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Cineplex Inc. — Interim / Quarterly Report 2021
Aug 12, 2021
46710_rns_2021-08-12_2e99bd90-d21c-4ac5-a79b-ea3a53d76f51.pdf
Interim / Quarterly Report
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FOR IMMEDIATE RELEASE
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Cineplex Inc. Reports Second Quarter Results Cineplex Theatres and Entertainment Venues Open Nationwide
TORONTO , Canada , August 12, 2021 (TSX: CGX) - Cineplex Inc. (“Cineplex” or the “Company”) today released its financial results for the three and six months ended June 30, 2021. Unless otherwise specified, all amounts are in Canadian dollars.
“The big screen is back! As of July 17, our entire circuit of theatres and entertainment venues were open, and guests are coming back in strong numbers to see movies the way they are meant to be seen,” said Ellis Jacob, President & CEO, Cineplex. “During the quarter, we remained prudent in managing costs and reduced our average monthly net cash burn to $24 million for Q2, down from $27 million in Q1, as our circuit continued to reopen across the country.”
“We have always focused on providing guests with exceptional experiences at a great value and coming out of the pandemic, it is even more important for us to drive habitual movie-going by making it easier and more accessible. That’s why, subsequent to quarter end, we launched Canada’s first of its kind movie subscription program called CineClub. For just $9.99 a month members receive one regular admission ticket, 20% off concession purchases and a variety of other benefits and discounts across Cineplex theatres, the Cineplex Store and our entertainment venues nationwide.”
“Looking ahead, the recent box office results are very encouraging, as is the upcoming film release schedule. We continue to implement our VenueSafe measures so guests can feel comfortable returning to our venues with family and friends. We have prepared for this for many months and with our efforts to control costs and solidify our liquidity and financial position during the closure period, we have set the stage for a strong comeback.”
Second Quarter Financial Results
| Second Quarter Financial Results | |||
|---|---|---|---|
| 2021 | **2020 ** | Period over Period Change (i) |
|
| Total revenues(ii) | $ 64.9 million | $ 22.0 million | 195.3 % |
| Theatre attendance | 1.1 million | — million |
NM |
| Net loss from continuingoperations(iii) | $ (103.7)million | $ (98.2)million | 5.6 % |
| Net loss from discontinued operations | $ — million | $ (0.7)million | -100.0 % |
| Net loss(iii) | $ (103.7)million | $ (98.9)million | 4.8 % |
| Box office revenuesperpatron(“BPP”) (iv) | $ 10.89 | $ 4.50 | 142.0 % |
| Concession revenuesperpatron(“CPP”) (iv) | $ 7.86 | $ 10.33 | -23.9 % |
| Adjusted EBITDA(iv) | $ (16.9)million | $ (41.3)million | -59.1 |
| Adjusted EBITDAaL(iii) (iv) | $ (53.2)million | $ (72.5)million | -26.7 |
| Adjusted EBITDAaL margin(iii) (iv) | (81.9) % |
(329.9) % |
248.0 % |
| Adjusted free cash flow(iv) | $ (65.9)million | $ (53.8)million | 22.6 |
| Adjusted free cash flow per common share of Cineplex (“Share”) (iv) |
$ (1.041) | $ (0.849) | 22.6 |
| Earnings per Share (“EPS”) from continuing operations - basic and diluted(iii) |
$ (1.64) | $ (1.55) | 5.8 % |
| EPS from discontinued operations - basic and diluted | $ — | $ (0.01) | NM |
| EPS - basic and diluted(iii) | $ (1.64) | $ (1.56) | 5.1 % |
Year to Date Financial Results
| Year to Date Financial Results | |||
|---|---|---|---|
| 2021 | **2020 ** | Period over Period Change (i) |
|
| Total revenues(ii) | $ 106.3 million | $ 304.8 million | -65.1 % |
| Theatre attendance | 1.6 million | 10.7 million |
-85.4 % |
| Net loss from continuingoperations(iii) | $ (193.4)million | $ (272.4)million | -29.0 % |
| Net loss from discontinued operations | $ — million | $ (5.0)million | -100.0 % |
| Net loss(iii) | $ (193.4)million | $ (277.3)million | -30.3 % |
| Box office revenuesperpatron(“BPP”) (iv) | $ 10.44 | $ 10.36 | 0.8 % |
| Concession revenuesperpatron(“CPP”) (iv) | $ 7.40 | $ 6.79 | 9.0 % |
| Adjusted EBITDA(iv) | $ (47.0)million | $ 5.2 million | NM |
| Adjusted EBITDAaL(iii) (iv) | $ (115.3)million | $ (70.1)million | 64.3 % |
| Adjusted EBITDAaL margin(iii) (iv) | (108.4) % |
(23.0) % |
-85.4 % |
| Adjusted free cash flow(iv) | $ (144.7)million | $ (54.0)million | 168.0 % |
| Adjusted free cash flow per common share of Cineplex (“Share”) (iv) |
$ (2.285) | $ (0.853) | 167.9 % |
| Earnings per Share (“EPS”) from continuing operations - basic and diluted(iii) |
$ (3.05) | $ (4.30) | -29.1 % |
| EPS from discontinued operations - basic and diluted | $ — | $ (0.08) | -100.0 % |
| EPS - basic and diluted(iii) | $ (3.05) | $ (4.38) | -30.4 % |
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 $2.6 million (2020 - $1.1 million) for the second quarter and $5.0 million (2020 - $2.4 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 NonGAAP financial measures reported by Cineplex are defined in the 'Non-GAAP Financial Measures' section at the end of this news release.
KEY DEVELOPMENTS IN THE SECOND QUARTER OF 2021
The following describes certain key business initiatives undertaken and results achieved during the first quarter of 2021 in each of Cineplex’s core business areas:
FILM ENTERTAINMENT AND CONTENT
Theatre Exhibition
-
Cineplex reported box office revenues of $12.5 million primarily due to an increase in attendance in June as Cineplex was able to open more theatres as provinces began to reduce mandatory closures and ease capacity restrictions. Cineplex will continue to adjust operating capacity in accordance with government directives.
-
BPP was $10.89, an increase of $6.39 or 142.0% 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 products.
-
Opened Quebec’s second VIP Cinemas at Cineplex Cinemas Forum and VIP in downtown Montreal.
Theatre Food Service
-
Theatre food service revenues continued to be materially negatively impacted by strict operating restrictions and mandatory closures of theatres. Cineplex continued to focus on food home delivery services and reported $3.7 million of food delivery revenues in the quarter, as compared to $3.3 million during the same quarter in 2020.
-
Theatre food service revenues increased from $0.1 million in the prior year period to $9.0 million in the current quarter due to the gradual reopening of theatres in select provinces across Canada. CPP was $7.86 in the current period.
Alternative Programming
- Alternative Programming (Cineplex Events) featured the release of the global anime box office hit Demon Slayer: Mugen Train and featured a curated series of films celebrating Pride month in June to recognize and amplify LGBTQ2+ voices and storytellers.
Digital Commerce
-
Total registered users for Cineplex Store increased 19% from the prior year period, reaching 2.1 million registered users.
-
Cineplex Store continues to benefit from PVOD releases.
MEDIA
-
Cinema media revenue increased 50.3% to $2.4 million when compared to the prior year period, mainly driven by the reopening of theatres during the latter part of the second quarter of 2021 resulting in increased pre-show and show-time advertising revenue.
-
In spite of the increase from prior year, Media revenues continued to be negatively impacted by the mandatory closures of theatres, resulting in a decline in advertising revenues when compared to historical levels. During the quarter, Media revenues were primarily driven by digital place-based media revenues, specifically from network management, creative services and media hardware sales.
AMUSEMENT AND LEISURE
Amusement Solutions
- Reported second quarter revenues of $22.2 million, an increase of $18.5 million versus the prior year period as a result of reopenings of P1AG route locations and eased capacity restrictions primarily in the United States.
Location-based Entertainment
-
Cineplex’s LBE venues remained fully or partially closed for the majority of the second quarter due to government mandated lockdown measures and enforced operating restrictions at open locations resulting in a material negative impact on revenues during the quarter.
-
During the latter part of the quarter, LBE venues (other than in Ontario) were able to gradually reopen while operating under mandated operating restrictions.
LOYALTY
- Membership in the SCENE loyalty program remained flat during the period ended June 30, 2021.
