<PAGE>
THIS COPY IS A COPY OF THE QUARTERLY REPORT ON FORM 10-Q FILED ON NOVEMBER 15,
1996 PURSUANT TO RULE 201 TEMPORARY HARDSHIP EXEMPTION
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission file number 33-77444
CINEMARK MEXICO (USA), INC.
CINEMARK de MEXICO, S.A. de C.V.
(Exact name of registrant as specified in its charter)
Texas 75-2493459
Mexico (N/A)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7502 Greenville Ave., Suite 800, LB-9, Dallas, Texas 75231
(Address of principal executive offices) (Zip Code)
(214) 696-1644
(Registrant's telephone number including area code)
_______________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No ____ The Registrant became subject to the filing requirements
of the Securities Exchange Act of 1934 on March 28, 1994.
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
4,044,432 shares of Common Stock as of November 13, 1996
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
<PAGE>
Index
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 1996 (unaudited) and December 31, 1995 3
Condensed Consolidated Statements of Income
(unaudited) for the three and nine month periods
ended September 30, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows
(unaudited) for the nine month periods ended
September 30, 1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II OTHER INFORMATION
Item 5. Other Information 12
Item 6(b). Reports on Form 8-K 12
SIGNATURES 16
<PAGE>
<TABLE>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1996 1995
----------------------- -----------------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $11,082,201 $1,423,029
Inventories 97,456 64,811
Tax and other receivables 1,731,107 957,257
Prepaid expenses and other 587,018 51,156
----------------------- -----------------------
Total current assets 13,497,782 2,496,253
THEATRE PROPERTIES AND EQUIPMENT 27,377,822 19,161,801
Less accumulated depreciation and amortization (2,012,280) (760,463)
----------------------- -----------------------
Theatre property and equipment - net 25,365,542 18,401,338
OTHER ASSETS:
Deferred charges and other 4,387,466 4,294,377
----------------------- -----------------------
TOTAL $43,250,790 $25,191,968
======================= =======================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $2,293,169 $1,750,543
Accounts payable affiliates (primarily due Cinemark USA, Inc.) 1,478,297 635,089
Accrued interest 654,066 1,120,000
----------------------- -----------------------
Total current liabilities 4,425,532 3,505,632
LONG-TERM LIABILITIES:
Senior note payable - Cinemark International, Inc. 8,934,979 2,520,548
12% senior subordinated notes 25,710,900 20,549,249
Deferred lease expense 299,510 201,915
----------------------- -----------------------
Total long-term liabilities 34,945,389 23,271,712
COMMON STOCK WARRANTS WITH
REDEMPTION REQUIREMENTS 200,729 3,424,132
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value, 100,000,000
authorized, 4,044,432 issued and outstanding 4,045 1,383
Additional paid-in capital 23,118,370 12,350,824
Unearned compensation - stock options (10,339) (12,922)
Accumulated deficit (9,216,448) (6,787,389)
Cumulative foreign currency translation adjustment (10,216,488) (10,561,404)
----------------------- -----------------------
Total shareholders' equity 3,679,140 (5,009,508)
----------------------- -----------------------
TOTAL $43,250,790 $25,191,968
======================= =======================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
--------------------- ----------------------- ------------------------ --------------------
REVENUES:
Admissions $5,095,092 $2,750,969 $10,977,576 $5,681,089
Concessions 2,635,002 1,297,226 5,764,975 2,702,416
Other 74,433 29,771 162,390 82,525
--------------------- ----------------------- ------------------------ --------------------
7,804,527 4,077,966 16,904,941 8,466,030
COSTS AND EXPENSES:
Cost of operations:
Film rentals 2,127,257 1,168,306 4,812,270 2,469,169
Concession supplies 903,774 437,550 1,955,746 972,739
Salaries and wages 878,252 343,443 2,050,051 901,942
Facility leases 1,019,560 456,163 2,085,364 1,235,258
Advertising 127,385 89,625 326,839 191,496
Utilities and other 907,473 671,736 2,221,721 1,427,690
--------------------- ----------------------- ------------------------ --------------------
Total 5,963,701 3,166,823 13,451,991 7,198,294
