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

Great. So we are at time. Thank you for joining today's fireside chat with Cinemark's President and CEO, Sean Gamble. Today, we're going to have a discussion on Cinemark's growth strategy, the future of moviegoing and the current state of exhibition. My name is Mike Ng. I cover movie theaters and Cinemark at Goldman, and I have the privilege of moderating this discussion today with Sean. We have 40 minutes today for the session, inclusive of audience Q&A. So if you have a question at the end, please just raise your hand, and we'll get a mic run over to you. First, Sean, thank you so much for making yourself available today. It's a privilege to have you and to be able to host you.

Just to start off, why don't we talk a little bit about the box office recovery? The box office is coming off a very strong summer and the buzz for some of the 4Q films like Avatar, Black Panther is building, look great. How are you thinking about the box office performance in 2022 to date and what that implies for the state of the box office recovery?

Well, first, thanks for having us as well, Michael. I very much appreciate being here. I think -- look, we were highly encouraged by the results we saw over the course of the summer. One of the questions on the mind as we were going through the pandemic was will consumer interest still be there in terms of going to the movies at the same level it was coming out of the pandemic versus prior to the pandemic. And I think what the slate of films that were released over the course of the summer and the results we saw prove that absolutely that interest remains. If anything, it was as strong if not stronger across all categories of films. We saw that in the summer. And actually, we also saw that, if you look back to the fourth quarter and first quarter, there were a whole series of films that were breaking records over the course of that period. It really just wasn't until the summer that we got into a more sustained release cadence of successive films week to week to week. And as that took place, we saw more and more moviegoers coming back to the theaters. I think that was really encouraging about the current state of interest and bodes really well for the future.

Great. While we're on the topic of talking about the future and reopening, can you talk a little bit about COVID normalization? What's changed operationally over the last couple of years that may stick around and still be relevant going forward? And what aspects of the recovery are you still monitoring very closely?

Sure. Well, we were already on a path prior to the pandemic of just looking at where we had opportunities for increased efficiencies and productivity and growth. And obviously, we spent a lot of time during the pandemic furthering those and accelerating them. So just some of the examples of enhancements that we worked on, we got quite a bit more depth at flexing our operating hours and schedules and programming just by the nature of the ups and downs we've been going through. So we developed some new skills there. We built new controls around labor management over the course of the pandemic. That's something that we're continuing to sustain now and will continue going forward. We've gained other efficiencies from the way we do ushering, to the way we do our inventory management in the theaters, to the way we book our showtimes that all have added improvements in the way we run the business. And then, of course, we've enhanced some of our cleaning protocols and safety protocols and air quality protocols that will continue as we go forward. So many, many enhancements that provided benefits during the pandemic and will continue to benefit from going forward.

That's great. So let's talk a little bit about the film slate in more detail. We talked about some of the strong performers in 2022 to date. What are some of the titles that you're most excited about as we head into the holiday? Do you have any early expectations as it relates to the 2023 domestic box office? Where do you see that box office trend heading?

Well, you hit on some of them already. I mean we're looking at a strong close to the year with some of the bigger films like the Black Panther and Avatar and Black Adam. But importantly, I mean, what we saw this summer was strong performance across a more diverse array of films. And we got more of that coming up over the course of the fourth quarter as well. I mean in the family category with Strange World and Puss in Boots. Adult fair when you look at films like Amsterdam and Ticket to Paradise. I mean there's a range of content, which we think is really healthy in attracting a broad, broad audience to come back. So we think we're looking at a strong close to the year. And similarly, as we kind of advance forward to 2023, similar to how '22 was a big improvement from 2021 in the industry's recovery, we're looking at 2023 as similarly being a further stage of recovery from 2022. The films that we have line of sight to at this point, it's a little bit early to fully gauge the entire slate of 2023, just it's the normal cycle time of the way you have visibility into films at this stage. But the larger films are looking more indicative of a pre-pandemic slate and the mid-tier and smaller films are continuing to round out. So we're very optimistic about things continuing to progress in a positive manner.

Great. Let's talk a little bit more about the blockbusters and then some of the small and mid-tier films. This year, we've seen fairly high levels of box office concentration, crowding out some of the small mid-budget films. That certainly has been a trend pre-pandemic as well. Could you talk a little bit about what you're seeing here as it relates to this blockbusterization trend? Where is it heading? Has the short windows during the pandemic affected this trend at all? Is it a function of perhaps younger consumers or older consumers, maybe not returning to the movies as adults have?

