Mr. Ellis Jacob reports

CINEPLEX REPORTS THIRD QUARTER 2024 RESULTS

Cineplex Inc. has released its financial results for the three and nine months ended Sept. 30, 2024.

Q3 (third quarter) 2024 highlights:

• Reported $395.6-million in revenues, exceeding Q3 2019 revenues of $373.7-million;
• Generated adjusted EBITDAaL (earnings before interest, taxes, depreciation, amortization and losses) of $47.5-million from continuing operations;
• Reported net loss from continuing operations of $24.7-million, which was impacted by the provision for the Competition Tribunal's administrative monetary penalty of $39.2-million;
• Delivered BPP (box office revenues per patron) of $13.19 and CPP of $9.85, both all-time quarterly records;
• Cinema media per patron (CMPP) of $1.37 grew by 10.5 per cent over prior year;
• Digital place-based media revenues of $13.3-million grew by 40.3 per cent over prior year, due to expanded digital out-of-home networks;
• Commenced normal course issuer bid (NCIB) program.

"Our third quarter saw a steady stream of diverse film content, which drove audiences into our theatres, resulting in box office revenues reaching 98 per cent of 2019 levels and total revenues exceeding 2019 levels," said Ellis Jacob, president and chief executive officer, Cineplex. "We achieved strong adjusted EBITDAaL and operating cash flow, which allowed us to invest in the business and return to shareholders through share repurchases.

"We have continued to make progress toward our strategic initiatives. We're excited about the opening of three new LBE locations and one new theatre before year-end, which will further solidify our position as Canada's leading entertainment destination. Our market leadership also extends to our media business, which recently joined the Canadian Out-of-Home Marketing and Measurement Bureau (COMMB). Our membership enhances the accreditation of our media segment and ensures our DOOH partners receive the most value for their impressions.

"While we are disappointed with the outcome of the Competition Tribunal's decision regarding our on-line booking fee, we remain confident in our position. As previously announced, Cineplex filed its notice of appeal with the Federal Court of Appeal on Oct. 23. Enhancing the guest experience is at the forefront of what we do and our commitment to Canadian consumers has always been about choice.

"Looking ahead, we remain confident that our market leadership, along with our diversified businesses, innovative strategies and robust consumer data, uniquely position us to capitalize on the strong film slate ahead, enabling us to generate significant free cash flows."

Third quarter and October box office results

An attached table compares 2024 monthly box office revenues with 2019 and 2023 monthly box office revenues.

Key developments in the third 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 third quarter box office revenues of $174.9-million, a decrease of $13.3-million or 7.1 per cent from $188.2-million, due to a 15.5-per-cent decrease in theatre attendance compared with Cineplex's strongest third quarter ever, which included the Barbenheimer phenomenon;
• Reported third quarter BPP of $13.19, an all-time quarterly record, $1.19 or 9.9 per cent higher than the $12 reported during the prior year;
• Closed one location in the third quarter at the end of its lease term as part of Cineplex's portfolio optimization and rationalization strategy;
• Enhanced the theatre circuit at Cineplex Cinemas Fredericton, in Fredericton, N.B., with a retrofit of recliner seating in all 10 auditoriums, opened one ScreenX auditorium at Cineplex Cinemas Coquitlam and VIP in Coquitlam, B.C., and installed laser projectors at 17 auditoriums across Canada.

Theatre food service:

• Reported third quarter theatre food service revenues of $130.6-million, a decrease of $1.8-million or 1.3 per cent compared with the prior year, primarily due to a 15.5-per-cent decrease in theatre attendance;
• Reported third quarter CPP of $9.85, an all-time quarterly record, an increase of $1.41 or 16.7 per cent compared with the prior year, primarily due to an increase in average spend.

Alternative programming and distribution:

• As part of the theatrical distribution partnership with Lionsgate, Cineplex Pictures (Cineplex's distribution business) distributed Kill, Borderlands, Never Let Go and Megalopolis, as well as The Instigators, from Apple Original Films during the third quarter;
• Continued a leadership position in alternative programming, with 9.3 per cent of third quarter box office revenues coming from international films, compared with those films having a 2.7-per-cent North American share. Strong performing titles, Jatt & Juliet 3 (Punjabi), Daaru Na Peenda Hove (Punjabi), and Bibi Rajni (Punjabi), of which Cineplex represented over 75 per cent of total North American box office;
• Event Cinema programming consisted of a variety of successful initiatives, including Coraline (the biggest Event Cinema program year to date) and a documentary from BTS member Jung Kook, I Am Still. Andre Rieu continued to drive fans to cinemas with an annual summer concert and music programming featuring Seventeen Tour Follow Again, Blackpink World Tour.