CORPORATE
-
During the second quarter, Cineplex negotiated the sale of certain restrictive lease rights for total proceeds of $6.4 million, of which $3.2 million has been received as of June 30, 2021.
-
In recognition of National Indigenous Peoples Day on June 21, Cineplex donated from every movie ticket sold, as well as from purchases made on the Cineplex Store, at The Rec Room and Playdium to imagineNATIVE – the world’s largest presenter of Indigenous screen content.
OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021
Total revenues
Total revenues for the three months ended June 30, 2021 increased $42.9 million (195.3%) to $64.9 million as compared to the prior year period. Total revenues for the six months ended June 30, 2021 decreased $198.5 million (65.1%) to $106.3 million as compared to the prior year period. A discussion of the factors affecting the changes in box office, food service, media, amusement and other revenues for the period 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 and concession margin per patron are defined and discussed in Non-GAAP measures section of this news release.
Box office revenues
The following table highlights the movement in box office revenues, theatre attendance and BPP for the quarter and the year to date (in thousands of dollars, except theatre attendance reported in thousands of patrons and per patron amounts, unless otherwise noted):
| Box office revenues | SecondQuarter | SecondQuarter | Year to Date | Year to Date |
|---|---|---|---|---|
| 2021 2020 Change |
2021 2020 Change |
|||
| Box office revenues Theatre attendance (i) Box office revenue per patron (i) BPP excluding premium priced product (i) |
$ 12,498 $ 27 NM 1,148 6 NM $ 10.89 $ 4.50 142.0 % $ 10.09 $ 4.50 124.2 % |
$ 16,316 $ 111,029 -85.3 % 1,563 10,716 -85.4 % $ 10.44 $ 10.36 0.8 % $ 9.73 $ 9.33 4.3 % |
||
| Same theatre box office revenues (i) Same theatre attendance (i) % Total box frompremiumpricedproduct(i) |
$ 12,484 $ 27 NM 1,146 6 NM 22.8 % — % 22.8 % |
$ 16,296 $ 110,112 -85.2 % 1,560 10,607 -85.3 % 20.2 % 28.7 % -8.5 % |
||
| (i)See Non-GAAP measures section of this news release. | ||||
| Box office continuity | Second Quarter Box Office Theatre Attendance |
Year to Date Box Office Theatre Attendance |
||
| 2020 as reported Same theatre attendance change Impact of same theatre BPP change |
$ 27 6 4,790 1,140 7,667 — |
$ 111,029 10,716 (93,912) (9,047) 96 — |
||
| Disposed and closed theatres(i) | 14 2 |
(897) (106) |
||
| 2021 as reported | $ 12,498 1,148 |
$ 16,316 1,563 |
||
| (i) See Non-GAAP measures section of this news release. Represents theatres opened, acquired, disposed or closed subsequent to the start of the prior year comparativeperiod. |
Second Quarter and Year to Date
| SecondQuarter 2021 Top Cineplex Films | SecondQuarter 2021 Top Cineplex Films | 3D | **% Box ** | SecondQuarter 2020 Top Cineplex Films | SecondQuarter 2020 Top Cineplex Films | 3D | % Box |
|---|---|---|---|---|---|---|---|
| 1 2 3 4 5 |
F9: The Fast Saga A Quiet Place Part II The Conjuring: The Devil Made Me Do It Godzilla Vs. Kong Cruella |
17.3 % 16.0 % 10.2 % 8.2 % 7.9 % |
1 2 3 4 5 |
Bloodshot The Invisible Man Sonic The Hedgehog Bad Boys For Life Harley Quinn: Birds of Prey |
21.1 % 17.9 % 15.9 % 9.5 % 7.0 % |
| SecondQuarter 2021 Top Cineplex Films | SecondQuarter 2021 Top Cineplex Films | 3D | **% Box ** | SecondQuarter 2020 Top Cineplex Films | SecondQuarter 2020 Top Cineplex Films | 3D | % Box |
|---|---|---|---|---|---|---|---|
| 1 2 3 4 5 |
F9: The Fast Saga A Quiet Place Part II The Conjuring: The Devil Made Me Do It Godzilla Vs. Kong Cruella |
16.2 % 15.0 % 9.6 % 7.7 % 7.4 % |
1 2 3 4 5 |
1917 Star Wars: The Rise of Skywalker Jumanji: The Next Level Bad Boys For Life Sonic The Hedgehog |
12.0 % 10.3 % 9.4 % 9.3 % 5.9 % |
||
| a a |
|||||||
Box office revenues increased to $12.5 million during the second quarter of 2021 as compared to a nominal amount recognized in the prior year period with only six theatres open in Alberta during June 2020. The increase in revenues is due to the gradual reopening of theatres across Cineplex’s circuit during the latter part of the quarter as strict operating restrictions across Canada were eased, with the exception of theatres in Manitoba and Ontario which opened subsequent to June 30, 2021.
Cineplex’s BPP for the period increased $6.39, or 142.0% from $4.50 in the prior period to $10.89 in the current period. The increase in BPP was 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 products.
Box office revenues for the six months ended June 30, 2021 were $16.3 million, a decrease of $94.7 million or 85.3% compared to the prior year. The decrease in box office revenues was primarily due to the decrease in attendance as a result of the government mandated restrictions that have kept theatres closed or operating below full capacity for a majority of the period. Prior year figures include the first quarter of 2020 during the majority of which Cineplex was operating at full capacity prior to the pandemic related closures.
Food service revenues
The following table highlights the movement in food service revenues, theatre attendance and CPP for the quarter and the year to date (in thousands of dollars, except theatre attendance and same theatre attendance reported in thousands of patrons and per patron amounts):
| patron amounts): | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Food service revenues | Second | Quarter | Year | to Date | |||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | ||||
| Food service - theatres | $ | 9,022 $ | 62 | NM | $ | 11,561 | $ | 72,743 | -84.1 % |
| Food delivery - theatres | 3,676 | 3,024 | NM | 7,454 | 3,024 | NM | |||
| Food service - LBE | 516 | 87 | NM | 687 | 6,771 | NM | |||
| Food delivery- LBE | 44 | 83 | NM | 81 | 83 | NM | |||
| Total food service revenues | $ | 13,258 $ | 3,256 | 307.2 % | $ | 19,783 | $ | 82,621 | -76.1 % |
| Theatre attendance (i) | 1,148 | 6 | NM | 1,563 | 10,716 | -85.4 % | |||
| CPP (i) (ii) | $ | 7.86 $ | 10.33 | -23.9 % | $ | 7.40 | $ | 6.79 | 9.0 % |
| Same theatre food service revenues (i) | $ | 9,006 $ | 62 | NM | $ | 11,536 | $ | 72,074 | -84.0 % |
| Same theatre attendance (i) | 1,146 | 6 | NM | 1,560 | 10,607 | -85.3 % | |||
| (i) See Non-GAAP measures section of this news release. | |||||||||
| (ii)Food service revenue from LBE and deliveryis not included in the CPP calculation. |
| Theatre food service revenue continuity | Second Quarter | Second Quarter | Year to Date | Year to Date | ||
|---|---|---|---|---|---|---|
| Theatre Food | Theatre | Theatre Food | Theatre | |||
| Service | Attendance | Service | Attendance | |||
| 2020 as reported | $ | 62 | 6 | $ | 72,743 | 10,716 |
| Same theatre attendance change | 10,846 | 1,140 | (61,631) | (9,047) | ||
| Impact of same theatre CPP change | (1,901) | — | 932 | — | ||
| Disposed and closed theatres(i) | 15 | 2 | (483) | (106) | ||
| 2021 as reported | $ | 9,022 | 1,148 | $ | 11,561 | 1,563 |
| (i) See Non-GAAP measures section of this news release. Represents theatres opened, acquired, disposed or closed subsequent to the start of the prior year | ||||||
| comparativeperiod. |
Second Quarter and Year to Date
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 have continued to be materially impacted by the government mandated closures of theatres and LBE venues as a result of COVID-19. During the period, indoor dining was either prohibited or subject to strict operating restrictions in most of the markets in which The Rec Room and Playdium operate, contributing to the material decrease in food service revenues when compared to historical levels. As a result of the gradual reopening of theatres in select provinces across Canada, food services revenues increased $10.0 million to $13.3 million during the quarter including food home delivery revenues of $3.7 million, as compared to $3.3 million reported in the second quarter of 2020, of which the majority was from home delivery revenue. CPP was $7.86 in the current period.
