TORONTO, Feb. 11, 2021 /CNW/ - (TSX: CGX) - Cineplex Inc.
("Cineplex" or the "Company") today released its financial results
for the three months and year ended December
31, 2020. Unless otherwise specified, all amounts are in
Canadian dollars.
"The COVID-19 pandemic has had an unprecedented impact on
Cineplex, along with the rest of the movie exhibition industry and
other industries in which we operate. Our teams worked diligently
throughout the year to mitigate the negative effects of COVID-19,
support the Company's long-term stability and implement industry
leading operating procedures focused on the health, safety and
well-being of its employees and guests," said Ellis Jacob, President & CEO, Cineplex.
"Specifically, during the fourth quarter we remained focused and
agile in adapting our operations, reducing expenses, and
strengthening Cineplex's liquidity. Key liquidity actions
included the receipt of $60 million
related to the reorganization of the SCENE loyalty program and
advancing the $57 million
sale-leaseback of our Head Office in Toronto, which closed in early January 2021. We also recently announced further
relief from certain financial covenants under our Credit Facilities
and the planned financing of a minimum $200
million in the form of Second Lien Secured Notes. These
initiatives, combined with our ongoing focus on minimizing cash
burn, will provide the liquidity we need to see us through the
pandemic recovery period as vaccines are rolled out, restrictions
are lifted and a return to normalcy begins."
"We know Canadians are going to be looking for safe and
affordable out of home entertainment choices coming out of the
pandemic and our focus right now is how best to leverage and
capitalize on this inevitable resurgence. We remain confident in
our strategy and will continue to take the necessary actions to
ensure that Cineplex not only survives, but thrives in the future,"
Mr. Jacob concluded.
Impact of the COVID-19 Pandemic
On March 16, 2020, Cineplex
announced the temporary closure of all of its theatres and LBE
venues across Canada, as well as
substantially all route locations operated by P1AG. On April 1, 2020, in response to applicable
government directives and guidance from Canadian public health
authorities, Cineplex announced that the closure of its theatres
and LBE venues across Canada would
remain in effect and that the reopening of such locations would be
reassessed as further guidance is provided by Canadian public
health authorities and applicable government authorities.
Cineplex was able to reopen a limited number of venues in late
June, and as government restrictions across the country were eased,
additional locations were opened. On August
21, 2020, Cineplex became one of the first of all the major
film exhibitors in the world to reopen its entire circuit of
theatres across Canada, including
location based entertainment venues. During this period, Cineplex
continued its negotiations with landlords, finalizing the majority
of discussions and realizing material reductions in rent payments
for both the closure period in the second, third, as well as for
the fourth quarter and future periods.
The COVID-19 pandemic has had a material negative effect on all
aspects of Cineplex's businesses resulting in material decreases in
revenues, results of operations and cash flows. Since March 15, 2020, Cineplex has experienced a net
cash burn of approximately $15
million to $20 million per
month as a result of having to close its theatres and LBE venues
(for Q4 2020 net cash burn was $74.3
million for the three months or approximately $24.8 million monthly) (see Non-GAAP measures
section of this news release). When used in this news release, net
cash burn is calculated as adjusted EBITDAaL less cash interest
(excluding amounts with respect to lease obligations), provision
for income taxes and net capital expenditures.
As some of Cineplex's largest expenses, such as film cost and
cost of food services, are fully variable, during the closure of
its theatres and LBE venues Cineplex focused on reducing its
largest fixed and semi-fixed expenses, including those attributed
to theatre payroll and theatre occupancy. As a result of the
measures described above and below, including receipt of assistance
under the CEWS, Cineplex was able to materially reduce theatre
payroll expenses from $41.9 million
reported in the fourth quarter of 2019 to approximately
$5.2 million in the fourth quarter of
2020. In total, Cineplex has received approximately $57.0 million in wage subsidies to end of the
fourth quarter, primarily under the CEWS program. With respect to
theatre occupancy expenses, Cineplex has worked with its landlord
partners to obtain relief measures, which resulted in significantly
reduced cash rent being paid in 2020 subsequent to the lockdowns.
During the fourth quarter Cineplex was able to reduce occupancy
costs by approximately $14.9 million.
Including the sale of certain restrictive lease rights to landlords
during the third quarter, on an annual basis Cineplex was able to
materially reduce net cash lease outflows by approximately
$72.5 million. The focus was on
identifying opportunities for lease-related abatements during the
closure period, converting fixed components of rent to variable
rent during the reopening period and looking for other
opportunities to extract value under its existing lease agreements.
With the second wave of COVID-19 resulting in another round of
closures in the fall and winter of 2020/2021, Cineplex continues to
work with landlord partners to obtain further relief.
Reopening Plans
Although restrictions on social gatherings were partially lifted
in many of the markets in which Cineplex operated during the third
quarter, social gathering restrictions were reinstituted in the
fourth quarter with the increased number of COVID-19 cases
throughout the country. The second wave of increased cases during
the fall months resulted in several provinces across Canada implementing mandatory lockdown
measures which have resulted in prolonged mandatory theatre
closures and operating restrictions on the LBE businesses. Due to
the uncertainty of the timing of the reductions of many
government-imposed restrictions and the potential long-term effects
that the COVID-19 pandemic may have on the exhibition and amusement
and leisure businesses, COVID-19 may have a prolonged negative
impact on Cineplex's operations. In addition, with the global delay
of exhibitors reopening, specifically those in California and New
York, distributors shifted the release dates of major movie
titles out of 2020 into 2021 and beyond, in an effort to maximize
box office revenues on the eventual release of such titles.
In addition, a limited number of previously expected theatrical
releases have instead been redirected to streaming services. The
impact of the reduction of new releases in the fourth quarter as a
result of these changes in combination with the ongoing and
potentially expanded restrictions on the reopening of Cineplex's
businesses, also negatively impacted the timing of Cineplex's
return to profitability.
In December 2020, Health Canada
approved and authorized the Pfizer-BioNTech and Moderna COVID-19
vaccines for use in Canada with
the first doses arriving during the holiday season. Canada has begun the inoculation process of
Canadians, starting with front line workers and high-risk
individuals with plans to start vaccinating the general population
during the spring of 2021, and having all Canadians immunized by
the fall of 2021. The efficient rollout of vaccines is a
significant leap forward to the return of normalcy and end of the
COVID-19 pandemic. However, the supply and roll-out of approved
vaccines in Canada has been
inconsistent to date and there can be no assurance that vaccines
will be widely available or distributed as currently anticipated,
which would delay a return to normalcy.
With the unknown duration of the pandemic and yet to be
determined timing of the phased complete reopening of Cineplex's
businesses, as well as consumers' future risk tolerance regarding
health matters, it is not possible to know the impact of the
pandemic on future results. However, Cineplex is optimistic that
the exhibition and amusement and leisure industries will recover
over time. Cineplex believes consumer demand for the theatrical
experience combined with a backlog of anticipated releases of
strong film content will help drive visitation, and that LBE
activities will increase as people seek out-of-home experiences
they have been restricted from enjoying for almost a year.
Management continues to pursue all viable options to maintain
adequate liquidity to fund operations for the currently anticipated
duration of the pandemic. During the fourth quarter, Cineplex
entered into an agreement to enhance and expand the SCENE
Scotiabank Loyalty program receiving $60.0
million with respect to the reorganization. In
addition, Cineplex continues to explore other measures to maintain
adequate liquidity, including but is not limited to planned asset
sales such as Cineplex's head office building in Toronto which was completed subsequent to year
end, additional financing sources and amendments to existing credit
facilities. All proceeds are used to repay the credit facilities,
in part as a permanent reduction.
Credit Facility Waiver
On February 8, 2020, Cineplex and Cineplex Entertainment
Limited Partnership entered into the third credit agreement
amendment with its lenders. The amendment provides Cineplex with
immediate financial covenant suspension in light of the COVID-19
pandemic and its effects on Cineplex's businesses, which will be
extended to the third quarter of 2021. As at December 31, 2020, an aggregate of $506.0 million was outstanding under the Credit
Facilities.
Other Matters
Non-cash impairment charges
During the quarter-ended December 31,
2020 the Company recorded $53.4
million in non-cash impairment charges related to goodwill
and property, equipment and leaseholds. The triggering event for
the re-evaluation was the ongoing COVID-19 pandemic and the
mandatory closure of theatres. Key contributors to the magnitude of
the charge include uncertainty of the length of the mandated
closures, initial delays in the vaccine roll out, and the changing
film release schedule, all impacting estimates regarding the
timeline of the business volumes return to normalized levels.
Repudiation of the Arrangement Agreement with
Cineworld
On June 12, 2020, Cineworld
delivered a notice to Cineplex purporting to terminate the
Arrangement Agreement dated December 15,
2019 between Cineplex and Cineworld (the "Arrangement
Agreement"). On July 3, 2020,
Cineplex announced that it had commenced an action in the Ontario
Superior Court of Justice against Cineworld and 1232743 B.C. Ltd. seeking damages arising from
what Cineplex claims was a wrongful repudiation of the Arrangement
Agreement. The claim seeks damages, including the approximately
$2.18 billion that Cineworld would
have paid upon the closing of the Cineworld Transaction for
Cineplex's securities, reduced by the value of the Cineplex
securities retained by its security holders, as well as
compensation for other losses including the failure of Cineworld to
repay or refinance Cineplex's approximately $664 million in debt and transaction
expenses.
On September 2, 2020, Cineworld
filed its Statement of Defence and Counterclaim in which it denied
Cineplex's claims and advanced a counterclaim seeking reimbursement
of an unspecified amount for costs incurred with respect to the
transaction and an unspecified amount for punitive damages.
Cineplex responded to Cineworld's defence and counterclaim on
September 15, 2020, denying all
claims levied by Cineworld.
While a trial date has been set for September 2021, due to uncertainties inherent in
litigation, it is not possible for Cineplex to predict the timing
or final outcome of the legal proceedings against Cineworld or to
determine the amount of damages, if any, that may be awarded.
