Q2 2024 Cineplex Inc Earnings Call

August 9, 2024

This is a hard work announcement for the Cineplex Q2 2024 earnings conference call, which will begin in approximately two minutes time. Thank you for your patience.

Speaker Change: Sounds good, thank you.

Operator: Thank you for your patience.

Adam: Welcome to today's Cineplex Q2 2021 earnings conference. My name is Adam and I'll be your representative today.

Operator: Sounds good. Thank you.

Adam: Good morning or good afternoon and welcome to today's Cineplex Q2 2024 earnings conference call. My name is Adam and I'll be your operator for today. If you'd like to ask a question during the Q&A portion of today's call, please press star followed by one on your telephone keypad to enter the queue.

Adam: If you'd like to ask a question during the Q&A portion of today's call, please press star, followed by one on your telephone key patterns to the queue.

Operator: Good morning or good afternoon, all, and welcome to today's Cineplex Q2 2024 Earnings Conference Call. My name is Adam, and I'll be your operator for today. If you'd like to ask a question during the Q&A portion of today's call, please press star followed by one on your telephone keypad to enter the queue. I will now hand the floor to Mahsa Rejali, Vice President of Corporate Development and Investor Relations. Please go ahead.

Maher Yaghi: I will now hand the floor to Maher Yaghi, Vice President of Corporate Development and Investor Relations. Please go ahead.

Adam: I will now hand the floor to Mahsa Rejali, Vice President of Corporate Development and Investor Relations. Please go ahead.

Ellis Jacob: Good morning, everyone.

Mahsa Rejali: Good morning, everyone. I would like to welcome you to Cineplex's 2nd Quarter 2024 Earnings Release Conference Call hosted by Ellis Jacob, President and Chief Executive Officer, and Gord Nelson, Chief Financial Officer. Before we begin, let me remind you that certain statements being made are forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding the information currently available. However, actual results may differ materially from those expressed in forward-looking statements.

Ellis Jacob: I would like to welcome you to Cineplex this second quarter of 2024 earnings release conference call hosted by Ellis Jacob, President and Chief Executive Officer, and Gord Nelson, Chief Financial Officer. Before we begin, let me remind you that certain statements we made are forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on managers' beliefs and assumptions regarding the information currently available. Actual results may defer materially from those expressed in forward-looking statements. Information regarding factors that could cause results to vary can be found in the company's most recently filed Annual Information Form and Management Discussion Analysis.

Speaker Change: Good morning, everyone. I would like to welcome you to Cineplex's second quarter 2024 earnings release conference call hosted by Ellis Jacob, President and Chief Executive Officer, and Gord Nelson, Chief Financial Officer.

Speaker Change: Before we begin, let me remind you that certain statements being made are forward-looking and subject to various risks and uncertainties.

Speaker Change: Such forward-looking statements are based on managers' beliefs and assumptions regarding the information currently available.

Mahsa Rejali: Information regarding factors that could cause results to vary can be found in the company's most recently filed annual information form and management's discussion and analysis. Following today's remarks, we will close the call with our customary question and answer period. I will now turn the call over to Ellis Jacob.

Speaker Change: Actual results may differ materially from those expressed in forward-looking statements.

Speaker Change: Information regarding factors that could cause results to vary can be found in the company's most recently filed annual information form and management's discussion and analysis. Following today's remarks, we will close the call with our customary question and answer period. I will now turn the call over to Ellis Jacob.

Ellis Jacob: Following today's remarks, we will close the call with our customary question-and-answer period.

Ellis Jacob: I will now turn the call over to Ellis Jacob. Thank you, Maher.

Ellis Jacob: Good morning and welcome to Q2 2021 Conference Call. As Gordon, I share highlights from the second quarter of the day. I wanted to start off by echoing my pure sentiment, as we all felt the extended impact of the Hollywood strikes in the first half of 2024. While we anticipated the film's late would have a slow start this quarter, the month of June also signaled a pivotal change towards the more positive outlook for the rest of the year. We saw record-breaking results from recent titles including Inside Out 2 in June and Deadpool and Wolverine's massive $211 million domestic opening weekend in late July.

Ellis Jacob: Thank you, Mahsa. Good morning, and welcome to the Q2 2024 conference call. As Gordon and I share highlights from the second quarter today, I wanted to start off by echoing my peer sentiment as we all felt the extended impact of the Hollywood strikes in the first half of 2024. While we anticipated the film slate would have a slow start this quarter, the month of June also signaled a pivotal change towards a more positive outlook for the rest of the year.

Ellis Jacob: Thank you, Mahsa. Good morning and welcome to Q2 2024 conference call.

Ellis Jacob: As Gordon and I share highlights from the second quarter today, I wanted to start off by echoing my peers' sentiment as we all felt the extended impact of the Hollywood strikes in the first half of 2024.

Operator: Approximately two minutes time. Thank you for your patience. Thank you.

Ellis Jacob: While we anticipated the film slate would have a slow start this quarter, the month of June also signaled a pivotal change towards a more positive outlook for the rest of the year.

Ellis Jacob: We saw record-breaking results from recent titles, including Inside Out 2 in June and Deadpool and Wolverine's massive $211 million domestic opening weekend in late July. The success of these titles, in addition to stellar performances by Despicable Me 4 and Twisters, led to two strong consecutive box office months for Cineplex, with June and July reaching over 90% of 2019 loved ones. In the month of July, we entertained 5.5 million guests, representing our largest attendance of the year. These results clearly show that supply, not demand, depressed global grosses in the early summer.

Ellis Jacob: We saw record-breaking results from recent titles, including Inside Out 2 in June , and Deadpool and Wolverine's massive $211 million domestic opening weekend in late July .

Ellis Jacob: The success of these titles, in addition to stellar performances by Despicable Me 4 and Twisters, led to two strong consecutive box office months for Cineplex, with June and July reaching over 90% of 2019 levels. Between the month of July, we entertained 5.5 million guests, representing our largest attendance of the year. These results clearly show that supply, not demand, to press the global grosses of the early summer. Having been in this industry for over 35 years, I've seen the absent flows of the film's late, but what always rings true is when compelling content is there, moviegoers head to their local theater to escape and immerse themselves in films of all genres.

Ellis Jacob: In the month of July , we entertained 5.5 million guests, representing our largest attendance of the year. These results clearly show that supply, not demand, depressed the global grosses of the early summer.

Ellis Jacob: Having been in this industry for over 35 years, I've seen the ebbs and flows of the film slate. But what always rings true is when compelling content is there, moviegoers head to their local theater to escape and immerse themselves in films of all genres. This past quarter, as we managed through the fluctuating film slate, our diversification strategy continued to serve us well. During the second quarter, we entertained 8.7 million moviegoers and generated total revenues of $277.3 million.

Speaker Change: Having been in this industry for over 35 years, I've seen the ebbs and flows of the film slate. But what always rings true is when compelling content is there, moviegoers head to their local theater to escape and immerse themselves in films of all genres.

Ellis Jacob: We delivered box office per patron of $13.11 and concession per patron of $9.56, both all-time quarterly records. Inside Out 2 stole the show as it became the top animated film of all time, with over 1.5 billion at the global box office, even outperforming last year's Super Mario Bros. Other top-performing titles from the quarter included Kingdom of the Planet of the Apes, The Fall Guy, Godzilla vs. Kong, The New Empire, and Bad Boys Ride or Die.

Ellis Jacob: This past quarter, as we managed through the fluctuating film's late, our diversification strategy continued to serve us well. During the second quarter, we entertained 8.7 million moviegoers and generated total revenues of 277.3 million. We delivered box office for patron of $13.11 and concession per patron of $9.56, both all-time quarterly records. Inside Out 2 stalled the show as it became the top animated film of all time with over 1.5 billion at the global box office, even outperforming last year's Super Mario Brothers. Other top performing titles from the quarter included Kingdom of the Planet of the Apes, The Fall Die, Godzilla, Lutz's Kong, The New Empire, and Bad Boys: Ride or Die.

Speaker Change: This past quarter, as we managed through the fluctuating film slate, our diversification strategy continued to serve us well.

Speaker Change: During the second quarter, we entertained 8.7 million moviegoers and generated total revenues of $277.3 million.

Speaker Change: We delivered box office per patron of $13.11 and concession per patron of $9.56, both all-time quarterly records.

Speaker Change: Inside Out 2 stole the show as it became the top animated film of all time, with over 1.5 billion at the global box office, even outperforming last year's Super Mario Bros.

Speaker Change: Other top performing titles from the quarter included Kingdom of the Planet of the Apes, The Fall Guy, Godzilla vs. Kong, The New Empire, and Bad Boys Ride or Die.

Operator: Good morning all. Good afternoon.

Operator: Welcome to today's Cineplex Q2 2021 earnings conference My name is Adam and I'll be your representative today. If you'd like to ask a question during the Q&A portion of today's call please press star flood by one on your telephone key patterns to the queue.

Ellis Jacob: This quarter continued to seek consumer interest in premium experiences, with 41.4% of the box office coming from offerings like High Max, Ultra AVX 3D, and the IP. We are very pleased with our cinema media results as revenue increased 4% over prior, despite the attendance decline in the quarter. Fully owning our media business allows us to retain all our revenues and drive higher margins. By offering a portfolio of media products, we attract advertising customers of all sizes across the wide range of categories, driving our revenue per patron to industry-leading levels, reaching over 3.5 times the revenue per patron to fall US peers for the past quarter.

Ellis Jacob: This quarter continued to see consumer interest in premium experiences with 41.4% of the box office coming from offerings like IMAX, Ultra AVX, 3D, and VIP. We are very pleased with our cinema media results as revenue increased 4% over the prior quarter despite the attendance decline in the quarter. Fully owning our media business allows us to retain all our revenues and drive higher margins. By offering a portfolio of media products, we attract advertising customers of all sizes across a wide range of categories, driving our revenue per patron to industry-leading levels, reaching over 3.5 times the revenue per patron of our U.S. peers for the past quarter.

Speaker Change: This quarter, continue to see consumer interest in premium experiences with 41.4% of the box office coming from offerings like IMAX, Ultra AVX, 3D, and VIP.

Maher Yaghi: I will now hand the floor to Maher Yaghi, Vice President of Corporate Development and Investor Relations. Please go ahead. Good morning everyone.

Speaker Change: We are very pleased with our cinema media results as revenue increased 4% over prior despite the attendance decline in the quarter. Fully owning our media business allows us to retain all our revenues and drive higher margins.

Maher Yaghi: I would like to welcome you to Cineplex this second quarter of 2024 earnings release conference call hosted by Ellis Jacob, President and Chief Executive Officer and Gord Nelson Chief Financial Officer. Before we begin, let me remind you that certain statements we made are forward looking and subject to various risks and uncertainties. Such forward looking statements are based on managers' beliefs and assumptions regarding the information currently available.

Maher Yaghi: Actual results may defer materially from those expressed in forward looking statements. Information regarding factors that could cause results to vary can be found in the company's most recently filed annual information form and management discussion analysis.

Speaker Change: By offering a portfolio of media products, we attract advertising customers of all sizes across a wide range of categories.

Speaker Change: Driving our revenue per patron to industry-leading levels, reaching over 3.5 times the revenue per patron of our U.S. peers for the past quarter.

Ellis Jacob: Recent Canadian research reinforced the power of cinema advertising as virtually unmissable, with 100% of cinema audiences viewing ads on the big screen. High attention scores and cinema delivers strong impact for brands with 75% average brand recall and a 35% uplift in brand choices. Our digital place-based media revenue also increased by 28.1%, primarily due to the addition of Cadillac Fairview, which significantly expanded our digital out-of-home shopping network. In addition to the recently announced operating and media sales agreement with Cadillac Fairview, CDM also signed a deal with them to sell, install, and manage directories at 14 properties across Canada starting in Q3.

Ellis Jacob: Recent Canadian research reinforced the power of cinema advertising as virtually unmissable, with 100% of cinema audiences viewing ads on the big screen. High attention scores in cinema deliver strong impact for brands, with 75% average brand recall and a 35% uplift in brand choice. Our digital place-based media revenue also increased by 28.1%, primarily due to the addition of Cadillac Fairview, which significantly expanded our digital out-of-home shopping network. In addition to the recently announced Operating and Media Sales Agreement with Cadillac Fairview, CDM also signed a deal with them to sell, install, and manage directories at 14 properties across Canada starting in Q3. Cadillac Fairview is one of the largest owners, operators, investors, and developers of office, retail, residential, and mixed-use properties in North America.

Speaker Change: Recent Canadian research reinforced the power of cinema advertising as virtually unmissable with 100% of cinema audiences viewing ads on the big screen.

Speaker Change: High attention scores in cinema deliver a strong impact for brands with 75% average brand recall and a 35% uplift in brand choice.

Maher Yaghi: Following today's remarks, we will close the call with our customary question and answer period.

Ellis Jacob: I will now turn the call over to Ellis Jacob. Thank you, Maher.

Speaker Change: Our digital-based media revenue also increased by 28.1% primarily due to the addition of Cadillac Fairview, which significantly expanded our digital out-of-home shopping network.

Ellis Jacob: Good morning and welcome to Q2 2021 conference call. As Gordon I share highlights from the second quarter of the day, I wanted to start off by echoing my pure sentiment as we all felt the extended impact of the Hollywood strikes in the first half of 2024. While we anticipated the film's late would have a slow start this quarter, the month of June also signaled a pivotal change towards the more positive outlook for the rest of the year.

Speaker Change: In addition to the recently announced operating and media sales agreement with Cadillac Fairview, CDM also signed a deal with them to sell, install, and manage directories at 14 properties across Canada starting in Q3.

Ellis Jacob: We saw record-breaking results from recent titles including Inside Out 2 in June and Deadpool and Wolverine's massive $211 million domestic opening weekend in late July. The success of these titles in addition to stellar performances by Despicable Me 4 and Twisters led to two strong consecutive box office months for Cineplex with June and July reaching over 90% of 2019 levels. Between the month of July, we entertained 5.5 million guests representing our largest attendance of the year.

Ellis Jacob: Cadillac Fairview is one of the largest owners, operators, investors, and developers of office, retail, residential, and mixed-use properties in North America. Our LBE business continues to perform well, generating second-quarter record revenues of 29.4 million. Building on the momentum of our LBE business, we are gearing up to open three new locations in the fourth quarter in key markets across the country. Montreal will get its first rack room within the Royal Mount Equal Community, which is a mixed-use, residential and retail area that will be 100% power neutral. It is anticipated to become one of the leading retail developments in Canada, where also opening a Cineplex Theatre at Royal Mount with five auditoriums offering full recliners and laser projectors.

Speaker Change: Cadillac Fairview is one of the largest owners, operators, investors, and developers of office, retail, residential, and mixed-use properties in North America.

Ellis Jacob: Our LBE business continues to perform well, generating second quarter record revenues of $29.4 million. Building on the momentum of our LBE business, we are gearing up to open three new locations in the fourth quarter in key markets across the country. Montreal will get its first rec room within the Royal Mount Eco community which is a mixed use residential and retail area that will be 100% carbon neutral.

Speaker Change: Our LBE business continues to perform well, generating second quarter record revenues of $29.4 million. Building on the momentum of our LBE business, we are gearing up to open three new locations in the fourth quarter in key markets across the country.

Speaker Change: Montreal will get its first rec room within the Royal Mount Eco community, which is a mixed-use residential and retail area that will be 100% carbon neutral.

