Cineplex Inc. Reports Record First Quarter Results, Announces Dividend Increase and Amended Credit Facilities
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 05/03/16 -- Cineplex Inc. ("Cineplex") (TSX: CGX) today released its financial results for the three months ended March 31, 2016.
First Quarter Results
"Cineplex achieved record first quarter results for 2016, with adjusted EBITDA of $57.1 million, an increase of 42.0% year over year," said Ellis Jacob, President and CEO, Cineplex Entertainment.
"Total revenue increased 30.8%, to $378.9 million, primarily due to strong performance from the film slate, resulting in record first quarter box office revenue of $192.6 million, which increased 23.5% and an all-time quarterly attendance record of 20.6 million guests. Record first quarter food service revenue, BPP and CPP, as well as the addition of $23.3 million in revenue resulting from our acquisition of Cineplex Starburst Inc. during the fourth quarter of 2015, also contributed to the strength of the quarter. Media revenue continued to grow increasing 13.7% to $33.1 million, largely due to Cineplex Digital Media revenue."
"We are pleased to announce a 3.8% dividend increase to $1.62 per share on an annual basis from the current $1.56 per share. This increase will be effective with the May 2016 dividend which will be paid in June 2016."
On May 2, 2016, Cineplex entered into amended and extended credit facilities. The amendment includes an extended five year term, an increased revolving component, and additional flexibility in the permitted use of funds. The amended facilities total $550.0 million and include a $150.0 million five-year senior secured non-revolving term credit facility and a $400.0 million five-year senior secured revolving credit facility.
In conjunction with the amended credit facilities, Cineplex entered into interest rate swap agreements that commenced April 25, 2016 for an aggregate notional principal amount of $50.0 million, and mature on October 24, 2018, the maturity date of the existing credit facilities. Under these agreements, Cineplex pays a fixed rate of 1.07% per annum, plus an applicable margin, and receives a floating rate of interest equal to the three-month Canadian deposit offering rate set quarterly in advance. In addition, on April 25, 2016, Cineplex entered into interest rate swap agreements for an aggregate notional principal amount of $200.0 million which commence on October 24, 2018 and mature on April 26, 2021, the maturity of the amended credit facilities. Under these new agreements, Cineplex pays a fixed rate of 1.484% per annum, plus an applicable margin, and receives a floating rate of interest equal to the three-month Canadian deposit offering rate set quarterly in advance.
KEY DEVELOPMENTS IN THE FIRST QUARTER OF 2016
The following describes certain key business initiatives undertaken and results achieved during the first quarter of 2016 in each of Cineplex''s core business areas:
FILM ENTERTAINMENT AND CONTENT
Theatre Exhibition
Food Service
Alternative Programming
Digital Commerce
MEDIA
Cineplex Media
Cineplex Digital Media
AMUSEMENT GAMING AND LEISURE
Cineplex Starburst Inc.
The Rec Room
eSports
LOYALTY
CORPORATE
OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2016
Total revenues
Total revenues for the three months ended March 31, 2016 increased $89.1 million (30.8%) to a first quarter record $378.9 million as compared to the prior year period. A discussion of the factors affecting the changes in box office, food service, media and other revenues for the period is provided below.
Non-GAAP measures discussed throughout this news release, including adjusted EBITDA, adjusted free cash flow, attendance, BPP, premium priced product, same store metrics, CPP, film cost percentage, food service cost percentage and concession margin per patron are defined and discussed in the non-GAAP measures section of this news release.
Box office revenues
The following table highlights the movement in box office revenues, attendance and BPP for the quarter (in thousands of dollars, except attendance reported in thousands of patrons, and per patron amounts, unless otherwise noted):
Box office revenues increased $36.6 million, or 23.5%, to $192.6 million during the first quarter of 2016, compared to $156.0 million recorded in the same period in 2015. The increase was due to the 17.4% increase in attendance to 20.6 million patrons, which is an all-time quarterly record for Cineplex. This increase was due to the strength of the film slate, including Deadpool, which had the all-time highest grossing February opening weekend. The current period also benefited from the continued strong performance of the fourth quarter release Star Wars: The Force Awakens which became the highest box office grossing film of all time in North America during the period. There were strong performing family-focused animated releases including Zootopia and Kung Fu Panda and one week of Batman v Superman: Dawn of Justice which was the highest grossing March opening weekend of all-time. The attendance increase over the prior year period was also partially due to less weather-related theatre closures, as extreme weather in the prior year period negatively impacted theatre attendance at certain locations, primarily in the Atlantic provinces.
