Q1 2026 Cineplex Inc Earnings Call

May 11, 2026

Operator: Good day, and thank you for standing by. Welcome to the Cineplex Q1 2026 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Rayhan Azmat, Vice President, Investor Relations. Please go ahead.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star, 1, 1 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star, 1, 1 again. Please be advised that today's conference is being recorded.

Speaker #1: I'd now like to hand the conference over to Rayhan Azmat, Vice President of Investor Relations. Please go ahead.

Rayhan Azmat: Good morning, everyone. I would like to welcome you to Cineplex's Q1 2026 earnings release conference call. 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. 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 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. 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 #2: Good morning, everyone. I would like to welcome you to Cineplex's First Quarter 2026 earnings release conference call. I'm Rayhan Azmat, Vice President and Investor Relations.

Speaker #2: 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 #2: 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 information currently available.

Speaker #2: 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 #2: 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 #3: Thank you, Rayhan, and good morning, everyone. I'm pleased to join you today to discuss Cineplex's first quarter 2026 results. The first quarter of 2026 built on the momentum we've been seeing across the industry and our business, with attendance and box office increasing meaningfully year over year.

Ellis Jacob: Thank you, Rehan, good morning, everyone. I'm pleased to join you today to discuss Cineplex's Q1 2026 results. The Q1 2026 built on the momentum we've been seeing across the industry and our business with attendance and box office increasing meaningfully year over year. We delivered our highest Q1 revenue since 2019, our Q1 box office reached 125% of the prior, with record Q1 results across several key operating metrics. Most importantly, the performance we saw in Q1 reinforces what we have long known to be true. Where there is quality, consistency, and breadth in the film slate, theatrical doesn't just perform well, it creates unforgettable moments that bring Canadians together. Before I speak to our strong Q1 results, I'd like to talk about the tremendous energy coming out of CinemaCon.

Speaker #3: We delivered our highest first quarter revenue since 2019, and our Q1 box office reached 125% of the prior year, with record Q1 results across several key operating metrics.

Speaker #3: More importantly, the performance we saw in Q1 reinforces what we have long known to be true: when there is quality, consistency, and breadth in the film slate, theatrical doesn't just perform well; it creates unforgettable moments that bring Canadian together.

Speaker #3: Before I speak to our strong first quarter results, I'd like to talk about the tremendous energy coming out of CinemaCon. This year's event reinforced the strength of what's ahead, with strong early reactions for several high-profile upcoming releases, including Toy Story 5, Christopher Nolan's The Odyssey, Spider-Man: Brand New Day, Dune Park 3, and Avengers: Doomsday.

Ellis Jacob: This year's event reinforced the strength of what's ahead with strong early reactions for several high-profile upcoming releases, including Toy Story 5, Christopher Nolan's The Odyssey, Spider-Man: Brand New Day, Dune: Part Three, and Avengers: Doomsday. I haven't experienced this level of buzz coming out of CinemaCon in years. The presentations this year amplified the excitement surrounding these highly anticipated releases and the breadth and quality of the content for 2026 and beyond. Just as importantly, CinemaCon reinforced the industry's long-term commitment to the theatrical business. Amazon MGM reaffirmed its plans to theatrically release at least 15 films per year, making it clear that theatrical is not just an experiment but a core part of its strategy.

Speaker #3: I haven't experienced this level of buzz coming out of CinemaCon in years. The presentations this year amplified the excitement surrounding these highly anticipated releases and the breadth and quality of the content for 2026 and beyond.

Speaker #3: Just as importantly, CinemaCon reinforced the industry's long-term commitment to the theatrical business. Amazon MGM reaffirmed its plans to theatrically release at least 15 films per year, making it clear that theatrical is not just an experiment but a core part of its strategy.

Speaker #3: We also saw continued support for meaningful exclusive theatrical windows, with studios such as Universal and Paramount reaffirming windows of at least 45 days, joining Sony and Disney, whose films already extend beyond that threshold.

Ellis Jacob: We also saw continued support for meaningful exclusive theatrical windows with studios such as Universal and Paramount reaffirming windows of at least 45 days, joining Sony and Disney, whose films already extend beyond that threshold. Amazon MGM further demonstrated its commitment to longer windows by delaying the streaming release of Project Hail Mary. In addition, David Ellison outlined plans for up to 30 theatrical releases per year should the proposed Warner Bros. and Paramount transaction receive regulatory approval. While that process remains ongoing, the emphasis on theatrical output reflects the broader recognition of its importance in the life cycle of a film. Taken together, these developments reinforce the confidence studios have in the theatrical release being foundational to a film's success designed to create scale, impact, and cultural relevance.

Speaker #3: Amazon MGM further demonstrated its commitment to longer windows by delaying the streaming release of project Hail Mary. In addition, David Ellison outlined plans for up to 30 theatrical releases per year should the proposed Warner Bros.

Speaker #3: and Paramount transaction receive regulatory approval. While that process remains ongoing, the emphasis on theatrical output reflects the broader recognition of its importance in the lifecycle of the film.

Speaker #3: Taken together, these developments reinforce the confidence studios have in the theatrical release being foundational to a film's success, designed to create scale, impact, and cultural relevance.

