Cinemark USA, Inc. Reports Results for Fourth Quarter and Year Ended December 31, 2002.Business Editors PLANO Plano (plā`nō), city (1990 pop. 128,713), Collin co., N Tex., less than 20 mi (32 km) NE of Dallas; inc. 1873. In a farm and livestock area on the blackland prairie, Plano is a booming financial and commercial center, with headquarters of many , Texas--(BUSINESS WIRE)--March 14, 2003 Cinemark USA, Inc., a leader in the motion picture exhibition industry, today reported revenues, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , net income and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the fourth quarter and year ended December 31, 2002. Cinemark USA, Inc.'s revenues for the fourth quarter ended December 31, 2002 increased 5.3% to $226.7 million from $215.2 million for the fourth quarter ended December 31, 2001. Operating income for the fourth quarter of 2002 was $23.4 million in comparison with an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $4.7 million for the fourth quarter of 2001. Net income for the fourth quarter of 2002 was $4.3 million as compared to a net loss of $4.6 million for the fourth quarter of 2001. Net income for the fourth quarter of 2002 includes a non-recurring write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of $3.1 million of fees (before tax) associated with the proposed initial public offering of the Company's parent, Cinemark, Inc., the closing of which was postponed due to unfavorable market conditions. Earnings before interest, taxes, depreciation, amortization and other non-cash expenditures (EBITDA) for the fourth quarter of 2002 increased to $43.7 million (after the $3.1 million write-off of IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. fees) from $43.3 million for the fourth quarter of 2001. For the year ended December 31, 2002, revenues increased 10.0% to $939.3 million from $853.7 million for the year ended December 31, 2001. Operating income for the year ended December 31, 2002 was $128.9 million in comparison with operating income of $57.6 million for the year ended December 31, 2001. Net income for the year ended December 31, 2002 was $35.6 million as compared to a net loss of $4.0 million for the year ended December 31, 2001. Net income for the year ended December 31, 2002 includes a non-recurring write-off of $3.1 million of fees (before tax) associated with the proposed initial public offering of the Company's parent, Cinemark, Inc., the closing of which was postponed due to unfavorable market conditions and a $3.4 million charge (net of tax) as a result of the cumulative effect of a change in accounting principle with respect to the amortization of goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . EBITDA for the year ended December 31, 2002 increased 20.6% to $205.0 million (after the $3.1 million write-off of IPO fees) from $170.0 million for the year ended December 31, 2001. Lee Roy Mitchell Mitchell, city (1990 pop. 13,798), seat of Davison co., SE S.Dak.; inc. 1881. Mitchell is a trade, distribution, and shipping center for a dairy and livestock area. , Cinemark's Chief Executive Officer, said, "The distributors provided the industry a strong slate of family oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. film product in 2002 resulting in historic industry performance. Cinemark increased its EBITDA margin in 2002 to 21.8% from 19.9% in 2001 and continued to utilize operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. to reduce net debt resulting in an $88.4 million reduction in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and an increase in cash and cash equivalents of $13.5 million. We will continue our focus in 2003 on strengthening our capital structure through debt retirement while maintaining a strategically focused domestic and international building program." In February 2003, the Company extended the maturity dates of its long-term debt as the Company issued $150 million principal amount of 9% Senior Subordinated Notes and entered into a new Senior Secured Credit Facility consisting of a $75 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. line and a $125 million term loan. The new facilities were utilized to retire the Company's existing senior revolving credit facility and a $77 million mortgage facility. Cinemark USA, Inc. continues to be a leader in the development of stadium seating theatres. During 2002, the Company opened seven new stadium seating theatres, with 58 screens, and added two screens to an existing theatre bringing its aggregate screen count at December 31, 2002 to 3,031 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador El Salvador (ĕl sälväthōr`), officially Republic of El Salvador, republic (2005 est. pop. 6,705,000), 8,260 sq mi (21,393 sq km), Central America. , Nicaragua, Costa Rica Costa Rica (kŏs`tə rē`kə), officially Republic of Costa Rica, republic (2005 est. pop. 4,016,000), 19,575 sq mi (50,700 sq km), Central America. , Panama, Colombia and the United Kingdom. The Company has commitments to open thirteen new theatres, with 132 screens and add seven screens to existing theatres scheduled to open in 2003 and thereafter. The Company intends that this press release be governed gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. by the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 (the "PSLR PSLR Peak Sidelobe Ratio Act") with respect to statements that may be deemed to be forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. under the PSLR Act. Such forward-looking statements may include, but are not limited to, the Company and any of its subsidiaries' long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. theatre strategy. Actual results could differ materially from those indicated by such forward-looking statements due to a number of factors. The Company, headquartered in Plano, TX, has a website at www.cinemark.com where it sells tickets over the internet.
