Q1 2025 Cineplex Inc Earnings Call
Operator: This concludes the holding announcement for the Cineplex Q1 2025 earnings conference. We will begin in approximately one minute's time. Thank you for your patience.
So as a holding and asking for the Cineplex Q1 to insurance you're five earnings conference will begin in approximately four minutes time. Thank you for your patience.
[music].
Operator: Good morning or good afternoon and welcome to the Cineplex Q1 2025 Earnings Conference. My name is Adam and I'll be your operator today.
Good morning open up.
Speaker Change: Going to the Cineplex Q1, 2025 earnings Conference My name is Adam Adobe reported today if.
Operator: If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad.
If you'd like to ask a question during the Q&A portion of today's call.
Speaker Change: <unk> Star followed by one on your telephone keypad.
Rayhan Azmat: And with that, I'll now hand the floor to Ray Azmat to begin. So Ray, please go ahead when you're ready.
Speaker Change: On the floating rate last month to begin to rise. Please go ahead when you're ready.
Rayhan Azmat: Good morning, everyone, and thank you for joining us to discuss Cineplex's first quarter 2025 results. I'm Rayhan Azmat, Vice President, Investor Relations, Corporate Development and Financial Planning and Analysis at Cineplex. Joining me today are Ellis Jacob, our President and Chief Executive Officer, and Gord Nelson, our Chief Financial Officer.
Speaker Change: Good morning, everyone and thank you for joining us to discuss Cineplex's first quarter 2025 results.
Speaker Change: Hi, Mike.
Speaker Change: Investor Relations corporate development and financial planning and analysis.
Speaker Change: Joining me today are Ellis, Jacob our President and Chief Executive Officer, and Gordon Nelson, Our Chief Financial Officer.
Rayhan Azmat: I'll 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. Actual results may differ 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 and analysis.
Speaker Change: I'll 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.
Speaker Change: Actual results may differ 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's discussion and analysis.
Rayhan Azmat: Following today's remarks, we will close the call with our customary question and answer period.
Speaker Change: 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: I will now turn the call over to Ellis Jacob. Thank you, Rayhan. And good morning, everyone. I appreciate you joining us today as we discuss Cineplex's first quarter results for 2025. While we experience a softer box office this past quarter, we continue to execute our strategic initiatives and see encouraging signs across our multiple business segments. Our media business performed very well this quarter, helping to offset soft-to-box office results. Entering the second quarter, April has already overperformed with phenomenal results, and we are excited about the strong slate of upcoming films that will drive our business forward for the remainder of the year.
Ellis Jacob: Thank you <unk> and good morning, everyone.
Ellis Jacob: I appreciate you joining us today as we discuss Cineplex's first quarter results for 2025.
Ellis Jacob: While we experienced a softer box office this past quarter, we continued to execute our strategic initiatives and see encouraging signs across our multiple business segments.
Ellis Jacob: Our media business performed very well this quarter, helping to offset softer box office results entering the second quarter April has already over performed with phenomenal results and we are excited about the strong slate of upcoming films that will drive our business forward for the remainder of the year.
Ellis Jacob: Taking a closer look at the exhibition business, in the first quarter, the box office performance delivered revenue of $100.9 million. The first two months of the quarter performed well. January delivered 100% of the prior year on the success of the extended runs of Mufasa, The Lion King, and Sonic the Hedgehog 3. Whereas February outperformed the prior year by 24%, driven by major releases such as Captain America, Brave New World, and Dogman. The March box office underperformed in comparison to the prior year due to the tremendous success of Dune Part 2 and Kung Fu Panda 4 as both overindexed to the North American box office at Cineplex in 2024.
Ellis Jacob: Taking a closer look at the exhibition business in the first quarter. The box office performance delivered revenue of $109 million. The first few months of the quarter performed well January delivered 100% of the prior year on the success of the extended runs of thoughts of the Lion King.
And Sonic the Hedgehog III, whereas February outperformed the prior year by 24% driven by major releases, such as Captain America, Brave, New World and Dog Man.
Ellis Jacob: The March box office underperformed in comparison to the prior year due to the tremendous success of June part, two and Kung Fu Panda full as both over indexed to the North American box office at Cineplex in 2024.
Ellis Jacob: Our international content strategy continues to yield impressive results, delivering 14.7% of the first quarter box office, surpassing the North American box office at 5.9%. I'm pleased to share we've seen a significant upside in box office momentum at the start of the second quarter, which positions us well for the upcoming months and the balance of the year. April delivered 176 percent of the prior year's box office due to the tremendous success of the Minecraft movie, which had the biggest opening weekend ever for a video game adaptation, beating the previous record held by the Super Mario Brothers movie.
Ellis Jacob: Our international content strategy continues to yield impressive results delivering 14, 7% of the first quarter box office. So far is in the North American box office at five 9%.
Ellis Jacob: I am pleased to share we have seen a significant upside in box office momentum at the start of the second quarter, which positions us well for the upcoming months and the balance of the year.
Ellis Jacob: April delivered 176% of the prior year's box office due to the tremendous success of the Minecraft movie, which had the biggest opening weekend ever for a video game adaptation, beating the previous record held by the Super Mario Brothers movie centers also delay.
Ellis Jacob: Sinners also delivered a strong performance within the month, especially in premium formats like IMAX. On the strong opening performance of Thunderbolts, the first week of May is continuing a similar momentum where we have now fully covered the Q1 box office shortfall on a year-to-date basis. And as of today, we have achieved 105% of prior box office and expect strong comparatives going forward.
Ellis Jacob: <unk> strong performance within the months, especially in premium formats like IMAX.
Ellis Jacob: On the strong opening performance of Thunderbolt. The first week of May is continuing a similar momentum where we have now fully covered the Q1 box office shortfall on a year to date basis.
Ellis Jacob: And as of today, we have achieved 105% of prior year box office and expect strong comparatives going forward.
Ellis Jacob: At CinemaCon this year, we were encouraged by the quality and quantity of films presented and engaged in productive discussions with our studio partners, reinforcing the vital role theater plays in the entertainment ecosystem. All major studios presented a solid slate of upcoming releases featuring key franchises, new originals, and marquee blockbusters. In addition to the excitement delivered by traditional studio partners, a significant highlight was Amazon MGM's commitment to theatrical releases. with plans to invest over one billion dollars annually in theatrical film production and distribution. This commitment includes a slate of 12 to 15 films annually receiving exclusive theatrical windows demonstrating their well-placed confidence in the theatrical experience.
Ellis Jacob: At Cinemark on this year, we were encouraged by the quality and quantity of films presented and engaged in productive discussions with our studio partners reinforcing the vital role theater in the entertainment ecosystem.
