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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cineplex Inc | TSX:CGX | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.91 | 8.75 | 8.75 | 0 | 13:02:58 |
TORONTO, Feb. 8, 2024 /CNW/ - (TSX: CGX) - Today, Cineplex Inc. ("Cineplex" or the "Company") released its financial results for the three months and year ended December 31, 2023. Unless otherwise specified, all amounts are in Canadian dollars.
2023 Highlights (continuing operations):
"Cineplex continues to demonstrate its position as a North American entertainment and media leader," said Ellis Jacob, President and CEO, Cineplex.
"Reflecting on this past year, the strength of our results can be attributed to our diversification strategy, our team's skilled and tenured operating discipline, and our ability to understand our guests' behaviours through leading data management and analytics. These initiatives translated into Cineplex generating excellent year-over-year revenue growth of 25.9% in 2023 and nearly tripling its adjusted EBITDAaL."
"Despite the content supply challenges our industry faced last year, we once again outperformed the North American box office relative to 2022 by a sizable 785 basis points. Our alternative programming, premium theatrical offerings, enhanced guest experiences and ability to attract and convert guests through our Scene+ loyalty program, allowed us to achieve strong box office revenue growth of 30.1% in 2023."
"This past year we focused on strengthening our capital base and with the successful sale of P1AG, paired with strong EBITDAaL results, it allowed us to significantly de-leverage and de-risk the balance sheet. As outlined in the comprehensive refinancing plans announced earlier today, we are focused on optimizing our capital structure."
"As we re-accelerate our growth in 2024, we have proven strategies that set us apart from our peers. Movie-going is back, and we are well positioned to anticipate and adjust as content supply returns following the now resolved writers' and actors' strikes. Our diversified lines of business will further contribute to our bottom line. By solidifying the balance sheet and executing against our financing plans, we are excited about Cineplex's future and what it will mean for our investors."
Fourth Quarter and Full Year Financial Results
Financial highlights | Fourth Quarter | Full Year | ||||
(in thousands of dollars, except theatre attendance in thousands of | 2023 | 2022 | Change (ii) | 2023 | 2022 | Change (ii) |
(i) | (i) | |||||
Total revenues | $315,078 | $309,920 | 1.7 % | $1,388,894 | $1,102,881 | 25.9 % |
Theatre attendance | 9,599 | 9,208 | 4.2 % | 47,862 | 38,045 | 25.8 % |
Net (loss) income from continuing operations | $(12,102) | $9,572 | NM | $138,051 | $(9,679) | NM |
Net income from discontinued operations | $3,148 | $596 | 428.2 % | $29,113 | $9,792 | 197.3 % |
Net (loss) income (iii) | $(8,954) | $10,168 | NM | $167,164 | $113 | NM |
Net (loss) income as a percentage of sales from continuing | (3.8) % | 3.1 % | -6.9 % | 9.9 % | (0.9) % | 10.8 % |
Cash provided by operating activities | $83,385 | $51,107 | 63.2 % | $196,094 | $78,279 | 150.5 % |
Box office revenues per patron ("BPP") (iv) | $12.90 | $13.06 | -1.2 % | $12.53 | $12.12 | 3.4 % |
Concession revenues per patron ("CPP") (iv) | $9.28 | $8.93 | 3.9 % | $8.90 | $8.72 | 2.1 % |
Adjusted EBITDA (iv) | $65,902 | $67,744 | -2.7 % | $322,962 | $220,168 | 46.7 % |
Adjusted EBITDAaL (iv) | $24,178 | $25,830 | -6.4 % | $157,363 | $54,201 | 190.3 % |
Adjusted EBITDAaL from discontinued operations (iv) | $5,352 | $5,367 | -0.3 % | $35,732 | $27,471 | 30.1 % |
Adjusted EBITDAaL including discontinued operations (iv) | $29,530 | $31,197 | -5.3 % | $193,095 | $81,672 | 136.4 % |
Adjusted EBITDAaL margin from continuing operations (iv) | 7.7 % | 8.3 % | -0.6 % | 11.3 % | 4.9 % | 6.4 % |
Adjusted free cash flow (iv) | $(1,047) | $(265) | 295.1 % | $83,691 | $(13,509) | NM |
Adjusted free cash flow per share (iv) | $(0.016) | $(0.004) | 300.0 % | $1.320 | $(0.213) | NM |
(Loss) earnings per share from continuing operations - basic (iii) | $(0.19) | $0.15 | NM | $2.18 | $(0.15) | NM |
Earnings per share from discontinued operations - basic | $0.05 | $0.01 | 400.0 % | $0.46 | $0.15 | 206.7 % |
(Loss) earnings per share - basic (iii) | $(0.14) | $0.16 | NM | $2.64 | $— | NM |
(Loss) earnings per share from continuing operations - diluted (iii) | $(0.19) | $0.15 | NM | $1.80 | $(0.15) | NM |
Earnings per share from discontinued operations - diluted | $0.05 | $0.01 | 400.0 % | $0.32 | $0.15 | 113.3 % |
(Loss) earnings per share - diluted (iii) | $(0.14) | $0.16 | NM | $2.12 | $— | NM |
(i) | The results of discontinued operations (P1AG) have been excluded from prior period figures as applicable per IFRS 5 to conform to current period presentation. All amounts are from continuing operations unless noted. |
