Thank Good full XXXX our call fourth you, joining the financial were morning, pleased very you today. quarter

surpassed industry exceptional Cinemark Our success results was our team's far and execution. fueled operational that by expectations,

we quarter, goers increase revenue a EBITDA worldwide of the and movie the with given increased $XXX.X fourth of significant QX gained a doubling the XX% of $XXX.X Moreover, quarter leverage execution films. to million. higher nearly our million initiatives, entertained of increased our our from million. our fourth across compared XX footprint, the global we the XXXX benefited We with to strategic scale In XX% grew year-over-year of and adjusted nearly attendance fixed volume over record costs

We our EBITDA also to by margin adjusted XX.X%. expanded basis XXX points

compared than quarter we we Domestically, XX% year, QX up compared share of of with basis patrons, the flat welcomed our pre-pandemic elevated significant points and the the share with held levels We XX.X with maintained saw last gains million more XXX market in period. fourth XXXX. of

to strategic heavily as well particularly towards share was family well skewed by that our a market films, Our which bolstered tend in content mix circuit, more our initiatives. perform as

associated X% strategic able We format concert was last average the XD Tour premium Eras higher on film to We from Taylor The of Propelled This $XXX.X with slower penetration. capacity $XX.XX. increased alternative year's the season. million. to content October the challenging revenue admissions our during price mix, initiatives grow ticket and comparison also were the our benefited overcome which higher during opportunities content XX% the we domestic year-over-year capitalize to by our holiday ability offset period, some crowded by impact driven the particularly and Swift, attendance, experienced to of primarily constraints growth pricing

delivered a $X.XX. concession year-over-year record-setting million to sizable We grew cap and per $XXX.X fourth quarter of a XX% domestic our revenue

with rates attendance. strong per concession driven cap despite up nearly Our by pricing was outsized X%, in incidence increase holding the strategic

revenue an an in increase XX% service payment onetime a contractual penetration third-party Other primarily received higher provider. million, was year-over-year, due million $XX and $X of online from attendance, a to increase

$XXX EBITDA, and million margin. a revenue of XX.X% yielding adjusted healthy EBITDA million $XXX.X delivered operations domestic our Overall, of adjusted

quarter to XX.X period. and Shifting our reached to XX% meaningfully representing market share international compared XX% of the outperform pre-pandemic during Notably, same our the XXXX the last quarter, levels, international year. with our continued million increase period attendance fourth segment. a We entertained guests fourth

adjusted revenue, million year-over-year and million $XX.X admissions international $XX.X we $XX.X of to EBITDA $XXX.X XX.X% $XX.X quarter. of revenue the revenue adjusted Internationally, concession XX% other of million a increased in In we yielding XXX% million to total, fourth delivered grew revenue EBITDA margin. million, and

attendance, the expected offset increase stronger by film FX inflationary International XX% partially adjusted associated with leverage enhanced impacts, EBITDA benefited in that were performances operating and from devaluation. than

intricate significant political record and meaningfully American throughout benefit managing track from in regions. economic our the to environment local continue We effectively long expertise our team and Latin

a XX% and XXX basis of the increased to down pricing high by driven and box rebates, product lower expense will year-over-year, and the favorable quarter certain expenses. films, forward recovery. by was of Concession concession XX an global its a fourth revenue, with concentration going as which office basis continues concession mix. offset revenue is were grossing and Film of of a overall XX.X%, strategic admissions inflationary the of and partially categories moist Turning [ concession rental as advertising measures, compared XXXX shift due up shrink points titles pressures mix dynamic points expect we costs on to percent persist in ]

with to wages XXXX in XX% fourth and offset as operating attendance compared salaries quarter $XXX.X were higher accommodate These by Global productivity hours, higher up benefits. increase employee to increases partially the our due million, wage of rates well and as hours the initiatives. payroll of were and impact expanded the labor

As percent and basis declined year-over-year. points wages salaries of a revenue, total XXX

lease a well rent domestic Facility internationally was X% expense attendance. due higher increase year-over-year, nature relatively $XX.X of the to as million, fixed variable in leases increase the reflecting as modest of

revenue, lease of points. decreased a basis expense XXX total As facility percent

from expense liability and as attendance, and such insurance. line higher variable This in other expense also by the primarily which driven fourth was property card impacted the Utilities was item quarter card higher gift costs our commissions XX% million, impacted $XXX.X credit up by increase XXXX, and fees.

total basis and revenue, declined points. percent XXX of a other As utilities

inflation, share-based exchange impacts compensation benefits lower These fluctuations. and and million incentive by $XX.X and year-over-year to severance foreign rate higher fourth were increased quarter partially was in compensation. offset expense increased the wage due G&A and costs