Ellis Jacob: All major studios presented a solid slate of upcoming releases featuring key franchises, new originals and marquee blockbusters.
Ellis Jacob: In addition to the excitement delivered by traditional studio partners significant highlight was Amazon mgm's commitment to theatrical releases with plans to invest over $1 billion annually and theatrical film production and distribution.
Ellis Jacob: This commitment includes a slate of 12% to 15 films annually, receiving exclusive theatrical windows, demonstrating their well placed confidence in the theatrical experience.
Ellis Jacob: We are also encouraged by our ongoing conversations with Apple and look forward to the release of their film, F1, at the end of June, which is already generating positive buzz. These industry developments, combined with our strong studio relationships, position us well to capitalize on the ongoing recovery of the theatrical exhibition business. The commitment we are seeing from both traditional and emerging studios reinforces our optimistic outlook.
Ellis Jacob: We're also encouraged by our ongoing conversations with Apple and look forward to the release of their F. One at the end of June which is already generating positive Bob.
Ellis Jacob: These industry developments combined with our strong studio relationships.
Ellis Jacob: <unk> us well to capitalize on the ongoing recovery of the theatrical exhibition business.
Ellis Jacob: The commitment we are seeing.
Ellis Jacob: But in both traditional and emerging studios reinforces our optimistic outlook.
Ellis Jacob: Taking a look at our media business, I'm pleased to report exceptional performance in the first quarter with total media revenues increasing by 32.9% to reach $29.7 million. This growth was driven by strong results across both our cinema advertising and digital place-based media segment. Cinema media revenue showed remarkable resilience, growing 38% to $17.1 million. This growth reflects the continued recovery in advertising spending and our success in attracting new advertisers across diverse categories. The value of our on-screen advertising product continues to resonate with advertisers, offering them unparalleled access to engage audiences in a premium environment. As one of the few exhibitors that own our cinema media business, this allows us to benefit from an extremely high margin segment with the majority of revenue flowing straight to the bottom line.
Ellis Jacob: Taking a look at our media business I'm pleased to report exceptional performance in the first quarter with total media revenues, increasing by 32, 9% to reach $29 7 million. This growth was driven by strong results across both our cinema advertising and digital place based.
Ellis Jacob: Media segment.
Ellis Jacob: Cinema media revenue showed remarkable resilience growing 38% to $17 1 million. This growth reflects the continued recovery in advertising spending.
Ellis Jacob: Success in attracting new advertisers across diverse categories.
Ellis Jacob: The value of our on screen advertising product continues to resonate with advertisers offering them unparalleled access to engage audiences in a premium environment.
Ellis Jacob: As one of the few exhibitors that own a cinema media business. This allows us to benefit from an extremely high margin segments with the majority of revenue flowing straight to the bottom line.
Ellis Jacob: In our digital play space media business, revenue increased by 26.5% to $12.6 million. This growth was driven by new client acquisitions and expanded deployments with existing partners this quarter. Within our digital out-of-home business, all our new and existing mall networks saw growth over Q1 2024.
Ellis Jacob: And our digital place based media business revenue increased by 26, 5% to $12 $6 million.
Ellis Jacob: This growth was driven by new client acquisitions and expanded deployments with existing partners this quarter.
Within our digital out of home business, all of our new and existing mall network saw growth over Q1 2024.
Ellis Jacob: A location-based entertainment business continues to expand, with the revenue increasing 10.5% to $38.1 million in the first quarter, due to three new locations being added at the end of 2024. As we continue to strive towards becoming Canadians' choice in entertainment, our ability to provide multiple entertainment options under one roof continues to resonate with guests. LBE generates strong EBITDA margins and offers a more predictable operating environment, given it's not dependent on contract. The Rec Room and Palladium locations are contributing steadily, and we're encouraged by the potential from recent new builds.
Ellis Jacob: Our location based entertainment business continues to expand with the revenue increasing 10, 5% to $38 1 million in the first quarter due to three new locations being added at the end of 2024.
Ellis Jacob: We continue to strive towards becoming Canadians choice and entertainment our ability to provide multiple entertainment options under one roof continues to resonate with guests.
Ellis Jacob: L B generated strong EBITDA margins and offers a more predictable operating environment, given it's not dependent on content the.
Ellis Jacob: The rec room, and palladium locations are contributing steadily and rewrite encouraged by the potential from recent new builds.
Ellis Jacob: Before I close, I wanted to share a brief update on our field of the Competition Tribunal's decision regarding our online booking. On October 23rd, 2024, Cineplex filed its notice of appeal with the Federal Court of Appeals, and with the Competition Bureau's consent, was granted a stay regarding payment of the Competition Tribunal's administrative monetary penalty pending the Federal Court of Appeals decision. We are diligently conducting all necessary court filings and other preliminary matters in order for the appeal to be heard expeditiously and hope the appeal will be heard in late 2025.
Ellis Jacob: Before I close I wanted to share a brief update on our appeal of the competition drive units decision regarding our online booking fee.
Ellis Jacob: On October 22, 2020 for Cineplex filed its notice of appeal with the Federal Court of Appeals and with the competition Bureau, as Vincent was brought to the state regarding payment of some addition, tribunals administrative monetary penalty pending the federal court of Appeals decision.
Ellis Jacob: We are diligently conducting all necessary filings in other preliminary matters in order for the appeal to be heard expeditiously and hope the appeal will be heard in late 2025.
Ellis Jacob: Looking ahead, we are optimistic about the release schedule for the remainder of Q2 and beyond. The May lineup is filled with action and adventures for the whole family. Coming on the heels of Thunderbolts is Mission Impossible The Final Reckoning, a fan favorite that traditionally does very well with Canadian audiences. Bringing the nostalgia back in May is the live-action adaptation of Lilo & Stitch and Karate Kid Legends. Jumping into June, we'll see a broad range of titles catering to different audiences with the John Wick spin-off film, Ballerina, distributed by Cineplex Pictures, which has extended its partnership deal with Lionsgate until the end of 2026.
Ellis Jacob: Looking ahead, we are optimistic about the releases scheduled for the remainder of Q2 and beyond the.
The main lineup is filled with action and adventure for the whole family coming.
Ellis Jacob: Coming on the heels of Thunderbolt mission impossible. The final recognizing a fan favorite that traditionally does very well with Canadian audiences.
Ellis Jacob: <unk> gave them nostalgia back in May as the live action adaptation of Lee Luann Stitch and Karate Kid legends.
Ellis Jacob: Jumping into June we'll see a broad range of titles catering to different audiences with the John Wick spin Awesome Battle Arena distributed by Cineplex Pictures, which has extended its partnership deal with Lionsgate until the end of 2026.