(ii) | Period over period change calculated based on thousands of dollars except percentage and per share values. Changes in percentage amounts are calculated as 2023 value less 2022 value. |
(iii) | 2023 includes recovery of approximately $150.2 million related to the recognition of deferred income tax assets recognized during the second quarter and expenses related to the Cineworld transaction and other transactions or litigation outside the normal course of business in the amount of $0.6 million (2022 - $0.9 million) for the fourth quarter and $3.4 million (2022 - $3.6 million) for the full year. |
(iv) | 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. |
Fourth Quarter and January Box Office Results
The following table compares 2023 and 2024 monthly box office revenues to 2019 monthly box office revenues:
Month | 2019 Box office (i) | 2023 / 2024 Box office (i) | 2023 / 2024 as a percentage of 2019 |
October | $54,528 | $37,354 | 69 % |
November | $52,314 | $34,640 | 66 % |
December | $74,946 | $51,847 | 69 % |
Q4 Total | $181,788 | $123,841 | 68 % |
January | $52,034 | $37,620 | 72 % |
(i) Amounts are in thousands of dollars. | |||
KEY DEVELOPMENTS IN 2023
The following describes certain key business initiatives undertaken and results achieved during 2023 in each of Cineplex's core business areas:
FILM ENTERTAINMENT AND CONTENT
Theatre Exhibition
Theatre Food Service
Alternative Programming and Distribution
Digital Commerce
MEDIA
Cinema Media
Digital Place-Based Media
LOCATION-BASED ENTERTAINMENT
LOYALTY
CORPORATE
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 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 RATIOS
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.
Below are non-GAAP financial measures or non-GAAP ratios for continuing operations 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, loss (gain) on disposal of assets, foreign exchange, the equity income 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.
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.
Adjusted Store Level EBITDAaL Metrics
Cineplex reviews and reports adjusted EBITDAaL at the location level for the LBE which is calculated as total LBE revenues from all locations less the total of operating expenses of LBE, which excludes pre-opening costs and overhead relating to the management of LBE.
Adjusted Store Level EBITDAaL Margin
Calculated as adjusted store level EBITDAaL divided by total revenues for LBE for the period.
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. Below are supplementary financial measures that Cineplex uses to depict its financial performance, financial position or cash flows.
Earnings (loss) per Share Metrics
Cineplex has presented basic and diluted earnings (loss) per share net of this item to provide a more comparable loss 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, 2023 the impact of two locations that has been opened or acquired and two locations that have been closed or otherwise disposed of have been excluded, resulting in 154 theatres being included in the same theatre metrics. For the year ended December 31, 2023 the impact of two locations that has been opened or acquired and four locations that have been closed or otherwise disposed of have been excluded, resulting in 152 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.
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 and goals, and the 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.
By their very nature, forward-looking statements involve inherent risks and uncertainties, including those described in Cineplex's Annual Information Form ("AIF"), and the management's discussion and analysis for the year ended December 31, 2023 ("Annual MD&A") and in this news release, which is incorporated herein by reference and available on SEDAR+ (www.sedarplus.ca). These 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, including: Cineplex's expectations with respect to liquidity and capital expenditures; 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; risks generally encountered in the relevant industry, competition, customer, legal, taxation and accounting matters.
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 Annual 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.sedarplus.ca.
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 2023 results. Ellis Jacob, President and Chief Executive Officer and Gord Nelson, Chief Financial Officer, will host the call scheduled for:
Cineplex Inc. Q4/YE 2023 Earnings Webcast:
Date: | Thursday, February 8, 2024 |
Time: | 10:00 a.m. Eastern Daylight Time |
Audio Webcast: | Audience URL https://events.q4inc.com/attendee/140885495 |
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 495623.
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, until February 1, 2024, 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 over 10,000 people in its offices and venues across Canada and the United States. To learn more, visit Cineplex.com.
SOURCE Cineplex
Copyright 2024 Canada NewsWire
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