Cineplex encouraged by positive momentum as
the industry recovers
TORONTO, Feb. 11, 2022 /CNW/ - (TSX: CGX) - Cineplex
Inc. ("Cineplex" or the "Company") today released its financial
results for the three months and year ended December 31, 2021. Unless otherwise specified,
all amounts are in Canadian dollars.
"Cineplex delivered its strongest quarter in two years," said
Ellis Jacob, President & CEO,
Cineplex. "Based on the positive momentum we saw during the
quarter, and the success of blockbuster films like Spider-Man:
No Way Home, we know that guests are coming back to our
theatres. Government mandated restrictions and closures in
Ontario, Quebec and Atlantic
Canada during the busiest box office period constrained our
ability to fully capitalize on this resurgence in the fourth
quarter as compared to other geographies, including the U.S."
"Attendance for the fourth quarter was up substantially as we
benefited from October and November film releases, despite the
closures and capacity restrictions at most of our locations in late
December. As a result, we significantly improved our net loss
during the quarter to $21.8 million
from $230.4 million in the prior year
period and improved our Adjusted EBITDAaL to $20.2 million, which represents our highest level
during the pandemic. During the quarter, we remained focused on
strengthening Cineplex's financial position and entered into the
Fourth Credit Agreement Amendment with our supportive lenders. This
continues the suspension of our financial covenant testing until
the end of the second quarter of 2022."
"A highlight from the quarter includes the launch of Scene+ in
partnership with Scotiabank. An evolved loyalty program with the
foundation of SCENE® and Scotia Rewards, members can benefit from
new partners and more ways to earn and redeem points through one
simplified offering. We also opened our 25th VIP Cinemas location
with Cineplex VIP Cinemas University District in
Calgary opening its doors in
November."
"We know the industry is recovering and our guests are coming
back to our theatres and entertainment venues. Our team has proven
that we can safely operate during the pandemic and we have laid the
groundwork to take us through the recovery period and beyond. With
provincial reopenings, easing restrictions and the enthusiasm of
guests wanting to experience out of home entertainment, the team is
optimistic about the year ahead and our continued momentum toward a
very strong recovery."
Fourth Quarter Financial Results
|
2021
|
2020
|
Period over Period
Change
(i)
|
Total revenues
(ii)
|
$
|
300.0
|
million
|
$
|
52.5
|
million
|
471.9%
|
Theatre
attendance
|
|
10.2
|
million
|
|
0.8
|
million
|
NM
|
Net loss from
continuing operations (iii)
|
$
|
(21.8)
|
million
|
$
|
(230.4)
|
million
|
-90.5%
|
Net loss from
discontinued operations
|
$
|
—
|
million
|
$
|
—
|
million
|
NM
|
Net loss
(iii)
|
$
|
(21.8)
|
million
|
$
|
(230.4)
|
million
|
-90.5%
|
Net loss as a
percentage of sales
|
|
(7.3)
|
%
|
|
(439.3)
|
%
|
432.0%
|
Cash provided by
(used in) operating activities
|
$
|
27.5
|
million
|
$
|
(61.0)
|
million
|
NM
|
Box office revenues
per patron ("BPP") (iv)
|
$
|
12.29
|
|
$
|
9.23
|
|
33.2%
|
Concession revenues
per patron ("CPP") (iv)
|
$
|
7.49
|
|
$
|
9.06
|
|
-17.3%
|
Adjusted EBITDA
(iv)
|
$
|
58.3
|
million
|
$
|
(32.1)
|
million
|
NM
|
Adjusted EBITDAaL
(iii) (iv)
|
$
|
20.2
|
million
|
$
|
(65.9)
|
million
|
NM
|
Adjusted EBITDAaL
margin (iii) (iv)
|
|
6.7
|
%
|
|
(125.7)
|
%
|
132.4%
|
Adjusted free cash
flow (iv)
|
$
|
(1.0)
|
million
|
$
|
(30.5)
|
million
|
-96.6%
|
Adjusted free cash
flow per common share of Cineplex ("Share") (iv)
|
$
|
(0.016)
|
|
$
|
(0.482)
|
|
-96.7%
|
Earnings per Share
("EPS") from continuing operations - basic and diluted
(iii)
|
$
|
(0.34)
|
|
$
|
(3.64)
|
|
-90.7%
|
EPS from discontinued
operations - basic and diluted
|
$
|
—
|
|
$
|
—
|
|
—
|
EPS - basic and
diluted (iii)
|
$
|
(0.34)
|
|
$
|
(3.64)
|
|
-90.7%
|
Full Year Financial Results
|
2021
|
2020
|
Period over Period
Change
(i)
|
Total revenues
(ii)
|
$
|
656.7
|
million
|
$
|
418.3
|
million
|
57.0%
|
Theatre
attendance
|
|
20.1
|
million
|
|
13.1
|
million
|
53.7%
|
Net loss from
continuing operations (iii)
|
$
|
(248.7)
|
million
|
$
|
(624.0)
|
million
|
-60.1%
|
Net loss from
discontinued operations
|
$
|
—
|
million
|
$
|
(5.0)
|
million
|
-100.0%
|
Net loss
(iii)
|
$
|
(248.7)
|
million
|
$
|
(629.0)
|
million
|
-60.5%
|
Net loss as a
percentage of sales
|
|
(37.9)
|
%
|
|
(149.2)
|
%
|
111.3%
|
Cash provided by
(used in) operating activities
|
$
|
61.0
|
million
|
$
|
(106.3)
|
million
|
NM
|
Box office revenues
per patron ("BPP") (iv)
|
$
|
11.77
|
|
$
|
10.17
|
|
15.7%
|
Concession revenues
per patron ("CPP") (iv)
|
$
|
7.93
|
|
$
|
6.99
|
|
13.4%
|
Adjusted EBITDA
(iv)
|
$
|
59.9
|
million
|
$
|
(55.9)
|
million
|
NM
|
Adjusted EBITDAaL
(iii) (iv)
|
$
|
(84.3)
|
million
|
$
|
(182.8)
|
million
|
-53.9%
|
Adjusted EBITDAaL
margin (iii) (iv)
|
|
(12.8)
|
%
|
|
(43.7)
|
%
|
30.9%
|
Adjusted free cash
flow (iv)
|
$
|
(151.5)
|
million
|
$
|
(161.9)
|
million
|
-6.4%
|
Adjusted free cash
flow per common share of Cineplex ("Share") (iv)
|
$
|
(2.392)
|
|
$
|
(2.556)
|
|
-6.4%
|
Earnings per Share
("EPS") from continuing operations - basic and diluted
(iii)
|
$
|
(3.93)
|
|
$
|
(9.85)
|
|
-60.1%
|
EPS from discontinued
operations - basic and diluted
|
$
|
—
|
|
$
|
(0.08)
|
|
-100.0%
|
EPS - basic and
diluted (iii)
|
$
|
(3.93)
|
|
$
|
(9.93)
|
|
-60.4%
|
|
|
i.
|
Period over period
change calculated based on thousands of dollars except percentage
and per share values. Changes in percentage amounts are calculated
as 2021 value less 2020 value.
|
ii.
|
All amounts are from
continuing operations.
|
iii.
|
2021 includes
expenses related to the Cineworld Transaction in the amount of $2.3
million (2020 - $1.3 million) for the fourth quarter and $11.4
million (2020 - $4.1 million) for the year-to date.
|
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
other financial measures reported by Cineplex are defined in the
'Non-GAAP and Other Financial Measures' section at the end of this
news release.
|
KEY DEVELOPMENTS IN 2021
The following describes certain key business initiatives
undertaken and results achieved during 2021 in each of Cineplex's
core business areas:
FILM ENTERTAINMENT AND CONTENT
Theatre Exhibition
- Reported annual box office revenues of $236.3 million, a 77.9% increase from 2020 as a
result of increased theatre attendance due to theatre reopenings
compared to theatre closures that remained in effect for a majority
of the prior year period.
- BPP was $11.77, an all-time
annual record, an increase of $1.60
or 15.7% when compared to the prior year due to new releases and
premium offerings in the current period as compared to the prior
period which focused on discounted pricing for older and more
classic film product.
- Opened Quebec's second VIP
Cinemas at Cineplex Forum and VIP in downtown Montreal on June 18,
2021.
- Opened Western Canada's first
standalone VIP Cinemas at Cineplex VIP Cinemas Brentwood in
Burnaby, British Columbia on
July 7, 2021.
- Opened Cineplex's 25th VIP Cinemas, Cineplex VIP Cinemas
University District located in the University District Calgary
on November 17, 2021.
- Opened three new ScreenX auditoriums: Scotiabank Theatre
Winnipeg in Manitoba,
Cinéma Cineplex Odeon Brossard et VIP in Quebec and Cineplex Cinemas Ancaster in
Ontario
- Launched CineClub, Canada's
first of its kind movie subscription program providing members with
benefits accessible across Cineplex's businesses nationwide
including Cineplex theatres, the Cineplex Store and LBE
venues.
Theatre Food Service
- Reported annual theatre food service revenues of $159.2 million, a 74.2% increase compared to the
prior year period primarily due to a significant increase in
theatre attendance as a result of the reopening of theatres coupled
with a record CPP.
- CPP was $7.93, an all-time annual
record, an increase of $0.94 or 13.4%
when compared to the prior year, due to product mix, modest price
increases and film product that appealed to first-run viewers who
tend to have a higher concession spend.
- Continued focus on theatre food delivery service over the prior
year reporting annual revenues of $13.1
million, an increase of 59.7% or $4.9
million.
Alternative Programming
- Alternative Programming (Cineplex Events) included the stage
event The Great Big Boo, the documentary about the author CS
Lewis, the anime features Sword Art
Online and Gintara, as well as the successful
re-release of past films including the reissue of The Matrix,
Halloween (1999) and Rad the 35th Anniversary.
- Cineplex released the feature film Lamb on October 8, 2021 and The Tragedy of Macbeth
on December 25, 2021.
Digital Commerce
- Total registered users for Cineplex Store increased by 18% as
compared to the prior year period, reaching over 2.2 million
registered users.
- Cineplex Store continues to benefit from Premium Video On
Demand ("PVOD") and Premium Electronic Sell Through ("PEST")
releases.
MEDIA
- Total media revenues remained flat at $65.3 million for the year ended December 31, 2021.
Cinema Media
- Reported annual Cinema media revenues of $33.0 million, an increase of $9.4 million or 39.8% over the prior year, due to
increases in show-time and pre-show advertising as a result of
reopened theatres and new film releases.
Digital Place-Based Media
- Reported annual revenues of $32.4
million, a decrease of $9.4
million or 22.5%, compared to 2020. The decrease is
attributable to a lower number of deployments combined with the
impact of certain contract expirations while focusing on higher
margin projects.
- Cineplex Digital Media rolled out the Flex SmartEngine, a
data-driven machine learning software platform that optimizes
digital signage.
AMUSEMENT AND LEISURE
Amusement Solutions
- Reported annual revenues of $134.5
million an increase of $56.6
million or 72.6% as compared to the prior year. The increase
is due to the reopening of P1AG route locations in Canada and the
United States.