Ellis Jacob: There's also a live action adaptation of How to Train Your Dragon, the latest from Pixar Animation Studios, Elio, two horror films with 28 Years Later and Megan 2.0, and Apple's F1 starring Brad Pitt, which tells the story of a former Formula One driver who returns to the sport to mentor a young rookie driver. As the summer movie-going season continues, we are off to a roaring prehistoric start with Jurassic World Rebirth. Then heroes, both big and small, hit the screens in Superman, Smurfs, The Fantastic Four, First Step, and Bad Guys 2. A reboot of the classic slasher film I Know What You Did Last Summer and the fourth installment of The Conjuring Last Rite will terrify moviegoers in the summer.
Ellis Jacob: There is also a live action adaptation of how to train your Dragon the latest from Pixar Animation Studios Hulio two horizontals with 28 years later, and Megan 2.0, and Apple F. One starting starring Brad Pitt, which tells the story of a form four former formula one driver.
Ellis Jacob: Our returns to the sport to mentor young rookie driver.
Ellis Jacob: As the summer Moviegoing season continues we are off to a roaring three historic start with Jurassic will rebuild than heroes, both big and small hit the screens and Superman Smurfs fantastic for first step and bad guys too.
Ellis Jacob: A reboot of the classic slasher film I know, what you did last summer and the fourth installment of the conjuring loss rates was terrified moviegoers in the summer.
Ellis Jacob: For a dose of comedy, a remake of The Naked Gun starring Liam Neeson and the anticipated sequel, Freakier Friday will hit theaters in August.
Ellis Jacob: For those of comedy a remake of the naked gun, starring Liam Neeson, and the anticipated sequel, Freaky Friday will hit theaters in August.
Ellis Jacob: Looking ahead to the fourth quarter, a wide array of content will hit the screens in time for the holiday movie-going season, with Tron Heiress, The Black Phone 2, The Running Man, Predator Badlands, Wicked for Good, Zootopia 2, Five Nights at Freddy's 2, the SpongeBob movie Search for Squarepants, and the film longtime fans are eagerly awaiting, Avatar Fire and Air. As we see the exhibition business gaining momentum ahead, we believe growth opportunities exist across all our business segments. Our media business will continue to capitalize on the robust film slate ahead. The LB segment presents an opportunity to capture our target guests with new menu items and value offerings launching in the quarter.
Ellis Jacob: Looking ahead to the fourth quarter, a wide array of content will hit the screens in time for the holiday moviegoing season withdrawn arris, the Blackstone to the running man creditor Badlands Wicked. Good Zootopia, two five night at Freddie Stu the Spongebob movie search for square.
Ellis Jacob: And the film longtime fans eagerly awaiting avatar fire and Nash.
Ellis Jacob: As we see the exhibition business gaining momentum ahead, we believe growth opportunities exists across all our business segments.
Ellis Jacob: Our media business will continue to capitalize on the robust film slate ahead.
Ellis Jacob: <unk> segment presents an opportunity to capture our targeted guests with new menu items and value offerings launching in the quarter.
Ellis Jacob: Our market position remains strong, supported by a diversified business model and premium entertainment offering. The early success we've seen in April and the beginning of May, combined with our strong upcoming slate and strategic initiatives, gives us confidence in our ability to deliver strong results as we move through 2025.
Ellis Jacob: Market position remains strong supported by a diversified business model and premium entertainment offerings.
Ellis Jacob: The early success, we've seen in April and the beginning of May combined with our strong upcoming slate that strategic initiatives gives us confidence in our ability to deliver strong results as we move through 2025.
Ellis Jacob: Over the decades I've spent in this industry, one thing has remained constant. When economic uncertainty sets in, people still turn to the movies. Time and time again, we've seen that in tough times, the movie theater isn't just resilience, it becomes essential. It's where people go to escape, to connect, and to find a bit of joy where they need it more.
Ellis Jacob: Over the decades spent in this industry. One thing has remained constant when economic uncertainty certain people still turned to the movies time and time again, we've seen that in tough times. The movie theater isn't just resilience it becomes essential.
Ellis Jacob: People go to escape to connect and to find a bit of joy, where they need it most.
Ellis Jacob: With that, I will turn things over to Gord Nelson. Thank you, Ellis.
Ellis Jacob: With that I'll turn things over to Gordon Allison.
Gordon Allison: Thank you I also I'm pleased to present, a condensed summary of the results for the first quarter of 2025 Cineplex, Inc. For further reference our financial statements and our MD&A have been filed on SEDAR plus and are available on our Investor Relations website at Cineplex com.
Gord Nelson: I'm pleased to present a condensed summary of the results for the first quarter of 2025 for Cineplex. For further reference, our financial statements and our MD&A have been filed on CDAR Plus and are 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 liquidity, capital allocation priorities and outcomes.
Gordon Allison: Our MD&A and earnings press release include a complete narrative on the operational results. So I will focus on highlighting select items in.
Gordon Allison: In addition to providing commentary on liquidity capital allocation priorities and outlook.
Gord Nelson: For my comments on operations, all amounts falling will be from continuing operations unless otherwise stated. As Ellis mentioned, we experienced a softer box office in the first quarter, which impacted our results. Total revenues for the quarter were $264.3 million dollars, representing a 10.3% decrease compared to the same period last year. A 14.5% decline in attendance led to adjusted EBITDA being negative $10.8 million as compared to positive $4.6 million in the prior year.
Gordon Allison: For my comments on operations all amounts fall in will be from continuing operations unless otherwise stated.
Gordon Allison: As Alex mentioned, we experienced a softer box office in the first quarter, which impacted our results total revenues for the quarter were $264 $3 million, representing a 10, 3% decrease compared to the same period last year.
Gordon Allison: A 14, 5% decline in attendance led to adjusted EBITDA will be negative $10 8 million as compared to positive $4 6 million in the prior year.
Gord Nelson: Although the soft box office impacted our exhibition segment, this was partially offset by strong performances in our media businesses and three new locations in our LBE segment. So, let's take a closer look at our site. In the film, entertainment, and content segment, box office revenues decreased 18.5% to $101.9 million, reflecting both lower attendance and a decrease in box office per patron. Theater attendance was 8.4 million, down 14.5% from prior year. This decline relative to the prior year was primarily due to a lack of compelling content in the current year, as Ellis mentioned earlier. Our box office per patron metric was $12.14, representing a 4.7% decrease over the prior year due to a decline in sales mix of premium priced products, the $5 Tuesday program, and a higher child mix due to the films playing during the quarter.
Gordon Allison: Although the soft box office impacted our exhibitions segment. This was partially offset by strong performances in our media businesses and three new locations in our <unk> segment.
