Mr. Ellis Jacob reports

CINEPLEX REPORTS FIRST QUARTER 2024 RESULTS

Cineplex Inc. has released its financial results for the three months ended March 31, 2024. Unless otherwise specified, all amounts are in Canadian dollars.

Q1 2024 highlights:

• Total revenue increased to $294.8-million as compared with $291.4-million in the prior year.
• Net income was $5.2-million in Q1 2024, an increase from a loss of $30.2-million in the prior year.
• All-time Q1 record BPP (box office revenues per patron) of $12.74 and CPP (concession revenues per patron) of $8.95 surpassed records set in Q1 2023.
• Outpaced the Q1 North American box office relative to Q1 2023 by 664 basis points.
• Completed national rollout of on-line mobile concession ordering.
• Increased digital place-based media revenue by 24 per cent over prior year due to expanded digital-out-of-home network.
• Completed sale of Player One Amusement Group (P1AG) for $155-million (subject to customary postclosing adjustments) and recognized a gain of $67.3-million.
• Completed comprehensive refinancing plan which extended debt maturities, reduced restrictions and reduced potential dilution.
• Thirteen per cent of Q1 box office revenues came from international programming.

"In the first quarter, we made tremendous strides towards strengthening our balance sheet with the closing of the strategic sale of P1AG, which accelerated our deleveraging and comprehensive refinancing plan, designed to improve financial flexibility," said Ellis Jacob, president and chief executive officer, Cineplex.

"We are now focusing on long-term growth with the path to increasing shareholder returns. Despite slower box office, we have emerged stronger and have much to look forward to. Our diversified businesses are gaining momentum, positioning us favourably for the future. With the addition of Cadillac Fairview and Cominar at the beginning of the year, Cineplex Digital Media has increased its out-of-home shopping network to 94 premium shopping centres, which includes nine of the country's top 10 busiest malls. A new Playdium location in the Greater Toronto Area was announced to open later this year as part of three new LBE openings slated for Q4 2024. With compelling margins, the LBE business continues to perform strongly with long-term growth potential.

"Not only do our diversified businesses set us apart from our peers, we also consistently outperform them in North American box office performance. At CinemaCon last month, our studio partners reinforced their commitment to an influx of dynamic content for the remainder of 2024 and into 2025. With new titles continuing to be added and the already strong line up in place, we anticipate a very strong second half of 2024.

"We've laid the groundwork for some of our key growth strategies in the first quarter and feel energized by the upcoming film slate. With our strategic initiatives in place and a promising film lineup on the horizon, we're excited about the opportunities ahead as we continue to prioritize the interests of our shareholders."

Key developments in the first quarter of 2024

The following describes certain key business initiatives undertaken and results achieved during 2024 in each of Cineplex's core business areas:

Film entertainment and content

Theatre exhibition:

• Reported first quarter box office revenues of $125.1-million, an increase of $1.7-million or 1.4 per cent from $123.3-million, due to a 0.5-per-cent increase in theatre attendance as a result of the success of highly anticipated films released during the quarter, including Dune: Part Two and Kung Fu Panda 4.
• Reported a first quarter record BPP of $12.74, 11 cents or 0.9 per cent higher than the $12.63 reported during the prior year.
• Enhanced the theatre circuit with an IMAX screen at Cineplex Cinemas Yonge-Eglinton and VIP and UltraAVX screen at Scotiabank Theatre Saskatoon and VIP.

Theatre food service:

• Reported first quarter theatre food service revenues of $87.9-million, an increase of $1.4-million or 1.6 per cent compared with the prior year, primarily due to a 0.5-per-cent increase in theatre attendance.
• Reported a first quarter record CPP of $8.95, an increase of 10 cents or 1.1 per cent compared with the prior year, primarily due to an increase in average spend.
• Completed the national rollout of mobile food and beverage ordering across the entire theatre circuit during the first quarter, allowing guests to preorder prior to the beginning of the movie.

Alternative programming and distribution:

• As part of the theatrical distribution partnership with Lionsgate, Cineplex's distribution business (Cineplex Pictures) distributed Ordinary Angels and Imaginary during the first quarter.
• Continued a leadership position in alternative programming, with 13 per cent of first quarter box office revenues coming from international films, including strong performing titles Warning 2 (Punjabi), Jatt Nuu Chudail Takri (Punjabi) and Oye Bhole Oye (Punjabi), of which Cineplex represented over 75 per cent of the total North American box office market share.
• Event cinema programming consisted of a variety of successful initiatives, including Queen Rock Montreal, the early 1980s concert presented exclusively in IMAX, Nabucco and Carmen plus others from the Metropolitan Opera, and some notable family fare including Trolls, Super Mario Bros., Paw Patrol and Peppa's Cinema Party driving audiences during spring break.

