Core Viewpoint - Cinemark Holdings Inc has been upgraded by an analyst due to recent strength in box office releases, debt reduction plans, and the potential for capital returns [2][3][7] Group 1: Box Office Performance - The second quarter box office is expected to decline by 30% year-over-year, but a recovery is anticipated in the third quarter with an estimated decline of only 6% year-over-year [3] - Monthly revenue is projected to turn positive in September and remain strong throughout the fourth quarter, with a forecasted growth of 27% driven by blockbuster titles [4] - The domestic box office is expected to reach $9.4 billion in 2025, representing a 15% increase from 2024 estimates and a 6% increase from 2023 figures [4] Group 2: Debt Management and Capital Returns - Cinemark is likely to pay off debt with cash rather than allowing it to convert to shares, aiming to reduce debt levels to those seen at the end of 2019 [5] - After repaying convertible debt and returning net leverage to pre-pandemic levels, Cinemark is expected to revisit its capital return strategy, with a dividend reinstatement being the most likely option [5] - The company may also consider share buyback authorization as part of its capital return strategy [5] Group 3: Analyst Sentiment and Stock Performance - The analyst upgraded Cinemark's rating from Neutral to Buy and raised the price target from $19 to $26, indicating a positive outlook for the company [7] - Cinemark shares increased by 4% to $20.25, with a 52-week trading range of $13.19 to $20.40, and the stock has risen 22% over the past year [6] - The analyst believes that Cinemark will prosper over the next 2.5 years, citing several favorable trends in the industry [8]

Core Viewpoint - Cinemark Holdings (CNK) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Cinemark suggest an improvement in the company's underlying business, likely leading to an increase in stock price [5]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - Only the top 20% of Zacks-covered stocks receive a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10]. Earnings Estimate Revisions for Cinemark - Cinemark is projected to earn $1.10 per share for the fiscal year ending December 2024, reflecting a year-over-year decline of -17.9% [8]. - Over the past three months, the Zacks Consensus Estimate for Cinemark has increased by 34.1%, indicating a positive trend in earnings estimates [8].

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers. Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Valu ...

Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. While any stock can see a spike in price for a short period, it takes a real momentum player to deliver positive returns for a longer time frame. CNK meets this criterion too, as the stock gained 3.3% over the past 12 weeks. Moreover, ...

Even though Cinemark beat Wall Street projections for the top and bottom lines for the first quarter, the downward trend is evident. In Q1 of this year, revenue came in at $579 million. However, in the year-ago quarter, sales stood at $611 million. Now, it's true that the Hollywood writers' strike impacted the entertainment offerings. Further, industry insiders are looking forward to a more exciting slate in the second half of this year and beyond. Still, the fundamental data isn't encouraging. And moviegoe ...

Investors interested in stocks from the Leisure and Recreation Services sector have probably already heard of Cinemark Holdings (CNK) and Vail Resorts (MTN) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and esti ...

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are unde ...

Financial Data and Key Metrics Changes - In Q1 2024, the company generated $579.2 million in worldwide revenue and delivered $70.7 million of adjusted EBITDA, yielding a solid adjusted EBITDA margin of 12.2% [45][64] - The company reported a net income of $24.8 million for the quarter, resulting in earnings per share of $0.19, which included a $27.7 million tax benefit [76] - The company ended the quarter with a strong cash position of $789 million and a net leverage ratio of 2.8 times for the trailing 12 months [50][77] Business Line Data and Key Metrics Changes - Domestic segment generated $457 million of total revenue with $49.1 million of adjusted EBITDA, yielding an adjusted EBITDA margin of 10.7% [73] - International operations delivered $122.2 million of total revenue with $21.6 million of adjusted EBITDA, yielding a 17.7% adjusted EBITDA margin [47] - Concession revenue in the U.S. reached $178.6 million, with a record concession per cap of $7.57, growing 2% year-over-year [10][45] Market Data and Key Metrics Changes - The North American industry box office declined modestly compared to 2023, with strong performances from titles like "Dune Part Two" and "Kung Fu Panda 4" [20][37] - The company maintained strong market share across both domestic and international markets, with a recovery exceeding industry averages by 700 basis points domestically and 600 basis points internationally compared to 2019 [63][42] Company Strategy and Development Direction - The company emphasizes a disciplined approach to capital allocation, focusing on strengthening its balance sheet while pursuing strategic investments for long-term success [51][52] - The company is optimistic about the resurgence of film volume, supported by a diverse slate of upcoming films and a strong consumer interest in theatrical experiences [25][40] - The company aims to enhance its theater offerings, including premium amenities and expanded food and beverage options, to drive incremental growth [69][70] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer spending has remained resilient, with no significant impact from macroeconomic conditions observed so far [81] - The company expects ongoing inflationary pressures but plans to offset these through strategic sourcing and pricing strategies [140] - Management remains optimistic about the future, anticipating a return to pre-pandemic levels of film volume by 2025 or 2026 [138][110] Other Important Information - The company successfully retired $150 million of COVID-related debt, reflecting confidence in its financial position and the industry's recovery [39] - The company has over 21 million members in its global loyalty programs, with the U.S. Movie Club accounting for 25% of domestic box office revenue [43][91] Q&A Session Summary Question: Impact of consumer spending on ticket and concession purchases - Management indicated that consumer behavior remains consistent with historical trends, with no significant impact from the macro economy observed [55] Question: Staffing costs and expense control initiatives - Management discussed ongoing efforts to optimize staffing based on attendance levels and to drive labor productivity through various initiatives [84][111] Question: Market share performance and loyalty programs - Management highlighted the positive impact of loyalty programs on market share, noting that Movie Club members tend to be more frequent and satisfied moviegoers [113][91] Question: M&A strategy and capital allocation - Management stated that M&A remains a potential growth avenue, with a focus on high-quality assets that can deliver solid returns [115][116] Question: Future film output and relationships with studios - Management expressed positive relationships with studio partners and noted that exclusive theatrical windows enhance the value of films [96][121]