Gordon Allison: So, let's take a closer look at our segments.
Gordon Allison: In the film Entertainment and content content segment box office revenues decreased 18, 5% to $101 $9 million.
Gordon Allison: Reflecting both lower attendance and a decrease in box office per patron.
Gordon Allison: Theater attendance was $8 4 million down 14, 5% from prior year.
Gordon Allison: This decline relative to the prior year was primarily due to a lack of compelling content in the current year as that was mentioned earlier.
Gordon Allison: Our box office per patron metric was $12 14.
Gordon Allison: Representing a four 7% decrease over the prior year due to a decline in sales mix of premium priced products, the $5 Tuesday program and a higher child mix due to the films playing during the quarter.
Gord Nelson: Concession per patron increased 2% based on an increase in average transaction spend. Our theater cash rent paid and payable was down 1.8% compared to Q1 2024. Due to the closure of two locations and rent reductions as we continue to optimize our theater portfolio and focus on reducing our fixed rent. As a result of the product challenges during the quarter, Segment EBITDA was negative $12.4 million.
Gordon Allison: Concession per patron increased 2% based on an increase in average transaction spend.
Gordon Allison: Our theater in cash rent paid and payable was down one 8% compared to Q1 2024.
Gordon Allison: Due to the closure of two locations and rent reductions as we continue to optimize our theater portfolio and focus on reducing our fixed rent costs.
Gordon Allison: As a result of the product challenges during the quarter segment EBITDA was negative $12 $4 million, but as we look forward when product is there the operating leverage is strong in this segment.
Gord Nelson: But as we look forward, when product is there, the operating leverage is strong. Ellis mentioned the strong box office performance for April and May to date. For the month of April 2025 alone, our consolidated EBITDA has increased approximately $25 million to positive $13 million for the month from negative $12 million in the prior year.
Gordon Allison: <unk> mentioned the strong box office performance for April and May to date.
Gordon Allison: For the month of April 2025 alone our consolidated EBITDA has increased approximately $25 million to positive $13 million for the month from negative $12 million in the prior year.
Gord Nelson: Our media business delivered exceptional. Total media revenues growing 32.9% to $29.7 million. Cinema media revenues increased 38% to $17.1 million as a result of strong demand from pharmaceutical, financial services, and e-commerce platforms. Capitalizing on the value cinema advertising offers, digital place-based media revenue grew 26.5% to 12.6%. The increase in digital price-based media is due to a combination of an increase in advertising revenue across our mall networks and new project revenue. All of our mall networks. Including newer additions like Cadillac, Fairview, and Common Art, but also increases from our longer term clients, such as Oxford and Ivanhoe Cambridge.
Gordon Allison: Our media business delivered exceptional results with total media revenues growing 32, 9% to $29 $7 million.
Gordon Allison: Cinema media revenues increased 38% to $17 1 million as a result of strong demand from pharmaceutical financial services and E Commerce platforms.
Gordon Allison: Capitalizing on the value cinema advertising offers digital place based media revenue grew 26, 5% to $12 6 million.
Gordon Allison: The increase in digital place based media is due to a combination of an increase in advertising revenue across our mall networks and new project revenue.
Gordon Allison: All of our mall network saw growth, including newer additions at Cadillac Fairview and common are but also increases from our longer term clients such as Oxford in Ivanhoe, Cambridge.
Gord Nelson: In addition, project revenue increased 32.7% over the prior year.
Gordon Allison: In addition project revenue increased 32, 7% over the prior year.
Gord Nelson: In 2024, we entered into an agreement with Suncor to install a digital network in their Petro-Canada. Appointments began in 2024 and ramped up in Q1, generating the strong list. Location-based entertainment continued to expand with revenues increasing 10.5% to $38.1 million, primarily due to an increase of three locations, which opened in Q4 of the prior year. SOAR level EBITDAL increased by 1% to $9.8 million, whereas SOAR level EBITDAL margin moderated to $25.7 million. This reflects elevated costs in the initial few months as we optimize operations in our new location. Although same store revenue declined 8.1% due to a number of factors.
Gordon Allison: In 2024, we entered into an agreement with Suncor to install a digital network and their Petro Canada stations.
Gordon Allison: <unk> deployments began in 2024 and ramped up in Q1 generating the strong lift in sales.
Gordon Allison: Location based entertainment continued to expand with revenues, increasing 10, 5% to $38 1 million.
Gordon Allison: Primarily due to an increase of three locations, which opened in Q4 of the prior year.
Gordon Allison: Store level, EBITDA increased by 1% to $9 $8 million, whereas store level EBITDA margin moderated to 25, 7%.
Gordon Allison: This reflects elevated costs in the initial few months as we optimize operations in our new locations.
Gordon Allison: Although same store revenue declined eight 1% due to a number of factors.
Gord Nelson: The same store EBITDA margin was 28.2%, which is marginally higher than the prior year due to strong operating demand. The LBE segment EBITDA decreased 0.4 million dollars, primarily due to the same sort of volume decline and additional one-time costs related to the opening of the new.
Gordon Allison: The same store EBITDA margin was 28, 2%, which is marginally higher than the prior year due to strong operating discipline.
Gordon Allison: The <unk> segment EBITDA decreased $4 million <unk>.
Gordon Allison: Primarily due to the same store volume declined an additional one time costs related to the opening of the new locations.
Gord Nelson: I want to speak briefly about our capital priorities and then cash flow and capital allocation in a quarter. Our capital allocation priorities remain unchanged and include continuing to focus on maintenance capital expenditures, strengthening our balance sheet to achieve our target leverage ratios, making strategic growth investments, and providing shareholder Thank you. For the first quarter, the film content challenges impacted our operating room.
Gordon Allison: I want to speak briefly about our capital priorities, and then cash flow and capital allocation during the quarter.
Gordon Allison: <unk>.
Gordon Allison: Our capital allocation priorities remain unchanged and include continuing to focus on maintenance capital expenditures strengthening our balance sheet to achieve our target leverage ratios, making strategic growth investments and providing shareholder returns.
Gordon Allison: For the first quarter the film content challenges impacted our operating results and this combined with the normal working capital seasonality resulted in a decrease in our cash balance of approximately $66 million.
Gord Nelson: And this, combined with the normal working capital seasonality, resulted in a decrease in our cash balance of approximately $66 million. In simple terms, this decrease is attributable primarily to the following items. Negative EBITDA of $10.8 million, a seasonal use of working capital of approximately $23.3 million. Cash interest of $15.1 million and net cap backs of $14.1 million, primarily related to the four bills completed in late 2024.