CINEMARK USA, INC.
FINANCIAL SUMMARY
For the Fourth Quarter and Year Ended December 31, 2002 and 2001
(In thousands)
Fourth Fourth
Quarter Quarter Year Year
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2002 2001 2002 2001
Statement of Operations data:
Theatre revenues $226,727 $215,209 $939,265 $853,658
Film rentals and advertising 77,715 74,181 321,821 295,019
Concession supplies 11,602 11,434 50,678 44,924
Facility lease expense 28,874 28,928 116,303 114,736
Other theatre operating expenses 49,938 47,026 202,117 192,025
General and administrative
expenses 16,044 12,144 48,220 42,690
Depreciation and amortization 16,306 18,037 66,893 73,544
Asset impairment loss 3,087 20,273 3,869 20,723
(Gain) loss on sale of assets
and other (256) 7,924 470 12,408
-------- -------- -------- --------
Total costs and expenses 203,310 219,947 810,371 796,069
-------- -------- -------- --------
Operating income (loss) 23,417 (4,738) 128,894 57,589
Interest expense (1) 13,659 15,005 57,793 70,931
Other (income) expense (934) 47 2,974 4,794
-------- -------- -------- --------
Income (loss) before income
taxes and cumulative effect of
an accounting change 10,692 (19,790) 68,127 (18,136)
Income taxes (benefit) 6,351 (15,190) 29,160 (14,115)
-------- -------- -------- --------
Income (loss) before cumulative
effect of an accounting change 4,341 (4,600) 38,967 (4,021)
-------- -------- -------- --------
Cumulative effect of an
accounting change - - (3,390) -
-------- -------- -------- --------
Net income (loss) $ 4,341 $ (4,600) $ 35,577 $ (4,021)
======== ======== ======== ========
Other Financial Data:
EBITDA (2) $ 43,742 $ 43,316 $205,031 $169,980
Cash and cash equivalents 63,719 50,199
Theatre properties and
equipment, net 791,731 866,406
Total assets 916,814 996,544
Long-term debt, including
current portion 692,587 780,956
Shareholder's equity 27,765 25,337
Other Operating Data:
Attendance 40,813 37,891 172,458 153,875
(1) Includes amortization of debt issue costs and excludes capitalized
interest.
(2) Represents operating income plus depreciation, amortization and
other non-cash expenditures. See reconciliation of EBITDA in the
chart below.
Fourth Fourth
Quarter Quarter Year Year
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2002 2001 2002 2001
Reconciliation of EBITDA:
Operating Income (loss) $ 23,417 $ (4,738) $128,894 $ 57,589
Add (deduct):
Depreciation and amortization 16,306 18,037 66,893 73,544
Asset impairment loss 3,087 20,273 3,869 20,723
(Gain) loss on sale of assets
and other (256) 7,924 470 12,408
Deferred lease expenses 914 1,307 3,802 4,702
Stock option compensation 274 513 1,103 1,014
-------- -------- -------- --------
EBITDA $ 43,742 $ 43,316 $205,031 $169,980
======== ======== ======== ========
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