Location-based Entertainment
- Reported total annual revenues of $44.8
million including food service revenues of $14.7 million, amusement revenues of $29.2 million and other revenues of $0.8 million, an increase of $19.2 million or 75.3% as compared to 2020. The
increase was due to the reopening of LBE businesses compared to
closures that remained in effect for a majority of the prior year
period.
- Opened Playdium in Dartmouth,
Nova Scotia on February 26,
2021, British Columbia's
first location of The Rec Room in Burnaby on July 5,
2021, and The Rec Room in Barrie, Ontario, on July 26, 2021. With these openings, Cineplex has
10 locations of The Rec Room and three locations of
Playdium across Canada.
LOYALTY
- Scene+ launched on December 13,
2021, merging the SCENE loyalty and Scotia Rewards
programs.
- Membership in the Scene+ loyalty program remained flat during
the year ended December 31,
2021.
CORPORATE
- Cineplex completed a sale and leaseback transaction for its
head office buildings located at 1303 Yonge Street and 1257 Yonge
Street, Toronto, Ontario for gross
proceeds of $57.0 million. Fifty
percent of the net proceeds were used to permanently reduce the
amount outstanding under Cineplex's Credit Facilities.
- On February 8, 2021, Cineplex and
Cineplex Entertainment Limited Partnership entered into the Third
Credit Agreement Amendment with The Bank of Nova Scotia providing Cineplex with certain
financial covenant relief in light of the COVID-19 pandemic and its
effects on Cineplex's business.
- On February 26, 2021, Cineplex
completed the $250.0 million Notes
Payable offering. Cineplex used the net proceeds raised in part to
permanently repay $100.0 million of
its Credit Facilities. The Notes Payable bear interest at a rate of
7.50% per annum and mature on February 26,
2026.
- Cineplex negotiated the sale of certain restrictive lease
rights for total proceeds of $6.4
million.
- On December 14, 2021 the Ontario
Superior Court of Justice ruled in favour of Cineplex, finding that
Cineworld repudiated the transaction to acquire Cineplex. The court
awarded damages for breach of contract to Cineplex in the amount of
$1.24 billion and reimbursement of
transaction costs of $5.5
million.
- On December 30, 2021, Cineplex
and Cineplex Entertainment Limited Partnership entered into the
Fourth Credit Agreement Amendment with The Bank of Nova Scotia, which among other things,
extended the suspension of financial covenant testing until the
second quarter of 2022 and liquidity covenant requirements until
June 30, 2022.
OPERATING RESULTS FOR THE THREE MONTHS AND YEAR ENDED
DECEMBER 31, 2021
Total revenues
Total revenues for the three months ended December 31, 2021 increased $247.5 million (471.9%) to $300.0 million as compared to the prior year
period. Total revenues for the year ended December 31, 2021 increased $238.4 million (57.0%) to $656.7 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 MD&A, 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, concession margin per patron and net cash
burn are defined and discussed in Non-GAAP and other financial
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
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Box office
revenues
|
$
|
125,890
|
$
|
7,260
|
NM
|
$
|
236,320
|
$
|
132,820
|
77.9%
|
Theatre attendance
(i)
|
|
10,245
|
|
786
|
NM
|
|
20,080
|
|
13,065
|
53.7%
|
Box office revenue
per patron (i)
|
$
|
12.29
|
$
|
9.23
|
33.2%
|
$
|
11.77
|
$
|
10.17
|
15.7%
|
BPP excluding premium
priced product (i)
|
$
|
10.40
|
$
|
8.61
|
20.8%
|
$
|
10.25
|
$
|
9.18
|
11.7%
|
Same theatre box
office revenues (i)
|
$
|
124,747
|
$
|
7,239
|
NM
|
$
|
234,474
|
$
|
131,601
|
78.2%
|
Same theatre
attendance (i)
|
|
10,187
|
|
783
|
NM
|
|
19,982
|
|
12,920
|
54.7%
|
% Total box from
premium priced product (i)
|
|
47.3%
|
|
19.1%
|
28.2%
|
|
38.7%
|
|
28.1%
|
10.6%
|
(i) Represents
a supplementary financial measure. See Non-GAAP and other financial
measures section of this news release.
|
Box office
continuity
|
Fourth
Quarter
|
Full
Year
|
|
Box
Office
|
Theatre
Attendance
|
Box
Office
|
Theatre
Attendance
|
2020 as
reported
|
$
|
7,260
|
786
|
$
|
132,820
|
13,065
|
Same theatre
attendance change
|
86,915
|
9,404
|
71,939
|
7,062
|
Impact of same
theatre BPP change
|
30,595
|
—
|
30,937
|
—
|
New and acquired
theatres (i)
|
1,123
|
56
|
1,722
|
85
|
Disposed and closed
theatres (i)
|
(3)
|
(1)
|
(1,098)
|
(132)
|
2021 as
reported
|
$
|
125,890
|
10,245
|
$
|
236,320
|
20,080
|
(i) See Non-GAAP and
other financial measures section of this news release.
Represents theatres opened, acquired, disposed or closed subsequent
to the start of the prior year comparative period and is used to
report on Cineplex's supplementary financial measures.
|
Fourth Quarter and Full Year
Fourth Quarter
2021 Top Cineplex Films
|
3D
|
%
Box
|
Fourth
Quarter 2020 Top Cineplex Films
|
3D
|
%
Box
|
1
|
Spider-Man: No Way
Home
|
√
|
23.7 %
|
1
|
Honest
Thief
|
|
11.9 %
|
2
|
No Time To
Die
|
√
|
13.4 %
|
2
|
Tenet
|
|
11.3 %
|
3
|
Dune
|
√
|
11.4 %
|
3
|
The War With
Grandpa
|
|
10.3 %
|
4
|
Venom: Let There Be
Carnage
|
√
|
8.4 %
|
4
|
The Croods: A New
Age
|
|
7.6 %
|
5
|
Eternals
|
√
|
8.3 %
|
5
|
100% Wolf
|
|
5.3 %
|
Full Year 2021 Top
Cineplex Films
|
3D
|
%
Box
|
Full Year 2020 Top
Cineplex Films
|
3D
|
%
Box
|
1
|
Spider-Man: No Way
Home
|
√
|
12.6 %
|
1
|
1917
|
|
8.1 %
|
2
|
Shang-Chi And The
Legend Of The Ten Rings
|
√
|
8.0 %
|
2
|
Star Wars: The Rise
of Skywalker
|
√
|
7.7 %
|
3
|
No Time To
Die
|
√
|
7.1 %
|
3
|
Jumanji: The Next
Level
|
√
|
7.6 %
|
4
|
Dune
|
√
|
6.1 %
|
4
|
Bad Boys For
Life
|
|
7.2 %
|
5
|
Venom: Let There Be
Carnage
|
√
|
4.5 %
|
5
|
Sonic The
Hedgehog
|
|
5.4 %
|
Fourth Quarter and Full Year
Box office revenues increased $118.6
million to $125.9 million
during the fourth quarter of 2021, compared to $7.3 million recorded in the same period in 2020.
This increase was mainly due to a 9.5 million increase in theatre
attendance as Cineplex's theatre circuit commenced reopening
during the third quarter, compared to closures that remained in
effect for a majority of the prior year period. The release of
Marvel's highly anticipated Spider-Man: No Way Home also
contributed to the significant increase in box office revenues when
compared to the prior year; it had the second biggest North
American opening weekend of all-time, grossing $260.1 million becoming the fourth highest
grossing film in North America and
eighth highest worldwide of all-time. It is also the first film to
generate in excess of $200.0 million
during its opening weekend since Avengers: Endgame which
debuted in 2019. However, government imposed capacity restrictions
were reinstated in December 2021
impacting the majority of Cineplex's theatres, limiting Cineplex's
ability to fully benefit from the strong slate of film releases in
December.
BPP for the three months ended December
31, 2021 was $12.29, an
all-time quarterly record for Cineplex. Price increases in select
key markets and additional VIP theatre locations which drive higher
per patron spend attributed to the increase. The release of first
run film product available in the current period drove guests to
premium experiences compared to limited film product in the prior
year, further contributing to the increase in BPP. When compared to
the prior year period, BPP increased $3.06 or 33.2% from $9.23 due to more new releases and premium
offerings in the current period as compared to the prior period
which focused on discounted pricing for older and more classic film
products.
Cineplex reported box office revenues for the year ended
December 31, 2021 of $236.3 million, an increase of $103.5 million or 77.9% from the prior year. The
increase in box office revenues was primarily due to a 7.0 million
increase in theatre attendance as a result of the full reopening of
Cineplex's theatres that commenced during the third quarter
compared to prolonged closures or significant capacity restrictions
that remained in effect for a majority of the prior year
period.
Cineplex's BPP for the year ended December 31, 2021 increased $1.60, or 15.7%, from $10.17 in 2020 to an all-time annual record of
$11.77 in 2021, eclipsing a record
previously established in 2019. This increase was primarily due
price increases in select key markets, and more first run film
product available in the current period driving guests to premium
experiences in the current period as compared to the prior period
which focused on discounted pricing for older and more classic film
products.
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
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Food service -
theatres
|
$
|
76,695
|
$
|
7,122
|
976.8
%
|
$
|
159,201
|
$
|
91,384
|
74.2 %
|
Food delivery -
theatres
|
2,999
|
2,660
|
12.7
%
|
13,052
|
8,175
|
59.7 %
|
Food service -
LBE
|
7,524
|
632
|
NM
|
14,613
|
8,882
|
64.5 %
|
Food delivery -
LBE
|
26
|
129
|
-79.9
%
|
132
|
191
|
-31.1 %
|
Total food service
revenues
|
$
|
87,244
|
$
|
10,543
|
727.5 %
|
$
|
186,998
|
$
|
108,632
|
72.1 %
|
|
|
|
|
|
|
|
Theatre attendance
(i)
|
10,245
|
786
|
NM
|
20,080
|
13,065
|
53.7 %
|
CPP (i) (ii)
(iii)
|
$
|
7.49
|
$
|
9.06
|
-17.3 %
|
$
|
7.93
|
$
|
6.99
|
13.4 %
|
Same theatre food
service revenues (i)
|
$
|
75,594
|
$
|
7,189
|
951.5 %
|
$
|
157,465
|
$
|
90,695
|
73.6 %
|
Same theatre
attendance (i)
|
10,187
|
783
|
NM
|
19,982
|
12,920
|
54.7 %
|
|
|
|
|
|
|
|
(i) Represents a
supplementary financial measure. See Non-GAAP and other financial
measures section of this news release.
|
(ii) Food service
revenue from LBE and delivery is not included in the CPP
calculation.
|
(iii) 2021 CPP was
negatively impacted by government restrictions prohibiting
concession sales effective December 18, 2021, in
Ontario.
|
Theatre food
service revenue continuity
|
Fourth
Quarter
|
Full
Year
|
|
Theatre Food
Service
|
Theatre
Attendance
|
Theatre Food
Service
|
Theatre
Attendance
|
2020 as
reported
|
$
|
7,122
|
786
|
$
|
91,384
|
13,065
|
Same theatre
attendance change
|
86,412
|
9,404
|
49,576
|
7,062
|
Impact of same
theatre CPP change
|
(17,911)
|
—
|
17,193
|
—
|
New and acquired
theatres (i)
|
1,089
|
56
|
1,651
|
85
|
Disposed and closed
theatres (i)
|
(17)
|
(1)
|
(603)
|
(132)
|
2021 as
reported
|
$
|
76,695
|
10,245
|
$
|
159,201
|
20,080
|
(i) See Non-GAAP and
other financial measures section of this news release. Represents
theatres opened, acquired, disposed or closed subsequent to the
start of the prior year comparative period and is used to report on
Cineplex's supplementary financial measures.
|
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 The Rec Room and Playdium.