Fourth Quarter Financial Results
|
|
|
|
|
2020
|
2019
|
Period over
Period
Change (i)
|
Total revenues
(ii)
|
$
|
52.5
|
million
|
$
|
443.2
|
million
|
-88.2 %
|
Theatre
attendance
|
0.8
|
million
|
16.8
|
million
|
-95.3 %
|
Net (loss) income
from continuing operations (iii)
|
$
|
(230.4)
|
million
|
$
|
4.7
|
million
|
NM
|
Net loss from
discontinued operations
|
$
|
—
|
million
|
$
|
(1.2)
|
million
|
NM
|
Net (loss) income
(iii)
|
$
|
(230.4)
|
million
|
$
|
3.5
|
million
|
NM
|
Box office revenues
per patron ("BPP") (iv)
|
$
|
9.23
|
|
$
|
10.79
|
|
-14.5 %
|
Concession revenues
per patron ("CPP") (iv)
|
$
|
9.06
|
|
$
|
6.81
|
|
33.0 %
|
Adjusted EBITDA
(iv)
|
$
|
(32.1)
|
million
|
$
|
106.5
|
million
|
NM
|
Adjusted EBITDAaL
(iii) (iv)
|
$
|
(65.9)
|
million
|
$
|
62.3
|
million
|
NM
|
Adjusted EBITDAaL
margin (iii) (iv)
|
(125.7)
|
%
|
14.1
|
%
|
-139.8 %
|
Adjusted free cash
flow (iv)
|
$
|
(30.5)
|
million
|
$
|
39.1
|
million
|
NM
|
Adjusted free cash
flow per common share of
Cineplex ("Share")
(iv)
|
$
|
(0.482)
|
|
$
|
0.618
|
|
NM
|
Earnings per Share
("EPS") from continuing
operations - basic and diluted (iii)
|
$
|
(3.64)
|
|
$
|
0.08
|
|
NM
|
EPS from discontinued
operations - basic and
diluted
|
$
|
—
|
|
$
|
(0.02)
|
|
NM
|
EPS - basic and
diluted (iii)
|
$
|
(3.64)
|
|
$
|
0.06
|
|
NM
|
Full Year Financial Results
|
|
|
|
|
2020
|
2019
|
Period over
Period
Change (i)
|
Total revenues
(ii)
|
$
|
52.5
|
million
|
$
|
443.2
|
million
|
-88.2 %
|
Theatre
attendance
|
0.8
|
million
|
16.8
|
million
|
-95.3 %
|
Net (loss) income
from continuing operations (iii)
|
$
|
(230.4)
|
million
|
$
|
4.7
|
million
|
NM
|
Net loss from
discontinued operations
|
$
|
—
|
million
|
$
|
(1.2)
|
million
|
NM
|
Net (loss) income
(iii)
|
$
|
(230.4)
|
million
|
$
|
3.5
|
million
|
NM
|
Box office revenues
per patron ("BPP") (iv)
|
$
|
9.23
|
|
$
|
10.79
|
|
-14.5 %
|
Concession revenues
per patron ("CPP") (iv)
|
$
|
9.06
|
|
$
|
6.81
|
|
33.0 %
|
Adjusted EBITDA
(iv)
|
$
|
(32.1)
|
million
|
$
|
106.5
|
million
|
NM
|
Adjusted EBITDAaL
(iii) (iv)
|
$
|
(65.9)
|
million
|
$
|
62.3
|
million
|
NM
|
Adjusted EBITDAaL
margin (iii) (iv)
|
(125.7)
|
%
|
14.1
|
%
|
-139.8 %
|
Adjusted free cash
flow (iv)
|
$
|
(30.5)
|
million
|
$
|
39.1
|
million
|
NM
|
Adjusted free cash
flow per common share of
Cineplex ("Share") (iv)
|
$
|
(0.482)
|
|
$
|
0.618
|
|
NM
|
Earnings per Share
("EPS") from continuing
operations - basic and diluted (iii)
|
$
|
(3.64)
|
|
$
|
0.08
|
|
NM
|
EPS from discontinued
operations - basic and
diluted
|
$
|
—
|
|
$
|
(0.02)
|
|
NM
|
EPS - basic and
diluted (iii)
|
$
|
(3.64)
|
|
$
|
0.06
|
|
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 2020 value less 2019 value.
|
ii.
|
All amounts are from
continuing operations.
|
iii.
|
2020 includes
expenses related to the Cineworld Transaction and associated
Litigation in the amount of $1.3 million for the fourth quarter and
$4.1 million for the full year.
|
iv.
|
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.
|
KEY DEVELOPMENTS IN 2020
The following describes certain key business initiatives
undertaken and results achieved during 2020 in each of Cineplex's
core business areas:
FILM ENTERTAINMENT AND CONTENT
Theatre Exhibition
- Government operating restrictions and mandated closures during
the fourth quarter resulted in the closure of most of Cineplex's
theatres by the end of the year.
- Reported annual box office revenues of $132.8 million, a 81.2% decrease from 2019 as a
result of the impact of the COVID-19 pandemic on theatre operations
commencing at the end of the first quarter.
- Opened two new ScreenX auditoriums: Scotiabank Theatre
Halifax in Nova Scotia and
Cineplex Cinemas Ottawa in Ontario.
- Converted four auditoriums to recliner seating during the
year.
- Announced a multi-year agreement with Universal Filmed
Entertainment Group that provides theatrical exclusivity of their
film releases for a shortened window of a minimum of 17 days up to
a maximum of 31 days after which the studio will have the option to
make its title available on Premium Video on Demand ("PVOD").
- Launched Private Movie Nights offering up to 20 guests to enjoy
a private moving-screening experience with more than 1,000 movies
to choose from.
Theatre Food Service
- Reported annual theatre food service revenues of $91.4 million, a 79.5% decrease from 2019 as a
result of the impact of COVID-19 on theatre operations.
- Expanded alcohol beverage service to an additional four
theatres, now totaling 91 (not including VIP auditoriums).
- Increased focus on home delivery services with Uber Eats and
Skip the Dishes as a result of the theatre and LBE restrictions and
closures, reporting annual theatre food service delivery revenues
of $8.4 million. During the year,
added five additional locations to the Uber Eats delivery platform,
and seven additional locations to the Skip the Dishes
platform.
Alternative Programming
- Alternative Programming (Cineplex Events) included the feature
release of On The Rocks, concerts included Stevie Nicks 24 Karat Gold and the
re-release of Break The Silence: The Movie starring BTS
along with anime title Fate/stay night [Heaven's Feel] III,
Akira 4K.
- Cineplex released the feature 100% Wolf on October 9, 2020 across the country with the
exception of Quebec. While
theatres did continue to shut down in most markets, the film
remained on-screen through mid-December and was in Cineplex's top
five films for the quarter.
Digital Commerce
- Experienced significant growth for the Cineplex Store
benefiting from PVOD releases including Wonder Woman 1984
and The Croods: A New Age.
- Total registered users for Cineplex Store increased by 39% from
the prior year, reaching over 1.9 million users.
- Cineplex Store continued to show significant growth with a 36%
increase over the prior year in active monthly users and an
increase of 57% in device activation compared to the prior
year.
- Cineplex offered a collection of "Understanding Black Stories"
films that were available free to rent or stream to support the
Black Lives Matter movement.
MEDIA
- Reported annual media revenues of $65.4
million, a decrease of $131.4
million or 66.8% compared to the prior year.
Cinema Media
- Cinema media reported annual revenues of $23.6 million in 2020, a decrease of $91.8 million or 79.6%, due to decreases in
show-time and pre-show advertising as a result of theatre closures
and limited film releases.
Digital Place-Based Media
- Reported annual revenues of $41.8
million in 2020, a decrease of $39.6
million or 48.6%, compared to 2019 mainly due to decreases
in recurring revenue and lower project installation revenues as a
result of COVID-19 and reductions in customers' business.
AMUSEMENT AND LEISURE
Amusement Solutions
- Reported annual revenues of $62.5
million in 2020 ($2.5 million
from Cineplex theatre gaming and $60.0
million from all other sources of revenues), a decrease of
$126.6 million as compared to the
prior year. The decrease is due to closures and capacity
restrictions of route operations that remained in effect for a
majority of the year and decreased distribution sales as a result
of the negative economic impact of COVID-19 across all
markets.
Location-based Entertainment
- Increased operating restrictions for non-essential businesses
in addition to new government mandated lockdown measures were
implemented across Canada in
response to the second wave of COVID-19, resulting in closures of
most LBE locations.
- Reported total annual revenues of $25.5
million including food service revenues of $9.1 million, amusement revenues of $15.4 million and other revenues of $1.0 million, a decrease of $53.7 million or 67.8% as compared to 2019 due to
closures and capacity restrictions on locations that were able to
open.
- Opened The Rec Room at Seasons of Tuxedo in Winnipeg, Manitoba, on February 18, 2020, the eighth location of The
Rec Room.
- Terminated its partnership with Topgolf in the third quarter of
2020.
LOYALTY
- Membership in the SCENE loyalty program increased by 0.1
million in 2020, reaching 10.4 million members at December 31, 2020.
- Cineplex entered into an agreement with Scotiabank to bring
together the full benefits of SCENE with Scotia Rewards,
Scotiabank's flexible customer loyalty program. The repositioning
includes adding new rewards partners, driving value through future
consolidation of SCENE and Scotia Rewards. Cineplex received cash
proceeds of $60.0 million for the
reorganization of its joint operation with SCENE.
- During the year, SCENE announced a strategic three-year
extension with its long-standing partners at Recipe Unlimited
Corporation.
CORPORATE
- On June 12, 2020, Cineworld
delivered the Termination Notice to Cineplex purporting to
terminate the Arrangement Agreement. Cineplex has commenced legal
action against Cineworld for its wrongful termination of the
Agreement.
- On June 29, 2020, Cineplex and
Cineplex Entertainment Limited Partnership entered into an
amendment agreement with The Bank of Nova
Scotia, as administrative agent, and the lenders from time
to time named therein, to the seventh amended and restated credit
agreement with a syndicate of lenders.
- Cineplex completed the offering of $316.3 million aggregate principal amount of
convertible unsecured subordinated debentures on July 17, 2020.
- In July, Cineplex announced a cost restructuring program
incurring $8.3 million in related
costs during the year.
- On June 29,2020, Cineplex sold
its interest in World Gaming Network for a nominal amount.
- Cineplex announced the appointment and return of Phyllis Yaffe to the Board of Directors. Ms.
Yaffe returned to the role of Board Chair, replacing Ian Greenberg who did not stand for re-election
at the Annual and Special Meeting of shareholders held in
October 2020.
- On November 12, 2020, Cineplex
and Cineplex Entertainment Limited Partnership entered into the
Second Credit Agreement Amendment with the Bank of Nova Scotia, as administrative agent, and the
lenders from time to time named therein, to the seventh amended and
restated credit agreement with a syndicate of lenders.
- During the year, Cineplex initiated a process to sell its head
office building located at 1303 Yonge Street and 1257 Yonge Street,
Toronto, Ontario. Subsequent to
period end, Cineplex completed a sale-leaseback transaction for
cash proceeds of $57.0 million.
OPERATING RESULTS FOR THE THREE MONTHS AND YEAR ENDED
DECEMBER 31, 2020
Total revenues
Total revenues for the three months ended December 31, 2020 decreased $390.8 million (88.2%) to $52.5 million as compared to the prior year
period. Total revenues for the year ended December 31, 2020 decreased $1.2 billion (74.9%) to $418.3 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
two periods is provided below.
