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Cineplex Inc. Reports First Quarter and Announces Dividend Increase

CNW Group - Thu May 9, 5:15AM CDT

(TSX:CGX.TO) - 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.

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       $
       0.460                           $
        0.609                       -24.5%
    Cineplex ("Share") (ii)

    ---



              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.
    --  Cineplex Store registered a 107% increase in device activation
        over the prior year period.
    --  Monthly active users of The Cineplex Store increased by 57% as
        compared to the prior year period.

MEDIA

--  Reported a first quarter record for total media revenues of
        $35.0 million, an increase of $2.5 million, or 7.7% as compared
        to the prior year period.

Cinema Media

--  First quarter cinema media revenues of $21.4 million increased
        nominally from $21.3 million in the prior year period despite
        the significant theatre attendance decline.

Digital Place-Based Media

--  Reported a first quarter record with revenues of $13.6 million,
        an increase of $2.4 million (21.9%) compared to the prior year
        period due to higher project installation revenues.

AMUSEMENT AND LEISURE

Amusement Solutions

--  Reported an all-time quarterly record with revenues of $50.5
        million ($2.8 million from Cineplex theatre gaming and $47.7
        million from all other sources of revenues), an increase of
        $7.5 million (17.4%) over the prior year period. The increase
        was primarily due to an increase in distribution sales and
        increased route revenues in the United States.

Location Based Entertainment

--  The Rec Room reported first quarter revenues of $16.4 million
        which included food service revenues of $7.9 million and
        amusement revenues of $8.0 million.
    --  On March 18, 2019, opened The Rec Room at Square One Shopping
        Centre in Mississauga, Ontario, the sixth location of The Rec
        Room.
    --  During the quarter, Cineplex announced plans to open Atlantic
        Canada's first Playdium location in Dartmouth, Nova Scotia at
        the Dartmouth Crossing Shopping Centre, scheduled to open in
        2020.

eSports

--  On March 24, 2019, WGN hosted the Madden 19 Canadian Challenge
        held at Live Nations's The Lounge in Toronto.
    --  During the first quarter, WGN hosted the Winnipeg Jets NHL 19
        Tournament with the finals held at the Bell MTS Place in
        Winnipeg on February 18, 2019.

LOYALTY

--  Membership in the SCENE loyalty program increased by 0.1
        million members in the period, reaching 9.7 million members at
        March 31, 2019.

CORPORATE

--  During the quarter, Cineplex was named by Waterstone Human
        Capital one of Canada's 10 Most Admired Corporate Cultures in
        the large enterprise category for 2018, the third time that
        Cineplex has won the award that celebrates best-in-class
        Canadian organizations.

OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2019

Total revenues

Total revenues for the three months ended March 31, 2019 decreased $25.9 million (6.6%) to $364.9 million as compared to the prior year period. A discussion of the factors affecting the changes in box office, food service, media, amusement and other revenues for the period is provided below.

Non-GAAP measures discussed throughout this news release, including adjusted EBITDA, adjusted EBITDAaL, adjusted free cash flow, theatre attendance, BPP, premium priced product, same theatre metrics, CPP, film cost percentage, food service cost percentage and concession margin per patron are defined and discussed in the Non-GAAP measures section of this news release.

Box office revenues

The following table highlights the movement in box office revenues, theatre attendance and BPP for the quarter (in thousands of dollars, except theatre attendance reported in thousands of patrons and per patron amounts, unless otherwise noted):

Box office revenues

                First Quarter



                                                                                                         2019                   2018                            Change

                                                                                                                                                                 ---




       Box office revenues                                                                                     $
              156,496                                     $
        181,380 -13.7%



       Theatre attendance (i)                                                                         14,988                 17,765                            -15.6%



       Box office revenue per patron (i)                                                                         $
              10.44                                       $
        10.21   2.3%



       BPP excluding premium priced product (i)                                                                   $
              9.03                                        $
        8.79   2.7%



       Canadian industry revenues (ii)                                                                                                                     -13.1%



       Same theatre box office revenues (i)                                                                    $
              152,958                                     $
        180,279 -15.2%



       Same theatre attendance (i)                                                                    14,700                 17,684                            -16.9%



       % Total box from premium priced product (i)                                                     40.9%                 41.1%                            -0.2%

    ---                                                                                                                                                          ---


       (i) See Non-GAAP measures section of this news release.



       (ii) Source: Gross box office receipts (inclusive of all taxes) from The Movie Theatre Association of Canada industry data adjusted for calendar quarter dates.

    ---
Box office continuity                                                                             First Quarter


                                                                                                               Box Office

                Theatre
                                                                                                                                               Attendance

                                                                                                                                                        ---


              2018 as reported                                                                                                         $
              181,380  17,765



              Same theatre attendance change                                                                    (30,426)                           (2,985)



              Impact of same theatre BPP change                                                                    3,105



              New and acquired theatres (i)                                                                        3,538                                288



              Disposed and closed theatres (i)                                                                   (1,101)                              (80)



              2019 as reported                                                                                                         $
              156,496  14,988

    ---                                                                                                                                                        ---

               (i) See Non-GAAP measures section of this news release. Represents theatres opened, acquired, disposed or closed subsequent to the
                start of the prior year
    comparative period.

    ---
First Quarter 2019 Top Cineplex Films           3D           % Box                           First Quarter 2018 Top Cineplex
                                                                                              Films                                          3D  % Box

    ---


         1
        Captain Marvel
     √  16.3% 1
           Black Panther
       √  22.2%



         2
        How To Train Your Dragon: The Hidden World
     √   7.2% 2
           Jumanji: Welcome To The Jungle
       √  10.1%



         3
        Aquaman
     √   7.0% 3
           Star Wars: The Last Jedi
       √   5.8%



         4
        The Lego Movie 2: The Second Part
     √   5.1% 4
           Peter Rabbit                                                      3.8%



         5
        Spider-Man: Into The Spider-Verse
     √   4.3% 5
           Fifty Shades Freed                                                3.3%

        ---                                                                                                                                        ---

Box office revenues decreased $24.9 million, or 13.7%, to $156.5 million during the first quarter of 2019, compared to $181.4 million reported in the same period in 2018. The decrease was due to the 15.6% decrease in theatre attendance to 15.0 million guests, partially offset by higher BPP. The theatre attendance decrease was due to the weaker film slate in the first quarter of 2019 compared to the first quarter of 2018. The prior year period is a tough comparator due to the success of Black Panther which became the third highest grossing film of all-time in North America, and the carryover strength of Star Wars: The Last Jedi and Jumanji: Welcome To The Jungle from the fourth quarter of 2017.

