Mr. Ellis Jacob reports

CINEPLEX REPORTS SECOND QUARTER 2023 RESULTS

Cineplex Inc. has released its financial results for the three and six months ended June 30, 2023. Unless otherwise specified, all amounts are in Canadian dollars.

Second quarter summary:

• Total revenues increased 20.9 per cent to $423.1-million compared with the second quarter of 2022.
• Net income increased to $176.5-million compared with net income of $1.3-million in the second quarter of 2022.
• Recognized approximately $158.4-million of deferred income tax assets as a result of the reasonable expectation of utilization to offset future periods of taxable income.
• Adjusted EBITDAaL (earnings before interest, taxes, depreciation, amortization and lease obligations) increased to $60.3-million compared with $35.8-million in the second quarter of 2022.
• All-time quarterly record revenues and adjusted EBITDAaL of $55.2-million and $13.1-million, respectively, for Player One Amusement Group (P1AG).
• Second quarter record revenues of $29.1-million for location-based entertainment (LBE).
• Second quarter record BPP (box office revenues per patron) of $12.84, 4.5 per cent higher than prior year.
• Second quarter record CPP (concession revenues per patron) of $9.21, 4.2 per cent higher than prior year.

"We are extremely pleased with our second quarter performance, which stemmed from the return of strong film product resulting in total revenues of $423.1-million and adjusted EBITDAaL of $60.3-million," said Ellis Jacob, president and chief executive officer, Cineplex. "This EBITDAaL level enabled repayment of approximately $26-million in bank debt during the quarter as part of our focus to delever the balance sheet and strengthen the capital base.

"In addition to a notable second quarter, the third quarter is also off to a sensational start with Barbie and Oppenheimer leading the charge. These remarkable results, as well as the performance of other major titles including Mission: Impossible -- Dead Reckoning Part One, led to Cineplex's July box office revenues not only exceeding 2019 levels but resulted in our highest July box office results ever and our second-highest monthly box office results behind December, 2015. Consumers continue to demonstrate their desire for a shared, immersive cinematic experience, and our studio partners have seen time and again that the best way to elevate and promote films and maximize financial value is with an exclusive theatrical release.

"Looking ahead, our positive outlook for the exhibition industry and all the other businesses in which we operate continues to hold true. We are excited about our strong year-to-date results which reflect the positive momentum from the industry's rebound, combined with our strategic actions to maximize attendance and box office, drive growth from diversified businesses, improve productivity, our liquidity position and our balance," Mr. Jacob concluded.

The attached table compares 2023 monthly box office revenues with 2019 monthly box office revenues.

Key developments in the second quarter of 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:

• Reported second quarter box office revenues of $164.5-million, an increase of $28.1-million or 20.6 per cent from $136.4-million due to a 15.5-per-cent increase in theatre attendance as a result of a strong film slate during the quarter, including The Super Mario Bros. Movie, which set a record for the biggest opening for an animated film ever;
• Reported a second quarter record BPP of $12.84, 55 cents or 4.5 per cent higher than the $12.29 reported during the prior year due to a higher percentage of premium ticket sales in the current period as compared with the prior year;
• Opened Cineplex's second Junxion location at Cineplex Junxion Erin Mills in Mississauga, Ont., on May 17, 2023. Cineplex Junxion is an innovative entertainment destination that brings movies, amusement gaming, dining and live performances together for the ultimate guest experience;
• Enhanced the theatre circuit with a retrofit of all recliner seating at three auditoriums at SilverCity St. Vital Cinemas in Winnipeg, Man.

Theatre food service:

• Reported second quarter theatre food service revenues of $118-million, an increase of $19.9-million or 20.3 per cent compared with the prior year, primarily due to a 15.5-per-cent increase in theatre attendance;
• Reported a second quarter record CPP of $9.21, an increase of 37 cents or 4.2 per cent compared with the prior year, primarily due to an increase in average spend.

