Company Also Reports January 2023 Box Office Results
TORONTO, Feb. 7, 2023
/CNW/ - (TSX: CGX) - Cineplex Inc. ("Cineplex" or the
"Company") today released its financial results for the three
months and year ended December 31,
2022. Unless otherwise specified, all amounts are in
Canadian dollars.
Fourth Quarter Summary
- Total revenues increased 16.7% to $350.1
million as compared to the fourth quarter of 2021.
- Net income improved to $10.2
million as compared to a net loss of $21.8 million in the fourth quarter of 2021.
- Adjusted EBITDAaL increased 54.5% to $31.2 million as compared to the fourth quarter
of 2021.
- Record fourth quarter adjusted EBITDAaL of $5.4 million in the Player One Amusement Group
business.
- Record fourth quarter adjusted store level EBITDAaL of
$9.3 million in the Location-Based
Entertainment business.
- Record fourth quarter total box office from premium experiences
of 50.0%.
- All time quarterly record box office revenues per patron of
$13.06.
- All time quarterly record concession revenues per patron of
$8.93.
"This year, Cineplex nearly doubled its revenues and generated
positive net income as compared to a net loss of $248.7 million the previous year, despite 2022
continuing to be tumultuous for the entertainment industry," said
Ellis Jacob, President & CEO.
"Our performance over the last year demonstrates that we can
successfully manage the turbulent environment caused by content and
other supply chain disruptions, inflationary pressures, and labour
shortages. In fact, during the fourth quarter, Cineplex's box
office recovery as compared to 2019 levels exceeded the North
American recovery by 533 basis points. Our strategy of investing in
premium formats across our theatre circuit is paying off, and this
past quarter we set a record of 50 per cent of box office revenues
derived from premium experiences. We also continue benefiting from
broadening our content strategy, as we consistently take an
industry leading market share in international film product.
Lastly, we continue our growth momentum as our diversified business
strategy continues delivering strong results, including an all-time
annual record adjusted EBITDAaL in the Player One Amusement Group
and our Location-Based Entertainment businesses, with both
exceeding pre-pandemic levels."
Jacob continued, "we were excited in December to share the news
of the grand opening of our the first location of our new 'Junxion'
entertainment concept, with Cineplex Junxion Kildonan
opening its doors in Winnipeg,
Manitoba. It provides an expanded entertainment experience
for our guests and generates additional revenue-per-square-foot by
driving incremental attendance and spend from the expanded
offerings. Then in January, we announced a theatrical distribution
agreement with Lionsgate for its 2023 film slate, bringing 11
titles to Canadian audiences and expanding our Cineplex Pictures
distribution business."
"As we move forward, we remain optimistic about the future of
theatrical exhibition and all of the other industries we operate
in. We have confidence in the ongoing recovery of content volume
and box office as traditional and non-traditional studios derive
increasing awareness and economic value from theatrical. Our
investment in diversification is paying off as we continue to see
growth and record results in our Amusement and Leisure businesses.
Cineplex is in a stronger position now than it was a year ago and
we expect this momentum will continue into 2023," Jacob
concluded.
Month
|
2019 Box Office
(i)
|
2022 / 2023 Box
Office (i)
|
2022 / 2023 as a
Percentage of 2019
|
October
|
$54,528
|
$33,907
|
62 %
|
November
|
$52,314
|
$37,981
|
73 %
|
December
|
$74,947
|
$48,359
|
65 %
|
Q4
Total
|
$181,789
|
$120,248
|
66 %
|
January
|
$52,034
|
$45,744
|
88 %
|
(i) Amounts are in
thousands of dollars.