BPP for the three months ended March 31, 2019 was $10.44, a $0.23 increase (2.3%) from the prior year period, and a first quarter record for Cineplex. The increase in BPP was due to price increases in selective markets as compared to the prior year.

Food service revenues

The following table highlights the movement in food service revenues, theatre attendance and CPP for the quarter (in thousands of dollars, except theatre attendance and same theatre attendance reported in thousands of patrons and per patron amounts):

Food service revenues

          First Quarter



                                                                                              2019           2018                     Change

                                                                                                                                       ---




       Food service - theatres                                                                     $
        95,172                $
        108,230 -12.1%



       Food service - The Rec Room                                                          7,886          8,718         -9.5%

    ---                                                                                                                   ---


       Total food service revenues                                                                $
        103,058                $
        116,948 -11.9%

    ---                                                                                                                                        ---




       Theatre attendance (i)                                                              14,988         17,765        -15.6%



       CPP (i) (ii)                                                                                  $
        6.35                   $
        6.09   4.3%



       Same theatre food service revenues (i)                                                      $
        92,309                $
        107,551 -14.2%



       Same theatre attendance (i)                                                         14,700         17,684        -16.9%

    ---                                                                                                                   ---




       (i) See Non-GAAP measures section of this news release.



       (ii) Food service revenue from The Rec Room is not included in the CPP calculation.

    ---
Theatre food service revenue continuity

              First Quarter


                                                                                                                                                                            Theatre Food

           Theatre
                                                                                                                                                                                 Service                 Attendance

                                                                                                                                                                                                                ---


              2018 as reported                                                                                                                                                                      $
         108,230  17,765



              Same theatre attendance change                                                                                                                                   (18,152)                    (2,985)



              Impact of same theatre CPP change                                                                                                                                   2,909



              New and acquired theatres (i)                                                                                                                                       2,863                         288



              Disposed and closed theatres (i)                                                                                                                                    (678)                       (80)

    ---                                                                                                                                                                                                         ---


              2019 as reported                                                                                                                                                                       $
         95,172  14,988

    ---                                                                                                                                                                                                                ---


              (i) See Non-GAAP measures section of this news release. Represents theatres opened, acquired, disposed or closed subsequent to the start of the prior year
    comparative period.

    ---

Food service revenues are comprised primarily of concession revenues, which includes food service sales at theatre locations. Food service revenues also include food and beverage sales at The Rec Room. Food service revenues decreased $13.9 million, or 11.9% mainly as a result of the $13.1 million (12.1%) decrease in theatre food service revenue. The decrease in theatre food service revenue resulted from the 15.6% decrease in theatre attendance, partially offset by the 4.3% ($0.26) increase in CPP to $6.35. Food service revenue from The Rec Room is not included in the CPP calculation.

Food services revenues from The Rec Room decreased $0.8 million (9.5%) compared to the prior year period to $7.9 million as bad winter weather conditions in the first quarter reduced evening business at several locations resulting in the food service decline. In addition, locations which have been opened for 12 to 24 months begin to move past the honeymoon phase and begin to settle into their expected long-term run-rate levels. Newer locations of The Rec Room typically experience higher sales volumes in the first year of operations.

CPP of $6.35 is a first quarter record for Cineplex. Expanded offerings outside of core food service products, including offerings at Cineplex's VIP Cinemas and Outtakes locations, have contributed to increased visitation and higher average transaction values, resulting in the record CPP in the period.

Media revenues

The following table highlights the movement in media revenues for the quarter (in thousands of dollars):

Media revenues

       First Quarter



                                        2019       2018                 Change






       Cinema media                         $
     21,383               $
      21,332 0.2%



       Digital place-based media     13,630     11,181        21.9%

    ---


       Total media revenues                 $
     35,013               $
      32,513 7.7%

    ---

Total media revenues increased $2.5 million (7.7%) compared to the prior year period to a first quarter record of $35.0 million. Cinema media revenues increased nominally (0.2%) compared to the prior year period despite the significant theatre attendance decline. This increase was due to a 21.9% or $2.4 million increase in digital place-based media revenues as a result of higher project installation revenues. During the quarter, digital place-based media added 345 new locations for a total of 13,847 locations (an increase of 5% over the prior year period).

Amusement Revenues

The following table highlights the movement in amusement revenues for the quarter (in thousands of dollars):

Amusement revenues

       First Quarter



                                                                                                                                                                        2019       2018

        Change

                                                                                                                                                                                                            ---




              Amusement - P1AG excluding Cineplex exhibition and The Rec Room (i)                                                                                           $
     47,673                  $
      40,238 18.5%



              Amusement - Cineplex exhibition (i)                                                                                                                     2,784      2,737           1.7%



              Amusement - The Rec Room                                                                                                                                8,043      6,930          16.1%

    ---                                                                                                                                                                                          ---


              Total amusement revenues                                                                                                                                      $
     58,500                  $
      49,905 17.2%

    ---                                                                                                                                                                                                            ---


              (i) Cineplex receives a venue revenue share on games revenues earned at in-theatre game rooms and XSCAPE Entertainment Centres.  Amusement - Cineplex
    exhibition reports the total of this venue revenue share which is consistent with the historical presentation of Cineplex's amusement revenues.  Amusement -
    P1AG excluding Cineplex exhibition and The Rec Room reflects P1AG's gross amusement revenues, net of the venue revenue share paid to Cineplex
    reflected in Amusement - Cineplex exhibition above.

    ---

Amusement revenues increased 17.2%, or $8.6 million, to an all-time quarterly record of $58.5 million in the first quarter of 2019 compared to the prior year period. The growth was due to an increase in distribution sales as well as in route revenues in the United States in part due to the Cinemark agreement signed in the second quarter of 2018. The additional location of The Rec Room in the current year contributed to an increase of $1.1 million to amusement revenues.

Other revenues

The following table highlights the other revenues which includes revenues from the Cineplex Store, promotional activities, screenings, private parties, corporate events, breakage on gift card sales and revenues from management fees for the quarter (in thousands of dollars):

Other revenues

       First Quarter



                                      2019       2018           Change




       Other revenues                     $
     11,871         $
      10,126 17.2%

    ---

Film cost

The following table highlights the movement in film cost and the film cost percentage for the quarter (in thousands of dollars, except film cost percentage):

Film cost

       First Quarter



                                                               2019       2018                 Change

                                                                                                 ---




       Film cost                                                   $
     78,721               $
       95,204 -17.3%



       Film cost percentage (i)                              50.3%     52.5%         -2.2%

    ---                                                                                 ---


       (i) See Non-GAAP measures section of this news release.