Alternative programming and distribution:

• As part of the theatrical distribution partnership with Lionsgate, during the second quarter, Cineplex's distribution business (Cineplex Pictures) distributed Are You There God? It's Me, Margaret, Sisu, About My Father and The Blackening. Additionally, Cineplex Pictures also distributed the feature film The Wrath of Becky during the quarter.
• Cineplex represented over 80 per cent of the total North American box office market share for successful international films, including Annhi Dea Mazaak Ae (Punjabi), Godday Godday Chaa (Punjabi) and Jodi (Punjabi).
• Event Cinema presented an assortment of big-screen programs, including the 20th anniversary of Lord of the Rings: Return of the King, continued presentations from the Metropolitan Opera with Don Giovanni and Falstaff, as well as a variety of music events featuring Machine Gun Kelly, one of the members of BTS (Suga), Metallica and Coldplay.

Digital commerce:

• Total registered users for Cineplex Store increased 4 per cent compared with the prior year, reaching approximately 2.3 million registered users.
• Curated Cineplex Store collections for Asian History Month, National Indigenous Peoples Day and Pride Month to elevate Asian stories, indigenous people and LGBTQ2IA+ voices.

Media:

• Reported second quarter media revenues of $26.1-million, a decrease of $300,000 or 1.2 per cent as compared with the prior year.

Cinema media:

• Reported second quarter cinema media revenues of $17.8-million, a decrease of $900,000 or 4.6 per cent over the prior year.

Digital place-based media:

• Reported second quarter revenues of $8.3-million, an increase of $600,000 or 7.3 per cent over the prior year.

Amusement solutions (P1AG) and LBE:

• Reported all-time quarterly record revenues of $76.9-million, an increase of $11.2-million or 17 per cent compared with the prior year.

Player One Amusement Group:

• Reported all-time quarterly record revenues of $55.2-million, an increase of $10.1-million or 22.4 per cent compared with the prior year. Adjusted EBITDAaL during the second quarter also was an all-time quarterly record of $13.1-million, an increase of $4.9-million or 60.9 per cent compared with the prior year. The increase in revenues and adjusted EBITDAaL were primarily due to increases in P1AG amusement revenues from United States and Canada route locations at FECs and theatres, along with an increase in distribution sales.

Location-based entertainment:

• Reported second quarter record revenues of $29.1-million, an increase of $1-million or 3.5 per cent compared with the prior year;
• Reported adjusted store-level EBITDAaL of $6.3-million, a decrease of $2-million or 24 per cent compared with the prior year.

Loyalty:

• Membership in the Scene+ loyalty program increased to over 13 million members as at June 30, 2023.

Corporate:

• On May 18, 2023, the Competition Bureau commenced legal action against Cineplex, alleging that Cineplex's on-line booking fee is misleading and constitutes drip pricing. Cineplex strongly denies the Competition Bureau's allegations and believes that the on-line booking fee fully complies with the letter and spirit of the law. Cineplex believes that the Competition Bureau's allegations have no merit and Cineplex will seek an early determination of this matter. Cineplex filed its response to the Competition Bureau's allegations on June 30, 2023.
• The CineClub subscription program (CineClub) reached over 115,000 members, providing members with benefits accessible across Cineplex's businesses nationwide including Cineplex theatres, LBE venues and the Cineplex Store.
• Recognized income taxes recovery of approximately $158.4-million on the basis of continued strong return to profitability providing a reasonable expectation that previously derecognized net deferred income tax assets will be utilized to offset future periods of taxable income.

You are cordially invited to participate in a conference call with the management of Cineplex to review its second quarter. Mr. Jacob, president and chief executive officer, and Gord Nelson, chief financial officer, will host the call.

Cineplex Q2 2023 earnings webcast

Date: Thursday, Aug. 10, 2023

Time: 10 a.m. Eastern Daylight Time

Audio webcast: on-line, preregistration available

An archive of the webcast will be available on Cineplex's website 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 362335.

All attendees should join the event five to 10 minutes prior to the scheduled start time. Media are welcome to join the call in listen-only mode.

About Cineplex Inc.

Cineplex 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 and 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 (Cineplex Store), 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.

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