Showing films is where Cinemark Holdings really makes its mark. The third-largest movie exhibitor in the US (following Regal Entertainment and AMC) has more than 5,200 screens in some 465 theaters in the US and Latin America. Cinemark operates its multiplex theaters in smaller cities and suburban areas of major metropolitan markets. Some larger theaters operate under the Tinseltown name; others are "discount" theaters showing no first-run films. About 85% of its first-run auditoriums feature stadium seating. The company prefers to build new theaters in midsized markets or in suburbs of major cities where the Cinemark theater is the only game in town.
Cinemark operates theaters in 39 US states, as well as Argentina, Brazil, Mexico, and 10 other Latin American countries. The company gets about 70% of its sales from the US market.
Despite a down economy, people still flock to the movies. The company's revenue has been trending upwards in recent fiscal years. Cinemark reported about $2.47 billion in revenue for fiscal 2012, up from the roughly $2.28 billion it brought in during fiscal 2011, and the $2.1 billion the company reported in revenue for fiscal 2010.
The company's strategy focuses on international expansion primarily in Latin America through construction of modern, state-of-the-art theatres in growing urban markets. Cinemark plans to build 13 new theatres with 88 screens during 2013 and three new theatres with 21 screens subsequent to 2013, investing an additional $89 million in Latin American markets.
Its adoption of the 3D format is just one way in which Cinemark focuses on being one of the most modern and technologically advanced movie chains. The company has developed a large screen digital format, XD Extreme Digital Cinema, or XD. The format includes wall-to-wall and ceiling-to-floor screens, wrap-around sound, and can play any available digital print. Cinemark has XD screens in more than 50 theatres. The company expanded on this concept with the launch of its first NextGen Cinema location in the Dallas area in 2010. NextGen is a high-tech movie theater that houses XD screens, the latest projectors and sound systems, and other cutting edge amenities.
The company is able to finance many of its technological advancements by forming partnerships with the other major theater chains. National CineMedia, a joint venture with Regal Entertainment and AMC Entertainment, delivers digital advertising, pre-recorded concerts, meetings, sporting events, and other non-film entertainment content. In addition, it is continuing to roll-out digital cinema through its Digital Cinema Implementation Partners, another joint venture between Cinemark, Regal, and AMC.
Mergers and Acquisitions
Cinemark USA, a wholly owned subsidiary of Cinemark, and Rave Real Property Holdco, an affiliate of Rave Cinemas, entered into an asset purchase agreement in 2012 in which Cinemark will acquire most of Rave's assets, consisting of 32 theaters and more than 480 screens in 12 states. The purchase price is $240 million. This acquisition would further enhance Cinemark's domestic footprint, especially adding presence in the New England market.
Madison Dearborn Capital Partners owns about a third of Cinemark; chairman and former CEO Lee Roy Mitchell and the Mitchell Special Trust collectively own about 11%. Members of the Syufy family, the founders of Century Theatres, hold a 5% stake.