Film cost varies primarily with box office revenues, and can vary from quarter to quarter based on the relative strength of the titles exhibited during the period. This is due to film cost terms varying by title and distributor. Film cost percentage during the first quarter of 2019 was 50.3%, a 2.2% decrease from the prior year period. The decrease in film cost percentage is attributable to the reduced concentration of box office revenues from a few titles, with the top five film in the current period accounting for only 39.9% of box office revenues in the period (2018 - 45.2%). Top films tend to have higher settlement rates than the other films in the slate due to their strong performance.

Cost of food service

The following table highlights the movement in cost of food service and food service cost as a percentage of food service revenues ("concession cost percentage") for both theatres and The Rec Room for the quarter (in thousands of dollars, except percentages and margins per patron):

Cost of food service

         First Quarter



                                                                   2019         2018                    Change

                                                                                                         ---




       Cost of food service - theatre                                  $
       21,271                $
        22,436 -5.2%



       Cost of food service - The Rec Room                       2,165        2,340         -7.5%

    ---                                                                                      ---


       Total cost of food service                                      $
       23,436                $
        24,776 -5.4%

    ---                                                                                                         ---




       Theatre concession cost percentage (i)                    22.4%       20.7%         1.7%




                The Rec Room food cost percentage (i)        27.5%       26.8%         0.7%



       Theatre concession margin per patron (i)                          $
       4.93                  $
        4.83  2.1%





       (i) See Non-GAAP measures section of this news release.

    ---

Cost of food service at the theatres varies primarily with theatre attendance as well as the quantity and mix of offerings sold. Cost of food service at The Rec Room varies primarily with the volume of guests who visit the locations as well as the quantity and mix of food and beverage items sold.

The decrease in the theatre cost of food service compared to the prior year period was due to the lower theatre food service revenues which was partly offset by the increase in the theatre concession cost percentage from 20.7% in the prior year period to 22.4% in 2019.

The theatre concession margin per patron increased 2.1% from $4.83 in the first quarter of 2018 to $4.93 in the same period in 2019, reflecting the impact of the higher CPP during the period.

The decrease in The Rec Room cost of food service as compared to the prior year period was due to the lower food service revenues.

Depreciation and amortization

The following table highlights the movement in depreciation and amortization expenses during the quarter (in thousands of dollars):

Depreciation and amortization expenses

       First Quarter



                                                                     2019       2018                  Change






       Depreciation of property, equipment and leaseholds                $
     28,857              $
        27,259   5.9%



       Amortization of intangible assets and other                 3,998      3,935        1.6%

    ---


       Sub-total - depreciation and amortization - other assets          $
     32,855              $
        31,194   5.3%

    ---


       Depreciation - right-of-use assets                         36,462
        NM

    ---


       Total depreciation and amortization                               $
     69,317              $
        31,194 122.2%

    ---

The quarterly increase in depreciation of property, equipment and leaseholds of $1.6 million (5.9%) is primarily due to investments in the amusement and leisure businesses, including the opening of The Rec Room at the Square One Shopping Centre.

The increase of $0.1 million (1.6%) in the amortization of intangible assets was primarily due to internally developed software for digital products including the Cineplex mobile app and website platform.

The quarterly increase in depreciation of right-of-use assets was as a result of the adoption of IFRS 16. The right-of-use assets are depreciated over the lease term. The current quarter expense represents the depreciation charge for the quarter.

Loss on disposal of assets

The following table shows the movement in the loss on disposal of assets during the quarter (in thousands of dollars):

Loss on disposal of assets         First Quarter



                                                2019     2018            Change






       Loss on disposal of assets                   $
      477          $
       210  127.1%

    ---

Other costs

Other costs include three main sub-categories of expenses; theatre occupancy expenses, which capture the rent and associated occupancy costs for Cineplex's theatre operations; other operating expenses, which include the costs related to running Cineplex's film entertainment and content, media, as well as amusement and leisure; and general and administrative expenses, which includes costs related to managing Cineplex's operations, including head office expenses. Please see the discussions below for more details on these categories.

The following table highlights the movement in other costs for the quarter (in thousands of dollars):

Other costs

        First Quarter



                                                                                                2019         2018                  Change

                                                                                                                                      ---




       Theatre occupancy expenses (i)                                                                $
      18,407                $
        51,898 -64.5%



       Other operating expenses (i)                                                         148,183      147,407         0.5%



       General and administrative expenses (i)                                               18,852       18,149         3.9%

    ---                                                                                                                  ---


       Total other costs                                                                            $
      185,442               $
        217,454 -14.7%

    ---                                                                                                                                       ---


       (i) See Accounting policies section of the Management's Discussion & Analysis ("MD&A").

    ---

Theatre occupancy expenses

The following table highlights the movement in theatre occupancy expenses for the quarter (in thousands of dollars) with the prior period presentation revised to provide comparability to the impact of the transition to IFRS 16:

Theatre occupancy expenses

        First Quarter



                                                                                                                                                                                     2019           Revised

         Change
                                                                                                                                                                                                       2018

                                                                                                                                                                                                                              ---




              Cash rent - theatre (i) (vii)                                                                                                                                                $
          39,879              $
        38,470   3.7%



              Other occupancy                                                                                                                                                     18,418            18,667       -1.3%



              One-time items (ii)                                                                                                                                                  (179)          (1,272)     -85.9%

    ---                                                                                                                                                                                                           ---


              Total theatre occupancy including cash lease payments                                                                                                                        $
          58,118              $
        55,865   4.0%

    ---                                                                                                                                                                                                                               ---




              Non-cash rent (iii) (vi)                                                                                                                                                 -          (2,978)
        NM



              Rent previously recognized as a finance lease (iv)                                                                                                                       -            (989)
        NM



              Cash rent related to lease obligations (v)                                                                                                                        (39,711)
        NM

    ---                                                                                                                                                                                                                       ---


              Theatre occupancy as reported                                                                                                                                                $
          18,407              $
        51,898 -64.5%

    ---                                                                                                                                                                                                                               ---


              (i) Represents the cash payments for theatre rent during the quarter. See IFRS 16 transition section of the MD&A for a reconciliation from previously reported
    figures.



