Market Overview

Cineplex Inc. Reports First Quarter and Announces Dividend Increase

Share:

TORONTO, May 9, 2019 /CNW/ - (TSX:CGX) - Cineplex Inc. ("Cineplex") today released its financial results for the three months ended March 31, 2019.  Unless otherwise specified, all amounts are in Canadian dollars.

Cineplex (CNW Group/Cineplex)

First Quarter Results






2019

2018

Period over Period
Change (i)

Total revenues

$

364.9

million

$

390.9

million

-6.6%

Theatre attendance

15.0

million

17.8

million

-15.6%

Net (loss) income

$

(7.4)

 million

$

15.2

million

NM

Box office revenues per patron ("BPP") (ii)

$

10.44


$

10.21


2.3%

Concession revenues per patron ("CPP") (ii)

$

6.35


$

6.09


4.3%

Adjusted EBITDA (ii)

$

77.4

million

$

53.5

million

44.7%

Adjusted EBITDAaL (ii) (iii)

$

34.3

million

$

49.5

million

-30.6%

Adjusted EBITDAaL margin (ii) (iii)

9.4%


12.7%


-3.3%

Adjusted free cash flow (ii)

$

29.1

million

$

38.6

million

-24.6%

Adjusted free cash flow per common share of
Cineplex ("Share") (ii)

$

0.460


$

0.609


-24.5%

Earnings per Share ("EPS") - basic

$

(0.12)


$

0.24


NM

EPS - diluted

$

(0.12)


$

0.24


NM

i. 

Period over period change calculated based on thousands of dollars except percentage and per share values.  Changes in percentage amounts are calculated as 2019 value less 2018 value.

ii.  

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 financial measures reported by Cineplex are defined in the 'Non-GAAP Financial Measures' section at the end of this news release.

iii. 

Prior period figures have been revised to conform to current period presentation.

 

"Although the Q1 results were impacted by the anticipated soft box office product, we continued to execute upon our diversification strategy and are encouraged by the results from our new businesses which resulted in Q1 records for media revenue, amusement revenue and other revenue," said Ellis Jacob, President and CEO, Cineplex.

"Total revenue for the first quarter of 2019 decreased 6.6% due to a 13.7% decrease in box office and an 11.9% decrease in food service. These decreases can largely be attributed to the 15.6% decrease in theatre attendance, which was a result of the quarter's expected weaker film product and the tough comparator quarter with last year's record success of the film Black Panther. Partially offsetting the theatre attendance decline is a record first quarter box office per patron of $10.44, and record first quarter concession per patron of $6.35, which increased $0.23 and $0.26 respectively from the prior year period.  Although there was a decrease in box office revenue in Q1, this was expected given the January and February 2019 release schedule.  As we look to Q2 and beyond we are encouraged by the recent record-breaking performance of Avengers: Endgame, which had the largest global opening weekend ever, and are confident in the strong film product scheduled for the remainder of the year.

As we continue to grow our diversified businesses, partially offsetting the Exhibition business decreases was a 17.2% increase in amusement revenue to an all-time quarterly record of $58.5 million as a result of P1AG and The Rec Room; and a 7.7% increase in total media revenue to a Q1 record of $35.0 million, largely due to a 21.9% increase in digital place-based media revenue as a result of higher project installation revenue.

The Q1 results are significantly impacted by the adoption of International Financial Reporting Standards ("IFRS") 16 - Leases and we encourage you to refer to our Financial Statements and MD&A for further details.  For the quarter, adjusted EBITDAaL (adjusted EBITDA after lease payments) decreased 30.6% primarily as a result of the theatre attendance decline as a result of the soft box office.  Net income was negatively impacted by approximately $3.3M related to the adoption of IFRS 16 in the current period and approximately $6.4 million or $0.10 per share as compared to Q1 2018.

Key accomplishments during the quarter included the opening of our sixth location of The Rec Room in Mississauga, Ontario; the expansion of alcohol beverage service to an additional 19 theatre locations, now totaling 54 locations; and our SCENE loyalty program reached 9.7 million members.

Although the first quarter film product was soft, the second quarter has been strong and we are encouraged by the outlook of the 2019 film slate.  We remain confident in our strategic direction as we continue to build scale in our other businesses, prudently manage our costs and execute on Cineplex's diversification strategy for future growth.  As such, we are pleased to announce a 3.4% dividend increase to $1.80 per share on an annual basis from the current $1.74 per share.  This increase will be effective with the May 2019 dividend, which will be paid in June 2019."

KEY DEVELOPMENTS IN THE FIRST QUARTER OF 2019

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

FILM ENTERTAINMENT AND CONTENT

Theatre Exhibition

  • Reported first quarter box office revenues of $156.5 million, a decrease of $24.9 million (13.7%) from $181.4 million reported in the prior year period due to a 15.6% decrease in theatre attendance from 17.8 million in 2018 to 15.0 million in the first quarter of 2019 due to a weaker film slate.
  • BPP was $10.44, a first quarter record for Cineplex, an increase of $0.23 (2.3%) over the prior year period BPP of $10.21.

Theatre Food Service

  • Reported first quarter theatre food service revenues of $95.2 million, a decrease of $13.1 million (12.1%) from $108.2 million reported in the prior year period as a result of the decrease in theatre attendance.
  • CPP was $6.35 for the period, a first quarter record for Cineplex, and $0.26 (4.3%) higher than the prior year period.
  • During the quarter, Cineplex added alcohol beverage service to an additional 19 theatres, now totalling 54 (excluding VIP).

Alternative Programming

  • Alternative Programming (Cineplex Events) in the first quarter of 2019 included the release of Dragon Ball Super: Broly, Carmen from The Metropolitan Opera and the concert event BTS World Tour: Love Yourself in Seoul.
  • Cineplex international film for the first quarter of 2019 included strong performances from The Wandering Earth and Gully Boy.

Digital Commerce

  • Total registered users for Cineplex Store increased by 42% in the first quarter of 2019 as compared to the prior year period.
  • Online and mobile ticketing represented 30% of total admission during the first quarter, up from 26% in the prior year period.
  • <

View Comments and Join the Discussion!