General and administrative expenses 718,591 540,252 1,655,214 1,285,541
Depreciation 741,696 212,687 1,240,506 462,070
--------------------- ----------------------- ------------------------ --------------------
Total 7,423,988 3,919,762 16,347,711 8,945,905
--------------------- ----------------------- ------------------------ --------------------
OPERATING INCOME (LOSS) 380,539 158,204 557,230 (479,875)
OTHER INCOME (EXPENSE):
Interest expense (1,123,587) (662,555) (2,830,398) (1,906,157)
Amortization of debt issue cost (26,763) (24,811) (76,384) (74,432)
Amortization of debt discount (48,081) (41,995) (139,205) (121,588)
Foreign currency exchange loss 45,619 (94,053) (3,221) (43,594)
Interest income 115,103 218,230 166,341 568,723
--------------------- ----------------------- ------------------------ --------------------
Total (1,037,709) (605,184) (2,882,867) (1,577,048)
--------------------- ----------------------- ------------------------ --------------------
LOSS BEFORE INCOME TAXES (657,170) (446,980) (2,325,637) (2,056,923)
INCOME TAXES (BENEFIT) (5,085) 217,414 103,422 181,305
--------------------- ----------------------- ------------------------ --------------------
NET LOSS ($652,085) ($664,394) ($2,429,059) ($2,238,228)
===================== ======================= ======================== ====================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
NINE MONTHS ENDED SEPTEMBER 30,
1996 1995
------------------------ ------------------------
<S> <C> <C>
OPERATIONS:
Net loss ($2,429,059) ($2,238,228)
Noncash items in net loss:
Amortization 215,589 196,020
Depreciation 1,240,506 462,070
Deferred lease expense 97,595 133,840
Debt issued for accrued interest 1,971,500
Amortized compensation - stock options 2,583 27,495
Cash from (used for) operating working
capital:
Inventories (32,645) (3,253)
Tax and other receivables (711,961) (26,621)
Accounts payable and accrued expenses 542,626 893,228
Accrued interest (486,482) (672,000)
Accounts payable affiliates 843,208
------------------------ ------------------------
Net cash from (used for) operations 1,253,460 (1,227,449)
INVESTING ACTIVITIES:
Additions to theatre properties (8,204,710) (7,864,115)
Decrease in temporary cash investments 0 2,721,780
Increase in other assets (169,473) (1,823,845)
------------------------ ------------------------
Net cash used for investing activities (8,374,183) (6,966,180)
FINANCING ACTIVITIES:
Capital contributions 10,000,000 302,625
Sale of common stock warrants 1,324,132
Increase in long-term debt 6,434,979
------------------------ ------------------------
Net cash from financing activities 16,434,979 1,626,757
FOREIGN CURRENCY TRANSLATION ADJUSTMENT 344,916 (1,576,492)
------------------------ ------------------------
DECREASE IN CASH AND CASH EQUIVALENTS 9,659,172 (8,143,364)
CASH AND CASH EQUIVALENTS:
Beginning of period 1,423,029 10,927,143
------------------------ ------------------------
End of period $11,082,201 $2,783,779
=================================================
SUPPLEMENTAL INFORMATION:
Cash paid for interest $1,345,380 $2,688,000
======================== ========================
Cash refund for income taxes ($552,748)
======================== ========================
</TABLE>
<PAGE>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Interim Financial Statements
The accompanying condensed consolidated financial statements have been
prepared by the Company, without audit, according to the rules and regulations
of the Securities and Exchange Commission. In the opinion of management,
these interim financial statements reflect all adjustments (which include only
normal recurring adjustments) necessary to state fairly the financial position
and results of operations as of and for the periods indicated.
These financial statements should be read in conjunction with the audited
annual financial statements and the notes thereto for the year ended December
31, 1995 included in the Annual Report filed on Form 10-K by the Company under
the Securities Exchange Act of 1934 on March 31, 1996.
Operating results for the nine months ended September 30, 1996 are not
necessarily indicative of the results to be achieved for the full year.
2. On September 30, 1996, the Company exchanged new Senior Subordinated
Notes (New Notes) in exchange for the existing Senior Subordinated Notes.