Ellis Jacob: These results clearly show that supply not demand to press the global grosses of the early summer. Having been in this industry for over 35 years, I've seen the absent flows of the film's late, but what always rings true is when compelling content is there, moviegoers head to their local theater to escape and immerse themselves in films of all genres. This past quarter, as we managed through the fluctuating film's late, our diversification strategy continued to serve us well.

Ellis Jacob: It is anticipated to become one of the leading retail developments in Canada. We're also opening a Cineplex theatre at Royal Mount with five auditoriums offering full recliners and laser projectors. Vancouver will also get a flagship rec room location on Granville Street in the Downtown Entertainment District.

Speaker Change: It is anticipated to become one of the leading retail developments in Canada. We're also opening a Cineplex Theatre at Royal Mount with five auditoriums offering full recliners and laser projectors.

Ellis Jacob: Vancouver will also get a flagship Rack Room location on Brandro Street in the downtown entertainment district. This is sure to be one of our top performing LBE locations. Located on three floors in a prime location, this premium venue will drive significant revenue from both corporate events and consumer visits. Lastly, situated adjacent to our Cineplex cinema Fairview Mall in Toronto, we are opening a new Palladium. This high-traffic location is near a residential area and easy to get to by transit. This creates a go-to one-stop entertainment destination for family and friends to come together for movies, gaming, and delicious food.

Speaker Change: Vancouver will also get a flagship rec room location on Granville Street in the Downtown Entertainment District.

Ellis Jacob: This is sure to be one of our top performing LBE locations. Located on three floors in a prime location, this premium venue will drive significant revenue from both corporate events and consumer visits. Lastly, situated adjacent to our Cineplex Cinema Fairview Mall in Toronto, we are opening a new Palladium. This high-traffic location is near a residential area and easy to get to by transit.

Speaker Change: This is sure to be one of our top performing LBE locations.

Ellis Jacob: During the second quarter, we entertained 8.7 million moviegoers and generated total revenues of 277.3 million. We delivered box office for patron of $13.11 and concession per patron of $9.56, both all-time quarterly records. Inside out two stalled the show as it became the top animated film of all-time with over 1.5 billion at the global box office, even outperforming last year's Super Mario Brothers. Other top performing titles from the quarter included Kingdom of the Planet of the Apes, the Fall Die, Godzilla, Lutz's Kong, the New Empire, and Bad Boys, Ride or Die.

Speaker Change: Located on three floors in a prime location, this premium venue will drive significant revenue from both corporate events and consumer visits.

Speaker Change: Lastly, situated adjacent to our Cineplex Cinema Fairview Mall in Toronto, we are opening a new Palladium. This high-traffic location is near a residential area and easy to get to by transit.

Ellis Jacob: This creates a go-to one-stop entertainment destination for family and friends to come together for movies, gaming, and delicious food. While we are building new LBE locations, we are also exploring opportunities to maximize our revenue per square footage at our theatres. Examples include using excess space to add additional amusement gaming or other high ROI-generating entertainment concepts similar to our junction location.

Speaker Change: This creates a go-to one-stop entertainment destination for family and friends to come together for movies, gaming, and delicious food.

Ellis Jacob: While we are building new LBE locations, we are also exploring opportunities to maximize our revenue per square footage at our theaters. Examples include using excess space to add additional amusement gaming or other high ROI-generating entertainment concepts similar to our Junction locations. Our real estate team has had success negotiating both rent reductions and reducing the total rentable square footage, in addition to obtaining landlord funding for theatre upgrades. They have also exited three theatres this year as part of our ongoing strategy to optimize our portfolio. Our pursuit of operational excellence in creating a seamless experience for guests led us to launch our online and mobile concession ordering earlier this year, where we've seen a significant increase in adoption among our guests.

Speaker Change: While we are building new LBE locations, we are also exploring opportunities to maximize our revenue per square footage at our theaters.

Speaker Change: Examples include using excess space to add additional amusement gaming or other high ROI-generating entertainment concepts similar to our junction locations.

Ellis Jacob: This quarter continued to seek consumer interest in premium experiences with 41.4% of the box office coming from offerings like High Max, Ultra AVX 3D, and the IP. We are very pleased with our cinema media results as revenue increased 4% over prior despite the attendance decline in the quarter. Fully owning our media business allows us to retain all our revenues and drive higher margins. By offering a portfolio of media products, we attract advertising customers of all sizes across the wide range of categories, driving our revenue per patron to industry-leading levels, reaching over 3.5 times the revenue per patron to fall US peers for the past quarter.

Ellis Jacob: Our real estate team has had success negotiating both rent reductions and reducing the total rentable square footage, in addition to obtaining landlord funding for theater upgrades. We have also exited three theaters this year as part of our ongoing strategy to optimize our portfolio. Our pursuit of operational excellence and creating a seamless experience for guests led us to launch our online and mobile concession ordering earlier this year, and we've seen a significant increase in adoption among our guests. The average per patron spend is notably higher compared to in-person transactions, helping to increase our overall concession revenue. We are continuing to enhance our mobile app functionality, reducing customer friction and enhancing overall consumer satisfaction.

Speaker Change: Our real estate team has had success negotiating both rent reductions and reducing the total rentable square footage, in addition to obtaining landlord funding for theater upgrades.

Speaker Change: We have also exited three theaters this year as part of our ongoing strategy to optimize our portfolio.

Speaker Change: Our pursuit of operational excellence and creating a seamless experience for guests led us to launch our online and mobile concession ordering earlier this year.

Ellis Jacob: The average per page spend is notably higher compared to in-person transactions, helping to increase our overall concession revenue. We are continuing to enhance our mobile app functionality, reducing customer friction and elevating overall consumer status. While our mission is to create an exceptional experience for our guests, we also want to ensure we are offering a wide array of content to keep them coming back to our theaters. Outside of the Hollywood movie slate, we are leading the charge when it comes to alternative content like the opera, sporting events, concerts, and classic films. This past June was our best ever for event cinema programming.

Speaker Change: where we've seen a significant increase in adoption among our guests. The average per patron spend is notably higher compared to in-person transactions, helping to increase our overall concession revenues.

Ellis Jacob: Recent Canadian research reinforced the power of cinema advertising as virtually unmissable with 100% of cinema audiences viewing ads on the big screen. High attention scores and cinema delivers strong impact for brands with 75% average brand recall and a 35% uplift in brand choices. Our digital place-based media revenue also increased by 28.1%, primarily due to the addition of Cadillac Fairview, which significantly expanded our digital out-of-home shopping network. In addition to the recently announced operating and media sales agreement with Cadillac Fairview, CDM also signed a deal with them to sell and install and manage directories at 14 properties across Canada starting in Q3.

Speaker Change: We are continuing to enhance our mobile app functionality, reducing customer friction and elevating overall consumer satisfaction.

Ellis Jacob: While our mission is to create an exceptional experience for our guests, we also want to ensure we are offering a wide array of content to keep them coming back to our theatre. Outside of the Hollywood movie slate, we are leading the charge when it comes to alternative content like opera, sporting events, concerts, and classic films. This past June was our best ever for event cinema programming. The Met Opera's Madame Butterfly was the strongest opera title since 2019, and Ghost Ride Here Right Now was the biggest new concert so far this year.

Speaker Change: While our mission is to create an exceptional experience for our guests, we also want to ensure we are offering a wide array of content to keep them coming back to our theatres.

Speaker Change: Outside of the Hollywood movie slate, we are leading the charge when it comes to alternative content like the opera, sporting events, concerts, and classic films.

Ellis Jacob: The Met Hopper's Madam Butterfly was the strongest opera title since 2019 and goes right here right now with the biggest new concert so far this year. We also welcome Canadian cricket fans into our theaters to cheer on their favorite teams in the ICC Men's T20 Cricket World Cup. The India's Pakistan game in June was the highest attended sporting event we've done since 2016. Our international programming contributed 9.2% to the second quarter box office, once again outperforming the North American box office at 3.1%. Jack and Julia Three, which released in June, is the highest grossing Punjabi film of all time, with Cineplex delivering 70% of the North American box office.

Speaker Change: This past June was our best ever for event cinema programming. The Met Opera's Madame Butterfly was the strongest opera title since 2019, and Ghost Ride Here Right Now was the biggest new concert so far this year.

Ellis Jacob: We also welcome Canadian cricket fans into our theatres to cheer on their favorite teams in the ICC Men's T20 Cricket World Cup. The India vs. Pakistan game in June was the highest-attended sporting event we've done since 2006.

Ellis Jacob: Cadillac Fairview is one of the largest owners, operators, investors, and developers of office, retail, residential, and mixed these properties in North America. Our LBE business continues to perform well, generating second-quarter record revenues of 29.4 million, building on the momentum of our LBE business, we are gearing up to open three new locations in the fourth quarter in key markets across the country. Montreal will get its first rack room within the Royal Mount Equal Community, which is a mixed-use, residential and retail area that will be 100% power neutral.

Speaker Change: We also welcome Canadian cricket fans into our theatres to cheer on their favourite teams in the ICC Men's T20 Cricket World Cup. The India vs. Pakistan game in June was the highest attended sporting event we've done since 2016.

Ellis Jacob: Our international programming contributed 9.2% to the second quarter box office, once again outperforming the North American box office at 3.1%. Jata Julia 3, which released in June, is our highest-grossing Punjabi film of all time, with Cineplex delivering 74% of the North American box office. Additionally, our distribution arm, Cineplex Pictures, released the Amazon MGM Studio film I Am Celine Dion in select theaters this past quarter, reinforcing the importance of the cinematic experience for key streaming releases.

Speaker Change: Our international programming contributed 9.2% to the second quarter box office, once again outperforming the North American box office at 3.1%.

Speaker Change: Jata Julia 3, which released in June , is our highest grossing Punjabi film of all time, with Cineplex delivering 74% of the North American box office.

Ellis Jacob: Our distribution on Cineplex Pictures released the Amazon MGM studio film I and Celine Dion in select theaters this quarter, reinforcing the importance of the cinematic experience for key streaming releases. They also successfully relanced the horror film franchise, The Strangers Chapter One, and the Hindi action film Kill. Up next is Borderlands and All-Star Tasks including Clayton Blanchett, Kevin Hart, and Jamie Lee Curtis.

Ellis Jacob: It is anticipated to become one of the leading retail developments in Canada, where also opening a Cineplex Theatre at Royal Mount with five auditoriums offering full recliners and laser projectors. Vancouver will also get a flagship rack room location on Brandro Street in the downtown entertainment district. This is sure to be one of our top performing LBE locations. Located on three floors in a prime location, this premium venue will drive significant revenue from both corporate events and consumer visits.

Speaker Change: Our distribution arm, Cineplex Pictures, released the Amazon MGM Studio film I Am Celine Dion in select theaters this past quarter, reinforcing the importance of the cinematic experience for key streaming releases.

Ellis Jacob: They have also successfully relaunched the horror film franchise The Strangers, Chapter 1, and the Hindi action film Kill. Up next is Borderlands, with an all-star cast, including Claire Blanchett, Kevin Hart, and Jamie Lee Curtis. We have no update on the Competition Bureau's allegations regarding our online booking fee.

Speaker Change: They also successfully relaunched the horror film franchise, The Strangers, Chapter 1, and the Hindi action film, Kill. Up next is Borderlands with an all-star cast, including Claide Blanchett, Kevin Hart, and Jamie Lee Curtis.

Ellis Jacob: We have no update on the Competition Bureau's allegations regarding our online booking fee. As a reminder, we presented our case before the competition tribunal in February. We note that the Competition Bureau is not contesting our right to charge the online booking fee. It is only contesting the manner in which we presented the fee to consumers. We strongly believe we have complied with both the letter and spirit of the law and that the Competition Bureau's allegations are unfounded. We await the competition tribunal's decision in the coming months.

Ellis Jacob: Lastly, situated adjacent to our Cineplex Cinema Fairview Mall in Toronto, we are opening a new palladium. This high-traffic location is near residential area and easy to get to by transit. This creates a go-to one-stop entertainment destination for family and friends to come together for movies, gaming, and delicious food. While we are building new LBE locations, we are also exploring opportunities to maximize our revenue per square footage at our theaters. Examples include using excess space to add additional amusement gaming or other high ROI-generating entertainment concepts similar to our junction locations.

Ellis Jacob: As a reminder, we presented our case before the Competition Tribunal in February. We note that the Competition Bureau is not contesting our right to charge the online booking fee; it is only contesting the manner in which we presented the fee.

Speaker Change: We have no update on the Competition Bureau's allegations regarding our online booking fee. As a reminder, we presented our case before the Competition Tribunal in February .

Speaker Change: We note that the Competition Bureau is not contesting our right to charge the online booking fee. It is only contesting the manner in which we presented the fee to consumers.

Ellis Jacob: We strongly believe we have complied with both the letter and the spirit of the law and that the Competition Bureau's allegations are unfounded. We await the Competition Tribunal's decision in the coming months. Before I pass it on to Gord, I want to reinforce that the future film slate is looking bright. The third quarter is off to a great start, and strong content has kicked off the back half of 2021. Despicable Me 4 led the charge in July, becoming the second highest grossing film domestically within the Despicable Me franchise and is still going strong.

Speaker Change: We strongly believe we have complied with both the letter and spirit of the law and that the Competition Bureau's allegations are unfounded. We await the Competition Tribunal's decision in the coming months.

Ellis Jacob: Before I pass it on to Gore, I want to reinforce that the future film slate is looking bright. The third quarter is off to a great start, and strong content has picked off the back half of 2024. The spicable meaningful led the charge in July, becoming the second highest grossing film domestically within the despicable need franchise and is still going strong. Twisters to audiences by storm with this opening weekend, doubling that of the Spree disaster Twister, which is the second highest grossing film of the year when it was released back in 1996. Of course, the film capturing everyone's attention around the globe is Deadpool and Wolverine smashing its opening North American weekend box office, becoming the biggest opening R-rated film of all time.

Gord Nelson: Before I pass it on to Gord, I want to reinforce that the future film slate is looking bright. The third quarter is off to a great start and strong content has kicked off the back half of 2024.

Ellis Jacob: Our real estate team has had success negotiating both rent reductions and reducing the total rentable square footage in addition to obtaining landlord funding for theatre upgrades. They have also exited three theatres this year as part of our ongoing strategy to optimize our portfolio. Our pursuit of operational excellence in creating a seamless experience for guests led us to launch our online and mobile concession ordering earlier this year, where we've seen a significant increase in adoption among our guests.

Gord Nelson: Despicable Me 4 led the charge in July , becoming the second highest grossing film domestically within the Despicable Me franchise and is still going strong.

Ellis Jacob: Twisters took audiences by storm with its opening weekend, doubling that of its predecessor, Twister, which was the second-highest-grossing film of the year, with... Of course, the film capturing everyone's attention around the globe is Deadpool and Wolverine, smashing its opening North American weekend box office, becoming the biggest opening R-rated film of all time.

Speaker Change: Twisters took audiences by storm with its opening weekend doubling that of its predecessor, Twister, which is the second highest grossing film of the year when it was released back in 1996.

Speaker Change: Of course, the film capturing everyone's attention around the globe is Deadpool and Wolverine, smashing its opening North American weekend box office, becoming the biggest opening R-rated film of all time.

Ellis Jacob: The average per page spend is notably higher compared to in-person transactions helping to increase our overall concession revenue. We are continuing to enhance our mobile app functionality, reducing customer friction and elevating overall consumer status. While our mission is to create an exceptional experience for our guests, we also want to ensure we are offering a wide array of content to keep them coming back to our theaters. Outside of the Hollywood movie slate, we are leading the charge when it comes to alternative content like the opera, sporting events, concerts, and classic films.