Speaker #3: That positioning aligns well with Cineplex's strengths from our focus on hospitality and community building that brings audiences together. To our extensive premium format offerings that elevate the theatrical experience.

Ellis Jacob: That positioning aligns well with Cineplex's strengths from our focus on hospitality and community building that brings audiences together to our extensive premium format offerings that elevate the theatrical experience. Recently, Netflix announced that the upcoming Narnia film will now receive a wide release with a 49-day exclusive theatrical window in 2027 instead of only a limited release in IMAX screens. Non-traditional studios continue to expand their theatrical involvement as they increasingly recognize the benefits a theatrical release can have in elevating awareness and long-term performance. Finally, new agreements with both the Writers Guild and the Screen Actors Guild have resolved any uncertainty around labor negotiations. While the industry was not anticipating further disruptions, these agreements provide greater clarity and stability into the production pipeline as we look forward. The Q1 of 2026 featured a diverse slate with strength across original, franchise, and international programming.

Speaker #3: And recently, Netflix announced that the upcoming Narnia film will now receive a wide release with a 49-day exclusive theatrical window on 2027 instead of only a limited release in IMAX screens.

Speaker #3: Non-traditional studios continue to expand their theatrical involvement as they increasingly recognize the benefits a theatrical release can have in elevating awareness and long-term performance.

Speaker #3: Finally, new agreements with both the Writers Guild and the Screen Actors Guild have resolved any uncertainty around labor negotiations. While the industry was not anticipating further disruptions, these agreements provide greater clarity and stability into the production pipeline as we look forward.

Speaker #3: The first quarter of 2026 featured a diverse slate with strength across original, franchise, and international programming. Five films generated more than $100 million in domestic box office during the quarter, compared to two films in the first quarter of the prior year.

Ellis Jacob: Five films generated more than CAD 100 million in domestic box office during the quarter, compared to two films in Q1 of the prior year. This performance reflects the breadth of the slate with films resonating across genres, and demographics, and the importance a steady theatrical pipeline plays in solidifying moviegoing as a recurring entertainment choice. Original films played a particularly important role in Q1. Project Hail Mary delivered an outstanding performance and has become the highest-grossing Amazon MGM release of all time and the studio's first film to surpass CAD 300 million in domestic box office, a notable achievement for a non-traditional studio. The film resonated strongly with our guests with approximately 2/3 of its Q1 box office generated from premium experiences and Cineplex over-indexing significantly versus the US, capturing almost 10% of total domestic revenue.

Speaker #3: This performance reflects the breadth of the slate with films resonating across genres and demographics, and the importance of steady theatrical pipeline plays in solidifying movie-going as a recurring entertainment choice.

Speaker #3: Original films played a particularly important role in Q1. Project Hail Mary has become the highest-grossing Amazon MGM release of all time and the studio's first film to surpass $300 million in domestic box office a notable achievement for a non-traditional studio.

Speaker #3: The film resonated strongly with our guests with approximately two-thirds of its Q1 box office generated from premium experiences and Cineplex over-indexing significantly versus the US, capturing almost 10% of total domestic revenue.

Ellis Jacob: Pixar's Hoppers achieved the studio's biggest opening for original titles since 2017. Along with Goat, highlighted strong audience appetite for fresh storytelling in animated family films on the big screen. The strength in original storytelling was complemented by continuing demand for franchise films. Scream 7 set new records for the franchise, becoming both the largest opening and highest grossing film in the series, underscoring the appeal of established intellectual property. 30% of our Q1 box office was generated from films released in 2025, including franchise titles such as Avatar: Fire and Ash and Zootopia 2, highlighting the value of extended theatrical runs. International programming continues to be a distinct strength for Cineplex, representing approximately 13% of our Q1 box office, more than double the domestic average.

Speaker #3: Pixar's Hopper's achieved the studio's biggest opening for original titles since 2017, and along with GOAT, highlighted strong audience appetite for fresh storytelling in animated family films on the big screen.

Speaker #3: The strength in original storytelling was complemented by continuing demand for franchise films. Screen 7 set new records for the franchise becoming both the largest opening and highest-grossing film in the series underscoring the appeal of established intellectual property.

Speaker #3: Thirty percent of our first quarter box office was generated from films released in 2025, including franchise titles such as Avatar: Fire and Ash and Zootopia 2, highlighting the value of extended theatrical runs.

Speaker #3: International programming continues to be a distinct strength for Cineplex. Representing approximately 13% of our First Quarter box office more than double the domestic average.

Ellis Jacob: Dhurandhar: The Revenge became the highest grossing Hindi language film in North American history and the first to surpass CAD 25 million domestically, with Cineplex capturing more than 30% of the film's total box office. While Dhurandhar: The Revenge was a standout film, it represents less than half of our international box office in Q1. That outcome reflects both the breadth of international content we curate and our ability to use data and analytics to understand where films will perform best and how to connect them with the right audiences. These capabilities allow us to consistently over-index on international releases. Guest demand for premium experiences remains a critical differentiator for Cineplex, and we saw that demand strengthen year-over-year in Q1.

