Transaction Represents a Meaningful Gain for
Cineplex and an Important Step Towards its Capital Structure
Plans
TORONTO , Feb. 1, 2024
/CNW/ - (TSX: CGX) – Cineplex Inc. ("Cineplex"), Cineplex, a
leading entertainment and media company announced today that it has
completed the previously announced sale of its amusement solutions
business, Player One Amusement Group ("P1AG"), to private equity
firm, OpenGate Capital ("OpenGate").
OpenGate acquired all issued and outstanding common shares of
P1AG for a total purchase price of $155
million in cash, subject to customary post-closing
adjustments (the "Transaction"). As part of the Transaction,
Cineplex and P1AG entered into a long-term agreement where P1AG
will continue to supply and service amusement games in Cineplex's
theatres and location-based entertainment venues. As previously
disclosed, Cineplex intends to use the net proceeds from the
Transaction to pay against the Company's credit facility.
"The sale of P1AG represents a meaningful gain for Cineplex and
an important step towards accelerating the Company's focus on
deleveraging and evaluating options to optimize its capital
structure," said Ellis Jacob,
President & CEO, Cineplex. "We would like to thank the P1AG
management team, and all employees across North America for their commitment,
dedication, and help in expanding and creating more value for
Cineplex and our investors."
Cineplex will present P1AG as a discontinued operation on a
retrospective basis until the closing date during the quarter
ending March 31, 2024. Included as
exhibits to this release are the changes to select previously
reported financial information, reflecting P1AG as a discontinued
operation.
SUPPLEMENTAL QUARTERLY FINANCIAL RESULTS (UNAUDITED)
Summary of Quarterly Results (in thousands of dollars
except per share, per patron, theatre attendance and theatre
location and screen data, unless otherwise noted):
|
Revised 2023
(ii)
|
Revised 2022
(ii)
|
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
(ii)
|
(ii)
|
(ii)
|
(ii)
|
(ii)
|
(ii)
|
(ii)
|
Revenues
|
|
|
|
|
|
|
|
Box office
revenues
|
$
188,233
|
$
164,491
|
$
123,338
|
$
120,248
|
$
124,700
|
$
136,372
|
$
79,952
|
Food service
revenues
|
146,228
|
131,392
|
101,076
|
97,168
|
105,193
|
110,637
|
68,388
|
Media
revenues
|
28,957
|
26,100
|
22,296
|
44,553
|
25,224
|
26,406
|
15,545
|
Amusement
revenues
|
26,158
|
21,686
|
26,161
|
20,643
|
24,066
|
20,626
|
15,585
|
Other
revenues
|
24,964
|
24,252
|
18,484
|
27,308
|
15,113
|
10,740
|
14,414
|
|
414,540
|
367,921
|
291,355
|
309,920
|
294,296
|
304,781
|
193,884
|
Expenses
|
|
|
|
|
|
|
|
Film cost
|
101,510
|
90,471
|
66,074
|
63,567
|
66,356
|
69,958
|
39,016
|
Cost of food
service
|
33,220
|
30,744
|
24,237
|
22,671
|
24,839
|
25,335
|
14,857
|
Depreciation -
right-of-use assets
|
21,894
|
21,971
|
21,533
|
22,799
|
22,618
|
23,966
|
24,129
|
Depreciation and
amortization - other
|
21,959
|
22,230
|
22,873
|
22,179
|
22,236
|
22,629
|
22,422
|
Loss (gain) on disposal
of assets
|
128
|
336
|
893
|
(3,327)
|
