Cineplex Inc. (“Cineplex” or the “Company”) today released its financial results for the three and nine months ended September 30, 2022. Unless otherwise specified, all amounts are in Canadian dollars.
Third Quarter Summary
- Total revenues increased 35.7% to $339.8 million as compared to the third quarter of 2021.
- Net income improved to positive $30.9 million as compared to a net loss of $33.6 million for the third quarter of 2021.
- Adjusted EBITDAaL increased 89.8% to $20.4 million as compared the third quarter of 2021.
- Record all-time quarterly adjusted EBITDAaL in the Player One Amusement Group business of $9.0 million.
- Record all-time quarterly adjusted EBITDAaL in the Location-Based Entertainment business of $9.7 million.
- Box office revenues reached 70% of the third quarter 2019 levels.
“During the third quarter, Cineplex reported total revenues of $339.8 million and adjusted EBITDAaL of $20.4 million, a 90 percent increase from the same quarter last year” said Ellis Jacob, President & CEO. “Despite limited Hollywood film product, we still achieved box office revenues of 70 percent compared to the same quarter in 2019. This was driven by strong box office in July and the success of our international film product. Cineplex consistently takes an industry leading market share in international cinema. In fact, we earned an impressive 80 percent of the North American box office for the Punjabi film, “Chhalla Mud Ke Nahi Aaya.” In addition, our commitment to growing our diversified businesses continues to deliver results, including an all-time quarterly record adjusted EBITDAaL in the Player One Amusement Group and Location-Based Entertainment businesses.”
Jacob continued, “this quarter we are celebrating a few important milestones from across the business, including the overwhelming turnout for National Cinema Day on September 3, 2022, where we welcomed over half a million guests, which proved to be Cineplex’s busiest day so far in 2022 and third busiest day in the last five years. It was truly remarkable to see the industry work together– with large and small theatre chains across Canada, the United States and Europe celebrating moviegoing. Also, during the quarter, we welcomed Empire Company Limited to the Scene+ loyalty program as co-owners alongside Cineplex and Scotiabank, and we have seen strong membership growth in recent months. We are also excited about the addition of Home Hardware Stores Limited as Scene+ loyalty partners with a launch expected to take place in the summer of 2023.”
“With respect to the Cineworld litigation, on September 7, 2022, Cineworld filed for Chapter 11 Bankruptcy in the United States and the following day, the US Bankruptcy Court ordered a worldwide stay of all enforcement proceedings against Cineworld. We attempted to lift the stay with respect to the ongoing appeal in Ontario, but our request was denied. Therefore, for the time being, the appeal in Ontario will remain stayed until a date to be determined. With that said, we continue to work closely with our advisors to monetize and maximize the judgement claim,” said Jacob.
“As we move forward, we have many highly anticipated titles hitting the big screen, including the release of two of the most anticipated films of 2022, “Black Panther: Wakanda Forever” and “Avatar: The Way of Water,” which is the sequel to the highest grossing film of all time. We are focused on increasing our offerings and generating momentum for our business, as evidenced through the partnerships with non-traditional studios such as Netflix for the theatrical release of “Glass Onion: A Knives Out Mystery,” and through the success of International Cinema in attracting a wide Canadian audience. With the backdrop of recessionary concerns, Cineplex is well positioned across all its business units to further capitalize on consumer demand for affordable out-of-home entertainment,” Jacob concluded.
Key Developments in the Third Quarter of 2022
The following describes certain key business initiatives undertaken and results achieved during the third quarter of 2022 in each of Cineplex’s core business areas:
Film Entertainment and Content
- Reported third quarter box office revenues of $124.7 million, an increase of $30.6 million (32.5%) from $94.1 million due to a 34.0% increase in theatre attendance.
- Celebrated National Cinema Day on September 3, 2022, welcoming approximately 550,000 guests across the theatre exhibition circuit, representing the largest attendance for a single day for the year to date, and the third largest attendance for a single day in the last five years, following “Avengers: Endgame” that opened in April 2019 and “Avengers: Infinity War” that opened in April 2018.
- BPP was $11.25, $(0.13) or 1.1% lower than $11.38 reported during the prior year period. The decrease was primarily due to product offerings at discounted prices on National Cinema Day.
- Opened British Columbia’s second ScreenX auditorium at Cineplex Cinemas Langley.
Theatre Food Service
- Reported third quarter theatre food service revenues of $92.5 million, an increase of $21.6 million (30.4%) compared to the prior year period primarily due to a 34.0% increase in theatre attendance.
- National Cinema Day held on September 3, 2022, resulted in the second highest grossing food service revenue day of 2022.
- CPP was $8.35, representing a decrease of $0.23 or 2.7% when compared to the prior year period, primarily due to the impact of National Cinema Media Day held on September 3, 2022, attracting discount seekers, resulting in lower average consumer spend and purchase incidence among total guests visiting Cineplex’s theatre circuit on that day.