Speaker #3: Dundar, The Revenge, became the highest-grossing Hindi-language film in North American history and the first to surpass $25 million domestically with Cineplex capturing more than 30% of the film's total box office.

Speaker #3: While Dundar: The Revenge was a standout film, it represents less than half of our international box office in the first quarter. That outcome reflects both the breadth of international content we curate and our ability to use data and analytics to understand where films will perform best and how to connect them with the right audiences.

Speaker #3: These capabilities allow us to consistently over-index on international releases. Guest demand for premium experiences remains a critical differentiator for Cineplex, and we saw that demand strengthened year over year in the first quarter.

Ellis Jacob: By offering a broad range of premium formats that align with how guests want to experience films, we translated those preferences into record financial performance. Box office per patron reached a Q1 record of CAD 12.94, while concession per patron also delivered a Q1 record of CAD 9.54. Turning to our media, our Q1 results reflected the expected impact of the Olympics, which temporarily diverted advertising spend towards live sporting events. The tough year-over-year comparison also reflects particularly strong pharmaceutical spending in the prior year. Despite that dynamic, our cinemas remain a high-attention premium environment for advertisers. As we look ahead to the remainder of 2026, a strong film slate provides a backdrop for advertiser demand, and we are encouraged by the opportunities we see in the balance of the year.

Speaker #3: By offering a broad range of premium formats that align with how guests want to experience films, we translated those preferences into record financial performance.

Speaker #3: Box office per patron reached a first quarter record of $12.94, while concession per patron also delivered a Q1 record of $9.54. Turning to our media, our first quarter results reflected the expected impact of the Olympics, which temporarily diverted advertising spend towards live sporting events.

Speaker #3: The tough year-over-year comparison also reflects particularly strong pharmaceutical spending in the prior year. Despite that dynamic, our cinemas remain a high-attention, premium environment for advertisers.

Speaker #3: As we look ahead to the remainder of 2026, a strong film slate provides a backdrop for advertiser demand and we are encouraged by the opportunities we see in the balance of the year.

Ellis Jacob: On location-based entertainment delivered store-level margins at our targeted 25% despite the broader macroeconomic pressures facing the industry that have contributed to a year-over-year decline in revenues. This performance emphasizes our focus on optimizing operations. Looking ahead, we see a number of opportunities to drive increased traffic and engagement. The FIFA World Cup is expected to bring meaningful demand into our locations in the summer. In June of 2026, we'll be opening a new Playdium location at Vaughan Mills, one of Canada's most highly visited retail destinations. We are also continuing to enhance the guest experience through increased convenience and digital engagement. Alongside our mobile ordering capabilities, we recently expanded our offerings with the launch of our online merchandise shop, giving guests more ways to buy exclusive merchandise for the films they love.

Speaker #3: On location-based entertainment delivered store-level margins that are targeted 25% despite the broader macroeconomic pressures facing the industry. That have contributed to a year-over-year decline in revenues.

Speaker #3: The performance emphasizes our focus on optimizing operations. Looking ahead, we see a number of opportunities to drive increased traffic and engagement. The FIFA World Cup is expected to bring meaningful demand into our locations in the summer.

Speaker #3: In June of 2026, we'll be opening a new Palladium location at Vaughan Mills, one of Canada's most highly visited retail destinations. We're also continuing to enhance the guest experience through increased convenience and digital engagement.

Speaker #3: Alongside our mobile ordering capabilities, we recently expanded our offerings with the launch of our online merchandise shop. Giving guests more ways to buy exclusive merchandise for the films they love.

Ellis Jacob: Our CineClub memberships surpassed 230,000 members at the end of March, with members showing higher visit frequency, stronger premium adoption, and increased spending per visit. We also continue to evolve the guest experience through initiatives such as Monday Surprise Premieres, which continues to be well-received and helps create moments of exclusivity and discovery. Alongside programs such as Five Dollar Tuesdays, these initiatives play an important role in driving attendance and frequency and are particularly effective at re-engaging lapsed moviegoers. By bringing guests back into the theatrical environment, we help restart the moviegoing cycle from experiencing trailers and upcoming films on the big screen to ongoing communication that builds awareness and supports increased visitation. Within our broader loyalty ecosystem, Tangerine and Shell joined the Scene+ program in Q1, expanding the program's everyday relevance to now more than 50 million members.

Speaker #3: Our CineClub membership surpassed 230,000 members at the end of March with members showing higher visit frequency stronger premium adoption and increased spending per visit.

Speaker #3: We also continue to evolve the guest experience through initiatives such as Monday Surprise premieres, which continues to be well received and helps create moments of exclusivity and discovery.

Speaker #3: Alongside programs such as $5 Tuesdays, these initiatives play an important role in driving attendance and frequency and are particularly effective at re-engaging lapsed movie goers.

Speaker #3: By bringing guests back into the theatrical environment, we help restart the movie-going cycle from experiencing trailers and upcoming films on the big screen to ongoing communication that builds awareness and supports increased visitation.

Speaker #3: Within our broader loyalty ecosystem, Tangerine and Shell joined the Scene+ program in Q1. Expanding the program's everyday relevance to more than 515 million members.

