Cinemark Holdings, Inc. (CNK) Earnings Call Transcript & Summary

Okay. Well, thank you, everyone, for joining today's fireside chat with Cinemark's CEO, Mark Zoradi; and President, CFO and COO, Sean Gamble. Mark has served as Cinemark's CEO since August of 2015. Prior to Cinemark, he spent 30 years at The Walt Disney Company, most recently serving as President of Walt Disney Studios Motion Pictures group. Mark will be retiring as CEO at the end of the year, but will remain on the company's Board of Directors through at least 2024. Sean, Cinemark's CFO and COO, will be Mark's successor as CEO at the beginning of 2022. Sean has been Cinemark's Chief Operating Officer and Chief Financial Officer since January of 2018 and Chief Financial Officer since August of 2014. Prior to joining Cinemark, Sean worked at the Comcast corporation as Chief Financial Officer of Universal Pictures within NBCUniversal from February 2009 to April 2014. Today, we're going to have a discussion on Cinemark's growth strategy, the future of moviegoing, including PVOD and subscription programs, the current state of exhibition, including recovery efforts and vaccination rollouts and the impact on that on the industry to name a few. My name is Mike Ng. I cover movie theaters, including Cinemark at Goldman Sachs, and I have the privilege of moderating this discussion with Mark and Sean. We have 40 minutes today, inclusive of audience Q&A. If you'd like to ask a question, you can submit your question through the webcast.

First, Mark and Sean, thank you so much for making yourselves available. Let's start off and talk about some of the good news that we've seen this month, Shang-Chi. This was a theatrical-only release that drove a record Labor Day opening weekend. Disney then subsequently announced that 5 of its next 6 titles in 2021 will have at least a 45-day exclusive theatrical release. Could you talk a little bit about the implications of some of this recent success for the industry on reopening? Do you think that this is a turning point for the industry?

Thanks, Mike. I think I'll take this. Sean and I will go back and forth. We're kind of used to doing this tag team. So first, appreciate the opportunity to be here. I always love the Goldman conference, missed being in person. Relative to your question, look, Shang-Chi was an unabashed giant success, not only for The Walt Disney Company, but also for exhibition and the industry. This movie went Labor Day weekend, which historically has not been that big of a moviegoing. Hit more than 3x the largest labor day weekend prior to that. For the 4 days, it did nearly $97 million. That was a big story. But maybe even the bigger story after that is what happened in weekend 2 and weekend 3 where it held phenomenally. So when -- I think when Disney saw those results, along with the results for Free Guy, which were also very, very strong, I think they looked at all that data, saw that there was less piracy on these movies as well and decided to make the choice that they didn't. As you mentioned, all but one movie they put 45 days, and that one movie they put as exclusive for a 30-day window. So that was really encouraging to us, and that was on top of what all the other studios had already previously announced, which was either to stay with an exclusive window or in Warner's case to return to an exclusive window in 2022. So it really solidified our distribution plans and content supply plans as we go forward through the end of this year and into next.

Okay. That's a great setup. Could you just describe to you -- for us, rather, where we are in the reopening process of the global theatrical circuit? And then for Cinemark specifically, as we continue to go through reopening, what are Cinemark's strategic priorities for the rest of the year and Internet?