It's interesting comment because you mentioned there was a bit of this trend happening prior to the pandemic with skewing a bit towards larger blockbuster films and smaller micro budget films. I would say this summer, I don't necessarily -- I wouldn't necessarily categorize it as crowding out the smaller films. I think what was more -- the mix was more a byproduct that there just weren't as many of those smaller films, just the way the production supply chain has been impacted by COVID. There just haven't been as many of those films available. So it was less those being crowded out more just a factor of what was being released. As we look ahead, I actually think what we might start to see, this is my belief, as the whole windowing structure is gravitating more toward a 45-day window. It's become a bit more dynamic. And part of the reason before the pandemic, we are seeing some of that shift to larger and micro budget films is because those mid-tier films were becoming riskier for the studios in their profitability. They're costing more to make and market. And then with a long window, there was less opportunity when they didn't work to do damage control. And now having the ability to let those movies run longer in success and potentially get into the home a bit earlier if they're not working, that actually creates a better risk proposition for the studios. And I think it will actually lead to more of those movies getting released because it's easier to take a risk and manage the outcome than before. So I think we'll start -- these are the conversations that we're having with the studios, and I suspect over the next few years, we'll start to see more of a shift in that direction.

Great. And that's a great segue to a deeper discussion around windowing. Could you just talk a little bit about the current stage of your relationships with studio partners? And can you just talk about where we're at as it relates to things like windowing, PVOD, day-and-date?

Sure. Well, we -- I mean, we've always had a really positive and healthy relationship with our studio partners, and we continue to. Obviously, over the course of the pandemic, there was a bit of experimentation that was going on with windows especially as many of them had just launched new streaming platforms. And unfortunately, theaters were closed for a certain extent. There just wasn't an option or they weren't performing as well because of the pandemic. Now as -- and by the way, that led to some challenging discussions and dialogues, but ultimately, we were able to come out with solutions that worked for everybody. Now as theatricals firing on all cylinders again, we are -- as I just mentioned, we're seeing that window gravitate more toward a 45-day window. We're hearing and seeing the commentary from the studios about the value that theatrical is providing them in generating better results for their film assets. Obviously, it's a big promotional vehicle and marketing vehicle that builds awareness. It creates a perception of quality. And we know that like it's always done in the home, it creates a bigger impact when those films ultimately go on to those platforms and go into the subsequent distribution channel. So we're hearing more and more of that, and that's how things are starting to take shape again.

Right. Could you talk a little bit about film rents? There was a bit of focus among investors around domestic film rents. In the second quarter, Cinemark's domestic film rents were around 60%. That was, I think, largely due to mix and concentration. But where are we at with film rents today? Do you have an opportunity to negotiate those lower on a like-for-like basis just because of the shortened window? What are you seeing there?

Well, for -- let me start with -- for the second quarter for us, there certainly was a component of the mix factor that we were just talking about with a greater concentration of larger films which hit higher on our scales and drive film rental rates up. But really, probably the biggest factor for us that influenced that metric is we intentionally leaned more heavily into our marketing expenditures in the second quarter as we're aiming to reignite moviegoing and also support our advantaged market share. So because all the volumes haven't fully recovered in terms of overall attendance, that put a little bit more pressure on that particular metric, and that was really some of the bigger driver of why the film rental and advertising rate was up versus prior years. As far as just the overall film rental structure, I mean, those are things that, talking about finding solutions with our studios, I think there's been a good understanding and back and forth on figuring out ways that provide commensurate economic value as there have been more varied release structures from a windows standpoint. So I think those will continue to evolve, but I think we are already in a positive place in terms of where we are today and how some of those things have appropriately adjusted to take into account some of the changes in the structure that have taken place.

Makes a lot of sense. Let's talk a little bit about Movie Club. Cinemark has done a great job reviving Movie Club subscriptions after the pandemic with over 20% of box office coming from members in the second quarter, which is better than 14% pre-pandemic. And I think you guys have over 1 million total members. Could you talk a little bit about what the typical demographic profile is of these Movie Club subscribers? How do they compare to standard moviegoers? And what are some of the things that Cinemark is doing from a promotional and incentive perspective to optimize for things like churn and also drive new subscribers?