Cinemark income to Inc. quarter of of delivered in fourth attributable we and earnings diluted net per share $XX.X Globally, the Holdings, $X.XX. million

year, $XXX.X and per earnings the Cinemark of of full Inc. generated million share $X.XX. to diluted For we income Holdings, attributable net

Shifting to in which year with the elevated prepare healthy convertible the We sheet. our XXXX. notes to maturing as we of $X.X August cash, remains balance ended a billion of address

million lower cash was we attributes working levels fourth box free December period. during flow, year-end generation associated with stronger flow our by XXXX. generated the Our has tailwinds our million lower in $XXX $XXX Specific balance pandemic accumulated quarter, cash the free during utilization which the CapEx tax capital cash of bolstered of benefited to from to from as mind, of office. cash taxes Keep free well due as benefited cash flow

As our we cash expect will as box taxes will CapEx look levels up recovery forward, ramp increase. resumes and we office our

allocation. Turning to capital

priorities. consistently X our with our capital sheet, returning we have to success, to on excess we focus a the As stated, company long-term pillars strategy, and have first over few investing X past to position strengthening years allocation capital the the shareholders balance for

in loan the recently our $XXX pillar, our the target of ending strengthen are where progress X.Xx Xx, through ratio point X the on Regarding the and maturities We range net to paid term basis reduction. at achieved extended leverage we balance year maintained a XX first November, our of reduced most million XXXX we during pandemic-related our reprices, we of our successful within interest sheet. net leverage. debt, proud we made Furthermore, rate to down

company, health the us a flexibility sheet to key our with differentiator asset invest and continue our a of maintain our strategic for the circuit. We growth in providing and to as long-term view balance

expenditures. spent on Moving second XXXX, to secure we long-term accretive success. million In and financially strategic to pillar, our capital Cinemark's grow and pursuing $XXX investments

recovery, on anticipated to are capital $XXX our office capitalize XXXX for increasing expenditures the approximately to intent box recovery our Given million. and that we

of half ROI-generating such enhancements, beverage be roughly projector builds spend and that allocate recliners, new formats other and circuit laser conversions remainder confidence, high high-quality a to expect spent opportunities, including with towards on the maintaining premium and to We as and food upgrades. theater

priorities. we and sheet pillars, coupled the to and industry's reevaluated have intend given our X expectations strength recovery, to around we growth allocation capital the on the these opportunities, broader While near-term Cinemark our with foremost, first continue of progress made balance we've our prioritize and

per shares, third are reinstatement of thrilled an of Based of has payable our dividend we our excess approximately quarterly, share, X% returning to For to Board $XX representing capital equates this shareholders, cash that our outstanding $X.XX pillar, authorized million the Directors on to an yield. share annually. approximate annual

on X. The our reinstatement March our performance XX the record health as dividend well sheet, March strength seeing first of quarterly financial to dividend of industry's shareholders as our recovery. of of we of will positive be The are underscores balance the the in and as trends payable operational

leverage remains near of to the convertible repayment this, addressed, primary notes greater our over The capital fully Once stock notes buybacks the our our consideration ratio free term. is flow a to and/or and/or cash our share Beyond mix dividends will intent Xx. within remains our the to of of return shareholders convertible in through time. dividends are of be provided buybacks, target relative X net determined our stock range

sufficient to that creation is that approach and us goal value provides on also to flexibility risk. capital a overarching to mitigating M&A, arise, may including with opportunities future Our while maintain any balanced disciplined capitalize allocation,

XXXX of In positioning closing, are our proud strong the of results we company. and our

shareholder being good business to demonstrating Our capital. our to future invest of our returns, the success dedication enables stewards in us and confidently of prioritize

we financial look highly we forward, while and operating long-term As value creating for all results generate shareholders. continuing strong remain focused to on

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

Operator

Beynon [Operator first of is question Macquarie. from Chad Instructions] coming Today's

Chad Beynon

Sean, reinstating maybe with U.S. Congrats on just the on wanted to the start focusing dividend. I concessions,

big the You record-setting driver couple in grow that mentioned numbers been a Obviously, you've that growth of years. have paces. up putting at this continue the of to next is

we've bit the little environment, consumer Is a the election. drive which of just after seen further particularly purchase, terms more growth? incidence improvement, So can of what's it just to the in going nice maybe a presidential you elaborate overall

grow uncontrollables that CapEx or So line? controllables how it the is kind helping and of see you

