UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
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:
4,108,464 shares of Common Stock (including options to acquire 835 shares of
common stock exercisable within 60 days of such date) as of May 12, 1997
<PAGE>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
Index
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
March 31, 1997 (unaudited) and December 31, 1996 3
Condensed Consolidated Statements of Income
(unaudited) for the three month periods
ended March 31, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows
(unaudited) for the three month periods ended
March 31, 1997 and 1996 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>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
1997 1996
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 8,895,057 $ 10,362,911
Inventories 313,488 109,055
Value added tax refunds and other receivables 2,418,253 2,186,814
Prepaid expenses and other 366,283 644,250
----------------------------
Total current assets 11,993,081 13,303,030
THEATRE PROPERTIES AND EQUIPMENT 32,159,142 28,868,387
Less accumulated depreciation and amortization (2,699,996) (2,429,362)
----------------------------
Theatre property and equipment - net 29,459,146 26,439,025
OTHER ASSETS:
Advanced Rents 2,485,600 2,537,374
Deferred taxes and other 2,426,201 853,915
----------------------------
Total other assets 4,911,801 3,391,289
----------------------------
TOTAL $ 46,364,028 $ 43,133,344
============================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 3,633,794 $ 2,802,727
Accrued interest 581,014 771,327
Income taxes payable 1,178,042 --
----------------------------
Total current liabilities 5,392,850 3,574,054
LONG-TERM LIABILITIES:
12% senior subordinated notes, due 2003 26,821,300 25,710,900
Senior secured credit notes - Cinemark International, Inc. 11,323,578 10,919,761
Deferred lease expense 413,635 332,042
----------------------------
Total long-term liabilities 38,558,513 36,962,703
COMMON STOCK WARRANTS 200,729 200,729
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value, 100,000,000 authorized,
4,108,464 and 4,044,432 issued and outstanding, respectively 4,108 4,044
Additional paid-in capital 23,387,078 23,146,551
Unearned compensation - stock options (36,797) (37,658)
Accumulated deficit (10,011,998) (9,586,624)
Cumulative foreign currency translation adjustment (11,130,455) (11,130,455)
----------------------------
Total shareholders' equity 2,211,936 2,395,858
----------------------------
TOTAL $ 46,364,028 $ 43,133,344
============================
</TABLE>
See Accompanying Notes to the Condensed Consolidated Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
1997 1996
<S> <C> <C>
REVENUES:
Admissions $ 4,194,996 $ 2,584,286
Concessions 2,254,125 1,333,242
Other 255,926 43,186
--------------------------
Total 6,705,047 3,960,714
COSTS AND EXPENSES:
Cost of operations:
Film rentals 1,876,115 1,227,665
Concession supplies 801,984 437,545
Salaries and wages 683,428 533,749
Facility leases 806,728 581,954
Advertising 103,501 69,659
Utilities and other 934,122 511,292
--------------------------
Total 5,205,878 3,361,864
General and administrative expenses 477,110 406,576
Depreciation 270,886 248,689
--------------------------
Total 5,953,874 4,017,129
--------------------------
OPERATING INCOME (LOSS) 751,173 (56,415)
OTHER INCOME (EXPENSE):
Interest expense (1,361,030) (803,869)
Amortization of debt issue cost (26,731) (24,811)
Amortization of debt discount -- (45,085)
Foreign currency exchange gain (loss) 31,883 (14,374)
Interest income 189,160 27,709
--------------------------
Total (1,166,718) (860,430)
--------------------------
LOSS BEFORE INCOME TAXES (415,545) (916,845)
INCOME TAXES 9,829 58,534
--------------------------
NET LOSS $ (425,374) $ (975,379)
==========================
</TABLE>
See Accompanying Notes to the Condensed Consolidated Financial Statements
4
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
THREE MONTHS ENDED MARCH 31,
1997 1996
<S> <C> <C>
OPERATIONS:
Net loss $ (425,374) $ (975,379)
Noncash items in net loss:
Depreciation 270,886 248,689
Amortization 26,731 69,896
Deferred lease expense 81,593 19,310
Amortization of prepaid leases 114,282 --
Debt issued for accrued interest 1,514,217 --
Amortized compensation - stock options 861 861
Cash from (used for) operating working
capital:
Inventories (204,433) (1,129)
Value added tax refund and other receivables 46,528 (205,783)
Accounts payable and accrued expenses 831,067 (137,901)
Accrued interest (190,313) (540,131)
Income taxes payable 1,178,042 --
Accounts payable affiliates -- 229,275
----------------------------
Net cash from (used for) operations 3,244,087 (1,292,292)
INVESTING ACTIVITIES:
Additions to theatre properties (3,291,007) (2,913,934)
Increase in other assets (1,661,525) (310,064)
----------------------------
Net cash used for investing activities (4,952,532) (3,223,998)
FINANCING ACTIVITIES:
Increase in long-term debt -- 3,950,000
Sale of common stock 240,591 --
----------------------------
Net cash from financing activities 240,591 3,950,000
FOREIGN CURRENCY TRANSLATION ADJUSTMENT -- 360,420
----------------------------
DECREASE IN CASH AND CASH EQUIVALENTS (1,467,854) (205,870)
CASH AND CASH EQUIVALENTS:
Beginning of period 10,362,911 1,423,029
----------------------------
End of period $ 8,895,057 $ 1,217,159
============================
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 3,853 $ 1,344,000
============================
</TABLE>
See Accompanying Notes to the Condensed Consolidated Financial Statements
5
<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, 1996 included in the Annual Report filed on Form 10-K by the Company under
the Securities Exchange Act of 1934 on March 31, 1997.
