Mr. Ellis Jacob reports

CINEPLEX REPORTS FOURTH QUARTER AND ANNUAL 2023 RESULTS

Today, Cineplex Inc. released its financial results for the three months and year ended Dec. 31, 2023.

Two thousand twenty-three highlights (continuing operations):

• Strong year-over-year revenue growth of 25.9 per cent, raising revenues to $1.4-billion;
• Adjusted EBITDAaL (earnings before interest, taxes, depreciation, amortization and lease obligations) increased 190.3 per cent to $157.4-million, as compared with $54.2-million in the prior year;
• Adjusted EBITDAaL margin significantly improved to 11.3 per cent in 2023 compared with 4.9 per cent in 2022;
• All-time annual record BPP (box office revenues per patron) of $12.53 and CPP (concession revenues per patron) of $8.90;
• All-time annual record revenues of $132.4-million in the location-based entertainment (LBE) business;
• 2023 marked Cineplex's biggest year for international programming, delivering 10 per cent of Cineplex's annual box office revenues;
• Achieved strong box office growth of 30.1 per cent and outpaced the North American box office relative to 2022 by an impressive 785 basis points;
• Announced the sale of Player One Amusement Group (P1AG) for gross proceeds of $155-million in cash (transaction closed on Feb. 1, 2024), providing additional liquidity to strengthen the balance sheet.

"Cineplex continues to demonstrate its position as a North American entertainment and media leader," said Ellis Jacob, president and chief executive officer, 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 per cent 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 per cent 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 deleverage and derisk the balance sheet. As outlined in the comprehensive refinancing plans announced earlier today, we are focused on optimizing our capital structure.

"As we reaccelerate 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 January box office results

The associated table compares 2023 and 2024 monthly box office revenues to 2019 monthly box office revenues.

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:
  • Reported annual box office revenues of $599.9-million, an increase of $138.6-million, or 30.1 per cent, from $461.3-million, due to a 25.8-per-cent increase in theatre attendance as a result of the success of highly anticipated films released during the year, including Barbie, The Super Mario Bros. Movie and Oppenheimer.
  • Reported an annual record BPP of $12.53, 41 cents, or 3.4 per cent, higher than the $12.12 reported during 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.
  • Signed a purchase agreement with IMAX Corp. for several new IMAX systems, including one IMAX screen that opened at Cineplex Cinemas Coquitlam and VIP in Coquitlam, B.C., on Dec. 5, 2023.
  • Opened two ScreenX auditoriums at Scotiabank Theatre Montreal in Montreal, Que., and SilverCity Brampton Cinemas in Brampton, Ont., on Dec. 15, 2023.
  • Welcomed nearly 700,000 guests on Aug. 27, 2023, in celebration of National Cinema Day, marking the second-busiest day in Cineplex history and donating a portion of ticket sales to the Canadian Picture Pioneers' Student Assistance awards program.
  • Launched the new Cineplex mobile app, providing guests with an improved experience while browsing for movies and theatres, purchasing movie tickets, discovering exciting events at The Rec Room and Junxion, and using CineClub discounts and Scene+ rewards.
  • The CineClub subscription program reached over 140,000 members, providing members with benefits accessible across Cineplex's businesses nationwide, including Cineplex theatres LBE venues and the Cineplex Store.
• Theatre food service:
  • Reported annual theatre food service revenues of $425.9-million, an increase of $94.3-million, or 28.4 per cent, compared with the prior year, primarily due to a 25.8-per-cent increase in theatre attendance.
  • Reported annual CPP of $8.90, an increase of 18 cents, or 2.1 per cent, compared with the prior year, primarily due to an increase in average spend.
  • Began the national rollout of mobile food and beverage ordering, beginning with theatres in select Ontario theatres during the fourth quarter, allowing guests to select their order, select a time frame and collect their order prior to the beginning of the movie.
• Alternative programming and distribution:
  • As part of the theatrical distribution partnership with Lionsgate, Cineplex's distribution business (Cineplex Pictures) distributed several films, including the highly successful John Wick: Chapter 4, and Hunger Games: The Ballad of Songbirds and Snakes in 2023. Cineplex extended its theatrical distribution partnership with Lionsgate until Dec. 31, 2024.
  • Expanded alternative programming offerings with major concert events, including the record-breaking Taylor Swift -- The Eras Tour, which took home the top spot during the fourth quarter.
  • Two thousand twenty-three marks Cineplex's biggest year for international programming, delivering 10 per cent of Cineplex's annual box office revenues. Strong performing international films, include Animal (Hindi) and Pathaan (Hindi), which have become Cineplex's top 2 Indian and international movies of all time. Cineplex also represented over 80 per cent of the total North American box office market share for other successful international films, including, Kali Jotta (Punjabi), Annhi Dea Mazaak Ae (Punjabi) and Godday Godday Chaa (Punjabi).
  • Event Cinema presented an assortment of big-screen programs in 2023, including: three concerts from cinema-favourite Andre Rieu; exciting stage performances with the Broadway hit Waitress: The Musical; a collection of anime titles, including Demon Slayer and Studio Ghibli classics; as well as continued presentations from the Metropolitan Opera featuring popular titles, including Don Giovanni, Fedora and Florencia en el Amazonas.
• Digital commerce:
  • Total registered users for Cineplex Store increased 3.5 per cent compared with the prior year, reaching approximately 2.4 million registered users.
  • Curated Cineplex Store collections for Black History Month, Asian History Month, National Indigenous Peoples Day, Pride Month, and National Day for Truth and Reconciliation to highlight diverse experiences, cultures and artistic expressions.