Sean Gamble

beverage our over the Look, for continued performance Sure. Chad. food really and years. Thanks been we've the thrilled with question,

food from coming as of big out saw we've a question was I beverage some think baseline there there, reset not in and just would a the it really new There industry to or pandemic. and a to jump continued grow. be whole and whether established the

always and from a of we results overall singles and into as beverage ultimately varied to our look our that the we whole our navigate lay we've kind doubles. that merchandise to way that assortment I of at out of Everything theaters some the through in well. of what types ways the Clearly, in a uptick the had. series we're new purchase lines food It's ease way of initiatives optimizing over game just the has to different drive and putting theaters the we had years that of big last forward-facing have fixtures couple theaters. as

it's whole range a of things. So

Specific food same plays I for question like the into not ticket pricing, only on but to pricing have that on working optimize our mean, our strategic too, incidents pricing kind based goes your team how and that's beverage. and it, elasticity, to we of best on

And the on heavily several do the So those in ease tends of like there's I a through what component we're other to richest just we still to do our of through lead that. we just guests have of margins. that offering growth promotions, overall last from the more But focus fine-tuning and of volume purchase. years come stimulating terms to the some better things of mentioned seen how bulk And we over incidents. drive

of got over try in to are of to series to that we've and a just of motion initiatives sustain a range continue increases wide whole those So time. things, types

Melissa Thomas

XXXX, XXXX domestic And catalysts context that little expecting of cap Chad, year-over-year we provide continue full year moderately for in concession to per just are bit with grow on to described. our Sean a expectations to

Chad Beynon

faith-based, of feeling And spacing different cetera, then of family-friendly, the of talk et just how the year? loaded about remainder you're for And the this last the this point guess, you're rest at for how X both. feeling the you action, Thank quarters. in about think we point breadth I then at about Great. more, you Can the content of obviously, XXXX, as genres, the content?

Sean Gamble

with quarter as remarks, that Sure as Well, seem the from mentioned mean thing. kind we've the And really bit rest strikes. though would prepared of is mentioned, little had yes, some you first the residual along. of gets we moving conversations I Hollywood later. then it just studios, a impact the be could in year the the

seeing during spacing an the as mentioned, goes, increase the I in as there is we're year. far mean, volume, I -- As more

some content out So that up in with while a more are [indiscernible] there great bunching the are see little do spaced bit pockets of nicely we throughout a year. cadence, periods

So that periods. seen flag. would usually the create I more past. of than our signs in the capacity Again, in that occupancy constraints are maximized positive we've could terms fully some in those Those sense we're in

we mentioned remarks, of we've content, think in of most types it's prepared I the As one the slates diverse seen.

paper, released year. and thus the types have course the of on based on we've seen the films So what films been at we we're over optimistic really think about offer of far, that audiences. that has perform to will these least all And a lot how materials

Operator

Karnovsky next of The JPMorgan. question is David from coming

David Karnovsky

then you versus dividends you the determine just be with your that and might stock? to allocation buyback. how that over Maybe just following on comment to the intend would what on mentioned time? of know you this And factors would I and/or commentary. repurchases the settle up maybe mix cash you capital Can later, convert on want clarify but a

Melissa Thomas

Great.

So convertible in maturities. terms note of your question on

have repay principal notes our maturity. don't amount industry, of conveyed using around financial to our recovery intend the August of provisional optimism call cash So the the that remarks, a given on and do in as our XXXX we in notes condition hand we've convertible The strong prepared upon their feature.

elevated in cash cash, prepare we the converts. balance remain to to do as our we address So expect near the term

factors. have Beyond the we principal choose stock price and us impact in How protects dilution on up to flexibility exceeds the call we $XX.XX, above cash our extent stock place we the a other the from settle either considerations price any do exposure spread shares. upon in $XX.XX, contingent movements the to and potential principal be settle among the will cash or which that amount, hand to amount to have

the And that the We'll so determine of time. and where action shareholders. the company of course that's really we'll there. -- believe based our strategy we're is at on price the that take we And the in best interest stock is

determining to facts stock that versus see the buybacks and time, respect relative will we over the on circumstances of really dividends based With be there. that mix

In cash returns be we'll management terms the not available total the that would circumstances and our based going to time. evaluate again, facts the general, limited and shareholders. consider but But and paid factors ongoing buybacks natures of in at to to dilution of we're that liquidity and include, on things valuation,

David Karnovsky

And then with to on IMAX your just thoughts be topic, on Sean, Narnia a the Okay. for get film. agreement I'd separate interested Netflix's

You'll participating and your But to this your -- opportunity view screens? [ get down with wanted the to footprint. a on overview some at arrangement somewhat an the point overall then you in structure ] XD IMAX participate similar line for whether see your

Sean Gamble

Sure.

