Cinemark has reportedly revealed its re-opening date for closed theaters, which came as a result of the current coronavirus pandemic. According to Deadline, Cinemark CFO and COO Sean Gamble held a special phone call with financial analysts and investors, in which he stated that the company is planning to start a “ramp up” by July 1. This would mean employees would begin returning to work roughly two weeks prior to the open date.
However, Gamble explained that theater openings would potentially be “state by state, county by county” depending on “demand.” It could also mean reduced hours and operating days of the week, but that is unknown at this time. “We won’t be everything back day 1, but dip our toe approach,” he said, explaining that it could be at least three months before theaters are back to their normal working level. Gamble also said that circuit profitability is possible “on occupancy levels of 20 percent to 30 percent,” so if city/county rules regarding social distancing become necessary to adhere to, the company “can execute that successfully and profitability.” He added, “Our lowest attended month had occupancy levels of 10 percent and we still operated profitability.”
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Cinemark CEO and Board Director Mark Zoradi also spoke on the call, sharing that the company plans there will be two weeks of “showing library product, high profile library product,” so that they can better estimate attendance and flow. “Security is more important than growth,” Zoradi later added. “What got us to this strength of position is that we were relatively conservative and didn’t chase multiples beyond what we were unable to do.” Zoradi’s security comment was a response to an analyst inquiring whether Cinemark had plans to pick up any new theaters that might be struggling.
“As debt starts to settle and when the COVID crisis starts to decline, and we get confirmation of when theaters can re-open, we will certainly consider the,” he went on to say. “With all the uncertainty we are very pleased to operate and open…and there’s going to be time and opportunity to consider that at a later date. At this time time, we’re not considering M&A opportunities.” Finally, regarding ticket pricing, Zoradi said, “We’ll charge less when we start to get people back with high profile library product. We’ll be able to make deals with studio partners prior to the big tentpoles coming.” He then added, “I don’t anticipate we’ll charge more for tentpole pictures.”