Ellis Jacob: Following a successful launch in Alberta during Q1, the Shell partnership will roll out nationwide in May. Tangerine has also recently launched a new credit card that allows customers to earn and redeem Scene+ points, further extending the program into everyday financial services. With the ability to earn and redeem points across groceries, entertainment, dining, travel, and now fuel, Scene+ continues to create more touchpoints in the day-to-day lives of Canadians. I'd also like to provide a brief update on the online booking fee. The Federal Court of Appeal upheld the Competition Tribunal's decision regarding the presentation of our online booking fee. We respectfully disagree with that decision and continue to believe the fee has always been presented clearly.

Speaker #3: Following a successful launch in Alberta during the first quarter, the Shell partnership will roll out nationwide in May. Tangerine is also recently launched a new credit card that allows customers to earn and redeem Scene+ points.

Speaker #3: Further extending the program into everyday financial services. With the ability to earn and redeem points across groceries, entertainment, dining, travel, and now fuel, Scene+ continues to create more touch points in the day-to-day lives of Canadians.

Speaker #3: I'd also like to provide a brief update on the online booking fee. The federal code of appeal upheld the competition tribunal's decision regarding the presentation of our online booking fee.

Speaker #3: We respectfully disagree with that decision and continue to believe the fee has always been prevented clearly. We have filed an application for leave to appeal to the Supreme Court of Canada and have been granted an interim stay regarding a payment of the administrative monetary penalty and cost penalty and cost.

Ellis Jacob: We have filed an application for leave to appeal to the Supreme Court of Canada and have been granted an interim stay regarding a payment of the administrative warranty penalty and costs, pending the Supreme Court of Canada's decision on Cineplex's application seeking leave to appeal. Looking forward. As we look ahead, momentum from Q1 has clearly carried into Q2. The Super Mario Galaxy Movie delivered the largest opening of the year so far and the highest grossing Easter weekend in Cineplex history, reinforcing the power theatrical plays in creating cultural moments. From 1 March through the end of the Easter weekend, Cineplex operated 9 of the top 20 grossing theaters domestically, reflecting the appeal of our premium formats, the quality of our circuit, and our strong operational execution.

Speaker #3: Pending the Supreme Court of Canada's decision on Cineplex's application seeking leave to appeal. Looking forward, as we look ahead, momentum from the first quarter has clearly carried into the second quarter.

Speaker #3: The Super Mario Galaxy movie delivered the largest opening of the year so far, and the history reinforcing the power theatrical plays in creating cultural moments.

Speaker #3: From March 1st through the end of the Easter weekend, Cineplex operated nine of the top 20 grossing theaters domestically, reflecting the appeal of our premium formats: the quality of our circuit and our strong operational execution.

Ellis Jacob: The second quarter has also benefit from the release of Michael, which has achieved the biggest opening for a biopic and Lionsgate biggest opening since 2015, marking another important chapter for Cineplex Pictures, which is distributing the film in Canada. More broadly, 2026 is shaping out to be a strong year for our distribution business with momentum building from the continued performance of The Housemaid, a late 2025 release that generated meaningful box office in Q1, the release of Michael in Q2, and looking ahead to The Hunger Games: Sunrise on the Reaping later this year. Together, these films reflect the growing scale of Cineplex Pictures and our ability to consistently connect titles with Canadian audiences.

Speaker #3: The second quarter has also benefited from the release of Michael, which has achieved the biggest opening for a biopic and Lionsgate biggest opening since 2015.

Speaker #3: Marking another important chapter for Cineplex Pictures, which is distributing the film in Canada. More broadly, 2026 is shaping out to be a strong year for our distribution business, with momentum building from the continued performance of the Housemate, a late 2025 release that generated meaningful box office in the first quarter, the release of Michael in Q2, and looking ahead to the Hunger Games: Sunrise on the Reaping later this year.

Speaker #3: Together, these films reflect the growing scale of Cineplex Pictures and our ability to consistently connect titles with Canadian audiences. Capitalizing on the success of the Super Mario Galaxy movie and Michael, our April box office increased 17% over the prior year, driven by the strength of the slate alongside our ability to create compelling premium environments in which audiences choose to experience these films.

Ellis Jacob: Capitalizing on the success of The Super Mario Galaxy Movie and Michael, our April box office increased 17% over the prior year, driven by the strength of the slate, alongside our ability to create compelling premium environments in which audiences choose to experience these films. More recently, The Devil Wears Prada 2 delivered a record-breaking opening weekend well ahead of the original film, reinforcing the strength of adult-skewed event-driven content. This momentum carried through to this past weekend, one of the strongest domestic box office periods in recent years. Notably, it marks just the third weekend since 2019 where 3 films each generated over CAD 30 million of box office, with Mortal Kombat II opening strongly with Michael and The Devil Wears Prada 2 continuing to perform.

Speaker #3: More recently, The Devil Wears Prada 2 delivered a record-breaking opening weekend, well ahead of the original film, reinforcing the strength of adult screen event-driven content.