Food service revenues for the six months ended June 30, 2021 were $19.8 million, a decrease of $62.8 million or 76.1% compared to the prior year, which included normal operations during the majority of the first quarter of 2020. The year to date decrease in food service revenues is due to the decrease in theatre attendance, limited concession menu options, and government mandated capacity restrictions at theatres and LBE venues.
Media revenues
The following table highlights the movement in media revenues for the quarter and the year to date (in thousands of dollars):
| Media revenues | SecondQuarter | Year to Date |
|---|---|---|
| 2021 2020 Change |
2021 2020 Change |
|
| Cinema media Digitalplace-based media |
$ 2,412 $ 1,604 50.3 % 6,989 6,276 11.4 % |
$ 4,311 $ 18,866 -77.1 % 14,164 21,171 -33.1 % |
| Total media revenues from continuingoperations | $ 9,401 $ 7,880 19.3 % |
$ 18,475 $ 40,037 -53.9 % |
| Media revenues from discontinued operations | — 220 -100.0 % |
— 602 -100.0 % |
| Total media revenues | $ 9,401 $ 8,100 16.1 % |
$ 18,475 $ 40,639 -54.5 % |
Second Quarter and Year to Date
For the three months ended June 30, 2021, total media revenues from continuing operations increased $1.5 million or 19.3% to $9.4 million in the second quarter compared to the prior year period. During the second quarter, media revenues were primarily driven by digital place-based media revenues specifically from network management, creative services and media hardware sales.
For the six months ended June 30, 2021, media revenues from continuing operations were $18.5 million, a decrease of $21.6 million or 53.9% compared to the prior year. The decrease is primarily due to a $14.6 million decrease in Cinema media revenue due to theatre closures and limited new releases subsequent to the first quarter of 2020, ultimately resulting in a sharp decline in show-time and pre-show advertising revenue. Digital place-based media revenues decreased $7.0 million primarily due to lower media hardware sales and media revenue, further contributing to the overall decrease in total media revenues.
Amusement Revenues
The following table highlights the movement in amusement revenues for the quarter and the year to date (in thousands of dollars):
| Amusement revenues SecondQuarter Year to Date 2021 2020 Change 2021 2020 Change Amusement - P1AG excluding Cineplex exhibition and LBE (i) $ 20,446 $ 3,687 NM $ 33,005 $ 38,648 -14.6 % Amusement - Cineplex exhibition (i) 199 12 NM 271 2,208 -87.7 % Amusement - LBE 1,539 32 NM 2,782 10,212 -72.8 % Total amusement revenues $ 22,184 $ 3,731 NM $ 36,058 $ 51,068 -29.4 % (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. |
SecondQuarter | Year to Date |
|---|---|---|
| 2021 2020 Change |
2021 2020 Change |
|
| $ 20,446 $ 3,687 NM 199 12 NM 1,539 32 NM |
$ 33,005 $ 38,648 -14.6 % 271 2,208 -87.7 % 2,782 10,212 -72.8 % |
|
| $ 22,184 $ 3,731 NM |
$ 36,058 $ 51,068 -29.4 % |
Second Quarter and Year to Date
Amusement revenues increased $18.5 million, to $22.2 million during the second quarter of 2021 compared to the prior year period. The quarterly increase in revenues was primarily due to the reopening of P1AG US route locations at FECs and theatres.
For the year to date, amusement revenues decreased $15.0 million or 29.4% when compared to the prior year period. The decrease was due to government mandated closures of Cineplex theatres, LBE venues and capacity restrictions on operating locations in Canada and the United States that have been in effect for a majority of the current period.
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 year to date (in thousands of dollars):
| the year to date (in thousands of dollars): | ||
|---|---|---|
| Other revenues | SecondQuarter | Year to Date |
| 2021 2020 Change |
2021 2020 Change |
|
| Other revenues from continuing operations Other revenues from discontinued operations(i) |
$ 7,585 $ 7,094 6.9 % — — NM |
$ 15,706 $ 20,034 -21.6 % — 199 NM |
| Total other revenues | $ 7,585 $ 7,094 6.9 % |
$ 15,706 $ 20,233 -22.4 % |
| (i)Other revenuesgenerated byWorldGamingNetwork LP. |
Second Quarter and Year to Date
The quarterly increase in other revenues from continuing operations is primarily due to increases in revenues from SCENE which were partially offset by lower digital commerce sales.
The year to date decrease in other revenues from continuing operations was primarily due to lower digital commerce sales and breakage revenues relating to gift card sales compared to the prior year. The recognition of breakage revenue on gift card sales and related products has been suspended during the shut down. This was partially offset by increases in revenue generated from SCENE. In addition, the prolonged shut downs reduced other ancillary revenues generated from theatres, such as venue rentals.
Film cost
The following table highlights the movement in film cost and the film cost percentage for the quarter and the year to date (in thousands of dollars, except film cost percentage):
| Film cost | SecondQuarter | SecondQuarter |
|---|---|---|
| 2021 2020 Change |
2021 2020 Change |
|
| Film cost Film costpercentage(i) |
$ 5,611 $ 10 NM 44.9 % 37.0 % 7.9 % |
$ 6,846 $ 56,510 -87.9 % 42.0 % 50.9 % -8.9 % |
| (i)See Non-GAAP measures section of this news release. |
Second Quarter and Year to Date
Film cost varies primarily with box office revenues and can vary from quarter to quarter usually based on the relative strength of the titles exhibited during the period, impacted by film cost terms varying by title and distributor. The increase in film cost in the second quarter over the prior year period was mainly due to the reopening of a limited number of theatres in the latter half of the period with new releases including F9: The Fast Saga and A Quite Place, Part II contributing to the increase in film cost percentage. In the prior year period, only six theatres were open in Alberta in late June, contributing to the nominal film cost recognized in the prior year period. The decrease in film cost and film cost percentage for the year to date period is due to limited releases of first run product and lower settlement rates on older and classic film product.
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 year to date (in thousands of dollars, except percentages and margins per patron):
| except percentages and margins per patron): | ||
|---|---|---|
| Cost of food service | SecondQuarter | Year to Date |
| 2021 2020 Change |
2021 2020 Change |
|
| Cost of food service - theatre Cost of food service - LBE |
$ 2,686 $ 730 267.9 % 181 59 207.1 % |
$ 4,019 $ 20,931 -80.8 % 260 2,067 -87.4 % |
| Total cost of food service | $ 2,867 $ 789 263.4 % |
$ 4,279 $ 22,998 -81.4 % |
| Theatre concession cost percentage (i) LBE food cost percentage (i) Theatre concession margin per patron (i) |
21.2 % 23.7 % -2.5 % 32.3 % 34.7 % -2.4 % $ 6.20 $ — NM |
21.1 % 27.6 % -6.5 % 33.9 % 30.2 % 3.7 % $ 5.83 $ 5.12 71.0 % |
| (i)See Non-GAAP measures section of this news release. |
Second Quarter and Year to Date
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 increase in cost of food service is primarily due to the gradual reopening of theatres operating under capacity restrictions, compared to closures of theatres and LBE locations that remained in effect for a majority of the prior period. The cost of food service in the second quarter of 2020 was primarily driven by home deliveries. The year to date decrease in cost of food service is due to the impact of prolonged mandatory closures and operating restrictions placed on Cineplex’s theatres and LBE locations leading to a sharp decline in the year to date attendance, resulting in lower cost of food sales.
Depreciation and amortization
The following table highlights the movement in depreciation and amortization expenses during the quarter and the year to date (in thousands of dollars):
| (in thousands of dollars): | ||
|---|---|---|
| Depreciation and amortization expenses | SecondQuarter | Year to Date |
| 2021 2020 Change |
2021 2020 Change |
|
| Depreciation of property, equipment and leaseholds Amortization of intangible assets and other assets |
$ 25,197 $ 28,373 -11.2 % 2,538 3,386 -25.0 % |
$ 51,980 $ 59,062 -12.0 % 5,264 6,659 -20.9 % |
| Sub-total - depreciation and amortization - other assets |
$ 27,735 $ 31,759 -12.7 % |
$ 57,244 $ 65,721 -12.9 % |
| Depreciation - right-of-use assets | 25,737 34,185 -24.7 % |
52,055 69,718 -25.3 % |
| Total depreciation and amortization | $ 53,472 $ 65,944 -18.9 % |
$ 109,299 $ 135,439 -19.3 % |
Second Quarter and Year to Date
The quarterly depreciation of property, equipment and leaseholds decreased $3.2 million, or 11.2%, to $25.2 million during the second quarter of 2021 compared to the prior year period, and a year to date decrease of $7.1 million, or 12.0%, to $52.0 million compared to the prior year. The decrease was due primarily to fully depreciated property, equipment and leaseholds.