Operating results for the three months ended March 31, 1997 are not
necessarily indicative of the results to be achieved for the full year.
2. FAS 52 - HIGHLY INFLATIONAL ECONOMIES
Beginning in 1997, generally accepted accounting principals require that
the U.S. dollar be used as the functional currency of the Company's Mexican
subsidiary for U.S. reporting purposes. As a result, fluctuations in the peso
during 1997 affecting the Company's investment in Mexico will be charged
to exchange gain or loss rather than to the cumulative adjustment account.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
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. In July 1993, Cinemark International contributed its entire
interest in Cinemark de Mexico to the Company.
RESULTS OF OPERATIONS
The following table presents certain income statement items as a percentage
of revenues.
% OF REVENUES
-----------------------
THREE MONTHS ENDED
MARCH 31,
1997 1996
Revenues:
Admissions 62.6 65.2
Concessions 33.6 33.7
Other 3.8 1.1
--- ---
Total revenues 100.0 100.0
Cost of operations 77.6 84.9
General and administrative expenses 7.1 10.3
Depreciation and amortization 4.0 6.3
Operating income (loss) 11.2 (1.4)
Interest expense 20.7 22.1
Loss before income taxes (6.2) (23.1)
Net loss (6.3) (24.6)
7
<PAGE>
REVENUES
Revenues for the quarter ended March 31, 1997 increased 69.3% to $6.7
million from $4.0 million in the first quarter of 1996. The increase in
revenues for the quarter is attributed to a 50.4% increase in attendance during
the quarter resulting from the addition of 22 screens since first quarter of
1996 and a strong industry performance. Revenues have also been affected by a
combined increase of 14.1% in admission and concession revenues per patron.
COST OF OPERATIONS
Costs of operations as a percentage of revenues were 77.6% for the first
quarter of 1997 versus 84.9% for the first quarter of 1996. The decrease as a
percentage of revenues resulted primarily from decreases in film expense as a
percentage of admission revenues to 44.7% in 1997 from 47.5% in 1996, a
decrease in salaries and wages as a percentage of revenues to 10.2% in 1997
from 13.5% in 1996, and a decrease in facility leases as a percentage of
revenues to 12.0% in 1997 from 14.7% in 1996. These decreases were partially
offset by an increase in concession supplies as a percentage of concession
revenues to 35.6% in 1997 from 32.8% in 1996 and an increase in utilities and
other as a percentage of revenues to 13.9% in 1997 from 12.9% in 1996.
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 first quarter of 1997 decreased as a percentage of revenues to 7.1%
from 10.3% in the first quarter of 1996. In absolute terms, general and
administrative expenses increased to $.5 million for the first quarter of 1997
from $.4 million for the first quarter of 1996. 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 first quarter of 1997,
paid to Cinemark USA (5% of revenues). The increase was offset by a decrease in
costs incurred by the Mexico City office for travel expenses, legal fees and
consulting fees.
INTEREST EXPENSE
Total interest costs incurred (including amortization of debt issue costs
and discount) for the first quarter of 1997 increased to $1.4 million from $.9
million for first quarter of 1996. The increase is primarily a result of
additional 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
8
<PAGE>
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 development. Due to the devaluation of the Mexican currency, pesos,
that began in December 1994, the Company has recognized a $11.1 million
unrealized cumulative translation loss adjustment in equity at March 31, 1997.
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. In 1997, generally accepted accounting principles
require that the U.S. dollar be used as the functional currency of the
Company's foreign subsidiary for U.S. reporting purposes. Thus, fluctuations in
the peso during 1997 that affect the Company's investment will be charged to
exchange gain or loss rather than to the cumulative adjustment account. The
exchange rate during 1997 through May 12, 1997 has been stable at N$7.9 to $1.