(49,879)
|
(4,654)
|
112
|
Other costs
|
162,885
|
158,431
|
147,061
|
153,835
|
149,507
|
140,748
|
109,493
|
Reversal of impairment
of long-lived assets
|
—
|
—
|
—
|
(19,880)
|
—
|
—
|
—
|
|
341,596
|
324,183
|
282,671
|
261,844
|
235,677
|
277,982
|
210,029
|
|
|
|
|
|
|
|
|
Subtotal
|
$
72,944
|
$
43,738
|
$ 8,684
|
$
48,076
|
$
58,619
|
$
26,799
|
$
(16,145)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(i)
|
$
116,448
|
$
87,893
|
$
52,719
|
$
67,744
|
$
53,094
|
$
68,835
|
$
30,495
|
Adjusted EBITDAaL
(i)
|
$
74,614
|
$
47,194
|
$
11,377
|
$
25,830
|
$
11,429
|
$
27,646
|
$
(10,704)
|
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
24,467
|
$
158,863
|
$
(33,177)
|
$ 9,572
|
$
27,093
|
$
(2,622)
|
$
(43,722)
|
Net income from
discontinued operations
|
5,279
|
17,682
|
3,004
|
596
|
3,764
|
3,935
|
1,497
|
Net (loss)
income
|
$
29,746
|
$
176,545
|
$
(30,173)
|
$
10,168
|
$
30,857
|
$ 1,313
|
$
(42,225)
|
Earnings (loss) per
share from continuing operations - basic
|
$
0.39
|
$
2.51
|
$ (0.52)
|
$
0.15
|
$
0.43
|
$ (0.04)
|
$ (0.69)
|
Earnings per share from
discontinued operations - basic
|
$
0.08
|
$
0.28
|
$
0.04
|
$
0.01
|
$
0.06
|
$
0.06
|
$
0.02
|
Earnings (loss) per
share - basic
|
$
0.47
|
$
2.79
|
$ (0.48)
|
$
0.16
|
$
0.49
|
$
0.02
|
$ (0.67)
|
Earnings (loss) per
share from continuing operations - diluted
|
$
0.34
|
$
1.80
|
$ (0.52)
|
$
0.15
|
$
0.39
|
$ (0.04)
|
$ (0.69)
|
Earnings per share from
discontinued operations - diluted
|
$
0.06
|
$
0.19
|
$
0.04
|
$
0.01
|
$
0.04
|
$
0.06
|
$
0.02
|
Earnings (loss) per
share - diluted
|
$
0.40
|
$
1.99
|
$ (0.48)
|
$
0.16
|
$
0.43
|
$
0.02
|
$ (0.67)
|
Cash provided by (used
in) operating activities from continuing operations
|
$
36,646
|
$
82,722
|
$
(6,659)
|
$
51,107
|
$
(1,387)
|
$
41,151
|
$
(12,592)
|
Cash used in investing
activities from continuing operations
|
(8,786)
|
(16,732)
|
(17,526)
|
(17,849)
|
(12,930)
|
(5,460)
|
(10,198)
|
Cash (used in) provided
by financing activities from continuing operations
|
(53,916)
|
(50,796)
|
2,107
|
(30,956)
|
11,998
|
(35,484)
|
14,643
|
Effect of exchange rate
differences on cash from continuing operations
|
64
|
(49)
|
34
|
(88)
|
220
|
77
|
(35)
|
Net change in cash from
continuing operations
|
$
(25,992)
|
$
15,145
|
$
(22,044)
|
$ 2,214
|
$
(2,099)
|
$
284
|
$
(8,182)
|
Cash flows provided by
discontinued operations
|
$ 5,029
|
$ 5,151
|
$ 7,069
|
$ 3,605
|
$ 4,369
|
$ 2,206
|
$ 5,339
|
BPP (i)
|
$ 12.00
|
$ 12.84
|
$ 12.63
|
$ 13.06
|
$ 11.25
|
$ 12.29
|
$ 12.00
|
CPP (i)
|
$
8.44
|
$
9.21
|
$
8.85
|
$
8.93
|
$
8.35
|
$
8.84
|
$
8.82
|
Film cost percentage
(i)
|
53.9 %
|
55.0 %
|
53.6 %
|
52.9 %
|
53.2 %
|
51.3 %
|
48.8 %
|
Theatre attendance (in
thousands of patrons) (i)
|
15,690
|
12,806
|
9,767
|
9,208
|
11,084
|
11,092
|
6,661
|
Theatre locations (at
period end)
|
158
|
158
|
157
|
158
|
158
|
159
|
159
|
Theatre screens (at
period end)
|
1,631
|
1,631
|
1,625
|
1,637
|
1,637
|
1,640
|
1,640
|
(i) See Non-GAAP and
other financial measures section of this news release.