Gordon Allison: In simple terms. This decrease is attributable primarily to the following items.
Gordon Allison: Negative EBITDA of $10 8 million.
Gordon Allison: Seasonal use of working capital of approximately $23 $3 million.
Gordon Allison: Cash interest of $15 1 million and net Capex of $14 1 million primarily related to the four builds completed in late 2024.
Gord Nelson: Although we continue to believe that our stock is currently undervalued, as a result of balancing these capital priorities, there was no activity under the NCIB during the quarter.
Gordon Allison: Although we continue to believe that our stock is currently undervalued as a result of balancing these capital priorities. There was no activity under the NCI <unk> during the quarter.
Gord Nelson: As we look forward, we expect the strong operating leverage of the business to return, as was evidenced by my comment on the April Ibadell Large working capital deficiencies are typically unique to Q1, as coupons and certificates sold in Q4 are redeemed in Q1, and we draw down the payables balances at December 31st, which reflect the strong December For more information visit www.FEMA.gov With respect to CapEx, our guidance for 2025 is now more muted at approximately 40 to 50 million dollars, which includes the 14.1 million dollars in Q1. Given the current uncertainty regarding tariffs and other matters, we will defer spend until there is more certainty.
Gordon Allison: As we look forward, we expect the strong operating leverage of the business to return.
Gordon Allison: As was evidenced by my comments on the April EBITDA results.
Gordon Allison: Large working capital deficiencies are typical unique to Q1 as coupons and certificate sold in Q4 are redeemed in Q1, and we draw down the payables balances at December 31, which reflect the strong December period.
Gordon Allison: With respect to Capex our guidance for 2025 is now more needed muted at approximately 40% to $50 million, which includes the $14 1 million in Q1.
Gordon Allison: Given the current uncertainty regarding tariffs and other matters, we will defer spend until there is more certainty.
Gord Nelson: With respect to the current macroeconomic environment and uncertainty, I would like to take a few moments to discuss these. As a reminder, our business is primarily based on providing compelling entertainment experiences to our guests in Canada. With respect to the threat of any U.S. trade tariffs on goods, approximately 99% of our revenue is generated in Canada through our operations and facilities in With respect to any potential reciprocal Canadian tariffs on goods, I remind you of our overall cost structures with approximately 78% of our annual costs coming from four categories. Film rent, employee costs, and occupancy costs.
Gordon Allison: With respect to the current macroeconomic environment and uncertainty I would like to take a few moments to discuss these matters.
Gordon Allison: As a reminder, our business is primarily based on promote providing compelling entertainment experiences to our guests in Canada.
Gordon Allison: And not transferring physical goods across borders.
Gordon Allison: With respect to the threat of any U S trade tariffs on goods approximately 99% of our revenue is generated in Canada through our operations and facilities in Canada.
Gordon Allison: With respect to any potential reciprocal Canadian tariffs on goods I remind you of our overall cost structure with approximately 78% of our annual costs coming from four categories.
Gordon Allison: Film rent employee costs and occupancy costs.
Gord Nelson: All intangible items that are not caught by any current tariff discussions represent 70% of our overall. The next largest cost category is food costs, which represents approximately 8% of our overall cost. We are continuing to evaluate any potential impacts and additional sourcing opportunities for any items potentially caught by tariffs and do not believe that any proposed tariffs will have a material impact. With respect to currency exposure, less than 5% of our costs are incurred in U.S.
Gordon Allison: All intangible items that are not caught by any current tariff discussions represent 70% of our overall costs.
Gordon Allison: Next largest cost categories food cost, which represents approximately 8% of our overall costs. We are continuing to evaluate any potential impacts and additional sourcing opportunities for any items potentially caused by tariffs and do not believe that any proposed tariffs will have a material impact.
Gordon Allison: On our business.
Gordon Allison: With respect to currency exposure less than 5% of our costs are incurred in U S dollars and.
Gord Nelson: dollars, and as Ellis mentioned previously, during times of economic uncertainty, the exhibition business has historically been resilient.
Gordon Allison: And as Alex mentioned previously during times of economic uncertainty the exhibition business has historically been resilient.
Gord Nelson: With the renewed confidence emerging from CinemaCon, as Ellis has articulated, the long-term outlook for exhibition remains strong. We believe this future is not only real, but imminent, beginning to take shape in the very near term with the strong.
Speaker Change: With the renewed confidence emerging from cinema Con as Atlas has articulated the long term outlook for exhibition remains strong.
Speaker Change: We believe the future is not only real but eminent beginning to take shape in the very near term with the strong recent results.
Gord Nelson: In summary, we are excited for the future of the business and remain highly focused on creating long-term value for shareholders.
Speaker Change: In summary, we are excited for the future of the business and we remain highly focused on creating long term value for shareholders and with that I would like to turn things over to the conference operator.
Operator: And with that, I would like to turn things over to the conference officers. Thank you. As a reminder, if you'd like to ask a question on today's call, please press star followed by one on your telephone keypad and answer into the queue. Remember to unmute locally when asking your question.
Speaker Change: Thank you.
Speaker Change: I wonder if you'd like to ask a question on todays call. Please press star followed by one on your telephone keypad notes into the queue.
Speaker Change: Please remember to mute locally when asking your question.
Adam Shine: And our first question comes from Adam Shine from National Bank Financial. Adam, please go ahead, your line is open. Thanks a lot. Good morning. Ellis, can you talk a little bit, I mean Gord obviously, good morning. Gord referenced the tariff dynamic. I don't think anyone believes that a movie tariff will indeed occur, but can you talk maybe about, you know, potential progress across some of the U.S. states? Certainly Gavin Newsom in California is trying to raise, you know, film incentives to stimulate more production activity. Do you ultimately see the prospect of statewide incentives or incentives from a number of additional U.S.
Speaker Change: And our first question comes from Adam Shine from National Bank Financial. Please go ahead. Your line is open.
Speaker Change: Thanks, a lot good morning, Alice can you talk I mean, obviously.
Speaker Change: <unk> referenced the tariff dynamic I don't know if you're getting what beliefs.
Speaker Change: Movie tariff will indeed occur.
Speaker Change: But can you talk maybe about.
Speaker Change: Potential progress across some of the U S States, certainly Gavin new cement California's trying to raise.
Speaker Change: Film incentives too.
Speaker Change: Stimulate more production activity do you ultimately see the prospect of statewide incentives our incentives from a number of additional U S states, perhaps stimulated additional film.
Ellis Jacob: states perhaps stimulating additional film production activity as compared to necessarily drawing productions from abroad, you know, back into the U.S.?
Speaker Change: Film production activity as compared to necessarily drawing productions from abroad back into the U S. We'll start there.