The quarterly and year to date decrease in amortization of intangible assets and other assets as compared to the prior year periods is due to fully amortized intangible assets.
The quarterly and year to date decrease of $8.4 million and $17.7 million 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 relating 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 year to date (in thousands of dollars):
| date (in thousands of dollars): | ||
|---|---|---|
| Impairment of long-lived assets and goodwill | Second Quarter | Year to Date |
| 2021 2020 Change |
2021 2020 Change |
|
| Impairment of property, equipment and leaseholds Impairment of right-of-use assets |
$ — $ — NM — — NM |
$ — $ 33,949 NM — 50,610 NM |
| Impairment ofgoodwill | — — NM |
— 88,495 NM |
| Impairment of long-lived assets andgoodwill | $ — $ — NM |
$ — $ 173,054 NM |
Second Quarter and Year to Date
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.
On June 30, 2021, Cineplex reassessed the underlying key assumptions and inputs used during the impairment testing completed at December 31, 2020 and determined that there were no material changes in those key judgements and conclusions.
In early 2020, in response to the outbreak of the COVID-19 pandemic as declared by the WHO, governmental authorities 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 Canada, 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. As a result of the triggering events, Cineplex performed impairment testing and recognized non-cash impairment charges in each of the three months ended March 31, September 30, and December 31, 2020 as follows:
| Impairment of long-lived assets, goodwill and investments | 2020 | 2020 | 2020 | 2020 |
|---|---|---|---|---|
| Q1 | Q3 | Q4 | Total | |
| Impairment of property, equipment and leaseholds Impairment of right-of-use assets Impairment of goodwill Impairment of investments Impairment of long-lived assets, goodwill and investments |
$ 33,949 50,610 88,495 — |
$ — — 65,634 — |
$ 5,243 21,236 26,906 2,790 |
$ 39,192 71,846 181,035 2,790 |
| $ 173,054 | $ 65,634 | $ 56,175 | $ 294,863 |
In assessing long-lived assets and goodwill for impairment, Cineplex compared the aggregate recoverable amount of the assets included in the relevant Cash Generating Units (“CGUs”) to their respective carrying amounts. The recoverable amount was determined based on the fair value less costs of disposal of the groups CGUs.
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.
Despite the reopening of all of Cineplex’s venues by the third quarter of 2021, ongoing restrictions on capacity limit Cineplex’s ability to resume full operations for the foreseeable future. In addition, if the return to more regular business continues to be
delayed for longer than currently anticipated 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 future impacts caused by more transmissible variants, management's estimates of operating results and further cash flows for the forecasted period may be negatively impacted. As a result, cash flows 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.
Impairment of intangible assets - discontinued operations
The following table highlights the movement in impairment of intangible assets - discontinued operations during the quarter and the year to date (in thousands of dollars):
| Impairment of intangible assets - discontinued operations | SecondQuarter | Year to Date |
|---|---|---|
| 2021 2020 Change |
2021 2020 Change |
|
| Impairment of intangible assets - discontinued operations | $ — $ 21 NM |
$ — $ 5,156 NM |
Intangible assets included in assets held for sale were written down prior to disposition to reflect their expected net realizable value in the prior period. 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 year to date (in thousands of dollars):
| dollars): | ||
|---|---|---|
| Loss (gain) on disposal of assets | SecondQuarter | Year to Date |
| 2021 2020 Change |
2021 2020 Change |
|
| Loss (gain) on disposal from continuing operations Loss on disposal from discontinued operations |
$ 179 $ 478 -62.6 % — 129 -100.0 % |
$ (29,881) $ 1,295 NM — 129 -100.0 % |
| Loss(gain)on disposal of assets | $ 179 $ 607 -70.5 % |
$ (29,881)$ 1,424 NM |
The year to date change in the loss (gain) on disposal of assets as compared to the prior year period is due to the sale of the head office buildings for gross proceeds of $57.0 million completed in the first quarter of 2021. Cineplex will continue to occupy its head office buildings as a tenant.
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 year to date (in thousands of dollars):
| Other costs | SecondQuarter | Year to Date | |
|---|---|---|---|
| 2021 2020 Change |
2021 2020 |
Change | |
| Theatre occupancy expenses Other operating expenses General and administrative expenses |
$ 5,349 $ 17,735 -69.8 % 53,790 35,038 53.5 % 14,213 9,402 51.2 % |
$ 12,131 $ 35,706 101,596 169,586 28,330 14,431 |
-66.0 % -40.1 % 96.3 % |
| Total other costs from continuingoperations | $ 73,352 $ 62,175 18.0 % |
$ 142,057 $ 219,723 | -35.3 % |
| Other costs from discontinued operations | — 606 -100.0 % |
— 2,212 |
-100.0 % |
| Total other costs | $ 73,352 $ 62,781 16.8 % |
$ 142,057 $ 221,935 | -36.0 % |
Theatre occupancy expenses
The following table highlights the movement in theatre occupancy expenses for the quarter and the year to date (in thousands of dollars):
| dollars): | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Theatre occupancy expenses | SecondQuarter | Year to Date | ||||||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | |||||
| Cash rent paid/payable (i) (iv) | $ | 25,530 $ | 37,659 | -32.2 % | $ | 47,752 | $ | 78,015 | -38.8 % | |
| Other occupancy | 12,204 | 18,368 | -33.6 % | 26,511 | 36,804 | -28.0 % | ||||
| One-time items(ii) | (2,237) | (561) | 298.8 % | (3,219) | (1,140) | 182.4 % | ||||
| Total theatre occupancyincludingcash leasepaymentspaid/payable | $ | 35,497 $ | 55,466 | -36.0 % | $ | 71,044 | $ | 113,679 | -37.5 % | |
| Cash rent related to lease obligations(iii) | (30,148) | (37,731) | -20.1 % | (58,913) | (77,973) | -24.4 % | ||||
| Theatre occupancyas reported | $ | 5,349 $ | 17,735 | -69.8 % | $ | 12,131 | $ | 35,706 | -66.0 % | |
| (i) Represents the cash payments for theatre rent paid or payable during the quarter. | ||||||||||
| (ii) One-time items include amounts related to both theatre | rent and other theatre occupancy costs. They are isolated | here | to illustrate Cineplex’s theatre rent | |||||||
| and other theatre occupancy costs excluding these one-time, non-recurring items. | ||||||||||
| (iii) Cash rent that has been reallocated to offset the lease obligations. | ||||||||||
| (iv) The 2021 year to date balance inclu des $0.8 million (2020 - $0.7 million) measures section of this news release. |
of cash rent paid not pertaining to the current period. See Non-GAAP |
measures section of this news release. |
||||
|---|---|---|---|---|
| Theatre occupancy continuity | Second Quarter | Year to Date | ||
| Occupancy | Occupancy | |||
| 2020 as reported | $ | 17,735 | $ | 35,706 |
| Impact of disposed theatres | (472) | (1,013) | ||
| Same theatre rent change (i) | (7,179) | (18,477) | ||
| One-time items | (1,647) | (2,078) | ||
| Other | (10,671) | (21,067) | ||
| Impact of IFRS 16 adoption: | ||||
| Cash rentpaid/payable related to lease obligations | 7,583 | 19,060 | ||
| 2021 as reported | $ | 5,349 | $ | 12,131 |
| (i)See Non-GAAP measures section of this news release. |
Second Quarter
Total theatre occupancy decreased $12.4 million or 69.8% during the second quarter of 2021 compared to the prior year period. This decrease was primarily due to the rent relief measures Cineplex has undertaken with landlord partners resulting in lower theatre rent related expense including common area maintenance and taxes as compared to the prior year period. In addition, Cineplex recognized realty tax subsidies of $5.2 million and rent subsidies of $4.7 million during the quarter, further reducing theatre occupancy expenses. Cineplex expects to continue to benefit from subsidy relief in the third quarter as a result of the extension periods for both the CERS and CEWS programs to October 23, 2021.