Non-GAAP measures discussed throughout this news release,
including adjusted EBITDA, adjusted EBITDAaL, adjusted store level
EBITDAaL, adjusted EBITDAaL margin, adjusted store level EBITDAaL
margin, 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 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 and the full
year (in thousands of dollars, except theatre attendance reported
in thousands of patrons and per patron amounts, unless otherwise
noted):
|
|
|
Box office
revenues
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Box office
revenues
|
$
|
7,260
|
|
$
|
181,789
|
|
-96.0
|
%
|
$
|
132,820
|
|
$
|
705,521
|
|
-81.2
|
%
|
Theatre attendance
(i)
|
786
|
|
16,849
|
|
-95.3
|
%
|
13,065
|
|
66,360
|
|
-80.3
|
%
|
Box office revenue
per patron (i)
|
$
|
9.23
|
|
$
|
10.79
|
|
-14.5
|
%
|
$
|
10.17
|
|
$
|
10.63
|
|
-4.3
|
%
|
BPP excluding premium
priced product (i)
|
$
|
8.61
|
|
$
|
9.40
|
|
-8.4
|
%
|
$
|
9.18
|
|
$
|
9.17
|
|
0.1
|
%
|
Same theatre box
office revenues (i)
|
$
|
7,177
|
|
$
|
180,184
|
|
-96.0
|
%
|
$
|
130,124
|
|
$
|
694,360
|
|
-81.3
|
%
|
Same theatre
attendance (i)
|
778
|
|
16,686
|
|
-95.3
|
%
|
12,825
|
|
65,342
|
|
-80.4
|
%
|
% Total box from
premium priced product (i)
|
19.1
|
%
|
38.7
|
%
|
-19.6
|
%
|
28.1
|
%
|
41.7
|
%
|
-13.6
|
%
|
(i) See Non-GAAP
measures section of this news release.
|
|
|
|
Box office
continuity
|
Fourth
Quarter
|
Full
Year
|
|
Box
Office
|
Theatre
Attendance
|
Box
Office
|
Theatre
Attendance
|
2019 as
reported
|
$
|
181,789
|
16,849
|
$
|
705,521
|
66,360
|
Same theatre
attendance change
|
(171,789)
|
(15,908)
|
(558,074)
|
(52,517)
|
Impact of same
theatre BPP change
|
(1,220)
|
—
|
(6,163)
|
—
|
New and acquired
theatres (i)
|
(535)
|
(45)
|
(4,278)
|
(299)
|
Disposed and closed
theatres (i)
|
(985)
|
(110)
|
(4,186)
|
(479)
|
2020 as
reported
|
$
|
7,260
|
786
|
$
|
132,820
|
13,065
|
(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.
|
Fourth Quarter and Full Year
|
|
|
|
|
|
Fourth Quarter
2020 Top Cineplex Films
|
3D
|
%
Box
|
Fourth Quarter
2019 Top Cineplex Films
|
3D
|
%
Box
|
1
|
Honest
Thief
|
|
11.9
|
%
|
1
|
Joker
|
|
15.4
|
%
|
2
|
Tenet
|
|
11.3
|
%
|
2
|
Frozen II
|
√
|
14.4
|
%
|
3
|
The War With
Grandpa
|
|
10.3
|
%
|
3
|
Star Wars: The Rise
Of Skywalker
|
√
|
13.9
|
%
|
4
|
The Croods: A New
Age
|
|
7.6
|
%
|
4
|
Jumanji: The Next
Level
|
√
|
7.3
|
%
|
5
|
100% Wolf
|
|
5.3
|
%
|
5
|
Maleficent: Mistress
Of Evil
|
√
|
3.6
|
%
|
|
|
|
|
|
|
|
|
Full Year 2020 Top
Cineplex Films
|
3D
|
%
Box
|
Full Year 2019 Top
Cineplex Films
|
3D
|
%
Box
|
1
|
1917
|
|
8.1
|
%
|
1
|
Avengers:
Endgame
|
√
|
8.6
|
%
|
2
|
Star Wars: The Rise
of Skywalker
|
√
|
7.7
|
%
|
2
|
The Lion
King
|
√
|
4.7
|
%
|
3
|
Jumanji: The Next
Level
|
√
|
7.6
|
%
|
3
|
Captain
Marvel
|
√
|
4.3
|
%
|
4
|
Bad Boys For
Life
|
|
7.2
|
%
|
4
|
Joker
|
|
4.0
|
%
|
5
|
Sonic The
Hedgehog
|
|
5.4
|
%
|
5
|
Frozen II
|
√
|
3.7
|
%
|
Fourth Quarter and Full Year
Box office revenues Box office revenues decreased $174.5 million, or 96.0%, to $7.3 million during the fourth quarter of 2020,
compared to $181.8 million recorded
in the same period in 2019. This decrease was due to a 95.3%
decrease in theatre attendance as a result of mandatory lockdown
measures during the fourth quarter of 2020 in many provinces in
response to the second wave of rising COVID-19 infections, as well
as reduced seating capacity restrictions in venues that were open
and limited first run film product.
BPP for the three months ended December
31, 2020 was $9.23, a
$1.56 decrease from the prior year
period as a result of lower ticket pricing on classic film product,
SCENE promotions and reduced premium offerings.
Box office revenues for the year ended December 31, 2020 were $132.8 million, a decrease of $572.7 million or 81.2% from the prior year. The
decrease in box office revenues was primarily due to a 80.3%
decrease in theatre attendance as a result of the negative impact
of COVID-19 government mandated restrictions that have kept a
theatres closed or operating below full capacity for a majority of
the year.
Cineplex's BPP for the year ended December 31, 2020 decreased $0.46, or 4.3%, from $10.63 in 2019 to $10.17 in 2020. This decrease was primarily due
to lower ticket pricing on previously released content with limited
new film releases during the year as a distributors have continued
to push their film slates further out in the calendar and into
2021.
Food service revenues
The following table highlights the movement in food service
revenues, theatre attendance and CPP for the quarter and the full
year (in thousands of dollars, except theatre attendance and same
theatre attendance reported in thousands of patrons and per patron
amounts):
|
|
|
Food service
revenues
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Food service -
theatres
|
$
|
7,122
|
$
|
114,678
|
-93.8
|
%
|
$
|
91,384
|
$
|
446,639
|
-79.5
|
%
|
Food delivery -
theatres
|
2,660
|
—
|
NM
|
8,175
|
—
|
NM
|
Food service -
LBE
|
632
|
10,481
|
-94.0
|
%
|
$
|
8,882
|
36,691
|
-75.8
|
%
|
Food delivery -
LBE
|
129
|
—
|
NM
|
191
|
—
|
NM
|
Total food service
revenues
|
$
|
10,543
|
$
|
125,159
|
-91.6
|
%
|
$
|
108,632
|
$
|
483,330
|
-77.5
|
%
|
Theatre attendance
(i)
|
786
|
16,849
|
-95.3
|
%
|
13,065
|
66,360
|
-80.3
|
%
|
CPP (i)
(ii)
|
$
|
9.06
|
$
|
6.81
|
33.0
|
%
|
$
|
6.99
|
$
|
6.73
|
3.9
|
%
|
Same theatre food
service revenues (i)
|
$
|
7,131
|
$
|
113,706
|
-93.7
|
%
|
$
|
89,282
|
$
|
439,444
|
-79.7
|
%
|
Same theatre
attendance (i)
|
778
|
16,686
|
-95.3
|
%
|
12,825
|
65,342
|
-80.4
|
%
|
|
|
|
|
|
|
|
|
(i) See Non-GAAP
measures section of this news release.
|
(ii) Food service
revenue from LBE and delivery is not included in the CPP
calculation.
|
|
|
|
Theatre food
service revenue continuity
|
Fourth
Quarter
|
Full
Year
|
|
Theatre Food
Service
|
Theatre
Attendance
|
Theatre Food
Service
|
Theatre
Attendance
|
2019 as
reported
|
$
|
114,678
|
16,849
|
$
|
446,639
|
66,360
|
Same theatre
attendance change
|
(111,112)
|
(15,908)
|
(361,365)
|
(52,517)
|
Impact of same
theatre CPP change
|
4,444
|
—
|
11,205
|
—
|
New and acquired
theatres (i)
|
(293)
|
(45)
|
(2,462)
|
(299)
|
Disposed and closed
theatres (i)
|
(595)
|
(110)
|
(2,633)
|
(479)
|
2020 as
reported
|
$
|
7,122
|
786
|
$
|
91,384
|
13,065
|
(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.
|
Fourth Quarter and Full Year
Food service revenues are comprised primarily of concession
revenues, which includes food service sales at theatre locations
and through delivery services including Uber Eats and Skip the
Dishes. Food service revenues also include food and beverage sales
at LBE venues, The Rec Room and Playdium.
Food services revenues were materially impacted by the
government mandated capacity restrictions and closures of theatres
and LBE venues as a result of COVID-19. Food delivery sales
continue to produce strong results with quarterly revenues of
$2.8 million. Theatre food service
revenues decreased $107.6 million
(93.8%) as compared to the prior year period to $7.1 million.
CPP increased 33.0% as compared to the prior year period to
$9.06 from $6.81. The increase in CPP compared to the prior
period is largely attributable to increased concession purchases as
a result of customers excited to return to the theatre incurring a
higher spend per visit in addition to a higher percentage of
theatres open in provinces that historically have a higher CPP.
Annual food service revenues decreased $374.7 million, or 77.5% as compared to the prior
year to $108.6 million, due to impact
of COVID-19 on its business. Cineplex continued to provide home
delivery services through Uber Eats and Skip the Dishes and
reported revenues of $8.4
million.
Media revenues
The following table highlights the movement in media revenues
for the quarter and the full year (in thousands of dollars):
|
|
|
Media
revenues
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Cinema
media
|
$
|
1,368
|
$
|
42,171
|
-96.8
|
%
|
$
|
23,568
|
$
|
115,415
|
-79.6
|
%
|
Digital place-based
media
|
11,128
|
27,374
|
-59.3
|
%
|
41,790
|
81,340
|
-48.6
|
%
|
Total media revenues
from continuing operations
|
$
|
12,496
|
$
|
69,545
|
-82.0
|
%
|
$
|
65,358
|
$
|
196,755
|
-66.8
|
%
|
Media revenues from
discontinued operations
|
—
|
248
|
-100.0
|
%
|
602
|
1,075
|
-44.0
|
%
|
Total media
revenues
|
$
|
12,496
|
$
|
69,793
|
-82.1
|
%
|
$
|
65,960
|
$
|
197,830
|
-66.7
|
%
|
Fourth Quarter and Full Year
Total media revenues from continuing operations decreased 82.0%
to $12.5 million in the fourth
quarter of 2020 compared to the prior year period. This decrease
was due to a $40.8 million decrease
in cinema media and $16.2 million decrease in digital
place-based media. The second wave of rising COVID-19 infections
during the fourth quarter further prolonged the closure of theatres
leading to a sharp decline in pre-show and show-time revenues which
have historically provided strong results during the holiday
season. Further, re-imposed mandatory lockdown measures during the
fourth quarter kept many malls and restaurants closed for a
majority of the quarter leading to a decline in installation and
digital advertising revenues.
Total media revenues from continuing operations decreased
$131.4 million, or 66.8%, in the year
ended December 31, 2020 compared to
the prior year to $65.4 million. This
decrease was due to a $91.8 million decrease in cinema media
revenue primarily as a result of a decrease in pre-show advertising
and show time advertising revenue due to theatre closures and
limited first run film product available. In addition, digital
place-based media decreased $39.6
million as compared to the prior period. The decrease
compared to the prior period is primarily attributable to a
decrease in media hardware sales, and digital media revenue as a
result of mall and theatre closures that have remained in effect
for a majority of the year due to the COVID-19 pandemic.
Amusement Revenues
The following table highlights the movement in amusement
revenues for the quarter and the full year (in thousands of
dollars):
|
|
|
Amusement
revenues
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Amusement - P1AG
excluding Cineplex exhibition and LBE (i)
|
$
|
11,815
|
$
|
39,931
|
-70.4
|
%
|
$
|
60,027
|
$
|
178,209
|
-66.3
|
%
|
Amusement - Cineplex
exhibition (i)
|
130
|
2,668
|
-95.1
|
%
|
2,457
|
10,907
|
-77.5
|
%
|
Amusement -
LBE
|
1,652
|
10,872
|
-84.8
|
%
|
15,417
|
39,115
|
-60.6
|
%
|
Total amusement
revenues
|
$
|
13,597
|
$
|
53,471
|
-74.6
|
%
|
$
|
77,901
|
$
|
228,231
|
-65.9
|
%
|
(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
LBE reflects P1AG's gross amusement revenues, net of the venue
revenue share paid to Cineplex reflected in Amusement - Cineplex
exhibition above.
|
Fourth Quarter and Full Year
Amusement revenues decreased $39.9
million (74.6%) to $13.6
million during the quarter compared to the prior year
period. For the full year period, amusement revenues decreased by
$150.3 million (65.9%) to
$77.9 million. The quarterly and full
year decrease in revenue was primarily due to the government
mandated closures of P1AG route locations, Cineplex theatres and
LBE venues due to COVID-19 implemented throughout the second to
fourth quarters.