I think put interesting they -- it's an together. structure

a such of a we would think as film see release to wide preferred full have that. I more

now. the it's from the also But commentary, that like filmmaker prefer. strategy would their similar to what pretty that's think clear sounds choosing not is employ right I they're to I know

. as So way shift. more promotional talent I real and effort described versus support think any to been this has

up year of films where think against from I releases be film it ultimately, released full several being remains have going be it major studio programmed major gets seen will in a very to other the XXXX, that suppliers. that will it is crowded in how period because

terms of think that it's of a kind plays So how TBD out. I in

but sustainable know I So necessarily it's it's time. one and that's being approach it's concept, an think interesting is an used, that over I don't

Operator

Fishman from question MoffettNathanson. next of is Robert The coming

Robert Fishman

then one and a X-parter for Sean, actually Sean for Melissa you. with start I'll too.

to markets in the So, the you U.S. perform in continue strongly

#X called top the out your you think in footprint. office your XX, talk the advantages I in of domestic or just XX #X geographic about you markets. box of Can XX

getting a from it regions bigger? that think can little suburban, more benefit you U.S. rather in even the bit I still leans

that, flip count XXXX, the your side reduced maybe And on screens. about by screen XXX since of you've

years the underperforming reductions going the more building see you forward in or expect ahead? do further good should So ROI screens we of as screens

Sean Gamble

country suburban We circuit that's and over certainly I our places opportunity say tend We to in not We markets [indiscernible]. Robert. do aren't areas for Los tend as markets. we in nothing that do Great growth, the have markets Yes, think time, evaluate that like profile. U.S. and how in, question. operate some we not inversion across San presence Thanks, to in a to with has just of in the Francisco has to more any large, mean, further evolved those, I Angeles, to other obviously starting we're -- with urban at large the

Ultimately, the boils a to it what's on level. discrete opportunity down

the looked as theaters yielded prospects we So we the just over that as over for time, -- chosen have in we've best to put look we've looked time, places returns.

the So be opportunities that extent out a of into we some to new other broadening there would were confidence high markets open to that had theaters. accretive

of theaters. closing mentioned kind You down

over was but our Clearly, our the by time Melissa pipeline see of kind optimizing pause have overall the terms opportunities pipeline. of of types all right our and be we're that We we whole what priorities of profile capital right balancing for have and believe about footprint part earlier. that We the pocket for and encouraged down strategy do growth continue we return of of of build builds. kind have new new emerging in of returns demographics a future pandemic, allocation spoke the us. that prospects will more a We boil reactivated that the do see to opportunities in the will that during to put bit on

Robert Fishman

cool. Okay,

go back margins prepared so Melissa, some we 'XX. remarks, versus in keeping full of year your flat to 'XX if And

about Just and about in talk like more just the improvement on lot other margin a cost potential is the line beyond. should pieces bit recover and the we of moving think some cost expected 'XX you how film to of Maybe rental Clearly, box little about a can further. with talk items side office efficiencies. costs

Melissa Thomas

All right.

based our first performance margins as box past further on had experiencing been optimistic beyond. So that ability we've I'd if the couple couple margins, of a expand go-forward XXXX years. and highlight that in We're to certainly of the on over office we the rebounds things

ongoing as as leverage average stronger cost of due well we our prices our the execution year-over-year do from initiatives operating over ticket in our to caps. concession and In as as to benefit XXXX, expect our margin well fixed office terms strategic higher of the per box growth our

However, share somewhat office mentioned. offset auditoriums recovers, and pressures, box expense as well increasingly market by benefits these as the anticipated may be as and tempering as capacity limits reached ongoing you inflationary other

I on in would for More things of expense there's side, couple the specifically XXXX, margins project mind. keep that you a out, as

of content do given we rates last -- in versus expect XXXX film our will rental greater share a concentration greater blockbuster first, anticipated. year increase So

pressure salaries Second, have to may ongoing do adjust the as in changes impact rate international we side, that take local to wage account. with which levels rebounds. flexibility facing wages office laws, to And staffing due further on margins then want into specific you less labor we to box international and attendance, the are

and year and I'd the circuit. call that maintenance needs as expect utilities also We do reflect repairs this maintenance other. out some to deferred higher address we across

G&A the there advance are to nature. initiatives and and on look but further count the will modest targeted we invest then And those increases be in success, head long-term for our in side, expected strategic company to capabilities investments position as

well the the on Latin America you side, the want FX inflation And in always factor dynamics as then to region. in as lastly,

and highly All do of focused we that said, maximizing potential. overall margin remain on profitability

Operator

Handler of, is next coming Capital. question The ROTH Eric from

Eric Handler

on had from of year, a adjusted question. XX-year basis consensus a at record variation operating as the margin least track Sean, above record use sort pre-pandemic get you -- a levels? last can a maybe to there or see was Revenue other this attendance levels, level. matter you EBITDA XX%, to a that do Melissa to close long XX%. But of of like Cinemark to fact, there? how get of back those Or levers for have back to record is are get normalized sort average