Well, I mean, you mentioned like testament to the sustained interest in moviegoing, we've been back in growth mode of Movie Club. And yes, we hit 1 million subscribers earlier this year, so which was a major milestone for the program. Interestingly, when we look at the profile of our Movie Club members, it's not dissimilar from the overall profile of our general moviegoers at Cinemark. One of the big benefits of the program is its versatility because of the nature of how you can roll over your credits to subsequent periods without losing them, the value of the 20% concession discount we provide. It has great viability not only for very frequent moviegoers who may go multiple times a month, but if you're a family of 4 and you only go to the movies 3 times a year because you can share those credits with others, and you can roll them over, it works really well for those types of consumers as well. So it has very broad reach. And part of the way that we're sustaining interest is similarly just to continue to market the various benefits of the program for -- and that's to attract new guests and remind guests of the value that the existing members of the value they're getting. We do various surprise and delight types of special access to screenings and things of that sort. So there's a range of things like that, that we do to keep it compelling. We recently rolled out even a new tier with Movie Club Platinum that recognizes our most frequent moviegoers with even enhanced benefits, which is also a bit of a carat to kind of achieve that level because you tap into that for the subsequent year. So there's a whole host of things we continue to do to attract new guests and maintain our existing members.

That's great to hear. In terms of ticket pricing, Cinemark's ticket pricing has been great. In the last year, there were also some mix shift benefits, I think, towards more premium format tickets, fewer matinees, fewer kids and senior tickets. As the recovery normalizes and COVID becomes further out in the rearview mirror, could you talk a little bit about what we should expect as it relates to average ticket pricing? Was the strength in ticket pricing, all really these mix benefits? Or were there some like-for-like price increases as well?

It's interesting. We've expected more of a normalization of ticket pricing at this point than we've seen. The bulk of the price increases for us at Cinemark at least have been more of a mix factor. We have had a slight bit of inflationary price increases. However, we are being careful with how aggressive we go on that particularly as we're trying to reignite moviegoing and attract moviegoers back, we want to make sure that there is a good value proposition, and we're letting our data drive us on what the appropriate types of increases are in this environment that don't dissuade attendance and frequency. So there's certainly a further runway of opportunity there. But the bulk of the lift has been mixed. We continue to see consumers over-indexing in selecting premium offerings. I do think maybe some more of that normalization may happen as we do see a greater volume of family films released and as our operating hours start to extend into earlier times of the day, matinee periods as a greater volume of movies released into 2023. But yes, we've been really pleased with the over-indexing. And at least at this moment, we're not seeing any signs of a change in that.

That's great. Talking about concessions. How do you expect the concession spends and the per caps to trend over the next year or 2? And could you talk a little bit about Cinemark's strategy in addressing things like cost inflation for product inputs as it relates to your concession strategy?

Certainly. It's interesting. Concessions is a similar story in some ways where we've certainly seen a big uptick in per caps, and some of that we attribute to just people's behavior right now coming out of the pandemic of over-indexing. I mean we see that not only in moviegoing, but with regard to people going out to restaurants and other forms of out-of-home entertainment, right? They tend to be over-indexing in the volume of consumption. So we've seen that in our food and beverage purchases. Our incidents are up. I mean the big driver of our per caps are more incidents than price, and we do suspect some of that will normalize in time. But to date, it's continued to hold strong. We haven't seen any signs of slowdown. We're leaning into a whole range of initiatives like we have historically. I mean, we recently rolled out our online purchasing platform with Snacks In A Tap, which allows guests to prepurchase their food and beverage and avoid lines, either by picking it up when they come to the theater or having it delivered straight to their seat, which provides a huge convenience to consumers. So that's only in its infancy, and we think that will continue to provide growth potential. So there's a range of things like that, that we continue to do. On the cost side, look, there's -- as everywhere, what we're looking at with supply chain and inflation has certainly provided some pressures on the cost side of the equation. What we're doing about that is just looking for ways to offset it, looking for alternatives where they make sense without impacting sales, alternative suppliers in certain circumstances, looking for more volume purchases when those opportunities avail themselves when prices are in a more favorable place, and we'll look at price where it makes sense. But again, our method has been looking at data of where can we modestly increase prices without having them affect incidents to try to find that sweet spot of maximizing volume and price.

Great. And on the topic of concession innovation, could you just talk about premium food and beverage? Are there any changes that you've made during the pandemic that will sustain going forward? Has the portfolio been narrowed at all relative to where we are -- where we were pre-pandemic?