|
Fourth Quarter and Full Year Financial Results
Financial
highlights
|
Fourth
Quarter
|
Full
Year
|
(in thousands of
dollars, except theatre attendance in thousands of
patrons and per share and per patron amounts)
|
2022
|
2021
|
Change
(i)
|
2022
|
2021
|
Change
(i)
|
Total
revenues
|
$350,124
|
$299,951
|
16.7 %
|
$1,268,562
|
$656,669
|
93.2 %
|
Theatre
attendance
|
9,208
|
10,245
|
-10.1 %
|
38,045
|
20,080
|
89.5 %
|
Net income (loss)
(ii)
|
$10,168
|
$(21,778)
|
NM
|
$113
|
$(248,722)
|
NM
|
Net income (loss) as a
percentage of sales (ii)
|
2.9 %
|
(7.3) %
|
10.2 %
|
— %
|
(37.9) %
|
NM
|
Cash provided by
operating activities
|
$59,622
|
$27,480
|
117.0 %
|
$107,148
|
$61,004
|
75.6 %
|
Box office revenues per
patron ("BPP") (iii)
|
$13.06
|
$12.29
|
6.3 %
|
$12.12
|
$11.77
|
3.0 %
|
Concession revenues per
patron ("CPP") (iii)
|
$8.93
|
$7.49
|
19.2 %
|
$8.72
|
$7.93
|
10.0 %
|
Adjusted EBITDA
(iii)
|
$74,186
|
$58,328
|
27.2 %
|
$251,694
|
$59,927
|
320.0 %
|
Adjusted EBITDAaL (ii)
(iii)
|
$31,197
|
$20,198
|
54.5 %
|
$81,672
|
$(84,295)
|
NM
|
Adjusted EBITDAaL
margin (ii) (iii)
|
8.9 %
|
6.7 %
|
2.2 %
|
6.4 %
|
(12.8) %
|
19.2 %
|
Adjusted free cash flow
(iii)
|
$1,672
|
$(1,032)
|
NM
|
$3,339
|
$(151,517)
|
NM
|
Adjusted free cash flow
per share (iii)
|
$0.026
|
$(0.016)
|
NM
|
$0.053
|
$(2.392)
|
NM
|
Earnings per share
("EPS") - basic and diluted (ii)
|
$0.16
|
$(0.34)
|
NM
|
$—
|
$(3.93)
|
NM
|
i.
|
Period over period
change calculated based on thousands of dollars except percentage
and per share values. Changes in percentage amounts are
calculated as 2022 value less 2021 value.
|
ii.
|
2022 includes expenses
related to the Cineworld Transaction and associated litigation and
claims recovery in the amount of $0.9 million (2021 -
$2.3 million) for the fourth quarter and $3.6 million (2021 - $11.4
million) for the full year.
|
iii.
|
Adjusted EBITDA,
adjusted EBITDAaL, adjusted EBITDAaL margin, adjusted free cash
flow per common share of Cineplex, BPP and CPP are
measures that do not have a standardized meaning under generally
accepted accounting principles ("GAAP"). These measures as well as
other Non-
GAAP other financial measures reported by Cineplex are defined in
the 'Non-GAAP and Other Financial Measures' section at the end of
this news
release.
|
KEY DEVELOPMENTS IN 2022
The following describes certain key business initiatives
undertaken and results achieved during 2022 in each of Cineplex's
core business areas:
FILM ENTERTAINMENT AND CONTENT
Theatre Exhibition
- Reported annual box office revenues of $461.3 million, an increase of $225.0 million (95.2%) from $236.3 million due to a 89.5% increase in theatre
attendance.
- Reported an annual record BPP of $12.12, $0.35 or
3.0% higher than $11.77 reported
during the prior year.
- Starting in April 2022, Cineplex
reopened its entire circuit of theatres and LBE venues without any
government mandated restrictions.
- Introduced an online booking fee on June
15, 2022 that applies to tickets purchased through
Cineplex's mobile app and website that will contribute to
Cineplex's further investment in its digital infrastructure.
- Celebrated National Cinema Day on September 3, 2022, welcoming approximately
550,000 guests across the theatre exhibition circuit, representing
the largest attendance for a single day in 2022, and the third
largest attendance for a single day in the last five years,
following Avengers: Endgame that opened in April 2019 and Avengers: Infinity War that
opened in April 2018.
- Opened four ScreenX auditoriums, including locations in
British Columbia, Ontario and Quebec.
- Opened Cineplex's first-ever Junxion location at
Cineplex Junxion Kildonan in Winnipeg, Manitoba on December 9, 2022. Cineplex Junxion is an
innovative entertainment destination that brings movies, amusement
gaming, dining and live performances together for the ultimate
guest experience.
- Opened British Columbia's
first 4DX auditorium at Cineplex Cinemas Metropolis on
December 15, 2022.
Theatre Food Service
- Reported annual theatre food service revenues of $331.6 million, an increase of $172.4 million (108.3%) compared to the prior
year period primarily due to a 89.5% increase in theatre
attendance.