Ellis Jacob: The film gave us the biggest opening weekend since 2021, which has Spider-Man No Way Home the third highest-grossing film of all time domestically. These films are just beginning of what we are seeing as a stable stream of notable titles coming in 2024 with an Hanzootas, Alien Romulus, Beetlejuice, Beetlejuice, Transformers 1, Joker, Fulia Du, Venon the Last Dance, Gladiator 2, Wicked, Moana 2, Mufasa, The Lion King, and Sonic the Hedgehog 3. Looking ahead to 2025, we are very excited by the Rupa Film Slate on the horizon, including another Jurassic World, Superman Legacy, the next installment of Mission Impossible, Hylio, Captain America, Brave New World, Wicked Part 2, How the Train Your Dragon live action, Fantastic Four, Soutopia 2, Thunderbolts, Snow White, Avatar 3, and many, many more.

Ellis Jacob: The film gave us the biggest opening weekend since 2021, which had Spider-Man: No Way Home, the third highest grossing film of all time, to mess with. These films are just the beginning of what we are seeing as a stable stream of notable titles coming in 2024 with It Ends With Us, Alien Romulus, Beetlejuice, Beetlejuice Transformers 1, Joker, Folie Deux, Venom, The Last Dance, Gladiator 2, Wicked, Moana 2, Mufasa, The Lion King, and Sonic the Hedgehog 3.

Speaker Change: The film gave us the biggest opening weekend since 2021, which had Spider-Man No Way Home, the third highest grossing film of all time, domestically.

Speaker Change: These films are just the beginning of what we are seeing as a stable stream of notable titles coming in 2024, with It Ends With Us, Alien Romulus,

Ellis Jacob: This past June was our best ever for event cinema programming. The Met Hopper's Madam Butterfly was the strongest opera title since 2019 and goes right here right now with the biggest new concert so far this year. We also welcome Canadian cricket fans into our theaters to cheer on their favorite teams in the ICC Men's T20 cricket world cup. The India's Pakistan Game in June was the highest attended sporting event we've done since 2016.

Speaker Change: Beetlejuice, Beetlejuice, Transformers 1, Joker, Folia Do, Venom, The Laugh Dance, Gladiator 2, Wicked, Moana 2, Mufasa, The Lion King, and Sonic the Hedgehog 3.

Ellis Jacob: Looking ahead to 2025, we are very excited by the robust film slate on the horizon, including another Jurassic World, and the next installment of Mission Impossible, Ilio, Captain America, Brave New World, Wicked Part 2, How to Train Your Dragon live action, Fantastic Four, Zootopia 2, Thunderbolts, Snow White, Avatar 3, and many, many more.

Speaker Change: Looking ahead to 2025, we are very excited by the robust film slate on the horizon, including another Jurassic World, Superman Legacy.

Speaker Change: The next installment of Mission Impossible, Helio, Captain America, Brave New World, Wicked Part 2, How to Train Your Dragon live action, Fantastic Four, Zootopia 2, Thunderbolts, Snow White, Avatar 3 and many many more.

Ellis Jacob: We've released, we've reached a pivotal point in the post-Sripe rebound with a variety of content hitting the big screen on a consistent basis to keep moviegoers on the edge of their seats. The pipeline of boxbusters over the next several years is truly remarkable.

Ellis Jacob: We believe we've reached a pivotal point in the post-strike rebound, with a variety of content hitting the big screen on a consistent basis to keep moviegoers on the edge of their seats. The pipeline of blockbusters over the next several years is truly remarkable. This is a promising moment for our business and shareholders, which leads me to my next point, capital return. As you know, we addressed the balance sheet in the first quarter through the sale of our Amusement Solutions business and a comprehensive refinancing plan, which included extending maturities and increasing financial flexibility.

Speaker Change: We believe we've reached a pivotal point in the post-strike rebound, with a variety of content hitting the big screen on a consistent basis to keep moviegoers on the edge of their seats.

Ellis Jacob: Our international programming contributed 9.2% to the second quarter box office, once again outperforming the North American box office at 3.1%. Jack and Julia three, which released in June, is the highest grossing Punjabi film of all time with Cineplex delivering 70% of the North American box office. Our distribution on Cineplex Pictures released the Amazon MGM studio film I and Celine Dion in select theaters this quarter, reinforcing the importance of the cinematic experience for key streaming releases. They also successfully relanced the horror film franchise, The Strangers Chapter One and the Hindi Action Film Kill. Up next is Borderlands and All-Star Tasks including Clayton Blanchett, Kevin Hart and Jamie Lee Curtis.

Ellis Jacob: This is a promising moment for our business and shareholders, which leads me to my next point, Capital Returf. As you know, we address the balance sheet in the first quarter through the sale of our amusement solutions business as well as the comprehensive refinancing plan, which included extending maturities and increasing financial flexibility. With the strength of our balance sheet and the confidence we have in our business plan, our board approved a normal course issue a bit to acquire up to 6.3 million common shares and supply, subject to TSX approval. We, along with our board, are focused on driving long-term shareholder value.

Speaker Change: The pipeline of blockbusters over the next several years is truly remarkable. This is a promising moment for our business and shareholders, which leads me to my next point, capital return.

Speaker Change: As you know, we addressed the balance sheet in the first quarter through the sale of our Amusement Solutions business as well as a comprehensive refinancing plan which included extending maturities and increasing financial flexibility.

Ellis Jacob: With the strength of our balance sheet and the confidence we have in our business plan, our board approved a normal course issuer bid to acquire up to 6.3 million common shares of Cineplex, subject to TSX approval. We, along with our board, are focused on driving long-term shareholder value. We firmly believe our share price is currently trading well below the intrinsic value of our business. We see tremendous value in opportunistically repurchasing our shares in an accretive manner with excess free cash flow while balancing our target debt leverage ratio and investment opportunities in high ROI-generating industries.

Speaker Change: With the strength of our balance sheet and the confidence we have in our business plan, our board approved a normal course issuer bid to acquire up to 6.3 million common shares of Cineplex, subject to TSX approval.

Ellis Jacob: We firmly believe our share price is currently trading well below the intrinsic value of our business. We see tremendous value in opportunistically repurchasing our shares in an accretive manner with excess recap slow while balancing our target debt leverage ratio and investment opportunities in high ROI generating initiatives.

Speaker Change: We, along with our board, are focused on driving long-term shareholder value. We firmly believe our share price is currently trading well below the intrinsic value of our business.

Ellis Jacob: We have no update on the competition bureau's allegations regarding our online booking fee. As a reminder, we presented our case before the competition tribunal and February. We note that the competition bureau is not contesting our right to charge the online booking fee. It is only contesting the manner in which we presented the fee to consumers. We strongly believe we have complied with both the letter and spirit of the law and that the competition bureau's allegations are unfounded. We await the competition tribunals' decision in the coming months.

Speaker Change: We see tremendous value in opportunistically repurchasing our shares in an accretive manner with excess free cash flow while balancing our target debt leverage ratio and investment opportunities in high ROI generating initiatives.

Ellis Jacob: As we look ahead, we have a lot to be excited about. As the film's late strength, and so does our market leadership as Canada's entertainment destination. With 156 theaters across Canada, Cineplex is the largest exhibitor in Canada with an industry-leading market share. Our leadership and alternative content and international programming will continue to ensure Canadians have even more reasons to come together and visit their local Cineplex, bringing content from around the world to their neighborhood. Our LBE business is set to grow on the back half as we build new locations as leading Canadian players delivering attractive stole-level margins.

Ellis Jacob: As we look ahead, we have a lot to be excited about. As the stone's lathe strengthens, so does our market leadership as Canada's entertainment destination. With 156 theaters across Canada, Cineplex is the largest exhibitor in Canada with an industry-leading market share.

Speaker Change: As we look ahead, we have a lot to be excited about. As the film slate strengthens, so does our market leadership as Canada's entertainment destination.

Speaker Change: With 156 theaters across Canada, Cineplex is the largest exhibitor in Canada with an industry-leading market share.

Ellis Jacob: Before I pass it on to Gore, I want to reinforce that future film slate is looking bright. The third quarter is off to a great start and strong content has picked off the back half of 2024. The spicable meaningful led the charge in July becoming the second highest grossing film domestically within the despicable need franchise and is still going strong. Twisters to audiences by storm with this opening weekend doubling that of the spree disaster twister which is the second highest grossing film of the year when it was released back in 1996.

Ellis Jacob: Our leadership in alternative content and international programming will continue to ensure Canadians have even more reasons to come together and visit their local Cineplex, bringing content from around the world to their neighborhood. Our LVE business is set to grow in the back half as we build new locations as a leading Canadian player, delivering an attractive store-level margin. This diversification of our business allows us to profitably deliver on our position as a destination for escape, play, and fun.

Speaker Change: Our leadership in alternative content and international programming will continue to ensure Canadians have even more reasons to come together and visit their local Cineplex, bringing content from around the world to their neighborhood.

Speaker Change: Our LVE business is set to grow on the back half as we build new locations as a leading Canadian player, delivering attractive store-level margins.

Ellis Jacob: This diversification of our business allows us to profitably deliver on our position as the destination for escape, play, and fun. With the wide range of attractive media channels, we offer a compelling place for advertisers to invest their dollars and capture our guests' undivided attention. We will continue to leverage Canada's most robust lifestyle loyalty program, Scene Plus. This award-winning program has over 15 million members, and we have strategically engaging them through personalized offers and value-driven promotions.

Speaker Change: This diversification of our business allows us to profitably deliver on our position as a destination for escape, play, and fun.

Ellis Jacob: With a wide range of attractive media channels, we offer a compelling place for advertisers to invest their dollars and capture our guests' undivided attention. We will continue to leverage Canada's most robust lifestyle loyalty program, Cineplex. This award-winning program has over 15 million members, and we are strategically engaging them through personalized offers and value-driven promotion. To close, I know you've all been watching the rebound of our industry as closely as we have, and I hope you are as excited for what's to come.

Ellis Jacob: Of course, the film capturing everyone's attention around the globe is deadpool and Wolverine smashing its opening North American weekend box office becoming the biggest opening R-rated film of all time. The film gave us the biggest opening weekend since 2021 which has Spider-Man no way home the third highest-grossing film of all time domestically. These films are just beginning of what we are seeing as a stable stream of notable titles coming in 2024 with an Hanzootas, Alien Romulus, Beetlejuice, Beetlejuice Transformers 1, Joker, Fulia Du, Venon the Last Dance, Gladiator 2, Wicked, Moana 2, Mufasa, The Lion King, and Sonic the Hedgehog 3.

Speaker Change: With a wide range of attractive media channels, we offer a compelling place for advertisers to invest their dollars and capture our guests' undivided attention.

Speaker Change: We will continue to leverage Canada's most robust lifestyle loyalty program, Cineplex. This award-winning program has over 15 million members and we are strategically engaging them through personalized offers and value-driven promotions.

Ellis Jacob: To close, I know you've all been watching the rebound of our industry as closely as we have, and I hope you are as excited for what's to come. Over the last several years, our team has been working hard to strengthen our position, optimize the balance sheet, find few operations, and differentiate us in the market. We are looking ahead towards the new horizon, and we are more confident than ever about Cineplex's ability to sustain its leadership within entertainment and media across North America.

Speaker Change: To close, I know you've all been watching the rebound of our industry as closely as we have, and I hope you are as excited for what's to come. Over the last several years, our team has been working hard to strengthen our position, optimize the balance sheet.

Ellis Jacob: Over the last several years, our team has been working hard to strengthen our position, optimize the balance sheet, fine-tune operations, and differentiate us in the market. We are looking ahead to a new horizon, and we are more confident than ever about Cineplex's ability to sustain its leadership within entertainment and media across North America. With that, I will turn things over to Gord.

Speaker Change: Fine-tune operations and differentiate us in the market.

Speaker Change: We are looking ahead towards a new horizon and we are more confident than ever about Cineplex's ability to sustain its leadership within entertainment and media across North America.

Ellis Jacob: Looking ahead to 2025, we are very excited by the Rupa Film Slate on the horizon including another Jurassic World, Superman Legacy, the next installment of Mission Impossible, Hylio, Captain America, Brave New World, Wicked Part 2, how the train, how the train your dragon life action, fantastic four, Soutopia 2, Thunderbolts, Snow White, Avatar 3, and many many more. We've released, we've reached a pivotal point in the post-Sripe rebound with a variety of content hitting the big screen on a consistent basis to keep movie goers on the edge of their seats. The pipeline of boxbusters over the next several years is truly remarkable.

Gord Nelson: With that, I will turn things over to George.

Gord Nelson: Thank you, Ellis, and I am pleased to present the condensed summary of the 2nd quarter 2024 proposal. For further reference, our financial statements and MD&A have been filed on CDAR Plus and are also available on our investor relations website at cineplex.com. Our MD&A and earnings press release include a complete narrative on the operational results, so I will focus on highlighting select items in addition to providing commentary on our liquidity, capital allocation priorities, and outcomes.

Gord Nelson: Thank you, Ellis, and I am pleased to present a condent. Sorry to be so important to us for Cineplex. Further reference or financial statements in MD&A have been filed on Cedar Plus, and are also available on our investor relations website at cineplex.com.

Claude: With that, I will turn things over to Claude. Thank you, Ellis, and I am pleased to present the condensed summary of the 2nd Quarter 2024 results for Cineplex Inc.

Claude: For further reference, our financial statements and MD&A have been filed on CDAR Plus and are also available on our investor relations website at cineplex.com.

Gord Nelson: Our MD&A and earnings press release include a complete narrative on the operational results, so I will focus on highlighting select items in addition to providing commentary on our liquidity, capital allocation priorities, and outlook. For my comments and operations, all amounts following will be from continuing operations unless otherwise stated. As you are all aware, our second quarter results continue to be impacted by the actors' and writers' strikes, which delayed the release date of a number of key titles, particularly impacting April and May. Our April and May box office was at 46% and 49% of 2019's pre-pandemic levels, respectively.

Claude: Our MD&A and earnings press release include a complete narrative on the operational results, so I will focus on highlighting select items in addition to providing commentary on our liquidity, capital allocation priorities, and outlook.

Gord Nelson: For my comments on operations, all amounts following will be from continuing operations unless otherwise stated. As you are all aware, our second quarter results continued to be impacted by the Actors and Writers Strike, which delayed the release dates of a number of key titles, particularly impacting April and May. Our April and May box office was at 46% and 49% of 2019's pre-pandemic levels, respectively. But in June and July, this box office percentage almost doubled to 90% and 94%.

Ellis Jacob: This is a promising moment for our business and shareholders which leads me to my next point, Capital Returf. As you know, we address the balance sheet in the first quarter through the sale of our amusement solutions business as well as the comprehensive refinancing plan which included extending maturedies and increasing financial flexibility. With the strength of our balance sheet and the confidence we have in our business plan, our board approved a normal course issue a bit to acquire up to 6.3 million common shares and supply subject to TSX approval.

Claude: For my comments on operations, all amounts following will be from continuing operations unless otherwise stated.

Claude: As you are all aware, our second quarter results continued to be impacted by the actors and writers strikes, which delayed the release dates of a number of key titles, particularly impacting April and May.

Speaker Change: Our April and May box office was at 46% and 49% of 2019's pre-pandemic levels, respectively.

Gord Nelson: But in June and July, this box office percentage almost doubled to 90% and 94%, respectively.

Claude: But in June and July , this box office percentage almost doubled to 90% and 94% respectively.

Gord Nelson: As a result of the April and May attendance impacts on our second quarter results, our total revenue decreased 24.6% to $277 million, and our adjusted EBITDA will decrease $0.9 million in 2024 as compared to $47.2 million in 2023, primarily due to the reduced supply of product as a result of the industry strikes.