Sure. I'll take that one, Mike. I'll actually start with kind of where we are as Cinemark. At this point, we're pretty much fully open. We're 100% open in all of our theaters in the U.S. and international recovered to a level, we're at 99% open. So just about every one of our theaters is now open on our global footprint. From an industry standpoint, we've seen that the -- on a screen basis, the industry is probably about 94% to 95% open. We suspect that at this point, the majority of that remaining percentage may not open, like if those theaters and screens were going to reopen, they would be open by this point. We don't necessarily think that will have a necessarily material effect on overall box office for the industry because those would be theaters that weren't significant performers ahead of the pandemic, and there's a reason why they're not reopening. So we'll see how that goes. As far as our priorities for the rest of this year and into next, really, there's kind of, I would say, 3 broad buckets that we're focusing on. Obviously, one is just continuing to effectively navigate the pandemic because we're still in the midst of this. And while we -- things have been improving, there's still some road to go. Connected to that, the second piece is just continuing to reinvigorate the industry, get consumers aware again that movie theaters are open and back into the habit of going to the movies. And then the third piece, as I say more of a sustaining thing is really just taking a good hard look like we've been doing at our business and evolving and adapting our company for a post pandemic environment. We want to continue to remain successful like we had been pre-pandemic in this new landscape. And one of the elements of that is focusing significantly on how we retain a lot of the market share advances we've made over this past year.

Great. And on the post pandemic elements, can we talk about what the box office is going to look like post pandemic. The box office figures ultimately return to pre pandemic levels? Are there things that change that may have -- may prevent that? What do you think are the steps that are necessary for the industry box office, at least in North America to return to that pre pandemic level?

Mike, I think I'll take that one. We kind of put this into 4 thoughts here. What's going to happen in '22, there's going to be 4 things: one, the status of the buyer where that stands; two, are there governmental restrictions; three, what's the consumer sentiment; and four, what's the content flow of new product. And as we look at all 4 of those, I think we're seeing some pretty green lights coming on each of them. We're not through all this. We've always kind of looked at '21 as being the transitionary year and '22 to be that recovery year. I think we're going to see some of that recovery in the fourth quarter as well because, again, if we go through each one of these, the virus is clearly not under control yet, but it's so much better than where it was because of vaccination rates and the restrictions that have been there. The governmental restrictions are not overly burdensome now. And so, we're seeing positive realm on that as well. Consumer sentiment has gotten as high as 80% comfortable going back. With the Delta variant, that actually came down into the 60s, but now we're starting to see that curve go back into the low-70% range. The sentiment curves are all going in the right way. And then finally, the content supply just looks outstanding going into the fourth quarter and next year, maybe we'll get into some more details of that question along the way. So I'll save that for later, if you like.

Great. Well, Mark, you've been such an incredible CEO for Cinemark over these past 6 years. As Cinemark transitions into new leadership in 2022, Mark, is there anything in particular that you'd like to accomplish before you leave and then as a follow-up to that, to Sean, Sean, is there anything you're looking forward to in particular and -- look forward to accomplishing in particular, in your time as the new CEO.

Thanks to the kind words there, Mike. I came -- I was on the Board prior to becoming CEO and then did that, as you mentioned, in August, it was named on August of 2015. My expectation was to likely stay 5 years and go through 2020 and then this little thing called COVID hid. So for a lot of good reasons, I decided to stay, the Board decided to stay that I should stay for at least another year. And so, a couple of things that I wanted to make sure and get accomplished in this year. Number one, make sure that the ship is stable and thank goodness to a lot of our team members, we went into this crisis in a pretty good, stable financial position, and we were very aggressive at reopening our theaters when we could, very innovative in what we try to do to continue to generate cash along the way. Because of that strong management team, I think that I've had the potential to work with Sean, we have a really, truly strategic and well-thought-through succession plan. Sean and I have worked together extremely closely over the last 6 years. So I think the investor community is going to -- is not going to see any ripples nor our management team here. So I think our constituencies are well informed. They get the plan. We're moving forward. So if I had one overriding goal in these last 3 months I'm here is to do everything in my power to be able to transition with Sean, to have it be as seamless as possible so that as we go forward, Cinemark is even more successful after I leave and just remain in a more strategic Board position than what we've been.

And I would add, Mike, to your question, I mean, look, Cinemark has had a long history of growth and reliable, consistent results. Mark has clearly made great strides in furthering that along. I'd say, over time, I would aim to take that to the next level. I think in the most near term, it's just getting through -- getting beyond this whole COVID drag and getting to a more stable -- getting us to a more stable playing field both for Cinemark and for our industry, so we can more fully devote our attention again to growth and the evolution of the whole moviegoing experience.