Year to Date
For the year to date period, theatre occupancy expenses decreased $23.6 million or 66.0% compared to the prior year. This decrease was primarily due to lower theatre rent related expense including common area maintenance and taxes as compared to the prior year period. Cineplex recognized realty tax subsidies of $9.6 million and rent subsidies of $11.2 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 year to date (in thousands of dollars):
| Other operating expenses | SecondQuarter | SecondQuarter | Year to Date | Year to Date | |||||
|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | Change | 2021 | 2020 | Change | ||||
| Theatre payroll | $ | 5,473 $ | 234 | 2239.0 % | $ | 9,108 | $ | 31,664 | -71.2 % |
| Theatre operating expenses | 8,078 | 8,812 | -8.3 % | 17,431 | 35,301 | -50.6 % | |||
| Media | 7,959 | 6,816 | 16.8 % | 16,243 | 25,727 | -36.9 % | |||
| P1AG | 19,687 | 9,604 | 105.0 % | 35,257 | 44,026 | -19.9 % | |||
| LBE (i) | 3,939 | 4,810 | -18.1 % | 7,757 | 17,886 | -56.6 % | |||
| LBE pre-opening (ii) | 678 | 179 | 278.7 % | 906 | 924 | -2.0 % | |||
| SCENE | 5,654 | 1,635 | 245.8 % | 10,398 | 4,208 | 147.1 % | |||
| Marketing | 1,123 | 1,059 | 6.0 % | 2,240 | 3,980 | -43.7 % | |||
| Other(iii) | 5,630 | 6,670 | -15.6 % | 11,150 | 15,405 | -27.6 % | |||
| Other operating expenses including cash lease payments paid/payable | $ | 58,221 $ | 39,819 | 46.2 % | $ | 110,490 | $ | 179,121 | -38.3 % |
| Cash rent related to lease obligations(iv) | (4,431) | (4,781) | -7.3 % | (8,894) | (9,535) | -6.7 % | |||
| Other operatingexpenses from continuingoperations | $ | 53,790 $ | 35,038 | 53.5 % | $ | 101,596 | $ | 169,586 | -40.1 % |
| Other operatingexpenses from discontinued operations | — | 606 | -100.0 % | — | 2,212 | -100.0 % | |||
| Total other operatingexpenses | $ | 53,790 $ | 35,644 | 50.9 % | $ | 101,596 | $ | 171,798 | -40.9 % |
| (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 that has been reallocated to offset the lease obligations. |
| (ii) Includes pre-opening costs of LBE. (iii) Other category includes overhead costs related to LBE and other Cineplex internal departments. (iv)Cash rent that has been reallocated to offset the lease obligations. |
||||
|---|---|---|---|---|
| Other operating continuity from continuing operations | Second Quarter | Year to Date | ||
| Other Operating | Other Operating | |||
| 2020 as reported | $ | 35,038 |
$ | 169,586 |
| Impact of disposed theatres | (164) | (756) | ||
| Same theatre payroll change (i) | 5,291 | (22,201) | ||
| Same theatre operating expenses change (i) | (622) | (17,469) | ||
| Media operating expenses change | 1,143 | (9,484) | ||
| P1AG operating expenses change | 10,083 | (8,769) | ||
| LBE operating expenses change | (871) | (10,129) | ||
| LBE pre-opening change | 499 | (18) | ||
| SCENE change | 4,019 | 6,190 | ||
| Marketing change | 64 | (1,740) | ||
| Other | (1,040) | (4,255) | ||
| Impact of IFRS 16 adoption: | ||||
| Cash rent related to lease obligations | 350 | $ | 641 | |
| 2021 as reported | $ | 53,790 |
$ | 101,596 |
| (i)See Non-GAAP measures section of this news release. |
Second Quarter
Other operating expenses increased $18.8 million during the second quarter of 2021 or 53.5% compared to the prior year period. The increase was primarily driven by increases in P1AG other operating expenses of $10.1 million as a result of the gradual reopening of P1AG US route locations. During the second quarter of 2020, prolonged government mandated closures and operating restrictions resulted in closures and operating levels far below normal for a majority of the period. In addition, Cineplex recognized increases in theatre payroll of $5.2 million as a result of the reopening of theatres and $4.0 million higher SCENE costs related to third-party redemption costs. Cineplex has begun the gradual reopening of theatres across Canada in accordance with provincial government directives and will adjust operating levels as permitted by applicable authorities. Cineplex received $15.8 million of subsidies in the current period, comprised of $12.8 million of payroll subsidies of which $7.0 million was offset against theatre payroll, and $3.0 million of non-theatre rent, realty tax and utilities subsidies.
Year to Date
The overall decrease in other operating expenses from continuing operations from the prior year resulted from the temporary closures and subsequent operating restrictions on theatres, LBE locations and P1AG route locations beginning in March 2020. Cineplex received $30.2 million of subsidies in the current period, comprised of $24.7 million of payroll subsidies of which $13.1 million was offset against theatre payroll, and $5.5 million of 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 year to date, including Share-based compensation costs, and G&A expenses net of these costs (in thousands of dollars):
| G&A expenses | SecondQuarter | Year to Date |
|---|---|---|
| 2021 2020 Change |
2021 2020 Change |
|
| G&A excluding the following items Restructuring Transaction / Litigation costs LTIP (i) Optionplan |
$ 9,940 $ 9,949 -0.1 % — 75 -100.0 % 2,591 1,098 136.0 % 1,795 (1,572) NM 445 47 846.8 % |
$ 20,558 $ 27,203 -24.4 % — 435 -100.0 % 5,021 2,369 111.9 % 3,099 (13,009) NM 844 (2,194) NM |
| G&A expenses including cash lease payments | $ 14,771 $ 9,597 53.9 % |
$ 29,522 $ 14,804 99.4 % |
| Cash rentpaid/payable included aspart of lease obligations(ii) | (558) (195) 186.2 % |
(1,192) (373) 219.5 % |
| G&A expenses as reported | $ 14,213 $ 9,402 51.2 % |
$ 28,330 $ 14,431 96.3 % |
| (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 that has been reallocated to offset the lease obligations. |
Second Quarter and Year to Date
G&A expenses during the three months ended June 30, 2021 increased $4.8 million as compared to the prior year period. This was primarily a result of an increase in LTIP expense due to the increase in Cineplex’s Share price during the quarter from $11.91 at March 31, 2021 to $14.90 at June 30, 2021 as compared to the decrease in the Share price in the second quarter of 2020. Cineplex also incurred $2.6 million (2020 - $1.1 million) of costs related to litigation arising from the Cineworld Transaction during the period. Employee benefit costs were reduced by $2.8 million (2020 - $3.8 million) under the CEWS program.
G&A expenses for the year to date period increased $13.9 million compared to the prior year period. The change was primarily due to a significant decrease in LTIP expense in the prior period due to the share 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 the prior year period to $8.04 per Share at June 30, 2020. Cineplex incurred year to date costs relating to litigation arising from the Cineworld Transaction of $5.0 million (2020 - $2.4 million). Employee salary and benefit costs were reduced by $5.7 million (2020 - $3.8 million) under the CEWS program in 2021.
EARNINGS BEFORE INTEREST, INCOME TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”) (see Non-GAAP measures section of this news release)
The following table presents EBITDA, adjusted EBITDA and adjusted EBITDAaL for the three and six months ended June 30, 2021 as compared to the prior year period (expressed in thousands of dollars, except adjusted EBITDAaL margin):
| EBITDA | SecondQuarter | Year to Date |
|---|---|---|
| 2021 2020 Change |
2021 2020 Change |
|
| EBITDA Adjusted EBITDA Adjusted EBITDAaL Adjusted EBITDAaL margin |
$ (17,700) $ (45,715) -61.3 % $ (16,902) $ (41,313) -59.1 % $ (53,165) $ (72,532) -26.7 % (81.9)% (329.9)% 248.0 % |
$ (20,224) $ (171,850) -88.2 % $ (47,007) $ 5,159 NM $ (115,255) $ (70,142) 64.3 % (108.4)% (23.0)% -85.4 % |
Adjusted EBITDAaL for the second quarter of 2021 was a loss of $(53.2) million compared to a loss of the $(72.5) million for the prior year period. The change primarily due to reopening of a limited number of theatres and LBE venues during the latter half of June 2021 in addition to increased amusement revenues from route operations in the United States where restrictions in certain states were reduced or lifted earlier in the quarter. Substantially all of Cineplex businesses remained closed in the second quarter of 2020 due to the impact of COVID-19 government imposed restrictions.