Additionally, the Company repurchased the majority of its outstanding warrants
(94.1%) for the issuance of $1.3 million of additional New Notes. Also,
Cinemark International contributed an additional $10 million of equity to
Cinemark Mexico pursuant to the exchange. The exchange created a net benefit
of $.8 million, including tax benefits, from the retirement of the warrants,
which was reduced by the charge off of the unamortized debt discount
associated with the Old Notes. This net benefit was credited to additional
paid in capital.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations
The following table presents certain income statement items as a percentage of
revenues.
% of Revenues
-------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues:
Admissions 65.3 67.5 64.9 67.1
Concessions 33.8 31.8 34.1 31.9
Other .9 .7 1.0 1.0
Total revenues 100.0 100.0 100.0 100.0
Cost of operations 76.4 77.7 79.6 85.0
General and
administrative expenses 9.2 13.2 9.8 15.2
Depreciation and
amortization 9.5 5.2 7.3 5.5
Operating income (loss) 4.9 3.9 3.3 (5.7)
Interest expense 15.4 17.9 18.0 24.8
Income before income taxes (8.4) (11.0) (13.8) (24.3)
Net loss (8.4) (16.3) (14.4) (26.4)
Overview
Cinemark Mexico (USA), Inc. (the "Company"), a Texas Corporation, was formed
in July 1993, as a subsidiary of Cinemark International, Inc. ("Cinemark
International", f/k/a Cinemark II, Inc.), which is wholly owned by Cinemark
USA, Inc. ("Cinemark USA"). The Company was established to serve as a holding
company to facilitate future investments in Mexico by Cinemark USA. The
Company's operations are conducted by Cinemark de Mexico S.A. de C.V.
("Cinemark de Mexico"), which was formed in September 1992, as a 99.99% owned
subsidiary of Cinemark International, to own or lease and operate movie
theatres in Mexico.
<PAGE>
Results of Operations
Revenues
Revenues for the quarter ended September 30, 1996 increased 91.4% to $7.8
million from $4.1 million in the third quarter of 1995. Revenues for the nine
month period ended September 30, 1996 (the "1996 Period") increased 99.7% to
$16.9 million from $8.5 million in the nine month period ended September 30,
1995 (the 1995 Period"). The increase in revenues for the quarter and Period
is attributed to a 121.2% and 132.0% increase in attendance during the quarter
and Period, respectively, resulting from the addition of 50 screens since
third quarter of 1995 for a total of 114 screens operated during the third
quarter of 1996. Revenues have also been affected by price increases which
increased per patron revenues 5.7%, however, this increase has been more than
offset by an 18.5% devaluation of the Mexican peso during the 1996 Period
compared to the 1995 Period.
Cost of Operations
Costs of operations as a percentage of revenues were 76.4% for the third
quarter of 1996 versus 77.7% for the third quarter of 1995. The decrease as a
percentage of revenues resulted primarily from a decrease in utilities and
other which decreased as a percentage of revenues to 11.6% in the third
quarter of 1996 from 16.5% in 1995. This decrease was partially offset by an
increase in salaries and wages as a percentage of revenues to 11.3% from 8.4%
in the third quarter of 1995 and an increase in facility lease expense as a
percentage of revenues to 13.1% from 11.2% in third quarter of 1995.
Costs of operations as a percentage of revenues were 79.6% for the 1996 Period
versus 85.0% for the 1995 Period. The decrease as a percentage of revenues
resulted primarily from a decrease in concession costs as a percentage of
concession revenues to 33.9% from 36.0% in the 1995 Period, a decrease in
facility lease expense as a percentage of revenues to 12.3% from 14.6% in the
1995 Period and a decrease utilities and other costs as a percentage of
revenues to 13.1% from 16.9% in the 1995 Period, these decreases were
partially offset by an increase in salaries and wages as a percentage of
revenues to 12.1% from 10.7% in the the 1995 Period.
