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Cineplex Inc
Symbol CGX
Shares Issued 63,333,238
Close 2019-11-13 C$ 23.10
Recent Sedar Documents

Cineplex earns $13.38-million in Q3

2019-11-14 07:31 ET - News Release

Mr. Gord Nelson reports

CINEPLEX INC. REPORTS THIRD QUARTER RESULTS

Cineplex Inc. has released its financial results for the three and nine months ended Sept. 30, 2019.

                                   THIRD QUARTER RESULTS
  
  
                                                                                   2019                2018

Total revenues                                                              $418.4-million   $386.4-million
Theatre attendance                                                            17.5 million     17.2-million
Net income from continuing operations                                        $15.1-million    $12.3-million
Net loss from discontinued operations                                         $1.7-million     $2.1-million
Net income*                                                                  $13.4-million    $10.2-million
Box office revenues per patron (BPP)                                                $10.16           $10.07       
Concession revenues per patron (CPP)                                                 $6.68            $6.25        
Adjusted EBITDA                                                             $106.1-million    $55.0-million
Adjusted EBITDAaL                                                            $62.3-million    $51.4-million
Adjusted EBITDAaL margin                                                              14.9%            13.3%
Adjusted free cash flow                                                      $48.2-million    $37.8-million
Adjusted free cash flow per common share of Cineplex                                $0.762           $0.596       
Earnings per share (EPS) from continuing operations -- basic and diluted             $0.24            $0.19        
EPS from discontinued operations -- basic and diluted                               $(0.03)          $(0.03)      
EPS -- basic and diluted*                                                            $0.21            $0.16        

* The adoption of IFRS (international financial reporting standards) 16 negatively impacted the net income 
  by approximately $3.8-million in the current period and approximately $6.4-million or 10 cents per share 
  as compared with Q3 2018.


  

                                            YEAR TO DATE RESULTS
  
                                                                                      2019             2018

Total revenues                                                            $1,221.9-million $1,184.6-million
Theatre attendance                                                            49.5-million     52.3 million
Net income from continuing operations                                        $31.8-million    $56.2-million
Net loss from discontinued operations                                         $6.4-million     $6.4-million
Net income*                                                                  $25.4-million    $49.8-million
Box office revenues per patron (BPP)                                                $10.58           $10.37        
Concession revenues per patron (CPP)                                                 $6.70            $6.31         
Adjusted EBITDA                                                             $299.3-million   $179.0-million
Adjusted EBITDAaL                                                           $168.2-million   $167.3-million
Adjusted EBITDAaL margin                                                              13.8%            14.1%
Adjusted free cash flow                                                     $129.3-million   $122.0-million
Adjusted free cash flow per common share of Cineplex                                $2.042           $1.926        
Earnings per share (EPS) from continuing  operations -- basic and diluted            $0.50            $0.89         
EPS from discontinued operations -- basic and diluted                               $(0.10)          $(0.10)       
EPS -- basic and diluted*                                                            $0.40            $0.79         

* The adoption of IFRS 16 negatively impacted the net income by approximately $11.0-million in the year to 
  date and approximately $19.7-million or 31 cents per share as compared with 2018.


  

"Cineplex reported a strong third quarter with growth across all businesses, resulting in record total revenue of $418.4-million, up 8.3 per cent, and adjusted EBITDAaL of $62.3-million, up 21.2 per cent compared to the prior year," said Ellis Jacob, president and chief executive officer, Cineplex.

"Recognizing the quarter's strong film slate, theatre attendance increased 1.8 per cent. This, combined with third quarter records for both BPP of $10.16 and CPP of $6.68, resulted in a 2.6-per-cent increase in box office revenue and an 8.9-per-cent increase in theatre food service revenue. Media revenue increased 30.6 per cent with growth in both cinema advertising and digital place-based media revenue; and amusement revenue increased 8.0 per cent as a result of increased route revenue and growth within our location-based entertainment venues.

"Key accomplishments during the quarter included opening the first reinvented Playdium 2.0 entertainment complex in Brampton, Ont., adding Canada's second 4DX auditorium at Scotiabank Theatre Chinook in Calgary, Alta., and announcing CDM's partnership with AMC to deploy, manage and enhance a digital signage network at approximately 630 locations across the United States. Also during the quarter, Cineplex initiated a review process of WorldGaming Network, engaging a third party adviser to identify a strategic equity partner to further develop the on-line e-sports business.