Gord Nelson: As a result of the April and May attendance impacts on our second quarter results, our total revenue decreased 24.6% to $277 million, and our adjusted EBITDA decreased to $0.9 million in 2024 as compared to $47.2 million in 2023, primarily due to the reduced supply of product as a result of the industry. Now, let's take a closer look at our segment.

Ellis Jacob: We along with our board are focused on driving long-term shareholder value. We firmly believe our share price is currently trading well below the intrinsic value of our business. We see tremendous value in opportunistically repurchasing our shares in an accretive manner with excess recap slow while balancing our target debt leverage ratio and investment opportunities in high ROI generating initiatives.

Speaker Change: As a result of the April and May attendance impacts on our second quarter results, our total revenue decreased 24.6% to $277 million and our adjusted EBITDA decreased to $0.9 million in 2024 as compared to $47.2 million in 2023.

Gord Nelson: Now let's take a closer look at our segments. In the Film Exhibition and Content Segment, attendance declined $4.1 million, or 31.8% to approximately $8.7 million. Total revenue decreased 30%, and segment adjusted EBITDA decreased to $2.9 million, primarily as a result of the attendance decline. On a positive note, we achieved $13.11 and $9.56, respectively. As part of our portfolio optimization and rationalization strategy, we closed two locations during the quarter and the third subsequent to quarter ends. We also monetize some underutilized land, an overflow parking lot for cash proceeds of $11.9 million. Pairing Q2 2024 to the pre-pandemic Q2 2019 period, our theater portfolio has decreased to 156 locations from 165 locations, and our theater cash rent paid and payable has decreased 7.7% to $35.9 million from $38.9 million.

Speaker Change: primarily due to the reduced supply of product as a result of the industry strikes.

Gord Nelson: In the film exhibition and content segment, attendance declined 4.1 million, or 31.8 percent, to approximately 8.7 million. Total revenue decreased 30%, and segment-adjusted EBITDA decreased to $2.9 million, primarily as a result of the attendance decline. On a positive note, we achieved.

Speaker Change: Now let's take a closer look at our segments.

Ellis Jacob: As we look ahead, we have a lot to be excited about. As the film's late strength and so does our market leadership as Canada's entertainment destination. With 156 theaters across Canada, Cinoplex is the largest exhibitor in Canada with an industry leading market share. Our leadership and alternative content and international programming will continue to ensure Canadians have even more reasons to come together and visit their local Cinoplex, bringing content from around the world to their neighborhood.

Speaker Change: In the film exhibition and content segment, attendance declined 4.1 million, or 31.8 percent to approximately 8.7 million.

Speaker Change: Total revenue decreased 30%, and segment-adjusted EBITDA decreased to $2.9 million, primarily as a result of the attendance decline.

Gord Nelson: CPP records of $13.11 and $9.56, respectively. As part of our portfolio optimization and rationalization strategy, we closed two locations during the quarter and a third subsequent to quarter end. We also monetized some underutilized land and overflow parking lots for cash proceeds of $11.9 million. Pairing Q2 2024 to the pre-pandemic Q2 2019 period, our theater portfolio has decreased to 156 locations from 165 locations.

Speaker Change: On a positive note, we achieved all-time BVP and CBP records of $13.11 and $9.56 respectively.

Speaker Change: As part of our portfolio optimization and rationalization strategy, we closed two locations during the quarter and a third subsequent to quarter end.

Ellis Jacob: Our LBE business is set to grow on the back half as we build new locations as leading Canadian players delivering attractive stole-level margins. This diversification of our business allows us to profitably deliver on our position as the destination for escape, play and fun. With the wide range of attractive media channels, we offer a compelling place for advertisers to invest their dollars and capture our guests' undivided attention. We will continue to leverage Canada's most robust lifestyle loyalty program, Scene Plus. This award-winning program has over 15 million members, and we have strategically engaging them through personalized offers and value-driven promotions.

Speaker Change: We also monetized some underutilized land and overflow parking lots for cash proceeds of $11.9 million.

Speaker Change: Pairing Q2 2024 to the pre-pandemic Q2 2019 period, our theater portfolio has decreased to 156 locations from 165 locations

Gord Nelson: And our theater cash rent paid and payable has decreased 7.7% to $35.9 million from $38.9. In the media segment, as we've mentioned previously, the cinema media business model post-pandemic has shifted to a CPM-based model. Encouragingly, despite the attendance challenges, the media segment revenue increased 11.6% to $28.9 million, and segment-adjusted EBITDA increased slightly to $13.8 million. However, segment-adjusted EBITDA was negatively impacted by conversion costs related to the new digital media network.

Speaker Change: And our theater cash rent paid and payable has decreased 7.7% to $35.9 million from $38.9 million.

Gord Nelson: In the media segment, as we've mentioned previously, the cinema media business model post-pandemic has shifted to a CPM-based model. It's encouragingly, despite the attendance challenges, the media segment revenue increased to 11.6% to $28.9 million and adjusted the EBITL increased slightly to $13.8 million. Segment adjusted EBITL was negatively impacted by conversion costs related to the new digital media networks. Cinema media revenue increased to $4% to $18.5 million, and cinema media revenue per patron or CMPP increased a very impressive 52.5% to $2.12 per patron from $1.39 in the prior year. Given the change to a CPM-based model and the transition to a regular product supply, we are introducing the CMPP metric in our public disclosures.

Speaker Change: In the media segment, as we've mentioned previously, the cinema media business model post-pandemic has shifted to a CPM-based model.

Speaker Change: Encouragingly, despite the attendance challenges, the media segment revenue increased 11.6% to $28.9 million, and segment-adjusted EBITDA increased slightly to $13.8 million.

Speaker Change: Segment-adjusted EBITDA was negatively impacted by conversion costs related to the new digital media networks.

Gord Nelson: Cinema media revenue increased 4% to $18.5 million, and cinema media revenue per patron, or CMPP, increased a very impressive 52.5% to $2.12 per patron from $1.39 in the prior year. Given the change to a CPM-based model and the transition to a regular product supply, we are introducing the CMPP metric in our public disclosure. Our digital place-based media revenue had a strong result, with total revenues up 28.1% to $10.6 million, primarily as a result of the addition of Cadillac Fairview to our shopping mall network beginning in 2024. And lastly, in our LBE segment, segment revenues increased 1% to $29.4 million. The second quarter is typically the seasonally weakest quarter for the LBE business.

Speaker Change: Cinema media revenue increased 4% to $18.5 million and cinema media revenue per patron, or CMPP, increased a very impressive 52.5% to $2.12 per patron from $1.39 in the prior year.

Gord Nelson: With that, I will turn things over to George. Thank you, Ellis, and I am pleased to present a condent. Sorry to be so important to us for Cineplex.

Gord Nelson: Further reference or financial statements in MD&A have been filed on Cedar Plus, and are also available in our investor relations website at cineplex.com. Our MD&A and earnings press release include a complete narrative on the operational results, so I will focus on highlighting select items in addition to providing commentary on our liquidity, capital allocation priorities, and outlook. For my comments and operations, all amounts following will be from continuing operations unless otherwise stated.

Speaker Change: Given the change to a CPM-based model and the transition to a regular product supply, we are introducing the CMPP metric in our public disclosures.

Gord Nelson: Our digital place-based media revenue had a strong result with total revenue is up $28.1% to $10.6 million, primarily as a result of the addition of Cadillac Fairview to our shopping mall network beginning in 2024. And lastly, in our LBE segment, segment revenue has increased 1% to $29.4 million. The second quarter is typically the seasonally weakest quarter for the LBE business, and year-over-year comparisons are impacted by Easter falling in Q1 in 2024 versus in Q2 in 2023. Our level adjusted EBITL margins were 16.2% versus 21.8% in the prior year, primarily as a result of increased minimum wages, costs related to flooding remediation in a number of locations, and timing of spend on new marketing initiatives.

Speaker Change: Our digital place-based media revenue had a strong result, with total revenues up 28.1% to $10.6 million, primarily as a result of the addition of Cadillac Fairview to our shopping mall network beginning in 2024.

Gord Nelson: As you are all aware, our second quarter results continue to be impacted by the actors and writers' strengths, which delayed the release date of a number of key titles, particularly impacting April and May. Our April and May box office was at 46% and 49% of 2019's pre-pandemic levels respectively. But in June and July, this box office percentage almost doubled to 90% and 94% respectively. As a result of the April and May attendance impacts on our second quarter results, our total revenue decreased $24.6% to $277 million, and our adjusted EBITDA will decrease the $0.9 million in 2024 as compared to $47.2 million in 2023, primarily due to the reduced supply of product as a result of the industry strikes.

Speaker Change: And lastly, in our LBE segment, segment revenues increased 1% to $29.4 million.

Gord Nelson: And year-over-year comparisons are impacted by Easter falling in Q1 in 2024 versus in Q2 in 2023. Store level adjusted EBITDA margins were 16.2% versus 21.8% in the prior year, primarily as a result of increased minimum wages, costs related to flooding remediation in a number of locations, and timing of spend on new marketing initiatives. We continue to expect that store-level margins for the year will exceed our 25% target. I would now like to move on and speak to our balance sheets and, in particular, our liquidity position. At quarter end, we had $57 million in cash and nothing drawn under the covenant, like credit facilities which have a capacity of $100 million.

Speaker Change: The second quarter is typically the seasonally weakest quarter for the LBE business and year-over-year comparisons are impacted by Easter falling in Q1 in 2024 versus in Q2 in 2023.

Speaker Change: For the last year, the average store-level adjusted EBITDA margins were 16.2% versus 21.8% in the prior year, primarily as a result of increased minimum wages.

Speaker Change: Costs related to flooding remediation in a number of locations, and timing of spend on new marketing initiatives.

Gord Nelson: We continue to expect that store-level margins for the year will exceed our 25% targets.

Speaker Change: We continue to expect that store-level margins for the year will exceed our 25% targets.

Gord Nelson: I would now like to move on and speak to our balance sheets, in particular, our liquidity position. At quarter end, we had $67 million in cash and nothing drawn under the covenant-like credit facilities, which have a capacity of $100 million. With the comprehensive re-financing plan, we have meaningfully pushed out near-term maturities and removed restrictions related to covenant testing, and no testing was required under the credit facilities at quarter end. As we have mentioned previously, our capital allocation priorities include maintenance capital expenditures, continuing to strengthen the balance sheet to achieve our target leverage ratios, investing in growth opportunities, and providing shareholder returns in the form of dividends and/or share buybacks.

Speaker Change: I would now like to move on and speak to our balance sheets and, in particular, our liquidity position.

Speaker Change: At quarter end, we had $57 million in cash and nothing drawn under the covenant-like credit facilities which have a capacity of $100 million.

Gord Nelson: With the comprehensive refinancing plan, we have meaningfully pushed out near-term maturities and removed restrictions related to covenant testing, and no testing was required under the credit facilities at quarter end. As we have mentioned previously, our capital allocation priorities include maintenance capital expenditures, continuing to strengthen the balance sheet to achieve our target leverage ratios, investing in growth opportunities, and providing shareholder returns in the form of dividends and or share buybacks. As we reflect at this juncture, we see a strong product pipeline going forward, driving the potential for significant free cash flow generation. Additionally, we see limited current commitments on the growth cap act.

Speaker Change: With the comprehensive refinancing plan, we have meaningfully pushed out near-term maturities and removed restrictions related to covenant testing, and no testing was required under the credit facilities at quarter end.

Gord Nelson: On a positive note, we achieved $13.11 and $9.56 respectively. As part of our portfolio optimization and rationalization strategy, we closed two locations during the quarter and the third subsequent to quarter ends. We also monetize some underutilized land, an overflow parking lot for cash proceeds of $11.9 million. Pairing Q2 2024 to the pre-pandemic Q2 2019 period, our theater portfolio has decreased to 156 locations from 165 locations and our theater cash rent paid and payable has decreased 7.7% to $35.9 million from $38.9 million.

Speaker Change: As we have mentioned previously, our capital allocation priorities include maintenance capital expenditures, continuing to strengthen the balance sheet to achieve our target leverage ratios, investing in growth opportunities, and providing shareholder returns in the form of dividends and or shared buybacks.

Gord Nelson: As we reflect at this juncture, we see a strong product pipeline going forward, driving the potential for significant free cash flow generation. We see limited current commitments on growth cap acts, and we see a current share price which we believe does not reflect the intrinsic value of the company.

Speaker Change: As we reflect at this juncture, we see a strong product pipeline going forward, driving the potential for significant free cash flow generation.

Gord Nelson: And we see a current share price that we believe does not reflect its intrinsic value. As such, we believe that it is appropriate at this time to introduce a normal course issuer bid to deliver current and long-term shareholder value. The board has approved the filing of an NCIB with the Toronto Stock Exchange to purchase up to 10% of the outstanding float, or approximately 6.3 million shares. Once approved, we will take a prudent and opportunistic approach to acquire shares using excess cash while balancing all our capital allocation priorities. We will make a press release once all approvals have been obtained. Now I'd like to take a few moments to consider the future.

Speaker Change: We see limited current commitments on growth CapEx.

Speaker Change: And we see a current share price which we believe does not reflect the intrinsic value of the company.

Gord Nelson: Thus, we believe that it is appropriate at this time to introduce a normal course issuer bid to deliver current and long-term shareholder value. Gord has approved the filing of an NCIB with the Toronto Stock Exchange to purchase up to 10% of the outstanding float, or approximately 6.3 million shares. Once approved, we will take a prudent and opportunistic approach to acquire shares using excess cash while balancing all our capital allocation priorities. We will press release once all approvals have been obtained.

Speaker Change: As such, we believe that it is appropriate at this time to introduce a normal course issuer bid to deliver current and long-term shareholder value.

Gord Nelson: In the media segment, as we've mentioned previously, the cinema media business model post-pandemic has shifted to a CPM-based model. It's encouragingly, despite the attendance challenges, the media segment revenue increased to $11.6% to $28.9 million and adjusted the EBITL increased slightly to $13.8 million. Segment adjusted EBITL was negatively impacted by conversion costs related to the new digital media networks. Cinema media revenue increased to $4% to $18.5 million and cinema media revenue per patron or CMPP increased a very impressive 52.5% to $2.12 per patron from $1.39 in the prior year.

Speaker Change: The board has approved the filing of an NCIB with the Toronto Stock Exchange to purchase up to 10% of the outstanding float, or approximately 6.3 million shares.

Speaker Change: Once approved, we will take a prudent and opportunistic approach to acquire shares using excess cash while balancing all our capital allocation priorities.

Speaker Change: We will press release once all approvals have been obtained.

Gord Nelson: Now I'd like to take a few moments to consider the future. I want to revisit the very real scenario I've described during our past analyst calls. This is where we achieve or exceed pre-pandemic adjusted EBITL levels on 75 to 80% of pre-pandemic attendance levels. No near-term cash taxes due to the NOLs. In this scenario, we could generate in excess of $100 million of free cash flow and use this free cash flow to invest, deliver, and provide additional shareholder returns. June attendance was 72% of pre-pandemic levels. Our July attendance was 76% of pre-pandemic levels. And early August results suggest this percentage will continue to grow into August.

Gord Nelson: I want to revisit the very real scenario I described to you in our past analyst call. This is where we achieve or exceed pre-pandemic adjusted EBITDA levels at 75% to 80% of pre-pandemic attendance levels. No near-term cash taxes due to the NOLs. In this scenario, we could generate in excess of $100 million of free cash flow and use this free cash flow to invest, de-lever, and provide additional shareholder returns. June 10, with 72% of pre-pandemic wealth. Our July attendants. 76% of the population pre-pandemic.