BPP for the three months ended March 31, 2016 was $9.36, a $0.46 increase (5.2%) from the prior year period and a first quarter record for Cineplex. The increase in BPP was due to the film mix featuring more 3D films than in the prior year period, with three of the top five available in 3D compared to none of the top five films in the prior period. Box office revenues from premium product accounted for 40.4% of box office revenues in the current period, up from 25.3% in the prior year period.
Food service revenues
The following table highlights the movement in food service revenues, attendance and CPP for the quarter (in thousands of dollars, except attendance and same store attendance reported in thousands of patrons, and per patron amounts):
Food service revenues increased $21.2 million, or 23.4% as a result of the 17.4% increase in attendance as compared to the prior year period and the CPP increase from $5.18 in the first quarter of 2015 to $5.44 in the same period in 2016 (a 5.0% increase). CPP of $5.44 is a first quarter record for Cineplex. Expanded offerings outside of core food service products, including offerings at Cineplex''s VIP Cinemas, have resulted in higher average transaction values, resulting in the higher CPP in the period.
While the 10% SCENE discount and SCENE points issued on food service purchases reduce individual transaction values which impacts CPP, Cineplex believes that this loyalty program drives incremental visits and food service purchases, resulting in higher overall food service revenues.
Media revenues
The following table highlights the movement in media revenues for the quarter (in thousands of dollars):
Total media revenues increased 13.7% to $33.1 million in the first quarter of 2016 compared to the prior year period, representing record first quarter media revenues record for Cineplex. This increase was primarily due to higher Cineplex Digital Media revenues, which increased $2.9 million (32.0%) as expansion of the client base resulted in increased project installation revenues and advertising revenue growth.
Cineplex Media revenues increased 5.4% to $21.1 million, a first quarter record for Cineplex Media, with the increase primarily due to new media initiatives.
Other revenues
The following table highlights the movement in games and other revenues for the quarter (in thousands of dollars):
Other revenues increased 196.8%, or $27.3 million, to $41.2 million in the first quarter of 2016 compared to the prior year period primarily due to the consolidation of CSI following Cineplex''s acquisition on October 1, 2015 of the 50% of CSI it did not already own ($23.3 million). Prior to October 1, 2015, Cineplex equity accounted for its 50% interest in CSI, with the results included in "Share of income of joint ventures".
Games revenues from Cineplex exhibition locations increased $0.8 million (38.2%) due to the higher attendance in the theatres and the addition of five XSCAPE Entertainment Centres since the prior year period.
The increase of $3.3 million (27.7%) in Other in the period was primarily due to additional revenues arising from enhanced guest service initiatives.
Film cost
The following table highlights the movement in film cost and the film cost percentage for the quarter (in thousands of dollars, except film cost percentage):
Film cost varies primarily with box office revenues, and can vary from quarter to quarter based on the relative strength of the titles exhibited during the period. The increase in film cost percentage is attributable to the the concentration of box office revenues from a few titles, with the top five films in the current period accounting for 49.3% of box office revenues in the period (2015 period - 34.2%). These top films tend to have higher settlement rates than the other films in the slate due to their strong performance, and include the ongoing success of Star Wars: The Force Awakens which is the highest grossing film of all time in North America, as well as the strong performance of both Deadpool and Zootopia in the period.
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 the quarter (in thousands of dollars, except percentages and margins per patron):
Cost of food service varies primarily with theatre attendance as well as the quantity and mix of offerings sold. The increase in the cost of food service as compared to the prior year period was due to the higher food service revenues and the 1.2% increase in the concession cost percentage during the period. The increase in the concession cost percentage is due in part to the mix of food offerings, with the addition of VIP theatres at four locations since the prior year period has contributed to the mix including more items outside of the core concession offerings, which tend to have higher costs. The concession margin per patron increased 3.4% from $4.07 in the first quarter of 2015 to $4.21 in the same period in 2016, reflecting the impact of the higher CPP during the period, partially offset by the impact of the higher concession cost percentage.
Despite the 10% discount offered to SCENE members and SCENE points offered on select offerings, which contributes to a higher concession cost percentage, Cineplex believes the SCENE program drives incremental attendance and purchase incidence which increases food service revenues and CPP.
Depreciation and amortization
The following table highlights the movement in depreciation and amortization expenses during the quarter (in thousands of dollars):
The quarterly increase in depreciation of property, equipment and leaseholds of $2.6 million (13.7%) is primarily due to the impact of equipment and leasehold improvements relating to assets acquired through acquisitions, new theatre construction and digital media asset acquisitions. The increase in amortization of intangible assets and other is primarily due to intangible assets acquired in the WGN and CSI transactions.