- Alternative Programming (Cineplex Events) in the third quarter of 2022 featured the return of violinist and conductor André Rieu’s summer concerts from Maastricht, Netherlands, the faith-based film Lifemark, and the return of stage events to the big screen with the National Theatre’s production of Prima Facie starring Jodie Comer.
- Cineplex Distribution (Cineplex Pictures) released the anime hit “Dragon Ball Super: Super Hero,” along with three international films “Chili Laugh Story” (China), The Killer (South Korea) and Khetet Mazinger (Egypt).
• Featured numerous strong performing international films, including Chhalla Mud Ke Nahi Aaya (Punjabi), Laal Singh Chaddha (Hindi) and Maid in Malacanang (Tagalog), of which Cineplex represented 80.0%, 42.0% and 37.5%, respectively, of the total North American market share.
- Total registered users for Cineplex Store increased 7% from the prior year period, reaching approximately 2.3 million
- Reported third quarter media revenues of $25.2 million, an increase of $11.2 million or 79.4% as compared to the prior year period.
- Reported third quarter cinema media revenues of $15.1 million, an increase of $8.5 million or 127.4% over the prior
year period, due to increases in cinema advertising as a result of increased theatre attendance and a return by advertisers
Digital Place-Based Media
- Reported third quarter revenues of $10.1 million, an increase of $2.7 million or 36.5% due to increased advertising at digital out of home networks and higher project installation revenues.
Amusement and Leisure
- Reported all-time quarterly record revenues in the third quarter of $69.6 million, an increase of $16.3 million or 30.5% compared to the prior year period.
Player One Amusement Group
- Reported third quarter record revenues of $45.5 million, an increase of $10.1 million or 28.4% compared to the prior year period. Adjusted EBITDAaL during the third quarter was an all-time quarterly record of $9.0 million, an increase of $2.0 million or 28.4% compared to the prior year period. The increase in revenues and adjusted EBITDAaL were primarily due to increases in P1AG amusement revenues from US and Canada route locations at FEC’s and theatres, along with an increase in distribution sales.
- Reported all-time record revenues in the third quarter of $31.0 million, an increase of $9.3 million or 42.5% compared to the prior year period. The current period included a third quarter record for food service revenues of $10.4 million, all-time quarterly record amusement revenues of $20.2 million and $0.5 million of media and other revenues. Adjusted EBITDAaL for the third quarter was an all-time quarterly record of $9.7 million, an increase of $0.5 million or 5.6% compared to the prior year period. The increase in revenues and adjusted EBITDAaL were primarily due to all LBE venues being open during the entire period compared to the prior year period that was subject to capacity restrictions.
- Membership in the Scene+ loyalty program increased to 10.8 million members during the period ended September 30, 2022.
- Welcomed Empire Company Limited as a co-owner of Scene+ during the third quarter, providing members with increased opportunities to earn and redeem points through Empire’s family of brands firstly in Atlantic Canada on August 11, 2022, in Western Canada on September 22, 2022, and across Canada by early 2023.
- Recognized a gain of $50.1 million on the disposition of its 1/6th ownership interest in Scene+, leaving a 1/3rd ownership interest in Scene+ with the satisfaction of specific non-financial milestones related to the reorganization of Scene+.
- Announced that Home Hardware Stores Limited will be joining Scene+ with a launch expected to take place in the summer of 2023, providing members with additional opportunities to earn and redeem points.
- In recognition of National Indigenous Peoples Day, Cineplex donated $1 from every movie ticket sold, plus every purchase on the Cineplex Store, at The Rec Room and Playdium, to imagineNATIVE, the world’s largest presenter of Indigenous screen content.
- Commemorated National Day for Truth and Reconciliation on September 30, 2022 by partnering with the Orange Shirt Society to raise awareness and honour Indigenous communities through Pre-Show content and through donations to the Orange Shirt Society.
- Fundraised and sponsored local Pride celebrations across Canada, including employee participation in select Pride parades, as well as made a corporate donation to Rainbow Railroad in support of LGBTQ2IA+ programs.
- Donated the proceeds raised during National Accessibility Week to the Canadian Paralympic Committee, an organization with a mission ensuring that people, programs, and equipment are in place so that Canadians with disabilities can be active in sports.
Cineplex (TSX:CGX) is a top-tier Canadian brand that operates in the Film Entertainment and Content, Amusement and Leisure, and Media sectors. Cineplex offers a unique escape from the everyday to millions of guests through its circuit of over 171 movie theatres and location-based entertainment venues. In addition to being Canada’s largest and most innovative film exhibitor, the company operates Canada’s favourite destination for ‘Eats & Entertainment’ (The Rec Room) and complexes specially designed for teens and families (Playdium). It also operates successful businesses in digital commerce (CineplexStore.com), alternative programming (Cineplex Events), cinema media (Cineplex Media), digital place-based media (Cineplex Digital Media “CDM”) and amusement solutions (Player One Amusement Group “P1AG”). Providing even more value for its guests, 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 10,000 people in its offices across Canada and the United States. To learn more visit Cineplex.com or download the Cineplex App.