Cinemark Holdings, Inc. — FY2022 Form 10-K
Reporting period: Year ended December 31, 2022; filed February 24, 2023. This is an annual report, not a standalone fourth-quarter report. Holdings is a holding company; substantially all operations are conducted through wholly owned Cinemark USA, Inc. (CUSA). Amounts below are in U.S. dollars unless stated otherwise.
Business context and performance
Cinemark operated 518 theatres and 5,847 screens in the U.S. and 15 Latin American countries. Its business depends heavily on film availability and box-office performance, with admissions and concessions as its main revenue sources. Management described the industry recovery from COVID-19 as ongoing. North American box office was estimated at approximately $7.5 billion in 2022, up more than 64% from 2021.
Key financial metrics
| Metric | FY2022 | FY2021 |
|---|---|---|
| Total revenue | $2,454.7 million | $1,510.5 million |
| Admissions revenue | $1,246.9 million | $780.0 million |
| Concession revenue | $938.3 million | $561.7 million |
| Operating loss | $89.8 million | $252.5 million |
| Net loss | $268.0 million | $422.2 million |
| Net loss attributable to Holdings | $271.2 million | $422.8 million |
| Basic and diluted loss per share | $2.26 | $3.55 |
| Adjusted EBITDA (non-GAAP) | $336.5 million | $80.0 million |
| Cash provided by operating activities | $136.0 million | $166.2 million |
| Capital expenditures | $110.7 million | $95.5 million |
Revenue rose 62.5%; attendance increased 63.5% to 172.7 million. Average ticket price was $7.22, down 2.3%, while concession revenue per patron rose 2.1% to $5.43. The operating loss was 3.7% of revenue, compared with 16.7% in 2021. Film rentals and advertising were 56.5% of revenue; cost inflation, wages, utilities and other operating expenses remained pressures. Cash and cash equivalents were $674.5 million at year-end, down from $707.3 million. Operating cash flow less capital expenditures was approximately $25.3 million.
Debt and liquidity: Long-term debt carrying value was $2,516.6 million, including $10.7 million current; debt fair value was $2,210.5 million. The company also reported present-value operating lease obligations of $1,189.9 million and finance lease obligations of $102.4 million. It had $100 million available on its revolving credit line and no revolver borrowings at year-end. The term loan balance was $626.5 million; management reported compliance with debt covenants. Holdings’ stockholders’ equity fell to $110.2 million from $322.9 million.
Material changes versus FY2021
- Recovery in attendance and a steadier film-release schedule drove the revenue rebound; international attendance grew 94.5% and U.S. attendance grew 49.7%.
- Adjusted EBITDA improved substantially, but the company remained loss-making. Operating loss narrowed by $162.7 million.
- Operating cash flow declined by $30.2 million, which management attributed mainly to payment timing and income-tax refunds received in 2021.
- Impairment charges increased to $174.1 million from $20.8 million. This included a $113.2 million write-down of the NCM investment and approximately $60.9 million of theatre-level long-lived asset impairments.
- Cash interest expense increased to $140.7 million for Holdings; reported interest expense was $155.3 million. The debt balance edged down from $2,543.3 million.
Outlook, commentary and risks
No quantitative financial guidance was provided. Management said existing cash and expected operating cash flows should cover working capital, capital expenditures and known contractual cash requirements for the next 12 months and beyond. It identified a 2023 film slate but emphasized that recovery depends on the availability and performance of new releases. The quarterly dividend remained suspended, with resumption uncertain.
- Key operating risks include insufficient or underperforming film releases, shorter or eliminated theatrical windows, streaming and other entertainment competition, and seasonal volatility.
- Inflation, supply-chain constraints, wage increases, labor availability, and foreign-exchange and political conditions in Latin America could pressure costs and results. Argentina is treated as a highly inflationary economy.
- Leverage and substantial lease commitments constrain flexibility. Approximately $1.3245 billion of debt maturities fall in 2025, including the term loan and Holdings’ convertible notes.
- The NCM investment was written down sharply; NCM excess cash distributions were restricted through December 2023. NCM’s financial condition and its agreements with exhibitors are relevant uncertainties.
- Other items include a pending sale of the Ecuador subsidiary, expected to close in 2023 subject to approvals, and closure of the Curacao theatre in January 2023. The company is litigating an insurance claim related to pandemic closures and is defending a consumer class action; it said pending proceedings were not expected to be material, but outcomes cannot be predicted.
Investor facts to verify
- Whether attendance, film supply and box-office performance continue to support revenue and positive operating cash generation.
- Cash availability, including restricted cash, revolver availability, debt covenant headroom, and the ability to address the 2025 maturity concentration.
- Progress in restoring profitability after operating losses and the effect of inflation and labour costs on margins.
- Further impairment risk, especially for theatre assets and the NCM investment, and the status of NCM distributions and exhibitor agreements.
- Whether the Ecuador sale closes as expected, and any material developments in the disclosed litigation and foreign-exchange exposures.