Cinemark(US:CNK)2022-05-06 16:19Financial Data and Key Metrics Changes - Cinemark reported a year-over-year revenue growth of over 300% in Q1 2022, with total revenue reaching $460.5 million and adjusted EBITDA of $25.2 million, marking the third consecutive quarter of positive adjusted EBITDA generation [6][33] - Attendance was 33.1 million patrons in Q1 2022, with domestic admissions revenue of $191.8 million and an average ticket price of $9.27 [33][34] - The company experienced a net loss of $74 million, resulting in a loss per share of $0.62, while capital expenditures were $18.7 million [40][41] Business Line Data and Key Metrics Changes - Domestic concessions revenue was $141.1 million with a record high per cap of $6.82, reflecting a 250 basis point increase in core concession incidence rates quarter-over-quarter [35][27] - International operations generated $88.5 million in total revenue, with adjusted EBITDA of $10.8 million and an adjusted EBITDA margin of 12.2% [36][37] - The company’s premium large-format auditoriums accounted for over 14% of global box office in Q1, despite representing only 5% of the global screen count [26] Market Data and Key Metrics Changes - Cinemark outperformed the North American industry recovery by 650 basis points when comparing Q1 2022 against Q1 2019, while Latin American admissions surpassed industry results by approximately 500 basis points [22][23] - Consumer sentiment regarding movie-going improved, with 87% of moviegoers expressing comfort returning to theaters [11][10] - The company noted that the film landscape remains dynamic, with several titles shifting release dates due to COVID-related production delays [12] Company Strategy and Development Direction - Cinemark is focused on enhancing guest experiences through investments in technology, premium amenities, and food and beverage offerings [30][31] - The company aims to capitalize on the box office momentum by providing a diverse range of content and improving marketing sophistication [31][29] - Strategic initiatives include expanding premium large formats and D-BOX seats, as well as enhancing loyalty programs to drive movie-going frequency [26][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued recovery of the box office, supported by a robust slate of upcoming films [32][14] - The company acknowledged challenges posed by inflation and rising costs but emphasized the importance of strategic pricing actions to offset these pressures [41][53] - Management highlighted the importance of theatrical releases for studios, noting that films released theatrically perform better on streaming platforms [20][21] Other Important Information - The company is transitioning its entire global circuit to Cinionic laser projectors to enhance the movie-going experience and achieve cost savings [24] - The Movie Club program has grown to 980,000 members, contributing 20% of the first quarter box office [29][59] Q&A Session Summary Question: Strategy in live events - Management indicated a range of scenarios for live events, including partnerships with companies like Fathom and Trafalgar, and hosting their own events [43][44] Question: Normalization of average ticket price and concession per caps - Management expects some normalization as the film content and audience mix diversify, but anticipates maintaining a portion of the growth seen during the pandemic [46][48] Question: Impact of consumer inflation on pricing actions - Management is cautious about inflation and is leveraging data for a more dynamic pricing model to offset cost pressures [52][53] Question: Trends in international markets - Latin America has made significant progress in recovery, with consumer enthusiasm improving and capacity restrictions largely lifted [56][57] Question: Movie Club statistics - The Movie Club has generated 20% of box office revenue in Q1, with over 77 million tickets sold since its inception [59] Question: Construction environment for new theaters - Development is picking up but remains slower than pre-pandemic levels, with ongoing projects from before the pandemic still in progress [60][61] Question: Staffing challenges - Staffing levels normalized in Q1, with the company ramping up hiring for the summer season, while wage rates have increased to attract and retain employees [63][66]