Cinemark Holdings Inc.

Inc. First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Chanda Brashear, Senior Vice President, Investor Relations, Thank you, Ms. Brescia. You may begin.

Good morning, everyone. I would like to welcome you to Cinemark Holding, Inc.' 's first quarter 2024 earnings release conference call hosted by Sean Gamble, President and Chief Executive Officer, and Melissa Thomas, Chief Financial Officer. Before we begin, I would like to remind everyone that statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties. The company's actual results may materially differ from forward-looking projections due to a variety of factors. Information concerning the factors that could cause results to differ materially is contained in the company's most recently filed 10-K. Also, today's call may include non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the company's most recently filed earnings release, 10Q, and on the company's website at ir.centermark.com. With that, I would now like to turn the call over to Sean Gamble.

Thank you, Chanda, and good morning, everyone. We appreciate you joining us today to discuss our first quarter 2024 results. Over the past three years, the theatrical exhibition industry has seen meaningful year-over-year increases in attendance in box office as film volume has been rebounding following the shutdown of moviemaking during the pandemic. And, as we indicated last quarter, while this year will likely experience a dip in that recovery trajectory due to over six months of Hollywood strikes last year that again disrupted film production, 2024 kicked off to a better-than-expected start. First quarter North American industry box office declined only modestly versus 2023 on account of a wide range of films that delivered outsized results. Examples include Sci-Fi Sensation Dune Part 2 that outgrossed its first installment by more than two and a half times with over $275 million of domestic box office. Animated hit Kung Fu Panda 4, which became the second biggest installment in its franchise history, with over $180 million domestically and more than half a billion dollars worldwide. Biopic Bob Marley, One Love, which captivated audiences and generated nearly $100 million of domestic box office. Musical comedy Mean Girls and action thriller The Beekeeper, which each delivered close to $70 million domestically. and mega-adventure Godzilla X Kong The New Empire that opened to a monstrous $80 million in North America at the end of the quarter and has since delivered over $500 million worldwide. The first quarter also benefited from strong continued playthrough of December's whimsical family spectacle Wonka, which has now exceeded $215 million domestically and nearly $415 million globally, as well as anyone but you that proved audiences are still craving romantic comedies in theaters, having generated close to $90 million of domestic box office over its impressive run. Furthermore, we continued to witness strength of non-traditional content during the quarter, such as the successful releases of Cabrini and the complete fourth season of faith-based series The Chosen. The solid results of all these diversified titles once again provide strong, further validation that consumer enthusiasm for experiencing compelling content in an elevated, cinematic theatrical setting remains vibrant. We certainly experienced that enthusiasm within our Cinemark theaters during the first quarter as we entertained nearly 40 million guests across our global circuit with results that once again outpaced the industry. Relative to 2019, our admissions recovery continued to sizably exceed that of our industry by 700 basis points domestically and 600 basis points internationally. To that end, we also continued to maintain the most significant market share gains compared to pre-pandemic results of all major exhibitors. While Melissa will cover our financials in greater detail in a moment, during the first quarter, we generated nearly $580 million of total revenue, more than $70 million of adjusted EBITDA, and a healthy 12% adjusted EBITDA margin. These results once again demonstrate our team's resilience and outstanding ability to skillfully navigate a dynamic operating environment pressured by strike-induced headwinds. Yesterday, we also successfully retired another $150 million of our COVID-related debt, given our sustained confidence in our team, financial position, and positive long-term outlook for our company and industry. That positive outlook was further reinforced a few weeks ago during CinemaCon, our industry's annual trade show event, as studios and filmmakers provided glimpses into their upcoming film lineups for the next year and a half. One key message that was emphasized again and again by studios during CinemaCon, as has been consistently conveyed to us during our one-on-one conversations, is the significant enhanced value that a theatrical release provides their films and their companies. As we've highlighted on previous earnings calls, The clear consensus is that theatrical release delivers unparalleled levels of promotional impact and quality perception, which strengthens consumer interest to see films, bolsters long-term recall value, and leads to elevated lifetime financial results throughout all distribution channels. It's also very important for consumers who want to experience these films on the big screen, as well as for attracting top-tier talent. In light of this context, as well as what has been further communicated by the studios with regard to their future film development plans, we continue to remain bullish about the resurgence of film volume over the coming years. Production is now fully up and running again following last year's strikes New significant entrants like Amazon and Apple are meaningfully scaling into theatrical exhibition. And nontraditional content like concerts, faith-based films, multicultural titles and anime is also growing. Along these lines, the major studios took the opportunity during CinemaCon to showcase an increased number of titles relative to prior years. And what they shared, both the quantity of films as well as the quality of