Food services revenues increased by $76.7
million primarily due to the $69.6
million increase in theatre food service revenues to
$76.7 million in the quarter. The
increase in food service revenues is due to the reopening of
theatres and LBE businesses that commenced during the third quarter
resulting in an increase in attendance across Cineplex's
businesses, although government imposed capacity restrictions
reinstated in December limited attendance levels that have
historically been higher during the holiday period. CPP decreased
by $1.57 or 17.3% to
$7.49, partly due to government
restrictions imposed in Ontario
prohibiting food consumption which negatively impacted theatre food
sales and CPP. In the prior year period, a higher percentage of
theatres were open in provinces that have historically had a higher
CPP, with excited movie goers incurring a higher spend per visit.
Food service revenues from LBE venues increased by $6.9 million to $7.5
million compared to the prior year period due to the
reopening of LBE businesses across Canada as restrictions were temporarily lifted
in 2021 and the addition of new LBE locations.
Annual food service revenues increased $78.4 million, or 72.1% as compared to the prior
year to $187.0 million. The increase
in food service revenues is primarily driven by the increase in
theatre food service revenue as a result of the reopening of
theatres across Canada compared to
extended closure periods experienced in the prior year. CPP
increased $0.94 or 13.4% to an
all-time annual record of $7.93.
Product mix, modest prices increases to Cineplex's core food
service products, additional VIP theatre locations and film product
targeted towards adult demographics all contributed to the increase
in CPP.
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
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Cinema
media
|
$
|
22,007
|
$
|
1,368
|
NM
|
$
|
32,958
|
$
|
23,568
|
39.8%
|
Digital place-based
media
|
10,788
|
11,128
|
-3.1%
|
32,372
|
41,790
|
-22.5%
|
Total media revenues
from continuing operations
|
$
|
32,795
|
$
|
12,496
|
162.4%
|
$
|
65,330
|
$
|
65,358
|
— %
|
|
|
|
|
|
|
|
Media revenues from
discontinued operations
|
—
|
—
|
—%
|
—
|
602
|
-100.0%
|
Total media
revenues
|
$
|
32,795
|
$
|
12,496
|
162.4%
|
$
|
65,330
|
$
|
65,960
|
-1.0%
|
Fourth Quarter and Full Year
Total media revenues from continuing operations increased
$20.3 million or 162.4% to
$32.8 million in the fourth quarter
of 2021 compared to the prior year period. This increase was due to
a $20.6 million increase in Cinema
media as a result of the reopening of theatres leading to
significant increases in pre-show and show-time advertising
revenues. Cineplex's cinema media arrangements are impacted by
theatre attendance levels which drive impressions and ultimately
impact media revenue generated by Cineplex. Accordingly, the
increase in cinema media revenue is consistent with the increase in
attendance levels when compared to the prior period. The release of
the highly anticipated films Spider-Man: No Way Home and
The Matrix Resurrections during the fourth quarter of 2021
contributed to the increase in both pre-show and show-time
advertising revenue compared to the prior year period which had
limited first run product releases. The increase in Cinema media
revenues was partially offset by a $0.3 million decrease in digital place-based
media revenues.
Total media revenues from continuing operations remained flat at
$65.3 million for the year ended
December 31, 2021. Cineplex
recognized a $9.4 million
increase in Cinema media revenue primarily due to the reopening of
theatres resulting in an increase in pre-show and show time
advertising revenue. This was offset by a decrease in digital
place-based media revenue of $9.4
million due to lower project revenue (hardware sales),
creative and digital advertising revenue.
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
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Amusement - P1AG
excluding Cineplex exhibition and LBE (i)
|
$
|
31,804
|
$
|
11,815
|
169.2
%
|
$
|
100,282
|
$
|
60,027
|
67.1 %
|
Amusement - Cineplex
exhibition (i)
|
1,963
|
130
|
NM
|
4,943
|
2,457
|
101.2 %
|
Amusement -
LBE
|
11,329
|
1,652
|
585.7
%
|
29,248
|
15,417
|
89.7 %
|
Total amusement
revenues
|
$
|
45,096
|
$
|
13,597
|
231.7 %
|
$
|
134,473
|
$
|
77,901
|
72.6 %
|
(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 increased $31.5
million or 231.7% to $45.1
million during the quarter compared to the prior year
period. The quarterly increase in revenues was primarily due to the
reopening of P1AG US and Canada
route locations at FECs and theatres. Additionally, the reopening
of LBE businesses also resulted in increased amusement revenues
when compared to the prior year period. However, government imposed
restrictions reinstated during December in several key provinces in
which Cineplex operates, reduced operations to below normal
capacity levels negatively impacting Cineplex's revenue generating
potential.
For the annual period, amusement revenues increased by
$56.6 million or 72.6% compared to
the prior year period to $134.5
million. The increase was due to strong reopening of P1AG US
route locations at FECs, theatres and increased equipment sales
when compared to the prior year where government mandated closures
resulted in prolonged closures of P1AG route locations, Cineplex
theatres and LBE venues. The opening of an additional
Playdium location in Dartmouth,
Nova Scotia and two additional The Rec Room locations
in Burnaby, British Columbia and
Barrie, Ontario during year also
contributed to the increase in LBE amusement revenues.
Other revenues
The following table highlights the other revenues which includes
revenues from the Cineplex Store, promotional activities,
screenings, private parties, corporate events, breakage on gift
card sales and revenues from management fees for the quarter and
the full year (in thousands of dollars):
Other
revenues
|
Fourth
Quarter
|
Full
Year
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Other revenues from
continuing operations
|
$
|
8,926
|
$
|
8,556
|
4.3 %
|
$
|
33,548
|
$
|
33,552
|
— %
|
Other revenues from
discontinued operations
|
—
|
—
|
—
|
—
|
199
|
-100.0 %
|
Total other
revenues
|
$
|
8,926
|
$
|
8,556
|
4.3 %
|
$
|
33,548
|
$
|
33,751
|
-0.6 %
|
Fourth Quarter and Full Year
The quarterly increase in other revenues from continuing
operations is primarily due to the resumption of the recognition of
breakage revenues relating to gift card sales, net of lower digital
commerce sales.
The annual increase in other revenues from continuing operations
was primarily due to the resumption of the recognition of breakage
revenues relating to gift card sales compared to the prior year
where the recognition of breakage revenue was suspended during the
shutdown of theatres and LBE venues.
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
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Film cost
|
$
|
61,990
|
$
|
3,151
|
NM
|
$
|
114,674
|
$
|
66,922
|
71.4
%
|
Film cost percentage
(i)
|
49.2
%
|
43.4
%
|
5.8
%
|
48.5
%
|
50.4
%
|
-1.9
%
|
(i) Represents a
supplementary financial measure. See Non-GAAP and other financial
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
which vary by title and distributor.
The increase in film cost and film cost percentage in the fourth
quarter over the prior year period is due to the release of first
run film product including Spider-Man: No Way Home, Dune,
Ghostbusters: Afterlife and No Time to Die, compared to limited
releases in the comparative period.
The increase in film cost for the annual period is due to the
release of first run film product in the current period compared to
limited releases and older and classic film product with lower
settlement rates in the prior year. In the prior year period, there
were a limited number of theatres open operating at significantly
reduced capacities, resulting in a less meaningful comparison of
film cost percentages.
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
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Cost of food service
- theatre
|
$
|
19,066
|
$
|
3,704
|
414.8 %
|
$
|
37,697
|
$
|
27,845
|
35.4
%
|
Cost of food service
- LBE
|
1,976
|
285
|
593.2 %
|
3,986
|
2,822
|
41.2
%
|
Total cost of food
service
|
$
|
21,042
|
$
|
3,989
|
427.5 %
|
$
|
41,683
|
$
|
30,667
|
35.9
%
|
|
|
|
|
|
|
|
Theatre concession
cost percentage (i)
|
23.9 %
|
37.9 %
|
-14.0 %
|
21.9 %
|
28.0
%
|
-6.1 %
|
LBE food cost
percentage (i)
|
26.2 %
|
37.4 %
|
-11.2 %
|
27.0 %
|
31.1
%
|
-4.1 %
|
Theatre concession
margin per patron (i)
|
$
|
5.70
|
$
|
5.63
|
1.2 %
|
$
|
6.19
|
$
|
5.04
|
22.8 %
|
(i) Represents a
supplementary financial measure. See Non-GAAP and other financial
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 location as well as the quantity and
mix between food and beverage items sold.
The quarterly and annual increase in cost of food service is
positively correlated to the increase in food service revenues
recognized during the quarter and annual period as a result of the
reopening of Cineplex theatres and LBE businesses, compared to
closures that remained in effect for a majority of the prior year
period. The quarterly and annual decrease in theatre concession
cost percentage and LBE food cost percentage when compared to the
prior year is due to higher costs resulting from extended closure
periods of theatres and LBE businesses in 2020 resulting in lower
volume of food sales and increased reserves on perishable inventory
as a result of mandated closures with limited notice in 2020.
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
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Depreciation of
property, equipment and leaseholds
|
$
|
24,754
|
$
|
27,043
|
-8.5 %
|
$
|
102,277
|
$
|
113,346
|
-9.8 %
|
Amortization of
intangible assets and other assets
|
2,747
|
1,707
|
60.9 %
|
10,765
|
11,500
|
-6.4 %
|
Sub-total -
depreciation and amortization - other assets
|
$
|
27,501
|
$
|
28,750
|
-4.3 %
|
$
|
113,042
|
$
|
124,846
|
-9.5 %
|
|
|
|
|
|
|
|
Depreciation -
right-of-use assets
|
25,041
|
28,136
|
-11.0 %
|
102,247
|
128,393
|
-20.4 %
|
Total depreciation
and amortization
|
$
|
52,542
|
$
|
56,886
|
-7.6 %
|
$
|
215,289
|
$
|
253,239
|
-15.0 %
|
Fourth Quarter and Full Year
Depreciation of property, equipment and leaseholds decreased by
$2.3 million, or 8.5% during
the quarter compared to the prior year period, and by $11.1 million or 9.8% for the year compared to
the prior year period. The decrease was due primarily to fully
depreciated property, equipment and leaseholds.
The quarterly increase in amortization of intangible assets and
other relates to software developments and additions in the current
period. The decrease in amortization of intangible assets and other
assets as compared to the prior full year period is due to fully
amortized intangible assets.
The quarterly and annual decrease of $3.1
million and $26.1 million,
respectively, in depreciation of right-of-use assets is primarily
due to modifications to lease agreements as a result of COVID-19
which reduced the corresponding right-of-use asset and related
depreciation recognized.