- Reported an annual record CPP of $8.72, an increase of $0.79 or 10.0% when compared to the prior
year.
- Opened a streetfront Starbucks location in Cinéma Banque
Scotia Montréal, in Montreal
Quebec under a licensing arrangement signed in 2022.
Alternative Programming
- Alternative Programming (Cineplex Events) opened the
Metropolitan Opera Live in HD season during the fourth quarter,
featuring three live operas Medea (Cherubini), La
Traviata (Verdi) and The Hours (Kevin Puts). Other top
events included the season three premiere of the faith based series
The Chosen and the Coldplay broadcast live from
Buenos Aires.
- Cineplex Distribution (Cineplex Pictures) released feature
films including Ella and the Little Sorcerer on March 4, 2022, the horror thriller Prey for
the Devil on October 28, 2022,
anime feature One Piece Film Red on November 4, 2022 and Bones and All on
November 23, 2022.
- Featured numerous strong performing international films,
including Babe Bhangra Paunde Ne (Punjabi),
Drishyam 2 (Hindi) and The Legend of Maula Jatt
(Punjabi), of which Cineplex represented 80.5%, 48.2% and 44.3%,
respectively, of the total North American market share.
Digital Commerce
- Total registered users for Cineplex Store increased 4% from the
prior year, reaching approximately 2.3 million registered
users.
MEDIA
- Reported annual media revenues of $111.7
million, an increase of $46.4
million or 71.0% as compared to the prior year period.
Cinema Media
- Reported annual cinema media revenues of $72.3 million, an increase of $39.3 million or 119.3% over the prior year
period, due to increases in cinema advertising as a return by
advertisers to cinema.
- Entered into a partnership with TikTok to leverage new and
innovative ways to engage moviegoers in theatres, providing
advertisers an unmatched opportunity to engage with audiences.
Digital Place-Based Media
- Reported annual revenues of $39.5
million, an increase of $7.1
million or 21.9% due to increased advertising at digital out
of home networks and higher project installation revenues.
AMUSEMENT SOLUTIONS AND LBE
- Reported all-time record annual revenues of $246.6 million, an increase of $112.1 million or 83.4% compared to the prior
year period.
Player One Amusement Group
- Reported annual revenues of $165.7
million, an increase of $65.4
million or 65.2% compared to the prior year period. Adjusted
EBITDAaL for the full year was an annual record of $27.5 million, an increase of $18.8 million or 215.4% compared to the prior
year. The increase in revenues and adjusted EBITDAaL were primarily
due to increases in P1AG amusement revenues from US and
Canada route locations at FEC's
and theatres, along with an increase in distribution sales.
Location-based Entertainment
- Reported all-time record annual revenues of $110.8 million, an increase of $66.1 million or 147.6% compared to the prior
year period.
- Adjusted EBITDAaL for the full year was an annual record of
$34.4 million, an increase of
$24.9 million or 263.9% compared to
the prior year period. The increase in revenues and adjusted
EBITDAaL were primarily due to all LBE venues being open during the
entire period compared to the prior year period that was subject to
capacity restrictions.
LOYALTY
- Membership in the Scene+ loyalty program increased to over 11
million members as at December 31,
2022.
- Welcomed Empire Company Limited as a co-owner of Scene+,
providing members with increased opportunities to earn and redeem
points through Empire's family of brands firstly in Atlantic Canada on August 11, 2022, in Western Canada on September 22, 2022, and across Canada by early 2023.
- Announced that Home Hardware Stores Limited will be joining
Scene+ with a launch expected to take place in the summer of 2023,
providing members with additional opportunities to earn and redeem
points.
- Recognized a gain of $50.1
million on the disposition of its 1/6th ownership interest
in Scene+ during the third quarter of 2022, leaving a 1/3rd
ownership interest in Scene+ with the satisfaction of specific
non-financial milestones related to the reorganization of
Scene+.
CORPORATE
- Celebrated Cineplex's induction into the Hall of Fame for
Canada's Most Admired Corporate
Cultures, being recognized by Waterstone Human Capital as
Best-in-Class Canadian Organization.
- Ellis Jacob, President &
CEO, was awarded the 2022 National Association of Theatre Owners
Marquee Award, recognizing his unparalleled dedication, commitment
and service to the motion picture theatre industry.