General and Administrative Expenses
Cinemark de Mexico conducts its real estate and administrative operations
from its Mexico City office. General and administrative expenses incurred
during the third quarter of 1996 decreased as a percentage of revenues to 9.2%
from 13.3% in the third quarter of 1995. Similarily, general and
administrative costs decreased as a percentage of revenues to 9.8% for the
1996 Period from 15.2% for the 1995 Period. In absolute terms, general and
administrative expenses increased to $.7 million for the third quarter of 1996
from $.5 million in 1995 and increased to $1.7 million for the 1996 Period
from $1.3 million for the 1995 Period. The increase in general and
administrative expenses is attributable to an increase in the management fee,
resulting from the increase in total revenues during the third quarter of 1996
and the 1996 Period, paid to Cinemark USA (5% of revenues). Costs incurred by
the Mexico City office for travel expenses, legal fees and consulting fees
remained constant between the quarters and Periods.
Interest Expense
Total interest costs incurred (including amortization of debt issue costs
and discount) for the third quarter of 1996 increased to $1.2 million from $.7
million for third quarter of 1995. Total interest costs incurred for the 1996
Period increased to $3.0 million from $2.1 million for the 1995 Period. The
<PAGE>
increase is primarily a result of the incurrence of an additional $9.0 million
in borrowings under the Company's senior debt facility.
Income Taxes
The Company has provided income taxes under FASB 109. The Company will file
a consolidated U.S. federal income tax return with Cinemark USA. Income tax
expense has been recorded primarily related to the income attributable to
Cinemark Mexico (USA). The tax benefit of the loss generated by Cinemark de
Mexico, which files a separate tax return in Mexico, has been fully reserved
and will be realized in future periods as Cinemark de Mexico begins generating
a profit from operations.
Inflation and Foreign Currency
The Company has invested approximately $40.5 million in Cinemark de
Mexico to fund the initial development operations. Due to the devaluation of
the Mexican currency, pesos, that began in December 1994, the Company has
recognized a $10.2 million unrealized cumulative translation loss adjustment
in equity at September 30, 1996 based on an exchange rate of N$7.5 per $1.
The exchange rate at November 13, 1996 had increased slightly to N$7.9 which
would have increased the cumulative translation loss to approximatley $10.5
million. Additionally, as a result of certain operating transactions being
denominated in dollars the Company has realized an exchange loss on the income
statement. The Company's debt and certain of its current theatre lease rent
is denominated in U.S. dollars while revenues are in Mexican pesos.
Additionally, almost all of the equipment and interior finish materials of the
Company's new theatres have been imported from the U.S. As a result of the
devaluation, certain costs of the Company (principally equipment, interest and
lease expenses) have almost doubled in relation to the Company's revenues.
The Company plans to raise prices over time in an attempt to compensate for
the devaluation. Currently, however, management does not believe that it can
raise prices sufficiently to offset the devaluation without dramatically
reducing patronage and concession consumption. The devaluation has
significantly impacted the Mexican economy and will affect the short term
profitability of the theatres. Additionally, the lack of available capital in
the Mexican market as a result of a significant rise in the interest rates has
reduced the availability of developer financing on future projects resulting
in a reduction in the rate of expansion initially anticipated by the
Company.
Liquidity and Capital Resources
Cinemark de Mexico's revenues are collected in cash, primarily through
box office admissions and the sale of concession items.
The Company's strategy is to enter into leases with terms of 15 to 20
years plus renewal options for the development of theatre facilities instead
of purchasing them due to the lower capital requirements for developing a
leasehold theatre. A typical leasehold theatre requires a capital outlay of
approximately $100,000 to $200,000 per screen, representing the costs of
equipment and interior finishout, whereas, the development of a fee owned or
ground lease theatre is estimated to range between $4.0 million and $10.0
million, per theatre. The Company attempts to obtain lease terms that are
typically built-to-suit construction obligations with Cinemark de Mexico being
responsible for theatre equipment. However, due to inability of landlords to
obtain financing in Mexico, many landlords have requested Cinemark de Mexico
to contribute to the cost of construction and recapture such contributions
(with interest) through rent abatements. Management has in the past and may
in the future make, such contributions to construction in markets it deems
appropriate. The Company will also consider a desirable location on a fee or
ground lease basis if there is no developer willing to construct the theatre
on the site on terms acceptable to the Company. In such events, the Company
<PAGE>
may consider alternative financing sources allowed under the Indenture
governing the Notes (the "Indenture"), such as additional borrowings, sales of
equity or entering into joint ventures.