We narrowed -- as we were coming out of the pandemic, we narrowed what we were offering for a couple of reasons. One, we wanted to make sure that we weren't -- for some of our more enhanced food that has a shorter shelf life, we want to make sure we weren't exposed to spoilage. And two, some of that requires more labor to put together. And as we're just balancing some of the uncertainties around attendance, we wanted to make sure that we weren't over-indexing on stuff and not being able to generate the sales. So that was in the early phase. Over the course of the summer, as there was a lot more volume, a lot more attendance coming in, we had largely gotten back to our full menus of what we had prior to the pandemic as well as things that we continue to test and evolve. If anything, I'd say, maybe some of the shifts that we're having is less pandemic related, more just optimization related as we've broadened the range of categories and offerings that we have. We're now just looking at where there are opportunities for SKU rationalization and how do we potentially maybe narrow some of those to just keep it more manageable without affecting our sales. And it's varied market by market, theater by theater based on the demographics of our consumer base in those markets. But that -- I guess that's just some of the -- just overall enhancements to our operating practices that we're focused on.

Right. That makes a lot of sense. And just following up on the earlier topic of costs. Over the past 3 years, Cinemark has done a great job managing costs. Can you talk about some of the initiatives that were implemented during the pandemic and whether or not those initiatives will stay in place during the post-pandemic world? You talked a little bit about potentially extending the operating hours again. And then separately, how do you expect to manage things like wage inflation in what's a very tight labor market? And how does that impact you guys?

Absolutely. Well, hit on some of those conceptually a moment ago in the sense of some of the new operating practices we put in place with regard to our scheduling and operating hours and inventory and so on and so forth. I mean an example within there -- specific to labor, I mean, getting into the wage piece, one of the things we had visibility to, which was more theoretical before, was how much labor you actually needed to run a theater when you had really low levels of volume. Coming out as we were reopening our theaters, what we learned is we actually could operate with less labor than we originally anticipated. So we are now using all kinds of staffing templates depending on what types of things we're doing in the theater. So back to the food and beverage question, depending on what we are actually offering at a period of time, that basically determines how much labor we actually need for given level of volume expectations. So we were able to reset all of those templates and gain a series of efficiencies, and we're going to continue to benefit from that going forward. Specific to the wage rate pressure, that's definitely been something that like many others in retail space, we've been challenged with just some significant inflation and wage pressure. That's stabilizing now. We're starting to see that stabilize. What has required us to do is just continue to look for ways to do more with less, gain productivity, be smarter about how we're staffing our theaters, be smarter about the operating hours, making sure we're only operating in profitable windows hour by hour, and look for ways to offset that. One of the things that's, I guess, a benefit for us because we go through some surges in the summer and in the holidays, which is the general cycle of release volume and we need more employees at that point in time, we tend to employ a lot of high school and college kids. It's a great first job opportunity for them. Those -- some of those areas have been less affected by some of these inflationary pressures, and there's a lot of natural adds and reductions in that. And that gives us an opportunity over time to reset the equation as things normalize in the marketplace.

Great. Let's talk a little bit about Cinemark's geographic footprint. Cinemark theaters have historically over-indexed to suburban areas. Can you refresh us on Cinemark's domestic footprint and talk a little bit about how that might be advantageous from an operational or even competitive standpoint? Naturally, I think AMC and Regal have historically operated more in urban markets.

Certainly. Across -- yes, yes, we do tend to skew a bit more suburban. We got about 30% of our circuit is based in Texas, 20% in California, about 5% in Ohio, and the remainder of the circuit is spread across 38 states throughout the U.S., so pretty well spread domestically. I wouldn't necessarily say that our suburban footprint gives us any inherent advantages in and of itself. We also tend to have a fairly urban presence here in San Francisco with our Century theaters. But I would say probably some of the advantages we have are just being in premium locations, smart decisions that have been made by our real estate team over the years to go into premium locations. And when we are connected to malls, about 25% of our circuit is in more traditional malls. We tend to be in malls that are still in good shape. Like we've been very discriminate about where we go. So we're not as exposed to challenges with some of the dynamics in that space. So I think that definitely helps and gives us an advantage in that sense. Location is a key component to people choosing where they go in retail in general, and we have an advantage in that sense based on the decisions we've made over the years.

Great. Before I start opening it up to audience questions, I do want to sneak a couple more in. But if you do have a question, just raise your hand and we'll get a mic over to you. Just on competition, obviously, the screen rationalization has been fairly muted during the pandemic. I think that's been a surprise to a lot of investors. When I look at some of the NATO data, it looks like screen counts have gone down about 1% in 2020. Could you just talk a little bit about what you expect to see from a competitive front? And does that screen rationalization data point surprise you at all?