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 and
the full year (in thousands of dollars):
|
|
|
Other
revenues
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Other revenues from
continuing operations
|
$
|
8,556
|
$
|
13,256
|
-35.5
|
%
|
$
|
33,552
|
$
|
51,309
|
-34.6
|
%
|
Other revenues from
discontinued operations
|
—
|
—
|
NM
|
199
|
16
|
NM
|
Total other
revenues
|
$
|
8,556
|
$
|
13,256
|
-35.5
|
%
|
$
|
33,751
|
$
|
51,325
|
-34.2
|
%
|
Fourth Quarter and Full Year
The quarterly and annual decreases in other revenues from
continuing operations were primarily due to the suspension of the
recognition of deferred revenues on gift card and other related
products during the shutdown of theatre and LBE venues. In
addition, the shutdown reduced other ancillary revenues generated
from theatres, such as venue rentals. This decrease was partially
offset by higher sales from Cineplex Store during the year
resulting from the widespread closures and lockdowns across all
businesses and the strength of PVOD titles including Wonder
Woman 1984.
Film cost
The following table highlights the movement in film cost and the
film cost percentage for the quarter and the full year (in
thousands of dollars, except film cost percentage):
|
|
|
Film
cost
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Film cost
|
$
|
3,151
|
|
$
|
93,925
|
|
-96.6
|
%
|
$
|
66,922
|
|
$
|
369,386
|
|
-81.9
|
%
|
Film cost percentage
(i)
|
43.4
|
%
|
51.7
|
%
|
-8.3
|
%
|
50.4
|
%
|
52.4
|
%
|
-2.0
|
%
|
(i) See Non-GAAP
measures section of this news release.
|
Fourth Quarter and Full Year
Film cost varies primarily with box office revenues, and can
vary from quarter to quarter usually based on the relative strength
of the titles exhibited during the period, impacted by film cost
terms varying by title and distributor.
Film costs decreased during the fourth quarter and annual period
due to limited releases of first run product and lower settlement
rates on older and classic film products. Due to the ongoing
pandemic, major distributors have continued to delay films which
were initially scheduled to release in 2020 further into 2021 and
beyond or have released via other platforms.
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
LBE for the quarter and the full year (in thousands of
dollars, except percentages and margins per patron):
|
|
|
Cost of food
service
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Cost of food service
- theatre
|
$
|
3,704
|
|
$
|
25,223
|
|
-85.3
|
%
|
$
|
27,845
|
|
$
|
97,306
|
|
-71.4
|
%
|
Cost of food service
- LBE
|
285
|
|
2,478
|
|
-88.5
|
%
|
2,822
|
|
9,517
|
|
-70.3
|
%
|
Total cost of food
service
|
$
|
3,989
|
|
$
|
27,701
|
|
-85.6
|
%
|
$
|
30,667
|
|
$
|
106,823
|
|
-71.3
|
%
|
Theatre concession
cost percentage (i)
|
37.9
|
%
|
22.0
|
%
|
15.9
|
%
|
28.0
|
%
|
21.8
|
%
|
6.2
|
%
|
LBE food cost
percentage (i)
|
37.4
|
%
|
23.6
|
%
|
13.8
|
%
|
31.1
|
%
|
25.9
|
%
|
5.2
|
%
|
Theatre concession
margin per patron (i)
|
$
|
5.63
|
|
$
|
5.31
|
|
6.0
|
%
|
$
|
5.04
|
|
$
|
5.26
|
|
-4.2
|
%
|
|
|
|
|
|
|
|
(i) See Non-GAAP
measures section of this news release.
|
Fourth Quarter and Full Year
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 LBE venues varies primarily with
the volume of guests who visit the locations as well as the
quantity and mix between food and beverage items sold. The increase
in theatre and LBE food cost percentages as compared to the prior
period is primarily due to increases in prepackaged products
associated with food delivery services, and a decrease in groups
and events bookings which have historically reduced the average
cost of food purchases and increased reserves taken for perishable
concession items as a result of year end closures.
Decreases in cost of food service for both segments are
primarily attributable to the temporary capacity restrictions and
mandated closures at Cineplex's theatres and LBE locations.
Cineplex opened a limited number of theatres and LBE locations,
which were then subsequently closed as several provinces across
Canada experienced a surge in
COVID-19 cases during the fourth quarter, further limiting the
reopening phase of theatre circuits. Increases in theatre and LBE
food cost percentages were primarily due to lower volumes of foods
sales, and increased reserves taken on perishable concession items
as a result of year end closures after limited openings during the
summer and fall periods.
Depreciation and amortization
The following table highlights the movement in depreciation and
amortization expenses during the quarter and the full year (in
thousands of dollars):
|
|
|
Depreciation and
amortization expenses
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Depreciation of
property, equipment and leaseholds
|
$
|
27,043
|
$
|
29,967
|
-9.8
|
%
|
$
|
113,346
|
$
|
116,911
|
-3.0
|
%
|
Amortization of
intangible assets and other
|
1,707
|
3,168
|
-46.1
|
%
|
11,500
|
11,972
|
-3.9
|
%
|
Sub-total -
depreciation and amortization - other assets
|
$
|
28,750
|
$
|
33,135
|
-13.2
|
%
|
$
|
124,846
|
$
|
128,883
|
-3.1
|
%
|
Depreciation -
right-of-use assets
|
28,136
|
36,471
|
-22.9
|
%
|
128,393
|
145,946
|
-12.0
|
%
|
Total depreciation
and amortization from continuing operations
|
$
|
56,886
|
$
|
69,606
|
-18.3
|
%
|
$
|
253,239
|
$
|
274,829
|
-7.9
|
%
|
Depreciation and
amortization from discontinued operations
|
—
|
—
|
NM
|
—
|
3,623
|
-100.0
|
%
|
Total depreciation
and amortization
|
$
|
56,886
|
$
|
69,606
|
-18.3
|
%
|
$
|
253,239
|
$
|
278,452
|
-9.1
|
%
|
Fourth Quarter and Full Year
Depreciation of property, equipment and leaseholds from
continuing operations decreased by $2.9
million, or 9.8% during the quarter compared to the
prior year period, and by $3.6
million or 3.0% for the year compared to the prior year
period. The decrease was due to the impact of the impairment
recorded in the first quarter of 2020 on the carrying amount of
long-lived assets.
The quarterly and annual amortization of intangible assets and
other from continuing operations decreased as compared to the prior
year periods as a result of fully depreciated intangible
assets.
The quarterly and annual decrease in depreciation of
right-of-use assets from continuing operations was due to reduced
carrying values resulting from the impairment recorded in the first
quarter of 2020 in addition to modifications to lease agreements
related to COVID-19 that reduced the carrying value of these
assets.
Impairment of long-lived assets, goodwill and
investments
The following table highlights the movement in impairment of
long-lived assets and goodwill during the quarter and the full year
(in thousands of dollars):
|
|
|
Impairment of
long-lived assets, goodwill and investments
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Impairment of
property, equipment and leaseholds
|
$
|
(5,243)
|
$
|
—
|
NM
|
$
|
(39,192)
|
$
|
—
|
NM
|
Impairment of
right-of-use assets
|
(21,236)
|
—
|
NM
|
(71,846)
|
—
|
NM
|
Impairment of
goodwill
|
(26,906)
|
—
|
NM
|
(181,035)
|
—
|
NM
|
Impairment of
investments
|
(2,790)
|
—
|
NM
|
(2,790)
|
—
|
NM
|
Impairment of
long-lived assets, goodwill and investments
|
$
|
(56,175)
|
$
|
—
|
NM
|
$
|
(294,863)
|
$
|
—
|
NM
|
Fourth Quarter and Full Year
With the closure of its operations on March 16, 2020 as a result of the declaration of
a global pandemic, and the ensuing negative impact on Cineplex's
businesses throughout the remainder of the year, triggering events
for purposes of testing long-lived assets and goodwill for
impairment occurred at each quarter end.
At each of March 31st and
September 30th carrying values of
assets were tested for recoverability measured as the fair value
based on internal budgets which reflected the negative impact of
the COVID-19 pandemic on Cineplex's current and future
results. Where the carrying value of assets were assessed as
exceeding the recoverable value of those assets at those points in
time, impairments were recognized. As at June 30th, management determined that there were
no material changes in key judgements or assumptions from those
determined as at March 31st and
therefore concluded that there was no impairment as at June 30th.
In addition to its required annual testing for impairment of
goodwill and indefinite-lived intangible assets in the fourth
quarter, the closure of most theatre and location-based
entertainment operations resulted in further decreases in revenues,
results of operations and cash flows which represented an indicator
to trigger impairment testing for both long-lived assets and
goodwill at December 31, 2020. Based
on the results of the impairment tests, Cineplex recognized
non-cash impairment charges of $53.4
million ($26.9 million to
goodwill and $26.5 million to
tangible and right-of-use assets) for the three months ended
December 31, 2020 and $292.1 million ($181.0
million to goodwill and $111.1
million to tangible and right-of-use assets) for the full
year.
Where an impairment has been recorded with respect to a
long-lived asset, it will be reversed when and if the recoverable
value of the related asset increases. Management will monitor and
re-assess the recoverable value of the impaired assets, reversing
the impairments where it increases. Impairments recorded with
respect to goodwill cannot be reversed.
If the return to business continues to be delayed as a result of
actions outside of the control of management, including but not
limited to additional changes to the film slate release schedule,
ongoing government restrictions impacting the re-opening of
entertainment venues and delays in the vaccine roll out,
management's estimates of operating results and further cash flows
for the forecasted period may be negatively impacted. As a result,
they may be insufficient to support the recoverability of goodwill
and long lived assets in certain CGUs, thus requiring further
impairment charges. Cineplex will continue to evaluate the
recoverability of goodwill at the cash generating unit level on an
annual basis during its fourth quarter and whenever events or
changes in circumstances indicate there may be a potential
impairment.
During the quarter, Cineplex assessed the recoverability of its
investment in VR Studios Inc. and recognized impairment of
$2.8 million, reducing the carrying
value of its investment to $nil.
Impairment of intangible assets - discontinued
operations
The following table highlights the movement in impairment of
intangible assets - discontinued operations during the quarter and
the full year (in thousands of dollars):
|
|
|
Impairment of
intangible assets - discontinued operations
|
Fourth
Quarter
|
Full
Year
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Impairment of
intangible assets - discontinued operations
|
$
|
—
|
$
|
—
|
NM
|
$
|
5,156
|
$
|
—
|
NM
|
Intangible assets included in assets held for sale were written
down prior to disposition to reflect their expected net realizable
value.
(Gain) loss on disposal of assets
The following table shows the movement in the loss on disposal
of assets during the quarter and the full year (in thousands of
dollars):
|
|
|
(Gain) loss on
disposal of assets
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
(Gain) loss on
disposal from continuing operations
|
$
|
(283)
|
$
|
868
|
NM
|
$
|
(13,101)
|
$
|
1,764
|
NM
|
Loss on disposal from
discontinued operations
|
—
|
—
|
NM
|
129
|
—
|
NM
|
(Gain) loss on
disposal of assets
|
$
|
(283)
|
$
|
868
|
NM
|
$
|
(12,972)
|
$
|
1,764
|
NM
|
The quarterly and annual movements in (gain) loss on disposal of
assets from continuing operations as compared to the prior year
periods were due mainly to the negotiated sale of certain
restrictive lease rights completed during the third quarter.