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 and goodwill
|
Fourth
Quarter
|
Full
Year
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Impairment of
property, equipment and leaseholds
|
$
|
943
|
$
|
5,243
|
-82.0 %
|
$
|
943
|
$
|
39,192
|
-97.6 %
|
Impairment of
right-of-use assets
|
2,774
|
21,236
|
-86.9 %
|
2,774
|
71,846
|
-96.1 %
|
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
|
$
|
3,717
|
$
|
56,175
|
-93.4 %
|
$
|
3,717
|
$
|
294,863
|
-98.7 %
|
Fourth Quarter and Full Year
Cineplex generally performs its annual test for impairment of
goodwill and indefinite-lived intangible assets in the fourth
quarter, in accordance with the policy described in its annual
consolidated financial statements. Assessment of impairment for
long-lived assets, including property, equipment, leaseholds,
right-of-use assets, intangible assets and goodwill is performed
more frequently as specific events or circumstances dictate
triggering events and changes in circumstances indicate that the
carrying amount of the asset group may not be fully
recoverable.
In early 2020, in response to the outbreak of the COVID-19
pandemic as declared by the WHO, the government of Canada announced mandated closure of schools,
public facilities and non-essential businesses. Consequently,
effective March 16, 2020 and
continuing throughout the remainder of the year, Cineplex had to
either temporarily close its theatres and location-based
entertainment venues or operate with strict capacity restrictions
across its operations, resulting in material decreases in revenues,
results of operations and cash flows and a material decrease in
Cineplex's market value due to a sharp decline in its share price.
These represented triggering events at each balance sheet date in
2020.
Increasing concerns over the new highly transmissible Omicron
COVID-19 variant and increased daily COVID-19 case counts led to
shutdowns and restrictions in several provinces that materially
affected operations representing a triggering event requiring
impairment testing for long-lived assets, indefinite-lived
intangible assets and goodwill at December
31, 2021. During the fourth quarter of 2021, government
imposed restrictions were reinstituted in Ontario, British
Columbia, New Brunswick,
Nova Scotia and Prince Edward Island, reducing capacity limits
to 50% and requiring temporary theatre closures in Quebec. Further government-imposed
restrictions were reinstated or modified subsequent to December 31, 2021 resulting in temporary theatre
closures in Ontario, Newfoundland and New
Brunswick. Based on the results of the impairment tests,
Cineplex recognized non-cash impairment charges of $0.9 million to property, equipment and
leaseholds and $2.8 million to
right-of-use assets for the year ended December 31, 2021. If the discount rates were to
increase by 2.0%, assuming a constant cash flow margin, or
discounted cash flows were 13% less than estimated, there would not
be any further material impairments to property, equipment and
leaseholds, and right-of-use assets.
Fair value less cost to sell is determined using Level 3 inputs
such as attendance and the related revenue growth rates, variable
and fixed cash flows, operating margins, and discount rates based
on Cineplex's internal budget. Cineplex projects revenue, operating
margins and cash flows for a period of five years, and applies a
perpetual long-term growth rate thereafter. In arriving at its
forecasts, Cineplex considers past experience, economic trends such
as inflation, as well as industry and market trends. Cineplex has
considered the significant impact of COVID-19 on the business with
the capacity restrictions and/or temporary theatre closures
reinstated during and subsequent to December
2021. Estimates have been applied for the impact of
temporary closures and for operations with capacity restrictions,
for both Cineplex and customer locations for the first quarter of
2022. Subsequent to 2022, a range of estimates for growth in
adjusted EBITDAaL (See Non-GAAP and other financial measures
section of this news release) from 1% to 6% has been applied
across locations for the period 2023-2026 to reflect a staged
reopening and other scenarios. Cineplex's estimated adjusted
EBITDAaL for 2022 contemplates the latest information provided by
government, at the measurement date, related to the timing of the
lifting of restrictions on locations and available information
related to the release of film content, as well as observable
evidence from other territories of consumer behaviour upon the
reopening of theatres.
Cineplex's projected revenue and cash flows for 2022 assume
business will be negatively impacted by the further
government-imposed restrictions reinstituted or modified in
Ontario, Quebec, British
Columbia, Newfoundland and
New Brunswick subsequent to
December 31, 2021 For every quarter
Cineplex stays closed, additional impairment charges could be
required.
Discount rates applied to the groups of goodwill cash-generating
units ("CGUs") represent Cineplex's assessment of the risks
specific to each group of CGUs regarding the time value of money
and individual risks of the underlying assets. Cineplex used
discount rates between 8.0% and 13.6% (2020 - between 11.0% and
16.7%), and no change to the perpetual growth rates between 0.5%
and 1.0% (2020 - between 0.5% and 1.0%), which are consistent with
the observed long-term average growth rates in the exhibition,
amusement and leisure, and digital media industries.
The determination of fair value less costs of disposal is
sensitive to the growth rates, discount rates, and long-term growth
rates used. The risk premiums expected by market participants
related to uncertainties about the industry and assumptions
relating to future cash flows may differ, depending on economic
conditions and other events. Accordingly, it is reasonably
possible that future changes in assumptions may negatively impact
future assessments of the recoverable amount for groups of
CGUs.
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.
For goodwill, Cineplex concluded there were no non-cash
impairment losses in the exhibition business within the Film
Entertainment and Content segment. For one group of CGUs in
the Film Entertainment and Content segment, if the discount rates
were to increase by 2.0%, assuming a constant cash flow margin, or
discounted cash flows were 13% less than estimated, the carrying
amount of the group of CGUs would exceed the reasonable range for
the recoverable amounts by $5.2
million. The goodwill for this group of CGUs represents 8%
of the total carrying amount of goodwill. For all other CGUs, no
reasonably possible change in assumption would cause the
recoverable amount to fall below the carrying value.
At the end of each future reporting period Cineplex will assess
whether there are indications that the impairment loss recognised
for an asset other than goodwill may no longer exist or may have
decreased. If any such indication exists, the Company will estimate
the recoverable amount of that asset and may reverse previously
recorded impairment losses.
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
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Impairment of
intangible assets - discontinued operations
|
$
|
—
|
$
|
—
|
NM
|
$
|
—
|
$
|
5,156
|
NM
|
Intangible assets included in assets held for sale were written
down in 2020 prior to disposition to reflect their expected net
realizable value. On June 29, 2020,
Cineplex sold all of its interest in WorldGaming Network LP for a
nominal amount. No other operations were classified as a
discontinued operation in the current period.
Loss (gain) 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):
|
|
|
Loss (gain) on
disposal of assets
|
Fourth
Quarter
|
Full
Year
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Loss (gain) on
disposal from continuing operations
|
$
|
1,576
|
$
|
(283)
|
NM
|
$
|
(28,283)
|
$
|
(13,101)
|
115.9 %
|
Loss on disposal from
discontinued operations
|
—
|
—
|
— %
|
—
|
129
|
-100.0 %
|
Loss (gain) on
disposal of assets
|
$
|
1,576
|
$
|
(283)
|
NM
|
$
|
(28,283)
|
$
|
(12,972)
|
118.0 %
|
The annual gain on disposal of assets was primarily from the
sale of the head office buildings completed in the first quarter of
2021, for gross proceeds of $57.0
million. Cineplex continues to occupy its head office
buildings as a tenant. The prior full year gain includes the sale
of certain restrictive lease rights in the third quarter.
Other costs
Other costs include three main sub-categories of expenses;
theatre occupancy expenses, which capture 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
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Theatre occupancy
expenses
|
$
|
13,176
|
$
|
9,891
|
33.2 %
|
$
|
40,945
|
$
|
60,514
|
-32.3 %
|
Other operating
expenses
|
129,023
|
55,567
|
132.2 %
|
339,313
|
276,092
|
22.9 %
|
General and
administrative expenses
|
15,771
|
11,755
|
34.2 %
|
59,296
|
39,084
|
51.7 %
|
Total other costs
from continuing operations
|
$
|
157,970
|
$
|
77,213
|
104.6 %
|
$
|
439,554
|
$
|
375,690
|
17.0
%
|
|
|
|
|
|
|
|
Other costs from
discontinued operations
|
—
|
—
|
— %
|
—
|
2,212
|
-100.0 %
|
Total other
costs
|
$
|
157,970
|
$
|
77,213
|
104.6 %
|
$
|
439,554
|
$
|
377,902
|
16.3 %
|
Theatre occupancy expenses
The following table highlights the movement in theatre occupancy
expenses for the quarter and the full year (in thousands of
dollars):
|
|
|
Theatre occupancy
expenses
|
Fourth
Quarter
|
Full
Year
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Cash rent
paid/payable (i)
|
$
|
32,415
|
$
|
23,727
|
36.6 %
|
$
|
113,080
|
$
|
109,161
|
3.6 %
|
Other
occupancy
|
14,786
|
12,820
|
15.3 %
|
57,852
|
65,545
|
-11.7 %
|
One-time items
(ii)
|
(863)
|
(169)
|
410.7 %
|
(4,690)
|
(2,108)
|
122.5 %
|
Total theatre
occupancy including cash lease payments
|
$
|
46,338
|
$
|
36,378
|
27.4 %
|
$
|
166,242
|
$
|
172,598
|
-3.7 %
|
|
|
|
|
|
|
|
Cash rent
paid/payable related to lease obligations (iii)
|
(33,162)
|
(26,487)
|
25.2 %
|
(125,297)
|
(112,084)
|
11.8 %
|
Theatre occupancy as
reported
|
$
|
13,176
|
$
|
9,891
|
33.2 %
|
$
|
40,945
|
$
|
60,514
|
-32.3 %
|
(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 including real estate taxes, business taxes and
common area maintenance. 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
|
Full
Year
|
|
Occupancy
|
Occupancy
|
2020 as
reported
|
$
|
9,891
|
$
|
60,514
|
Impact of new and
acquired theatres
|
218
|
363
|
Impact of disposed
theatres
|
(179)
|
(1,410)
|
Same theatre rent
change (i)
|
7,100
|
14,566
|
One-time
items
|
(694)
|
(2,582)
|
Other
|
3,515
|
(17,293)
|
|
|
|
Impact of IFRS 16
adoption:
|
|
|
Cash rent
paid/payable related to lease obligations
|
(6,675)
|
(13,213)
|
2021 as
reported
|
$
|
13,176
|
$
|
40,945
|
(i) Represents a
supplementary financial measure. See Non-GAAP and other financial
measures section of this news release.
|
Fourth Quarter
Theatre occupancy expenses increased $3.3
million or 33.2% during the fourth quarter of 2021 compared
to the prior year period. This increase was primarily due to
the reduction in subsidies received as a result of the reopening of
Cineplex's businesses. The increase was also attributable to the
increase theatre rent related expenses including common area
maintenance and taxes incurred as Cineplex's theatres were open
during the period. During the prior year period, Cineplex
recognized lower theatre occupancy expenses as a majority of
theatres were closed or operating at far below normal capacity
levels. As a result, rent relief measures negotiated with landlord
partners were higher in the prior year period as compared to the
current period. Cineplex was able to reduce theatre occupancy
expenses through the receipt of realty tax and rent subsidies of
$0.5 million (2020 - $2.9 million) and $1.0
million ($2.7 million),
respectively.