Cinemark Holdings (CNK) came out with quarterly earnings of $0.19 per share, beating the Zacks Consensus Estimate of a loss of $0.21 per share. This compares to loss of $0.03 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 190.48%. A quarter ago, it was expected that this movie theater owner would post a loss of $0.16 per share when it actually produced a loss of $0.15, delivering a surprise of 6.25%.Over the last four quarter ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company presents unaudited Q1 2024 financial statements for both the holding and operating entities [Cinemark Holdings, Inc. Financial Statements](index=5&type=section&id=Cinemark%20Holdings%2C%20Inc.%20Financial%20Statements) The holding company reported a net income of $25.3 million on revenues of $579.2 million for Q1 2024 Cinemark Holdings, Inc. - Condensed Consolidated Statement of Income (Loss) | (in millions, except per share data) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Total revenue** | **$579.2** | **$610.7** | | Operating income | $17.6 | $28.5 | | Loss before income taxes | $(2.4) | $(6.4) | | Income tax benefit | $(27.7) | $(3.9) | | **Net income (loss)** | **$25.3** | **$(2.5)** | | Net income (loss) attributable to Cinemark Holdings, Inc. | $24.8 | $(3.1) | | **Basic EPS** | **$0.20** | **$(0.03)** | | **Diluted EPS** | **$0.19** | **$(0.03)** | Cinemark Holdings, Inc. - Condensed Consolidated Balance Sheet Highlights | (in millions) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $788.6 | $849.1 | | **Total Assets** | **$4,780.1** | **$4,836.8** | | Long-term debt, less current portion | $2,391.6 | $2,391.3 | | **Total Liabilities** | **$4,444.7** | **$4,518.0** | | **Total Equity** | **$335.4** | **$318.8** | Cinemark Holdings, Inc. - Condensed Consolidated Statement of Cash Flows | (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash (used for) provided by operating activities | $(22.7) | $7.9 | | Net cash used for investing activities | $(23.3) | $(26.3) | | Net cash used for financing activities | $(10.4) | $(4.9) | | **Decrease in cash and cash equivalents** | **$(60.5)** | **$(24.4)** | [Cinemark USA, Inc. Financial Statements](index=11&type=section&id=Cinemark%20USA%2C%20Inc.%20Financial%20Statements) The primary operating subsidiary posted a net income of $27.9 million on revenues of $579.2 million Cinemark USA, Inc. - Condensed Consolidated Statement of Income | (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Total revenue** | **$579.2** | **$610.7** | | Operating income | $18.5 | $29.4 | | Income before income taxes | $1.3 | $(2.2) | | Income tax benefit | $(26.6) | $(8.5) | | **Net income** | **$27.9** | **$6.3** | | Net income attributable to Cinemark USA, Inc. | $27.4 | $5.7 | Cinemark USA, Inc. - Condensed Consolidated Balance Sheet Highlights | (in millions) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $558.2 | $612.4 | | **Total Assets** | **$4,612.4** | **$4,655.9** | | Long-term debt, less current portion | $1,936.3 | $1,936.8 | | **Total Liabilities** | **$3,989.1** | **$4,055.6** | | **Total Equity** | **$623.3** | **$600.3** | Cinemark USA, Inc. - Condensed Consolidated Statement of Cash Flows | (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash (used for) provided by operating activities | $(16.4) | $15.7 | | Net cash used for investing activities | $(23.3) | $(26.3) | | Net cash used for financing activities | $(10.4) | $(4.9) | | **Decrease in cash and cash equivalents** | **$(54.2)** | **$(16.6)** | [Notes to Condensed Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail revenue disaggregation, debt structure, segment performance, and a significant tax benefit Disaggregation of Revenue by Segment (in millions) | Segment | Q1 2024 Revenue | Q1 2023 Revenue | | :--- | :--- | :--- | | U.S. Operating Segment | $457.0 | $479.1 | | International Operating Segment | $122.2 | $131.6 | | **Total** | **$579.2** | **$610.7** | Long-Term Debt Carrying Value (in millions) | (As of March 31, 2024) | Cinemark Holdings, Inc. | Cinemark USA, Inc. | | :--- | :--- | :--- | | Total long-term debt | $2,430.0 | $1,970.0 | | Less: Current portion | $7.8 | $7.8 | | Less: Debt issuance costs, net | $30.6 | $25.9 | | **Long-term debt, net** | **$2,391.6** | **$1,936.3** | - The company recorded a significant **deferred tax benefit of $33.7 million** in Q1 2024 related to the release of valuation allowances in certain foreign jurisdictions, which was a primary driver of the quarter's net income[178](index=178&type=chunk)[240](index=240&type=chunk) - Subsequent to the quarter's end, on May 1, 2024, CUSA redeemed the remaining **$150.0 million outstanding principal** of its 8.75% Senior Secured Notes[38](index=38&type=chunk)[124](index=124&type=chunk) - The company's investment in National CineMedia, Inc. (NCMI) is accounted for at fair value, resulting in a recognized **unrealized gain of $4.4 million** for the