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 include
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 and the full year (in thousands of dollars):
|
|
|
Other
costs
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Theatre occupancy
expenses
|
$
|
9,891
|
$
|
18,493
|
-46.5
|
%
|
$
|
60,514
|
$
|
71,867
|
-15.8
|
%
|
Other operating
expenses
|
55,567
|
167,416
|
-66.8
|
%
|
276,092
|
629,849
|
-56.2
|
%
|
General and
administrative expenses
|
11,755
|
29,014
|
-59.5
|
%
|
39,084
|
80,977
|
-51.7
|
%
|
Total other costs
from continuing operations
|
$
|
77,213
|
$
|
214,923
|
-64.1
|
%
|
$
|
375,690
|
$
|
782,693
|
-52.0
|
%
|
Other costs from
discontinued operations
|
—
|
1,471
|
NM
|
2,212
|
7,001
|
-68.4
|
%
|
Total other
costs
|
$
|
77,213
|
$
|
216,394
|
-64.3
|
%
|
$
|
377,902
|
$
|
789,694
|
-52.1
|
%
|
Theatre occupancy expenses
The following table highlights the movement in theatre occupancy
expenses for the quarter and the year to date (in thousands of
dollars):
|
|
|
Theatre occupancy
expenses
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Cash rent
paid/payable (i)
|
$
|
23,727
|
$
|
39,042
|
-39.2
|
%
|
$
|
109,161
|
$
|
156,921
|
-30.4
|
%
|
Other
occupancy
|
12,820
|
18,545
|
-30.9
|
%
|
65,545
|
73,736
|
-11.1
|
%
|
One-time items
(ii)
|
(169)
|
(62)
|
NM
|
(2,108)
|
(2,275)
|
-7.3
|
%
|
Total theatre
occupancy including cash lease payments paid/payable
|
$
|
36,378
|
$
|
57,525
|
-36.8
|
%
|
$
|
172,598
|
$
|
228,382
|
-24.4
|
%
|
Cash rent
paid/payable related to lease obligations (iii) (v)
|
(26,487)
|
(39,032)
|
-32.1
|
%
|
(112,084)
|
(156,515)
|
-28.4
|
%
|
Theatre occupancy as
reported
|
$
|
9,891
|
$
|
18,493
|
-46.5
|
%
|
$
|
60,514
|
$
|
71,867
|
-15.8
|
%
|
(i) Represents the
cash payments for theatre rent paid or payable during the
quarter.
|
|
(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) Cash rent
paid/payable that has been reallocated to offset the lease
obligations.
|
|
|
|
Theatre occupancy
continuity
|
Fourth
Quarter
|
Year to
Date
|
|
Occupancy
|
Occupancy
|
2019 as
reported
|
$
|
18,493
|
$
|
71,867
|
Impact of new and
acquired theatres
|
(20)
|
580
|
Impact of disposed
theatres
|
(251)
|
(1,241)
|
Same theatre rent
change (i)
|
(15,094)
|
(44,623)
|
One-time
items
|
(107)
|
167
|
Other
|
(5,675)
|
(10,667)
|
Impact of IFRS 16
adoption:
|
|
|
Cash rent
paid/payable related to lease obligations
|
12,545
|
44,431
|
2020 as
reported
|
$
|
9,891
|
$
|
60,514
|
(i) See Non-GAAP
measures section of this news release.
|
|
|
Fourth Quarter
Theatre occupancy expenses decreased $8.6
million during the fourth quarter of 2020 compared to the
prior year period. This decrease was primarily due to the
rent relief measures Cineplex has undertaken with landlord partners
resulting in lower theatre rent related expense including common
area maintenance and taxes as compared to the prior year period. In
addition, the decrease compared to the prior period can be
attributed to rent and realty tax subsidies totaling $2.8 million and $3.2
million, of which $2.7 million
and $2.9 million were offset against
theatre occupancy costs during the period, respectively.
Full Year
The decrease in theatre occupancy expenses of $11.4 million for the 2020 year compared the
prior year was mainly due to lower theatre rent related expense
including common area maintenance and taxes as compared to the
prior year period, net of rent and realty tax subsidies
received.
Other operating expenses
The following table highlights the movement in other operating
expenses during the quarter and the full year (in thousands of
dollars):
|
|
|
Other operating
expenses
|
Fourth
Quarter
|
Year to
Date
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|
|
|
|
|
|
|
Theatre
payroll
|
$
|
5,157
|
$
|
41,925
|
-87.7
|
%
|
$
|
40,689
|
$
|
160,593
|
-74.7
|
%
|
Theatre operating
expenses
|
12,717
|
32,986
|
-61.4
|
%
|
61,359
|
121,833
|
-49.6
|
%
|
Media
|
8,513
|
27,762
|
-69.3
|
%
|
42,913
|
88,621
|
-51.6
|
%
|
P1AG
|
15,494
|
36,818
|
-57.9
|
%
|
71,638
|
156,687
|
-54.3
|
%
|
LBE (i)
|
5,037
|
14,692
|
-65.7
|
%
|
26,731
|
53,110
|
-49.7
|
%
|
LBE pre-opening
(ii)
|
785
|
603
|
30.3
|
%
|
1,907
|
2,447
|
-22.1
|
%
|
SCENE
|
4,890
|
2,470
|
98.0
|
%
|
13,423
|
15,549
|
-13.7
|
%
|
Marketing
|
2,136
|
5,128
|
-58.3
|
%
|
7,223
|
16,254
|
-55.6
|
%
|
Other
(iii)
|
5,093
|
9,686
|
-47.4
|
%
|
24,389
|
32,879
|
-25.8
|
%
|
Other operating
expenses including cash lease payments
|
$
|
59,822
|
$
|
172,070
|
-65.2
|
%
|
$
|
290,272
|
$
|
647,973
|
-55.2
|
%
|
Cash rent
paid/payable related to lease obligations (iv)
|
(4,255)
|
(4,654)
|
-8.6
|
%
|
(14,180)
|
(18,124)
|
-21.8
|
%
|
Other operating
expenses from continuing operations
|
$
|
55,567
|
$
|
167,416
|
-66.8
|
%
|
$
|
276,092
|
$
|
629,849
|
-56.2
|
%
|
Other operating
expenses from discontinued operations
|
—
|
1,471
|
NM
|
2,212
|
7,001
|
-68.4
|
%
|
Total other operating
expenses
|
$
|
55,567
|
$
|
168,887
|
-67.1
|
%
|
$
|
278,304
|
$
|
636,850
|
-56.3
|
%
|
(i) Includes
operating costs of LBE locations. Overhead relating to management
of LBE portfolio are included in the 'Other' line.
|
(ii) Includes
pre-opening costs of LBE.
|
(iii) Other category
includes overhead costs related to LBE and other Cineplex internal
departments.
|
(iv) Cash rent
paid/payable that has been reallocated to offset the lease
obligations.
|
|
|
|
Other operating
continuity from continuing operations
|
Fourth
Quarter
|
Year to
Date
|
|
Other
Operating
|
Other
Operating
|
2019 as
restated
|
$
|
167,416
|
$
|
629,849
|
Impact of new and
acquired theatres
|
(166)
|
(1,182)
|
Impact of disposed
theatres
|
(535)
|
(1,953)
|
Same theatre payroll
change (i)
|
(36,233)
|
(117,621)
|
Same theatre
operating expenses change (i)
|
(20,102)
|
(59,626)
|
Media operating
expenses change
|
(19,249)
|
(45,708)
|
P1AG operating
expenses change
|
(21,324)
|
(85,049)
|
LBE operating
expenses change
|
(9,655)
|
(26,379)
|
LBE pre-opening
change
|
182
|
(540)
|
SCENE
change
|
2,420
|
(2,126)
|
Marketing
change
|
(2,992)
|
(9,031)
|
Other
|
(4,594)
|
(8,486)
|
|
|
|
Impact of IFRS 16
adoption:
|
|
|
Cash rent related to
lease obligations
|
399
|
$
|
3,944
|
2020 as
reported
|
$
|
55,567
|
$
|
276,092
|
(i) See Non-GAAP
measures section of this news release.
|
Fourth Quarter
The overall decrease in other operating expenses was a result of
the restricted operations and temporary closures of theatres, LBE
locations and P1AG route locations and the resulting impact on all
other parts of the business. In managing its costs, Cineplex
benefited from government subsidy programs in Canada and the
United States. During the fourth quarter, Cineplex
recognized $14.3 million in payroll
subsidies, with $6.9 million
offsetting theatre payroll and additionally $1.8 million offsetting utilities.
Full Year
The overall decrease in other operating expenses was as a result
of the temporary closure of theatres, LBE locations and P1AG route
locations leading to a decrease in business volumes. Rising
COVID-19 cases during the fall months resulted in delayed rollouts
of re-openings and limited operating capacity on locations
permitted to remain open.
General and administrative expenses
The following table highlights the movement in general and
administrative ("G&A") expenses during the quarter and the year
to date, including Share-based compensation costs, and G&A
expenses net of these costs (in thousands of dollars):
|
|
|
G&A
expenses
|
Fourth
Quarter
|
Year to
Date
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|
|
|
|
|
|
|
G&A excluding the
following items
|
$
|
7,261
|
$
|
16,403
|
-55.7
|
%
|
$
|
43,717
|
$
|
64,108
|
-31.8
|
%
|
Restructuring
|
2,396
|
189
|
NM
|
8,258
|
1,078
|
NM
|
Transaction /
Litigation costs
|
1,279
|
11,711
|
-89.1
|
%
|
4,101
|
11,711
|
-65.0
|
%
|
LTIP (i)
|
248
|
466
|
NM
|
(15,104)
|
3,076
|
NM
|
Option
plan
|
718
|
407
|
76.4
|
%
|
(1,203)
|
1,605
|
NM
|
G&A expenses
including cash lease payments
|
$
|
11,902
|
$
|
29,176
|
-59.2
|
%
|
$
|
39,769
|
$
|
81,578
|
-51.3
|
%
|
Cash rent
paid/payable included as part of lease obligations (ii)
|
(147)
|
(162)
|
-9.3
|
%
|
(685)
|
(601)
|
14.0
|
%
|
G&A expenses as
reported
|
$
|
11,755
|
$
|
29,014
|
-59.5
|
%
|
$
|
39,084
|
$
|
80,977
|
-51.7
|
%
|
(i) LTIP includes the
expense for RSUs and PSUs, as well as the expense for the executive
and Board deferred share unit plans.
|
(ii) Cash rent
paid/payable that has been reallocated to offset the lease
obligations.
|
Fourth Quarter and Full Year
G&A expenses decreased $17.3
million during the fourth quarter of 2020 compared to the
prior year period. This was primarily due to a $9.1 million decrease in G&A excluding LTIP
costs as a result of the $2.3 million
received under the COVID-19 CEWS wage subsidy program, and
$10.4 million decrease in Cineworld
Transaction related costs as compared to the prior period. These
savings were partially offset by costs of $2.4 million arising from a cost restructuring
program implemented in the third quarter.
G&A expenses for 2020 decreased $41.9
million (51.7%) as compared to the prior year. The decrease
is due to a $26.6 million decrease in
Incentive Plan expenses, $8.4 million
of which was included in the $11.7
million Cineworld Transaction costs, a $2.8 million decrease in option plan expense and
the $9.4 million received under the
COVID-19 CEWS wage subsidy program that was recorded against
payroll costs. Additionally, payroll costs were reduced mainly due
to voluntary salary reductions for full-time employees. With the
termination of the Arrangement Agreement, Share options have been
reclassified to being accounted for as equity-settled and equity
instruments issued under the previous Long-Term Incentive Plan have
been accounted for over their original vesting periods (prior to
the Arrangement Agreement). These savings were partially offset by
an increase in restructuring costs of $7.2
million compared to the prior period.