Speaker #3: This momentum carried through to this past weekend, one of the strongest domestic box office periods in recent years. Notably, it marked just the third weekend since 2019 where three films each generated over $30 million of box office, with Mortal Kombat 2 opening strongly with Michael and the Devil Wears Prada 2 continuing to perform.

Ellis Jacob: Driven by the strength of the slate, alongside our ability to create compelling premium environments in which audiences choose to experience these films, our Q2 box office to date is up 23% over the prior. The remainder of 2026 continues to shape up as one of the most compelling film slates we've seen in years, defined by depth and diversity across multiple categories. Family audiences will be well-served with a strong lineup that includes Toy Story 5, Minions & Monsters, a live-action Moana, and Jumanji: Open World. The superhero universe is also featured prominently with highly anticipated releases including Supergirl, Spider-Man: Brand New Day, already the most watched trailer of all time, Clayface, and Avengers: Still to Date.

Speaker #3: Driven by the strength of the slate, alongside our ability to create compelling premium environments in which audiences choose to experience these films, our second quarter box office to date is up 23% over the prior year.

Speaker #3: The remainder of 2026 continues to shape up as one of the most compelling film slates we've seen in years, defined by depth and diversity across multiple categories.

Speaker #3: Family audiences will be well served with a strong lineup that includes Toy Story 5, Minions and Monsters, a live-action Moana, and Jumanji: Open World.

Speaker #3: The superhero universe is also featured prominently with highly anticipated releases including Supergirl, Spider-Man: Brand New Day, Already the Most Watched Trailer of All Time, Clayface, and Avengers: Doomsday.

Ellis Jacob: Original storytelling remains an important driver with titles such as Steven Spielberg's Disclosure Day, Christopher Nolan's epic The Odyssey, Digger starring Tom Cruise, and Pixar's Hex offering fresh content. Beyond that, a wide range of established IP round out the slate from sci-fi films Star Wars: The Mandalorian & Grogu and Dune: Part Three to the comedy Focker-in-Law. With this breadth across genres and a continued focus on the guest experience, we believe Cineplex is well-positioned to capture the full value of a strengthening theatrical landscape. I will now turn the call over to Gordon Nelson, our Chief Financial Officer, to walk through the financials in more detail.

Speaker #3: Original storytelling remains an important driver, with titles such as Steven Spielberg's Disclosure Day: Christopher Nolan's epic The Odyssey, Digger starring Tom Cruise and Pixar's Hex, offering fresh content.

Speaker #3: Beyond that, a wide range of established IP rounded out the slate from sci-fi films Star Wars: The Mandalorian and Grogu and Dune: Part III to the comedy Folker in Law.

Speaker #3: With this breadth across genres, and a continued focus on the guest experience, we believe Cineplex is well positioned to capture the full value of a strengthening theatrical landscape.

Speaker #3: I will now turn the call over to Gord Nelson, our Chief Financial Officer, to walk through the financials in more detail.

Gord Nelson: Thanks, Ellis. I am pleased to present a condensed summary of the Q1 2026 results for Cineplex Inc. For further reference, our financial statements and MD&A have been filed on SEDAR+ 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. I will focus on highlighting select items in addition to providing commentary on liquidity, capital allocation priorities, and our outlook. For my comments on operations, all amounts following will be from continuing operations unless otherwise stated. The Q1 reflected a meaningful improvement in performance compared to the prior year, driven by a stronger film slate and higher attendance, partially offset by continued macroeconomic pressure in certain non-theatrical businesses.

Speaker #2: Thanks, Alice. I am pleased to present a condensed summary of the first quarter 2026 results for Cineplex Inc. For further reference, our financial statements and MD&A have been filed on SEDAR+ and are also available on our investor relations website at cineplex.com.

Speaker #2: Our MV&A and earnings press release included 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 our outlook.

Speaker #2: For my comments on operations, all amounts following will be from continuing operations unless otherwise stated. The first quarter reflected a meaningful improvement in performance compared to the prior year, driven by a stronger film slate and higher attendance.

Speaker #2: Partially offset by continued macroeconomic pressure in certain non-theatrical businesses. Total revenues for the quarter were $291 million, an increase of 15.6% from $251.7 million in Q1 2025.

Gord Nelson: Total revenues for the quarter were CAD 291 million, an increase of 15.6% from CAD 251.7 million in Q1 2025, primarily driven by a 17.3% increase in theater attendance to 9.8 million guests. Our consolidated adjusted EBITDA for the quarter was CAD 4.1 million compared to a loss of CAD 10.7 million in the prior year. This improvement reflects higher attendance and strength in per patron metrics. Let's take a closer look at the segments. In the Film Entertainment and Content segment, box office revenue increased 25% year over year to CAD 127.4 million, supported by the 17.3% increase in attendance and a higher mix of premium products.

Speaker #2: Primarily driven by a 17.3% increase in theater attendance to 9.8 million guests. Our consolidated adjusted EBITDA for the quarter was $4.1 million, compared to a loss of $10.7 million in the prior year.

Speaker #2: This improvement reflects higher attendance and strength in per-patron metrics. So let's take a closer look at the segments. In the film entertainment and content segment, box office revenue increased 25% year-over-year to $127.4 million.