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 finish out, 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
9
<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. The Company exercised its option to issue additional
notes for the interest payment due on the New Notes on February 1, 1997.
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. On January 9, 1997, New
Wave Investment also acquired an additional 64,032 shares of common stock of
the Company for $.3 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
capital needs for theatre construction. The Mexico Senior Credit Facility
permits the Company to relend to Cinemark de Mexico any funds borrowed to
10
<PAGE>
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. The Company has fully drawn the $10.0
million available under the Mexico Senior Credit Facility.
At May 12, 1997, Cinemark de Mexico was operating eleven theatres (114
screens), had one theatre (15 screens) under construction and two theatres (20
screens) under commitment with executed leases. The construction of these
theatres will require additional capital expenditures by the Company of
approximately $16.0 million which will be funded with cash currently available
and cash flow from operations. Funding beyond these sources required to
construct theses and additional theatres is subject to Cinemark de Mexico
achieving sufficient levels of cash flow from operations or raising additional
equity.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
Supplemental Schedules specified by the Senior Notes indenture:
Condensed Consolidating Balance Sheet
(unaudited) as of March 31, 1997
Condensed Consolidating Statement of
Income (unaudited) for the three months
ended March 31, 1997
Condensed Consolidating Statement of Cash Flow (unaudited) for
the three months ended March 31, 1997
ITEM 6(B) REPORTS ON FORM 8-K
No reports have been filed by Registrant during the quarter for
which this report is filed.
12
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF MARCH 31, 1997
(Unaudited)
Cinemark Mexico Cinemark
USA, Inc. de Mexico Eliminations TOTAL
ASSETS
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 6,739,442 $ 2,155,615 $ -- $ 8,895,057
Inventories -- 313,488 -- 313,488
Value added tax refunds and other 155,772 2,262,481 -- 2,418,253
Prepaid expenses and other -- 366,283 -- 366,283
------------------------------------------------------------
Total current assets 6,895,214 5,097,867 -- 11,993,081
THEATRE PROPERTIES AND EQUIPMENT -- 32,159,142 -- 32,159,142
Less accumulated depreciation and amortization -- (2,699,996) -- (2,699,996)
------------------------------------------------------------
Theatre properties and equipment - net -- 29,459,146 -- 29,459,146
OTHER ASSETS:
Investment in and advances to affiliate (8,552,314) -- 8,552,314 --
Deferred charges and other 2,111,874 2,799,927 -- 4,911,801
Advances and notes 41,874,225 -- (41,874,225) --
------------------------------------------------------------
Total other assets 35,433,785 2,799,927 (33,321,911) 4,911,801
------------------------------------------------------------
TOTAL $ 42,328,999 $ 37,356,940 $(33,321,911) $ 46,364,028
============================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 12,400 $ 3,621,394 $ -- $ 3,633,794
Accrued interest 581,014 -- -- 581,014
Income taxes payable 1,178,042 -- -- 1,178,042
------------------------------------------------------------
Total current liabilities 1,771,456 3,621,394 -- 5,392,850
LONG-TERM LIABILITIES:
12% senior subordinated notes 26,821,300 -- -- 26,821,300
Intercompany advances -- 41,874,225 (41,874,225) --
Senior secured notes 11,323,578 -- -- 11,323,578
Deferred lease expense -- 413,635 -- 413,635
------------------------------------------------------------
38,144,878 42,287,860 (41,874,225) 38,558,513
COMMON STOCK WARRANTS 200,729 -- -- 200,729
SHAREHOLDERS' EQUITY:
Common stock 4,108 -- -- 4,108
Additional paid-in capital 23,387,078 10,750,000 (10,750,000) 23,387,078
Unearned compensation - stock options (36,797) -- -- (36,797)
Accumulated deficit (10,011,998) (19,974,762) 19,974,762 (10,011,998)
Cumulative foreign currency translation adjustment (11,130,455) 672,448 (672,448) (11,130,455)
------------------------------------------------------------
Total shareholders' equity 2,211,936 (8,552,314) 8,552,314 2,211,936
------------------------------------------------------------
TOTAL $ 42,328,999 $ 37,356,940 $(33,321,911) $ 46,364,028
============================================================
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(Unaudited)