quarter[71](index=71&type=chunk)[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the 5.2% revenue decline due to lower attendance from Hollywood strike impacts [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Q1 revenue decreased 5.2% to $579.2 million, driven by a 7.5% decline in attendance Consolidated Revenue and Key Performance Indicators | Metric (in millions, except per patron data) | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Admissions revenue | $289.8 | $311.0 | (6.8%) | | Concession revenue | $224.2 | $235.8 | (4.9%) | | **Total revenue** | **$579.2** | **$610.7** | **(5.2%)** | | Attendance | 39.7 | 42.9 | (7.5%) | | Average ticket price | $7.30 | $7.25 | 0.7% | | Concession revenue per patron | $5.65 | $5.50 | 2.7% | - The decrease in attendance was attributed to less carryover benefit from prior year releases and the reduced scale of new film releases due to the impact of the Hollywood strikes[176](index=176&type=chunk) Adjusted EBITDA Reconciliation (in millions) | | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income (loss) | $25.3 | $(2.5) | | Add back: Taxes, Interest, D&A, etc. | $45.4 | $88.7 | | **Adjusted EBITDA** | **$70.7** | **$86.2** | [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity despite using $22.7 million in cash from operations - Cash used for operating activities was **$(22.7) million for Holdings**, a decrease from cash provided by operating activities of $7.9 million in Q1 2023, driven by timing of revenue and vendor payments[134](index=134&type=chunk) - **Capital expenditures totaled $23.5 million**, with $20.3 million invested in existing theatres and $3.2 million for new theatres[152](index=152&type=chunk) - On May 1, 2024, the company redeemed the remaining **$150.0 million principal amount** of its 8.75% Secured Notes, which fully satisfied and discharged the related indenture[128](index=128&type=chunk)[165](index=165&type=chunk) - As of March 31, 2024, the company was in **full compliance with all covenants** governing its outstanding debt[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include interest rate fluctuations on variable-rate debt and foreign currency - The company is exposed to interest rate risk on its variable rate debt; a **100 basis point increase** in interest rates would increase annual interest expense by **$2.0 million**[168](index=168&type=chunk) - The company uses three interest rate swap agreements to hedge a portion of the interest rate risk associated with its variable rate term loan[168](index=168&type=chunk)[169](index=169&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024 - Management concluded that as of March 31, 2024, the company's **disclosure controls and procedures were effective**[196](index=196&type=chunk)[214](index=214&type=chunk) - **No material changes** to the company's internal control over financial reporting were identified during the first quarter of 2024[172](index=172&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in several legal proceedings, none of which are deemed financially material - The company is appealing a summary judgment in favor of its insurer, Factory Mutual, regarding claims for losses sustained due to **COVID-19 theatre closures**[95](index=95&type=chunk) - A new putative nationwide class action lawsuit was filed on April 16, 2024, alleging **mislabeling of twenty-four ounce draft beer cups**[257](index=257&type=chunk) - The company is appealing a confirmation order from the NCM bankruptcy case related to its Exhibitor Services Agreement[95](index=95&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from the previous annual report - The company reported **no material changes** to its risk factors from the most recent Form 10-K filing[216](index=216&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 253,720 shares to satisfy employee tax-withholding obligations Share Repurchases in Q1 2024 | Period | Total Shares Purchased (in thousands) | Average Price Paid per Share | | :--- | :--- | :--- | | January 2024 | 0.52 | $13.93 | | February 2024 | 252.99 | $16.48 | | March 2024 | 0.21 | $17.97 | | **Total** | **253.72** | **N/A** | - Share repurchases were conducted to satisfy **employee tax-withholding obligations** upon vesting of share-based awards[199](index=199&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) Supplemental financial statements for Cinemark USA, Inc. are provided for debt covenant compliance - Supplemental financial schedules are provided for CUSA to comply with the requirements of its senior notes indentures, separating restricted and unrestricted subsidiaries[220](index=220&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including SOX certifications - The report includes **CEO and CFO certifications** as required by Sections 302 and 906 of the Sarbanes-Oxley Act[207](index=207&type=chunk) - Financial statements and notes are provided in **iXBRL format** as part of Exhibit 101[207](index=207&type=chunk)