On August 3, 1993, the Company issued $20.4 million of 12% Senior
Subordinated Notes due 2003 (the "Old Notes") with detachable warrants (the
"Warrants"). The Old Notes were bearing interest at 12% per annum payable
semi-annually on August 1 and February 1 of each year commencing February 1,
1994. The Company was required to make a sinking fund payment of $6,667,000
on each of August 1, 2001 and August 1, 2002, which amounts were to be
utilized on such respective dates to retire a like face amount of the
outstanding Old Notes.
On May 6, 1994, the Company issued, at a discount of $55.00 per $1,000
note, an additional $2.0 million of 12% Senior Subordinated Notes due 2003
with the terms governed by the Indenture from the initial offering of Senior
Subordinated Notes.
On September 30, 1996, the Company exchanged new notes (New Notes) in
exchange for the Cinemark Mexico Old Notes (which included the $2 million
issued in May of 1994). The New Notes are Senior Subordinated Notes due 2003
with an annual stated interest rate of 12% payable semiannually on February 1
and August 1. The Company has the ability to issue additional notes, subject
to the same terms as the New Notes, in payment of interest due on any of the
semiannual interest payment dates through February 1, 2000. If the Company
elects to exercise this option, the interest rate for the applicable
semiannual period for which the additional bonds are issued is accruable at
13% rather than 12%. The election is at the discretion of the Company and
applies to all outstanding bonds for the relevant semiannual interest period.
The Indenture governing the New Notes is the same as the old Indenture with
certain modifications. The Indenture requires Cinemark Mexico to maintain a
Cash Flow Coverage Ratio (as defined in the new Indenture) of 2.0 to 1.0
beginning after December 31, 1999. Sinking fund payments as previously
described are required under the new Indenture.
As part of the exchange agreement the note holders agreed to receive
additional notes in payment of the accrued interest due on the Old Notes for
the period February 1 1996 through the date of the exchange. The interest for
this period was paid at the rate of 13% per annum ($2.0 million of New Notes
were issued). Additionally, the Company repurchased the majority of its
outstanding warrants (94.1%) for the issuance of $1.3 million of additional
New Notes. Also, Cinemark International contributed an additional $10 million
of equity to Cinemark Mexico pursuant to the exchange. The exchange created a
net benefit of $.8 million, including tax benefits, from the retirement of the
warrants, which was reduced by the charge off of the unamortized debt discount
associated with the Old Notes. This net benefit was credited to additional
paid in capital.
In December of 1994, Cinemark International, Inc. (the parent company of
Cinemark Mexico (USA), Inc.) contributed an additional $5.0 million of capital
to Cinemark Mexico (USA), Inc. New Wave Investments made an additional $.3
million contribution on June 1, 1995 and the majority of warrant holders
purchased an additional $1.3 million of warrants in September 1995.
At November 13, 1996, Cinemark de Mexico was operating eleven theatres
(114 screens) and had two theatres (24 screens) under commitment with executed
leases. The construction of these theatres will require additional capital
expenditures by the Company of approximately $11.0 million.
The indenture for the Old and New Notes allows for the incurrence of
$10.0 million of senior debt. On December 4, 1995, the Company entered into
the Mexico Senior Credit Facility allowing for the borrowing of $10 million of
senior secured debt from Cinemark international to fund Cinemark de Mexico's
<PAGE>
capital needs for theatre construction contemplated during 1996. The Mexico
Senior Credit Facility permits the Company to relend to Cinemark de Mexico any
funds borrowed to finance construction of uncompleted locations, the
acquisition and installation of furniture, fixtures and equipment of such
locations and for general corporate purposes and working capital. As of
November 13, 1996, Cinemark de Mexico has borrowed $9.0 million under the
Mexico Senior Credit Facility.
<PAGE>
PART II. Other Information
Item 5. Other Information
Supplemental Schedules specified by the Senior Notes indenture:
Condensed Consolidating Balance Sheet
(unaudited) as of September 30, 1996
Condensed Consolidating Statement of
Income (unaudited) for the nine months
ended September 30, 1996
Condensed Consolidating Statement of
Cash Flow (unaudited) for the nine months
ended September 31, 1996
Item 6(b) Reports on Form 8-K
No reports have been filed by Registrant during the
quarter for which this report is filed.