- Celebrated Community Day on November 19,
2022, by hosting a morning of free, family-friendly movies
with discounted concessions, where one
dollar from every concession order of select items was
donated to BGC Canada (formerly Boys & Girls Clubs of
Canada).
- On December 22, 2022, Cineplex
entered into the Sixth Credit Agreement Amendment, extending the
maturity date of the credit facility from November 13, 2023 to November 13, 2024.
NON-GAAP AND OTHER FINANCIAL MEASURES
National Instrument 52-112, Non-GAAP and Other Financial
Measures Disclosure ("NI 52-112") imposes obligations
regarding disclosure of non-GAAP financial measures, non-GAAP
ratios, and other financial measures. Cineplex reports on certain
non-GAAP measures, non-GAAP ratios, supplementary financial
measures and total segment measures that are used by management to
evaluate Cineplex's performance. The following measures included in
this news release do not have a standardized meaning under GAAP and
may not be comparable to similar measures provided by other
issuers. Cineplex includes these measures because its management
believes that they assist investors in assessing financial
performance. These non-GAAP and other financial measures are used
throughout this news release and are defined below.
NON-GAAP FINANCIAL MEASURES
Non-GAAP financial
measures are defined in 52-112 as a financial measure disclosed
that (a) depicts the historical or expected future financial
performance, financial position or cash flow of an entity, (b) with
respect to its composition, excludes an amount that is included in,
or includes an amount that is excluded from, the composition of the
most directly comparable financial measure disclosed in the primary
financial statements of the entity, (c) is not disclosed in the
financial statements of the entity, and (d) is not a ratio,
fraction, percentage or similar representation.
NON-GAAP RATIO
A non-GAAP ratio is defined by 52-112
as a financial measure disclosed that (a) is in the form of a
ratio, fraction, percentage or similar representation, (b) has a
non-GAAP financial measure as one or more of its components, and
(c) is not disclosed in the financial statements.
The below are non-GAAP financial measures or non-GAAP ratios
that are reported by Cineplex.
EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDAaL
Management defines EBITDA as earnings before interest income and
expense, income taxes and depreciation and amortization expense.
Adjusted EBITDA excludes the change in fair value of financial
instrument, gain on disposal of assets, foreign exchange, the
equity income (loss) of CDCP, and impairment, depreciation,
amortization, interest and taxes of Cineplex's other joint ventures
and associates. Adjusted EBITDAaL modifies adjusted EBITDA to
deduct current period cash rent paid or payable related to lease
obligations. During the year, Cineplex agreed to a variety of
arrangements with landlords to reduce or defer cash rent paid or
payable as a result of the impact of COVID-19.
Subsequent to the adoption of IFRS 16, Leases, by
Cineplex effective January 1, 2019,
the calculation of EBITDA no longer includes a charge for amounts
paid or payable with respect to leased property and equipment.
Given the majority of Cineplex's businesses are carried on in
leased premises, Cineplex introduced the measure of adjusted
EBITDAaL which includes a deduction for cash rent paid/payable
related to lease obligations. Cineplex's management believes that
adjusted EBITDAaL is an important supplemental measure of
Cineplex's profitability at an operational level and provides
analysts and investors with comparability in evaluating and valuing
Cineplex's performance period over period. EBITDA, adjusted for
various unusual items, is also used to define certain financial
covenants in Cineplex's Credit Facilities. Management calculates
adjusted EBITDAaL margin by dividing adjusted EBITDAaL by total
revenues.
EBITDA, adjusted EBITDA and adjusted EBITDAaL are non-GAAP
measures generally used as an indicator of financial performance
and they should not be seen as a measure of liquidity or a
substitute for comparable metrics prepared in accordance with GAAP.
Cineplex's EBITDA, adjusted EBITDA and adjusted EBITDAaL may differ
from similar calculations as reported by other entities and
accordingly may not be comparable to EBITDA, adjusted EBITDA or
adjusted EBITDAaL as reported by other entities.