|
(ii) 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.
|
The following table shows the reconciliation of Cineplex's
previously reported adjusted EBITDAaL to the revised adjusted
EBITDAaL:
Adjusted
EBITDAaL
|
Revised 2023
(i)
|
Revised 2022
(i)
|
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
|
|
|
|
|
|
|
Adjusted EBITDAaL as
previously reported
|
$
83,064
|
$
60,258
|
$
20,243
|
$
31,197
|
$
20,430
|
$
35,764
|
$
(5,719)
|
Less:
|
|
|
|
|
|
|
|
Adjusted EBITDAaL from
discontinued operations
|
8,450
|
13,064
|
8,866
|
5,367
|
9,001
|
8,118
|
4,985
|
Adjusted EBITDAaL -
revised
|
$
74,614
|
$
47,194
|
$
11,377
|
$
25,830
|
$
11,429
|
$
27,646
|
$ (10,704)
|
(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.
|
The following table shows the reconciliation of Cineplex's
revised net income (loss) to the revised adjusted EBITDAaL:
Reconciliation of
revised net
income (loss) to revised adjusted
EBITDAaL
|
Revised 2023
(i)
|
Revised 2022
(i)
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
Net income (loss)
(iv)
|
$
24,467
|
$ 158,863
|
$ (33,177)
|
$
9,572
|
$
27,093
|
$
(2,622)
|
$ (43,722)
|
Depreciation and
amortization - other
|
21,959
|
22,230
|
22,873
|
22,179
|
22,236
|
22,629
|
22,422
|
Depreciation -
right-of-use assets
|
21,894
|
21,971
|
21,533
|
22,799
|
22,618
|
23,966
|
24,129
|
Interest expense -
lease obligations
|
16,606
|
16,312
|
16,152
|
16,268
|
15,785
|
14,619
|
14,584
|
Interest expense -
other
|
21,014
|
18,229
|
23,502
|
20,626
|
16,317
|
13,814
|
10,078
|
Interest
income
|
(248)
|
(282)
|
(211)
|
(125)
|
(84)
|
(38)
|
(30)
|
Current income tax
(recovery) expense
|
(2)
|
(837)
|
—
|
—
|
—
|
—
|
(724)
|
Deferred income tax
recovery
|
9,927
|
(150,225)
|
—
|
—
|
—
|
—
|
—
|
EBITDA
|
$ 115,617
|
$
86,261
|
$
50,672
|
$
91,319
|
$ 103,965
|
$
72,368
|
$
26,737
|
Loss (gain) on disposal
of assets
|
128
|
336
|
893
|
(3,327)
|
(49,879)
|
(4,654)
|
112
|
Loss (gain) on
financial instruments recorded at fair value
|
580
|
1,020
|
270
|
(970)
|
1,630
|
1,770
|
3,830
|
CDCP equity loss
(income) (i)
|
—
|
—
|
—
|
3
|
30
|
332
|
(854)
|
Foreign exchange (gain)
loss
|
(78)
|
88
|
729
|
468
|
(2,795)
|
(1,128)
|
525
|
Reversal of impairment
of long-lived assets
|
—
|
—
|
—
|
(19,880)
|
—
|
—
|
—
|
Depreciation and
amortization - joint ventures and associates (ii)
|
201
|
187
|
142
|
123
|
130
|
133
|
131
|
Taxes and interest of
joint ventures and associates (ii)
|
—
|
1
|
13
|
8
|
13
|
14
|
14
|
Adjusted
EBITDA
|
$ 116,448
|
$
87,893
|
$
52,719
|
$
67,744
|
$
53,094
|
$
68,835
|
$
30,495
|
Cash rent paid/payable
related to lease obligations
|
(41,437)
|
(40,301)
|
(42,543)
|
(41,528)
|
(41,276)
|
(40,805)
|
(42,358)
|
Cash rent paid not
pertaining to current period
|
(397)
|
(398)
|
1,201
|
(386)
|
(389)
|
(384)
|
1,159
|
Adjusted EBITDAaL
(iii)
|
$
74,614
|
$
47,194
|
$
11,377
|
$
25,830
|
$
11,429
|
$
27,646
|
$
(10,704)
|
(i) CDCP equity income
is not included in adjusted EBITDA as CDCP is a limited-life
financing vehicle that is funded by virtual print
fees collected from distributors. On December 16, 2022, Cineplex
divested its investment in CDCP.