For the six months ended June 30, 2021, adjusted EBITDAaL was a loss of $(115.3) million as compared to a loss of $(70.1) million for the same period in 2020. The change was primarily due to the impact of the COVID-19 government imposed restrictions and resulting closures of substantially all of Cineplex businesses during the majority of the six months ended June 30, 2021, as compared to prior year period where Cineplex operated at full capacity until restrictions and closures began in March 2020. Adjusted EBITDAaL margin is calculated as adjusted EBITDAaL divided by total revenues.
ADJUSTED FREE CASH FLOW (see Non-GAAP measures section of this news release)
For the second quarter of 2021, adjusted free cash flow per common share of Cineplex was $(1.04) as compared to $(0.85) in the prior year period. The declared dividends per common share of Cineplex were $nil in the second quarter of 2021 and $nil in the prior year period. During the 12 months ended June 30, 2021, Cineplex generated adjusted free cash flow per Share of $(3.60), compared to $0.53 in the prior 12 month period. Cineplex declared dividends per Share of $0.00 and $1.05, respectively, in each 12 month period. The payout ratios for these periods were 0.0% and 199.7%, respectively.
NON-GAAP FINANCIAL MEASURES
EBITDA and Adjusted Free Cash Flow
EBITDA and adjusted free cash flow are not measures recognized by GAAP and do not have standardized meanings in accordance with such principles. Therefore, EBITDA and adjusted free cash flow may not be comparable to similar measures presented by other issuers.
EBITDA is calculated by adding back to net income or net loss, income tax expense, depreciation and amortization expense, and interest income from continuing operations. Adjusted EBITDA excludes the change in fair value of financial instrument, loss (gain) on disposal of assets, foreign exchange, impairment of long-lived assets, goodwill and investments, the equity loss of CDCP, the non-controlling interests’ share of adjusted EBITDA of TG-CPX Limited Partnership, and depreciation, amortization, interest and taxes of Cineplex’s other joint ventures and associates. Adjusted EBITDAaL modifies adjusted EBITDA to deduct current period cash rent paid or payable related to lease obligations net of quantified savings negotiated with landlords as a result of the COVID-19 closures, including savings negotiated after the period end. This includes agreements with landlords that are evidenced by way of written confirmation of the terms agreed upon to the date of approval of the financial statements and MD&A, and are in the process of being formally documented.
Cineplex’s management believes that adjusted EBITDAaL is an important supplemental measure of Cineplex’s profitability at an operational level and provides analysts and investors with comparability in evaluating and valuing Cineplex’s performance period over period. EBITDA, adjusted for various unusual items, is also used to define certain financial covenants in Cineplex’s Credit Facilities. Management calculates adjusted EBITDAaL margin by dividing adjusted EBITDAaL by total revenues.
Adjusted free cash flow is a non-GAAP measure generally used by Canadian corporations, as an indicator of financial performance and it should not be seen as a measure of liquidity or a substitute for comparable metrics prepared in accordance with GAAP. For a detailed reconciliation of net income or net loss to EBITDA, adjusted EBITDA and adjusted EBITDAaL and
from cash provided by operating activities to adjusted free cash flow, please refer to Cineplex’s management’s discussion and analysis filed on www.sedar.com.
Earnings per Share Metrics
Cineplex has presented basic and diluted earnings per share net of this item to provide a more comparable earnings per share metric between the current periods and prior year periods. In the non-GAAP measure, earnings is defined as net income or net loss 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 (excluding temporary government-mandated shutdowns) or otherwise disposed of subsequent to the start of the prior year comparative period. For the three months ended June 30, 2021 the impact of four locations that have been closed or otherwise disposed of have been excluded, resulting in 156 theatres being included in the same theatre metrics. For the six months ended June 30, 2021 the impact of the four locations that have been closed or otherwise disposed of have been excluded, resulting in 156 theatres being included in the same theatre metrics.
Cost of sales percentages
Cineplex reviews and reports cost of sales percentages for its two largest revenue sources, box office revenues and food service revenues as these measures are widely used in the theatre exhibition industry. These measures are reported as film cost percentage and concession cost percentage, respectively, and are calculated as follows:
Film cost percentage: Calculated as total film cost expense divided by total box office revenues for the period.
Theatre concession cost percentage: Calculated as total theatre food service costs divided by total theatre food service revenues for the period.
LBE food cost percentage: Calculated as total LBE food costs divided by total LBE food service revenues for the period.
Lease-related cash saving
Quantified savings negotiated with landlords as a result of the COVID-19 disclosures. This includes agreements that are evidenced by way of written confirmation of the terms agreed upon to the date of the MD&A, and are in the process of formally documented.
Net cash burn
Calculated as adjusted EBITDAaL less cash interest expense (excluding amounts with respect to lease obligations), provision for income taxes and net capital expenditures.
| income taxes and net capital expenditures. | ||||
|---|---|---|---|---|
| Net cash burn | Last Fifteen Months |
2021 | 2020 | |
| Q2 Q1 |
Q4 Q3 |
Q2 | ||
| Adjusted EBITDAaL Cash interest expense excluding lease obligations Provision for incomes taxes Net capital expenditures |
$ (300,460) (61,641) 63,292 (31,565) |
$ (53,165) $ (62,090) (15,701) (13,429) — — (3,021) (5,055) |
$ (65,948) $ (46,725) $ (72,532) (13,412) (11,317) (7,782) 12,355 16,497 34,440 (7,272) (8,198) (8,019) |
|
| Total net cash burn | $ (330,374) | $ (71,887)$ (80,574) | $ (74,277)$ (49,743)$ (53,893) | |
| Average monthlynet cash burn | $ (22,025) | $ (23,962)$ (26,858)$ (24,759)$ (16,581)$ (17,964) |
Certain information included in this news release contains forward-looking statements within the meaning of applicable securities laws. These forward-looking statements include, among others, statements with respect to Cineplex’s objectives, goals and strategies to achieve those objectives and goals, as well as statements with respect to Cineplex’s beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements. Forwardlooking 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 locationbased entertainment (“LBE”) venues, employee reductions and other cost-cutting initiatives and increased expenses relating to safety measures taken at its facilities to protect the health and well-being of guests and employees;
-
Cineplex’s expectations with respect to net cash burn, liquidity and capital expenditures, including its ability to meet its ongoing capital, operating and other obligations, and anticipated needs for, and sources of, funds; and
-
Cineplex’s ability to execute cost-cutting and revenue enhancement initiatives in response to the COVID-19 pandemic.
The COVID-19 pandemic has had an unprecedented impact on Cineplex, along with the rest of the movie exhibition industry and other industries in which Cineplex operates, including material decreases in revenues, results of operations and cash flows. The situation continues to evolve and the social and economic effects are widespread. As an entertainment and media company that operates spaces where guests gather in close proximity, Cineplex’s business has been significantly impacted by the actions taken to control the spread of COVID-19. These actions include, among other things, the introduction of social distancing measures and restrictions including those on capacity. Restrictions imposed in many of the markets in which Cineplex operates are gradually being lifted as vaccination rates increase 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, 2020 (“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 any litigation surrounding the termination of the Cineworld transaction; and diversion of management time on litigation related to the Cineworld transaction.
The foregoing list of factors that may affect future results is not exhaustive. When reviewing Cineplex’s forward-looking statements, readers should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the “Risks and Uncertainties” section of Cineplex’s MD&A.
Cineplex does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable Canadian securities law. Additionally, 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 first quarter. Ellis Jacob, President and Chief Executive Officer and Gord Nelson, Chief Financial Officer, will host the call scheduled for:
Cineplex Inc. Q2 2021 Analyst Conference Call Details:
Date: Thursday, August 12, 2021 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: 647-484-0477 (Toronto) or 1-800-458-4121 (Canada/US Toll-free), conference code: 2579120.
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.