Loss on disposal of assets
The following table shows the movement in the loss on disposal of assets during the quarter (in thousands of dollars):
Other costs
Other costs include three main sub-categories of expenses, including theatre occupancy expenses, which capture the rent and associated occupancy costs for Cineplex''s various operations; other operating expenses, which include the costs related to running Cineplex''s film entertainment and content, media, amusement gaming and leisure as well as Cineplex''s ancillary businesses; 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 (in thousands of dollars):
Theatre occupancy expenses
The following table highlights the movement in theatre occupancy expenses for the quarter (in thousands of dollars):
Theatre occupancy expenses increased $1.6 million (3.2%) during the first quarter of 2016 compared to the prior year period. This increase was primarily due to the impact of new and acquired theatres net of disposed theatres ($0.4 million) and a reduction in one-time credits of $0.7 million as compared to the prior year period.
Other operating expenses
The following table highlights the movement in other operating expenses during the quarter (in thousands of dollars):
Other operating expenses during the first quarter of 2016 increased $36.7 million or 45.4% compared to the prior year period. The major component of the increase is the inclusion of CSI which is not included in the prior year comparative ($20.1 million). Additional increases include higher same-store payroll costs and media costs due to higher business volumes and higher amusement, gaming and leisure costs (excluding CSI) due to the addition of WGN which was acquired in the third quarter of 2015 and not included in the prior year comparative.
The major movements in the Other category include higher 3D royalty costs due to higher 3D attendance in the period ($0.7 million), higher credit card service fees primarily due to increased online ticket sales in the period ($0.5 million) and higher same-store theatre operating costs due to the higher business volumes in the period compared to the prior year period.
General and administrative expenses
The following table highlights the movement in general and administrative ("G&A") expenses during the quarter, including Share based compensation costs, and G&A net of these costs (in thousands of dollars):
G&A expenses increased $0.1 million (0.8%) during the first quarter of 2016 compared to the prior year period primarily due to higher head office payroll and professional fees, partially offset by a $0.7 million decrease in LTIP expense. The LTIP decrease was mainly due to Cineplex''s Share price increasing less in the current period compared to the prior period (a 5.2% increase in the current period compared to an 11.3% increase in the prior year period).
EARNINGS BEFORE INTEREST, INCOME TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") (see non-GAAP measures section of this news release)
The following table presents EBITDA and adjusted EBITDA for the three months ended March 31, 2016 as compared to the prior year period (expressed in thousands of dollars, except adjusted EBITDA margin):
Adjusted EBITDA for the first quarter of 2016 increased $16.9 million, or 42.0%, as compared to the prior year period, and represents a first quarter record for Cineplex. The increase compared to the prior year period was primarily due to the all-time quarterly attendance record resulting in record first quarter film entertainment revenues, higher media contribution primarily due to Cineplex Digital Media, and higher contribution from CSI due to 100% ownership in the current period compared to 50% in the prior period. Adjusted EBITDA margin, calculated as adjusted EBITDA divided by total revenues, was 15.1% in the current period, an increase of 1.2% from 13.9% in the prior year period.
ADJUSTED FREE CASH FLOW (see non-GAAP measures section of this news release)
For the first quarter of 2016, adjusted free cash flow per common share of Cineplex was $0.70 as compared to $0.44 in the prior year period. The declared dividends per common share of Cineplex were $0.39 in the first quarter of 2016 and $0.38 in the prior year period. During the year ended March 31, 2016, Cineplex generated adjusted free cash flow per Share of $2.75, compared to $2.45 per Share in the year ended March 31, 2015. Cineplex declared dividends per Share of $1.56 and $1.50, respectively, in each year. The payout ratios for these periods were approximately 56.5% and 60.9%, 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. Management uses adjusted EBITDA and adjusted free cash flow to evaluate performance primarily because of the significant effect certain unusual or non-recurring charges and other items have on EBITDA from period to period.
EBITDA is calculated by adding back to net income, income tax expense, depreciation and amortization expense, and interest expense net of interest income. Adjusted EBITDA is calculated by adjusting EBITDA for losses on disposal of assets, the equity income of CDCP, the non-controlling interests'' share of EBITDA of WGN and BSL, and depreciation, amortization, interest and taxes of Cineplex''s other joint ventures. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA 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 to EBITDA and adjusted EBITDA and from cash provided by operating activities to adjusted free cash flow, please refer to Cineplex''s management''s discussion and analysis filed on .
