Interesting to see how much growth took place at the exhibition chain’s U.S. venues as opposed to Latin America, which is supposed to be its most attractive opportunity. Overall, Cinemark generated net income in Q3 of $80.7M, +68.9% vs the period last year, on revenues of $757.6, +19.6%. Analysts anticipated lower revenue, about $733.2M. And earnings at 69 cents a share soared past forecasts for 55 cents. Much of that is due to what Cinemark says was its all-time high attendance: +16.4% to 81.0M globally, with domestic +23% to 50.6M and international +6.8% to 30.4M. Admission revenues were +19.2% to $479.6M helped by a 3.7% increase in the average outlay for a domestic ticket, to $6.68 — although the average price dropped 3.1% at international venues to $4.66. Concession revenues were +21.1% to $242.3M with the average domestic patron spending $3.38 (+2.7%) and international spending $2.34 (+3.5%). CEO Tim Warner credits North America’s “robust box office in the third quarter with an increase of 6.4%, fueled by a record summer box office.” The company’s worldwide operations “have now outperformed the North American industry in 17 of the past 18 consecutive quarters on a currency adjusted basis.”
The exhibition chain’s board says it will pay 25 cents per share each quarter, up from 21 cents. The increase follows the Mexican Federal Competition Commission’s decision last week to reject Cinemark‘s $125M deal to sell its 31 theaters in the country to Groupo Cinemex. Cinemark says it will appeal the ruling. The chain has been making big investments in its Latin American theaters to replace traditional projectors with digital ones. “If Cinemark can raise the dividend now, we see potential for more hikes next year and beyond when this [capital expenditure] bulge rolls off,” says Lazard Capital Markets’ Barton Crockett. With the increase, Cinemark’s dividend yield rises to 3.2% from 2.9% but is still behind Regal’s 4.4%. Last week Cinemark reported record admission revenues in Q2, a strong quarter for the entire industry. Its shares are off about 1% in early trading on a down day for the stock markets.
Barco has scored a hit in the immersive audio turf war previewed at April’s CinemaCon. Global chain Cinemark is siding with the open sound format employed by Barco’s Auro 11.1 over competitor Dolby Atmos. The theater company has committed to deploying Auro 11.1 in over 150 premium Extreme Digital (XD) screens beginning this year in its “tier one” markets, including North America. Dominant sound specialist Dolby has seen its Dolby Atmos system used exclusively on major studio projects including WB’s Man Of Steel, Pacific Rim, and Gravity, Paramount’s Star Trek Into Darkness, Disney’s Marvel’s Iron Man 3 and Monsters University, and Fox’s Percy Jackson: Sea Of Monsters and Wolverine. Meanwhile Auro 11.1′s major native productions thus far are highlighted by DreamWorks Animation’s The Croods and Fox’s Turbo – a modest start. (Sony’s Elysium was mixed in both Auro 11.1 and Dolby Atmos.) But Cinemark operates 467 theaters in 39 US states, Brazil, Mexico, Argentina and 10 additional Latin American countries, and their business means at least a minor victory for Barco’s immersive audio contender…
Add Cinemark to the list of exhibition chains licking their wounds from the weak Q1 box office. The company reports this morning that it generated net income of $33.1M, -22.9% vs the period last year, on revenues of $547.8M, -5.4%. The revenue figure was slightly short of the $550.4M that analysts anticipated. But earnings at 28 cents a share beat forecasts for 24 cents. Admissions revenues fell 6.4% to $349.4M as a 6.7% drop in worldwide attendance to 57.4M wiped out the 1 cent gain in the average ticket price to $6.09. And concession revenue fell 4.1% to $172.4M, even as average sales per patron rose 8 cents to $3. All of the fall-off in attendance took place at domestic theaters (-13% to 34.7M) while Cinemark’s international ones were up 4.8% to 22.8M.
The exhibition company gave Tim Warner — who had overseen Cinemark‘s expansion in Latin America — a nice raise in February 2012, when he took the top job following the retirement of Alan Stock. The CEO’s new package included $700,000 salary, $2.1M in stock awards, $933,310 in non-equity compensation, and $207,655 in other compensation, according to the proxy filed at the SEC today. Stock ended up with $1.6M, mostly consisting of a $1.3M consulting fee. Warner’s compensation equals 1.7 times the median for Cinemark’s four other highest-paid current executives — well below the threshold that causes concern for corporate governance watchdogs. Company shares appreciated 36.7% last year.