And I guess while we're on the topic, Mark, I just want to express to you, it's been an absolute pleasure getting to know you the last several years. And Sean, I certainly see that Cinemark is in very good hands. So I congratulations to both of you.

You don't want to think that actually because -- and whenever you leave a job like this, it's bittersweet, and this has been a great 6.5 years. But Sean and I have been such great partners. I'm looking forward to being on the Board. And when Sean chooses to use me as a sounding Board, I'm happy to be there. But this is going to be Sean's ship come January, and I'm going to be there just to support him.

That's awesome. And you talked a little bit about the 4 factors that will ultimately impact the path of the industry box office, right? The status of the virus, government regulations, consumer sentiment and content flows so let's dig a little bit into content. As you mentioned, there's a relatively stacked slate of highly anticipated movies for the remainder of the year. Venom, Dune, No Time To Die, Spider-Man, Matrix 4 to name a few. Can you talk a little bit about your box office expectations for the rest of the year and next year? And are there any films in particular that you're excited about that might outperform expectations or serve as catalyst bring consumers back into the movies who may have been reticent to go up until now?

When I look at the lineup, especially in the fourth quarter, the thing that sticks out to me is the variety of products. There is a variety of products for all audiences to bring back. So that's probably the thing that excites me the most. And secondarily, that it's coming from multiple content providers. So as you look at this and you go, okay, look, MGM is bringing Bond and the House of Gucci. That's great, 2 big movies. And then Warner Brothers has got Dune and Matrix coming. And then you have Disney with Eternals from Marvel, you've got Encanto animation, and then you got West Side Story with Steven Spielberg. So Disney's contributing 3 big movies. And then you got Sony with 2 very, very big movies, Ghostbusters: Afterlife and also Spider-Man. We were able to actually see the entire movie of Ghostbusters at CinemaCon. And so, I can speak with real knowledge about this film. This film's a 4-quadrant movie that we think is going to do very, very well. And then finally, you've got Universal. It's got Halloween II and Sing 2. So everybody is contributing something. And prior to when Paramount chose to move Maverick Top Gun into next year, we would have had that one as well. And I look at that, and I take the long-term approach to it, Maverick's going to be a giant success, probably even bigger in that Memorial Day weekend. And it was important to Paramount because Tom Cruise is a guy that wants to travel the world and promote it, that he had the ability to do that. And I think that was probably one of the biggest reasons they chose to do it. So you look at this fourth quarter, and I think it's going to be really the beginning of the recovery. And then '22 is really who's who. And so I -- given that the studios have all lined up with some significant form of an exclusive window, and you got the fourth quarter, which is going to prove that it's the right thing to do, then you got this giant '22 lineup, I think we're in for a good recovery. Now you asked about percentages, I got to stop short there because you just -- we just don't exactly know. And I think it would be maybe a little bit too aggressive to be thinking that all of a sudden, the industry is going to recover in 1 year. This might be a 1 or 2 or 2.5-year process to build everybody back up and get that last 10% of consumers who still have some hesitancy to go to the movies.

And just talking about 2 of the other 4 factors, I guess, the status of the virus and government regulations with turns around Delta variant, I think you're seeing some cities begin to require proof of vaccination to come in and spend time in doors to watch a movie. Could you talk a little bit about government regulations in the past of the virus more broadly and how you think it might affect the recovery of the box office?