              (ii) One-time items include amounts related to both theatre rent and other theatre occupancy costs.  They are isolated here to illustrate Cineplex's theatre rent
    and other theatre occupancy costs excluding these one-time, non-recurring items.



              (iii) Non-cash rent included in the 2018 balances in the previous reporting period. See IFRS 16 transition section of the MD&A for a reconciliation from
    previously reported figures.



              (iv) Rent payments that were charged to the finance lease obligations in the previous reporting period. See IFRS 16 transition section of the MD&A


              for a reconciliation from previously reported figures.



              (v) Cash rent that has been reallocated to offset the lease obligations.



              (vi) See Non-GAAP measures section of this news release.



              (vii) The 2019 balance includes $1.1 million of cash rent paid not pertaining to the current period. See Non-GAAP measures section of this news release.

    ---
Theatre occupancy continuity                   First Quarter


                                                                      Occupancy




       2018 as reported                                                          $
     51,898



       Impact of new and acquired theatres                                   750



       Impact of disposed theatres                                         (535)



       Same theatre rent change (i)                                        1,178



       One-time items                                                      1,093



       Other                                                               (233)






                Impact of IFRS 16 adoption:

    ---




       Impact of non-cash rent in prior period                             2,978



       Cash rent previously recognized as a finance lease                    989



       Cash rent related to lease obligations                           (39,711)

    ---                                                         ---


       2019 as reported                                                          $
     18,407

    ---                                                                                 ---


       (i) See Non-GAAP measures section of this news release.

    ---

Theatre occupancy expenses as reported decreased $33.5 million (64.5%) during the first quarter of 2019 compared to the prior year period. This decrease was primarily due to the impact of the adoption of IFRS 16 partially offset by the impact of non-cash rent in the prior period.

Total theatre occupancy including cash lease payments increased $2.2 million (4.0%) during the first quarter of 2019 compared to the prior year period. This increase was primarily due to a $1.2 million increase in same theatre rent and a $1.1 million decrease in one-time credits. The increase in same-theatre rent was due to the inclusion of the up front payments of annual rent at one theatre location in the first quarter of 2019 in cash rent-theatre. In comparison, the prior year period includes one quarter of rent expense for the location.

Other operating expenses

The following table highlights the movement in other operating expenses during the quarter (in thousands of dollars) with the prior period presentation revised to provide comparability to the impact of the transition to IFRS 16:

Other operating expenses

         First Quarter



                                                                                                                                                                             2019            Revised

          Change
                                                                                                                                                                                                2018

                                                                                                                                                                                                                         ---




              Theatre payroll                                                                                                                                                       $
          36,710                $
        38,293  -4.1%



              Theatre operating expenses                                                                                                                                  28,562             29,419       -2.9%



              Media (i)                                                                                                                                                   16,742             16,421        2.0%



              P1AG (i)                                                                                                                                                    40,965             35,719       14.7%




                The Rec Room (i) (ii)                                                                                                                          11,148             10,540        5.8%



              Location-based entertainment pre-opening (i) (iii)                                                                                                             691                290      138.3%



              SCENE                                                                                                                                                        5,038              4,217       19.5%



              Marketing                                                                                                                                                    2,851              4,408      -35.3%



              Other (iv)                                                                                                                                                   9,809              8,205       19.5%

    ---                                                                                                                                                                                                    ---


              Other operating expenses including cash lease payments                                                                                                               $
          152,516               $
        147,512   3.4%



              Non-cash rent (v) (vi)                                                                                                                                           -             (105)
        NM



              Cash rent related to lease obligations (vii)                                                                                                               (4,333)
        NM

    ---                                                                                                                                                                                                                  ---


              Other operating expenses as reported                                                                                                                                 $
          148,183     147,407             0.5%

    ---                                                                                                                                                                                                                    ---


              (i) Prior period balances were revised to exclude non-cash rent.  See IFRS 16 transition section of the MD&A for a reconciliation from previously reported
    figures.



              (ii) Includes operating costs of The Rec Room locations.  Overhead relating to management of The Rec Room portfolio are included in the 'Other' line.



              (iii) Includes pre-opening costs of The Rec Room and Playdium locations



              (iv) Other category includes overhead costs related to The Rec Room, operating costs of WGN and other Cineplex internal departments.



              (v) Non-cash rent included in the 2018 balances in the previous reporting period. See IFRS 16 transition section of the MD&A for a reconciliation from
    previously reported figures.



              (vi) See Non-GAAP measures section of this news release.



              (vii) Cash rent that has been reallocated to offset the lease obligations.

    ---
Other operating continuity                      First Quarter


                                                                    Other Operating




       2018 as reported                                                            $
     147,407



       Impact of new and acquired theatres                                   2,069



       Impact of disposed theatres                                           (429)



       Same theatre payroll change (i)                                     (2,679)



       Same theatre operating expenses change (i)                          (1,369)



       Media operating expenses change                                         321



       P1AG operating expenses change                                        5,246




                The Rec Room operating expenses change                     608



       Location-based entertainment pre-opening change                         401



       SCENE change                                                            821



       Marketing change                                                    (1,556)



       Other                                                                 1,571






                Impact of IFRS 16 adoption:

    ---




       Non-cash rent in prior period                                           105



       Cash rent related to lease obligations                              (4,333)

    ---                                                         ---


       2019 as reported                                                            $
     148,183

    ---                                                                                    ---


       (i) See Non-GAAP measures section of this news release.

    ---

Other operating expenses during the first quarter of 2019 increased $0.8 million or 0.5% compared to the prior year period. The increase was primarily due to higher amusement and leisure costs related to P1AG due to higher distribution sales as well as the impact of new and acquired theatres. These were partially offset by the $2.7 million decrease in same theatre payroll and the $1.4 million decrease in same theatre operating expenses as a result of the lower business volumes for theatre exhibition, a $1.6 million decrease in marketing due to the timing of campaigns and $4.3 million of cash rent related to the lease obligations arising upon the adoption of IFRS 16.