Wall Street may have expected a little too much of the exhibition chain for the last three months of 2012. It reports net income of $27.8M, +52.3% vs the end of 2011, on revenues of $611.5M, +14.1%. Pretty good, right? But analysts expected revenues to come in higher, at $616.7M. And a pre-tax loss of $5.6M for early debt retirement held earnings to 24 cents a share, shy of forecasts for 38 cents. Attendance at the U.S. theaters was up 10.3% to 40.6M, while the average ticket price rose 5.2% to $6.91, and concessions revenues per patron was up 4% to $3.39. That propelled U.S. revenues 15.5% to $435.4M. Sales at the international theaters was up 10.8% to $178.8M. CEO Tim Warner notes that Cinemark “continues to be the number one attended worldwide exhibitor.” He told analysts that he’s “encouraged” about the releases scheduled for 2013 — including 32 wide-release 3D films. But the current quarter’s results may be “challenging” compared to the sales records set last February and March.
Cinemark To Sell Theaters In Mexico
Texas-based Cinemark Holdings will sell its Mexico theaters to Grupo Cinemex and Cadena Mexicana de Exhibicion, the company announced. The Mexico circuit encompasses 290 screens in 31 theaters. Cinemark CEO Tim Warner said the sale would allow Cinemark to concentrate on its remaining Latin American theaters in Central and South America. Cinemark said its Mexico operation’s unaudited revenues for the 12 months ending September 30, 2012 were $73.7 million from 12.9 million admissions with a net income of $7.9 million. Sale of the Mexico theaters is subject to closing conditions and regulatory approval.
Ireland Reauthorizes Film & TV Incentive With 4% Increase
Ireland’s film and TV tax incentive has been signed into law and extended through to 2020. Value of the incentive commonly known as Section 481 will increase to 32% of qualifying expenditures from 28% from 2015. Minister for Arts Heritage and the Gaeltacht Jimmy Deenihan acknolwedged the new law during a visit to the set of Frank, which he described “an example of the excellent work the Irish film industry is producing.” Michael Fassbinder stars in Frank with Domhnall Gleeson and Maggie Gyllenhaal. The project centers on a band fronted by an eccentric leader Frank, played by Fassbender. Currently shooting in Dublin and Wicklow, it’s directed by Lenny Abrahamson and co-produced by Ireland’s Element Pictures and the UK’s Runaway Fridge Productions. Other big-budget projects to benefit from the incentive include The History Channel’s Vikings and BBC’s Ripper Street.
Here’s yet another indication that movie theater owners are making peace with the idea that their customers also want to spend time being entertained at home. This weekend 24 Cinemark theaters in five markets – San Francisco, Dallas, Salt Lake City, Chicago, and Cleveland — will charge $5 a ticket for matinee showings of Disney’s Lady And The Tramp, Peter Pan and Cinderella. It isn’t just for nostalgia’s sake. The exhibition chain will also sell Diamond Edition Blu-ray discs for each of the movies. Cinemark still sees an opportunity to lure buyers back. They’ll receive an unspecified “free offer from Cinemark and a special gift” tied to Disney’s upcoming Oz The Great and Powerful, Cinemark says. The company’s James Meredith calls it “a very exciting and unique program” to see the films on a big screen “before they return to the Disney vault.”
Cinemark should not be sued in civil court for the shooting rampage and deaths last July in its Aurora, Colorado theater at a midnight screening of The Dark Knight Rises, says a federal magistrate judge. Cinemark moved in late October to have the civil claims dismissed. At the time, the exhibitor argued that each suit “fails to state a claim upon which relief can be granted as a matter of law,” arguing that what happened was not its fault. In a dense 22-page recommendation (read it here) filed Thursday, Judge Michael Hegarty said the consolidated negligence and wrongful death civil lawsuits by victims and their families should be dismissed. Instead he suggests that because the plaintiffs’ “state plausible claims,” they may have a further case under the Colorado Premises Liability Act. ”Absent allegations that Plaintiffs’ injuries occurred other than on Defendant’s property and did not arise out of a condition of the property or by activities conducted on the property, and in accordance with prevailing case law, the Court concludes that Plaintiffs’ claims for negligence and wrongful death are abrogated by the CPLA and must be dismissed,” says the recommendation to the district court. All of the lawsuits cite the lack of proper security at the July 20 opening day midnight screening of The Dark Knight Rises at the Aurora Century 16 …
The Colorado multiplex where a gunman opened fire in a crowded theater watching a July 20 midnight screening of The Dark Knight Rises is reopening today. A private ceremony is planned for victims, first responders and officials, the AP says. Twelve people were killed and 58 were wounded in the attack. Cinemark said it will open the theater to the public Friday and have it fully operational by January 25. Cinemark reportedly spent $1 million on renovations and has renamed the venue the Century Aurora but has given few other details about plans. Some victims’ family members are upset about tonight’s “special evening of remembrance”, though — Cinemark sent out invitations during the holidays. Outraged invitees publicly condemned the circuit in a letter published January 2 in the Denver Post. “This disgusting offer that you’d ‘like to invite you and a guest to a special evening of remembrance on Thursday, January 17 at 5 PM’ followed by the showing of a movie and then telling us to be sure ‘to reserve our tickets’ is wholly offensive to the memory of our loved ones,” the letter read in part.