Sure. I guess it's a little hard to say as far as like a vaccine requirement in terms of the effect. There's not a lot of data on that. Obviously, it's pretty limited in terms of what's been put in place or what's been talked about, and I still think it's kind of questionable as how pervasive that becomes. There certainly could be a short-term effect like we've seen in other parts of the world where that's been in place. But obviously, people tend to kind of adapt to that new scenario and move on. Clearly, measures that would ultimately get the pandemic under control, the biggest thing that's going to lead to a resurgence of the box office is containment of the virus, right? We saw that in June and July, how fast our business was starting to recover. It was moving at a pace that it far exceeded what we were expecting earlier in the year, as COVID was being reined in ahead of the Delta variant step back. So as soon as things get contained in, we've got a pretty good conviction that things are going to really accelerate in terms of box office. In the meantime, we've obviously taken extensive measures to keep our guests safe with a whole range of health and safety measures. Clearly, we've done all kinds of different things, just to call out one. With our airflow now, we've increased all kinds of fresh -- heightened fresh air flow into our theaters with more sophisticated filtration, MERV 13 filters, HEPA vacuums, so on and so forth. So we feel like we've really taken strong measures to keep people safe in this environment, but getting the virus under control is really going to be paramount in terms of seeing some real big resurgence.

Great. Let's switch gears a little bit and talk about distribution changes. The National Association of Theatre Owners, NATO, has cited Black Widow as being one of the most pirated films and even further emphasized that a simultaneous release might be a pandemic-era artifact. Could you talk a little bit about your views on the future of PVOD and simultaneous releases? Is this a new permanent tool in the toolkit? Or is this something that we really won't be seeing as much of going forward in a post-pandemic world?

Michael, you bring up a very interesting topic, the piracy. And the years I was at the studios, we were so concerned about piracy, and we were always asking exhibition to try and eliminate piracy coming out of the theaters, the camcorders and et cetera. And in a world of simultaneous releases, sometimes it's not the theaters or many times it's not the theaters where the piracy is coming, but it's actually in the home. And I think all content providers recognize that. And it's one of the things that is in their decision-making process, should we go simultaneous or should we wait? When you see movies that didn't go simultaneous, they tend to have -- they tend to be less high on the pirated list than those that did. So I think that's a really important factor in all of the studio's decisions. And as we look now, looking to 2022, basically, every studio has said that they're going to have a significant form of an exclusive release. I want to make one exception to that. Disney came out for the remainder of '21, saying what they're going to do and have all their movies with an exclusive window, they have not committed to '22. So I certainly can't put words in Disney's mouth, but it's a very positive sign that Bob Chapek and the distribution team decided to take the remainder of this '21 and put exclusive windows on it. So I would at least hope and expect that there would be a significant continuation of that based on the results that they saw on Free Guy and on Shang-Chi.

Great. And just while we're on the topic of windows, theatrical windows have certainly been gravitating towards this new 45-day window. Can you talk about the implications of that for exhibition? And do you see the window further compressing out over the next few years?

Well, look, we certainly believe that a window is in everyone's best interest in kind of generating those larger cultural moments, in elevating content, in staving off piracy, as Mark just touched on, it helps build bigger brands. We've seen that forever in terms of how theatrical release benefits content and we think it also helps to maximize revenues. So in light of some of the more recent experimentation with day-and-date releases and some of the marketing tactics to boost subscribers for streaming platforms, we clearly view a 45-day window or an exclusive window as an overall positive. Obviously, the majority of the revenue we generate on our films takes place within that time frame. We expect we're going to continue to see some experimentation and some fluidity over the course of the next year or so. And it's likely that there won't necessarily be a one-size-fits-all model as was the case pre-pandemic, which in some respect, is a positive. We think that could actually lead to an increase in content flow as there are new models that have a better profitability model for the studios, particularly on some of the smaller and mid-tier releases. So in some ways, this can lead to new opportunities that were limited previously. Look, I would say also, long term, we certainly think that as some of these streaming platforms mature, we're in this kind of period where they're in their infancy. But as they mature, there's going to be a heightened focus on retention, on elevating content, on using that content to promote those platforms and differentiate those services. And that's where theatrical has been a huge benefit to the studios forever. Again, we've seen how that lifts up the performance of consumer products, of theme park rides and subsequent distribution channels. And there's no evidence to suggest that would be any different with streaming platforms when you get to that stage and you're trying to retain your subscribers against other platforms. So we think there's a long-term net positive in terms of how these 2 different windows play together. And we know already today that the most active streamers are most frequent moviegoers. They are people who love content and they'd love to see it in that elevated format, it gives it a lift.