Cinemark Mexico Cinemark
USA, Inc. de Mexico Eliminations TOTAL
<S> <C> <C> <C> <C>
REVENUES:
Admissions $ -- $ 4,194,996 $ -- $ 4,194,996
Concessions -- 2,254,125 -- 2,254,125
Other -- 255,926 -- 255,926
--------------------------------------------------------
Total -- 6,705,047 -- 6,705,047
COSTS AND EXPENSES:
Cost of operations:
Film rentals -- 1,876,115 -- 1,876,115
Concession supplies -- 801,984 -- 801,984
Salaries and wages -- 683,428 -- 683,428
Facility leases -- 806,728 -- 806,728
Advertising -- 103,501 -- 103,501
Utilities and other -- 934,122 -- 934,122
---------------------------------------------------------
Total -- 5,205,878 -- 5,205,878
General and administrative expenses 3,186 473,924 -- 477,110
Depreciation -- 270,886 -- 270,886
---------------------------------------------------------
Total 3,186 5,950,688 -- 5,953,874
---------------------------------------------------------
OPERATING INCOME (LOSS) (3,186) 754,359 -- 751,173
OTHER INCOME (EXPENSE):
Interest expense (1,312,736) (1,223,404) 1,175,110 (1,361,030)
Amortization of debt issue cost (26,731) -- -- (26,731)
Foreign currency exchange gain -- 31,883 -- 31,883
Interest income 1,277,832 86,438 (1,175,110) 189,160
Equity in loss of subsidiary (350,724) -- 350,724 --
---------------------------------------------------------
Total (412,359) (1,105,083) 350,724 (1,166,718)
---------------------------------------------------------
LOSS BEFORE INCOME TAXES (415,545) (350,724) 350,724 (415,545)
INCOME TAXES 9,829 -- -- 9,829
---------------------------------------------------------
NET LOSS $ (425,374) $ (350,724) $ 350,724 $ (425,374)
=========================================================
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(Unaudited)
Cinemark Mexico Cinemark
USA, Inc. de Mexico Eliminations TOTAL
<S> <C> <C> <C> <C>
OPERATIONS:
Net loss $ (425,374) $ (350,724) $ 350,724 $ (425,374)
Noncash items in net loss:
Depreciation -- 270,886 -- 270,886
Amortization 26,731 -- -- 26,731
Deferred lease expense -- 81,593 -- 81,593
Amortization of prepaid leases -- 114,282 -- 114,282
Debt issued for accrued interest 1,514,217 -- -- 1,514,217
Amortized compensation - stock options 861 -- -- 861
Equity in loss of subsidiary 350,724 -- (350,724) --
Cash from (used for) operating working capital:
Inventories -- (204,433) -- (204,433)
Value added tax and other 239,934 (193,406) -- 46,528
Accounts payable and accrued expenses (21,200) 852,267 -- 831,067
Accrued interest expense (190,313) -- -- (190,313)
Income taxes payable 1,178,042 -- -- 1,178,042
-------------------------------------------------------------
Net cash from operations 2,673,622 570,465 -- 3,244,087
INVESTING ACTIVITIES:
Additions to theatre properties -- (3,291,007) -- (3,291,007)
Increase in other assets (2,682,268) (229,257) 1,250,000 (1,661,525)
Intercompany advances (2,166,085) -- 2,166,085 --
-------------------------------------------------------------
Net cash used for investing activities (4,848,353) (3,520,264) 3,416,085 (4,952,532)
FINANCING ACTIVITIES:
Capital contributions -- 1,250,000 (1,250,000) --
Sale of common stock 240,591 -- -- 240,591
Intercompany advances -- 2,166,085 (2,166,085) --
-------------------------------------------------------------
Net cash from financing activities 240,591 3,416,085 (3,416,085) 240,591
INCREASE (DECREASE) IN CASH (1,934,140) 466,286 -- (1,467,854)
CASH:
Beginning of period 8,673,582 1,689,329 -- 10,362,911
-------------------------------------------------------------
End of period $ 6,739,442 $ 2,155,615 -- $ 8,895,057
=============================================================
</TABLE>
15
<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: May 12, 1997
Jeffrey J. Stedman/
---------------------
Jeffrey J. Stedman
Vice President and
Chief Financial Officer
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CINEMARK MEXICO (USA), INC. AND SUBSIDIARY MARCH 31, 1997, FORM 10-Q AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 8,895,057
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 313,488
<CURRENT-ASSETS> 11,993,081
<PP&E> 32,159,142
<DEPRECIATION> 2,699,996
<TOTAL-ASSETS> 46,364,028
<CURRENT-LIABILITIES> 5,392,850
<BONDS> 26,821,300
0
0
<COMMON> 4,108
<OTHER-SE> 2,207,828
<TOTAL-LIABILITY-AND-EQUITY> 46,364,028
<SALES> 6,705,047
<TOTAL-REVENUES> 6,705,047
<CGS> 0
<TOTAL-COSTS> 5,205,878
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,387,761
<INCOME-PRETAX> (415,545)
<INCOME-TAX> 9,829
<INCOME-CONTINUING> (425,374)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (425,374)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