Ellis Jacob: We'll start there. Yeah, I think, you know, a lot of, you know, movies are not only filmed in California, they are filmed in other parts of the US. And I think that will be part of the incentives will continue to increase production in other areas of the US. And from an overall perspective, it will lead to, I feel additional movies being produced right across the board. And, you know, in international situations that will also continue to be used, depending on the overall cost of the film. But I'm not overly concerned about, you know, the comments that have been made over the last number of days.
Speaker Change: Yes, I think.
Speaker Change: A lot of.
Speaker Change: Movies are not only filmed in California. They are filmed in other parts of the U S and I think that will be part of the incentives. We will continue to increase production in other areas of the U S and from an overall perspective, it will lead to I feel additional movies being produced right across the.
Speaker Change: The board and.
Speaker Change: And international situations that will also continue to be used depending on the overall cost of the film, but I'm not overly concerned about.
Speaker Change: The comments that have been made over the last number of days.
Ellis Jacob: Given what we saw out of Guzo a few months back, are you seeing any incremental benefits just in terms of drive more people into your own theatres? On locations that are close to our existing theaters, they've improved, but a lot of his locations aren't close to us, so we don't find the total benefits as a result.
Speaker Change: Given what we saw out of guzzo.
Speaker Change: A few months back are you seeing any incremental benefits just in terms of.
Speaker Change: Drive more people into your own theatres.
Speaker Change: On locations that are close to our existing theaters the improved but.
Speaker Change: A lot of us locations on close to us So we don't find.
Speaker Change: The total benefits as a result.
Gord Nelson: Okay, and comments were made obviously on the nature of the BPP dip, which were pretty clear in the Q1. Can you maybe talk a little bit about some of the resuscitation and BPP so far in Q2? Yeah, the reason it was low on Q1 was because of the decline in the sales mix of premium priced products. Then we had the $5 Tuesday program and there was a higher child ticket mix due to the films playing in the quarter. And I feel in this quarter that we are in, that will change because of the premium offerings, because of the pricing.
Speaker Change: Okay and comments were made obviously on the nature of the BP Pete depth, which were pretty clear in the Q1 can you maybe talk a little bit about some of the resuscitation and DPP so far in Q2.
Speaker Change: Yeah. The reason it was lower in Q1 was.
Speaker Change: The decline in the sales mix of premium priced product than we had the $5 Tuesday program and there was a higher child ticket mix due to the films playing in the quarter and I feel in the in this quarter that we're in that will change because of the premium offerings because of the pricing.
Gord Nelson: And that will definitely be on the positive side going forward.
Speaker Change: And that will definitely be on the positive side going forward.
Gord Nelson: Okay, we'll leave it there. Thank you very much. Thanks, Adam.
Speaker Change: Okay, we'll leave it there thank you very much.
Adam Shine: Thanks, Adam.
Derek Lessard: The next question comes from Derek Lessard from TD Cowan. Derek, please go ahead. Your line is open. Yeah, good morning, everybody. And Ellis, I think I can hear a faint, some faint sound of some excitement back in your voice. I guess I just want to maybe hit on the same store sales decline, Gordon, on the LBE side. Was there anything, anything? I think you've mentioned there's a couple of drivers of that. So I'm just wondering if there's anything to read from that.
Speaker Change: The next question comes from Derek Lessard from TD Cowen Derek. Please go ahead. Your line is open.
Derek Lessard: Yes, good morning, everybody and I think I can hear a faint.
Derek Lessard: Faint sound of some excitement back in your voice.
Derek Lessard: I guess I just wanted to maybe hit on the same store sales decline Gordon on the L. B side was there anything anything I think you've mentioned there is a couple of drivers of that so I'm just wondering if theres anything to read from that.
Gord Nelson: Yeah, so Derek, look, there's a few things there, like, you know, obviously last year was a leap year, so there's an extra day in last year's operations. The timing of the school holidays around Christmas into the new year impacted, so there's less holidays in 2025 versus 2024, you know, family day occurred during some adverse weather So, you know, a number of small things leading to that. You know, the 8% things were declined, you know, as we look out for the entire year, though, you know, we've always said that, you know, on average, we expect these boxes to do about 10 million dollars of revenue.
Derek Lessard: Yeah, So derik Theres a few things there like obviously last year was a leap year. So there was an extra day in last year's operations.
Derek Lessard: The timing of the school holidays around the Christmas into the new year impacted so theres less holidays.
In 2025 versus 2024.
Derek Lessard: Family day occurred during some sort of adverse weather situations.
Derek Lessard: Situations across the country. So.
Derek Lessard: Small things leading to that.
Derek Lessard: The eight 8% same store decline as we look out for the entire year, though we've always said that.
Derek Lessard: On average we expect these boxes to do about $10 million of.
Derek Lessard: Revenue.
Gord Nelson: And so with the start in Q1 is, you know, we have obviously some concerns with where the general economic conditions are, but, you know, we would, we would think that, you know, you're probably that average is going to be impacted by 3 to 5%. So, somewhere between 9.5 to 9.7Million dollars on average for. for Lafoye. Okay.
Derek Lessard: And so with the start in Q1 is.
Derek Lessard: We have obviously some concerns with where the general economic conditions are.
Derek Lessard: But we would we would think that.
Derek Lessard: Probably that average is going to be impacted by 3% to 5% so somewhere between nine 5% to $9 $7 million in average board for the 16 locations throughout the year for the full year.
Gord Nelson: Sorry, Gord. So you're taking into account some economic slowdown? Yeah, obviously, that will impact. Like right today, we're down 8% on the same store. But over the course of the full year, the impact we believe will be three to Okay, okay, that's fine.
Derek Lessard: Okay.
Speaker Change: Sorry go ahead so your.
Derek Lessard: You're taking into account some economic.
Derek Lessard: Slowdown.
Derek Lessard: Yes, obviously that will impact that Greg today, where we're down 8% on the same store.
Derek Lessard: Alright, but over the course of the full year the impact we believe will be 3% to 5%.
Speaker Change: Okay. Okay, that's fine.
Derek Lessard: And I guess another question for me is, is have you seen or maybe are you anticipating maybe any bump from staycations this year? in Canada. Well, we've seen, you know, it's all content driven. And when the product is there, our guests come out in a big way. And I think that will continue as we move forward into the balance of the summer and into the balance of the year. So we feel pretty strongly about the content and our guests coming out to see these films. And then just on that sort of the relative value proposition of, you know, theatrical experience versus, say, a concert or professional sporting event, when you look at sort of pre-pandemic to today, you know, the gap.
Speaker Change: I guess another question for me is have you seen or maybe are you anticipating maybe any bump from staycations this year.