Speaker Change: Now I'd like to take a few moments to consider the future.

Speaker Change: I want to revisit the very real scenario I've described during our past Analyst Calls.

Speaker Change: This is where we achieve or exceed pre-pandemic adjusted EBITDA levels on 75% to 80% of pre-pandemic attendance levels.

Gord Nelson: Given the change to a CPM-based model and the transition to a regular product supply, we are introducing the CMPP metric in our public disclosures. Our digital place-based media revenue had a strong result with total revenue is up $28.1% to $10.6 million, primarily as a result of the addition of Cadillac Fairview to our shopping mall network beginning in 2024.

Speaker Change: No near-term cash taxes due to the NOLs. In this scenario, we could generate in excess of $100 million of free cash flow and use this free cash flow to invest, de-lever, and provide additional shareholder returns.

Speaker Change: June attendance was 72% of pre-pandemic levels.

Speaker Change: Our July attendance was 76% of pre-pandemic levels.

Gord Nelson: And lastly, in our LBE segment, segment revenue has increased 1% to $29.4 million. The second quarter is typically the seasonally weakest quarter for the LBE business and year-over-year comparisons are impacted by Easter falling in Q1 in 2024 versus in Q2 in 2023. Our level adjusted EBITL margins were 16.2% versus 21.8% in the prior year, primarily as a result of increased minimum wages, costs related to flooding remediation in a number of locations and timing of spend on new marketing initiatives. We continue to expect that store-level margins for the year will exceed our 25% targets.

Operator: And early August results suggest this percentage will continue to grow into August. We are taking action today with the planned NCIB, and we will continue to build back this business stronger than it was before the pandemic. In summary, we believe there's a lot to be excited about. With our long history of a disciplined operations and capital management approach, we remain highly focused on creating long-term shareholder value. And with that, I would like to turn things over to the conference operator for questions.

Speaker Change: And early August results suggest this percentage will continue to grow into August .

Gord Nelson: We are taking action today with the planned NCIB, and we will continue to build back this business stronger than it was before the pandemic.

Speaker Change: We are taking action today with the planned NCIB and we will continue to build back this business stronger than it was before the pandemic.

Gord Nelson: In summary, we believe there's a lot to be excited about. With our long history of a disciplined operations and capital management approach, we remain highly focused on creating long-term shareholder value.

Speaker Change: In summary, we believe there's a lot to be excited about.

Speaker Change: With our long history of a disciplined operations and capital management approach, we remain highly focused on creating long-term shareholder value. And with that, I would like to turn things over to the conference operator for questions.

Adam: And with that, I would like to turn things over to the conference operator for questions. Thank you. As a reminder, if you would like to ask a question today, please press Starflow by one on the telephone keypad now to enter the queue. Can you prepare to ask a question? Please ensure you are unmuted locally.

Operator: Thank you. As a reminder, if you would like to ask a question today, please press star followed by one on your telephone keypad. Now turn to the queue and prepare to ask your question. Please ensure you are unmuted locally. And our first question today comes from Drew McReynolds from RBC. Drew, your line is open, please go ahead.

Speaker Change: Thank you. As a reminder, if you would like to ask a question today, please press star followed by one on your telephone keypad. Now turn to the queue. When preparing to ask your question, please ensure you are unmuted locally.

Gord Nelson: I would now like to move on and speak to our balance sheets in particular our liquidity position. At quarter end, we had $67 million in cash and nothing drawn under the covenant-like credit facilities which have a capacity of $100 million. With the comprehensive re-financing plan, we have meaningfully pushed out near-term materiities and removed restrictions related to covenant testing and no testing was required under the credit facilities at quarter end. As we have mentioned previously, our capital allocation priorities include maintenance capital expenditures, continuing to strengthen the balance sheet to achieve our target leverage ratios, investing in growth opportunities and providing shareholder returns in the form of dividends and or share buybacks.

Drew Mcreynolds: And our first question today comes from Dream of Grandels from RBC. Drew, your line is open. Please go ahead.

Drew Mcreynolds: Thanks very much and good morning. Two for me.

Speaker Change: And our first question today comes from Drew McReynolds from RBC. Drew, your line is open, please go ahead.

Drew Mcreynolds: Thanks very much. Good morning.

Drew Mcreynolds: First, on the cost side, Gord, I think you commented on just the higher cost of LBE. But I missed the Cineplex Digital Media conversion costs if you can just kind of elaborate on those. And then the second question with respect to the Cineplex media business, obviously great to see the year over year growth given kind of the lower attendance. Wondering kind of the reasons for your ability to do that, just given, you know, obviously, revenues being more tied to attendance. I know there's some moving parts underneath there. And most importantly, do you think you can kind of continue that kind of performance relative to attendance in the back half of 2024?

Drew Mcreynolds: A two for me. First on the cost side. Go ahead. I think you commented on just the higher cost on LBE.

Drew Mcreynolds: Thanks very much and good morning. Two for me. First, on the cost side, Gord, I think

Drew Mcreynolds: But I missed within Synaplex digital media conversion costs if you can just kind of elaborate on those. And then the second question with respect to the Synaplex Media business. Obviously great to see the Eurovia growth given kind of the lower attendance, wondering kind of the reasons for your ability to do that just given, you know, obviously revenues being more tied to attendance. I know there's some moving parts underneath there.

Speaker Change: You commented on just the higher costs on LBE. But I missed within Cineplex Digital Media conversion costs, if you can just kind of elaborate on those. And then the second question with respect to the Cineplex media business.

Speaker Change: Obviously, great to see the year-over-year growth given kind of the lower attendance.

Speaker Change: wondering…

Speaker Change: kind of the reasons for your ability to do that, just given, you know, obviously,

Drew Mcreynolds: And most importantly, do you think you can kind of continue that kind of kind of performance relative to attendance in the back half of 2024.

Speaker Change: Revenues being more tied to attendance. I know there's some moving parts underneath there. And most importantly, do you think you can kind of continue that kind of performance relative to attendance in the back half of 2024? Thank you.

Gord Nelson: As we reflect at this juncture, we see a strong product pipeline going forward driving the potential for significant free cash flow generation. We see limited current commitments on growth cap acts, and we see a current share price which we believe does not reflect the intrinsic value of the company.

Drew Mcreynolds: Thank you, Drew.

Gord Nelson: Thank you.

Gord Nelson: Let me just kind of step back and talk about sort of the media business and the overall margins, and then talk about kind of costs and where we see things going. So, as we've kind of described on previous calls, once we're ramped up, the cinema media business would typically operate around 80% of the margin, and the CDM business would be in that sort of low to mid-teens type margin. As we look into the first and the second quarter, I'm pleased to say that the cinema media business continues to ramp up and continues to deliver at those margin levels.

Speaker Change: Thanks Drew. So let me just kind of step back and talk about sort of the media business and the overall margins and then talk about kind of costs and where we see things going. So you know as we've kind of described on previous calls you know once we're ramped up is

Gord Nelson: Thanks Drew, so let me just kind of step back and talk about sort of the media business and the overall margins, and then talk about costs and where we see things going. So, you know, as we've kind of described on previous calls, once we're ramped up, the cinema media business would typically operate around, you know, an 80% EBITDA margin, and the CDM business would be in that sort of low to mid-teens type margin.

Gord Nelson: Thus, we believe that it is appropriate at this time to introduce a normal course issuer bid to deliver current and long-term shareholder value. Gord has approved the filing of an NCIB with the Toronto Stock Exchange to purchase up to 10% of the outstanding float or approximately 6.3 million shares. Once approved, we will take a prudent and opportunistic approach to acquire shares using excess cash while balancing all our capital allocation priorities. We will press release once all approvals have been obtained.

Speaker Change: The cinema media business would typically operate around an 80% EBITDA margin. And the CDM business would be in that sort of low to mid-teens type margin.

Gord Nelson: You know, as we look into the first and second quarter, I'm pleased to say that, you know, the cinema media business with its, you know, it continues to ramp up and continues to deliver at those margin levels. But as we look at the digital media business, with respect to the kind of transition and the takeover of the Cadillac Fairview and now the Common Air networks, there are some additional costs from our perspective in terms of converting over the networks and ensuring that, you know, everything will operate smoothly as we kind of ramp up and build the media networks across with Cadillac Fairview.

Speaker Change: As we look into the first and the second quarter, I'm pleased to say that the cinema media business continues to ramp up and continues to deliver at those margin levels.

Gord Nelson: But as we look at the digital media business, with respect to the kind of transition and the takeover of the Cadillac Fairview, now the culinary networks, is there some additional costs from our perspective in terms of converting over the networks and ensuring that everything will operate smoothly as we kind of ramp up and build the media networks across with Cadillac Fairview. So, with that said, I would suggest that the margins and the digital media business have been depressed during the first two quarters. As I look at the back half of the year, with the integration initiatives that have been put in place, we should be operating at that mid-team margin.

Speaker Change: But as we look at the digital media business, with respect to the kind of transition and the takeover of the Cadillac Fairview and now the Common Air networks, is there some additional costs from our perspective in terms of converting over the networks and ensuring that everything will operate smoothly as we kind of ramp up and build the media networks across with Cadillac Fairview. So with that said, I would, you know, I would, I would suggest that the margins and the cinnamon

Gord Nelson: So, with that said, I would, you know, I would suggest that the margins in the cinema digital media business have been depressed during the first two quarters. But as I look at the back half of the year, with the integration initiatives that have been put in place, we should be operating at that mid-teen margin. As far as the ramp-up of the businesses goes, then, with respect to the media business, I think what we're seeing is, and what you may not have noticed is, we put out a women's study or initiated a women's study in our media business to really show the effectiveness and the spend, and that was just recently deployed in the first half of this year.

Speaker Change: Digital media business have been depressed during the first two quarters. But as I look at the back half of the year, what's the integration initiatives that have been put in place as we should be operating at that mid-team margin?

Gord Nelson: As far as the ramp up of the businesses go, then, so with respect to the media business, you know, I think what we're seeing is, and what you have, what you may not have noticed, we put out a women's study, or initiated a women's study in our media business, to really show the effectiveness in the spend, and that was just recently deployed in the first half of this year. Advertisers recognize and are evaluating their spend, and as they look at what the spend is in the digital categories, you know, sometimes they are looking to kind of question the effectiveness of that spend. Our women's study being out there at the right time has now attracted, you know, more media people to engage and look with us in terms of advertising in the cinema space, and the attractiveness of the film titles and the re-emergence of product on a recurring basis is all helpful.

Speaker Change: As far as the ramp-up of the businesses go then, so with respect to the media business, I think what we're seeing is, and what you may not have noticed is, we put out a women's study, or initiated a women's study in our media business to really show the effectiveness and the spend, and that was just recently deployed in the first half of this year. Businesses recognize and are evaluating their spend, and as they look at kind of what's

Gord Nelson: June attendance was 72% of pre-pandemic levels. Our July attendance was 76% of pre-pandemic levels. And early August results suggest this percentage will continue to grow into August. We are taking action today with the planned NCIB and we will continue to build back this business stronger than it was before the pandemic. In summary, we believe there's a lot to be excited about.

Gord Nelson: Companies recognize and are evaluating their spend, and as they look at what the spend is in the digital categories, sometimes they're looking to question the effectiveness of that spend, and our women's study being out there at the right time has now attracted more media people to engage and work with us in terms of advertising in the cinema space, and the attractiveness of the film titles and the reemergence of product on a recurring basis is all helpful. So we're very encouraged about the outlook for the back half of the year in the media.

Speaker Change: And that's what the SPIN is in the digital categories.

Speaker Change: They're looking to kind of question the effectiveness of that spend, and our women's study being out there at the right time has now attracted, you know, more media people to engage and work with us in terms of advertising in the cinema space. And the attractiveness of the film titles and the reemergence of product on a recurring basis is all helpful. So we're very encouraged about the outlook for the back half of the year in the media space.

Gord Nelson: With our long history of a disciplined operations and capital management approach, we remain highly focused on creating long-term shareholder value.

Operator: And with that, I would like to turn things over to the conference operator for questions. Thank you. As a reminder, if you would like to ask a question today, please press Starflow by one on the telephone keypad now to enter the queue. Can you prepare to ask a question? Please ensure you are unmuted locally.

Gord Nelson: So, we're very encouraged by the outlook for the back half of the year in the media space. And through the recall on the screen, advertising is huge, and it's very beneficial, and we can even have ROIs for advertisers, which really add significant value compared to other ways of reaching your guest.

Ellis Jacob: And Drew, the recall on screen advertising is huge, and it's very beneficial, and we can even have ROIs for our advertisers, which really adds significant value compared to other ways of reaching your guests.

Speaker Change: And Drew, the recall on the screen advertising is huge and it's very beneficial and we can even have ROIs for our advertisers which really add significant value compared to other ways of reaching your guests.

Drew Mcreynolds: And our first question today comes from Dream of Grandels from RBC. Drew, your line is open. Please go ahead. Thanks very much. Good morning. A two for me. First on the cost side. Go ahead. I think you commented on just the higher cost on LBE. But I missed within Synaplex digital media conversion costs if you can just kind of elaborate on those. And then the second question with respect to the Synaplex media business.

Drew Mcreynolds: Okay, that's a great rundown. Thank you.

Drew Mcreynolds: Okay, that's great. It's a great rundown. Thank you.

Drew Mcreynolds: Thanks, thank you.

Gord Nelson: Thanks Drew.

Speaker Change: Okay, that's great. It's a great rundown. Thank you.

Derek Lessard: The next question comes from Derek Lesot, from KD Cowan. Derek Kielon is open. Please go ahead. Yeah, good morning, everybody. Happy to see the buyback announcement, and hopefully we never have to speak about COVID and strikes ever again.

Operator: The next question comes from Derek Lessard from TV Cowan. Derek, your line is open. Please go ahead. Yeah, I can.

Drew: Thanks Drew.

Derek Lessard: Yeah, good morning, everybody. Happy to see the buyback announcement, and hopefully, we never have to speak about COVID and strikes ever again. Ellis, I just wanted to talk to you about the slate for a second. Obviously, we're expecting a much better second half and into 2025, but how should we look at it, or how should we think about it from a quarterly cadence? Is Q4 expected to be the strongest of the year? And maybe a follow-up to that is, with that film slate coming back, how do you balance your international and alternative content, which has been really successful for you guys?

Drew: The next question comes from Derek Lessard from TD Cowan. Derek, your line is open, please go ahead.

Speaker Change: Yeah, good morning, everybody. Happy to see the buyback announcement, and hopefully we never have to speak about COVID and strikes ever again. Ellis?

Derek Lessard: I just wanted to talk to you about the slate for a second. Obviously, we're expecting a much better second half and into 2025, but how should we think about it from a quarterly cadence? It's Q4, expected to be the strongest of the year, and maybe a follow-up to that is with that film slate coming back strong. How do you balance your international and alternative content, which has been really successful for you guys?

Drew Mcreynolds: Obviously great to see the Eurovia growth given kind of the lower attendance, wondering kind of the reasons for your ability to do that just given, you know, obviously revenues being more tied to attendance, I know there's some moving parts underneath there. And most importantly, do you think you can kind of continue that kind of kind of performance relative to attendance in the back half of 2024.

Derek Lessard: I just wanted to talk to you about the slate for a second. Obviously, we're expecting a much better second half.

