Cinemark(US:CNK)2022-11-04 18:31Financial Data and Key Metrics Changes - The company reported a 50% year-over-year increase in worldwide revenue for Q3 2022, generating $650.4 million and $99.5 million in adjusted EBITDA, yielding an adjusted EBITDA margin of 15.3% [40] - The adjusted EBITDA increased by 125% compared to the previous year, indicating a strong recovery [40] - The company experienced a net loss of $24.5 million, resulting in a loss per share of $0.20 [51] Business Line Data and Key Metrics Changes - Domestic segment served 29.5 million guests, generating $257.6 million in admissions revenue with an average ticket price of $8.73, up 10% versus pre-pandemic levels [41] - International segment attendance was 18.9 million, generating $138.7 million in total revenue with an adjusted EBITDA margin of 20.8% [45] - Domestic concession revenue reached $200.8 million, with a concession per cap of $6.81, an increase of over 30% compared to Q3 2019 [43] Market Data and Key Metrics Changes - The overall volume of major releases in 2022 has recovered to approximately 60% of pre-pandemic levels, with expectations for further recovery in 2023 [16][18] - The company outperformed North American industry box office recovery by more than 400 basis points domestically compared to Q3 2019 [30] - The international attendance surpassed second quarter 2022 levels, reflecting ongoing recovery in Latin America [45] Company Strategy and Development Direction - The company aims to reignite theatrical movie-going across all audience segments and has stepped up marketing efforts to attract back moviegoers [28] - The focus is on expanding the pipeline of content and audiences while evolving the company for long-term stability and growth [35] - The company is optimistic about the future of theatrical exhibition, seeing new revenue opportunities from experiential offerings and partnerships [36][38] Management's Comments on Operating Environment and Future Outlook - Management noted that historically, macroeconomic factors like inflation and recession have not materially impacted theatrical movie-going [24] - The company expects to generate positive free cash flow for the full year based on a stronger film lineup in Q4 [53] - Management expressed confidence in the ongoing recovery of content volume and the value of theatrical releases for studios [18][19] Other Important Information - The company ended the quarter with $632 million in cash and capital expenditures for Q3 were $25 million, below the target due to supply chain constraints [52][53] - The company is focused on strengthening its balance sheet and making prudent investments for long-term success [54] Q&A Session Summary Question: What is the outlook for the film slate in the next year or two? - Management indicated that studios are leaning back into theatrical distribution, but it may take a couple of years to fully recover the volume of releases [57][58] Question: How did National Cinema Day impact average ticket price and attendance? - National Cinema Day represented about a $0.17 headwind on domestic average ticket price and resulted in around 2 million attendees [63] Question: What are the capital allocation priorities for excess cash? - The company prioritizes strengthening its balance sheet and deleveraging while also planning to increase capital expenditures in 2023 [66][67] Question: What factors contributed to the strong attendance in Latin America? - Attendance strength was attributed to an easier comparison from last year, a favorable film mix, and successful promotional events like National Cinema Week [75][76] Question: How does the company view the mix and number of titles needed for box office recovery? - Management believes that while more variety and volume are beneficial, the company can still be successful with fewer titles if they appeal to a wide audience [79][80]