- 30 -
About Cineplex
Cineplex (TSX: CGX) is a top-tier Canadian brand that operates in the film entertainment and content, amusement and leisure, and media sectors. As a leading entertainment and media company, Cineplex welcomes millions of guests annually through its circuit of theatres and location-based entertainment (“LBE”) venues across the country. In addition to being Canada’s largest and most innovative film exhibitor, Cineplex also operates successful businesses in digital commerce (CineplexStore.com), food service, alternative programming (Cineplex Events), cinema media (Cineplex Media), digital place-based media (Cineplex Digital Media “CDM”) and amusement solutions (Player One Amusement Group “P1AG”). Additionally, Cineplex operates an LBE business through Canada’s newest destinations for ‘Eats & Entertainment’ ( The Rec Room ), and entertainment complexes specifically designed for teens and families ( Playdium ). Cineplex is a joint venture partner in SCENE, Canada’s largest entertainment loyalty program.
Proudly recognized as having one of the country’s Most Admired Corporate Cultures, Cineplex employs approximately 10,000 people in its offices across Canada and the United States. To learn more visit Cineplex.com or download the Cineplex App.
For further information:
Investor Relations contact:
Mahsa Rejali Executive Director, Corporate Development & Investor Relations [email protected]
Media Relations contact: Melissa Pressacco Director, Communications [email protected]
Cineplex Inc. Interim Condensed Consolidated Balance Sheets
(Unaudited)
(expressed in thousands of Canadian dollars)
| Assets Current assets Cash and cash equivalents Trade and other receivables Income taxes receivable Inventories Prepaid expenses and other current assets Non-current assets Property, equipment and leaseholds Right-of-use assets Interests in joint ventures and associates Intangible assets Goodwill |
June 30, December 31, 2021 2020 $ 29,202 $ 16,254 44,517 51,834 10,809 66,551 21,609 21,712 13,514 11,613 |
|---|---|
| 119,651 167,964 500,311 555,340 812,707 881,418 3,852 8,644 84,364 84,922 635,352 635,582 |
|
| $ 2,156,237 $ 2,333,870 |
Cineplex Inc.
Interim Condemned Consolidated Balance Sheets … continued
(Unaudited)
(expressed in thousands of Canadian dollars)
| Liabilities Current liabilities Accounts payable and accrued liabilities Share-based compensation Income taxes payable Deferred revenue Lease obligations Fair value of interest rate swap agreements Non-current liabilities Share-based compensation Long-term debt Fair value of interest rate swap agreements Lease obligations Post-employment benefit obligations Other liabilities Total liabilities Shareholders’ (deficit) equity Share capital Deficit Hedging reserves and other Contributed surplus Cumulative translation adjustment Total shareholders’ (deficit) equity |
June 30, December 31, 2021 2020 $ 91,071 $ 82,992 824 482 1,946 802 224,932 219,983 110,775 97,259 9,151 7,202 |
|---|---|
| 438,699 408,720 |
|
| 4,907 2,670 755,996 725,271 12,383 19,157 1,033,396 1,073,666 10,637 11,503 68,527 68,649 |
|
| 1,885,846 1,900,916 |
|
| 2,324,545 2,309,636 |
|
| 852,448 852,379 (1,096,786) (903,394) (131) (131) 77,571 75,882 (1,410) (502) |
|
| (168,308) 24,234 |
|
| $ 2,156,237 $ 2,333,870 |
Cineplex Inc. Interim Condensed Consolidated Statements of Operations (Unaudited)
(expressed in thousands of Canadian dollars, except per share amounts)
| Three months 2021 Revenues Box office $ 12,498 Food service 13,258 Media 9,401 Amusement 22,184 Other 7,585 64,926 Expenses Film cost 5,611 Cost of food service 2,867 Depreciation - right-of-use assets 25,737 Depreciation and amortization - other assets 27,735 Loss (gain) on disposal of assets 179 Other costs 73,352 Share of loss of joint ventures and associates 1,052 Interest expense - lease obligations 14,741 Interest expense - other 17,899 Interest income (108) Foreign exchange 365 Change in fair value of financial instruments (800) Impairment of long-lived assets and goodwill — 168,630 Loss from continuing operations before income taxes (103,704) Provision for income taxes Current — Deferred — — Net loss from continuing operations $ (103,704) Net loss from discontinued operations, net of taxes — Net loss $ (103,704) Net loss from continuing operations attributable to: Owners of Cineplex $ (103,704) Non-controlling interests — Net loss from continuing operations $ (103,704) Net loss attributable to: Owners of Cineplex $ (103,704) Non-controlling interests — Net loss $ (103,704) Net loss per share attributable to owners of Cineplex - basic and diluted: Continuing operations $ (1.64) Discontinued operations — Total operations $ (1.64) |
Three months | ended June 30, | Six months ended June 30, |
|---|---|---|---|
| 2021 $ 12,498 13,258 9,401 22,184 7,585 |
2020 $ 27 3,256 7,880 3,731 7,094 |
2021 2020 $ 16,316 $ 111,029 19,783 82,621 18,475 40,037 36,058 51,068 15,706 20,034 |
|
| 64,926 | 21,988 | 106,338 304,789 |
|
| 5,611 2,867 25,737 27,735 179 73,352 1,052 14,741 17,899 (108) 365 (800) — |
10 789 34,185 31,759 478 62,175 3,192 11,353 9,719 (57) 1,059 — — |
6,846 56,510 4,279 22,998 52,055 69,718 57,244 65,721 (29,881) 1,295 142,057 219,723 3,466 3,927 29,100 23,031 31,564 26,605 (134) (129) 595 (868) (800) — — 173,054 |
|
| 168,630 | 154,662 | 296,391 661,585 |
|
| (103,704) | (132,674) | (190,053) (356,796) |
|
| — — |
(7,632) (26,808) |
3,339 (7,865) — (76,542) |
|
| — | (34,440) | 3,339 (84,407) |
|
| $ (103,704) | $ (98,234) | $ (193,392)$ (272,389) | |
| — | (693) | — (4,952) |
|
| $ (103,704) | $ (98,927) | $ (193,392)$ (277,341) | |
| $ (103,704) — |
$ (98,230) (4) |
$ (193,392) $ (272,384) — (5) |
|
| $ (103,704) | $ (98,234) | $ (193,392)$ (272,389) | |
| $ (103,704) — |
$ (98,923) (4) |
$ (193,392) $ (277,336) — (5) |
|
| $ (103,704) | $ (98,927) | $ (193,392)$ (277,341) | |
| $ (1.55) (0.01) |
$ (3.05) $ (4.30) — (0.08) |
||
| $ (1.64) | $ (1.56) | $ (3.05)$ (4.38) |
Cineplex Inc.
Interim Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
(expressed in thousands of Canadian dollars)
| Net loss from continuing operations Other comprehensive (loss) income from continuing operations Items that will be reclassified subsequently to net income: Foreign currency translation adjustment Recognition of currency translation adjustment on disposition of discontinued operations Other comprehensive (loss) income from continuing operations Comprehensive loss from continuing operations Net loss from discontinued operations, net of taxes Foreign currency translation adjustment from discontinued operations Comprehensive loss Comprehensive loss from continuing operations attributable to: Owners of Cineplex Non-controlling interests Comprehensive loss attributable to: Owners of Cineplex Non-controlling interests |
Three months ended June 30, | Six months ended June 30, |
|---|---|---|
| 2021 2020 $ (103,704)$ (98,234) |
2021 2020 $ (193,392)$ (272,389) |
|
| (480) (2,259) — (160) |
(908) 3,385 — (160) |
|
| (480) (2,419) |
(908) 3,225 |
|
| (104,184) (100,653) — (693) — 545 |
(194,300) (269,164) — (4,952) — 7 |
|
| $ (104,184)$ (100,801) | $ (194,300)$ (274,109) | |
| $ (104,184) $ (100,649) — (4) |
$ (194,300) $ (269,159) — (5) |
|
| $ (104,184)$ (100,653) | $ (194,300)$ (269,164) | |
| $ (104,184) $ (100,797) — (4) |
$ (194,300) $ (274,104) — (5) |
|
| $ (104,184)$ (100,801) | $ (194,300)$ (274,109) |
Cineplex Inc. Interim Condensed Consolidated Statements of Changes in Equity (Unaudited)
(expressed in thousands of Canadian dollars) For the periods ended June 30, 2021 and 2020
| January 1, 2021 Net loss Other comprehensive loss Total comprehensive loss Share option expense PSU/RSU expense Settlement for cancelled options Issuance of shares on exercise of options June 30, 2021 January 1, 2020 Net loss Other comprehensive income Total comprehensive loss Dividends declared Share option expense Conversion to equity-settled option plan June 30, 2020 |
Share capital Contributed surplus Hedging reserves and other Cumulative translation adjustment Deficit Non- controlling interests Total $ 852,379 $ 75,882 $ (131) $ (502) $ (903,394) $ — $ 24,234 — — — — (193,392) — (193,392) — — — (908) — — (908) |
|---|---|
| — — — (908) (193,392) — (194,300) — 844 — — — — 844 — 974 — — — — 974 — (60) — — — — (60) 69 (69) — — — — — |
|
| $ 852,448 $ 77,571 $ (131)$ (1,410)$(1,096,786)$ — $ (168,308) |
|
| $ 852,379 $ 4,052 $ (131) $ (887) $ (264,310) $ (109) $ 590,994 — — — — (277,336) (5) (277,341) — — — 3,392 (160) — 3,232 |
|
| — — — 3,392 (277,496) (5) (274,109) — — — — (9,500) — (9,500) — 160 — — — — 160 — 3,944 — — — — 3,944 |
|
| $ 852,379 $ 8,156 $ (131)$ 2,505 $ (551,306)$ (114)$ 311,489 |
Cineplex Inc.