Digital commerce:

• Celebrated Black History Month with a collection of films available on the Cineplex Store, with an accompanying donation to The Black Academy, an organization that celebrates, empowers and showcases black Canadian talent.

Media:

• Reported first quarter media revenues of $22.4-million, an increase of $100,000 or 0.2 per cent compared with the prior year.
• Continued leveraging expertise in data and analytics to drive revenues.

Cinema media:

• Reported first quarter cinema media revenues of $12.4-million, a decrease of $1.9-million or 13.1 per cent over the prior year, due to the prior year including advertising deals related to expanding the Scene+ loyalty program, and revenue related to advertising campaigns that were previously deferred during pandemic periods.
• In March of 2024, Cineplex Media released the results of its proprietary Canadian cinema attention results from Lumen, a well-known and respected global research company. These results far outperform any other video media option in the marketplace, and highlight the strength of the cinema advertising channel.

Digital place-based media:

• Reported first quarter revenues of $9.9-million, an increase of $1.9-million or 24 per cent over the prior year.
• Began operating a network of 200 digital displays in 18 Cadillac Fairview shopping centres and selling digital and static media, sponsorships and activations for Cadillac Fairview's extensive network of highly desirable shopping destinations across Canada.
• Signed an agreement with Cominar to develop, install and maintain a state-of-the-art digital signage network in five Cominar-managed shopping centres across Quebec. The addition of Cominar's shopping centres grows Cineplex's reach in the Greater Montreal Area to 117 million shoppers annually, and to over 750 million shoppers annually, across Canada.

Location-based entertainmen:

• Reported first quarter revenues of $34.5-million, a decrease of $600,000 or 1.7 per cent compared with the prior year due to inclement weather in key regions.
• Reported first quarter adjusted store-level EBITDAaL (earnings before interest, taxes, depreciation, amortization and lease obligations) of $9.7-million, a decrease of $2.4-million or 20.1 per cent compared with the prior year, primarily due to an increase in payroll-related costs.

Loyalty:

• Membership in the Scene+ loyalty program increased to over 15 million members as at March 31, 2024.
• Celebrated National Popcorn Day on Jan. 19, 2024, by treating Scene+ members across the country to a free bag of popcorn. Additionally, theatre teams across Canada gifted first responders with popcorn as a show of appreciation.

Corporate:

• On Feb. 1, 2024, Cineplex completed the sale of 100 per cent of the issued and outstanding shares of P1AG for a purchase price of $155-million in cash, subject to customary postclosing adjustments. In connection with the sale of P1AG, Cineplex recognized a material gain of $67.3-million during the first quarter.
• On March 4, 2024, Cineplex completed a comprehensive refinancing plan, which included the following components:
  • The closing of a private placement offering of $575-million aggregate principal amount of 7.625 per cent senior secured notes due March 31, 2029;
  • The redemption in full of Cineplex's existing 7.5 per cent senior secured second lien notes due Feb. 26, 2026, using a portion of the proceeds from the 2024 notes offering;
  • The repayment in full and termination of the eighth amended and restated credit agreement using a portion of the proceeds from the 2024 notes offering;
  • The corporation entering into of a new $100-million covenant-lite revolving credit facility with a maturity date of March 4, 2027, with a syndicate of banks led by Bank of Nova Scotia;
  • Amendments to the corporation's 5.75 per cent convertible unsecured subordinated debentures due Sept. 30, 2025;
  • A redemption, on a pro rata basis, of $100-million of the outstanding convertible debentures at a price of 102.35 per cent of par plus accrued and unpaid interest thereon to, but excluding, the date of the redemption.

You are cordially invited to participate in a conference call with the management of Cineplex to review its first quarter results. Mr. Jacob, president and chief executive officer, and Gord Nelson, chief financial officer, will host the call scheduled for:

Cineplex Q1 2024 earnings webcast

• Date: Thursday, May 9, 2024;
• Time: 10 a.m. Eastern Daylight Time;
• Audio webcast: Q4 website:
  • Preregistration available.

An archive of the webcast will be available on the Cineplex website after the webcast for a limited time.

Please note, 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 483097.

All attendees should join the event five to 10 minutes prior to the scheduled start time. Media are welcome to join the call in listen-only mode.

About Cineplex Inc.

Cineplex 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 and entertainment (The Rec Room), complexes specially designed for teens and families (Playdium), and an entertainment concept that brings movies, amusement gaming, dining and live performances together under one roof (Cineplex Junxion). It also operates successful businesses in digital commerce (Cineplex Store), alternative programming (Cineplex Events), motion picture distribution (Cineplex Pictures), cinema media (Cineplex Media), digital place-based media (Cineplex Digital Media) and, until Feb. 1, 2024, amusement solutions (Player One Amusement Group). Providing even more value for its guests, Cineplex is a partner in Scene+, Canada's largest entertainment and lifestyle loyalty program.

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