Speaker Change: and into 2025. But how should we look, or how should we think about it from a quarterly cadence, you know, is Q4 expected to be the strongest of the year? And maybe a follow-up to that is, with that film flake coming back,

Gord Nelson: Thank you, Drew. Let me just kind of step back and talk about sort of the media business and the overall margins and then talk about kind of costs and where we see things going. So as we've kind of described on previous calls, once we're ramped up is the cinema media business would typically operate around 80% of the margin and the CDM business would be in that sort of low to mid-teens type margin.

Speaker Change: Strong. How do you balance your international and alternative content, which has been really successful for you guys?

Ellis Jacob: Great question, and the first part of it on Q4, the coming Q4 of 2024 is going to be one of the strongest Q4s and significantly better than 2023. There are a lot of large movies, and they are well spaced out to October, November, and December.

Ellis Jacob: Yeah, great question. And the first part of it on Q4. The coming Q4 of 2024 is going to be one of the strongest Q4s and significantly better than 2023. There are a lot of large movies, and they are well spaced out through October, November, and December. And on your question relating to international, we are basically, with the help of AI and intelligence, are basically able to select specific movies for playing in our theaters and also look at opportunities in different markets across the country.

Speaker Change: Yeah, great question and the first part of it on Q4, the coming Q4 of 2024 is going to be one of the strongest Q4s and significantly better than 2023.

Speaker Change: There are a lot of large movies and they are well spaced out through October , November and December .

Ellis Jacob: And on your question relating to international, we basically, with the help of AI and intelligence, are basically able to select specific movies for playing in our theaters and also looking at opportunities in different markets across the country. So it is going to be, you know, to me a high-class problem when you've got more movies than you have screens to put them in, and hopefully you will increase our overall box office and penetration right across the ecosystem.

Gord Nelson: As we look into the first and the second quarter, I'm pleased to say that the cinema media business is continues to ramp up and continues to deliver at those margin levels. But as we look at the digital media business, with respect to the kind of transition and the takeover of the Cadillac Fairview, now the culinary networks, is there some additional costs from our perspective in terms of converting over the networks and ensuring that everything will operate smoothly as we kind of ramp up and build the media networks across with Cadillac Fairview.

Speaker Change: And on your question relating to international, we basically, with the help of AI and intelligence, are basically able to select specific movies.

Speaker Change: for playing in our theaters and also looking at opportunities in different markets across the country.

Ellis Jacob: So it is going to be, you know, a high class problem when you've got more movies than you have screens to put them on, and hopefully, we'll increase our overall box office and penetration right across the U.S.

Speaker Change: So, it is going to be, you know, to me, a high-class problem when you've got more movies than you have screens to put them in, and hopefully we'll increase our overall box office and penetration right across the ecosystem.

Derek Lessard: Well, thanks for that.

Derek Lessard: Okay, thanks for that. And maybe just one last one for me.

Gord Nelson: So with that said, I would suggest that the margins and the digital media business have been depressed during the first two quarters, as well as I look at the back half of the year, with the integration initiatives that have been put in places we should be operating at that mid-team margin. As far as the ramp up of the businesses go, then, so with respect to the media business, you know, I think what we're seeing is, and what you have, what you may not have noticed, we put out a women's study, or initiated a women's study in our media business, to really show the effectiveness in the spend, and that was just recently deployed in the first half of this year.

Derek Lessard: And maybe just one last one for me. You know, consumer weakness has been sort of the trending narrative this quarter. Maybe talk about what you're seeing on that front, whether it's at the box office or any weakness maybe in the bedroom attendance.

Derek Lessard: You know, consumer weakness has been sort of the trending narrative this quarter. Maybe talk about what you're seeing on that front, whether it's at the box office or any weakness, maybe as in the rec room attendance.

Speaker Change: Thanks for that. And maybe just one last one for me.

Speaker Change: Consumer weakness has been sort of the trending narrative this quarter. Maybe talk about what you're seeing on that front, whether it's at the box office or any weakness maybe in the rec room attendance.

Gord Nelson: Derek, it's Gord. I'll take the first half of that question then. You know, as we see it, as you look at historical data too, and we have this in our investor PowerPoint, when consumers are facing kind of tougher economic times, what they tend to do is downsize their out-of-home experiences. And so theatrical exhibition has tended to benefit during those periods. You know, in seven out of the last nine recessionary periods, industry box office has actually gone up.

Ellis Jacob: Derek, it's great. I'll take the first half of that question then. You know, as we see it, as you look at historically too, and we have this in our investor power point, when consumers are facing kind of tougher economic times, is what they tend to do is downsize their out-of-home experiences. And so theatrical exhibition has tended to benefit during those periods; you know, seven out of the last nine recessionary periods, industry box office has actually gone up. And so we're encouraged because, as you, as we've mentioned, we continue to report record results in our spending metrics of BPP and CPP.

Gord Nelson: Derek, it's Gord. I'll take the first half of that question then. You know, as we see and as you look at historically, too, and we have this in our investor PowerPoint, when consumers are facing kind of tougher economic times is what they tend to do is downsize their out-of-home experiences.

Gord Nelson: Advertisers recognize and are evaluating their spend, and as they look at what the spend is in the digital categories, you know, sometimes they are looking to kind of question the effectiveness of that spend, and our women's study being out there at the right time has now attracted, you know, more media people to engage and look with us in terms of advertising in the cinema space, and the attractiveness of the film titles and the re-emergence of product on a recurring basis is all helpful. So, we're very encouraged by the outlook for the back half of the year in the media space.

Speaker Change: And so theatrical exhibition has tended to benefit during those periods. Seven out of the last nine recessionary periods, industry box office has actually gone up. And so we're encouraged because, as we've mentioned, we continue to report.

Gord Nelson: And so we're encouraged because, as we've mentioned, we continue to report record results in our spending metrics of BPP and CPP. So those trends are continuing with us. In tougher economic environments, spending continues to increase, and people are looking to indulge and downsize their out-of-home entertainment experiences from things like concerts and professional sporting events to moviegoing.

Ellis Jacob: So those trends are continuing with us in tougher economic environments; spending continues to increase, and they're looking to indulge in downsize their out-of-home entertainment experiences from things like concerts and professional sporting events to movie going.

Speaker Change: Record results in our spending metrics, so BPP and CPP. So those trends are continuing with us in tougher economic environments. Spending continues to increase, and they're looking to indulge and downsize their out-of-home entertainment experiences from things like concerts and professional sporting events to moviegoing.

Gord Nelson: And through the recall on the screen advertising is huge, and it's very beneficial, and we can even have ROIs for advertisers which really add significant value compared to other ways of reaching your guest. Okay, that's great rundown. Thank you. Thanks, thank you.

Derek Lessard: Thanks, everybody. Thank you.

Speaker Change: Aravinda Galappatthige, Maher Yaghi

Speaker Change: Thanks, everybody.

Aravinda Galappatthige: The next question comes from Miyaki from Scorshivank. Miyalan is open. Please go ahead. Great, so thank you for taking my question. It's very encouraging to see you guys embark on this NTIB.

Operator: The next question comes from Maher Yaghi from Scotiabank. Maher, your line is open. Please go ahead.

Gord Nelson: Thank you.

Speaker Change: The next question comes from Maher Yaghi from Scotiabank. Maher, your line is open, please go ahead.

Maher Yaghi: Great. Thank you for taking my question. It's very encouraging to see you guys embark on this NCIB.

Mayor Yankee: Great, thank you for taking my question. It's very encouraging to see you guys embark on this NCIB. Maybe I wanted to ask you how does this

Maher Yaghi: Maybe I wanted to ask you, how does this affect, or should we interpret this announcement versus a discussion about implementing a dividend? You guys talked about that in the past, trying to figure out the priority that you would allocate capital to in terms of dividend payment and stock buyback. Related to the stock buyback, how should we expect your free cash flow to evolve so that we can maybe better forecast the buyback?

Aravinda Galappatthige: Maybe I wanted to ask you how does this affect or should we interpret this announcement versus a, you know, a discussion about a implementing a dividend. And eventually you guys talked about that in the past, you know, trying to figure out, you know, the priority that you guys will allocate capital to, you know, in terms of dividend payment and stock buyback and related to the stock buyback. How should we expect your free cash role to evolve so that we can maybe better forecast the buyback. Then, you know, how it will evolve over time, i.e., you know, is it in the earlier in the year that you think you're going to be active or after seeing Q3 Q4 results and how they found out, then you would have enough visibility to undertake more aggressively to buy back.

Derek Lessard: The next question comes from Derek Lesot, from KD Cowan. Derek Kielon is open, please go ahead. Yeah, good morning, everybody.

Mayor Yankee: effect or should we interpret this announcement versus a you know a discussion about a implementing a dividend eventually you guys talked about that in the past

Ellis Jacob: Happy to see the buyback announcement, and hopefully we never have to speak about COVID and strikes ever again. I just wanted to talk to you about the slate for a second. Obviously, we're expecting a much better second half and into 2025, but how should we think about it from a quarterly cadence? It's Q4 expected to be the strongest of the year, and maybe a follow-up to that is with that film slate coming back strong.

Speaker Change: trying to figure out the priority that you guys will allocate capital to in terms of dividend payment and stock buyback. And related to the stock buyback,

Speaker Change: How should we expect your free cash flow to evolve so that we can maybe better forecast the buyback?

Ellis Jacob: How do you balance your international and alternative content which has been really successful for you guys? Great question and the first part of it on Q4, the coming Q4 of 2024 is going to be one of the strongest Q4s and significantly better than 2023. There are a lot of large movies and they are well spaced out to October, November and December. And on your question relating to international, we basically with the help of AI and intelligence are basically able to select specific movies for playing in our theaters and also looking at opportunities in different markets across the country.

Maher Yaghi: Thank you. Thank you. how it will evolve over time, i.e., you know, is it earlier in the year that you think you're going to be active, or after seeing Q3, Q4 results and how they pan out, then you would have enough visibility to undertake the buyback more aggressively.

Speaker Change: tend to, you know,

Speaker Change: How it will evolve over time, i.e., you know,

Speaker Change: Is it in the earlier in the year that?

Speaker Change: You think you're going to be active or after seeing Q3, Q4 results?

Gord Nelson: So, Mayor, thanks for those questions. It's Gord.

Gord Nelson: So, Mara, thanks for those questions, Gord. Look at, I think, the first half of your question was on buyback versus dividend. And we made some commentary about, you know, we're in a position right now where we, over the near term, it's almost like a switch has been flipped and we're going to be creating significant access cashflow. So with, you know, as we also mentioned, not a significant number of new build commitments. So, we have a window where we have significant access cashflow and we believe that the current share price does not reflect the intrinsic value of the shares.

Speaker Change: So, Mayor, thanks for those questions, it's Gord. Look, and I think the first half of your question was on buyback versus dividend.

Gord Nelson: I think the first half of your question was on buyback versus dividend, and we made some commentary about, you know, we're in a position right now where, over the near term, it's almost like a switch has been flipped, and we're going to be creating significant excess cash flow with, and as we also mentioned, not a significant number of new build commitments. So we have a window where we have significant excess cash flow, and we believe that the current share price does not reflect the intrinsic value of the shares.

Speaker Change: And we made some commentary about, you know, we're in a position right now where we, over the near term, it's almost like a switch has been flipped, and we're going to be creating significant...

Ellis Jacob: So it is going to be, you know, to me a high-class problem when you've got more movies than you have screens to put them in and hopefully you will increase our overall box office and penetration right across the ecosystem. Well, thanks for that.

Speaker Change: access cash flow with, and as we also mentioned, not a significant number of new build commitments.

Speaker Change: So we have a window where we have significant excess cash flow and we believe that the current share price does not reflect the intrinsic value of the shares. So with those factors, it weights our decision more into a share buyback versus a dividend.

Ellis Jacob: And maybe just one last one for me. You know, consumer weakness has been sort of the trending narrative this quarter. Maybe talk about what you're seeing on that front, whether it's at the box office or any weakness maybe in the bedroom attendance. Derek, it's great. I'll take the first half of that question then. You know, as we see it, as you look at historically too and we have this in our investor power point, when consumers are facing kind of tougher economic times is what they tend to do is downsize their out-of-home experiences.

Gord Nelson: So, with those factors, it weights our decision more into a share buyback versus a dividend.

Gord Nelson: So with those factors, it weights our decision more towards a share buyback versus a dividend. The other thing is, as we'll mention, I think, and we've described, is that once we hit our target leverage ratio of 2.5 to 3 times on a look-back basis or trailing LTM basis, I think that you will see will be the catalyst for introducing a dividend. We are committed to our shareholders, and we're committed to returning money through both of those vehicles.

Gord Nelson: The other thing, as we mentioned, I think, and we've described, is that, you know, once we're hit our target leverage ratio of two and a half to three times, you know, on a look back basis or trailing LTM basis, and I think that you will see will be the catalyst for, you know, introducing a dividend. We are committed to our shareholders, and we're committed to return through both of those vehicles, but there's our position that the share buyback is more of a priority given where everything is in the short term.

Speaker Change: The other thing is, as we mentioned, I think, and we've described, is that, you know, once we're

Speaker Change: Hit our target leverage ratio of two and a half to three times, you know, on a, in a look back basis or a trailing LTM basis, is I think that you will see will be the catalyst.

Ellis Jacob: And so theatrical exhibition has tended to benefit during those periods, you know, seven out of the last nine recessionary periods industry box office has actually gone up. And so we're encouraged because as you, as we've mentioned, we continue to report record results in our spending metrics of BPP and CPP. So those trends are continuing with us in tougher economic environments, spending continues to increase and they're looking to indulge in downsize their out-of-home entertainment experiences from things like concerts and professional sporting events to movie going. Thanks, everybody.

Speaker Change: for introducing a dividend. We are committed to our shareholders and we're committed to return through both of those vehicles.

Gord Nelson: It is our position that this year's buyback is more of a priority, given where everything is in the short term. With respect to timing, I'm not going to make any comment on timing. You know, as we mentioned, we will opportunistically look and engage at those times, and I don't think it's appropriate for us to commit to timing.

Speaker Change: It is our position that this year buyback is is more of a priority given where everything is in the short term.

Operator: Thank you.

Gord Nelson: With respect to timing, I'm not going to make any comment on timing. You know, as we mentioned, we will opportunistically look and engage at those times, and that I don't think it's appropriate for us to commit on timing.

Speaker Change: With respect to timing, I'm not going to make any comment on timing. You know, as we mentioned, we will opportunistically look and engage at those times, and I don't think it's appropriate for us to commit on timing.

Maher Yaghi: That's fair. I was just trying my luck.

Aravinda Galappatthige: That's where I was trying my luck. So, in terms of that, you can't blame me.

Speaker Change: That's fair, I was trying my luck. So, in terms of...

Ellis Jacob: So in terms of the cadence when it comes to the financial results in the back half of the year, as we look through Q3 and Q4, what does 2025 look like when it comes to the cadence of movie releases that you see? On an annual basis, how should we think about rolling forward on a 12-month basis what we should be forecasting in terms of revenue and EBITDA? And just a follow-up to that, as you continue to increase the number of entertainment business footprint, how should we think about your EBITDA margin moving as you expand that investment over time?

Aravinda Galappatthige: So, in terms of the cadence, when it comes to the financial results in the back half of the year, maybe you can, you know, as we look through Q3 and Q4, how does 2025 look like when it comes to the cadence of movie releases that you can see?

Speaker Change: He can't blame me. So in terms of the cadence when it comes to the financial result in the back half of the year

Speaker Change: Maybe you can, you know, as we look through...

Speaker Change: Q3 and Q4.