Interim Condensed Consolidated Statements of Cash Flows (Unaudited)
(expressed in thousands of Canadian dollars)
| Cash provided by (used in) Operating activities Net loss from continuing operations Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization - other assets Depreciation - right-of-use assets Unrealized foreign exchange Interest rate swap agreements - non-cash interest Accretion of Debentures and Notes Payable Other non-cash interest Loss (gain) on disposal of assets Deferred income taxes Non-cash share-based compensation Change in fair value of financial instruments Impairment of long-lived assets, goodwill and investments Net change in interests in joint ventures and associates Changes in operating assets and liabilities Net cash provided by (used in) operating activities Investing activities Proceeds from disposal of assets, net Purchases of property, equipment and leaseholds Intangible assets additions Tenant inducements Net cash received from CDCP Net cash (used in) provided by investing activities Financing activities Dividends paid Borrowings (repayments) under credit facilities, net Repayments of lease obligations - principal Issuance of notes payable, net Financing fees Net cash used in financing activities Effect of exchange rate differences on cash Increase (decrease) in cash and cash equivalents from continuing operations Cash flows used in discontinued operations Cash and cash equivalents - Beginning of period Cash and cash equivalents - End of period Supplemental information Cash paid for interest - lease obligation Cash paid for interest - other Cash received for income taxes, net |
Three months ended June 30, | Six months ended June 30, |
|---|---|---|
| 2021 2020 $ (103,704) $ (98,234) 27,735 31,759 25,737 34,185 245 739 (1,849) 1,909 4,021 — 177 328 179 478 — (26,808) 1,194 160 (800) — — — 1,576 4,178 62,622 69,401 |
2021 2020 $ (193,392) $ (272,389) 57,244 65,721 52,055 69,718 456 (690) (5,377) 11,295 7,759 — 624 677 (29,881) 1,295 — (76,542) 1,818 4,104 (800) — — 173,054 4,792 6,069 86,203 58,973 |
|
| 17,133 18,095 |
(18,499) 41,285 |
|
| 3,252 50 (5,026) (14,441) (1,992) (1,760) 2,005 6,422 — 782 |
59,916 50 (13,741) (51,944) (5,078) (5,481) 5,665 18,299 — 3,910 |
|
| (1,761) (8,947) |
46,762 (35,166) |
|
| — — 13,000 (1,000) (19,086) (993) — — — (800) |
— (19,000) (221,000) 39,000 (38,543) (34,812) 243,996 — (321) (800) |
|
| (6,086) (2,793) |
(15,868) (15,612) |
|
| 413 560 9,699 6,915 — (253) 19,503 7,144 |
553 (390) 12,948 (9,883) — (2,391) 16,254 26,080 |
|
| $ 29,202 $ 13,806 | $ 29,202 $ 13,806 | |
| $ 14,167 $ 166 $ 5,918 $ 5,964 $ (49,028) $ (12,997) |
$ 26,772 $ 11,521 $ 21,512 $ 11,443 $ (53,515) $ (11,515) |
Cineplex Inc. Interim Condensed Consolidated Supplemental Information (Unaudited)
(expressed in thousands of Canadian dollars)
Reconciliation to Adjusted EBITDAaL
| Reconciliation to Adjusted EBITDAaL | ||
|---|---|---|
| Three months ended June 30, | Six months ended June 30, | |
| Net loss from continuing operations Depreciation and amortization - other Depreciation - right-of-use assets Interest expense - lease obligations Interest expense - other Interest income Current income tax (recovery) expense Deferred income tax recovery EBITDA from continuing operations Loss (gain) on disposal of assets Change in fair value of financial instruments CDCP equity loss (i) Foreign exchange loss (gain) Impairment of long-lived assets and goodwill Non-controlling interest adjusted EBITDA |
2021 2020 |
2021 2020 |
| $ (103,704) $ (98,234) 27,735 31,759 25,737 34,185 14,741 11,353 17,899 9,719 (108) (57) — (7,632) — (26,808) |
$ (193,392) $ (272,389) |
|
| 57,244 65,721 |
||
| 52,055 69,718 29,100 23,031 31,564 26,605 (134) (129) 3,339 (7,865) — (76,542) |
||
| $ (17,700) $ (45,715) 179 478 (800) — 1,043 2,784 365 1,059 — — — 4 |
$ (20,224) $ (171,850) (29,881) 1,295 (800) — 3,281 3,374 595 (868) — 173,054 — 5 |
|
| Depreciation and amortization - joint ventures and associates (ii) Taxes and interest of joint ventures and associates (ii) |
— 20 11 57 |
— 44 22 105 |
| Adjusted EBITDA from continuing operations Cash rent paid/payable related to lease obligations (iii) Negotiated lease-related cash savings for the period (iii) (iv) Cash rent paid not pertaining to current period |
$ (16,902) $ (41,313) (35,137) (42,706) (751) 11,851 (375) (364) |
$ (47,007) $ 5,159 (68,998) (87,880) — 11,851 750 728 |
| Adjusted EBITDAaL (iv) | $ (53,165) $ (72,532) |
$ (115,255) $ (70,142) |
(i) CDCP equity 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 $nil (2020 - $11.8 million) through June 30, 2021.
(iv) See Non-GAAP measures section of this news release.
Cineplex Inc. Interim Condensed Consolidated Supplemental Information
(Unaudited)
(expressed in thousands of Canadian dollars, except number of shares and per share data)
Adjusted Free Cash Flow
| Adjusted Free Cash Flow | ||
|---|---|---|
| Cash provided by (used in) operating activities Less: Total capital expenditures net of proceeds on sale of assets Standardized free cash flow Add/(Less): Changes in operating assets and liabilities (i) Changes in operating assets and liabilities of joint ventures and associates (i) |
Three months ended June 30, 2021 2020 |
Six months ended June 30, 2021 2020 |
| $ 17,133 $ 18,095 (4,992) (14,391) |
$ (18,499) $ 41,285 (13,707) (51,894) |
|
| 12,141 3,704 (62,622) (69,401) (524) (986) |
(32,206) (10,609) (86,203) (58,973) (1,326) (2,142) |
|
| Principal component of lease obligations Principal portion of cash rent paid not pertaining to current period Growth capital expenditures and other (ii) Share of income (loss) of joint ventures and associates, net of non- cash depreciation Non-controlling interest |
(19,086) (993) (369) (357) 4,511 13,777 2 (331) — 4 |
(38,543) (34,812) 737 714 12,972 48,303 (163) (404) — 5 |
| Net cash received from CDCP (iii) Adjusted free cash flow Average number of Shares outstanding |
— 782 |
— 3,910 |
| $ (65,947) $ **(53,801) ** |
$ (144,732) $ (54,008) |
|
| 63,339,618 63,333,238 |
63,337,300 63,333,238 |
|
| Adjusted free cash flow per Share Dividends declared |
$ (1.041) $ (0.849) $ — $ — |
$ (2.285) $ (0.853) $ — $ 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. Cineplex’s 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.