Speaker Change: In Canada.
Speaker Change: Well we've seen.
Speaker Change: It's all content driven and when the product is there a guest come out in a big way and I think that will continue.
Speaker Change: Move forward into the.
Speaker Change: Balance of the summer and into the balance of the year.
Speaker Change: So we feel pretty strongly about the content and.
Speaker Change: Guests coming out to see these films and then just on the sort of the relative value proposition.
Speaker Change: The actual experience versus say a concert or professional sporting event. When you look at sort of pre pandemic to today the gap.
Derek Lessard: you know, accessibly wide.
Speaker Change: Excessive we widened so we become a more attractive value opportunity for out of home visits.
Gord Nelson: Okay, and just maybe one more for me, given that you have pulled back a little bit on the CAPEX this year, could you maybe talk about any plans for or any future LBE expansion plans? So yeah, right.
Speaker Change: Okay, and just maybe one more for me given that your you have pulled back a little bit on the Capex. This year could you maybe talk about any plans for or any future expansion plans.
Speaker Change: So yes right today.
Gord Nelson: Today, you know, as noted in our MD&A, we have one And as we've always said, we, you know, we're being where we believe in the opportunity for up to 30 locations across Canada. We're in what we always refer to as a prudent pause. And when you see retailers. You know, unfortunately, if Hudson's Bay and others either downsize the university in the country is we, we see opportunities. So we're just in a little bit of a prudent pause as we look for future opportunities.
Speaker Change: As noted in our MD&A, we have one commitment.
Speaker Change: And as we've always said we.
Speaker Change: We're beating.
Speaker Change: We believe in the opportunity for up to 30 locations across Canada.
Speaker Change: We are and what we always refer to as a prudent pause and when you see retailers like H.
Speaker Change: Unfortunately at Hudson's Bay.
Speaker Change: And others, either downsizing or actually in the country as we we see opportunities for potential better sites at better economics going forward. So we're just in a little bit of a prudent path.
Speaker Change: As we look for future opportunities and then sort of also mentioned historically from the time, we commit to a location to the time, we actually.
Derek Lessard: And then as we've sort of also mentioned historically, from the time we commit to a location, This is The Time with Yaakhil Khanna. You know, trouble on ground and building, depending on the site. Sometimes it can be. Right. Okay. Thanks for the color, Gord. Thank you.
Speaker Change: Shovel on ground there building depending on the site, sometimes it can be a year to two years.
Speaker Change: Alright, okay. Thanks for the color guard.
Speaker Change: Thank you.
Operator: As a reminder, that's star followed by one to ask a question.
Speaker Change: As a reminder, that Phillip I wanted to ask a question.
Maher Yaghi: The next question comes from Maher Yaghi from Scotiabank.
Speaker Change: Next question comes from Matt Young from Scotiabank. Your line is open. Please go ahead.
Maher Yaghi: Maher, your line is open, please go ahead. Great, thank you for taking my question. I wanted to go on the question that Adam alluded to in terms of potential tariffs on movie production outside of the U.S. I spoke with few of the studios in the U.S. and I did not get the sense, talking with them, that there's going to be a negative reaction, like basically a reduction of production of movies as a consequence. Could be a shift in where the production is made.
Matt Young: Great. Thank you for taking my question I wanted to.
Speaker Change: Go on question, Adam alluded to in terms of.
Speaker Change: Potential tariffs on mortgage production outside of the U S I spoke with a.
Speaker Change: A few of the studios in the U S.
Speaker Change: I did not get the sense talking with them that there is a going to be a negative reaction like basics.
Speaker Change: Basically reducing a reduction of production of movies as a consequence, it could be a shift in where the production is made but can you talk about.
Ellis Jacob: But can you talk about, let's say, if the cost to produce a movie goes up, how would that affect your economics as a movie operates? Well, at the moment, nothing has been confirmed. And as you have spoken with them, I had spoken to all the major studios in the U.S. and they basically feel that things will stay in the same vein with incentives coming from U.S. states for, you know, both the producers and also some of the exhibitors, if they feel that's necessary. So I'm not, you know, on the Monday I was quite concerned when it was first brought up, but as the week has gone along, I feel there's less of, you know, a huge risk.
Speaker Change: Let's say the cost to produce a movie goes up how would that affect.
Speaker Change: Your economics as in <unk>.
Speaker Change: Operator.
Speaker Change: Well at the moment nothing has been confirmed in as you had spoken with them I had spoken to all the major studios in the U S and.
Speaker Change: They basically you feel that.
Speaker Change: Things will stay in the same vein with incentives coming from U S States for you.
Speaker Change: Both.
Speaker Change: The producers and also some of the exhibitors if they feel that's necessary so I am not.
Speaker Change: On the Monday I was quite concerned when it was first brought up but as the week has gone along I feel there's less of.
Speaker Change: A huge risks because to be able to make the charge is going to be very very difficult because and movies made in different parts of the world in different U S States and a lot of them are finished in California, but it would be very difficult to keep the.
Ellis Jacob: Because to be able to make the charge, it's going to be very, very difficult because movies are made in different parts of the world and different U.S. states. And a lot of them, you know, are finished in California. But it would be very difficult to keep the, you know, pieces of the movies in different areas. And one area that, you know, would impact the U.S.
Speaker Change: Pieces the movies in different areas and one area that would impact the U S exhibitors more than Canadian is for international content.
Ellis Jacob: exhibitors more than Canadian is for international content, if there are tariffs on those, because that's not something that we would have to be impacted by in Canada. Right. And in terms of passing through any increase in cost of production, if it were to happen. How would that be passed through to the consumer? We would work together and, you know, it's in a position now where it's too early to speculate. And that's why I think it's better that we see where this ends up. And I understand that there's some announcements happening today. So until we know where things are going, I don't want to put us or, you know, our guests in an awkward position in any way.
Speaker Change: There are tariffs on those because that is not something that we would have to be impacted by in Canada.
Speaker Change: Alright, and then in terms of passing through any increase in <unk>.
Speaker Change: Cost of production for it to happen.
Speaker Change: How would that be passed through to the.
Speaker Change: The consumer.
Speaker Change: We would work together and.
Speaker Change: It's in a position now where it's too early to speculate.
Speaker Change: And Thats why I think it's better that we see where that ends up and I understand that there is some announcements happening today. So until we know where things are going I don't want to.
Speaker Change: With us or.
Speaker Change: Our guests in an awkward position in any way.
Maher Yaghi: Okay, fair enough. I wanted to ask you on the media side, it continues to grow nicely and you seem to be seeing a different angle of the media advertising things. Thank you. spend than other advertisers in Canada, which is good to see.