Miyaki: The next question comes from Miyaki from Scorshivank. Miyalan is open. Please go ahead. Great, so thank you for taking my question. It's very encouraging to see you guys embark on this NTIB. Maybe I wanted to ask you how does this affect or should we interpret this announcement versus a, you know, a discussion about a implementing a dividend. And eventually you guys talked about that in the past, you know, trying to figure out, you know, the priority that you guys will allocate capital to, you know, in terms of dividend payment and stock buyback and related to the stock buyback.

Speaker Change: How does 2025 look like when it comes to the cadence of movie releases that you see? And on an annual basis, how should we think about...

Aravinda Galappatthige: And on a manual basis, how should we think about rolling forward on a 12-month basis that we should be forecasting in terms of revenue and EBITDA? And just a follow-up to that, as you continue to increase the number of, you know, you know, sorry, the entertainment business footprint.

Speaker Change: rolling forward on a 12-month basis that we should be forecasting in terms of revenue and EBITDA. And just a follow-up to that, as you continue to increase

Speaker Change: the number of, you know, sorry, the entertainment business footprint, so how should we think about your EBITDA margin moving as you expand that investment over time?

Ellis Jacob: So, how should we think about your EBITDA margin moving as you expand that investment over time? Now, when we talk about the movie business moving into 2025, we see a really strong slate of films distributed all through the year. And we will continue to, you know, increase our penetration on premium offerings for our guests because they do enjoy that. And it's something that has done very well for us in driving our overall cost per patron and revenue. And on the concession side, we will continue to see growth. And, you know, I'm optimistic that we will cross the 10-dollar mark in 2025 as we move forward.

Ellis Jacob: Now when we talk about the movie business moving into 2025, we see a really strong slate of films distributed all through the year, and you know I mentioned some of the large ones like Jurassic World, Superman Legacy, I expect that in July is going to be massive, the Mission Impossible, Elio, Captain America, Wicked Part 2, How to Train Your Dragon, Fantastic Four, Zootopia, Snow White, Avatar 3, and there are many many more movies that are in the year for 2025, and that to me is all about, you know, giving our guests the best experience, and we will continue to, you know, increase our penetration on premium offerings for our guests, because they do enjoy that, and it's something that has done very well for us in driving our overall loss per patron and revenue, and on the concession side we will continue to see growth, and you know I'm optimistic that we will cross the $10 mark in 2025 as we move forward, so I think there's a lot of opportunities in the theatrical side, and then when we look at ELB in 2025, we would have had three new openings at the end of this year, which will provide us with relatively strong numbers into 2025 and into the future, and we will continue to focus on the two major businesses, which is the theatrical exhibition business, and the leisure business, and not forgetting media as also an important part of our overall EBITDA contribution. And as you know, we are one of the few companies in the world that basically own our media business, which allows us to retain a significant amount of the incremental dollars that we get from media.

Miyaki: How should we expect your free cash role to evolve so that we can maybe better forecast the buyback. Then, you know, how it will evolve over time, I.E., you know, is it in the earlier in the year that you think you're going to be active or after seeing Q3Q4 results and how they found out, then you would have enough visibility to undertake more aggressively to buy back. So, Mara, thanks for those questions, Gord.

Speaker Change: Now when we talk about the movie business moving into 2025, we see a really strong slate of films distributed all through the year, and you know I mentioned some of the large ones like Jurassic World,

Speaker Change: Superman Legacy, I expect that in July it's going to be massive. The Mission Impossible, Elio, Captain America, Wicked Part II, How to Train Your Dragon, Fantastic Four, Zootopia.

Speaker Change: Snow White, Avatar 3, and there are many, many more movies that are in the year for 2025.

Speaker Change: And that to me is all about, you know, giving our guests the best experience. And we will continue to, you know, increase our penetration on premium offerings for our guests.

Miyaki: Look at, I think, the first half of your question was on buyback versus dividend. And we made some commentary about, you know, we're in a position right now where we, over the near term, it's almost like a switch has been flipped and we're going to be creating significant access cashflow so with, you know, as we also mentioned, not a significant number of new build commitments. So, we have a window where we have significant access cashflow and we believe that the current share price does not reflect the intrinsic value of the shares.

Speaker Change: because they do enjoy that and it's something that has done very well for us.

Speaker Change: In driving our overall loss per patron and revenue, and on the concession side, we will continue to see growth. And, you know, I'm optimistic that we will cross the $10 mark in 2025 as we move forward.

Ellis Jacob: So, I think there's a lot of opportunities in the theatrical side.

Ellis Jacob: And then when we look at the Galaxy in 2025, we would have had three new old things at the end of this year, which will provide us with relatively strong numbers into 2025 and into the future.

Speaker Change: So, I think there's a lot of opportunities in the theatrical side. And then when we look at the LV in 2025, we would have had three new openings at the end of this year, which will provide us with relatively strong numbers into 2025 and into the future. And we will continue to focus on the two major businesses, which is the theatrical exhibition business and the leisure business. And not forgetting media is also an important part of our overall EBITDA contributions.

Miyaki: So, with those factors, it weights our decision more into a share buyback versus a dividend. The other thing, as we mentioned, I think, and we've described, is that, you know, once we're hit our target leverage ratio of two and a half to three times, you know, on a look back basis or trailing LTM basis, and I think that you will see will be the catalyst for, you know, introducing a dividend. We are committed to our shareholders and we're committed to return through both of those vehicles, but there's our position that the share buyback is, is more of a priority given where everything is in the short term.

Gord Nelson: And we will continue to focus on the two major businesses, which are the theatrical exhibition business and the leisure business, and not forgetting media as also an important part of our overall EBITDA health contribution. And as you know, we are one of the few companies in the world that basically own our media business, which allows us to retain a significant amount of the incremental dollars that we get from media sales.

Speaker Change: And as you know, we are one of the few companies in the world that basically own our media business, which allows us to retain a significant amount of the incremental dollars that we get from media sales.

Gord Nelson: And, Maher, just two other quick comments here then. On the back half of the year... Yeah, Gord, I'm just trying to figure out, as you open more rec rooms and playgrounds, how is the margin initially going to be affected? Yeah, so, but I want to make one other quick comment too.

Miyaki: With respect to timing, I'm not going to make any comment on timing, you know, as we mentioned, we will opportunistically look and engage at those times and that I don't think it's appropriate for us to commit on timing. That's where I was trying my luck. So, in terms of that, you can't blame me.

Speaker Change: And, Maher, just two other quick comments here then. On the back half of the year... Yeah, Gord, I'm just trying to figure out, as you open more rec rooms and palladiums, how's the margin initially going to get affected?

Maher Yaghi: So the back half of the year, last year, we delivered $99 million of EBITDA in the last half of the year, and that's in a strike-affected fourth quarter. So, again, we have renewed confidence in our ability to deliver at those pre-pandemic levels going forward. On your question about the LBEs, the LBEs, as we, as we add new LBEs, are, you know, they come in at roughly a 25% store level margin, as I communicated. So, as those expand and we bring them in, you should expect, you know, the overall EBITDA margin to increase, all things considered.

Gord Nelson: But I want to make one other quick comment, too. So the back half of the year, last year we delivered $99 million of EBITL in the last half of the year, and that's in a strike-impacted fourth quarter. So again, we have renewed confidence in our ability to deliver, you know, at those pre-pandemic levels going forward. And your question on the LBE is, as we add new LBEs, is, you know, they come in at a rough, we have 25% store-level margin, as I communicated. So as those expand and we bring them in, you should expect, you know, the overall EBITL margin to increase, all things equal.

Speaker Change: Aravinda Galappatthige, Maher Yaghi,

Speaker Change: Yeah, so, but I want to make one other quick comment too. So, the back half of the year

Speaker Change: Last year, we delivered $99 million of EBITDA in the last half of the year, and that's in a strike-impacted fourth quarter. So again, we have...

Gord Nelson: So, in terms of the cadence, when it comes to the financial results in the back half of the year, maybe you can, you know, as we look through Q3 and Q4, how does 2025 look like when it comes to the cadence of movie releases that you can see? And on a manual basis, how should we think about rolling forward on a 12 month basis that we should be forecasting in terms of revenue and EBITDA?

Speaker Change: Renewed confidence in our ability to deliver at those pre-pandemic levels going forward. Thank you. Thank you.

Speaker Change: And your question on the LBEs is the LBEs, as we add new LBEs, is, you know, they come in at roughly a 25% store-level margin, as I communicated. So as those expand and we bring them in, you should expect, you know, the overall EBITDA margin to increase.

Gord Nelson: And just a follow-up to that, as you continue to increase the number of, you know, you know, sorry, the entertainment business footprint. So, how should we think about your EBITDA margin moving as you expand that investment over time? Now, when we talk about the movie business moving into 2025, we see a really strong slate of films distributed all through the year. And we will continue to, you know, increase our penetration on premium offerings for our guests because they do enjoy that.

Speaker Change: All things equal.

Speaker Change: Great, thank you.

Aravinda Galappatthige: As a reminder, if you'd like to ask a question, that's staffed by one on your telephone keypad. The next question comes from Aravinda Galapagigo from Canacorn, Genuity. Aravinda, please go ahead. Your line is open. Good morning. Thanks for taking my questions.

Operator: As a reminder, if you'd like to ask a question, that's a star followed by one on your telephone keypad. The next question comes from Aravinda Galappatthige from Canaccord Genuity. Aravinda, please go ahead, your line is open.

Speaker Change: Thank you.

Speaker Change: As a reminder, if you'd like to ask a question, that's star followed by one on your telephone keypad.

Speaker Change: The next question comes from Aravinda Galappatthige from Canaccord Genuity. Aravinda, please go ahead, your line is open.

Aravinda Galappatthige: Good morning, thanks for taking my questions. I wanted to focus a little bit on media, you know, just going back to some of the comments Gord made about, you know, returning to pre-pandemic levels of EBITDA, adjusted EBITDA. What would, you know, what does the media have to do in that context? I mean, obviously, a decent quarter considering where your attendance was, but you're still 30 to 40% below pre-pandemic levels. Maybe Ellis or Gord, you could kind of talk to some of the initiatives to try and lift media up.

Aravinda Galappatthige: I wanted to focus a little bit on media, but, you know, just going back to some of the comments God made about, you know, returning to pre-pandemic levels of EBITL. You know, what does media have to do in that context? I mean, you know, obviously it's a decent quarter considering where your attendance was, but you're still 30% to 40% below pre-pandemic levels. Maybe Alusokore, you can kind of talk to some of the initiatives to try and lift media up. Is it the case of sort of getting newer accounts and is it sort of getting larger campaigns with the existing accounts?

Aravinda Galappatthige: Good morning. Thanks for taking my questions. I wanted to focus a little bit on media, you know, just going back to some of the comments Gord made about, you know, returning to pre-pandemic levels of EBITDA, adjusted EBITDA.

Speaker Change: What would, you know, what does media have to do in that context? I mean, you know, obviously a decent quarter considering where your attendance was, but you're still 30 to 40 percent below pre-pandemic levels.

Aravinda Galappatthige: Is it a case of sort of getting newer accounts in? Or is it sort of getting larger campaigns with the existing accounts? I wanted to get a sense of what your plans are to sort of lift that back up towards, you know, over $100 million in revenue, which you used to do in cinema media. And, you know, I think even the reported EBITDA pre-pandemic was over $100 million. I think it was in 2018. So any kind of longer term color on that? Thank you for your questions.

Speaker Change: Maybe, Ellis or Gord, you can kind of talk to some of the initiatives to try and lift media up. Is it a case of sort of getting newer accounts in? Is it sort of getting larger campaigns with the existing accounts?

Aravinda Galappatthige: Wanted to get a sense of what your plans are to sort of lift that back up towards, you know, over $100 million in revenue, which you used to do in cinema media. And, you know, think even the reported EBITL pre-pandemic was over $100 million. I think it was in 2018. So any kind of longer term color on that.

Speaker Change: Wanted to get a sense of what your plans are to sort of lift that back up towards.

Speaker Change: You know, over a hundred million dollars in revenue, which you used to do in cinema media. And, you know, I think even the reported advertel pre-pandemic was over a hundred million dollars. I think it was in 2018. So, any kind of longer term color on that. Thanks.

Aravinda Galappatthige: Thanks.

Gord Nelson: And it's something that has done very well for us in driving our overall cost per patron and revenue. And on the concession side, we will continue to see growth. And, you know, I'm optimistic that we will cross the 10-dollar mark in 2025 as we move forward. So, I think there's a lot of opportunities in the theatrical side. And then when we look at the Galaxy in 2025, we would have had three new old things at the end of this year which will provide us with relatively strong numbers into 2025 and into the future.

Ellis Jacob: Thank you for your question. And the main focus there, as compared to pre-pandemic, is we have some great data and we will be able to leverage that and give our advertisers a great return on their investment. With the movies on the screen because the recall for some of the advertisers are huge, and they're seeing it.

Ellis Jacob: Thank you for your question. And the main focus there, as compared to pre-pandemic, is that we have some great data, and we will be able to leverage that and give our advertisers a great return on their investment with the movies on the screen because the recall for some of the advertisers is huge, and they're seeing it. I know there are some comments being made where sometimes they remember the ad more than the movie, which is good and bad, but that's something that we continue to see, and we are also seeing a strong return of the automotive back onto the screen. So as the attendance continues to increase, and as we move forward, we see a great positive impact on our media side of the business. Gord, do you want to make any comments? I think that's perfect.

Speaker Change: Thank you for your question. And the main focus there as compared to pre-pandemic is we have some great data and we will be able to leverage that and give our advertisers a great return on their investment with the movies on the screen.

Speaker Change: Because the recall for some of the advertisers are huge, and they're seeing it, and I know there's some comments being made where sometimes they remember the ad more than the movie.

Ellis Jacob: And I know there's some comments being made where sometimes they remember the ad more than the movie, which is good and bad. But that's something that we continue to see as we are also seeing a strong return of the automotive back onto the screen. So, as the attendance continues to increase and as we move forward, we see a great positive impact on our media side of them.

Speaker Change: Which is good and bad, but that's something that we continue to see and we are also seeing a strong return of the automotive back onto the screen.

Gord Nelson: And we will continue to focus on the two major businesses which is the theatrical exhibition business and the leisure business and not forgetting media as also an important part of our overall EBITDA health contribution. And as you know, we are one of the few companies in the world that basically own our media business, which allows us to retain a significant amount of the incremental dollars that we get from media sales. But I want to make one other quick comment, too.

Speaker Change: So, as the attendance continues to increase and as we move forward, we see a great positive impact on our media side of the business.

Gord Nelson: And Gord, you want to make any comments? So, nothing got stuck on.

Speaker Change: And Gord, do you want to make any comments or... No, I think that's fair comment.

Adam Shine: The next question comes from Adam Shine from National Bank Financial.

Gord Nelson: Thank you. Thank you.

Gord Nelson: The next question comes from Adam Shine from National Bank Financial. Adam, your line is open. Please go ahead.

Gord Nelson: Aravinda Galappatthige Aravinda Galappatthige, Maher Yaghi,

Adam Shine: Thanks a lot. Good morning.

Adam Shine: Adam Mulan is a police guy ahead. Thanks a lot. Good morning. Lots of questions, obviously, on the recovery at the box office, which you guys are very enthusiastic about, and we certainly agree with that. Maybe Gord, you could talk a little bit about the film entertainment content margins, the context being that last year, obviously a depressed year, 11.5% margin, going back to 2019 to shy of 15%. You maybe speak to some of the efficiencies that you have put in place, that you're continuing to put in place, notwithstanding minimum wage increases, that could help frame the prospect of further margin expansion as a further kicker to recovery story.