Melissa Thomas

one, that take Eric. I'll

dividends a pre-pandemic which margin NCM So not will recur and rates it's DCIP, XXX on about from points by received benefited basis from that worth noting go-forward basis.

factors, market that, caps the shifting As market be share concession office. going But key those going average on us beverage or extent going attendance per higher the forward, success, the is sustain ability food to ticket and and be box we business attendance kind beverage, to mix of towards of the that prices grow share particularly think the and which margin. the are drivers market you've Those we of biggest as about have which that, share, seen levers to to grow food side, in well are of to margin certainly and drive our as biggest expansion is outside expansion. margin

of that side generating place, it whether on margins. then and that, And takes expand headwinds look are outside certainly puts our be are some driving we to mitigating we're And But facing. offsetting to really going to to revenue be cost us. it's pressures initiatives that cost many for in have the continue productivity there expense

Eric Handler

variation seeing domestic we did those That's of helpful. -- when new you maybe mention projects versus many Sean, that believe of have signed come do And we your then, And up you then build can I reactivating do plans. of And about LATAM? about you in point, At budget. sort some part this that our is XXXX can start the between maybe for construction? talk And when online?

Sean Gamble

in actually fact, Sure concept, right opening thing. family in Yes, which is first that our have location center entertainment now. El new a Paso, this week, happening is we

some expect working continuing so that this we a do and of as opportunities are year. point, motion I -- committed have have that's we we're of other this other also We in will a mean be on. couple happening build. we variety that projects of also to not things, There's that that are

will and recovery, cash earlier, overall the strength mentioned I opportunities. projections, the of balance on as pace that, be our objectives of flow just just dependent ongoing course, that that Of industry our sheet fortification

range that So there's that. go things of into a

markets, at the domestic-based international that the versus bit a additions opportunities that are would this say this slower we are have stage screen point those as at that things reactivated things too. far in actually and in There well couple moving international are of that's our as a U.S. what's nature, motion I kind little base. exploration happening LatAm of of than some across But so More as of

Operator

Morgan from coming is question next Swinburne of Stanley. Ben The

Benjamin Swinburne

I if know wanted to a you ask I Because, cash can cash of rate couple 'XX. don't tax us in with questions. help flow-related

range. income you think was I grow, but would entirely that's to income last 'XX. partly because longer-term year, because taxes of million in within spending think you And presume then cash about I XX% grow. going kind I to the book in said 'XX $XXX range. a of is it or what I know your -- conference capital Obviously, million in that that's had $XXX numbers mentioned at

to right framework? wanted of the still Just longer-term was see if kind that

think dividends, And is whatever when how the to the right is with flow maybe ratio then going cash some buybacks free -- it's tied how you cash combine do you more guys degree, generation. to think the presumably important I and flow just to question you it free do and just Board do about payout you're

of out paying XX% were given August I get we return Obviously, to think once what's of XX% was just year. any to cash at be dividend like to beyond you higher. about the the term, in much $XX is like last convert? But Pre-pandemic, the around million going your sort least flow. philosophy XXX% year's capital free dividend long

Melissa Thomas

with the I'll cash Sure. taxes. start

So meaningfully do on side, up that to there's taxes XXXX. the a in of we that. drivers cash And start expect couple to step of

continues, naturally is increase. our to recovery cash First cause business that taxes will

our rate available return We XX%. and thirdly, under income since their also to then tax of minimize holiday a XXXX, have to tax income less Brazil, And has tax start to statutory tax been attributes corporate they'll exposure.

XXXX. to increase our So those factors X really in are taxes driving cash

rate and where look normalized basis, that back begin land, will step return to on you will a As to XX%. we think effective tax at closer that,

tax side. the So context cash on the that's

time. what and really expenditures capital be of over terms In normalized range that would

in stated for million mentioned, you normalized is range, within that at the as we're Ben, [ year. to as We being expectation the this $XXX have past, XXX million and ] $XXX

that's be about think investment opportunities we grow beyond do little to number we accretive beyond As that time. million at to that $XXX a could going contingent XXXX, the upon think that, potentially the but

for range we have things shake good pretty a where opportunities out. that's now, to for are. think we'll could the But say ROI where I'd see So

allocate in point that over time. flow, cash free of And how percentage about thinking will then flow on third free the cash ultimately of terms we're we the

time that allocation is a our to that thinking capital to risk. philosophy strategy make us, sufficient us for of standpoint, the in Just the flexibility mitigating to able we're while from way that are same maintaining we is be front this at opportunities sure about want capture

those X value want sure we're all end of we're shareholders. we for But day factors. that the at long-term make considering to So to trying the just deliver really

So those balancing we'll be factors.