Last week, alleged gunman James Holmes had his arraignment pushed back until March 12. He faces 166 counts including for murder and attempted murder.
Some family members of victims of the Aurora, Colorado movie theater shooting are outraged over an invitation they received from Cinemark to attend “a special evening of remembrance” and a movie in the theater where their loved ones were killed. The letter, published today in the Denver Post, is signed by eight relatives of victims who say they are particularly upset that the invitation was sent during the holidays. A portion of the letter follows below:
To the Management of Cinemark USA, Inc.:
During the holiday we didn’t think anyone or anything could make our grief worse but you, Cinemark, have managed to do just that by sending us an invitation two days after Christmas inviting us to attend the re-opening of your theater in Aurora where our loved ones were massacred.Thanks for making what is a very difficult holiday season that much more difficult. Timing is everything and yours is awful.
You (Cinemark) has shown, and continues to show, ZERO compassion to the families of the victims whose loved ones were killed in their theater. You, Cinemark, have never once reached out to the families to offer condolences.
This disgusting offer that you’d “like to invite you and a guest to a special evening of remembrance on Thursday, January 17 at 5 PM” followed by the showing of a movie and then telling us to be sure “to reserve our tickets” is wholly offensive to the memory of our loved ones.
The star-filled concert will be widely shown on TV and streamed online — but this should provide an opportunity for fans who don’t have a ticket to the Madison Square Garden event to enjoy a communal experience with immersive video and sound. National CineMedia will provide a feed of the 12-12-12 benefit over its Digital Broadcast Network to more than 200 Cinemark, Century and Tinseltown theaters. They’ll show it live beginning at 7:30 ET, and charge about the same price the venue would for a child’s movie ticket with all proceeds going to victims of Hurricane Sandy. The concert will feature Alicia Keys, Eric Clapton, Bruce Springsteen, Billy Joel, Kanye West, The Rolling Stones, The Who, and Paul McCartney. Other chains including Clearview and National Amusements also will show the concert in some theaters, but Cinemark appears to be committing the most venues.
The Aurora, Colorado movie theater where a gunman went on a rampage at a July 20th midnight screening of The Dark Knight Rises will reopen on January 17, 2013. The news came in a December 5-dated letter from Cinemark president and CEO Tim Warner to Aurora mayor Steve Hogan. Now called Century Theater XD, the former Century 16 has undergone extensive renovations in the months since James Holmes allegedly opened fire, killing 12 and wounding 58. The theater will show free movies from January 18 to 20. The city of Aurora had polled residents online earlier this fall about what they wanted to see happen to the theater. The city says a majority said it should be reopened, though some victims’ families have told local media they do not think it should reopen. Cinemark is embroiled in several lawsuits with victims’ families over the shooting – all charging security negligence by the chain at the Aurora theater was partially to blame for the tragedy. The company has unsuccessfully tried to get the suits dismissed. The lawsuits will go forward as one and will go to trial on May 5, 2014 in Denver, a federal judge ordered in late November.
The price includes cash and assumed liabilities and will give the Texas-based exhibition chain an additional 32 theaters with 483 screens in 12 states All of the screens have digital projectors, and 37% are 3D capable. The group also includes seven IMAX screens and nine premium large format auditoriums. “The acquisition of these high quality assets will further enhance Cinemark’s diversified domestic footprint, including the expansion of our presence in the New England market,” Cinemark CEO Tim Warner says. Over the last 12 months the theaters Cinemark is buying sold 18.8M tickets and generated $228.9M in revenues with $41.7M in cash flow. The companies need to run the deal past antitrust officials before it closes. Akin Gump Strauss Hauer & Feld provided legal advice to Cinemark while AGM Partners and Kirkland & Ellis helped Rave.