|
(ii) Includes the joint
ventures with the exception of CDCP (see (i) above).
|
(iii) See Section 18,
Non-GAAP and other financial measures.
|
(iv) 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 $3.4 million (2022 - $3.6 million) for the full
year.
|
The following table discloses management's calculation of
EBITDA, adjusted EBITDA, and adjusted EBITDAaL for P1AG:
Reconciliation of
reported net
income to adjusted EBITDAaL
|
2023
|
2022
|
|
|
|
|
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
|
|
|
|
Net income
(i)
|
5,279
|
17,682
|
3,004
|
596
|
3,764
|
3,935
|
1,497
|
|
|
|
|
|
Depreciation and
amortization - other
|
2,519
|
2,659
|
3,133
|
3,396
|
3,843
|
4,022
|
4,470
|
|
|
|
|
|
Depreciation -
right-of-use assets
|
618
|
679
|
666
|
692
|
659
|
520
|
134
|
|
|
|
|
|
Interest expense -
lease obligations
|
165
|
176
|
181
|
185
|
161
|
120
|
120
|
|
|
|
|
|
Interest expense -
other
|
2
|
1
|
4
|
2
|
(14)
|
(2)
|
5
|
|
|
|
|
|
Current income tax
expense (recovery)
|
(201)
|
1,106
|
1,615
|
1,921
|
—
|
—
|
—
|
|
|
|
|
|
Deferred income tax
(recovery) expense
|
1,516
|
(8,215)
|
2,307
|
—
|
—
|
—
|
—
|
|
|
|
|
|
EBITDA
|
9,898
|
14,088
|
10,910
|
6,792
|
8,413
|
8,595
|
6,226
|
|
|
|
|
|
(Gain) loss on disposal
of assets
|
(128)
|
(110)
|
(149)
|
(139)
|
31
|
4
|
45
|
|
|
|
|
|
Foreign exchange loss
(gain)
|
(349)
|
321
|
(715)
|
(211)
|
1,556
|
505
|
(291)
|
|
|
|
|
|
Adjusted
EBITDA
|
9,421
|
14,299
|
10,046
|
6,442
|
10,000
|
9,104
|
5,980
|
|
|
|
|
|
Cash rent paid/payable
related to lease obligations
|
(971)
|
(1,235)
|
(1,180)
|
(1,075)
|
(999)
|
(986)
|
(995)
|
|
|
|
|
|
Adjusted EBITDAaL
(ii)
|
8,450
|
13,064
|
8,866
|
5,367
|
9,001
|
8,118
|
4,985
|
|
|
|
|
|
(i) 2023 includes
recovery of approximately $8.2 million related to the recognition
of deferred income tax assets recognized during the second
quarter.
|
|
|
|
|
|
(ii) See Non-GAAP and
other financial measures section of this news release.