And while we're on the topic of windowing, could you talk a little bit about the current state of relationships with your studio partners? And are there opportunities to negotiate film rents lower? Said differently, does the change in windows and impact execution give an opportunity to drive those film rents lower given the concessions that you're providing?

Look, we continue to have excellent relationships with our studio partners. And obviously, we have very active and frequent conversations with them. We've all been trying to figure out -- working together and trying to figure out how to get through this pandemic, and we're continuing to work on solving kind of how things need to take shape in the post pandemic environment. So that's kind of the mode we've been in with regard to relationships and the dynamics. As far as film economics go, akin to the deals that we've negotiated to date throughout the pandemic, we're going to continue to seek economic consideration that's commensurate with any kind of changes in the window from kind of their historic norms. I would say, by and large, we've had positive receptivity from the studios in kind of recognizing the appropriateness of doing so.

And moving on to other areas of costs within the P&L, since the start of the pandemic, Cinemark, I think, has done a really great job of managing costs. Could you talk to some of these initiatives that you put into place and whether or not some of these cost initiatives will stay in place once we emerge out of the pandemic?

Sure thing. There certainly were certain things that we enacted during the course of pandemic, which were, I call them pandemic-specific action, some of the deferrals of spend and freezing various expenditure categories that will tick back up. But there obviously also are a wide range of actions we've taken in terms of optimizing processes and gaining incremental cost productivity that will be sustaining. Just to give you some examples, we worked really hard at further optimizing our operating hours to make sure that we're structuring the time we're opening to be the best in terms of generating margins. We've kind of reset our staffing levels in terms of what's needed for different levels of attendance. Prior to the pandemic, it was always a theoretical exercise in terms of how much labor you actually need to run a theater. Well, clearly, as we were getting going again, we got a real-life example of that. And we've been able to fine-tune our labor needs. Along those same lines of that, we've improved various processes to take work out of the system, and that's also leading to a reduced amount of workforce that's needed. And clearly, some of the restructuring actions we took both in terms of kind of our base cost from a people and process standpoint will be sustaining. We're also -- we're continuing to do pursue a range of additional productivity initiatives, both to help with any kind of near-term drag on attendance, but also to help us, like we always would have, to help us offset anticipated cost pressures. We expect that there's inflation that we're going to be facing, like many companies in the retail space, and there's going to be ongoing, just kind of COVID effects that we're going to have to contend with.

I was just wondering if you could talk a little bit more about rent specifically. Could you talk a little bit about the accommodations that Cinemark was able to get from landlords in terms of these deferrals and abatements? How much flexibility does Cinemark have on these agreements? And how should we be thinking about future rent expense?

Mike, in the beginning of COVID and through the middle of it, we did -- we got a significant amount of rental abatements, less amount -- excuse me, rental deferrals, less amount than actual abatements. We negotiated in excess of [ $8 million ] in terms of deferrals. And we've been -- obviously, we've been in the process of paying those back. As we look forward from here, given that the outlook is pretty positive, I don't anticipate that we would have a significant amount of new additional rent deferrals for abatements. And that's because the businesses look -- it's coming back and our landlords know that. And so we're at this point of actually starting to pay back many of those deferrals that took place. And by the end of next year, those will all be paid back. And as you know, the way we do our accounting, we always did it on an accrual basis. So we were accounting for those expenses, even though they weren't all being paid. And Cinemark is in a good position to be able to now pay back, have a strong relationship with all of our landlords.