Speaker #2: Supported by the 17.3% increase in attendance and a higher mix of premium products. Attendance increased by 1.5 million guests, reflecting improved content breadth versus the prior year, with strong contributions from titles such as Project Hail Mary, Hoppers, There Under, The Revenge, and Goat, as well as extended theatrical runs from 2025 films Avatar: Fire and Ash and Zootopia 2.

Gord Nelson: Attendance increased by 1.5 million guests, reflecting improved content breadth versus prior year, with strong contributions from titles such as Project Hail Mary, Hoppers, They're Under, The Revenge, and Goat, as well as extended theatrical runs from 2025 films, Avatar: Fire and Ash and Zootopia 2. March, in particular, represented a material step up in performance, culminating in our strongest Q1 box office since 2019. Box office revenue per patron increased to a Q1 record of CAD 12.94, up 6.6% from the prior year, driven by strategic pricing initiatives, film mix, and an increase in revenue from premium formats, which accounted for 38.2% of box office revenue, up from 35.6% last year.

Speaker #2: March in particular represented a material step up in performance, culminating in our strongest first quarter box office since 2019. Box office revenue per patron increased to a first quarter record of $12.94, up 6.6% from the prior year.

Speaker #2: Driven by strategic pricing initiatives, film mix, and an increase in revenue from premium formats, which accounted for 38.2% of box office revenue, up from 35.6% last year.

Gord Nelson: Theater food service increased 22.5% to CAD 93.9 million, reflecting the increase in attendance and purchase incidents. Concession revenue per patron reached a Q1 record of CAD 9.54, an increase of 4.5% year over year. Other revenue increased 22.2% year over year, reflecting increased attendance as well as a stronger quarter from our distribution business. Results from Cineplex Pictures benefited from the continued performance of The Housemaid, which was released late in 2025 and contributed meaningfully during the Q1. The increase in attendance over the prior year highlights our operating leverage.

Speaker #2: Theater food service increased 22.5% to 93.9 million, reflecting the increase in attendance and purchase incidents. Concession revenue per patron reached a first quarter record of $9.54, an increase of 4.5% year over year.

Speaker #2: Other revenue increased 22.2% year over year, reflecting increased attendance, as well as stronger quarter from our distribution business, results from Cineplex Pictures benefited from the continued performance of the Housemade, which was released late in 2025, and contributed meaningfully during the first quarter.

Speaker #2: The increase in attendance over the prior year highlights our operating leverage. While theater payroll and theater operating expenses increased year over year, growth in these costs remained well below the rate of growth in attendance and revenue.

Gord Nelson: While theater payroll and theater operating expenses increased year-over-year, growth in these costs remained well below the rate of growth in attendance and revenue, reflecting the largely fixed nature of our costs and the benefit each incremental attendee brings to our extra bi- exhibition business. Cash rent paid and payable is lower relative to the prior year due to closed locations and the renegotiation of leases upon renewal. Other occupancy costs increased by approximately CAD 0.8 million over the prior year, primarily due to increased common area maintenance and real estate tax expenses. Segment adjusted EBITDA for film entertainment and content was CAD 8.9 million, representing a significant improvement compared to a loss of CAD 12.4 million in the prior year, driven by attendance recovery and per patron growth.

Speaker #2: Reflecting the largely fixed nature of our costs and the benefit each incremental attendee brings to our exhibition business, cash rent paid and payable is lower relative to the prior year due to closed locations and the renegotiation of leases upon renewal.

Speaker #2: Other occupancy costs increased by approximately 0.8 million over the prior year, primarily due to increased common area maintenance and real estate tax expenses. Segment adjusted EBITDA for film entertainment and content was 8.9 million, representing a significant improvement compared to a loss of 12.4 million in the prior year.

Speaker #2: Driven by attendance recovery and per patron growth. In the media segment, revenues declined 18.9% year over year to $13.9 million. This performance reflects lower demand for in-theater advertising, driven by the diversion of spend toward the 2026 Winter Olympics and a tougher year-over-year comparison following significantly higher pharmaceutical advertising spend in the prior year.

Gord Nelson: In the media segment, revenues declined 18.9% year-over-year to CAD 13.9 million. This performance reflects lower demand for in-theater advertising, driven by the diversion of spend toward the 2026 Winter Olympics and a tougher year-over-year comparison following significantly higher pharmaceutical advertising spend in the prior year. Cinema media per patron declined to CAD 1.41 compared to CAD 2.04 in the prior year, reflecting the decreased demand despite higher attendance during the period. Adjusted EBITDA for the media segment was CAD 9.6 million compared to CAD 12.9 million in the prior year, reflecting lower revenues during the quarter. Location-Based Entertainment revenues for the quarter were CAD 35 million, a decrease of 8.1% year-over-year.

Speaker #2: Cinema media per patron declined to $1.41 compared to $2.04 in the prior year, reflecting the decreased demand despite higher attendance during the period. Adjusted EBITDA for the media segment was 9.6 million, compared to 12.9 million in the prior year, reflecting lower revenues during the quarter.

Speaker #2: Location-based entertainment revenues for the quarter were $35 million, a decrease of 8.1% year over year. Same-store revenues excluding the 2024 new builds were down 5.6%, which aligns closer to the declines we are seeing in the industry as a result of the broader economic headwinds.