Full Year
The decrease in theatre occupancy expenses of $19.6 million or 32.3% for the 2021 year compared
the prior year was due to lower theatre rent related expenses
including common area maintenance and taxes as compared to the
prior year period. Cineplex recognized realty tax subsidies of
$11.0 million (2020 - $2.9 million) and rent subsidies of $12.9 million (2020 - $2.7
million), contributing to the decrease in theatre occupancy
expenses.
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
|
Full
Year
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Theatre
payroll
|
$
|
30,766
|
$
|
5,157
|
496.6 %
|
$
|
63,818
|
$
|
40,689
|
56.8 %
|
Theatre operating
expenses
|
27,146
|
12,717
|
113.5 %
|
66,188
|
61,359
|
7.9 %
|
Media
|
13,146
|
8,513
|
54.4 %
|
37,263
|
42,913
|
-13.2 %
|
P1AG
|
27,853
|
15,494
|
79.8 %
|
91,573
|
71,638
|
27.8 %
|
LBE (i)
|
12,692
|
5,037
|
152.0 %
|
31,331
|
26,731
|
17.2 %
|
LBE pre-opening
(ii)
|
—
|
785
|
NM
|
1,354
|
1,907
|
-29.0 %
|
SCENE
|
8,641
|
4,890
|
76.7 %
|
29,019
|
13,423
|
116.2 %
|
Marketing
|
5,211
|
2,136
|
144.0 %
|
10,710
|
7,223
|
48.3 %
|
Other
(iii)
|
7,605
|
5,093
|
49.3 %
|
24,676
|
24,389
|
1.2 %
|
Other operating
expenses including cash lease payments
|
$
|
133,060
|
$
|
59,822
|
122.4 %
|
$
|
355,933
|
$
|
290,272
|
22.6 %
|
Cash rent
paid/payable related to lease obligations (iv)
|
(4,037)
|
(4,255)
|
-5.1 %
|
(16,620)
|
(14,180)
|
17.2 %
|
Other operating
expenses from continuing operations
|
$
|
129,023
|
$
|
55,567
|
132.2 %
|
$
|
339,313
|
$
|
276,092
|
22.9 %
|
|
|
|
|
|
|
|
Other operating
expenses from discontinued operations
|
—
|
—
|
— %
|
—
|
2,212
|
-100.0 %
|
Total other operating
expenses
|
$
|
129,023
|
$
|
55,567
|
132.2 %
|
$
|
339,313
|
$
|
278,304
|
21.9 %
|
(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
|
Full
Year
|
|
Other
Operating
|
Other
Operating
|
2020 as
reported
|
$
|
55,567
|
$
|
276,092
|
|
|
|
Impact of new and
acquired theatres
|
788
|
1,238
|
Impact of disposed
theatres
|
21
|
(1,071)
|
Same theatre payroll
change (i)
|
24,834
|
22,542
|
Same theatre
operating expenses change (i)
|
14,451
|
5,276
|
Media operating
expenses change
|
4,633
|
(5,650)
|
P1AG operating
expenses change
|
12,359
|
19,935
|
LBE operating
expenses change
|
7,655
|
4,600
|
LBE pre-opening
change
|
(785)
|
(553)
|
SCENE
change
|
3,751
|
15,596
|
Marketing
change
|
3,075
|
3,487
|
Other
|
2,456
|
261
|
|
|
|
|
|
|
Impact of IFRS 16
adoption:
|
|
|
Cash rent related to
lease obligations
|
218
|
$
|
(2,440)
|
2021 as
reported
|
$
|
129,023
|
$
|
339,313
|
(i) See Non-GAAP and
other financial measures section of this news release. These are
measures included as part of Cineplex's supplementary financial
measure calculations.
|
Fourth Quarter
Other operating expenses increased $73.5
million or 132.2% during the fourth quarter of 2021 compared
to the prior year period. The increase was primarily driven by
increases in same store theatre payroll and theatre operating
expenses of $25.6 million and
$14.4 million, respectively, as
Cineplex's theatres were operating at a greater capacity in the
current period as compared to extended closures in effect during
the prior year. Cineplex also recognized P1AG other operating
expenses of $27.9 million, an
increase of $12.4 million when
compared to the prior year due to the reopening of P1AG US and
Canadian route locations. With the lifting of government-imposed
restrictions, Cineplex's LBE locations were also open for the
majority of the fourth quarter resulting in LBE other operating
expenses of $12.7 million an increase
of $7.7 million when compared to the
prior year. Cineplex also recognized a $3.8
million increase in SCENE operating costs prior to the
launch of Scene+, and a $3.1 million
increase in marketing expenses primarily related to the launch of
Cineplex's national brand campaign, Where Escape Begins
which launched on September 27, 2021.
Cineplex received $8.9 million of
subsidies in the current period, comprised of $8.8 million (2020 -$14.3
million) of payroll subsidies of which $6.5 million (2020 - $6.9
million) was offset against theatre payroll, and
$0.1 million (2020 - $1.8 million) of non-theatre rent, realty tax and
utilities subsidies.
Full Year
The overall increase in other operating expenses was a result of
the reopening of Cineplex's theatres, LBE businesses and P1AG US
and Canada route locations at
FEC's and theatres. The increase is also attributable to the
increase in SCENE operating costs prior the launch of Scene+. In
the prior year period, Cineplex experienced extended closure
periods of its theatres, LBE locations and P1AG route locations
resulting in a significant decrease in business volumes. For the
annual period, Cineplex received $54.8
million (2020 - $49.8 million)
of subsidies in the current period, comprised of $48.4 million (2020 - $47.6 million) of payroll subsidies of which
$30.6 million (2020 - $25.3 million) was offset against theatre
payroll, and $6.4 million (2020 -
$2.2 million) non-theatre rent,
realty tax and utility subsidies.
General and administrative expenses
The following table highlights the movement in general and
administrative ("G&A") expenses during the quarter and the full
year, including Share-based compensation costs, and G&A
expenses net of these costs (in thousands of dollars):
G&A
expenses
|
Fourth
Quarter
|
Full
Year
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
G&A excluding the
following items
|
$
|
12,730
|
$
|
7,261
|
75.3 %
|
$
|
44,239
|
$
|
43,717
|
1.2 %
|
Restructuring
|
—
|
2,396
|
-100.0 %
|
—
|
8,258
|
-100.0 %
|
Transaction /
Litigation costs
|
2,275
|
1,279
|
77.9 %
|
11,395
|
4,101
|
177.9
%
|
LTIP (i)
|
800
|
248
|
222.6
%
|
4,065
|
(15,104)
|
-126.9 %
|
Option
plan
|
523
|
718
|
-27.2 %
|
1,903
|
(1,203)
|
-258.2 %
|
G&A expenses
including cash lease payments
|
$
|
16,328
|
$
|
11,902
|
37.2 %
|
$
|
61,602
|
$
|
39,769
|
54.9 %
|
Cash rent
paid/payable included as part of lease obligations (ii)
|
(557)
|
(147)
|
278.9 %
|
(2,306)
|
(685)
|
236.6 %
|
G&A expenses as
reported
|
$
|
15,771
|
$
|
11,755
|
34.2 %
|
$
|
59,296
|
$
|
39,084
|
51.7 %
|
(i) LTIP includes the
expenses 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 increased $4.0
million during the fourth quarter of 2021 compared to the
prior year period. The change is attributable to higher head office
payroll expenses and professional fees incurred related to the
litigation against Cineworld. Cineplex incurred $2.3 million (2020 - $1.3
million) of expenses related to litigation arising from the
Cineworld Transaction during the quarter (Section 1.1, Cineworld
Transaction). Variable wage subsidies declined as business volumes
increased, resulting in lower wage benefits received in the current
period, contributing to the higher G&A expenses compared to the
prior year. Employee payroll was reduced by $0.8 million (2020 - $2.3
million) under the THRP.
G&A expenses for the annual period increased $20.2 million as compared to the prior year. The
change was primarily due to a significant decrease in LTIP expense
in the prior period due to the sharp decline in Cineplex's Share
price as a result of the impact of the COVID-19 pandemic on
Cineplex's business, which fell from $33.90 at the beginning of 2020 to $9.27 per Share at December 31, 2020. Cineplex also recognized total
costs relating to litigation arising from the Cineworld Transaction
of $11.4 million, an increase of
$7.3 million when compared to the
prior year. Employee payroll was reduced by $7.8 million (2020 - $9.4
million) received under the CEWS and THRP program in
2021.
NET LOSS AND EARNINGS BEFORE INTEREST, INCOME TAXES,
DEPRECIATION AND AMORTIZATION AFTER LEASES ("EBITDAaL") (see
Non-GAAP and other financial measures section of this news
release)
The following table presents net loss, EBITDA, adjusted EBITDA
and adjusted EBITDAaL for the three months and year ended
December 31, 2021 as compared to the
prior year period (expressed in thousands of dollars, except
adjusted EBITDAaL margin):
|
|
|
NET LOSS AND
EBITDA
|
Fourth
Quarter
|
Full
Year
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
Net loss
|
$
|
(21,778)
|
$
|
(230,403)
|
-90.5 %
|
$
|
(248,722)
|
$
|
(624,001)
|
-60.1 %
|
Net loss as a
percentage of sales
|
(7.3) %
|
(439.3) %
|
432.0 %
|
(37.9) %
|
(149.2) %
|
111.3 %
|
EBITDA
|
$
|
60,966
|
$
|
(90,897)
|
NM
|
$
|
93,402
|
$
|
(345,244)
|
NM
|
Adjusted
EBITDA
|
$
|
58,328
|
$
|
(32,097)
|
NM
|
$
|
59,927
|
$
|
(55,866)
|
NM
|
Adjusted
EBITDAaL
|
$
|
20,198
|
$
|
(65,948)
|
NM
|
$
|
(84,295)
|
$
|
(182,815)
|
-53.9 %
|
Adjusted EBITDAaL
margin
|
6.7 %
|
(125.7) %
|
132.4 %
|
(12.8) %
|
(43.7) %
|
30.9 %
|
Net loss and adjusted EBITDAaL for the fourth quarter of 2021
were $(21.8) million and $20.2 million, respectively, as compared to the
net loss of $(230.4) million and
adjusted EBITDAaL of $(65.9) million,
respectively, in the prior year period. The movement in both net
loss and adjusted EBITDAaL was primarily due to the reopening of
Cineplex's entire circuit of theatres and LBE venues during the
majority of the fourth quarter, despite capacity restrictions
reinstated in Ontario,
New Brunswick, Nova Scotia, Prince
Edward Island, and British
Columbia on December 18, 2021
and theatres in Quebec mandated to
close effective December 20, 2021 in
response to a surge in COVID-19 cases. Cinema media revenues and
amusement revenues from route operations in both Canada and the
United States also increased in the periods of reopening. In
the prior year period, the second wave of COVID-19 in the winter
resulted in another round of closures of Cineplex's theatres and
LBE venues in several provinces during the latter half of the
fourth quarter of 2020.