"Looking ahead, I am encouraged by the positive results from across our businesses as we further execute our diversification strategy, build scale and achieve more meaningful growth for the future."

Key developments in the third quarter of 2019

The following describes certain key business initiatives undertaken and results achieved during the third quarter of 2019 in each of Cineplex's core business areas.

Film entertainment and content

Theatre

Exhibition

  • Reported third quarter box office revenues of $177.9-million, an increase of $4.6-million (2.6 per cent) from $173.3-million reported in the prior year period due to a 1.8-per-cent increase in the theatre attendance and growth in BPP;
  • BPP was $10.16, a third quarter record for Cineplex, nine cents (0.9 per cent) higher than $10.07 reported during the prior year period;
  • Opened Canada's second 4DX auditorium at Scotiabank Theatre Chinook in Calgary, Alta.;
  • Announced plans for a new Cineplex VIP Cinemas at Royalmount in Montreal, Que., which is expected to open in 2022. The VIP Cinemas will include five luxury auditoriums and a fully licensed lounge.

Theatre

Food service

  • Reported a third quarter record for theatre food service revenues of $117.0-million, an increase of $9.5-million (8.9 per cent) from the prior year period as a result of the growth in CPP and a 1.8-per-cent increase in theatre attendance;
  • CPP was $6.68, a third quarter record for Cineplex, 43 cents (6.9 per cent) higher than $6.25 reported during the prior year period;
  • Expanded alcohol beverage service to an additional 12 theatres, now totalling 78 (excluding VIP);
  • Expanded home delivery options with the addition of a Skip the Dishes pilot program.

Alternative programming

  • Alternative programming (Cineplex Events) featured live events from Andre Rieu, the one-woman show Fleabag by Phoebe Waller-Bridge and Margaret Atwood's book launch of The Testaments. Feature film events included Anime titles along with documentaries from BTS and the feature Game Changers.
  • Cineplex international film program featured several strong performing international films, including Chinese, Hindi, Punjabi and Filipino films with Hello, Love Goodbye becoming the highest grossing Filipino title in Cineplex history.

Digital commerce

  • On-line and mobile ticketing represented 31 per cent of total theatre admissions during the third quarter, up from 24 per cent in the prior year period.
  • Total registered users for Cineplex Store increased by 43 per cent in the third quarter of 2019 in addition to a 181-per-cent increase in device activations as compared with the prior year period.

Media

  • Reported third quarter revenues of $43.3-million for total media, an increase of $10.1-million (30.6 per cent) compared with the prior year period.

Cinema media

  • Reported third quarter revenues of $22.6-million, compared with $20.0-million in the prior year period, an increase of 13.0 per cent, primarily due to increases in show time and preshow advertising.

Digital place-based media

  • Reported an all-time quarterly record for digital place-based media revenues of $20.7-million, an increase of $7.5-million (57.2 per cent) compared with the prior year period due to higher project installation revenues and other digital services revenues;
  • Chosen to deploy, manage and enhance AMC theatres' digital network at approximately 630 locations across the United States, including its box office signage, theatre menu boards and other ancillary signage.

Amusement and leisure

Amusement solutions

  • Reported record third quarter revenues of $47.6-million, an increase of $1.9-million (4.2 per cent) over the prior year period as a result of increased route operations revenue.

Location-based entertainment (LBE)

  • Reported third quarter revenues of $19.6-million, an increase of $2.8-million (16.6 per cent) over the prior year period due to two additional locations of The Rec Room as compared with the prior year and one Playdium 2.0 in the current period;
  • Opened Canada's first reinvented Playdium 2.0 entertainment complex in Brampton, Ont., on Sept. 16, 2019;
  • During the quarter, Cineplex announced plans to open Quebec's first location of The Rec Room at Royalmount in Montreal, Que., expected to open in 2022.

E-sports

  • WGN hosted its second annual Rocket League WGN North American Championship e-sports tournament. The tournament grand finals took place in August, 2019, at Fan Expo Canada held at the Metro Toronto Convention Centre.
  • Cineplex initiated a review process of WGN's on-line e-sports business, engaging a third party adviser to identify a strategic equity partner.

Loyalty

  • Membership in the Scene loyalty program increased by 200,000 members in the period, reaching 10.1 million at Sept. 30, 2019.
  • Scene celebrated 10-million members with national no excuses day on Sept. 27, 2019, offering Scene members exclusive promotional offers, including half off point redemptions.