Gord Nelson: Same-store revenues excluding the 2024 new builds were down 5.6%, which aligns closer to the declines we are seeing in the industry as a result of the broader economic headwinds. Despite this, adjusted store level EBITDA margin declined modestly and remained at our targeted 25%, supported by labor optimization and operating efficiencies. Notably, our same store, excluding 2024 new builds, the adjusted store level EBITDA margin was 27.8%. Adjusted store level EBITDA decreased to CAD 8.8 million compared to CAD 9.8 million in the prior year, primarily due to lower revenues, partially offset by cost controls.

Speaker #2: Despite this, adjusted store-level EBITDA margin declined modestly and remained at our targeted 25%. Supported by labor optimization and operating efficiencies. Notably, our same store excluding 2024 new builds the adjusted store-level EBITDA margin was 27.8%.

Speaker #2: Adjusted store-level EBITDA decreased to 8.8 million compared to 9.8 million in the prior year, primarily due to lower revenues partially offset by cost controls.

Speaker #2: At the segment level, despite the revenue decline, adjusted EBITDA was only down slightly at $7.2 million versus $7.7 million in the prior year, and the segment adjusted EBITDA margin increased modestly to 20.7% from 20.2% in the prior year, highlighting the operational efficiencies implemented at the segment overhead level.

Gord Nelson: At the segment level, despite the revenue decline, adjusted EBITDA was only down slightly at CAD 7.2 million versus CAD 7.7 million in the prior year, and the segment adjusted EBITDA margin increased modestly to 20.7% from 20.2% in the prior year, highlighting the operational efficiencies implemented at the segment overhead level. G&A expenses for the quarter were CAD 21.6 million, an increase from CAD 18.9 million in the prior year. The increase is primarily due to timing of recognition of LTIP expenses for retirement-eligible employees and increased LTIP costs from an increase in Cineplex's common share price, partially offset by lower costs in other G&A expense categories.

Speaker #2: G&A expenses for the quarter were $21.6 million, an increase from $18.9 million in the prior year. The increase is primarily due to the timing of recognition of LTIP expenses for retirement-eligible employees and increased LTIP costs from an increase in Cineplex's common share price, partially offset by lower costs in other G&A expense categories.

Speaker #2: We ended the first quarter with $77.9 million of cash on the balance sheet and no drawings under our $100 million covenant-like revolving credit facility.

Gord Nelson: We ended Q1 with CAD 77.9 million of cash on the balance sheet and no drawings under our CAD 100 million covenant-like revolving credit facility. During the quarter, we completed an amendment to extend the maturity of our bank credits agreement to September 2028 or March 2029, depending on the status of our secured notes. The extension preserves the covenant-like structure but does not contain financial maintenance covenants. The amendment provides flexibility with respect to permitted distributions and debt repayments, strengthening our liquidity profile and financial flexibility. Net capital expenditures for the quarter were CAD 6.7 million, reflecting a spend of approximately CAD 3 million related to our Playdium location opening at Vaughan Mills in the summer.

Speaker #2: During the quarter, we completed an amendment to extend the maturity of our bank credit agreements to September 2028 or March 2029, depending on the status of our secured notes.

Speaker #2: The extension preserves the covenant-like structure but does not contain financial maintenance covenants. The amendment provides flexibility with respect to permitted distributions and debt repayments strengthening our liquidity profile and financial flexibility.

Speaker #2: Net capital expenditures for the quarter were 6.7 million reflecting a spend of approximately $3 million related to our Palladium location opening at Vaughan Mills in the summer.

Gord Nelson: The decline in capital expenditures relative to the prior year is primarily due to the timing of cash payments, with Q1 of the prior year being elevated due to the 3 LBE locations that opened in the Q4 of 2024. Our guidance for the year continues at approximately CAD 50 million. Our capital allocation priorities remain unchanged and include maintenance capital expenditures, strengthening the balance sheet to achieve our target leverage ratios, providing shareholder returns in the form of share buybacks and/or dividends, and selective investment in growth opportunities. During the Q1, we repurchased approximately CAD 5 million in common shares for cancellation under our normal course issuer bid. We continue to view share repurchases as a flexible tool within our capital allocation framework, subject to liquidity and restrictions under our debt agreements and market conditions.

Speaker #2: The decline in capital expenditures relative to the prior year is primarily due to the timing of cash payments, with Q1 of the prior year being elevated due to the three LBE locations that opened in the fourth quarter of 2024.

Speaker #2: Our guidance for the year continues at approximately $50 million. Our capital allocation priorities remain unchanged and include maintenance capital expenditures, strengthening the balance sheet to achieve our target leverage ratios, providing shareholder returns in the form of share buybacks and/or dividends, and selective investment in growth opportunities.

Speaker #2: During the first quarter, we repurchased approximately $5 million in common shares for cancellation under our normal course issuer bid. We continue to view share repurchases as a flexible tool within our capital allocation framework.

Speaker #2: Subject to liquidity, restrictions under our debt agreements and market conditions. In light of ongoing global and economic uncertainty, we continue to monitor potential impacts to our business.