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(Unaudited)
Cinemark Mexico Cinemark
USA, Inc. de Mexico Eliminations TOTAL
------------------ -------------- ------------- ---------------
ASSETS
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $10,031,043 $1,051,158 $ - $11,082,201
Inventories 97,456 97,456
Tax and other receivables 4,986,739 1,731,107 (4,986,739) 1,731,107
Prepaid expenses and other 480,598 106,420 587,018
------------------ -------------- ------------- ---------------
Total current assets 15,498,380 2,986,141 (4,986,739) 13,497,782
THEATRE PROPERTIES AND EQUIPMENT 27,377,822 27,377,822
Less accumulated depreciation and amortization (2,012,280) (2,012,280)
------------------ -------------- ------------- ---------------
Theatre properties and equipment - net 25,365,542 25,365,542
OTHER ASSETS:
Investment in and advances to affiliate (10,537,687) 0 10,537,687
Deferred charges and other 698,347 3,689,119 4,387,466
Advances and notes 33,527,974 (33,527,974)
------------------ -------------- ------------- ---------------
Total other assets 23,688,634 3,689,119 (22,990,287) 4,387,466
------------------ -------------- ------------- ---------------
TOTAL $39,187,014 $32,040,802 ($27,977,026) $43,250,790
================== ============== ============= ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $7,200 $2,285,969 $2,293,169
Accounts payable - affiliates 0 1,478,297 1,478,297
Accrued interest 654,066 4,986,739 (4,986,739) 654,066
------------------ -------------- ------------- ---------------
Total current liabilities 661,266 8,751,005 (4,986,739) 4,425,532
LONG-TERM LIABILITIES:
Notes payable - affiliates 8,934,979 8,934,979
12% senior subordinated notes 25,710,900 33,527,974 (33,527,974) 25,710,900
Deferred lease expense 299,510 299,510
------------------ -------------- ------------- ---------------
34,645,879 33,827,484 (33,527,974) 34,945,389
COMMON STOCK WARRANTS WITH
REDEMPTION REQUIREMENTS 200,729 200,729
SHAREHOLDERS' EQUITY:
Common stock 4045 4045
Additional paid-in capital 23,118,370 7,000,000 (7,000,000) 23,118,370
Unearned compensation - stock options (10,339) (10,339)
Accumulated deficit (9,216,448) (18,284,187) 18,284,187 (9,216,448)
Cumulative foreign currency translation adjustment (10,216,488) 746,500 (746,500) (10,216,488)
------------------ -------------- ------------- ---------------
Total shareholders' equity 3,679,140 (10,537,687) 10,537,687 3,679,140
------------------ -------------- ------------- ---------------
TOTAL $39,187,014 $32,040,802 ($27,977,026) $43,250,790
================== ============== ============= ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
Cinemark Mexico Cinemark
USA, Inc. de Mexico Eliminations TOTAL
-------------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
REVENUES:
Admissions $10,977,576 $10,977,576
Concessions 5,764,975 5,764,975
Other 162,390 162,390
-------------------- ---------------- --------------- -----------------
Total 16,904,941 16,904,941
COSTS AND EXPENSES:
Cost of operations:
Film rentals 4,812,270 4,812,270
Concession supplies 1,955,746 1,955,746
Salaries and wages 2,050,051 2,050,051
Facility leases 2,085,364 2,085,364
Advertising 326,839 326,839
Utilities and other 0 2,221,721 2,221,721
-------------------- ---------------- --------------- -----------------
Total 0 13,451,991 13,451,991
General and administrative expenses 11,606 1,643,608 1,655,214
Depreciation 1,240,506 1,240,506
-------------------- ---------------- --------------- -----------------
Total 11,606 16,336,105 16,347,711
-------------------- ---------------- --------------- -----------------
OPERATING INCOME (LOSS) (11,606) 568,836 557,230
OTHER INCOME (EXPENSE):
Interest expense (2,830,398) (3,352,666) 3,352,666 (2,830,398)
Amortization of debt issue cost (76,384) (76,384)
Amortization of bond discount (139,205) (139,205)