Benjamin Swinburne

the leverage you'll you get you Okay. lower, ratio payout at operate Because, point, the below if your would Or dip range? below within keep obviously, range? leverage some But presumably you'll X%?

Melissa Thomas

Yes.

to forward. for is intent the us leverage going Xx So ratio within that operate X net to

Benjamin Swinburne

get Are if Got know as you don't still you your then deck and to about could crystal ask I next you slate. along And expecting office just box pre-pandemic ball, way? but in the supply the since have 'XX you. game. to well slide I there Sean [indiscernible] year have levels a [indiscernible] slate a back

Sean Gamble

bounce round optimistic that We're to back that out. up would volume of year continuing we'd to XX% pre-pandemic about volume potentially mean, I certainly levels. where back levels. of We the potentially be which to of XXXX And Well, months pre-pandemic thought year impacted XXXX XXX work Hollywood, had then that. to stoppage creep see and in pipeline was. mentioned releases, between looking XXXX will it's a this somewhere clearly, I interesting. be X continuing We're

stakes And 'XX, obviously, for -- to large mean then the XXXX, what's the their studios phenomenal tend plant their I films. about

content, reach [indiscernible] that optimistic definitely well pandemic. that continue on an and that based very nice we as we line to nontraditional visibility sight to much the that and looks like have, it we're out, as until conversations entrants further, mid-tier level we films will the prior ramp gap close smaller Angel round to to get not those But and later. new the Studios of it volume if continue promising. have saw won't the into that in How of We Amazon

the with regard So we're continued see definitely trends encouraged to we by rebuild the of volume.

Operator

from next is Wells coming Omar Fargo. Mejias of The question

Omar Mejias Santiago

next follow-up expectations prior over I the you XX% gap to that years. on talked about remarks by of and maybe XXX Sean, pre-pandemic. for your think your question few films just And the you year-end of closing and a highlighted prepared

about just we studies volume these So the some up volume from entrants just should the from think will how of from. come additional mostly where ramping some smaller of major films or It's new studios, midsize. the

gap Just to that sort or like looks of bridge it. any sort of color potentially that closing on how exceeding

And on than you Melissa higher on bit talked maybe there. I a of -- in from wages and Can think were expected, talked factors? and some drivers you costs about what side, on key But the those concession U.S. internal some were maybe and cost drivers But pressures and about there. inflationary of think about X some pressures the came they salaries inflationary initiatives. the there some potential unpack you've side, elevated. the some also you talked And I

Sean Gamble

what and films up we to Omar. you Yes, all think also traditional XX are that as indicated that all for their your is regarding and with I and on sense our factors speak first the Thanks, with by kind XXXX. partners sense a And then add from question we -- get to your of just up. studio mentioned, [indiscernible], the to get when potential try publicly to plans know has Amazon our

plan terms building up. they of year. similar So has they releases in Studios level of are been delivering scale a intentions. to a films X expressed Lionsgate has have. studio to ramped that major to about Angel AXX X has clearly of the the

we put X I as nontraditional has we together. And then office content been look all that at So how our past -- grown. for over XX% mentioned of of to kind look the box continue it's years.

bigger consumer types see appeal creator and for to concert, We continue content reporatory, gain of films foreign, bigger results. faith-based,

downside of the continue has for that potential that element, mid-tier potential. of on improved dynamic more that think risk because look when more a opportunities more there's just at upside the window. And try we lower there's too. there's to as even equation a result more then We films smaller and So studios to and

And But to coming kind much that closing. Obviously, back we're of how versus it mix we're off. compelling building volume to gap that films too not pre-pandemic, vary really, now. the 'XX get of really about has overall looking we to films to on the is that talking mean, that wouldn't will the scale back year doesn't assessment types the XXX far -- right level more that's within back. that earlier been question, towards average I So get this take and that fully year-to-year. XXX of because of things when were

Melissa Thomas

favorable XX the On Omar, points on in things And side, of to rate, U.S. basis a cost would there we sold, are of your the mention that I were there. then, question cost couple year-over-year there goods

So with strategic there, the that actions. by and pleased we was driven pricing outcome were really

we're the going to think that that see start shrink waste in on continue continue COGS or concession modest increase So we'll due the still certain offset 'XX, some and side. We the categories. inflationary on pressure to higher we we'll we inflationary see and concession attendance forward, modest ongoing front rebates to pressure -- with in see some on saw pressures partially by

semi-variable to expenses, did credit card addition card bit We a margins would varying we But there and attendance, the in higher fees, have the that a to side. other channels. so call in I stronger by increased bit out degrees. point that variable gift see higher namely XX% QX, as in our increase have that, However, did driven impacts card have in as which in sales would in on gift increase commissions on penetration an quarter, maybe utilities little and the the may to janitorial, utilities and been particular, due well come part pressured third-party

We and cost some due impact also on liability side, higher saw property to the fixed insurance.