General and administrative expenses

The following table highlights the movement in general and administrative ("G&A") expenses during the quarter, including Share-based compensation costs, and G&A expenses net of these costs (in thousands of dollars) with the prior period presentation revised to provide comparability to the impact of the transition to IFRS 16:

G&A expenses

        First Quarter



                                                                                                                                                                                   2019            Revised

        Change
                                                                                                                                                                                                      2018

                                                                                                                                                                                                                              ---




              G&A excluding LTIP and option plan expense (i)                                                                                                                             $
           17,828                $
       17,773  0.3%



              Restructuring                                                                                                                                                          -               996
       NM



              LTIP (i)                                                                                                                                                             762            (1,049)
       NM



              Option plan                                                                                                                                                          389                431         -9.7%

    ---                                                                                                                                                                                                            ---


              G&A expenses including cash lease payments                                                                                                                                 $
           18,979                $
       18,151  4.6%



              Non-cash rent (iii) (iv)                                                                                                                                               -               (2)
       NM



              Cash rent included as part of lease obligations (v)                                                                                                                (127)
       NM

    ---                                                                                                                                                                                                                       ---


              G&A expenses as reported                                                                                                                                                   $
           18,852                $
       18,149  3.9%

    ---                                                                                                                                                                                                                              ---


              (i) Prior period balance was revised to exclude non-cash rent. See IFRS 16 transition section of the MD&A for a reconciliation of previously reported figures.



              (ii) LTIP includes the expense for the LTIP program as well as the expense for the executive and Board deferred share unit plans.



              (iii) Non-cash rent included in the 2018 balances in the previous reporting period.  See IFRS 16 transition section of the MD&A for a reconciliation of previously
    reported figures.



              (iv) See Non-GAAP measures section of this news release.



              (v) Cash rent that has been reallocated to offset the lease obligations.

    ---

G&A expenses increased $0.7 million (4.6%) during the first quarter of 2019 compared to the prior year period primarily due to a $1.8 million increase in LTIP expense. LTIP in the first quarter reflected ongoing regular vesting and a relatively flat share price during the period, compared to a significant price decrease in the prior year period resulting in an expense recovery. Professional fees increased by $0.8 million due in part to an increase in consulting work including the software upgrade undertaken for IFRS 16.

EARNINGS BEFORE INTEREST, INCOME TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") (see Non-GAAP measures section of this news release)

The following table presents EBITDA, adjusted EBITDA and adjusted EBITDAaL for the three months ended March 31, 2019 as compared to the prior year periods (expressed in thousands of dollars, except adjusted EBITDAaL margin):

EBITDA

                First Quarter



                                                                                                           2019                  2018

       Change

                                                                                                                                                            ---




       EBITDA                                                                                                    $
              76,690                  $
     54,890    39.7%



       Adjusted EBITDA                                                                                           $
              77,442                  $
     53,532    44.7%



       Adjusted EBITDAaL (i)                                                                                     $
              34,331                  $
     49,458   -30.6%



       Adjusted EBITDAaL margin (i)                                                                       9.4%                12.7%            -3.3%

    ---                                                                                                                                           ---


       (i) Prior period figures have been revised to conform to current period presentation. See IFRS 16 transition section of the MD&A.

    ---

Adjusted EBITDAaL for the first quarter of 2019 decreased $15.1 million, or 30.6%, as compared to the prior year period. The decrease compared to the prior year period was primarily due to a decline in box office and theatre food service revenues as a result of reduced attendance. Adjusted EBITDAaL margin, calculated as Adjusted EBITDAaL divided by total revenues, was 9.4%, a decrease of 3.3% from 12.7% in the prior year period due to lower theatre exhibition revenues and higher contributions from lower margin businesses including amusement and leisure.

ADJUSTED FREE CASH FLOW (see Non-GAAP measures section of this news release)

For the first quarter of 2019, adjusted free cash flow per common share of Cineplex was $0.46 as compared to $0.61 in the prior year period. The declared dividends per common share of Cineplex were $0.44 in the first quarter of 2019 and $0.42 in the prior year period. During the 12 months ended March 31, 2019, Cineplex generated adjusted free cash flow per Share of 2.66, compared to $2.31 in the prior 12 month period. Cineplex declared dividends per Share of $1.74 and $1.68, respectively, in each 12 month period. The payout ratios for these periods were 65.2% and 72.6%, respectively.

NON-GAAP FINANCIAL MEASURES

EBITDA and Adjusted Free Cash Flow

EBITDA and adjusted free cash flow are not measures recognized by GAAP and do not have standardized meanings in accordance with such principles. Therefore, EBITDA and adjusted free cash flow may not be comparable to similar measures presented by other issuers. As a result of the adoption of IFRS 16, Leases on January 1, 2019, new non-GAAP measures including adjusted EBITDAaL and associated adjusted EBITDAaL margin have been introduced to ensure comparability of periods.

EBITDA is calculated by adding back to net income or net loss, income tax expense, depreciation and amortization expense, and interest income. Adjusted EBITDA excludes the change in fair value of financial instrument, loss on disposal of assets, foreign exchange gain, the equity income of CDCP, the non-controlling interests' share of adjusted EBITDA of TG-CPX Limited Partnership, and depreciation, amortization, interest and taxes of Cineplex's other joint ventures and associates. Adjusted EBITDAaL modifies adjusted EBITDA to deduct current period cash rent related to lease obligations. Prior year adjusted EBITDAaL deducts rent previously recognized as a reduction in finance lease obligations, and non-cash rent previously presented as amortization of tenant inducements, rent averaging liabilities, density right and fair-value lease contract liabilities.

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.

Adjusted free cash flow is a non-GAAP measure generally used by Canadian corporations, as an indicator of financial performance and it should not be seen as a measure of liquidity or a substitute for comparable metrics prepared in accordance with GAAP.

For a detailed reconciliation of net income or net loss to EBITDA, adjusted EBITDA and adjusted EBITDAaL and from cash provided by operating activities to adjusted free cash flow, please refer to Cineplex's management's discussion and analysis filed on www.sedar.com.

Earnings per Share Metrics

Cineplex has presented basic and diluted earnings per share net of this item to provide a more comparable earnings per share metric between the current periods and prior year periods. In the non-GAAP measure, earnings is defined as net income or net loss excluding the change in fair value of financial instrument.

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 and IMAX product; divided by total paid theatre attendance for the period, less paid theatre attendance for 3D, 4DX, UltraAVX, VIP and IMAX product.

CPP: Calculated as total theatre food service revenues divided by total paid total theatre attendance for the period.

Premium priced product: Defined as 3D, 4DX, UltraAVX, IMAX and VIP film product.

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.