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 and year ended December 31, 2020 as compared to the prior year
periods (expressed in thousands of dollars, except adjusted
EBITDAaL margin):
|
|
|
EBITDA
|
Fourth
Quarter
|
Full
Year
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
EBITDA
|
$
|
(90,897)
|
|
$
|
106,905
|
|
NM
|
$
|
(345,244)
|
|
$
|
407,584
|
|
NM
|
Adjusted
EBITDA
|
$
|
(32,097)
|
|
$
|
106,529
|
|
NM
|
$
|
(55,866)
|
|
$
|
405,786
|
|
NM
|
Adjusted
EBITDAaL
|
$
|
(65,948)
|
|
$
|
62,327
|
|
NM
|
$
|
(182,815)
|
|
$
|
230,546
|
|
NM
|
Adjusted EBITDAaL
margin
|
-125.7
|
%
|
14.1
|
%
|
-139.8
|
%
|
-43.7
|
%
|
13.8
|
%
|
-57.5
|
%
|
Adjusted EBITDAaL for the fourth quarter of 2020 decreased
$128.3 million, as compared to the
prior year period. For the year ended December 31, 2020, adjusted EBITDAaL decreased
$413.4 million, as compared to the
prior year period. The quarterly and annual decreases were
primarily due to the impact of the COVID-19 government imposed
restrictions and resulting closure of substantially all of Cineplex
businesses since March 2020. In
computing adjusted EBITDAaL, cash rents paid or payable have been
partially offset by the quantified lease-related savings negotiated
with landlords as a result of the COVID-19 closures. This includes
agreements with landlords that are evidenced by way of written
confirmation of the terms agreed upon up to the date of this
MD&A, and are in the process of being formally documented.
Adjusted EBITDAaL margin is calculated as adjusted EBITDAaL divided
by total revenues.
ADJUSTED FREE CASH FLOW (see Non-GAAP measures section of
this news release)
For the fourth quarter of 2020, adjusted free cash flow per
common share of Cineplex was $(0.48)
as compared to $0.62 in the prior
year period. The declared dividends per common share of Cineplex
were nil in the fourth quarter of 2020 and $0.45 in the prior year period. During the 12
months ended December 31, 2020,
Cineplex generated adjusted free cash flow per Share of
$(2.55), compared to $2.66 in the prior 12 month period. Cineplex
declared dividends per Share of $0.15
and $1.78, respectively, in each 12
month period. The payout ratios for these periods were (5.9)% and
66.9%, 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.
EBITDA is calculated by adding back to net income or net loss,
income tax expense, depreciation and amortization expense, and
interest income from continuing operations. Adjusted EBITDA
excludes the change in fair value of financial instrument, (gain)
loss on disposal of assets, foreign exchange, impairment of
long-lived assets, goodwill and investments, the equity loss
(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 paid or payable related to lease
obligations net of quantified savings negotiated with landlords as
a result of the COVID-19 closures, including savings negotiated
after the period end. This includes agreements with landlords that
are evidenced by way of written confirmation of the terms agreed
upon to the date of approval of the financial statements and
MD&A, and are in the process of being formally documented.
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 ScreenX and IMAX product; divided by total
paid theatre attendance for the period, less paid theatre
attendance for 3D, 4DX, UltraAVX, VIP, ScreenX and IMAX
product.
CPP: Calculated as total theatre food service
revenues divided by total paid total theatre attendance for the
period.
Premium priced product: Defined as 3D, 4DX,
UltraAVX, IMAX, ScreenX 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 December
31, 2020 the impact of one location that has been opened or
acquired and four locations that have been closed have been
excluded, resulting in 157 theatres being included in the same
theatre metrics. For the year ended December
31, 2020 the impact of the two locations that have been
opened or acquired and five locations that have been closed have
been excluded, resulting in 155 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.
LBE food cost percentage: Calculated as total LBE food
costs divided by total LBE food service revenues for the
period.
Lease-related Cash Saving
Quantified savings
negotiated with landlords as a result of the COVID-19 disclosures.
This includes agreements that are evidenced by way of written
confirmation of the terms agreed upon to the date of the MD&A,
and are in the process of formally documented.
Net Cash Burn
Calculated as adjusted EBITDAaL less
cash interest expense (excluding amounts with respect to lease
obligations), provision for income taxes and net capital
expenditures.
|
|
Net cash
burn
|
2020
|
|
Q4
|
Q3
|
Q2
|
Adjusted
EBITDAaL
|
$
|
(65,948)
|
$
|
(46,725)
|
$
|
(72,532)
|
Cash interest expense
excluding lease obligations
|
(13,412)
|
(11,317)
|
(7,782)
|
Provision for income
taxes
|
12,355
|
16,497
|
34,440
|
Net capital
expenditures
|
(7,272)
|
(8,198)
|
(8,019)
|
Total net cash
burn
|
$
|
(74,277)
|
$
|
(49,743)
|
$
|
(53,893)
|
Average monthly net
cash burn
|
$
|
(24,759)
|
$
|
(16,581)
|
$
|
(17,964)
|
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. Forward-looking statements
also include, statements pertaining to:
- Cineplex's outlook, goals, expectations and projected
results of operations, including factors and assumptions underlying
Cineplex's projections regarding the duration and impact of a novel
strain of coronavirus ("COVID-19") pandemic on Cineplex, the movie
exhibition industry and the economy in general, as well as
Cineplex's response to the pandemic related to the closure of its
theatres and location-based entertainment ("LBE") venues, employee
reductions and other cost-cutting initiatives and increased
expenses relating to safety measures taken at its facilities to
protect the health and well-being of guests and employees;
- Cineplex's expectations with respect to net cash burn,
liquidity and capital expenditures, including its ability to meet
its ongoing capital, operating and other obligations, and
anticipated needs for, and sources of, funds; and
- Cineplex's ability to execute cost-cutting and revenue
enhancement initiatives in response to the COVID-19
pandemic.
The COVID-19 pandemic has had an unprecedented impact on
Cineplex, along with the rest of the movie exhibition industry and
other industries in which Cineplex operates, including material
decreases in revenues, results of operations and cash flows. The
situation continues to evolve and the social and economic effects
are widespread. As an entertainment and media company that operates
spaces where guests gather in close proximity, Cineplex's business
has been significantly impacted by the actions taken to control the
spread of COVID-19. These actions include, among other things, the
introduction of social distancing measures and restrictions
including those on capacity. There is limited visibility on when
these restrictions will be lifted in many of the markets in which
Cineplex operates and how quickly guests will return to Cineplex's
locations once its operations resume due to prolonged safety
concerns and adverse economic conditions. Cineplex is actively
monitoring the situation and is adapting its business strategies as
the impact of the COVID-19 pandemic evolves.
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, the
duration and impact of the COVID-19 pandemic on Cineplex, the movie
exhibition industry and the economy in general, as well as
Cineplex's response to the COVID-19 pandemic as it relates to the
closure of its theatres and location-based entertainment venues,
employee reductions and other cost-cutting initiatives, and
increased expenses relating to safety measures taken at its
facilities to protect the health and well-being of customers and
employees; Cineplex's expectations with respect to
liquidity and capital expenditures, including its ability to meet
its ongoing capital, operating and other obligations, and
anticipated needs for, and sources of, funds; Cineplex's
ability to execute cost-cutting and revenue enhancement initiatives
in response to the COVID-19 pandemic; risks generally encountered
in the relevant industry, competition, customer, legal, taxation
and accounting matters; the outcome of any litigation surrounding
the termination of the Cineworld transaction; and diversion of
management time on litigation related to the Cineworld
transaction.
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.
You are cordially invited to participate in a conference call
with the management of Cineplex (TSX: CGX) to review our fourth
quarter. Ellis Jacob, President
and Chief Executive Officer and Gord Nelson, Chief Financial
Officer, will host the call scheduled for:
Thursday, February 11,
2021
10:00 am Eastern
Time
In order to participate in the conference call, please dial
647-792-1240, or from outside Toronto and from the U.S.,
dial 1-800-437-2398 at least five to 10 minutes prior to 10:00
a.m. ET. Please quote the conference confirmation code 9829938 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 9829938.
The replay will begin at 1:00 p.m. ET on Thursday, February 11, 2021 and end at 1:00
p.m. ET on Thursday, February 18,
2021.
Note that media are welcome to join the call in listen-only
mode.
About Cineplex
Cineplex (TSX: CGX) is a top-tier Canadian brand that operates
in the film entertainment and content, amusement and leisure, and
media sectors. As a leading entertainment and media company,
Cineplex welcomes millions of guests annually through its circuit
of theatres and location-based entertainment ("LBE") 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 "CDM") and amusement
solutions (Player One Amusement Group "P1AG"). Additionally,
Cineplex operates an LBE business through Canada's newest destinations for 'Eats &
Entertainment' (The Rec Room), and entertainment complexes
specifically designed for teens and families (Playdium).
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.