So that increase there. the contributed to

the something other, is deferred across the addressing mentioned think particularly, elevated to that we remain I into as circuit. side and leaning R&M as do we will going move that are XXXX, utilities we some So be on earlier into maintenance on and that

expect to million headwind $X $XX to around we that and -- that in million XXXX. be of So

Operator

of coming Patrick next Research. Sholl is from The Barrington [ ] question

Unknown Analyst

kind sort with market that giving on share limits? side like capacity slate some question needs guess, maybe maybe kind filling marketing that whether your a your and a slate, slate? the also alternative how you're the of And bit you you're the approach at of as of out kind that pricing I like of of stronger you And to just like little back content I then ticket approaching film of and how how closer in context XXXX and XXXX like strong are of supporting slate. in like of that mentioned kind the gain [indiscernible] kind you as of to stand more a and

Melissa Thomas

I'll Okay. start. question take to ticket price the average

for prices we in domestically So in of on full XXXX, XXXX, ticket quarter-to-quarter year growth terms average fluctuate mix. modest based expect will that our film

D-Box maximize with leverage as continue factor going increases, overall to mix analytics from lean some as mix, format and in in expect attendance opportunities in XD, office. your drivers, expected be offset really us that In premium to optimal do to typically FX pricing that's respect a of terms inflationary and on strategic tailwind the well the growth including dynamics XD, region as in of given face for country the well With pricing But a find some prices to box side as the primary continued price the continue film and pressure mind Keep we well. strength to slate. international as ticket to question... from the we data

Sean Gamble

it's On content channels market to some tend to established alternative -- alternative they some ways, marketing, content little bit is target audiences marketing, easier to I'll take niche content more in nontraditional because focused them. that one. With be reach in ways regard with a interesting, to the

those They're a audiences of They So similar. well. to base followers channels as you usually, they films, that concert fold. things those you different can get like . State-based proactively. into the think kinds a films as have broad film kind their usually tap artist for has of looking more of foreign same

the or always a more to on finding So And those look that -- you well content over But of asking, consumers through as it their all our kind marketing own will how marketing these you of channels potential traditional channels, like as that like we're follow of a occasion, have where distributors generally with [indiscernible] a cross to they're direct follow campaign. basically those sound freedom supplemented Pat? these speaking, that's they as getting this of way when mainstream. gets bit the have -- their content. more and connectivity to the were they'll films audiences something what

Operator

question next coming Hickey from The Benchmark. of Mike is

Michael Hickey

quarter dividend. on your Congrats the and

Just sort X that in think America how a and region couple to pointed domestic years of here for cetera, from opportunity, margin Clearly, and business? next see minus us. from that out, volume, growth the is and of Latin for the whether terms tailwinds in will over you or the perform growth plus is you everything obvious, revenue you Sean, variety, domestic of the pretty 'XX good you 'XX is think maybe et obvious you less film

Sean Gamble

region this really results mean, is recovery the question, the been of the America, whole, Latin the ahead pleased with say, at I stage. of I performance for Thanks pacing in would as just obviously, we've and financial a the U.S. Sure. Latin Mike. America. the actually

economically, while recovery of strongest of moviegoing look on has during Argentina even with everything was been that gone a but the places, one you the For that the around we've there has lagging, the recently world. at seen certain pandemic, it

moviegoers I our over-index U.S. overall look moviegoing in business. the positive region look that are think they and our at level signs similar the movies going. has consumption positive performance really as has of see fundamentals the in to we is really able look mean we strong. in there so that to business ahead, have, going Latin where way just of there, positive consumers we've The loss region been been been of to to we tend America no still we the And to that So for of just behavior interest the about continue -- strong. is of enhance

Michael Hickey

Good to hear, Sean.

to Club. like you've Movie on quarter, every seems question data share. great Second It got

Club. of revenues now from admission your Movie I think you maybe of XX% said

it about have reoccurrence key I forward your program? been a of of terms attendance you trending higher. is success? terms your of think And sales, do which when obviously retention market and your I of strategic goals huge think in is of this value share some sort has thinking concession growth to and important been that's how of loyalty sort maximize achieving here, the of in you how guess

Sean Gamble

I Well, some coming a that mean kind of yes, of -- a audiences Sure, sure. number we see to program one, amount that mean that the our mentioned, has it's These are very overall. program it's as important for the ratio to you goals tremendous -- lot of we us is, represent success. it had office consumers seek of on through hit as I keeps grow year. from to And they value loyal the year the you Cinemark. derive a of business. very can after They box continue that

both and helped food increased beverage moviegoing has stimulate cases. program the that frequency and seen in consumption also We've

behavior, joining grow. of after the to consumers' look we tend program both to we prior at when and the So program, those joining see

stimulates it and which a positive all they derive aligned So back of with this of program. upgrading which studio's directly think greater It highly from comes consumption, very as the there's to greater behavior, interest value the the well, is kind they program.