Foreign currency exchange loss (39,498) 36,814 (537) (3,221)
Interest income 3,353,084 165,386 (3,352,129) 166,341
Equity in loss of subsidiary (2,581,630) 2,581,630
-------------------- ---------------- --------------- -----------------
Total (2,314,031) (3,150,466) 2,581,630 (2,882,867)
-------------------- ---------------- --------------- -----------------
LOSS BEFORE INCOME TAXES (2,325,637) (2,581,630) 2,581,630 (2,325,637)
INCOME TAXES 103,422 103,422
-------------------- ---------------- --------------- -----------------
NET LOSS ($2,429,059) ($2,581,630) $2,581,630 ($2,429,059)
==================== ================ =============== =================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
Cinemark Mexico Cinemark
USA, Inc. de Mexico Eliminations TOTAL
-------------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net loss ($2,429,059) ($2,581,630) $2,581,630 ($2,429,059)
Noncash items in net loss:
Depreciation 1,240,506 1,240,506
Amortization 76,384 76,384
Deferred lease expense 97,595 97,595
Debt issued for accrued interest 1,971,500 1,971,500
Amortization of debt discount 139,205 139,205
Amortized compensation - stock options 2,583 2,583
Equity in loss of subsidiary 2,581,630 (2,581,630)
Cash from (used for) operating working capital:
Inventories (32,645) (32,645)
Interest and other receivables (4,869,586) (829,114) 4,986,739 (711,961)
Accounts payable and accrued expenses (31,300) 573,926 542,626
Accrued interest expense 1,148,128 3,352,129 (4,986,739) (486,482)
Accounts payable affliliates 0 843,208 843,208
-------------------- ---------------- --------------- -----------------
Net cash from (used for) operations (1,410,515) 2,663,975 0 1,253,460
INVESTING ACTIVITIES:
Additions to theatre properties (8,204,710) (8,204,710)
Increase (decrease) in other assets 8,310 (177,783) (169,473)
Increase (decrease) in advances and notes (5,550,000) 5,550,000 0
-------------------- ---------------- --------------- -----------------
Net cash used for investing activities (5,541,690) (8,382,493) 5,550,000 (8,374,183)
FINANCING ACTIVITIES:
Capital contributions 10,000,000 10,000,000
Borrowings under senior secured credit
agreement 6,384,979 5,600,000 (5,550,000) 6,434,979
-------------------- ---------------- --------------- -----------------
Net cash from financing activities 16,384,979 5,600,000 (5,550,000) 16,434,979
FOREIGN CURRENCY TRANSLATION 39,498 305,418 344,916
-------------------- ---------------- --------------- -----------------
DECREASE IN CASH 9,472,272 186,900 9,659,172
CASH:
Beginning of period 558,771 864,258 1,423,029
-------------------- ---------------- --------------- -----------------
End of period $10,031,043 $1,051,158 $11,082,201
==================== ================ =============== =================
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
CINEMARK MEXICO (USA), INC.
Registrant
DATE: November 13, 1996
/Jeffrey J. Stedman/
Jeffrey J. Stedman
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED BALANCE SHEETS, STATEMENTS OF INCOME AND STATEMENTS OF
CASH FLOW AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000910280
<NAME> Cinemark Mexico USA INC
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 11,082,201
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 97,456
<CURRENT-ASSETS> 13,497,782
<PP&E> 27,377,822
<DEPRECIATION> 2,012,280
<TOTAL-ASSETS> 43,250,740
<CURRENT-LIABILITIES> 4,425,532
<BONDS> 34,645,879
0
0
<COMMON> 4,045
<OTHER-SE> 3,675,095
<TOTAL-LIABILITY-AND-EQUITY> 43,250,790
<SALES> 16,904,941
<TOTAL-REVENUES> 16,904,941
<CGS> 0
<TOTAL-COSTS> 14,692,497
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,045,987
<INCOME-PRETAX> (2,325,637)
<INCOME-TAX> 103,422
<INCOME-CONTINUING> (2,429,059)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,429,059)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