Digital commerce:

• Curated a Cineplex Store collection in honour of National Day for Truth and Reconciliation to highlight diverse Indigenous experiences, cultures and artistic expressions. Cineplex also made a donation to Tipi of Hope Foundation.

Media:

• Reported third quarter media revenues of $31.4-million, an increase of $2.5-million or 8.5 per cent compared with the prior year;
• Continued leveraging expertise in data and analytics to drive revenues.

Cinema media:

• Reported third quarter cinema media revenues of $18.1-million, a decrease of $1.4-million or 7.0 per cent over the prior year;
• Reported a third quarter cinema media per patron (CMPP) of $1.37, an increase of 13 cents or 10.5 per cent over the prior year;
• Cineplex Media's mall network, featuring over 750 screens across 96 shopping destinations, has been officially accredited by the COMMB, establishing Cineplex's advanced mall audience measurement methodology as the new COMMB standard creating a new standard within the DOOH space.

Digital place-based media:

• Reported third quarter revenues of $13.3-million, an increase of $3.8-million or 40.3 per cent over the prior year, primarily due to the agreement with Cadillac Fairview that began in the first quarter;
• Non-project revenues accounted for $7.7-million, an increase of $1.4-million or 23.2 per cent during the third quarter, compared with the prior year of $6.2-million, which primarily consists of media advertising, sales of software and information technology support.

Location-based entertainment:

• Reported third quarter revenues of $31.1-million, a decrease of $3.1-million or 9.1 per cent compared with the prior year;
• Reported third quarter adjusted store-level EBITDAaL of $7.6-million, a decrease of $2.3-million or 23.5 per cent compared with the prior year;
• Enhanced the location-based entertainment circuit at The Rec Room South Edmonton, in Edmonton, Alta., with attraction upgrades of spark bowling, and augmented reality axe throwing and darts.

Loyalty:

• Membership in the Scene+ loyalty program was over 15 million members as at Sept. 30, 2024.

Corporate:

• Recognized a $39.2-million provision related to the Competition Tribunal's administrative monetary penalty. Cineplex strongly denies the allegations and is appealing both the finding and penalty;
• Cineplex repurchased for cancellation 185,700 common shares of Cineplex at an average price of $10.99 per common share under its previously announced normal course issuer bid;
• Celebrated community day on Sept. 14, 2024, with a morning of free, family-friendly movies, free gaming at Xscape Play card locations and free non-redemption gaming at LBE venues, with select discounted concessions, where $1 from every concession order of select items, and food and beverage orders were donated to BGC Canada;
• Commemorated National Day for Truth and Reconciliation on Sept. 30, 2024, by raising awareness, honouring indigenous communities through preshow content and donating to Tipi of Hope Foundation.

You are cordially invited to participate in a conference call with the management of Cineplex to review the company's third quarter results.

Mr. Jacob and Gord Nelson, chief financial officer, will host the call scheduled as follows.

Date:  Wednesday, Nov. 6, 2024

Time:  10 a.m. EDT

An audio webcast will be available. An archive of the webcast will be available on the company's website after the webcast for a limited time.

Please note that analysts who cover the company should use the dial-in option to participate in the live question period.

Dial-in number:  1-226-828-7575 (local) or 1-833-950-0062 (toll-free in Canada), access code 758686.

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 168 movie theatres and location-based entertainment venue. 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 cinema media (Cineplex Media), alternative programming (Cineplex Events), motion picture distribution (Cineplex Pictures), digital commerce (Cineplex Store) and digital place-based media (Cineplex Digital Media or CDM). Providing even more value for its guests, Cineplex is a partner in Scene+, Canada's largest entertainment and lifestyle loyalty program.

Proudly recognized as having one of the country's most admired corporate cultures, Cineplex employs over 10,000 people in its offices and venues across Canada.

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