Operating results for the three and nine months ended Sept. 30, 2019

Total revenues

Total revenues for the three months ended Sept. 30, 2019, increased $32.1-million (8.3 per cent) to $418.4-million as compared with the prior year period. Total revenues for the nine months ended Sept. 30, 2019, increased $37.3-million (3.2 per cent) to 1,221.9-million as compared with the prior year period.

About Cineplex Inc.

Cineplex is a top-tier Canadian brand that operates in the film entertainment and content, amusement and leisure, and media sectors. A leading entertainment and media company, Cineplex welcomes over 70 million guests annually through its circuit of theatres and location-based entertainment venues across the country.

You are cordially invited to participate in a conference call with the management of Cineplex to review the company's third quarter. Ellis Jacob, president and chief executive officer, and Gord Nelson, chief financial officer, will host the call scheduled for: Thursday, Nov. 14, 2019, at 10 a.m. Eastern Time.

In order to participate in the conference call please dial 647-484-0475, or toll-free from Canada or the United States dial 1-888-394-8218 at least 10 minutes prior to 10 a.m. ET. Please quote the conference confirmation code 6219020 to access the call.

If you cannot participate in a live mode, a replay will be available. Please dial 647-436-0148, or toll-free from Canada or the U.S. dial 1-888-203-1112. The replay passcode is 6219020.

The replay will begin at 1 p.m. ET on Thursday, Nov. 14, 2019, and end at 1 p.m. ET on Thursday, Nov. 21, 2019.

Note that media will be participating in listen-only mode.

                                   STATEMENTS OF OPERATIONS
             (expressed in thousands of dollars, except per share amounts)
  
  
                                                          Three months ended Sept. 30,   Nine months ended Sept. 30,
                                                                  2019           2018           2019           2018
Revenues
Box office                                                 $   177,865 $      173,278     $  523,732  $     541,892
Food service                                                   125,550        115,557        358,171        354,775
Media                                                           43,308         33,162        127,210        104,913
Amusement                                                       58,143         53,838        174,760        152,320
Other                                                           13,582         10,554         38,053         30,695
                                                               418,448        386,389      1,221,926      1,184,595
Expenses
Film cost                                                       93,735         90,213        275,461        287,763
Cost of food service                                            27,439         24,257         79,122         74,053
Depreciation -- right-of-use assets                             36,456              -        109,475              -
Depreciation and amortization -- other assets                   31,712         32,483         95,748         93,743
Loss on disposal of assets                                         303            783            896          1,617
Other costs                                                    190,955        217,003        567,771        643,847
Share of income of joint ventures and associates                  (560)        (1,118)        (2,572)        (2,850)
Interest expense -- lease obligations                           12,091            126         36,780            425
Interest expense -- other                                        6,244          6,766         17,453         19,536
Interest income                                                    (75)           (60)          (208)          (205)
Foreign exchange                                                  (449)           391            569           (438)
                                                               397,851        370,844      1,180,495      1,117,491
Income from continuing operations before income taxes           20,597         15,545         41,431         67,104
Provision for income taxes
Current                                                          7,932          6,182         16,345         19,008
Deferred                                                        (2,435)        (2,979)        (6,762)        (8,101)
                                                                 5,497          3,203          9,583         10,907
Net income from continuing operations                       $   15,100  $      12,342      $  31,848   $     56,197
Net (loss) from discontinued operations, net of taxes           (1,718)        (2,133)        (6,429)        (6,395)
Net income                                                  $   13,382  $      10,209      $  25,419   $     49,802

Net income from continuing operations attributable to
Owners of Cineplex                                          $   15,102  $      12,414      $  31,868   $     56,269
Non-controlling interests                                           (2)           (72)           (20)           (72)
Net income from continuing operations                       $   15,100  $      12,342      $  31,848   $     56,197
Net income attributable to
Owners of Cineplex                                          $   13,384  $      10,281      $  25,439   $     49,874
Non-controlling interests                                           (2)           (72)           (20)           (72)
Net income                                                  $   13,382  $      10,209      $  25,419   $     49,802
Net income per share attributable to owners of  Cineplex
-- basic and diluted
Continuing operations                                         $   0.24    $      0.19        $  0.50     $     0.89
Discontinued operations                                          (0.03)         (0.03)         (0.10)         (0.10)
Total operations                                              $   0.21    $      0.16        $  0.40     $     0.79



  

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