Cineplex
Inc. Consolidated Balance Sheets (expressed in
thousands of Canadian dollars)
|
|
|
|
|
December
31,
|
December
31,
|
|
2020
|
2019
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
$
|
16,254
|
$
|
26,080
|
Trade and other
receivables
|
51,834
|
168,065
|
Income taxes
receivable
|
66,551
|
9,757
|
Inventories
|
21,712
|
30,995
|
Prepaid expenses and
other current assets
|
11,613
|
14,226
|
Fair value of interest
rate swap agreements
|
—
|
1,022
|
Assets held for
sale
|
—
|
6,573
|
|
|
|
|
167,964
|
256,718
|
|
|
|
Non-current
assets
|
|
|
Property, equipment and
leaseholds
|
555,340
|
662,798
|
Right-of-use
assets
|
881,418
|
1,232,849
|
Deferred income
taxes
|
—
|
14,197
|
Fair value of interest
rate swap agreements
|
—
|
472
|
Interests in joint
ventures and associates
|
8,644
|
28,221
|
Intangible
assets
|
84,922
|
88,367
|
Goodwill
|
635,582
|
816,790
|
|
|
|
|
$
|
2,333,870
|
$
|
3,100,412
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
liabilities
|
|
|
Accounts payable and
accrued liabilities
|
$
|
82,992
|
$
|
220,188
|
Share-based
compensation
|
482
|
25,681
|
Dividends
payable
|
—
|
9,500
|
Income taxes
payable
|
802
|
1,183
|
Deferred
revenue
|
219,983
|
222,998
|
Lease
obligations
|
97,259
|
106,352
|
Fair value of interest
rate swap agreements
|
7,202
|
1,874
|
Liabilities related to
assets held for sale
|
—
|
2,808
|
|
|
|
|
408,720
|
590,584
|
|
|
|
Non-current
liabilities
|
|
|
Share-based
compensation
|
2,670
|
—
|
Long-term
debt
|
506,000
|
625,000
|
Fair value of interest
rate swap agreements
|
19,157
|
10,837
|
Lease
obligations
|
1,073,666
|
1,261,243
|
Post-employment
benefit obligations
|
11,503
|
10,678
|
Other
liabilities
|
68,649
|
9,813
|
Deferred income
taxes
|
—
|
1,263
|
Convertible
debentures
|
219,271
|
—
|
|
|
|
|
1,900,916
|
1,918,834
|
|
|
|
Total
liabilities
|
2,309,636
|
2,509,418
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share
capital
|
852,379
|
852,379
|
Deficit
|
(903,394)
|
(264,310)
|
Hedging reserves and
other
|
(131)
|
(131)
|
Contributed
surplus
|
75,882
|
4,052
|
Cumulative translation
adjustment
|
(502)
|
(887)
|
|
|
|
Total equity
attributable to owners of Cineplex
|
24,234
|
591,103
|
Non-controlling
interests
|
—
|
(109)
|
|
|
|
Total
equity
|
24,234
|
590,994
|
|
|
|
|
$
|
2,333,870
|
$
|
3,100,412
|
Cineplex
Inc. Consolidated Statements of
Operations (expressed in thousands of Canadian dollars,
except per share amounts)
|
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Revenues
|
|
|
|
|
|
|
|
Box office
|
$
|
7,260
|
|
|
$
|
181,789
|
|
|
$
|
132,820
|
|
|
$
|
705,521
|
|
Food
service
|
10,543
|
|
|
125,159
|
|
|
108,632
|
|
|
483,330
|
|
Media
|
12,496
|
|
|
69,545
|
|
|
65,358
|
|
|
196,755
|
|
Amusement
|
13,597
|
|
|
53,471
|
|
|
77,901
|
|
|
228,231
|
|
Other
|
8,556
|
|
|
13,256
|
|
|
33,552
|
|
|
51,309
|
|
|
52,452
|
|
|
443,220
|
|
|
418,263
|
|
|
1,665,146
|
|
Expenses
|
|
|
|
|
|
|
|
Film cost
|
3,151
|
|
|
93,925
|
|
|
66,922
|
|
|
369,386
|
|
Cost of food
service
|
3,989
|
|
|
27,701
|
|
|
30,667
|
|
|
106,823
|
|
Depreciation -
right-of-use assets
|
28,136
|
|
|
36,471
|
|
|
128,393
|
|
|
145,946
|
|
Depreciation and
amortization - other assets
|
28,750
|
|
|
33,135
|
|
|
124,846
|
|
|
128,883
|
|
(Gain) loss on
disposal of assets
|
(283)
|
|
|
868
|
|
|
(13,101)
|
|
|
1,764
|
|
Other
costs
|
77,213
|
|
|
214,922
|
|
|
375,690
|
|
|
782,693
|
|
Share of loss
(income) of joint ventures and associates
|
2,345
|
|
|
(1,597)
|
|
|
8,409
|
|
|
(4,169)
|
|
Interest expense -
lease obligations
|
14,200
|
|
|
11,879
|
|
|
49,085
|
|
|
48,659
|
|
Interest expense -
other
|
19,375
|
|
|
18,610
|
|
|
61,483
|
|
|
36,063
|
|
Interest
income
|
(33)
|
|
|
(44)
|
|
|
(182)
|
|
|
(252)
|
|
Foreign
exchange
|
759
|
|
|
496
|
|
|
57
|
|
|
1,065
|
|
Impairment of
long-lived assets, goodwill and investments
|
56,175
|
|
|
—
|
|
|
294,863
|
|
|
—
|
|
|
233,777
|
|
|
436,366
|
|
|
1,127,132
|
|
|
1,616,861
|
|
(Loss) income from
continuing operations before income taxes
|
(181,325)
|
|
|
6,854
|
|
|
(708,869)
|
|
|
48,285
|
|
Provision for
income taxes
|
|
|
|
|
|
|
|
Current
|
(65,776)
|
|
|
5,414
|
|
|
(73,495)
|
|
|
21,759
|
|
Deferred
|
114,854
|
|
|
(3,228)
|
|
|
(11,373)
|
|
|
(9,990)
|
|
|
49,078
|
|
|
2,186
|
|
|
(84,868)
|
|
|
11,769
|
|
Net (loss) income
from continuing operations
|
$
|
(230,403)
|
|
|
$
|
4,668
|
|
|
$
|
(624,001)
|
|
|
$
|
36,516
|
|
Net loss from
discontinued operations, net of taxes
|
—
|
|
|
(1,196)
|
|
|
(4,952)
|
|
|
(7,625)
|
|
Net (loss)
income
|
$
|
(230,403)
|
|
|
$
|
3,472
|
|
|
$
|
(628,953)
|
|
|
$
|
28,891
|
|
Net (loss) income
from continuing operations attributable to:
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(230,403)
|
|
|
$
|
4,672
|
|
|
$
|
(623,996)
|
|
|
$
|
36,540
|
|
Non-controlling
interests
|
—
|
|
|
(4)
|
|
|
(5)
|
|
|
(24)
|
|
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
|
(230,403)
|
|
|
$
|
4,668
|
|
|
$
|
(624,001)
|
|
|
$
|
36,516
|
|
Net (loss) income
attributable to:
|
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(230,403)
|
|
|
$
|
3,476
|
|
|
$
|
(628,948)
|
|
|
$
|
28,915
|
|
Non-controlling
interests
|
—
|
|
|
(4)
|
|
|
(5)
|
|
|
(24)
|
|
Net (loss)
income
|
$
|
(230,403)
|
|
|
$
|
3,472
|
|
|
$
|
(628,953)
|
|
|
$
|
28,891
|
|
Net (loss) income
per share attributable to owners of Cineplex - basic and
diluted:
|
|
|
|
|
Continuing
operations
|
$
|
(3.64)
|
|
|
$
|
0.08
|
|
|
$
|
(9.85)
|
|
|
$
|
0.58
|
|
Discontinued
operations
|
—
|
|
|
(0.02)
|
|
|
(0.08)
|
|
|
(0.12)
|
|
Total
operations
|
$
|
(3.64)
|
|
|
$
|
0.06
|
|
|
$
|
(9.93)
|
|
|
$
|
0.46
|
|
Cineplex
Inc. Consolidated Statements of Comprehensive
Income (expressed in thousands of Canadian
dollars)
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
|
(230,403)
|
|
|
$
|
4,668
|
|
|
$
|
(624,001)
|
|
|
$
|
36,516
|
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income from continuing
operations
|
|
|
|
|
|
|
|
Items that will be
reclassified subsequently to net income:
|
|
|
|
|
|
|
|
Gain on hedging
instruments
|
—
|
|
|
7,295
|
|
|
—
|
|
|
4,853
|
|
Associated deferred
income taxes recovery
|
—
|
|
|
(1,943)
|
|
|
—
|
|
|
(1,306)
|
|
Foreign currency
translation adjustment
|
(1,862)
|
|
|
(1,189)
|
|
|
378
|
|
|
(3,398)
|
|
Recognition of
currency translation adjustment on disposition of discontinued
operations
|
—
|
|
|
—
|
|
|
(160)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Items that will
not be reclassified to net income:
|
|
|
|
|
|
|
|
Actuarial loss of
post-employment benefit obligations
|
(495)
|
|
|
1,054
|
|
|
(495)
|
|
|
(1,054)
|
|
Associated deferred
income taxes expense
|
133
|
|
|
(282)
|
|
|
133
|
|
|
282
|
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income
|
(2,224)
|
|
|
4,935
|
|
|
(144)
|
|
|
(623)
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income from continuing operations
|
(232,627)
|
|
|
9,603
|
|
|
(624,145)
|
|
|
35,893
|
|
|
|
|
|
|
|
|
|
Net loss from
discontinued operations, net of taxes
|
—
|
|
|
(1,196)
|
|
|
(4,952)
|
|
|
(7,625)
|
|
Foreign currency
translation adjustment from discontinued operations
|
—
|
|
|
116
|
|
|
7
|
|
|
210
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
$
|
(232,627)
|
|
|
$
|
8,523
|
|
|
$
|
(629,090)
|
|
|
$
|
28,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income from continuing operations attributable
to:
|
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(232,627)
|
|
|
$
|
9,607
|
|
|
$
|
(624,140)
|
|
|
$
|
35,917
|
|
Non-controlling
interests
|
—
|
|
|
(4)
|
|
|
(5)
|
|
|
(24)
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
$
|
(232,627)
|
|
|
$
|
9,603
|
|
|
$
|
(624,145)
|
|
|
$
|
35,893
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income attributable to:
|
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(232,627)
|
|
|
$
|
8,527
|
|
|
$
|
(629,085)
|
|
|
$
|
28,502
|
|
Non-controlling
interests
|
—
|
|
|
(4)
|
|
|
(5)
|
|
|
(24)
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
$
|
(232,627)
|
|
|
$
|
8,523
|
|
|
$
|
(629,090)
|
|
|
$
|
28,478
|
|
Cineplex
Inc. Consolidated Statements of Changes in
Equity (expressed in thousands of Canadian
dollars) For the periods ended December 31, 2020 and
2019
|
|
Share
capital
|
Contributed
surplus
|
Hedging reserves
and other
|
Cumulative
translation adjustment
|
Deficit
|
Non-controlling
interests
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1,
2020
|
$
|
852,379
|
|
$
|
4,052
|
|
$
|
(131)
|
|
$
|
(887)
|
|
$
|
(264,310)
|
|
$
|
(109)
|
|
$
|
590,994
|
|
|
|
|
|
|
|
|
|
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(628,948)
|
|
(5)
|
|
(628,953)
|
|
Other comprehensive
loss
|
—
|
|
—
|
|
—
|
|
385
|
|
(522)
|
|
—
|
|
(137)
|
|
Total
comprehensive loss
|
—
|
|
—
|
|
—
|
|
385
|
|
(629,470)
|
|
(5)
|
|
(629,090)
|
|
Dividends
declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(9,500)
|
|
—
|
|
(9,500)
|
|
Share option
expense
|
—
|
|
1,152
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,152
|
|
PSU/RSU
expense
|
—
|
|
76
|
|
—
|
|
—
|
|
—
|
|
—
|
|
76
|
|
Settlement for
cancelled options
|
—
|
|
(453)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(453)
|
|
Conversion to
equity-settled option plan
|
—
|
|
3,944
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,944
|
|
Conversion to
equity-settled PSU/RSU plan
|
—
|
|
311
|
|
—
|
|
—
|
|
—
|
|
—
|
|
311
|
|
Issuance of