Reconciliation of reported net income (loss) to adjusted
EBITDAaL
|
Three months ended
December 31,
|
Year ended
December 31,
|
|
2022
|
2021
|
2022
|
2021
|
|
|
|
|
|
Net income
(loss)
|
$
10,168
|
$
(21,778)
|
$
113
|
$
(248,722)
|
|
|
|
|
|
Depreciation and
amortization - other
|
25,575
|
27,501
|
105,197
|
113,042
|
Depreciation -
right-of-use assets
|
23,491
|
25,041
|
95,517
|
102,247
|
Interest expense -
lease obligations
|
16,453
|
14,648
|
61,842
|
58,590
|
Interest expense -
other
|
20,628
|
15,584
|
60,826
|
65,138
|
Interest
income
|
(125)
|
(30)
|
(277)
|
(232)
|
Current income tax
expense
|
1,921
|
—
|
1,197
|
3,339
|
EBITDA
|
$
98,111
|
$
60,966
|
$
324,415
|
$
93,402
|
|
|
|
|
|
(Gain) loss on disposal
of assets
|
(3,466)
|
1,576
|
(57,807)
|
(28,283)
|
(Gain) loss on
financial instruments recorded at fair value
|
(970)
|
(5,420)
|
6,260
|
(8,790)
|
CDCP equity loss
(income) (i)
|
3
|
(2,439)
|
(489)
|
(146)
|
Foreign exchange loss
(gain)
|
257
|
(109)
|
(1,371)
|
(43)
|
(Reversal) impairment
of long-lived assets
|
(19,880)
|
3,717
|
(19,880)
|
3,717
|
Depreciation and
amortization - joint ventures and associates (ii)
|
123
|
25
|
517
|
25
|
Taxes and interest of
joint ventures and associates (ii)
|
8
|
12
|
49
|
45
|
Adjusted
EBITDA
|
$
74,186
|
$
58,328
|
$
251,694
|
$
59,927
|
|
|
|
|
|
Cash rent paid/payable
related to lease obligations (iii)
|
(42,603)
|
(37,755)
|
(170,022)
|
(144,222)
|
Cash rent paid not
pertaining to current period (iv)
|
(386)
|
(375)
|
—
|
—
|
Adjusted EBITDAaL
(v)
|
$
31,197
|
$
20,198
|
$
81,672
|
$
(84,295)
|
|
|
|
|
|
(i)
|
CDCP equity (income)
loss not included in adjusted EBITDA as CDCP is a limited-life
financing vehicle that is funded by virtual print fees collected
from
distributors.
|
(ii)
|
Includes the joint
ventures with the exception of CDCP (see (i) above).
|
(iii)
|
The cash rent paid or
payable includes negotiated lease obligations savings of $0.8
million (2021 - $29.7 million) through December 31, 2022. The
negotiated lease obligation savings represent forgiveness of lease
payments.
|
(iv)
|
Includes amounts
pre-paid or deferred to future periods, to better reflect the
current period EBITDAaL.
|
(v)
|
See Non-GAAP and other
financial measures section of this news release.
|
Adjusted Free Cash Flow
Free cash flow is a non-GAAP measure generally used by Canadian
corporations as an indicator of financial performance and it should
not be viewed as a measure of liquidity or a substitute for
comparable metrics prepared in accordance with GAAP. Standardized
free cash flow adjusts the amount of cash from operating activities
to deduct capital expenditures net of proceeds on sale of assets in
ordinary business operations. Standardized free cash flow is a
non-GAAP measure recommended by the CICA in its 2008 interpretive
release, Improved Communication with Non-GAAP Financial
Measures: General Principles and Guidance for Reporting EBITDA and
Free Cash Flow, and is designed to enhance comparability.
Adjusted free cash flow is also a non-GAAP measure used by Cineplex
to modify standardized free cash flow to exclude certain cash flow
activities and to measure the amount available for activities such
as repayment of debt, dividends to owners and investments in future
growth through acquisitions. Adjusted free cash flow includes
repayments of lease obligations that represented the principal
portion of rent expenses that were included in net income
calculation prior to the adoption of accounting standard IFRS 16,
Leases, by Cineplex. Given that the materiality of the
principal portion of the rent expenses and comparability of
adjusted free cash flow disclosure for comparative periods,
adjusted free cash flow also adjusts standard free cash flow to
deduct principal amount of repayment of lease obligation.