It's interesting. We had anticipated probably a greater reduction in screens as well coming out of the pandemic. And I think what wound up happening is because there was a lot of government stimulus money in the SVoD, money that got pumped into the industry eventually, that wound up preserving a range of screens that may have otherwise gone under. Over time, I think it will be interesting to see how that continues to take shape. Obviously, our industry has been undergoing a longer recovery cycle than others. I think to the extent that continues to be a longer cycle, that may put some pressure on some of these screens that may ultimately see a greater effect and a greater -- a bit more of a reduction. We'll have to see. But yes, I think that's really been the byproduct of why there perhaps hasn't been as much rationalization coming out of the pandemic as might otherwise have been anticipated throughout.

Great. That's helpful. I understand. One thing that I've always been impressed by is Cinemark's long-term market share gains quarter after quarter, year after year. It seems like you do outperform the domestic box office during the pandemic, but certainly pre-pandemic as well. Could you talk a little bit about what you think has been the driving force behind some of those long-term market share gains?

Certainly. I mean, we've been fortunate to have about, I think, 11 of 12 years of market outperformance relative to box office in the industry, and it's a range of things. We benefited even to a greater uptick coming out of the pandemic by being one of the first circuits to be able to open. Some of the operating enhancements that we talked about earlier enabled us to open and operate with positive variable cash flow when others couldn't immediately. So by doing that, we managed to attract new consumers to our theaters that may have not been coming to Cinemark before and now maintain those. That has -- that's been something that has been more of a near-term uplift in some of our outperformance. But really, what has sustained that over time, I'd say it's been the culmination of a range of things. I mean, it all starts with providing our guests a phenomenal experience when they're with us. I think Cinemark has a reputation for excellent guest service, which we pride ourselves on. We've had a history of consistently investing in maintaining our theaters so that they stay fresh and uplift. I mean, the quickest way to lose attendees is to let your theaters go downhill and not maintain them properly. So we've tended to over-index relative to our peers in doing that. We've invested quite a bit recently in our marketing capabilities. And I think that is now playing out as we're trying to get people to come back to theaters and maintain our share, all the investments that we are pumping into that ahead of the pandemic are playing through. We've just got an incredible reach now through our social and digital media channels to attract consumers to Cinemark, and we've even been able to work collaboratively with the studios now to get them to invest some of their dollars in our channels because they're more efficient in translating into ticket sales.

Great. I'd love your thoughts on premium large-format screens. For Cinemark, I think your XD screens generated about 25% plus of Top Gun's domestic box office. And in the second quarter, nearly 15% of your domestic box office came from XD and IMAX despite the fact that I think they only make up about 5% of your screens. So could you talk about what you're seeing from a premium large format perspective? And what's your general strategy there?

Certainly. It's kind of back to what we were talking about earlier of some of this over-indexing in consumer behavior coming out of the pandemic. We've seen -- just like we're talking about with food and beverage purchases, we have seen a significant uptick in people selecting our premium offerings, whether it's XD, IMAX, our D-BOX motion seats, it's really across the board, and that hasn't slowed. Interestingly, with everything happening in the marketplace right now with the inflationary environment we're in and concerns about recessions. And by the way, this has played out historically, right? Going to the movies has tended to buck the trends of recession time and again. It really is the strength of content that drives the people to the theaters. Well, even in that environment, we haven't seen any slowing of people selecting those premium offerings. We've seen that, by the way, also in Latin America, not just in the U.S. here. So as we look forward, we're going to continue to lean into that. It's one of the places as we're balancing and managing our capital coming out of the pandemic, one of the areas that we are continuing to actively invest in are these premium formats, second XDs in some of our theaters, additional motion seats. We still have pockets where actually recliners are a value. We have our recliner theaters that are great -- represent a great return. So those types of things are really having value, and we're just seeing the consumers lean into that.

Great. And since you mentioned Latin America, that was 19% of revenue in the last quarter. Could you just give us your outlook for moviegoing in Latin America? What's the recovery look like relative to the United States? And what are the growth prospects for box office and screens look like in LatAm relative to the United States?