This is a sad sign of the times: The exhibition chain has decided it must give customers a special incentive to respect the movies, and each other. It unveiled today CineMode — a component within its iPhone and Android smartphone app — that can determine whether the owner uses the mobile device during a film, and send digital coupons to those who leave them alone. “It is important to develop tools that maximize and preserve the movie-going experience,” says Cinemark’s marketing and communications VP James Meredith. He adds that customers have asked the chain to “design an alternative and creative solution” to keep others from lighting up their phones in the dark theater. Before a film starts, Cinemark will flash a message on the movie screen urging customers to launch CineMode. The app will dim the smartphone’s screen and ask users to turn the volume off so incoming calls only cause the phone to vibrate. Customers must stay in CineMode throughout the film. If they do, then the company says it will automatically send a coupon to be stored in the app’s Rewards section.
Cinemark looked like two different companies in the quarter that ended in September. The part with the U.S. theaters delivered blah results compared to last year, while the Latin American-focused international side was on fire. All together, the company reported net income of nearly $48M, +6.7% vs the period last year, on revenues of $633.6M, -1%. The revenue figure was ahead of the Street’s forecast for $626.8M. Earnings per share, at 41 cents, also beat projections for 35 cents. “Not only is the international box office growing faster than domestic revenues, but there are stronger socio-economic trends in those regions along with significantly better new theater growth opportunities,” says B. Riley & Co analyst Eric Wold. The U.S. theaters ended up with revenues of $416.2M, -5.7%. Attendance was down 7.4% to 41.1M. The average ticket price fell three cents to $6.44 but the average concession spending per patron was up 16 cents to $3.29. In contrast, Cinemark’s overseas revenues were up 9.4% to $220.6M. Attendance rose nearly 14% to 28.5M, outweighing the 39 cent drop in the average ticket price to $4.81. Concession prices per patron abroad were up three cents to $2.26. “As our results consistently demonstrate, Cinemark has designed a company with a strong and stable domestic base, which supports our substantial quarterly dividend, accompanied by our international circuit, which represents a long-running growth engine and differentiates us from all of our industry peers worldwide,” CEO Tim Warner …
Like it did with the first round of lawsuits, the theater chain has quickly responded to the most recent legal actions against it for the July 20 shooting at its Aurora, Colo, cinema. Late last week, Cinemark filed motions (read two of them here and here) to dismiss the October 11 civil complaints from parents of victims of the midnight The Dark Knight Rises screening shooting. The exhibitor seeks to have the claims dismissed because each one “fails to state a claim upon which relief can be granted as a matter of law,” arguing that what happened was not its fault. “It would be patently unfair, and legally unsound, to impose on Cinemark, a private business in the entertainment industry, the duty and burden to have foreseen and prevented the criminal equivalent of a meteor falling from the sky,” said Cinemark’s lawyers in their October 18 motions. The shootings by alleged gunman James Holmes left 12 dead and 58 wounded.
Four more lawsuits have been filed against the theater chain by families of those killed in the July 20 shooting in Aurora, Colorado. The deaths occurred during a midnight screening of The Dark Knight Rises. Like the first lawsuits against Cinemark filed over three weeks ago, this week’s actions cite the lack of proper security at the chain’s Century 16 location. Two of the wrongful death suits (read them here and here) were filed by the mothers of shooting victims Matthew McQuinn and Alexander Boik. “Plaintiff prays for judgment in her favor and against the Defendant in an amount which will fully and fairly compensate her for damages, losses, and injuries, both past and future,” says both suits. Both also say “the amount in controversy herein exceeds the sum of $75,000.” The shooting left 12 dead and 58 wounded. Cinemark responded to the September 21 suits from Denise Traynom, Brandon Axelrod and Joshua Nowlan by saying that it was not responsible for the tragedy and sought to have the suits dismissed. Attorney Jerome Malman represents Boik’s mother Mary Theresa Hoover, McQuinn’s mother Jerri Jackson and Rena Medek, whose daughter Micayla was also killed in the theater. Attorney Sandra Hagen represents Dion Rosborough, Jon Boik, Tony Briscoe and Ryan Lumba in their combined suit.
The movie theater chain says it is not responsible for alleged gunman James Holmes’ fatal rampage at the Century 16’s midnight screening of The Dark Knight Rises on July 20 in Aurora, CO. “Plaintiff’s claims against Cinemark are grounded in nothing more than allegations that a random unbalanced individual randomly chose this theatre on this random night at this random time to randomly murder and injure other human beings. Random acts, by very definition, are not legally foreseeable,” the company said in a motion to dismiss (read it here) filed yesterday. Last week, audience members Denise Traynom, Brandon Axelrod and Joshua Nowlan sued the chain for failing to provide adequate security at the theater on the night that saw 12 people killed and 58 wounded. Cinemark says besides not being able to foresee Holmes’ actions, the suits should be dismissed because they fail to state a claim on which relief can be granted. The plaintiffs say that in each case damages exceed $75,000, and they are asking for a jury trial.