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TORONTO, Canada, August 11, 2022 (TSX: CGX) – Cineplex Inc. (“Cineplex” or the “Company”) today released its financial results for the three and six months ended June 30, 2022. Unless otherwise specified, all amounts are in Canadian dollars.
“Cineplex delivered its strongest quarter in over two years, thanks to a great film slate and record-breaking results from across our diversified businesses,” said Ellis Jacob, President & CEO, Cineplex. “The cumulative success of Top Gun: Maverick, Doctor Strange in the Multiverse of Madness, and Jurassic World Dominion during the quarter – which saw each film opening with a domestic box office over $100 million – is a testament to the fact that when strong film product is available, Canadians return to our theatres in droves. We generated positive net income for the first time since the start of the pandemic. We also achieved a second quarter record BPP of $12.29 and an all-time quarterly record CPP of $8.84. We also saw very encouraging results in our other businesses, including an all-time quarterly record adjusted EBITDAaL in Player One Amusement Group and record second quarter adjusted EBITDAaL in the Location-Based Entertainment business.”
Jacob continued, “in addition to reporting our strongest results since the pandemic began, this quarter we are celebrating a few other important milestones from across the business, including the expansion of the Scene+ loyalty program and Empire Company Limited joining Scotiabank and Cineplex as partners. Today, we are also celebrating the one-year anniversary of CineClub.”
“With respect to the Cineworld litigation, we remain focused on preparations for the Ontario Court of Appeal hearings which are scheduled for October 12 and 13 of this year. As part of the ongoing efforts to maximize and monetize the value of the judgement, we have engaged Moelis & Company as financial advisor and Goodmans LLP as lead counsel,” said Jacob.
“As we look forward, we remain confident in the recovery of our businesses, our strong capital management and liquidity, and our efforts to manage financial uncertainties as we have done during previous economic downturns. The strong quarterly results aided our compliance with the financial covenant testing for the second quarter of 2022. In anticipation of ongoing film release shifts caused by COVID-19 related production delays, we have received the support and confidence of our lending group for the suspension of financial covenant testing in the third quarter of 2022. With the backdrop of recessionary concerns, Cineplex is well positioned to further capitalize on pent-up consumer demand for affordable out-of-home entertainment,” Jacob concluded.
Second Quarter Financial Results
|2022||2021||Period over Period Change|
|Net income (loss) (ii)||$||1.3||million||$||(103.7) million||NM|
|Net income (loss) as a percentage of sales (ii)||0.4||%||(159.7)||%||160.1%|
|Cash provided by (used in) operating activities||$||47.2||million||$||17.1||million||175.2%|
|Box office revenues per patron (“BPP”) (iii)||$||12.29||$||10.89||12.9%|
|Concession revenues per patron (“CPP”) (iii)||$||8.84||$||7.86||12.5%|
|Adjusted EBITDA (iii)||$||77.9||million||$||(16.9) million||NM|
|Adjusted EBITDAaL (ii) (iii)||$||35.8||million||$||(53.2) million||NM|
|Adjusted EBITDAaL margin (ii) (iii)||10.2||%||(81.9)||%||92.1%|
|Adjusted free cash flow (iii)||$||21.8||million||$||(65.9) million||NM|
|Adjusted free cash flow per Share (iii)||$||0.345||$||(1.041)||NM|
|Earnings per Share (“EPS”) – basic and diluted (ii)||$||0.02||$||(1.64)||NM|
Year to Date Financial Results
|2022||2021||Period over Period Change|
|Net loss (ii)||$||(40.9) million||$||(193.4) million||-78.8%|
|Net loss as a percentage of sales (ii)||(7.1)||%||(181.9)||%||174.8%|
|Cash provided by (used in) operating activities||$||41.7||million||$||(18.5) million||NM|
|Box office revenues per patron (“BPP”) (iii)||$||12.19||$||10.44||16.8%|
|Concession revenues per patron (“CPP”) (iii)||$||8.83||$||7.40||19.3%|
|Adjusted EBITDA (iii)||$||114.4||million||$||(47.0) million||NM|
|Adjusted EBITDAaL (ii) (iii)||$||30.0||million||$||(115.3) million||NM|
|Adjusted EBITDAaL margin (ii) (iii)||5.2||%||(108.4)||%||113.6%|
|Adjusted free cash flow (iii)||$||0.1||million||$||(144.7) million||NM|
|Adjusted free cash flow per Share (iii)||$||0.002||$||(2.285)||NM|
|Earnings per Share (“EPS”) – basic and diluted (ii)||$||(0.65)||$||(3.05)||-78.7%|
Proactive Credit Facility Amendment
On August 10, 2022, Cineplex entered into a fifth amending agreement to the Credit Agreement, (the “Fifth Credit Agreement Amendment”), which among other things, extended the suspension of financial covenant testing until the fourth quarter of 2022 and liquidity covenant requirement until March 31, 2023. The following is a summary of the key terms of the Fifth Credit Agreement Amendment:
This summary of the Fifth Credit Agreement Amendment is qualified in its entirety by reference to the provisions of the Credit Agreement which contains a complete statement of those terms and conditions. The Credit Agreement and each of the First, Second, Third, Fourth and Fifth Credit Agreement Amendment were filed on SEDAR on June 30, 2020, November 13, 2020, February 8, 2021, January 4, 2022, and August 10, 2022, respectively, for each of Credit Agreement Amendments.
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