Speaker Change: The next question comes from Adam Shine from National Bank Financial. Adam, your line is open. Please go ahead.

Adam Shine: Lots of questions obviously on the recovery at the box office, which you guys are very enthusiastic about, and we certainly agree with that. Maybe Gord, you could talk a little about the film entertainment content margins. The context being that, you know, last year was obviously a depressed year, 11.5% margin. Going back to 2019, just shy of 15%. Can you maybe speak to some of the efficiencies that you have put in place, that you're continuing to put in place, notwithstanding minimum wage increases that could help frame the prospect of further margin expansion as a further kicker to the recovery story?

Adam Shine: Thanks a lot. Good morning. Lots of questions obviously on the recovery at the box office, which you guys are very enthusiastic about and we certainly agree with that. Maybe Gord, you could talk a little about

Gord Nelson: The film entertainment content margins, the context being that, you know, last year, obviously a depressed year, 11.5% margin, going back to 2019, just shy of 15%.

Gord Nelson: So the back half of the year, last year we delivered $99 million of EBITL in the last half of the year, and that's in a strike-impacted fourth quarter. So again, we have renewed confidence in our ability to deliver, you know, at those pre-pandemic levels going forward. And your question on the LBE is, as we add new LBEs is, you know, they come in at a rough, we have 25% store-level margin as I communicated. So as those expand and we bring them in, you should expect, you know, the overall EBITL margin to increase all things equal.

Speaker Change: Could you maybe speak to...

Operator: Thank you.

Speaker Change: Some of the efficiencies that you have put in place, that you're continuing to put in place notwithstanding minimum wage increases that could help frame the prospect of further margin expansion as a further kicker to the recovery story.

Gord Nelson: Yeah, so Adam, great question. And I tried to hint on a few of those in my call scripts today. When you think about the category, our overall cost categories, our rent and rent-related items, our occupancy items, represent about 25% of our overall costs. And, as I highlighted, our theater rent-cash paid and payable decreased over 7% from the pre-pandemic period. So we've continued to describe, you know, describe that our focus for us is rent productions and rationalizations as we go forward. And we see that as continuing opportunity going forward. So you have a 25% cost category, which tends to be either flat and or potentially declining.

Gord Nelson: Yeah, so Adam, great question. And I tried to hint at a few of those in my call scripts today. You know, when you think about the category, you know, our overall cost categories, our rent and rent-related items, or occupancy items, represent about 25% of our overall cost. And, as I highlighted, our theater rent cash paid and payable decreased over 7% from the pre-pandemic period. So, we've continued to describe, you know, describe that our focus for us is rent reductions and rationalizations as we go forward.

Speaker Change: Yeah, Adam, great question and I tried to hint on a few of those in my call scripts today. You know, when you think about the category, you know, our overall cost categories, our rent and rent-related items, our occupancy-related items represent about 25% of our overall costs.

Operator: As a reminder, if you'd like to ask a question, that's staffed by one on your telephone keypad.

Speaker Change: And, you know, as I highlighted, our theatre rent cash paid and payable decreased over 7%.

Aravinda Galappatthige: The next question comes from Aravinda Galapagigo from Canacorn, Genuity. Aravinda, please go ahead. Your line is open.

Aravinda Galappatthige: Good morning. Thanks for taking my questions. I wanted to focus a little bit on media, but, you know, just going back to some of the comments, God, God made about, you know, returning to pre-pandemic levels of EBITL. You know, what does media have to do in that context? I mean, you know, obviously it's a decent quarter considering where your attendance was, but you're still 30% to 40% below pre-pandemic levels. Maybe Alusokore, you can kind of talk to some of the initiatives to try and lift media up.

Speaker Change: So, we've continued to describe, you know, describe that our focus for us is rent reductions and rationalizations as we go forward. And so, you know, and we see that as continuing opportunity going forward. So you have a 25% cost category.

Gord Nelson: And so, you know, and we see that as a continuing opportunity going forward. So, you have a 25% cost category, which tends to be either flat or potentially declining. And then, as you look at your other cost categories, so payroll is one, as you mentioned. And as Ellis described, we look to continue to deploy our digital products and our connections with our consumers to ease the journey through our environment.

Gord Nelson: And then, if you look at your other cost categories, so payroll is one, as you mentioned. And as Elvis described, you know, we look to continue to deploy, you know, our digital products, our connections with our consumers to ease the journey through our environment. And the two components of that is one that allows us to kind of personalize and increase revenue per patron, but also gives us the ability to optimize, you know, our payroll costs as we have better ideas about volumes and requirements from a staffing perspective. So we continue to feel confident that we're going to see continued kind of enhancements in the overall film entertainment and content margin as we go forward.

Speaker Change: which tends to be either flat...

Speaker Change: And then as you look at your other cost categories, so payroll is one, as you mentioned, and as Ellis described, we look to continue to deploy our digital products, our connections with our consumers, to ease the journey through our environment.

Gord Nelson: And the two components of that are one, it allows us to kind of personalize and increase revenue per patron, but also gives us the ability to optimize, you know, our payroll costs as we have better ideas about volumes and requirements from a staffing perspective. So, we continue to feel confident that we're going to see continued enhancements in the overall film entertainment and content margin as well.

Aravinda Galappatthige: Is it the case of sort of getting newer accounts and is it sort of getting larger campaigns with the existing accounts? Wanted to get a sense of what your plans are to sort of lift that back up towards, you know, over $100 million in revenue, which you used to do in cinema media. And, you know, think even the reported EBITL pre-pandemic was over $100 million. I think it was in 2018.

Speaker Change: The two components of that is one is it allows us to kind of personalize and increase revenue per patron, but also gives us the ability to optimize.

Speaker Change: Our payroll costs as we have better ideas about volumes and requirements from a staffing perspective. So we continue to feel confident that we're going to see continued kind of enhancements.

Ellis Jacob: So any kind of longer term color on that. Thanks. Thank you for your question. And the main focus there as compared to pre-pandemic is we have some great data and we will be able to leverage that and give our advertisers a great return on their investment. With the movies on the screen because the recall for some of the advertisers are huge and they're seeing it. And I know there's some comments being made where sometimes they remember the ad more than the movie, which is good and bad.

Speaker Change: and the overall film entertainment and content margin as we go forward.

Gord Nelson: Super. Thanks a lot.

Adam Shine: Thanks a lot.

Ellis Jacob: And Adam, we are creating a seamless experience for our guests. And that's what we've been focused on. And that helps us overall for increasing our revenue per patron. And also, you know, minimizing the impact of the minimum wage increases.

Speaker Change: Super. Thanks a lot. And Adam, we are creating a seamless experience for our guests and that's what we've been focused on and that helps us overall for increasing our revenue per patron and also, you know, minimizing the impact of the minimum wage increases.

Adam Shine: Can I maybe just follow up?

Adam Shine: Can I maybe just follow up? I mean, one thing in the past when you were building up all these diversification elements was the whole overall other theatre op-ex element, which tended to be very difficult to forecast and tended to surprise to the upside. We certainly saw less than expected spend in this Q2. Is that a particular area where, I know there are a bunch of expenses lumped in there, but an area where there should not necessarily be a surprise to the upside going forward as in years past with further efficiencies to be gained there?

Gord Nelson: I mean, one thing in the past when you were building up all these diversification elements was the whole overall other theater op-ex element that tended to be very difficult to forecast and tended to surprise to the upside. We certainly, you know, saw less than expected spend in this Q2. Is that is that a particular area where I know there are a bunch of expenses left in there, but an area where, you know, there should not necessarily be a surprise in the upside going forward as in years past with further efficiencies to be. Yeah, Adam, look at part of, you know, what's, there's two items in that, in that cost category that tends to kind of go up or down, the rest of the cost caters are relatively flat.

Adam Shine: Thank you.

Speaker Change: Can I maybe just follow up? I mean, one thing in the past when you were building up all these diversification elements was the whole overall other theatre op-ex element that tended to be very difficult to forecast and tended to surprise to the upside. We certainly, you know, saw less than expected spend in this Q2. Is that a particular area where, I know there are a bunch of expenses lumped in there, but an area where, you know, there should not necessarily be a surprise to the upside going forward as in years past with further efficiencies to be gained there?

Ellis Jacob: But that's something that we continue to see as we are also seeing a strong return of the automotive back onto the screen. So as the attendance continues to increase and as we move forward, we see a great positive impact on our media side of them. And Gord, you want to make any comments?

Gord Nelson: So, nothing got stuck on. Thank you.

Gord Nelson: Yeah, Adam, look at part of, and you know what? There are two items in that cost category that tends to kind of go up or down; the rest of the cost categories are relatively flat, and that would be if there are initiatives and costs related to bringing in new partners related to the SCEAN program. That would be one component, and the second would be our distribution business. So, there's revenue that goes into other revenue, and then there's costs related to the distribution business.

Adam Shine: The next question comes from Adam Shine from National Bank Financial. Adam Mulan is a police guy ahead. Thanks a lot, good morning. Lots of questions, obviously, on the recovery at the box office, which you guys are very enthusiastic about, and we certainly agree with that. Maybe Gord, you could talk a little bit about the film entertainment content margins, the context being that last year, obviously a depressed year, 11.5% margin, going back to 2019 to shy of 15%.

Speaker Change: Yeah Adam look at part of and you know what what there's two items in that in that cost category that tend to kind of

Gord Nelson: And that would be, if there's initiatives and costs related to bringing in new partners related to the scene program, would be one component, and the second would be our distribution business. So, there's revenue that goes into other revenue, and then there's, there's costs related to this distribution business. So in a quarter, like the comparator quarter is an example for Q2, we had John Week 4 driving up the other revenue a little bit and then driving up the other operating expenses, you know, a little bit. I think it, I mean, I say a little bit, you know, about $3 million or so.

Speaker Change: Go up or down, the rest of the cost categories are relatively flat, and that would be if there's initiatives and costs related to bringing in new partners related to the scene program, would be one component, and the second would be our distribution business.

Adam Shine: You maybe speak to some of the efficiencies that you have put in place, that you're continuing to put in place, notwithstanding minimum wage increases that could help frame the prospect of further margin expansion as a further kicker to recovery story. Yeah, so Adam, great question. And I tried to hint on a few of those in my call scripts today. When you think about the category, our overall cost categories, our rent and rent-related items, our occupancy items, represent about 25% of our overall costs.

Speaker Change: So, there's revenue that goes into other revenue, and then there's costs related to the distribution business. So, in a quarter, like the comparator quarter, as an example for Q2, we had John Wick 4.

Gord Nelson: So, in a quarter, like the comparator quarter, as an example for Q2, we had John Wick 4, driving up the other revenue a little bit and then driving up the other operating expenses a little bit, I think, and when I say a little bit, you know, about $3 million or so. So, in quarters where we have strong films being released through Cineplex Pictures, there will be a bit of an anomaly, but otherwise, it should be relatively stable.

Speaker Change: driving up the other revenue a little bit, and then driving up the other operating expenses a little bit, I think, and when I say a little bit, you know, about three million dollars or so.

Gord Nelson: So, so in quarters where we have strong films being released through Cineplex Pictures, is, is there a bit of an anomaly, but otherwise it should be relatively consistent.

Speaker Change: So in quarters where we have strong films being released through Cineplex Pictures, there will be an anomaly, but otherwise it should be relatively consistent.

Adam Shine: And as I highlighted, our theater rent-cash paid and payable decreased over 7% from the pre-pandemic period. So we've continued to describe, you know, describe that our focus for us is rent productions and rationalizations as we go forward. And we see that as continuing opportunity going forward. So you have a 25% cost category, which tends to be either flat and or potentially declining. And then if you look at your other cost categories, so payroll is one as you mentioned.

Adam Shine: Perfect. Thank you.

Adam: That's a fun reminder that staff will look by one, the telephone key fans. What's the question today?

Operator: As a final reminder, that's a star followed by one and the telephone keypad to ask a question today. We have no further questions, so I'll hand the call back to Ellis Jacob for any concluding remarks.

Speaker Change: Perfect, thank you.

Speaker Change: As a final reminder, that's star followed by one in the telephone keypad to ask the question today.

Ellis Jacob: We have no further questions, so I'll hand it back to Elis Jacob for any concluding remarks. Thank you very much, and thank you again for joining the call this morning. We are excited about the strong film slate for the balance of 2024 and into 2025. As our business continues to ramp up, we look forward to sharing our strong results during our third quarter of 2024 earnings call in November.

Speaker Change: [inaudible]

Speaker Change: We have no further questions, so I'll hand the call back to Ellis Jacob for any concluding remarks.

Ellis Jacob: Thank you very much. And thank you again for joining the call this morning. We are excited about the strong film slate for the balance of 2024 and into 2025. As our business continues to ramp up, we look forward to sharing our strong results during our third quarter 2024 earnings call in November. Have a wonderful day.

Ellis Jacob: Thank you very much and thank you again for joining the call this morning. We are excited about the strong film slate for the balance of 2024 and into 2025.

Speaker Change #100: As our business continues to ramp up, we look forward to sharing our strong results during our third quarter 2020 for earnings call in November. Have a wonderful day.

Adam: Have a wonderful day.

Operator: This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

Adam: This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

Adam Shine: And as Elvis described, you know, we look to continue to deploy, you know, our digital products, our connections with our consumers to ease the journey through our environment. And the two components of that is one that allows us to kind of personalize and increase revenue per patron, but also gives us the ability to optimize, you know, our payroll costs as we have better ideas about volumes and requirements from a staffing perspective.

Speaker Change #101: This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

Speaker Change #102: [inaudible] and I am born and I am born and

Adam Shine: So we continue to feel confident that we're going to see continued kind of enhancements in the overall film entertainment and content margin as we go forward. Super. Thanks a lot. And Adam, we are creating a seamless experience for our guests. And that's what we've been focused on. And that helps us overall for increasing our revenue per patron. And also, you know, minimizing the impact of the minimum wage increases.

Gord Nelson: Can I maybe just follow up? I mean, one thing in the past when you were building up all these diversification elements was the whole overall other theater op-ex element that tended to be very difficult to forecast and tended to surprise to the upside. We certainly, you know, saw less than expected spend in this Q2. Is that is that a particular area where I know there are a bunch of expenses left in there, but an area where, you know, there should not necessarily be a surprise in the upside going forward as in years past with further efficiencies to be Yeah, Adam, look at part of, you know, what's, there's two items in that, in that cost category that tends to kind of go up or down, the rest of the cost caters are relatively flat.

Gord Nelson: And that would be, if there's initiatives and costs related to bringing in new partners related to the scene program, would be one component and the second would be our distribution business. So, there's revenue that goes into other revenue and then there's, there's costs related to this distribution business. So in a quarter, like the comparator quarter is an example for Q2, we had John Week 4 driving up the other revenue a little bit and then driving up the other operating expenses, you know, a little bit.

Gord Nelson: I think it, I mean, I say a little bit, you know, about $3 million or so. So, so in quarters where we have strong films being released through Cineplex pictures is, is there a bit of an anomaly, but otherwise it should be relatively consistent.

Adam Shine: Perfect. Thank you.

Operator: That's a fun reminder, that staff will look by one, the telephone key fans, what's the question today?

Ellis Jacob: We have no further questions, so I'll hand it back to Elis Jacob for any concluding remarks.

Ellis Jacob: Thank you very much and thank you again for joining the call this morning. We are excited about the strong film slate for the balance of 2024 and into 2025. As our business continues to ramp up, we look forward to sharing our strong results during our third quarter of 2024 earnings call in November.

Operator: Have a wonderful day.

Operator: This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

Q2 2024 Cineplex Inc Earnings Call

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