Net loss for the year ended December 31,
2021 was $(248.7) million, as
compared to the net loss of $(624.0)
million in the prior year period. Adjusted EBITDAaL for the
year ended December 31, 2021 was a
loss of $(84.3) million as compared
to a loss of $(182.8) million for the
same period in 2020. The movements in both net loss and adjusted
EBITDAaL were primarily due to the lifting of some restrictions on
the theatre and LBE businesses commencing near the end of the
second quarter of 2021, and reopening of Cineplex's entire circuit
of theatres and LBE venues as of July 17,
2021, continuing into the third and fourth quarters. In
response to a surge in COVID-19 cases, capacity restrictions were
reinstated in Ontario,
New Brunswick, Nova Scotia, Prince
Edward Island and British
Columbia effective December 18,
2021 and theatres in Quebec
were mandated to close effective December
20, 2021. In the prior year period, Cineplex operated at
full capacity until restrictions and closures began in March 2020 which continued until the latter half
of August subsequent to which limited reopenings were allowed. The
second wave of COVID-19 in the winter resulted in another round of
closures in Cineplex's theatres and LBE venues in several provinces
during the latter half of the fourth quarter of 2020.
ADJUSTED FREE CASH FLOW (see Non-GAAP and other financial
measures section of this news release)
For the fourth quarter of 2021, adjusted free cash flow per
common share of Cineplex was $(0.02)
as compared to $(0.48) in the prior
year period. During the 12 months ended December 31, 2021, Cineplex generated adjusted
free cash flow per Share of $(2.39),
compared to $(2.55) in the prior 12
month period. Cineplex declared dividends per Share of $0.00 and $0.15,
respectively, in each 12 month period. The payout ratios for these
periods were 0.0% and (5.9)%, respectively.
NON-GAAP AND OTHER FINANCIAL MEASURES
National Instrument 52-112, Non-GAAP and Other Financial
Measures Disclosure ("NI 52-112") is effective for
documents filed by reporting issuers for years ending on or after
October 15, 2021. The
Instrument imposes obligations regarding disclosure of
non-GAAP financial measures, non-GAAP ratios, and other financial
measures. Cineplex reports on certain non-GAAP measures, non-GAAP
ratios, supplementary financial measures and total segment measures
that are used by management to evaluate the performance of
Cineplex. The following measures included in this news release do
not have a standardized meaning under GAAP and may not be
comparable to similar measures provided by other issuers. Cineplex
includes these measures because its management believes that they
assist investors in assessing financial performance. These non-GAAP
and other financial measures are used throughout this news release
and are defined below.
NON-GAAP FINANCIAL MEASURES
Non-GAAP financial measures are defined in 52-112 as a financial
measure disclosed that (a) depicts the historical or expected
future financial performance, financial position or cash flow of an
entity, (b) with respect to its composition, excludes an amount
that is included in, or includes an amount that is excluded from,
the composition of the most directly comparable financial measure
disclosed in the primary financial statements of the entity, (c) is
not disclosed in the financial statements of the entity, and (d) is
not a ratio, fraction, percentage or similar representation.
NON-GAAP RATIO
A non-GAAP ratio is defined by 52-112 as a financial measure
disclosed that (a) is in the form of a ratio, fraction, percentage
or similar representation, (b) has a non-GAAP financial measure as
one or more of its components, and (c) is not disclosed in the
financial statements.
The below are non-GAAP financial measures or non-GAAP ratios
that are reported by Cineplex.
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 on
disposal of assets, foreign exchange, the equity income (loss) of
CDCP, the non-controlling interests' share of adjusted EBITDA of
TG-CPX Limited Partnership, and impairment, depreciation,
amortization, interest and taxes of Cineplex's other joint ventures
and associates. Adjusted EBITDAaL modifies adjusted EBITDA to
deduct current period cash rent paid or payable related to lease
obligations. During the year, Cineplex agreed to a variety of
arrangements with landlords to reduce or defer cash rent paid or
payable as a result of the impact of COVID-19.
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 Section 17,
Non-GAAP and other financial measures Cineplex's 2021 Management
Discussion & Analysis, on page 77.
Net cash burn
Management believes that net cash burn is an important non-GAAP
measure that is used to analyze Cineplex's cash used to maintain
operating activities, make growth capital expenditures and
principal repayments on its lease obligations. Net Cash Burn is
calculated as net cash provided by (used in) operating activities
adjusted for the timing differences of changes in operating assets
and liabilities, less repayments of lease obligations - principal
and net capital expenditures, adjusted for the the timing of lease
payments and tax recoveries.
SUPPLEMENTARY FINANCIAL MEASURES
Supplementary financial measures are financial measures that are
not (a) presented in the financial statements and (b) is, or is
intended to be, disclosed periodically to depict the historical or
expected future financial performance, financial position or cash
flow, that is not a non-GAAP financial measure or a non-GAAP ratio
as defined in the instrument. The below are supplementary financial
measures that Cineplex uses to depict its financial performance,
financial position or cash flows.
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 and other financial
measure, earnings is defined as net income or net loss attributable
to Cineplex excluding the change in fair value of financial
instruments.
Per Patron Revenue Metrics
Cineplex reviews per patron
metrics as they relate to box office revenue and theatre food
service revenue such as BPP, CPP, BPP excluding premium priced
product, and concession margin per patron, as these are key
measures used by investors to value and assess Cineplex's
performance, and are widely used in the theatre exhibition
industry. Management of Cineplex defines these metrics as
follows:
Theatre Attendance: Theatre attendance is calculated as
the total number of paying patrons that frequent Cineplex's
theatres during the period.
BPP: Calculated as total box office revenues divided
by total paid theatre attendance for the period.
BPP excluding premium priced product: Calculated as total
box office revenues for the period, less box office revenues from
3D, 4DX, UltraAVX, VIP ScreenX and IMAX product; divided by total
paid theatre attendance for the period, less paid theatre
attendance for 3D, 4DX, UltraAVX, VIP, ScreenX and IMAX
product.
CPP: Calculated as total theatre food service
revenues divided by total paid total theatre attendance for the
period.
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, 2021 the impact of 2 locations that
have been opened or acquired and 6 locations that have been closed
have been excluded, resulting in 152 theatres being included in the
same theatre metrics. For the year ended December 31, 2021 the impact of the 2 locations
that have been opened or acquired and the 7 locations that have
been closed have been excluded, resulting in 151 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.
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 or
operational restrictions 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 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 vaccine passports or proof of vaccination mandates,
social distancing measures and restrictions including those on
capacity. The uncertainty of the timing of the reductions of many
government-imposed restrictions may potentially have negative
effects on Cineplex's businesses. Restrictions imposed in many of
the markets in which Cineplex operates are gradually being lifted
as COVID-19 cases decline across the country, providing clearer
visibility for the reopening of Cineplex's business and the return
to normalcy. 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"), and MD&A for the
year ended December 31, 2021 ("Annual
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
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 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 the 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, Cineplex undertakes 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 Annual 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:
Cineplex Inc. Q4 2021 Analyst Conference Call Details:
Date:
|
Friday, February 11,
2022
|
|
|
Time:
|
10:00 a.m. Eastern
Daylight Time
|
|
|
Audio
Webcast:
|
Available here
or on the Company's investor website homepage
at http://ir.cineplex.com/.
|
|
The webcast will be
available for one year.
|
Analysts who cover the Company, should use the dial-in option to
participate in the live question period: 1-226-828-7575 (Local) or
1-833-950-0062 (Canada Toll-free), access code: 448868.
All attendees should join the event 5-10 minutes prior to the
scheduled start time. When prompted, please provide the
confirmation code or event title. 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. Cineplex offers a unique escape from the everyday to
millions of guests through its circuit of over 170 movie theatres
and location-based entertainment venues. In addition to being
Canada's largest and most
innovative film exhibitor, the company operates Canada's favourite destination for 'Eats &
Entertainment' (The Rec Room) and complexes specially
designed for teens and families (Playdium). It also operates
successful businesses in digital commerce (CineplexStore.com),
alternative programming (Cineplex Events), cinema media (Cineplex
Media), digital place-based media (Cineplex Digital Media "CDM")
and amusement solutions (Player One Amusement Group "P1AG").
Providing even more value for its guests, Cineplex is a joint
venture partner in SCENE, Canada's
largest entertainment loyalty program.
Proudly recognized as having one of the country's Most Admired
Corporate Cultures, Cineplex employs approximately 10,000 people in
its offices across Canada and the
United States. To learn more visit Cineplex.com or download
the Cineplex App.
Cineplex Inc.
Consolidated Balance
Sheets
(expressed in thousands of Canadian
dollars)
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
26,938
|
|
$
|
16,254
|
Trade and other
receivables
|
80,679
|
|
51,834
|
Income taxes
receivable
|
1,984
|
|
66,551
|
Inventories
|
24,899
|
|
21,712
|
Prepaid expenses and
other current assets
|
13,365
|
|
11,613
|
|
|
|
|
|
147,865
|
|
167,964
|
|
|
|
|
Non-current
assets
|
|
|
|
Property, equipment and
leaseholds
|
464,439
|
|
555,340
|
Right-of-use
assets
|
768,675
|
|
881,418
|
Interests in joint
ventures and associates
|
7,423
|
|
8,644
|
Intangible
assets
|
81,651
|
|
84,922
|
Goodwill
|
635,545
|
|
635,582
|
Derivative financial
instrument
|
9,240
|
|
—
|
|
|
|
|
|
$
|
2,114,838
|
|
$
|
2,333,870
|
|
|
|
|
Cineplex Inc.