Great. Let's switch gears a little bit. Cinemark's Movie Club subscription has been an example of incredible new product innovation, I think, has been a key tenet of Cinemark's strategic vision. With reopening, what are some of the initiatives and promotional incentives that Cinemark has been undertaking to ensure that Movie Club subscribers, paid subscribers and new moviegoers are incentivized to join the subscription plan?

Michael, this is a favorite topic of both Sean and I. We launched Movie Club as the first exhibitor-sponsored subscription program back in December of 2017. And pre pandemic, we were just over 950,000 members. I think one of the best things we did when the pandemic hit is we were very proactive in communicating with all of our members, our theaters were closed, and we put them all on automatic pause. And we got so many positive responses that people didn't have to do that themselves. So we immediately stopped billing people. And then as our theaters began to reopen, we allowed people to use their benefits even though they were paused. And just in the last 2 or 3 months have we taken people off of pause and began to re-bill people. So we're now in a situation where we built up a lot of goodwill with all of those subscribers. And between now and the end of the year, we'll start going back into the mode of subscriber acquisition. So we look forward to reporting those numbers, even at the end of November or perhaps in our early 2022 earnings call. But I think all those preparatory things of communicating and pausing and then rolling back out the unpaused with incentives for people to sign back up again, we're starting to reap the benefits of it.

Yes. It definitely sounds like an example of over-delivering and exceeding customer expectations.

And one of the secret sauces that we think of our program, too, is that it's very affordable to the consumer. It's $10 a month. For that $10, you get one movie a month, you have no online fees. If you don't use the credit during the month, it rolls over. And then the final ticker is you get a 20% discount on concessions. And you add all those up, and I think that's why Movie Club has been so successful.

Great. One other innovation that I think has gained a lot of steam over the last 12 months has been Cinemark Private Watch Parties. And I think that's certainly one thing that seems to have been a driver of some of the market share gains that Cinemark has realized over the last year. Can you talk about the performance of Private Watch Parties and where you see that innovation having a place post-pandemic, if at all?

Again, I appreciate that question because this was an innovation that really came out of our operations and marketing team. And we were the first national exhibitor to really jump on this and make it simple for the consumer. Look, we've all offered birthday parties and private parties over the years, but the difference for the Private Watch Party is it was literally a click on either the web or our app to buy this, and you could bring 20 people, 20 of your friends, you control the environment, and you did that for somewhere between $99 and $150. So it was highly, highly successful at our most needed time when COVID was the most active, and it encouraged people to come back so much so that we've had over 275 individual Private Watch Parties representing over 3.5 million people. Now in the midst of COVID, that's what it was ragingly popular. Now that COVID is waning and people are actually coming back to the theater, it's economically viable for us to program less Private Watch Party. But still, we're still selling over 1,000 Private Watch Parties each and every week. So we think it will continue, but obviously, not to the same extent as when we're in the middle of COVID because part of the benefit to it was people could kind of incubate within their group. Now, look, we're selling a lot more than 20 seats on an individual auditorium. So it makes economic sense for us to open those up and sell Private Watch Parties during less high demand periods. So you won't see them on Friday night and Saturday night, but you'll certainly see them on Sunday afternoon or midweek, and that's how we're selling more than 1,000 a week ongoing.

Great. That's very clear. One thing that surprised me is the strength of the domestic average ticket prices and food and beverage per caps. This past quarter, I think both of those items reached new all-time highs. Can you talk us through how the F&D per caps have been impacted by the pandemic? And how we should think about per caps growth from here on out? And where are we in terms of the reintroduction of enhanced food and beverage offerings?