convertible debentures
|
—
|
|
66,800
|
|
—
|
|
—
|
|
—
|
|
—
|
|
66,800
|
|
Non-controlling
interests acquired
|
—
|
|
—
|
|
—
|
|
—
|
|
(114)
|
|
114
|
|
—
|
|
|
|
|
|
|
|
|
|
December 31,
2020
|
$
|
852,379
|
|
$
|
75,882
|
|
$
|
(131)
|
|
$
|
(502)
|
|
$
|
(903,394)
|
|
$
|
—
|
|
$
|
24,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1,
2019
|
$
|
852,379
|
|
$
|
7,815
|
|
$
|
(3,678)
|
|
$
|
2,301
|
|
$
|
(179,721)
|
|
$
|
(85)
|
|
$
|
679,011
|
|
|
|
|
|
|
|
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
28,915
|
|
(24)
|
|
28,891
|
|
Other comprehensive
loss
|
—
|
|
—
|
|
3,547
|
|
(3,188)
|
|
(772)
|
|
—
|
|
(413)
|
|
Total
comprehensive income
|
—
|
|
—
|
|
(3,547)
|
|
(3,188)
|
|
28,143
|
|
(24)
|
|
28,478
|
|
Dividends
declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(112,732)
|
|
—
|
|
(112,732)
|
|
Share option
expense
|
—
|
|
1,607
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,607
|
|
Conversion to
cash-settled option plan
|
—
|
|
(5,370)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,370)
|
|
|
|
|
|
|
|
|
|
December 31,
2019
|
$
|
852,379
|
|
$
|
4,052
|
|
$
|
(131)
|
|
$
|
(887)
|
|
$
|
(264,310)
|
|
$
|
(109)
|
|
$
|
590,994
|
|
Cineplex
Inc. Consolidated Statements of Cash
Flows (expressed in thousands of Canadian
dollars)
|
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2020
|
2019
|
|
2020
|
2019
|
|
|
|
|
|
|
Cash provided by
(used in)
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
|
(230,403)
|
|
$
|
4,668
|
|
|
$
|
(624,001)
|
|
$
|
36,516
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
|
|
Depreciation and
amortization of property, equipment and leaseholds, and intangible
assets
|
28,750
|
|
33,135
|
|
|
124,846
|
|
128,883
|
|
Depreciation of
right-of-use assets
|
28,136
|
|
36,471
|
|
|
128,393
|
|
145,946
|
|
Unrealized foreign
exchange
|
787
|
|
309
|
|
|
342
|
|
698
|
|
Interest rate swap
agreements - non-cash interest
|
2,509
|
|
11,891
|
|
|
13,922
|
|
10,472
|
|
Accretion of
convertible debentures
|
3,428
|
|
—
|
|
|
7,471
|
|
—
|
|
Other non-cash
interest
|
368
|
|
408
|
|
|
1,396
|
|
1,745
|
|
(Gain) loss on
disposal of assets
|
(283)
|
|
868
|
|
|
(13,101)
|
|
1,764
|
|
Deferred income
taxes
|
114,854
|
|
(3,228)
|
|
|
(11,373)
|
|
(9,990)
|
|
Non-cash share-based
compensation
|
(3,149)
|
|
407
|
|
|
1,228
|
|
1,608
|
|
Impairment of
long-lived assets and goodwill
|
56,175
|
|
—
|
|
|
294,863
|
|
—
|
|
Net change in
interests in joint ventures and associates
|
5,044
|
|
(1,466)
|
|
|
12,878
|
|
(4,704)
|
|
Changes in operating
assets and liabilities
|
(67,257)
|
|
40,670
|
|
|
(43,178)
|
|
8,727
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
(61,041)
|
|
124,133
|
|
|
(106,314)
|
|
321,665
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
Proceeds from
disposal of assets, including sale of discontinued
operations
|
59,870
|
|
—
|
|
|
80,920
|
|
—
|
|
Purchases of
property, equipment and leaseholds
|
(9,969)
|
|
(51,448)
|
|
|
(73,411)
|
|
(146,367)
|
|
Intangible assets
additions
|
(2,106)
|
|
(2,709)
|
|
|
(9,005)
|
|
(7,865)
|
|
Tenant
inducements
|
2,697
|
|
4,832
|
|
|
24,296
|
|
13,985
|
|
Net cash received
from CDCP
|
—
|
|
2,882
|
|
|
3,910
|
|
15,394
|
|
|
|
|
|
|
|
Net cash provided by
(used in) investing activities
|
50,492
|
|
(46,443)
|
|
|
26,710
|
|
(124,853)
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
Dividends
paid
|
—
|
|
(28,498)
|
|
|
(19,000)
|
|
(112,415)
|
|
Borrowings
(repayment) under credit facilities, net
|
46,000
|
|
(24,000)
|
|
|
(119,000)
|
|
45,000
|
|
Repayments of lease
obligations - principal
|
(32,323)
|
|
(32,352)
|
|
|
(91,946)
|
|
(128,252)
|
|
Issuance of
convertible debentures, net
|
—
|
|
—
|
|
|
303,063
|
|
—
|
|
Financing
fees
|
(700)
|
|
—
|
|
|
(1,500)
|
|
(243)
|
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
12,977
|
|
(84,850)
|
|
|
71,617
|
|
(195,910)
|
|
|
|
|
|
|
|
Effect of exchange
rate differences on cash
|
650
|
|
345
|
|
|
552
|
|
483
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents from continuing operations
|
3,078
|
|
(6,815)
|
|
|
(7,435)
|
|
1,385
|
|
Cash flows used in
discontinued operations
|
—
|
|
2,821
|
|
|
(2,391)
|
|
(547)
|
|
Cash and cash
equivalents - Beginning of period
|
13,176
|
|
30,074
|
|
|
26,080
|
|
25,242
|
|
|
|
|
|
|
|
Cash and cash
equivalents - End of period
|
$
|
16,254
|
|
$
|
26,080
|
|
|
$
|
16,254
|
|
$
|
26,080
|
|
|
|
|
|
|
|
Supplemental
information
|
|
|
|
|
|
Cash paid for
interest - lease obligation
|
$
|
13,203
|
|
$
|
11,443
|
|
|
$
|
32,371
|
|
$
|
47,018
|
|
Cash paid for
interest - other
|
$
|
27,247
|
|
$
|
6,634
|
|
|
$
|
47,859
|
|
$
|
25,302
|
|
Cash (received) paid
for income taxes, net
|
$
|
(1,124)
|
|
$
|
7,315
|
|
|
$
|
(16,297)
|
|
$
|
36,402
|
|
Cineplex
Inc. Condensed Consolidated Supplemental
Information (expressed in thousands of Canadian
dollars)
|
|
|
|
|
Reconciliation to
Adjusted EBITDAaL
|
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2020
|
2019
|
|
2020
|
2019
|
|
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
|
(230,403)
|
|
$
|
4,668
|
|
|
$
|
(624,001)
|
|
$
|
36,516
|
|
|
|
|
|
|
|
Depreciation and
amortization - other
|
28,750
|
|
33,135
|
|
|
124,846
|
|
128,883
|
|
Depreciation -
right-of-use assets
|
28,136
|
|
36,471
|
|
|
128,393
|
|
145,946
|
|
Interest expense -
lease obligations
|
14,200
|
|
11,879
|
|
|
49,085
|
|
48,659
|
|
Interest expense -
other
|
19,375
|
|
18,610
|
|
|
61,483
|
|
36,063
|
|
Interest
income
|
(33)
|
|
(44)
|
|
|
(182)
|
|
(252)
|
|
Current income tax
(recovery) expense
|
(65,776)
|
|
5,414
|
|
|
(73,495)
|
|
21,759
|
|
Deferred income tax
recovery
|
114,854
|
|
(3,228)
|
|
|
(11,373)
|
|
(9,990)
|
|
|
|
|
|
|
|
EBITDA from
continuing operations
|
$
|
(90,897)
|
|
$
|
106,905
|
|
|
$
|
(345,244)
|
|
$
|
407,584
|
|
|
|
|
|
|
|
(Gain) loss on
disposal of assets
|
(283)
|
|
868
|
|
|
(13,101)
|
|
1,764
|
|
CDCP equity loss
(income) (i)
|
2,085
|
|
(1,803)
|
|
|
7,279
|
|
(4,827)
|
|
Foreign exchange
loss
|
759
|
|
496
|
|
|
57
|
|
1,065
|
|
Impairment of
long-lived assets, goodwill and investments
|
56,175
|
|
—
|
|
|
294,863
|
|
—
|
|
Non-controlling
interest adjusted EBITDA
|
—
|
|
4
|
|
|
5
|
|
24
|
|
Depreciation and
amortization - joint ventures and associates (ii)
|
11
|
|
23
|
|
|
73
|
|
99
|
|
Taxes and interest of
joint ventures and associates (ii)
|
53
|
|
36
|
|
|
202
|
|
77
|
|
|
|
|
|
|
|
Adjusted EBITDA
from continuing operations
|
$
|
(32,097)
|
|
$
|
106,529
|
|
|
$
|
(55,866)
|
|
$
|
405,786
|
|
|
|
|
|
|
|
Cash rent
paid/payable related to lease obligations
|
(30,889)
|
|
(43,849)
|
|
|
(126,949)
|
|
(175,240)
|
|
Negotiated
lease-related cash savings for the period (iii)
|
(2,598)
|
|
—
|
|
|
—
|
|
—
|
|
Cash rent paid not
pertaining to current period (iv)
|
(364)
|
|
(353)
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
Adjusted EBITDAaL
(iii)
|
$
|
(65,948)
|
|
$
|
62,327
|
|
|
$
|
(182,815)
|
|
$
|
230,546
|
|
|
|
|
|
|
|
(i)
CDCP equity loss (income) not included in adjusted EBITDA as CDCP
is a limited-life financing vehicle that is funded by virtual print
fees collected from distributors.
|
(ii) Includes
the joint ventures with the exception of CDCP (see (i)
above).
|
(iii) See
Non-GAAP measures section of this news release.
|
(iv) Includes
amounts pre-paid or deferred to future periods, to better reflect
the current period EBITDAaL.
|
Cineplex
Inc. Consolidated Supplemental
Information (expressed in thousands of Canadian dollars,
except number of shares and per share data)
|
|
|
|
|
Adjusted Free Cash
Flow
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
|
|
|
|
|
2020
|
2019
|
|
2020
|
2019
|
|
|
|
|
|
|
Cash (used in)
provided by operating activities
|
$
|
(61,041)
|
|
$
|
124,133
|
|
|
$
|
(106,314)
|
|
$
|
321,665
|
|
Less: Total capital
expenditures net of proceeds on sale of assets
|
(10,099)
|
|
(51,448)
|
|
|
(73,411)
|
|
(146,367)
|
|
|
|
|
|
|
|
Standardized free
cash flow
|
(71,140)
|
|
72,685
|
|
|
(179,725)
|
|
175,298
|
|
|
|
|
|
|
|
Add/(Less):
|
|
|
|
|
|
Changes in operating
assets and liabilities (i)
|
67,257
|
|
(40,670)
|
|
|
43,178
|
|
(8,727)
|
|
Changes in operating
assets and liabilities of joint ventures and associates
(i)
|
(2,699)
|
|
(131)
|
|
|
(4,469)
|
|
535
|
|
Principal component
of lease obligations
|
(32,323)
|
|
(32,352)
|
|
|
(91,946)
|
|
(128,252)
|
|
Principal portion of
cash rent paid not pertaining to current period
|
(357)
|
|
(346)
|
|
|
—
|
|
—
|
|
Growth capital
expenditures and other (ii)
|
8,928
|
|
37,202
|
|
|
68,032
|
|
114,665
|
|
Share of income of
joint ventures and associates, net of non-cash
depreciation
|
(196)
|
|
(147)
|
|
|
(855)
|
|
(482)
|
|
Non-controlling
interest
|
—
|
|
4
|
|
|
5
|
|
24
|
|
Net cash received
from CDCP (iii)
|
—
|
|
2,882
|
|
|
3,910
|
|
15,394
|
|
Adjusted free cash
flow
|
$
|
(30,530)
|
|
$
|
39,127
|
|
|
$
|
(161,870)
|
|
$
|
168,455
|
|
Average number of
Shares outstanding
|
63,333,238
|
|
63,333.238
|
|
|
63,333,238
|
|
63,333,238
|
|
Adjusted free cash
flow per Share
|
$
|
(0.482)
|
|
$
|
0.618
|
|
|
$
|
(2.556)
|
|
$
|
2.660
|
|
Dividends
declared
|
$
|
—
|
|
$
|
0.450
|
|
|
$
|
0.150
|
|
$
|
1.780
|
|
(i) Changes in
operating assets and liabilities are not considered a source or use
of adjusted free cash flow.
|
(ii) 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.
|
(iii) 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