|
|
|
|
|
|
The following tables show the changes to the previously
disclosed balances in cash provided by (used in) operating
activities, cash used in investing activities and cash (used in)
provided by financing activities as previously disclosed:
Cash provided by
(used in) operating activities
|
Revised 2023
(i)
|
Revised 2022
(i)
|
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
|
|
|
|
|
|
|
Cash provided by (used
in) operating activities as previously reported
|
$
44,693
|
$
93,219
|
$
3,135
|
$
59,622
|
$
5,811
|
$
47,152
|
$
(5,437)
|
Less:
|
|
|
|
|
|
|
|
Operating cash flows in
discontinued operations
|
8,047
|
10,497
|
9,794
|
8,515
|
7,198
|
6,001
|
7,155
|
Cash provided by (used
in) operating activities - revised
|
$
36,646
|
$
82,722
|
$
(6,659)
|
$
51,107
|
$
(1,387)
|
$
41,151
|
$ (12,592)
|
(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.
|
Cash used in
investing activities
|
Revised 2023
(i)
|
Revised 2022
(i)
|
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
|
|
|
|
|
|
|
Cash used in investing
activities as previously reported
|
$ (10,950)
|
$ (21,118)
|
$ (19,207)
|
$ (21,898)
|
$ (14,523)
|
$
(8,132)
|
$ (11,196)
|
Less:
|
|
|
|
|
|
|
|
Investing cash flows in
discontinued operations
|
(2,164)
|
(4,386)
|
(1,681)
|
(4,049)
|
(1,593)
|
(2,672)
|
(998)
|
Cash used in investing
activities - revised
|
$
(8,786)
|
$ (16,732)
|
$ (17,526)
|
$ (17,849)
|
$ (12,930)
|
$
(5,460)
|
$ (10,198)
|
(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.
|
Cash (used in)
provided by financing activities
|
Revised 2023
(i)
|
Revised 2022
(i)
|
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
|
|
|
|
|
|
|
Cash (used in) provided
by investing activities as previously reported
|
(54,754)
|
(51,904)
|
1,062
|
(31,893)
|
11,128
|
(36,349)
|
13,767
|
Less:
|
|
|
|
|
|
|
|
Financing cash flows in
discontinued operations
|
(838)
|
(1,108)
|
(1,045)
|
(937)
|
(870)
|
(865)
|
(876)
|
Cash (used in) provided
by financing activities - revised
|
$ (53,916)
|
$ (50,796)
|
$
2,107
|
$ (30,956)
|
$
11,998
|
$ (35,484)
|
$
14,643
|
(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.
|
SUPPLEMENTAL ANNUAL FINANCIAL RESULTS (UNAUDITED)
The following table shows the changes to previously disclosed
revenues, expenses and net income (loss) for the year ended
December 31, 2022 and 2021:
|
2022
|
|
2021
|
|
Reported
|
|
P1AG
|
|
Revised
|
|
Reported
|
|
P1AG
|
|
Revised
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Box office
|
$ 461,272
|
|
$
—
|
|
$ 461,272
|
|
$ 236,320
|
|
$
—
|
|
$ 236,320
|
Food service
|
381,386
|
|
—
|
|
381,386
|
|
186,998
|
|
—
|
|
186,998
|
Media
|
111,728
|
|
—
|
|
111,728
|
|
65,330
|
|
—
|
|
65,330
|
Amusement
|
246,601
|
|
165,681
|
|
80,920
|
|
134,473
|
|
100,282
|
|
34,191
|
Other
|
67,575
|
|
—
|
|
67,575
|
|
33,548
|
|
—
|
|
33,548
|
|
1,268,562
|
|
165,681
|
|
1,102,881
|
|
656,669
|
|
100,282
|
|
556,387
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Film cost
|
238,897
|
|
—
|
|
238,897
|
|
114,674
|
|
—
|
|
114,674
|
Cost of food
service
|
87,702
|
|
—
|
|
87,702
|
|
41,683
|
|
—
|
|
41,683
|
Depreciation -
right-of-use assets
|
95,517
|
|
2,005
|
|
93,512
|
|
102,247
|
|
3,154
|
|
99,093
|
Depreciation and
amortization - other assets
|
105,197
|
|
15,731
|
|
89,466
|
|