Consolidated Balance Sheets …
continued
(expressed in thousands of Canadian dollars)
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
157,950
|
|
$
|
82,992
|
Share-based
compensation
|
—
|
|
482
|
Income taxes
payable
|
1,945
|
|
802
|
Deferred revenue and
other
|
293,206
|
|
219,983
|
Lease
obligations
|
101,058
|
|
97,259
|
Fair value of interest
rate swap agreements
|
8,063
|
|
7,202
|
|
|
|
|
|
562,222
|
|
408,720
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Share-based
compensation
|
4,940
|
|
2,670
|
Long-term
debt
|
739,211
|
|
725,271
|
Fair value of interest
rate swap agreements
|
6,160
|
|
19,157
|
Lease
obligations
|
1,004,465
|
|
1,073,666
|
Post-employment
benefit obligations
|
9,973
|
|
11,503
|
Other
liabilities
|
7,590
|
|
68,649
|
|
|
|
|
|
1,772,339
|
|
1,900,916
|
|
|
|
|
Total
liabilities
|
2,334,561
|
|
2,309,636
|
|
|
|
|
|
|
|
|
Shareholders'
(deficit) equity
|
|
|
|
|
|
|
|
Share
capital
|
852,465
|
|
852,379
|
Deficit
|
(1,151,394)
|
|
(903,394)
|
Hedging reserves and
other
|
(131)
|
|
(131)
|
Contributed
surplus
|
80,027
|
|
75,882
|
Cumulative translation
adjustment
|
(690)
|
|
(502)
|
|
|
|
|
Total shareholders'
(deficit) equity
|
(219,723)
|
|
24,234
|
|
|
|
|
|
$
|
2,114,838
|
|
$
|
2,333,870
|
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,
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Box office
|
$
|
125,890
|
|
$
|
7,260
|
|
$
|
236,320
|
|
$
|
132,820
|
Food
service
|
87,244
|
|
10,543
|
|
186,998
|
|
108,632
|
Media
|
32,795
|
|
12,496
|
|
65,330
|
|
65,358
|
Amusement
|
45,096
|
|
13,597
|
|
134,473
|
|
77,901
|
Other
|
8,926
|
|
8,556
|
|
33,548
|
|
33,552
|
|
|
|
|
|
|
|
|
|
299,951
|
|
52,452
|
|
656,669
|
|
418,263
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Film cost
|
61,990
|
|
3,151
|
|
114,674
|
|
66,922
|
Cost of food
service
|
21,042
|
|
3,989
|
|
41,683
|
|
30,667
|
Depreciation -
right-of-use assets
|
25,041
|
|
28,136
|
|
102,247
|
|
128,393
|
Depreciation and
amortization - other assets
|
27,501
|
|
28,750
|
|
113,042
|
|
124,846
|
Loss (gain) on
disposal of assets
|
1,576
|
|
(283)
|
|
(28,283)
|
|
(13,101)
|
Other
costs
|
157,970
|
|
77,213
|
|
439,554
|
|
375,690
|
Share of (income)
loss of joint ventures and associates
|
(1,781)
|
|
2,345
|
|
755
|
|
8,409
|
Interest expense -
lease obligations
|
14,648
|
|
14,200
|
|
58,590
|
|
49,085
|
Interest expense -
other
|
15,584
|
|
19,375
|
|
65,138
|
|
61,483
|
Interest
income
|
(30)
|
|
(33)
|
|
(232)
|
|
(182)
|
Foreign
exchange
|
(109)
|
|
759
|
|
(43)
|
|
57
|
Change in fair value
of financial instruments
|
(5,420)
|
|
—
|
|
(8,790)
|
|
—
|
Impairment of
long-lived assets and goodwill
|
3,717
|
|
56,175
|
|
3,717
|
|
294,863
|
|
|
|
|
|
|
|
|
|
321,729
|
|
233,777
|
|
902,052
|
|
1,127,132
|
|
|
|
|
|
|
|
|
Loss from
continuing operations before income taxes
|
(21,778)
|
|
(181,325)
|
|
(245,383)
|
|
(708,869)
|
|
|
|
|
|
|
|
|
Provision for
income taxes
|
|
|
|
|
|
|
|
Current
|
—
|
|
(65,776)
|
|
3,339
|
|
(73,495)
|
Deferred
|
—
|
|
114,854
|
|
—
|
|
(11,373)
|
|
|
|
|
|
|
|
|
|
—
|
|
49,078
|
|
3,339
|
|
(84,868)
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
$
|
(21,778)
|
|
$
|
(230,403)
|
|
$
|
(248,722)
|
|
$
|
(624,001)
|
|
|
|
|
|
|
|
|
Net loss from
discontinued operations, net of taxes
|
—
|
|
—
|
|
—
|
|
(4,952)
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(21,778)
|
|
$
|
(230,403)
|
|
$
|
(248,722)
|
|
$
|
(628,953)
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations attributable to:
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(21,778)
|
|
$
|
(230,403)
|
|
$
|
(248,722)
|
|
$
|
(623,996)
|
Non-controlling
interests
|
—
|
|
—
|
|
—
|
|
(5)
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
$
|
(21,778)
|
|
$
|
(230,403)
|
|
$
|
(248,722)
|
|
$
|
(624,001)
|
|
|
|
|
|
|
|
|
Net loss
attributable to:
|
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(21,778)
|
|
$
|
(230,403)
|
|
$
|
(248,722)
|
|
$
|
(628,948)
|
Non-controlling
interests
|
—
|
|
—
|
|
—
|
|
(5)
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(21,778)
|
|
$
|
(230,403)
|
|
$
|
(248,722)
|
|
$
|
(628,953)
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to owners of Cineplex - basic and
diluted:
|
|
|
|
|
Continuing
operations
|
$
|
(0.34)
|
|
$
|
(3.64)
|
|
$
|
(3.93)
|
|
$
|
(9.85)
|
Discontinued
operations
|
—
|
|
—
|
|
—
|
|
(0.08)
|
|
|
|
|
|
|
|
|
Total
operations
|
$
|
(0.34)
|
|
$
|
(3.64)
|
|
$
|
(3.93)
|
|
$
|
(9.93)
|
Cineplex Inc.
Consolidated Statements of
Comprehensive Loss
(expressed in thousands of Canadian
dollars)
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
$
|
(21,778)
|
|
$
|
(230,403)
|
|
$
|
(248,722)
|
|
$
|
(624,001)
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income from continuing
operations
|
|
|
|
|
|
|
|
Items that will be
reclassified subsequently to net income:
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
(141)
|
|
(1,862)
|
|
(188)
|
|
378
|
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
|
722
|
|
(495)
|
|
722
|
|
(495)
|
Associated deferred
income taxes expense
|
—
|
|
133
|
|
—
|
|
133
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss) from continuing
operations
|
581
|
|
(2,224)
|
|
534
|
|
(144)
|
|
|
|
|
|
|
|
|
Comprehensive loss
from continuing operations
|
(21,197)
|
|
(232,627)
|
|
(248,188)
|
|
(624,145)
|
|
|
|
|
|
|
|
|
Net loss from
discontinued operations, net of taxes
|
—
|
|
—
|
|
—
|
|
(4,952)
|
Foreign currency
translation adjustment from discontinued operations
|
—
|
|
—
|
|
—
|
|
7
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(21,197)
|
|
$
|
(232,627)
|
|
$
|
(248,188)
|
|
$
|
(629,090)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
from continuing operations attributable to:
|
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(21,197)
|
|
$
|
(232,627)
|
|
$
|
(248,188)
|
|
$
|
(624,140)
|
Non-controlling
interests
|
—
|
|
—
|
|
—
|
|
(5)
|
|
|
|
|
|
|
|
|
|
$
|
(21,197)
|
|
$
|
(232,627)
|
|
$
|
(248,188)
|
|
$
|
(624,145)
|
|
|
|
|
|
|
|
|
Comprehensive loss
attributable to:
|
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(21,197)
|
|
$
|
(232,627)
|
|
$
|
(248,188)
|
|
$
|
(629,085)
|
Non-controlling
interests
|
—
|
|
—
|
|
—
|
|
(5)
|
|
|
|
|
|
|
|
|
|
$
|
(21,197)
|
|
$
|
(232,627)
|
|
$
|
(248,188)
|
|
$
|
(629,090)
|
Cineplex Inc.
Consolidated Statements of Changes in
Equity
(expressed in thousands of Canadian
dollars)
For the periods ended December 31, 2021 and 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
Contributed
surplus
|
|
Hedging reserves
and other
|
|
Cumulative
translation adjustment
|
|
Deficit
|
|
Non-controlling
interests
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1,
2021
|
|
$
|
852,379
|
|
$
|
75,882
|
|
$
|
(131)
|
|
$
|
(502)
|
|
$
|
(903,394)
|
|
$
|
—
|
|
$
|
24,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(248,722)
|
|
—
|
|
(248,722)
|
Other comprehensive
income (loss)
|
|
—
|
|
—
|
|
—
|
|
(188)
|
|
722
|
|
—
|
|
534
|
Total
comprehensive loss
|
|
—
|
|
—
|
|
—
|
|
(188)
|
|
(248,000)
|
|
—
|
|
(248,188)
|
Share option
expense
|
|
—
|
|
1,903
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,903
|
PSU/RSU
expense
|
|
—
|
|
2,388
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,388
|
Settlement for
cancelled options
|
|
—
|
|
(60)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(60)
|
Issuance of shares on
exercise of options
|
|
86
|
|
(86)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2021
|
|
$
|
852,465
|
|
$
|
80,027
|
|
$
|
(131)
|
|
$
|
(690)
|
|
$
|
(1,151,394)
|
|
$
|
—
|
|
$
|
(219,723)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1,
2020
|
|
$
|
852,379
|
|
$
|
4,052
|
|
$
|
(131)
|
|
$
|
(887)
|
|
$
|
(264,310)
|
|
$
|
(109)
|
|
$
|
590,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(628,948)
|
|
(5)
|
|
(628,953)
|
Other comprehensive
income (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
|
Cineplex Inc.
Consolidated Statements of Cash
Flows
(expressed in thousands of Canadian dollars
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Cash provided by
(used in)
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
Net loss from
continuing operations
|
$
|
(21,778)
|
$
|
(230,403)
|
|
$
|
(248,722)
|
$
|
(624,001)
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
|
|
Depreciation and
amortization - other assets
|
27,501
|
28,750
|
|
113,042
|
124,846
|
Depreciation -
right-of-use assets
|
25,041
|
28,136
|
|
102,247
|
128,393
|
Unrealized foreign
exchange
|
78
|
787
|
|
55
|
342
|
Interest rate swap
agreements - non-cash interest
|
(5,282)
|
2,509
|
|
(12,730)
|
13,922
|
Accretion of
convertible debentures and notes payable
|
4,164
|
3,428
|
|
15,973
|
7,471
|
Other non-cash
interest
|
148
|
368
|
|
960
|
1,396
|
Loss (gain) on
disposal of assets
|
1,576
|
(283)
|
|
(28,283)
|
(13,101)
|
Deferred income
taxes
|
—
|
114,854
|
|
—
|
(11,373)
|
Non-cash share-based
compensation
|
1,228
|
(3,149)
|
|
4,292
|
1,228
|
Change in fair value
of financial instruments
|
(5,420)
|
—
|
|
(8,790)
|
—
|
Impairment of
long-lived assets, goodwill and investments
|
3,717
|
56,175
|
|
3,717
|
294,863
|
Net change in
interests in joint ventures and associates
|
(2,088)
|
5,044
|
|
1,805
|
12,878
|
Changes in operating
assets and liabilities
|
(1,405)
|
(67,257)
|
|
117,438
|
(43,178)
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
27,480
|
(61,041)
|
|
61,004
|
(106,314)
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
Proceeds from
disposal of assets, net
|
68
|
59,870
|
|
63,215
|
80,920
|
Purchases of
property, equipment and leaseholds
|
(5,052)
|
(9,969)
|
|
(23,627)
|
(73,411)
|
Intangible assets
additions
|
(1,992)
|
(2,106)
|
|
(9,200)
|
(9,005)
|
Tenant
inducements
|
1,044
|
2,697
|
|
8,068
|
24,296
|
Net cash received
from CDCP
|
1,995
|
—
|
|
1,995
|
3,910
|
|
|
|
|
|
|
Net cash (used in)
provided by investing activities
|
(3,937)
|
50,492
|
|
40,451
|
26,710
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
Dividends
paid
|
—
|
—
|
|
—
|
(19,000)
|
Repayments under
credit facilities, net
|
1,000
|
46,000
|
|
(246,000)
|
(119,000)
|
Repayments of lease
obligations - principal
|
(25,525)
|
(32,323)
|
|
(88,259)
|
(91,946)
|
Issuance of
convertible debentures, net
|
—
|
—3
|
|
—
|
303,063
|
Issuance of notes
payable, net
|
—
|
—
|
|
243,996
|
—
|
Financing
fees
|
(542)
|
(700)
|
|
(863)
|
(1,500)
|
|
|
|
|
|
|
Net cash (used in)
provided by financing activities
|
(25,067)
|
12,977
|
|
(91,126)
|
71,617
|
|
|
|
|
|
|
Effect of exchange
rate differences on cash
|
(9)
|
650
|
|
355
|
552
|
|
|
|
|
|
|
(Decrease) increase
in cash and cash equivalents from continuing operations
|
(1,533)
|
3,078
|
|
10,684
|
(7,435)
|
Cash flows used in
discontinued operations
|
—
|
—
|
|
—
|
(2,391)
|
Cash and cash
equivalents - Beginning of period
|
28,471
|
13,176
|
|
16,254
|
26,080
|
|
|
|
|
|
|
Cash and cash
equivalents - End of period
|
$
|
26,938
|
$
|
16,254
|
|
$
|
26,938
|
$
|
16,254
|
|
|
|
|
|
|
Supplemental
information
|
|
|
|
|
|
Cash paid for
interest - lease obligation
|
$
|
14,581
|
$
|
13,203
|
|
$
|
56,708
|
$
|
32,371
|
Cash paid for
interest - other
|
$
|
27,798
|
$
|
27,247
|
|
$
|
52,143
|
$
|
47,859
|
Cash received for
income taxes, net
|
$
|
—
|
$
|
(1,124)
|
|
$
|
(62,329)
|
$
|
(16,297)
|
Cineplex Inc.