materials presented, created a buzz of optimism that permeated the convention all week. A diverse range of highly anticipated films slated for the rest of this year appear primed to fully deliver, including a resurgence of family films like If, The Garfield Movie, Inside Out 2, Despicable Me 4, Moana 2, and Mufasa the Lion King, action-adventure sagas such as Kingdom of the Planet of the Apes, Furiosa, Bad Boys Ride or Die, Twisters, The Last Dance, and Gladiator 2, comedic thrill rides like The Fall Guy, Deadpool and Wolverine, Borderlands, Beetlejuice Beetlejuice, Red 1, and Sonic the Hedgehog 3, suspense thrillers such as A Quiet Place Day 1, Alien Romulus, Joker 2, Speak No Evil, and Smile 2, and the fantastical world of Wicked Part 1. And next year's lineup is already coming together in a big way with a wide array of spectacle films. That includes Wicked Part II, Another Jurassic World, Superman Legacy, the next installment of Mission Impossible, a reboot of the Fantastic Four, Ballerina from the John Wick universe, a live action version of How to Train Your Dragon, Captain America A Brave New World, Snow White, Zootopia 2, Minecraft, Megan 2, Tron Ares, and of course, Avatar 3, whose prior installments represent the number one and number three biggest global films of all time. So again, based on strong, sustained consumer interest in moviegoing, Numerous indicators that point to a continued resurgence of film volume and the highly encouraging slate of upcoming titles on the horizon, we maintain a positive future outlook for the actual exhibition and our company. And we believe that Cinemark, in particular, is uniquely positioned to prosper as we move forward on account of several key differentiators. To start, our consistent investment in maintaining and enhancing our theaters over time, which we have performed at sustained levels that significantly exceed our peers, has positioned our company with the largest collection of high-quality assets in our markets. In addition to a more favorable overall condition of our theaters, we have the highest penetration of luxury seat of the major operators with almost 70% of our domestic circuit reclined, We have the best sight and sound technology and overall film presentation in the business, including 99.97% screen uptime. We have the number one private label premium large format in the world with our XD auditoriums, as well as the largest footprint of D-Box motion seats. And we now offer enhanced food and beverage menus in more than 80% of our U.S. theaters. We also have a distinctive global footprint across the U.S. and Central and South America, with a concentration in both suburban and Latin markets that have strong moviegoing cultures, which tend to over-index in theater visitation frequency. With one of the highest market shares in North America, as well as the highest share across our Latin American region, our global footprint also provides valuable scale. Furthermore, it provides attractive diversification across 42 states and 14 countries, beneficial best practice sharing, and access to varied pockets of growth in under-penetrated markets. Beyond the quality of our assets and our favorable geographic profile, we also have a solid financial position with a healthy balance sheet, industry-leading adjusted EBITDA margins and cash flow generation, and results that consistently outperform our industry. Our disciplined and balanced approach toward capital allocation over the years has positioned our company with an outsized advantage to both effectively navigate periods of reduced film volume, as well as actively capitalize on market opportunities as they materialize. Our solid financial position is further supported by our advanced operating capabilities. These capabilities are the byproduct of deep experience, domain expertise, and skill of our sensational global team, as well as years of deploying strategic initiatives. Examples include our heightened levels of customer service that consistently earn high satisfaction ratings from nearly 95% of our guests in our domestic surveys. sophisticated social and digital marketing platforms and tools that deliver billions of media impressions annually, driving increased film awareness and demand to visit Cinemark, and planning and execution rigor that has a consistent track record of optimizing show times and staffing, fine-tuning operating hours theater by theater based on fluctuating weekly demand, and driving efficiencies to help offset varied inflationary and supply chain-oriented headwinds. Our adept operating abilities and consumer-minded actions have also helped us to develop a loyal and extensive consumer base. We have over 21 million members in our global loyalty programs and in the U.S. alone, Movie Club, our paid subscription tier, now accounts for 25% of our domestic box office. These members are frequent and dedicated Cinemark moviegoers as well as our most satisfied guests. Moreover, our marketing reach extends to a total addressable customer base of nearly 30 million consumers and continues to grow. Finally, we are also well positioned to drive incremental value creation on account of the numerous levers we have that go above and beyond our industry's continued recovery and our singular competitive advantages. from continuing to extend premium amenities more broadly across our circuit, to enhancing our food, beverage, and merchandise offerings as well as distribution methods even further, to taking our pricing sophistication to the next level while executing a wide range of additional productivity initiatives, to further optimizing our circuit, including adding attractive new assets while addressing lower performing properties. The opportunities before us to drive incremental growth and prosperity that are fully within our control are plentiful. Those opportunities, combined with the positive direction our industry is headed, as well as our advantage market position, underpin our optimism about the future of Cinemark and our ability to create meaningful, long-term value for our shareholders. I'll now turn the call over to Melissa for a deeper look at our first quarter financials. Melissa?