113,042
|
|
20,218
|
|
92,824
|
(Gain) loss on disposal
of assets
|
(57,807)
|
|
(59)
|
|
(57,748)
|
|
(28,283)
|
|
79
|
|
(28,362)
|
Other costs
|
687,738
|
|
134,155
|
|
553,583
|
|
439,554
|
|
87,579
|
|
351,975
|
Share of loss of joint
ventures and associates
|
2,608
|
|
—
|
|
2,608
|
|
755
|
|
—
|
|
755
|
Interest expense -
lease obligations
|
61,842
|
|
586
|
|
61,256
|
|
58,590
|
|
519
|
|
58,071
|
Interest expense -
other
|
60,826
|
|
(9)
|
|
60,835
|
|
65,138
|
|
(3)
|
|
65,141
|
Interest
income
|
(277)
|
|
—
|
|
(277)
|
|
(232)
|
|
(4)
|
|
(228)
|
Foreign
exchange
|
(1,371)
|
|
1,559
|
|
(2,930)
|
|
(43)
|
|
45
|
|
(88)
|
Loss (gain) on
financial instruments recorded at fair value
|
6,260
|
|
—
|
|
6,260
|
|
(8,790)
|
|
—
|
|
(8,790)
|
(Reversal) impairment
of long-lived assets
|
(19,880)
|
|
—
|
|
(19,880)
|
|
3,717
|
|
—
|
|
3,717
|
|
1,267,252
|
|
153,968
|
|
1,113,284
|
|
902,052
|
|
111,587
|
|
790,465
|
Income (loss) before
income taxes
|
1,310
|
|
11,713
|
|
(10,403)
|
|
(245,383)
|
|
(11,305)
|
|
(234,078)
|
Income tax expense
(recovery)
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
1,197
|
|
1,921
|
|
(724)
|
|
3,339
|
|
—
|
|
3,339
|
Net income
(loss)
|
113
|
|
9,792
|
|
(9,679)
|
|
(248,722)
|
|
(11,305)
|
|
(237,417)
|
Net income (loss) from
discontinued operations, net of taxes
|
—
|
|
—
|
|
9,792
|
|
—
|
|
—
|
|
(11,305)
|
Net income
(loss)
|
$
113
|
|
$ 9,792
|
|
$
113
|
|
$
(248,722)
|
|
$
(11,305)
|
|
$
(248,722)
|
|
|
|
|
|
|
|
|
|
|
|
|
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
MD&A 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
report 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.
P1AG Adjusted EBITDAaL
Calculated as amusement revenues of P1AG less the total operating
expenses of P1AG, which excludes foreign exchange.
P1AG Adjusted EBITDAaL Margin
Calculated as P1AG Adjusted EBITDAaL divided by total amusement
revenues for P1AG for the period.
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.
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.
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.
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) and digital place-based media (Cineplex Digital
Media). 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.
Caution Regarding Forward-Looking Statements:
Certain statements in this news release may contain
forward-looking information (identified by words such as "will",
"anticipates", "expects", "intends" and similar expressions
suggesting future events or future performance). Such
forward-looking information is based on expectations and
assumptions made by Cineplex and is subject to risks and
uncertainties which may be beyond Cineplex's control. Readers are
cautioned that undue reliance should not be placed on
forward-looking information as actual results may vary materially
from the forward-looking information. A comprehensive discussion of
risks that may impact Cineplex can be found in Cineplex's public
reports and filings, which are available under the Company's
profile on Sedar+ (www.sedarplus.ca). Cineplex does not undertake
to update, correct or revise any forward-looking information as a
result of any new information, future events or otherwise, except
as may be required by applicable law.
SOURCE Cineplex