I'll start with the latter part of that first. We still think the long-term prospects for LatAm are very positive. Culturally, going to the movies is very much part of the fabric of these countries. It's a big family-type activity. There hasn't been any change that we're seeing of that coming out of the pandemic. Many of these markets still are quite underpenetrated in terms of the number of theaters that they have. So we think over time, there still is a positive long-term aspect. You're generally dealing with some near-term ups and downs of the economic and political landscape. As far as recovery in the pandemic, LatAm was one of the places that tended to trail the U.S. just based on availability of vaccines and the overall quality of health care in that region. Now they've largely caught up to the U.S. Actually, their vaccine penetration exceeds the U.S. in most parts of Latin America. So we've seen that. 2Q, specifically, I would say our overall share of LatAm relative to our total company was a little bit down. That was more of a byproduct of Top Gun actually. It was -- we tend to see certain films and types of films, genres that will over-index or under-index in Latin America relative to the U.S. And Top Gun performed exceptionally well in LatAm. It actually far exceeded expectations there, much like it did in the U.S. It just wasn't nearly the juggernaut that it was in LatAm like it was in the U.S., just given the more domestic skewing aspects of that film. And because of that exacerbation, it wound up making the U.S. bit higher relative to LatAm in terms of the mix for 2Q.

That's really interesting. So it sounds like maybe you'll even get some additional leverage when the kids box office recovers because not only will that benefit the domestic box office, but I believe that Latin America skews -- or sorry, kids content resonates really well in Latin America.

Absolutely, the kids. Kids, family films, more pure action-type films. On the flip side, horror films, especially when they're religious-oriented horror films skew really well, whereas sci-fi and films that have either more of a sports or U.S. comedy, talking comedies based-type themes, those tend to under-index in a market like LatAm.

Great. Well, I think we have time for a closing question. Movie theaters have been long considered one of the more recession-proof forms of entertainment. The performance in 2008 and 2009 certainly supports that. Could you talk a little bit about Cinemark's and the moviegoing industry's value proposition in a potential economic downturn? And then can you comment on Cinemark specific positioning in a scenario where the economy worsens?

Certainly. One of the -- we think the big driving factors for why moviegoing tends to buck the trend of other retail in a recessionary period is not only does it provide a form of escape, but it is a relatively affordable form of local entertainment compared to other options. So what tends to happen, and this is, I think, a misconception. Most people tend to think, oh, there's a recession, people are going to go to the movies less. But what tends to happen is consumers will cut other types of activities. They'll not go on vacation. They won't make that trip. They won't go to a more costly like sporting event or something like that, but they're still looking to get out and do stuff. They want to get out of the home, and that's where the affordability comes into play. When you think about spending 2 to 3 hours of your time, the cost of doing that and going to the movies, we tend to pick up on that. So they'll trade off other things and still come to the movies. So as long as the content is there and that strength of content is there, moviegoing bucks those trends. And 3 out of the past 4 recessions, box office has actually grown versus reduced. And like I was saying a moment ago, interesting even in this marketplace, not only are we seeing that continue, but we're also seeing people still trading up when they come out to those more expensive premium offerings. So they haven't even ratcheted down to the more basic offerings. They're still pursuing the more costly options. So when they do come out, that becomes their moment of splurge. It's like, all right, I'm going out. I'm going to have a good time now. I'm going to just forget about my other troubles and going to lean into this and enjoy a fun day or night out.

Right. And I believe that Cinemark has also been very deliberate in their pricing strategy to make sure that it's very accessible to the consumers that they serve, right?

Absolutely. I mean that has overwhelmingly been our philosophy for years. We'll have varied price points throughout the week, throughout the day to make going to the movies accessible. And what we've found is trying to strike that right balance between how much price we're going after versus the frequency of moviegoing that we're able to generate, there's a balancing act there. So I would say, even in this period, like we've been careful not to just try to pursue the trends of, let's just -- everybody is just jacking up their prices because it's an inflationary environment. We think we can. We've been doing that to a limited degree where it makes sense, but we're very cautious as we're trying to get more people to come back to the theaters and get them to come to the theaters more often that we want them to feel value and feel real positive impression when they come to our theaters now, and we think it's been working. I mean that's part of the reason why we've seen a great over-indexing in our attendance, in our share, whether it be from a ticket sale perspective as well as from a food and beverage incidence perspective.

That's great. Well, I've always been impressed by your operational excellence, and I think the market share gains speak for themselves. We're just about at time. So thank you very much, Sean. I really appreciate you making yourself available and for all of your thoughts and your time.

Thank you again for having us. Appreciate it, Michael.

Great. Thanks.