Cineplex presents standardized free cash flow and adjusted free
cash flow per share because they are key measures used by investors
to value and assess Cineplex. Management of Cineplex defines
adjusted free cash flow as standardized free cash flow adjusted for
certain items, and considers adjusted free cash flow the amount
available for distribution to shareholders. Standardized free cash
flow is defined by the CICA as cash from operating activities as
reported in the GAAP financial statements, less total capital
expenditures minus proceeds from the disposition of capital assets
other than those of discontinued operations, as reported in the
GAAP financial statements; and dividends, when stipulated, unless
deducted in arriving at cash flows from operating activities. The
standardized free cash flow calculation excludes common dividends
and others that are declared at the Board's discretion.
Reconciliation of reported cash provided by operating
activities to adjusted free cash flow per share
|
Three months ended
December 31,
|
Year ended
December 31,
|
|
2022
|
2021
|
2022
|
2021
|
|
|
|
|
|
Cash provided by
operating activities
|
$
59,622
|
$
27,480
|
$
107,148
|
$
61,004
|
Less: Total capital
expenditures net of proceeds on sale of assets
|
(27,538)
|
(4,985)
|
(62,474)
|
(20,295)
|
|
|
|
|
|
Standardized free cash
flow
|
32,084
|
22,495
|
44,674
|
40,709
|
|
|
|
|
|
Add/(Less):
|
|
|
|
|
Changes in operating
assets and liabilities (i)
|
(15,907)
|
1,405
|
26,105
|
(117,438)
|
Changes in operating
assets and liabilities of joint ventures and
associates (i)
|
(746)
|
307
|
1,214
|
(1,050)
|
Repayments of lease
obligations - principal
|
(26,141)
|
(25,525)
|
(109,166)
|
(88,259)
|
Principal portion of
cash rent paid not pertaining to current period
|
(381)
|
(737)
|
—
|
—
|
Growth capital
expenditures and other (ii)
|
14,804
|
(350)
|
37,663
|
13,358
|
Share of income of
joint ventures and associates, net of non-cash
depreciation
|
(2,103)
|
(622)
|
(2,531)
|
(832)
|
Net cash received from
CDCP (iii)
|
62
|
1,995
|
5,380
|
1,995
|
Adjusted free cash
flow
|
$
1,672
|
$
(1,032)
|
$
3,339
|
$
(151,517)
|
Average number of
shares outstanding
|
63,366,796
|
63,343,223
|
63,359,240
|
63,339,239
|
Adjusted free cash
flow per share
|
$
0.026
|
$
(0.016)
|
$
0.053
|
$
(2.392)
|
(i)
|
Changes in operating
assets and liabilities are not considered a source or use of
adjusted free cash flow.
|
(ii)
|
Growth capital
expenditures and other represent expenditures on Board approved
projects, exclude maintenance capital expenditures, and are
net of proceeds on asset sales. The Revolving Facility is available
to Cineplex to fund Board approved projects.
|
(iii)
|
Excludes the share of
loss of CDCP, as CDCP is a limited-life financing vehicle funded by
virtual print fees collected from distributors. Cash
invested into CDCP, as well as distributions received from CDCP,
are considered to be uses and sources of adjusted free cash
flow.
|
SUPPLEMENTARY FINANCIAL MEASURES
Supplementary
financial measures are financial measures that are not (a)
presented in the financial statements and (b) is, or is intended to
be, disclosed periodically to depict the historical or expected
future financial performance, financial position or cash flow, that
is not a non-GAAP financial measure or a non-GAAP ratio as defined
in the instrument. The below are supplementary financial measures
that Cineplex uses to depict its financial performance, financial
position or cash flows.
Earnings per Share Metrics
Cineplex has presented
basic and diluted earnings per share net of this item to provide a
more comparable earnings per share metric between the current
periods and prior year periods. In the non-GAAP and other financial
measure, earnings is defined as net income or net loss attributable
to Cineplex excluding the change in fair value of financial
instruments.
Per Patron Revenue Metrics
Cineplex reviews per patron
metrics as they relate to box office revenue and theatre food
service revenue such as BPP, CPP, BPP excluding premium priced
product, and concession margin per patron, as these are key
measures used by investors to value and assess Cineplex's
performance, and are widely used in the theatre exhibition
industry. Management of Cineplex defines these metrics as
follows:
Theatre Attendance: Theatre attendance is calculated as
the total number of paying patrons that frequent Cineplex's
theatres during the period.