Per Patron Revenue Metrics
Cineplex reviews per patron metrics as they relate to box office revenue and concession 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:
Attendance: 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 attendance for the period.
BPP excluding premium priced product: Calculated as total box office revenues for the period, less box office revenues from 3D, UltraAVX, VIP and IMAX product; divided by total paid attendance for the period, less paid attendance for 3D, UltraAVX, VIP and IMAX product.
CPP: Calculated as total food service revenues divided by total paid attendance for the period.
Premium priced product: Defined as 3D, UltraAVX, IMAX and VIP film product.
Concession margin per patron: Calculated as total food service revenues less total cost of food service, divided by attendance for the period.
Same Store Analysis
Cineplex reviews and reports same store metrics relating to box office revenues, concession revenues, rent expense and payroll expense, as these measures are widely used in the theatre exhibition industry as well as other retail industries. Same store metrics are calculated by removing the results for all theatres that have been opened, acquired, closed or otherwise disposed of subsequent to the start of the prior year comparative period. For the three months ended March 31, 2016, the impact of the four locations that have been opened or acquired and the two locations that have been closed have been excluded, resulting in 159 theatres being included in the same store metrics.
Cost of sales percentages
Cineplex reviews and reports cost of sales percentages for its two largest revenue sources, box office revenues and concession 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.
Concession cost percentage: Calculated as total food service costs divided by total food service revenues for the period.
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.
By their very nature, forward-looking statements involve inherent risks and uncertainties, including those described in Cineplex''s Annual Information Form ("AIF"), Cineplex''s management''s discussion and analysis ("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, risks generally encountered in the relevant industry, competition, customer, legal, taxation and accounting matters.
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, we undertake 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 MD&A, can be found on SEDAR at .
About Cineplex Inc.
Cineplex is one of Canada''s leading entertainment companies and operates one of the most modern and fully digitized motion picture theatre circuits in the world. A top-tier Canadian brand, Cineplex operates numerous businesses including theatrical exhibition, food service, amusement gaming, alternative programming (Cineplex Events), Cineplex Media, Cineplex Digital Media, and the online sale of home entertainment content through CineplexStore.com and on apps embedded in various electronic devices. Cineplex is also a joint venture partner in SCENE - Canada''s largest entertainment loyalty program.
Cineplex is headquartered in Toronto, Canada, and operates 163 theatres with 1,666 screens from coast to coast, serving approximately 77 million guests annually through the following theatre brands: Cineplex Cinemas, Cineplex Odeon, Cineplex VIP Cinemas, Galaxy Cinemas, SilverCity Cinemas and Scotiabank Theatres. Cineplex also owns and operates the UltraAVX, Poptopia, and Outtakes brands. Cineplex trades on the Toronto Stock Exchange under the symbol CGX. More information is available at Cineplex.com. Further information can be found in the disclosure documents filed by Cineplex with the securities regulatory authorities, available at .
You are cordially invited to participate in a teleconference call with the management of Cineplex (TSX: CGX) to review our quarterly results. Ellis Jacob, President and Chief Executive Officer, Gord Nelson, Chief Financial Officer and Pat Marshall, Investor Relations Officer will host the call. The teleconference call is scheduled for:
Tuesday, May 3, 2016
10:00 a.m. Eastern Time
In order to participate in the conference call, please dial 416-849-1847 or outside of Toronto dial 1-866-530-1554 at least five to ten minutes prior to 10:00 a.m. Eastern Time. Please quote the conference ID 7406912 to access the call.
Reconciliation to Adjusted EBITDA
Adjusted Free Cash Flow
Contacts:
Cineplex Inc.
Gord Nelson
Chief Financial Officer
(416) 323-6602
Cineplex Inc.
Pat Marshall
Vice President Communications and Investor Relations
(416) 323-6648
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 03.05.2016 - 04:15 Uhr
Sprache: Deutsch
News-ID 1432139
Anzahl Zeichen: 5426
contact information:
Contact person:
Town:
TORONTO, ONTARIO
Phone:
Kategorie:
Arts & Culture
Typ of Press Release:
type of sending:
Date of sending:
Anmerkungen:
Diese Pressemitteilung wurde bisher 260 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Cineplex Inc. Reports Record First Quarter Results, Announces Dividend Increase and Amended Credit Facilities
"
steht unter der journalistisch-redaktionellen Verantwortung von
Cineplex Inc. (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