It's an interesting -- it's a great question. It's interesting if we look at scene of food and beverage. We clearly have felt that we've seen a positive benefit in terms of people first coming back to the movies to kind of the big event and over indulging in kind of food and beverage consumption. And we've definitely seen an uptick in the volume of incidents and consumption amount per patron basis. Early on, we had some thinking that, okay, that -- maybe we'll see that start to take kind of a bigger step back to kind of where we were. But thus far, it's continued to hold. And we've seen now as people are kind of making more trips back, it's continued to sustain. So we're starting to think that actually a good chunk of this could -- and if not all of it could be sustaining going forward. Don't think that we'll see the kind of big growth step that we took going forward, but with some of the initiatives that we've been pursuing, such as the kind of Snacks in a Tap where we've got the online ordering capability, we think that the historic levels of that 5% to 6% per year per cap growth are certainly feasible, and that's what we're going to be targeting on a go-forward basis. It's interesting, too, we've seen all that with kind of our reduced levels of enhanced food. We have started bringing that back into the fold now. I would say we're fully there, but we're getting close. We've been tailoring that to the levels of attendance that we have, obviously. We wanted to make sure that certainly for some of the more perishable items, we were bringing that back as we had better certainty around sustained levels of attendance. So we've kind of gotten there. And we've seen that our core products have continued to hold as we put that in and we think we'll continue to drive benefits like we have historically as we put more and more of that back into fold.

Great. And just on ticket pricing, can you talk a little bit about your views on ticket pricing strategies going forward? Are there opportunities for staggered pricing schemes depending on the day of the week or the hour, just would love your thoughts there.

Definitely. Well, we've had -- obviously, we've had kind of varied pricing for quite some time. In terms of the latter part, different days of the week, different times of the day, we have different -- it's already tethered somewhat to demand. The history around that is based on kind of demand where our peak periods have higher pricing than our lower demand periods. We certainly feel like there's opportunity there. And one of the initiatives we have is to continue to work on strategic pricing and thinking about where there might be opportunities to be a bit more dynamic in our pricing efforts, one of the big things that we're studying and looking at now of just how pricing elasticities and demand are evolving as we kind of exit the pandemic. So clearly, that's still happening, but we're not just assuming that kind of where things were pre-pandemic are going to maintain. And our -- look, our objective overall is we're careful with pricing. Going to the movies has historically been one of the most affordable forms out-of-home entertainment. And certainly, as we're trying to get guests to come back and come back more frequently. We want to maintain that perception. The last thing we want is for them to feel like they're getting gouged on price or feel like it's a bad deal. So, we've been kind of focused on, all right, how do we make this a good value proposition for people to come back. So we're going to always have that, kind of, in mind as we try to maintain a perception of affordability and quality and value. But we are going to be absolutely focused on making sure we understand the evolving elasticities and taking advantage of opportunities with regard to pricing and being more varied and dynamic as we look ahead.

Okay. We're about to hit time. So maybe if I could just squeeze one last one in. On international and Latin America, pre-pandemic, Cinemark generated about 20% of its revenue from LatAm. What's the current state of LatAm today? What's your outlook would be going in LatAm? And then Mark, in China, if you have any closing remarks, I would love to hear that as well.

Michael, I'll take the Latin America One. Basically, Latin America is in a stable position. I think Sean might have mentioned that where 99% of our theaters open. We're selling food across the region with the exception of one particular country, a relatively small country. Given that the health care and the vaccine is not as far along the curve as it is in the United States, Latin America is somewhere 60 to 90 days behind the U.S. in terms of recovery. But we don't see anything systemic there that wouldn't see a full recovery in Latin America as we had in the U.S. And in fact, I actually just think instinctually, the Latin countries have always been big moviegoing people. So it's a big family entertainment. It's an affordable way for families to get out of the home. There's a less amount of great new setups of television sets across the middle class. So going to the movies is a big deal in Latin America. We don't expect anything different out of the Latin America recovery as we would in the U.S. So we're continuing to be bullish on Latin America.

Excellent. Well, we're a couple of minutes over. So with that, we'll wrap up. Mark, Sean, thank you for all the time today. It's been an absolute pleasure. And I think I speak for everybody listening in when I say we really appreciate all your insights and thoughts. That was great.

Thanks, Michael.

Thanks, Mike. Really appreciate it.

Yes, see you.