BPP: Calculated as total box office revenues divided
by total paid theatre attendance for the period.
BPP excluding premium priced product: Calculated as total
box office revenues for the period, less box office revenues from
3D, 4DX, UltraAVX, VIP ScreenX and IMAX product; divided by total
paid theatre attendance for the period, less paid theatre
attendance for 3D, 4DX, UltraAVX, VIP, ScreenX and IMAX
product.
CPP: Calculated as total theatre food service
revenues divided by total paid total theatre attendance for the
period.
Premium priced product: Defined as 3D, 4DX,
UltraAVX, IMAX, ScreenX and VIP film product.
Theatre concession margin per patron: Calculated as total
theatre food service revenues less total theatre food service cost,
divided by theatre attendance for the period.
Same Theatre Analysis
Cineplex reviews and reports
same theatre metrics relating to box office revenues, theatre food
service revenues, theatre rent expense and theatre payroll expense,
as these measures are widely used in the theatre exhibition
industry as well as other retail industries.
Same theatre metrics are calculated by removing the results for
all theatres that have been opened, acquired, closed or otherwise
disposed of subsequent to the start of the prior year comparative
period. For the three months ended December
31, 2022 the impact of two locations that have been opened
or acquired and five locations that have been closed or otherwise
disposed of have been excluded, resulting in 151 theatres being
included in the same theatre metrics. For the year ended
December 31, 2022 the impact of three
locations that have been opened or acquired and seven locations
that have been closed or otherwise disposed of have been excluded,
resulting in 148 theatres being included in the same theatre
metrics.
Cost of sales percentages
Cineplex reviews and reports
cost of sales percentages for its two largest revenue sources, box
office revenues and food service revenues as these measures are
widely used in the theatre exhibition industry. These measures are
reported as film cost percentage and concession cost percentage,
respectively, and are calculated as follows:
Film cost percentage: Calculated as total film cost
expense divided by total box office revenues for the period.
Theatre concession cost percentage: Calculated as total
theatre food service costs divided by total theatre food service
revenues for the period.
LBE food cost percentage: Calculated as total LBE food
costs divided by total LBE food service revenues for the
period.
Lease-related cash saving
Quantified savings
negotiated with landlords as a result of the COVID-19
disclosures.
Certain information included in this news release contains
forward-looking statements within the meaning of applicable
securities laws. These forward-looking statements include, among
others, statements with respect to Cineplex's objectives, goals and
strategies to achieve those objectives and goals, as well as
statements with respect to Cineplex's beliefs, plans, objectives,
expectations, anticipations, estimates and intentions. The words
"may", "will", "could", "should", "would", "suspect", "outlook",
"believe", "plan", "anticipate", "estimate", "expect", "intend",
"forecast", "objective" and "continue" (or the negative thereof),
and words and expressions of similar import, are intended to
identify forward-looking statements. Forward-looking statements
also include, statements pertaining to:
- Cineplex's outlook, goals, expectations and projected
results of operations, including factors and assumptions underlying
Cineplex's projections regarding the duration and impact of a novel
strain of coronavirus ("COVID-19") pandemic on Cineplex, the movie
exhibition industry and the economy in general, as well as
Cineplex's response to the pandemic related to the closure or
operational restrictions of its theatres and location-based
entertainment ("LBE") venues, employee reductions and other
cost-cutting initiatives and increased expenses relating to safety
measures taken at its facilities to protect the health and
well-being of guests and employees;
- Cineplex's expectations with respect to liquidity and
capital expenditures, including its ability to meet its ongoing
capital, operating and other obligations, and anticipated needs
for, and sources of, funds; and
- Cineplex's ability to execute cost-cutting and revenue
enhancement initiatives in response to the COVID-19
pandemic.