Same Theatre Analysis

Cineplex reviews and reports same theatre metrics relating to box office revenues, theatre food service revenues, theatre rent expense and theatre payroll expense, as these measures are widely used in the theatre exhibition industry as well as other retail industries.

Same theatre metrics are calculated by removing the results for all theatres that have been opened, acquired, closed or otherwise disposed of subsequent to the start of the prior year comparative period. For the three months ended March 31, 2019 the impact of the four locations that have been opened or acquired and two locations that have been closed or otherwise disposed of have been excluded, resulting in 161 theatres being included in the same theatre metrics.

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.

The Rec Room food cost percentage: Calculated as total The Rec Room food costs divided by total The Rec Room food service revenues for the period.

Non-cash rent

Calculated as the total amortization of tenant inducements, rent averaging liabilities, density rights and fair-value lease contract liabilities. This accounting treatment was applicable under IAS 17 in 2018 but not applicable under IFRS 16 in 2019 and onwards.

Certain information included in this news release contains forward-looking statements within the meaning of applicable securities laws. These forward-looking statements include, among others, statements with respect to Cineplex's objectives, goals and strategies to achieve those objectives and goals, as well as statements with respect to Cineplex's beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective" and "continue" (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

By their very nature, forward-looking statements involve inherent risks and uncertainties, including those described in Cineplex's Annual Information Form ("AIF"), Cineplex's management's discussion and analysis ("MD&A") and in this news release. Those risks and uncertainties, both general and specific, give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Cineplex cautions readers not to place undue reliance on these statements, as a number of important factors, many of which are beyond Cineplex's control, could cause actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, risks generally encountered in the relevant industry, competition, customer, legal, taxation and accounting matters.

The foregoing list of factors that may affect future results is not exhaustive. When reviewing Cineplex's forward-looking statements, readers should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the "Risks and Uncertainties" section of Cineplex's MD&A.

Cineplex does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable Canadian securities law. Additionally, we undertake no obligation to comment on analyses, expectations or statements made by third parties in respect of Cineplex, its financial or operating results or its securities. All forward-looking statements in this news release are made as of the date hereof and are qualified by these cautionary statements. Additional information, including Cineplex's AIF and MD&A, can be found on SEDAR at www.sedar.com.

About Cineplex

Cineplex (TSX:CGX.TO) 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. In addition to being Canada's largest and most innovative film exhibitor, Cineplex also operates successful businesses in digital commerce (CineplexStore.com), food service, alternative programming (Cineplex Events), cinema media (Cineplex Media), digital place-based media (Cineplex Digital Media), amusement solutions (Player One Amusement Group) and an online esports platform for competitive and passionate gamers (WorldGaming.com). Additionally, Cineplex operates a location based entertainment business through Canada's newest destination for 'Eats & Entertainment' (The Rec Room), and will also be opening new complexes specially designed for teens and families (Playdium) as well as exciting new sports and entertainment venues across Canada (Topgolf). Cineplex is a joint venture partner in SCENE, Canada's largest entertainment loyalty program.

Proudly recognized as having one of the country's Most Admired Corporate Cultures, Cineplex employs approximately 13,000 people in its offices across Canada and the United States. To learn more visit Cineplex.com or download the Cineplex App.

You are cordially invited to participate in a conference call with the management of Cineplex (TSX:CGX.TO) to review our first quarter. Ellis Jacob, President and Chief Executive Officer and Gord Nelson, Chief Financial Officer, will host the call scheduled for:

Thursday May 9, 201910:00 am Eastern Time

In order to participate in the conference call please dial 647-484-0475, or from outside Toronto and from the U.S., dial 1-888-394-8218 at least five to ten minutes prior to 10:00 am 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 from outside Toronto and from the U.S., dial 1-888-203-1112. The replay passcode is 6219020.

The replay will begin at 1:00 pm ET on Thursday May 9, 2019 and end at 1:00 pm ET on Thursday May 16, 2019.

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

Cineplex Inc.Interim Condensed Consolidated Balance Sheets(Unaudited)(expressed in thousands of Canadian dollars)

March 31,   December 31,


                                            2019            2018




                  Assets




                  Current assets


     Cash and cash
      equivalents                   $
          23,877                      $
        25,242


     Trade and other
      receivables                         90,135         165,586


     Income taxes
      receivable                          11,042           4,944


     Inventories                          29,738          30,592


     Prepaid
      expenses and
      other current
      assets                              16,132          13,862


     Fair value of
      interest rate
      swap
      agreements                           1,094           1,457





                                         172,018         241,683




                  Non-current
                   assets


     Property,
      equipment and
      leaseholds                         623,937         634,354


     Right-of-use
      assets                           1,307,829


     Deferred income
      taxes                               13,885          13,444


     Fair value of
      interest rate
      swap
      agreements                             887           2,063


     Interests in
      joint ventures
      and associates                      35,123          38,912


     Intangible
      assets                              96,609         108,758


     Goodwill                            817,045         817,235





                                 $
          3,067,333                   $
        1,856,449

Cineplex Inc.Interim Condensed Consolidated Balance Sheets … continued(Unaudited)(expressed in thousands of Canadian dollars)

March 31,    December 31,


                                         2019             2018




                  Liabilities




                  Current
                   liabilities


     Accounts payable
      and accrued
      liabilities                $
         168,540                      $
       186,407


     Share-based
      compensation                      2,261            4,862


     Dividends
      payable                           9,183            9,183


     Income taxes
      payable                           1,007           12,167


     Deferred revenue                 179,324          214,016


     Lease
      obligations                     107,705            3,058


     Fair value of
      interest rate
      swap agreements                   1,630            1,184



                                      469,650          430,877





                  Non-current
                   liabilities


     Share-based
      compensation                      9,317            8,210


     Long-term debt                   606,000          580,000


     Fair value of
      interest rate
      swap agreements                  12,989            7,674


     Lease
      obligations                   1,304,634           10,789


     Post-employment
      benefit
      obligations                       9,120            9,250


     Other
      liabilities                      11,699          119,110


     Deferred income
      taxes                             6,616           11,528



                                    1,960,375          746,561



                  Total
                   liabilities      2,430,025        1,177,438







                  Equity




     Share capital                    852,379          852,379


     Deficit                         (214,621)       (179,721)


     Hedging reserves
      and other                        (9,379)         (3,678)


     Contributed
      surplus                           8,204            7,815


     Cumulative
      translation
      adjustment                          787            2,301



     Total equity
      attributable to
      owners of
      Cineplex                        637,370          679,096