And increased guest this, it which leads overall -- experience, enhances satisfaction. the the to third just piece of

simplistic. So it's

tailor learnings of data line so is tend the in these they can their ease of guests, purchase we likes of direct a what just to -- the terms based our we communications and have to get simplified. We communication prefer to we on of

important. very and just whole been consumers that around, a So of there's range drive it's benefits all

ebbs Fortunately, And seeing flows based pace we what since growing. program marketplace, we That consistent as considerably the volume we of up were were content up continue at to see or it's XXXX. mentioned, that's continued but even the the amount that's with and pre-pandemic. year-over-year, of on XX% a and in amount grow we're I

Operator

Goldman is coming today Our Stephen from from Laszczyk Sachs. final of question

Stephen Laszczyk

Just from me. X follow-ups

on a market turn like you're for it share. pressure. market sounds in expecting elaborate Could outlook First, in on U.S., more for your XXXX Sean bit little you some

then increases Just called dynamically other on of related film I curious And the added second might how how versus competition much slight be expected to prepared capacity or be forward. out for much factors. in Melissa of that or any some you related might rental your remarks, were going think expense persist

or you if what any we curious be more to expect Just heavier and expense rental means could could talk a quarters this in about there's film bit particular, little if lighter?

Sean Gamble

thrilled Stephen. 'XX. Thanks, mean, least with by I'll with starting I Sure. about market XXXX talk share. at the we results XXXX of were

amount benefits of mix with as thresholds. further in were occupancy attendance of that was ahead XXX that the worked that just kind share continue We we've to hitting had market well slate of efforts points really we year of we well the pursued 'XX, which amplified pre-pandemic. In capacity be at content drive well basis of improvements, constraints believe circuit over by the were those benefits about for to structural will a sustained minimize where pretty a we all our to as out see spread continue

do expect benefits the content or So to we constraints, temper maintained, those strains capacity the we bit. in structural 'XX a as we received some benefits look as [indiscernible] capacity to as to well XXXX, of expect mix but the will be the we continue limited

the content diversified byproduct a just marketplace. more in the volume marketplace that's overall, of and -- So in more

to constraints, earlier, the utilized. there generally regard is I mentioned what mean, being content capacity is great I we're as at fully So happening in least a with market, of there's lot the when

little highly moments, of our but a other some So parts and to those over market, may share will productive we're the of in bit. compress volume spill that

have the a rate overall. it's we overall but share it does of that So affect not necessarily bad thing,

Melissa Thomas

the of year. benefited a then side, on the lower from in our film strike, particularly rental to rental And XXXX [indiscernible] film rates for half concentration the films the first due Hollywood of

rental office in the is rates. are saw box content blockbuster as it researched increase second film concentration what as we half, So

dependent So content, a as the to could any it's really in that the concentration film we from standpoint, as year, we Hollywood side. the how look half But But the XXXX forward upon rates of think year-over-year. to quarterly quarter. a lighter blockbuster increase the about to expect . that rental you was impact of the on will be XXXX, greater present given of film given which rental dynamic with concentration in rate continue our going first do certainly strikes

concession would is on consistent full a included of and would admissions the marketing point returns expected vary quarter-to-quarter, to film calling on line that within and the does we worth item that but rental the spend think I that our also also be saw expect marketing other XXXX be the be we based and that that in side, out seeing, for do what year attendance revenue relatively as XXXX. will percent we're our

Operator

the to At this like closing comments. floor Mr. for time, back I'd over turn Gamble to

Sean Gamble

advancements company with of position and we over Donna. We able All just office closing, recovery and been the I'd position impact we to in our you, highly strength and Cinemark a success. environment our confidence In ahead result encouraged our that further make years as the the Thank continued the once right. again further box upside anticipate we've significant like for to maintain the in remain the reinforce advantaged past the road strength -- the today's to strategic of of initiatives. about

again all like just I'd joining this with we our and results. you look again And to to following us you quarter forward for morning, thank once Thank speaking first you.

Operator

concludes Ladies this and gentlemen, today's event.

and You your day. up enjoy rest webcast the your lines may disconnect the this walk of and at time,

Cinemark (CNK) 19 Feb 252024 Q4 Earnings call transcript