The COVID-19 pandemic has had an unprecedented impact on
Cineplex, along with the rest of the movie exhibition industry and
other industries in which Cineplex operates, including material
decreases in revenues, results of operations and cash flows. As an
entertainment and media company that operates spaces where guests
gather in close proximity, Cineplex's business has been
significantly impacted by the actions taken to control the spread
of COVID-19. These actions included, among other things, the
introduction of vaccine passports or proof of vaccination mandates,
social distancing measures and restrictions including those on
capacity.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, including those described in
Cineplex's Annual Information Form ("AIF"), and MD&A for the
year ended December 31, 2022 ("Annual
MD&A") and in this news release. Those risks and uncertainties,
both general and specific, give rise to the possibility that
predictions, forecasts, projections and other forward-looking
statements will not be achieved. Certain material factors or
assumptions are applied in making forward-looking statements and
actual results may differ materially from those expressed or
implied in such statements. Cineplex cautions readers not to place
undue reliance on these statements, as a number of important
factors, many of which are beyond Cineplex's control, could cause
actual results to differ materially from the beliefs, plans,
objectives, expectations, anticipations, estimates and intentions
expressed in such forward-looking statements. Cineplex's
expectations with respect to liquidity and capital expenditures,
including its ability to meet its ongoing capital, operating and
other obligations, and anticipated needs for, and sources of,
funds; Cineplex's ability to execute cost-cutting and
revenue enhancement initiatives in response to the COVID-19
pandemic; risks generally encountered in the relevant industry,
competition, customer, legal, taxation and accounting matters; the
outcome of the litigation surrounding the termination of the
Cineworld transaction and Cineworld's subsequent bankruptcy
proceedings; and diversion of management time on litigation related
to the Cineworld transaction and Cineworld's bankruptcy
proceedings.
The foregoing list of factors that may affect future results
is not exhaustive. When reviewing Cineplex's forward-looking
statements, readers should carefully consider the foregoing factors
and other uncertainties and potential events. Additional
information about factors that may cause actual results to differ
materially from expectations and about material factors or
assumptions applied in making forward-looking statements may be
found in the "Risks and Uncertainties" section of Cineplex's
MD&A.
Cineplex does not undertake to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
Canadian securities law. Additionally, Cineplex undertakes no
obligation to comment on analyses, expectations or statements made
by third parties in respect of Cineplex, its financial or operating
results or its securities. All forward-looking statements in this
news release are made as of the date hereof and are qualified by
these cautionary statements. Additional information, including
Cineplex's AIF and Annual MD&A, can be found on SEDAR at
www.sedar.com.
You are cordially invited to participate in a conference call
with the management of Cineplex (TSX: CGX) to review our fourth
quarter and year end 2022 results. Ellis
Jacob, President and Chief Executive Officer and Gord
Nelson, Chief Financial Officer, will host the call scheduled
for:
Cineplex Inc. Q4/YE 2022 Earnings Webcast:
Date:
|
Tuesday, February 7,
2023
|
|
|
Time:
|
10:00 a.m. Eastern
Daylight Time
|
|
|
Audio
Webcast:
|
Audience URL
https://events.q4inc.com/attendee/399583783
Pre-registration available.
An archive of the webcast will be available at
https://corp.cineplex.com/investors after the webcast for a limited
time.
|
Please note, analysts who cover the Company, should use the
dial-in option to participate in the live question period:
1-226-828-7575 (Local) or 1-833-950-0062 (Canada Toll-free), access
code 477853. All attendees should join the event 5-10 minutes prior
to the scheduled start time. Media are welcome to join the call in
listen-only mode.
About Cineplex
Cineplex (TSX: CGX) is a top-tier Canadian brand that operates
in the Film Entertainment and Content, Amusement and Leisure, and
Media sectors. Cineplex offers a unique escape from the everyday to
millions of guests through its circuit of over 170 movie theatres
and location-based entertainment venues. In addition to being
Canada's largest and most
innovative film exhibitor, the company operates Canada's favourite destination for 'Eats &
Entertainment' (The Rec Room), complexes specially designed for
teens and families (Playdium), and a newly launched entertainment
concept that brings movies, amusement gaming, dining, and live
performances together under one roof (Cineplex Junxion). It also
operates successful businesses in digital commerce
(CineplexStore.com), alternative programming (Cineplex Events),
motion picture distribution (Cineplex Pictures), cinema media
(Cineplex Media), digital place-based media (Cineplex Digital
Media) and amusement solutions (Player One Amusement Group).
Providing even more value for its guests, Cineplex is a partner in
Scene+, Canada's largest
entertainment and lifestyle loyalty program.
Proudly recognized as having one of the country's Most Admired
Corporate Cultures, Cineplex employs approximately 10,000 people in
its offices across Canada and the
United States. To learn more visit Cineplex.com or download
the Cineplex App.
SOURCE Cineplex