Consolidated Supplemental
Information
(expressed in thousands of Canadian
dollars)
______________________________________________________________________
Reconciliation to reported net loss to adjusted
EBITDAaL
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Net loss from
continuing operations
|
$
|
(21,778)
|
$
|
(230,403)
|
|
$
|
(248,722)
|
$
|
(624,001)
|
|
|
|
|
|
|
Depreciation and
amortization - other
|
27,501
|
28,750
|
|
113,042
|
124,846
|
Depreciation -
right-of-use assets
|
25,041
|
28,136
|
|
102,247
|
128,393
|
Interest expense -
lease obligations
|
14,648
|
14,200
|
|
58,590
|
61,483
|
Interest expense -
other
|
15,584
|
19,375
|
|
65,138
|
49,085
|
Interest
income
|
(30)
|
(33)
|
|
(232)
|
(182)
|
Current income tax
(recovery) expense
|
—
|
(65,776)
|
|
3,339
|
(73,495)
|
Deferred income tax
expense (recovery)
|
—
|
114,854
|
|
—
|
(11,373)
|
|
|
|
|
|
|
EBITDA from
continuing operations
|
$
|
60,966
|
$
|
(90,897)
|
|
$
|
93,402
|
$
|
(345,244)
|
|
|
|
|
|
|
Loss (gain) on
disposal of assets
|
1,576
|
(283)
|
|
(28,283)
|
(13,101)
|
Change in fair value
of financial instruments
|
(5,420)
|
—
|
|
(8,790)
|
—
|
CDCP equity (income)
loss (i)
|
(2,439)
|
2,085
|
|
(146)
|
7,279
|
Foreign exchange
(gain) loss
|
(109)
|
759
|
|
(43)
|
57
|
Impairment of
long-lived assets, goodwill and investments
|
3,717
|
56,175
|
|
3,717
|
294,863
|
Non-controlling
interest adjusted EBITDA
|
—
|
—
|
|
—
|
5
|
Depreciation and
amortization - joint ventures and associates (ii)
|
25
|
11
|
|
25
|
73
|
Taxes and interest of
joint ventures and associates (ii)
|
12
|
53
|
|
45
|
202
|
|
|
|
|
|
|
Adjusted EBITDA
from continuing operations
|
$
|
58,328
|
$
|
(32,097)
|
|
$
|
59,927
|
$
|
(55,866)
|
|
|
|
|
|
|
Cash rent
paid/payable related to lease obligations (iii)
|
(37,755)
|
(30,889)
|
|
(144,222)
|
(126,949)
|
Negotiated
lease-related cash savings for the period (iii)
|
—
|
(2,598)
|
|
—
|
—
|
Cash rent paid not
pertaining to current period (iv)
|
(375)
|
(364)
|
|
—
|
—
|
|
|
|
|
|
|
Adjusted EBITDAaL
(v)
|
$
|
20,198
|
$
|
(65,948)
|
|
$
|
(84,295)
|
$
|
(182,815)
|
|
|
|
|
|
|
(i)
|
CDCP equity (income)
loss 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)
|
The cash rent paid or
payable includes negotiated lease obligations savings of $34.9
million (2020 - $42.5 million) through December 31,
2021.
|
(iv)
|
Includes amounts
pre-paid or deferred to future periods, to better reflect the
current period EBITDAaL.
|
(v)
|
See Non-GAAP and
other financial measures section of this news release.
|
Cineplex Inc.
Consolidated Supplemental
Information
(expressed in thousands of Canadian dollars,
except number of shares and per share data)
_________________________________________________________________________________________
Reconciliation of reported cash provided by (used in)
operating activities to adjusted free cash flow per share
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
|
|
|
|
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
(used in) operating activities
|
$
|
27,480
|
$
|
(61,041)
|
|
$
|
61,004
|
$
|
(106,314)
|
Less: Total capital
expenditures net of proceeds on sale of assets
|
(4,985)
|
(10,099)
|
|
(20,295)
|
(73,411)
|
|
|
|
|
|
|
Standardized free
cash flow
|
22,495
|
(71,140)
|
|
40,709
|
(179,725)
|
|
|
|
|
|
|
Add/(Less):
|
|
|
|
|
|
Changes in operating
assets and liabilities (i)
|
1,405
|
67,257
|
|
(117,438)
|
43,178
|
Changes in operating
assets and liabilities of joint ventures and associates
(i)
|
307
|
(2,699)
|
|
(1,050)
|
(4,469)
|
Principal component
of lease obligations
|
(25,525)
|
(32,323)
|
|
(88,259)
|
(91,946)
|
Principal portion of
cash rent paid not pertaining to current period
|
(737)
|
(357)
|
|
—
|
—
|
Growth capital
expenditures and other (ii)
|
(350)
|
8,928
|
|
13,358
|
68,032
|
Share of loss of
joint ventures and associates, net of non-cash
depreciation
|
(622)
|
(196)
|
|
(832)
|
(855)
|
Non-controlling
interest
|
—
|
—
|
|
—
|
5
|
Net cash received
from CDCP (iii)
|
1,995
|
—
|
|
1,995
|
3,910
|
Adjusted free cash
flow
|
$
|
(1,032)
|
$
|
(30,530)
|
|
$
|
(151,517)
|
$
|
(161,870)
|
|
|
|
|
|
|
Average number of
Shares outstanding
|
63,343,223
|
63,333,238
|
|
63,339,239
|
63,333,238
|
|
|
|
|
|
|
Adjusted free cash
flow per Share
|
$
|
(0.016)
|
$
|
(0.482)
|
|
$
|
(2.392)
|
$
|
(2.556)
|
Dividends
declared
|
$
|
—
|
$
|
—
|
|
$
|
—
|
$
|
0.150
|
(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. The Revolving Facility is available
to Cineplex to fund Board approved projects.
|
(iii)
|
Excludes the share of
loss 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.
|
Cineplex Inc.
Consolidated Supplemental
Information
(expressed in thousands of Canadian
dollars)
_________________________________________________________________________________________
Reconciliation of net cash provided by (used in) operating
activities to net cash
burn
|
|
|
Net cash
burn
|
2021
|
2020
|
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$
|
27,480
|
$
|
52,023
|
$
|
17,133
|
$
|
(35,632)
|
$
|
(61,041)
|
$
|
(86,558)
|
$
|
18,095
|
Changes in operating
assets and liabilities
|
1,405
|
(32,640)
|
(62,622)
|
(23,581)
|
67,257
|
34,894
|
(69,401)
|
Repayments of lease
obligations - principal
|
(25,525)
|
(24,191)
|
(19,086)
|
(19,457)
|
(32,323)
|
(24,811)
|
(933)
|
Net capital
expenditures
|
(4,008)
|
(3,475)
|
(3,021)
|
(5,055)
|
(7,272)
|
(8,198)
|
(8,019)
|
Timing difference of
lease abatements recognized as
compared to cash payments
|
1,965
|
1,153
|
(2,435)
|
1,830
|
12,672
|
18,868
|
(18,933)
|
Timing difference of
cash tax recoveries as
compared to current tax provision
|
—
|
—
|
—
|
3,309
|
(53,946)
|
16,643
|
26,808
|
|
|
|
|
|
|
|
|
Total net cash
burn
|
$
|
1,317
|
$
|
(7,130)
|
$
|
(70,031)
|
$
|
(78,586)
|
$
|
(74,653)
|
$
|
(49,162)
|
$
|
(52,383)
|
Average monthly net
cash burn
|
$
|
439
|
$
|
(2,377)
|
$
|
(23,344)
|
$
|
(26,195)
|
$
|
(24,884)
|
$
|
(16,387)
|
$
|
(17,461)
|
To comply with NI 52-112, effective this quarter, Cineplex
revised its presentation of Net Cash Burn to reconcile from its
closest GAAP figure, net cash provided by (used in) operating
activities. Under the previous presentation beginning with Adjusted
EBITDAaL, Net Cash Burn would be presented as follows:
|
|
|
|
Net cash
burn
|
2021
|
2020
|
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
|
|
|
|
|
|
|
|
Adjusted
EBITDAaL
|
$
|
20,198
|
$
|
10,762
|
$
|
(53,165)
|
$
|
(62,090)
|
$
|
(65,948)
|
$
|
(46,725)
|
$
|
(72,532)
|
Cash interest expense
excluding lease obligations
|
(16,669)
|
(15,983)
|
(15,701)
|
(13,429)
|
(13,412)
|
(11,317)
|
(7,782)
|
Provision for income
taxes
|
—
|
—
|
—
|
—
|
12,355
|
16,497
|
34,440
|
Net capital
expenditures
|
(4,008)
|
(3,475)
|
(3,021)
|
(5,055)
|
(7,272)
|
(8,198)
|
(8,019)
|
Other adjustments to
conform to current presentation
|
1,796
|
1,566
|
1,856
|
1,988
|
(376)
|
581
|
1,510
|
|
|
|
|
|
|
|
|
Total net cash
burn
|
$
|
1,317
|
$
|
(7,130)
|
$
|
(70,031)
|
$
|
(78,586)
|
$
|
(74,653)
|
$
|
(49,162)
|
$
|
(52,383)
|
Average monthly net
cash burn
|
$
|
439
|
$
|
(2,377)
|
$
|
(23,344)
|
$
|
(26,195)
|
$
|
(24,884)
|
$
|
(16,387)
|
$
|
(17,461)
|
SOURCE Cineplex