     Non-controlling
      interests                           (62)            (85)



                  Total equity        637,308          679,011



                               $
         3,067,333                    $
       1,856,449

Cineplex Inc.Interim Condensed Consolidated Statements of Operations(Unaudited)(expressed in thousands of Canadian dollars, except per share amounts)

Three months ended March 31,




                                       2019                                 2018




                  Revenues


      Box
      office                    $
        156,496                       $
           181,380


      Food
      service                       103,058                              116,948


     Media                           35,013                               32,513


     Amusement                       58,500                               49,905


     Other                           11,871                               10,126



                                    364,938                              390,872





                  Expenses


      Film
      cost                           78,721                               95,204


      Cost
      of
      food
      service                        23,436                               24,776


      Depreciation
      -

       right-
      of-
      use
      assets                         36,462


      Depreciation
      and
      amortization
      -
      other
      assets                         32,855                               31,194


      Loss
      on
      disposal
      of
      assets                            477                                  210


      Other
      costs                         185,442                              217,454


      Share
      of
      income
      of
      joint
      ventures
      and
      associates                       (369)                                (897)


      Interest
      expense
      -
      lease
      obligations                    12,220                                  157


      Interest
      expense
      -
      other                           5,417                                6,327


      Interest
      income                            (74)                                 (87)


      Foreign
      exchange                          541                                 (765)



                                    375,128                              373,573





                   (Loss)
                   income
                   before
                   income
                   taxes            (10,190)                              17,299





                   Provision
                   for
                   income
                   taxes


     Current                            408                                2,035


     Deferred                        (3,238)                                  38



                                     (2,830)                               2,073



                   Net
                   (loss)
                   income       $
        (7,360)                       $
           15,226





                   Attributable
                   to:


      Owners
      of
      Cineplex                  $
        (7,350)                       $
           15,226


      Non-
      controlling
      interests                         (10)



                   Net
                   (loss)
                   income       $
        (7,360)                       $
           15,226





                   Basic
                   net
                   (loss)
                   income
                   per
                   share
                   attributable
                   to
                   owners
                   of
                   Cineplex      $
        (0.12)                         $
           0.24


                   Diluted
                   net
                   (loss)
                   income
                   per
                   share
                   attributable
                   to
                   owners
                   of
                   Cineplex      $
        (0.12)                         $
           0.24

Cineplex Inc.Interim Condensed Consolidated Statements of Comprehensive Income(Unaudited)(expressed in thousands of Canadian dollars)

Three months ended March 31,




                                                2019                                   2018




                  Net (loss) income                   $
       (7,360)                          $
     15,226





                  Other comprehensive (loss)
                   income


                  Items that will be
                   reclassified subsequently
                   to net income:


     (Loss) income on hedging
      instruments                            (7,794)                                   776


     Associated deferred income
      taxes recovery (expense)                 2,093                                  (211)


     Foreign currency
      translation adjustment                 (1,514)                                 1,507




                  Other comprehensive (loss)
                   income                    (7,215)                                 2,072





                  Comprehensive (loss)
                   income                            $
       (14,575)                          $
     17,298





                  Attributable to:


     Owners of Cineplex                              $
       (14,565)                          $
     17,298


     Non-controlling interests                  (10)





                  Comprehensive (loss)
                   income                            $
       (14,575)                          $
     17,298

Cineplex Inc.Interim Condensed Consolidated Statements of Changes in Equity(Unaudited)(expressed in thousands of Canadian dollars)For the three months ended March 31, 2019 and 2018

Share              Contributed                            Hedging                              Cumulative
                                                                                     surplus                             reserves and                               translation
                                                                                                                   other                                adjustment                               Deficit                              Non-                Total
                                                             capital                                                                                                                                       controlling
                                                                                                                                                                                                                       interests








                January 1, 2019                        $
       852,379    $
        7,815              $
              (3,678)                 $
             2,301                    $
              (179,721)                     $
              (85)                  $
           679,011





     Net loss                                                                                                                                                               (7,350)                                (10)                     (7,360)



     Other comprehensive loss                                                                          (5,701)                          (1,514)                                                                                             (7,215)





                Total comprehensive loss                                                             (5,701)                          (1,514)                               (7,350)                                (10)                    (14,575)



     Dividends declared                                                                                                                                                    (27,550)                                                       (27,550)



     Share option expense                                                   389                                                                                                                                                                389


      TGLP non-controlling interests capital contribution                                                                                                                                                           33                           33






                March 31, 2019                         $
       852,379    $
        8,204              $
              (9,379)                   $
             787                    $
              (214,621)                     $
              (62)                  $
           637,308









                January 1, 2018                        $
       856,761    $
        1,647                $
              1,332                $
             (2,817)                   $
              (148,060)
           $                                     $
           708,863





     Net income                                                                                                                                                             15,226                                                          15,226



     Other comprehensive income                                                                           565                            1,507                                                                                                2,072




                Total comprehensive income                                                              565                            1,507                                15,226                                                          17,298



     Dividends declared                                                                                                                                                    (26,599)                                                       (26,599)



     Share option expense                                                   431                                                                                                                                                                431






                March 31, 2018                         $
       856,761    $
        2,078                $
              1,897                $
             (1,310)                   $
              (159,433)
           $                                     $
           699,993

Cineplex Inc.Interim Condensed Consolidated Statements of Cash Flows(Unaudited)(expressed in thousands of Canadian dollars)

Three months ended March 31,


                                                 2019                       2018


                   Cash provided by (used
                    in)




                   Operating activities


      Net (loss) income                               $
        (7,360)                     $
         15,226


      Adjustments to reconcile
       net (loss) income to net
       cash provided by
       operating activities


      Depreciation and
       amortization of
       property, equipment and
       leaseholds, and
       intangible assets                       32,855                     31,194


      Depreciation of right-
       of-use assets                           36,462


      Amortization of tenant
       inducements, rent
       averaging liabilities
       and fair value lease
       contract liabilities                                             (3,085)


      Unrealized foreign
       exchange                                   429


      Interest rate swap
       agreements - non-cash
       interest                                 (558)                       120


      Accretion of convertible
       debentures                                                           601


      Other non-cash interest                     559                        101


      Loss on disposal of
       assets                                     477                        210


      Deferred income taxes                   (3,238)                        38


      Non-cash share-based
       compensation                               389                        431


      Net change in interests
       in joint ventures and
       associates                             (1,686)                   (1,205)