Media:

• Reported annual media revenues of $118.7-million, an increase of $6.9-million, or 6.2 per cent, compared with the prior year.
• Continued leveraging expertise in data and analytics to drive revenues.
• Cinema media:
  • Reported annual cinema media revenues of $80.1-million, an increase of $7.8-million, or 10.8 per cent, over the prior year.
• Digital place-based media:
  • Reported annual revenues of $38.6-million, a decrease of $900,000, or 2.2 per cent, over the prior year.
  • Signed an agreement with Cadillac Fairview to operate a network of 200 digital displays in 18 Cadillac Fairview shopping centres, and to sell digital and static media, and sponsorships, for its extensive network of highly desirable shopping destinations across Canada.

Location-based entertainment:

• Reported all-time record annual revenues of $132.4-million, an increase of $21.5-million, or 19.4 per cent, compared with the prior year.
• Reported all-time record annual adjusted store level EBITDAaL of $37.9-million, an increase of $3.6-million, or 10.4 per cent, compared with the prior year.
• Announced plans for one Playdium location in Toronto, Ont., at Cadillac Fairview Mall, which is expected to open during the fourth quarter of 2024.

Loyalty:

• Membership in the Scene+ loyalty program increased to over 14 million members as at Dec. 31, 2023.
• Welcomed Home Hardware Stores Ltd. to the Scene+ loyalty program, providing members with additional opportunities to earn and redeem points.

Corporate:

• Recognized income taxes recovery of $150.2-million during the second quarter of 2023 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.
• Celebrated Community Day on Nov. 4, 2023, with a morning of free, family friendly movies with select discounted concessions, where $1 from every concession order of select items, XSCAPE Play Card, food and beverage orders, and game bands at LBE venues were donated to BGC Canada.
• On Nov. 22, 2023, Cineplex announced it had entered into a definitive agreement to sell 100 per cent of the issued and outstanding shares of P1AG for a purchase price of $155-million, subject to customary postclosing adjustments.
• On Dec. 13, 2023, Cineplex entered into the eighth amended and restated credit agreement amendment which extended the maturity date of the credit facility from Nov. 13, 2024, to Nov. 13, 2025, amended the standard administrative provisions relating to the potential replacement of benchmark rates and made certain other administrative amendments.

You are cordially invited to participate in a conference call with the management of Cineplex to review its fourth quarter and year-end 2023 results. Ellis Jacob, president and chief executive officer, and Gord Nelson, chief financial officer, will host the call.

Cineplex Q4, year-end 2023 earnings webcast:

• Date: Thursday, Feb. 8, 2024;
• Time: 10 a.m. ET;
• Audio webcast: access on-line:
  • Preregistration available;
  • An archive of the webcast will be available at the company'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 495623.

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 (CineplexStore.com), alternative programming (Cineplex Events), motion picture distribution (Cineplex Pictures), cinema media (Cineplex Media), digital place-based media (Cineplex Digital Media) and, until Feb. 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.

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