Speaker Change: Okay Fair enough I wanted to ask you on the media side.
Speaker Change: To grow nicely.
Speaker Change: You seem to be.
Speaker Change: Seeing a different angle of their media advertising.
Speaker Change: And then other advertiser.
Speaker Change: Advertisers and in Canada.
Gord Nelson: How much more growth What would you expect to see from that business? a level that is consuming most of the time that you have available to put advertising minutes in front of consumers watching movies or there's still more inventory you can sell at this point in time. Yeah, so let's talk about, so you're asking a bit about capacity utilization. And so, you know, the business, there's 12 months of the year and and so we may be typically have high capacity utilization in November and into December. So there's opportunities and we've always said there's opportunities to kind of, you know, improve that capacity utilization across the full 12 months of the year.
Speaker Change: Sure.
Speaker Change: Good to see how much more growth.
Speaker Change: Do you expect to see from from that business.
Speaker Change: Have we reached a.
Speaker Change: A level that is consuming most of the time that you have available to put advertising advertising.
Speaker Change: Minutes in front of it.
Speaker Change: Consumers watching movies or Theres still more.
Speaker Change: Inventory you can sell at this point in time.
Speaker Change: Yes, so let's talk about so youre asking a bit about the capacity utilization and so the business 12 months of the year.
Speaker Change: And so we may be typically have high capacity utilization.
Speaker Change: In November and into December so theres opportunities and we've always said there's opportunities to kind of.
Speaker Change: Improve that capacity utilization across the full 12 months of the year now advertisers need to be wide AD campaigns during those periods.
Gord Nelson: Now, advertisers need to be wanting to have campaigns during those periods. But that's where there's opportunity. It's overall the capacity utilization is relatively low. In the first quarter, and we called out a couple of things as we saw some great success in new categories coming into cinema. So, pharma was one that we called out and so pharma had a significant improvement year over year. And when we think about pharma as a category going forward, you know, the category that's probably less impacted by general economic conditions than perhaps some of the other categories. The other thing that we wanted to kind of, just for me to call out too, is as we look at our revenue mix, this is the first quarter where our programmatic category ended up in our top five.
Speaker Change: But thats, where theres opportunity.
Speaker Change: Overall, the capacity utilization is relatively low in the first quarter and we called out a couple of things as we saw some great success in new categories coming into cinema. So pharma was one that we called out.
Speaker Change: And so pharma had a significant.
Speaker Change: <unk> year over year, and when we think about pharma as a category going forward.
Speaker Change: Its a category thats probably less.
Speaker Change: Impacted by general economic conditions, and perhaps some of the other categories. Maybe the other thing that we wanted to kind of just for me to call out too as we look at our our revenue mix. This is the first quarter, where where our programmatic category ended up in our top five and so programmatic is a big.
Gord Nelson: And so programmatic is a big opportunity for us. So, and again, we want to provide a portfolio of media solutions for our customers. So, you know, we have in cinema when the lights go dark, we have the pre-show, we have the lobby network, we have our mall networks, we have an entire portfolio of solutions that we can kind of Create and cater to the advertiser's needs. So we see opportunity, although we do recognize that, you know, there's there's general challenges in advertising, but we were one of the few, if not, perhaps the only category of advertising that showed improvement.
Speaker Change: The opportunity for us as we go forward so.
Speaker Change: And and.
And again we.
Speaker Change: We want to provide a portfolio of media solutions for our customers. So we have in cinema.
Speaker Change: Whitesville dark we have depreciable, we have the lobby network we.
Speaker Change: We have a mall networks, we have an entire portfolio of solutions that we can kind of <unk>.
Speaker Change: Create and cater to the advertiser's needs. So we see opportunity, although we do recognize that there.
Speaker Change: There is general challenges in advertising, but we were one of the few if not.
Speaker Change: Perhaps the only.
Speaker Change: Category of advertising that showed improvement in Q1.
Gord Nelson: Great. And my last question, Gord, when you were talking about the stock buyback in a year, you put that in the same sentence or close to the same sentence you were talking about, the fact that you're going to see improvement in free cash flow generation in the back half and also potentially in Q2. Is it fair to assume that The outlook on free cash flow provides a good window of opportunity here to see you come back with a more active buyback in the months to come. Yeah, look at our commentary was kind of unique. I was speaking specifically about Q1.
Speaker Change: Okay, Great and my last question.
Speaker Change: You were talking when you were talking about the stock buyback that you had.
Speaker Change: Yeah.
And in the year, you put that in the same sentence or close to the same sentence you were talking about the fact that youre going to see improvement in free cash flow generation in the back half.
Speaker Change: Also potentially in Q2 is it.
Speaker Change: Fair to assume that.
Speaker Change: The outlook on free cash flow provides a good window of opportunity here to see you.
Uh huh.
Speaker Change: Come back with more.
Speaker Change: Active buyback.
Speaker Change: And amongst become.
Speaker Change: Yes, we will get our commentary was kind of unique.
Speaker Change: I was speaking specifically about Q1, and just and I highlighted a number of things that resulted in the drain of cash, but youre absolutely right as we look forward.
Gord Nelson: And just, you know, and I highlighted a number of things that resulted in the drain of cash. But you're absolutely right, you know, as we look forward, and we balance the capital priorities of which, you know, kind of leverage, and capital, you know, capital investments, and share buybacks are all part of that equation. So things are looking encouraging going forward. And, you know, I'll leave it at that.
The capital priorities of which kind of leverage.
Speaker Change: Capital.
Speaker Change: Capital investments and share buybacks are all part of that equation. So things are looking encouraging going forward.
Speaker Change: And.
Speaker Change: I'll leave it at that for now.
Maher Yaghi: Okay, thank you. Thank you.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you.
Operator: Final call for questions, staff, followed by.
Speaker Change: I'm going to call for questions Star followed by one.
Ellis Jacob: We have no further questions, so I'll hand the call back to the management team for any closing comments.
Speaker Change: We have no further questions. So I'll hand, the call back to the management team for any closing comments.
Okay.
Operator: Thank you, sir, and thank you all for joining our call this morning. We are totally energized by the start of the second quarter and look forward to sharing our second quarter results with you in August. And we hope to see you at the movies very soon. Thank you.
Speaker Change: Thank you Sir and thank you all for joining our call. This morning.
Speaker Change: Totally energized by the start of the second quarter and look forward to sharing.
Speaker Change: Current quarter results with you in August and we would hope to see you at the movies very soon thank you.
Operator: This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines. Thank you.
Speaker Change: This concludes today's call. Thank you very much for your attendance you may now disconnect your lines.
Speaker Change: Thank you.
Speaker Change: [music].