      Changes in operating
       assets and liabilities                   2,251                        919





      Net cash provided by
       operating activities                    60,580                     44,550





                   Investing activities


      Proceeds from disposal of
       assets                                                               182


      Purchases of property,
       equipment and leaseholds              (32,362)                  (25,511)


      Intangible assets
       additions                              (1,612)                   (1,355)


      Tenant inducements                          615                      1,876


      Net cash received from
       CDCP                                     5,474                        684





      Net cash used in
       investing activities                  (27,885)                  (24,124)





                   Financing activities



     Dividends paid                         (27,550)                  (26,599)


      Borrowings under credit
       facilities, net                         26,000                      6,000


      Repayments of lease
       obligations -principal                (32,484)                     (832)



     Financing fees                            (243)




      Net cash used in
       financing activities                  (34,277)                  (21,431)





                   Effect of exchange rate
                    differences on cash           217                       (54)




                   Decrease in cash and cash
                    equivalents               (1,365)                   (1,059)




                   Cash and cash equivalents
                    -Beginning of period       25,242                     40,597





                   Cash and cash equivalents
                    -End of period                     $
        23,877                      $
         39,538





                   Supplemental information


      Cash paid for interest -
       lease obligation                                $
        11,687                         $
         157


      Cash paid for interest -
       other                                            $
        5,895                       $
         6,773


      Cash paid for income
       taxes, net                                      $
        17,861                       $
         7,072

Cineplex Inc.Interim Consolidated Supplemental Information(Unaudited) (expressed in thousands of Canadian dollars)

Reconciliation to Adjusted EBITDAaL

Three months ended March 31,


                                        2019                                   2018



                  Net (loss) income          $

                (7,360)              $

      15,226




     Depreciation and
      amortization -
      other                           32,855                                 31,194


     Depreciation -
      right-of-use
      assets                          36,462


     Interest expense
      -lease
      obligations                     12,220                                    157


     Interest expense
      -other                           5,417                                  6,327


     Interest income                    (74)                                  (87)


     Current income
      tax expense                        408                                  2,035


     Deferred income
      tax (recovery)
      expense                        (3,238)                                    38





                  EBITDA                      $

                76,690               $

      54,890




     Loss on disposal
      of assets                          477                                    210


     CDCP equity
      income (i)                       (317)                                 (818)


     Foreign exchange
      loss (gain)                        541                                  (765)


     Non-controlling
      interest                            11


     Depreciation and
      amortization -
      joint ventures
      and associates
      (ii)                                29                                      2


     Taxes and
      interest of
      joint ventures
      and associates
      (ii)                                11                                     13




                  Adjusted EBITDA             $

                77,442               $

      53,532




     Cash rent related
      to lease
      obligation (iii)              (44,171)


     Cash rent paid
      not pertaining
      to current
      period                           1,060


     Cash rent
      previously
      recognized as a
      finance lease
      (iv)                                                                   (989)


     Non-cash rent
      (v) (vi)                                                             (3,085)





                  Adjusted EBITDAaL
                   (vi) (vii)         34,331                                 49,458
CDCP equity income not included
                                    in adjusted EBITDA as CDCP is a
                                    limited-life financing vehicle
                                    that is funded by virtual print
                                    fees collected from

              (i)                  distributors.


               (ii)                Includes the joint ventures and
                                    associates with the exception of
                                    CDCP (see (i) above).


               (iii)               Balance of cash rents that have
                                    been reallocated to offset the
                                    lease obligations.


                                  Rent payments that were charged
                                    to the finance lease obligations
                                    in the previous reporting
                                    period. See IFRS 16 transition
               (iv)                 section of the MD&A.



              (v)                 Non-cash rent included in the
                                    2018 balances in the previous
                                    reporting period. See IFRS 16
                                    transition section of the MD&A.


               (vi)                See Non-GAAP measures section of
                                    this news release.


               (vii)               Prior period figures have been
                                    revised to conform to current
                                    period presentation. See IFRS 16
                                    transition section of the MD&A.

Cineplex Inc.Interim Consolidated Supplemental Information(Unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share data)

Adjusted Free Cash Flow

Three months ended March 31,




                                              2019                                   2018





                     Cash provided by
                      operating
                      activities (i)               $

                60,580               $

      44,550


        Less: Total capital
         expenditures net
         of proceeds on
         sale of assets                   (32,362)                              (25,329)





        Standardized free
         cash flow                          28,218                                 19,221




        Add/(Less):


        Changes in
         operating assets
         and liabilities
         (ii)                              (2,251)                                 (919)


        Changes in
         operating assets
         and liabilities of
         joint ventures and
         associates (ii)                     1,317                                    308


        Principal component
         of lease
         obligations                      (32,484)                                 (832)


        Principal portion
         of cash rent paid
         not pertaining to
         current period                      1,037


        Growth capital
         expenditures and
         other (iii)                        27,692                                 20,042


        Share of income of
         joint ventures and
         associates, net of
         non-cash
         depreciation                           92                                     94


        Non-controlling
         interest                               11


        Net cash received
         from CDCP (iv)                      5,474                                    684



                     Adjusted free cash
                      flow                         $

                29,106               $

      38,598





        Average number of
         Shares outstanding             63,333,238                             63,330,446




                     Adjusted free cash
                      flow per Share                $

                0.460                $

      0.609


                     Dividends declared             $

                0.435                $

      0.420

    ---
(i)                 Prior period figures have been
                                    revised to conform to current
                                    period presentation. See IFRS 16
                                    transition section of  the MD&A
                                    for further details.


               (ii)                Changes in operating assets and
                                    liabilities are not considered a
                                    source or use of adjusted free
                                    cash flow.


               (iii)               Growth capital expenditures and
                                    other represent expenditures on
                                    Board approved projects, exclude
                                    maintenance capital expenditures,
                                    and are net of proceeds on asset
                                    sales.  Cineplex's revolving
                                    facility is available to fund
                                    Board approved projects.


               (iv)                Excludes the share of income of
                                    CDCP, as CDCP is a limited-life
                                    financing vehicle funded by
                                    virtual print fees collected from
                                    distributors.
                         Cash invested into CDCP, as well
                         as cash distributions received
                         from CDCP, are considered to be
                         uses and sources of adjusted free
                         cash flow.

SOURCE Cineplex

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/May2019/09/c4050.html

SOURCE: Cineplex

Gord Nelson, Chief Financial Officer, (416) 323-6602

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