Gord Nelson: In light of ongoing global and economic uncertainty, we continue to monitor potential impacts to our business. We do not expect these conditions to have a material effect on Cineplex's operations. Our business is not meaningfully exposed to fuel-related costs, and the majority of goods sold across our circuit are sourced from North America, limiting exposure to supply chain disruption. As a result, we do not anticipate any material impact to operating performance or liquidity. Before concluding, I would like to take a moment to recognize Ellis Jacob. At CinemaCon last month, Ellis was named the recipient of the Legend of Cinema Award, one of the highest honors in the global exhibition industry. This recognition speaks not only to his decades of leadership at Cineplex, but also to his lasting impact on theatrical exhibition worldwide. On behalf of the entire Cineplex team, congratulations, Ellis, on this very well-deserved honor.

Speaker #2: We do not expect these conditions to have a material effect on Cineplex's operations. Our business is not meaningfully exposed to fuel-related costs, and the majority of goods sold across our circuit are sourced from North America limiting exposure to supply chain disruption.

Speaker #2: As a result, we do not anticipate any material impact to operating performance or liquidity. Before concluding, I would like to take a moment to recognize Ellis Jacob.

Speaker #2: At CinemaCon last month, Ellis was named the recipient of the Legend of Cinema Award. One of the highest honors in the global exhibition industry.

Speaker #2: This recognition speaks not only to his decades of leadership at Cineplex, but also to his lasting impact on theatrical exhibition worldwide. On behalf of the entire Cineplex team, congratulations, Ellis, on this very well-deserved honor.

Gord Nelson: Building on the momentum from Q1, industry excitement following CinemaCon is the highest we have seen in years. This sentiment reflects recent successes and the breadth and consistency of the 2026 film slate positions us well for the remainder of the year. We expect this increased depth of content to support continued attendance momentum throughout 2026. At the same time, we remain focused on disciplined capital management, strengthening our financial flexibility, and executing against our long-term strategic priorities. With that, I will turn it back to the operator for questions.

Speaker #2: Building on the momentum from the first quarter, industry excitement following CinemaCon is the highest we have seen in years. This sentiment reflects recent successes and the breadth and consistency of the 2026 film slate, and positions us well for the remainder of the year.

Speaker #2: We expect this increased depth of content to support continued attendance momentum throughout 2026. At the same time, we remain focused on disciplined capital management, strengthening our financial flexibility, and executing against our long-term strategic priorities.

Speaker #2: With that, I will turn it back to the operator for questions.

Operator: Our first question comes from Adam Shine with National Bank.

Speaker #1: On your touchtone phone, and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from Adam Shine with National Bank.

Operator: Our first question comes from Adam Shine with National Bank.

Adam Shine: Hello.

Speaker #3: Hello.

Speaker #4: Good morning, Adam.

Gord Nelson: Morning, Adam.

Speaker #3: Hi. Hi. Good morning. I'm not sure I was hearing anything. Okay, I can hear you now, so that's great. So, a couple of questions.

Operator: Morning, Adam.

Ellis Jacob: Morning, Adam.

Adam Shine: Hi. Good morning. I'm not sure I was hearing anything. Okay, I can hear you now, so that's great. A couple of questions. One for you, Ellis. Just, you know, coming out of CinemaCon, a lot of positives. You had highlighted, I think, going into it that you had hoped to see the studios maybe step up some of their marketing going forward. Maybe you could just talk to whether, you know, there are any commitments related to that. For Gord and you, Ellis, as well, just in the context of media, very clear as to what transpired in the Q1.

Speaker #3: One for you, Ellis. Just coming out of CinemaCon, a lot of positives. You had highlighted, I think, going into it that you had hoped to see the studios maybe step up some of their marketing going forward.

Speaker #3: Maybe you could just talk to whether there were any commitments related to that. And then for Gord, and you, Ellis, as well, just in the context of media, be very clear as to what transpired in the Q1.

Speaker #3: Maybe talk about how things are going so far in Q2, and any particular concerns heading into the World Cup month, and whether we might see a repeat of the Olympics dynamic or perhaps not.

Adam Shine: Maybe talk about how things are going so far, in the Q2 and any particular concerns heading into, you know, the World Cup months and whether, you know, we might see a repeat of the Olympics dynamic or perhaps not? Thanks.

Speaker #3: Thanks.

Speaker #4: Yeah. In response regarding CinemaCon and the area of promotion and media, we are really working very hard and well with the studios in using the data and basically being able to attract our guests in a big way back to the movie that they are releasing across the next four quarters and into 2027.

Ellis Jacob: Yeah. In response regarding CinemaCon and the area of promotion and media, we are really working very hard and well with the studios in using the data and basically being able to attract our guests in a big way back to the movie that they are releasing across the next four quarters and into 2027. I think that's been a real positive. Given the window making it longer also is beneficial overall because you're getting a longer period of time for these films to play through. You look at a movie like Devil Wears Prada and how well it's done, and it was pretty tough to get a movie ticket on the weekend to see that movie.

Speaker #4: So, I think that's been a real positive. And, given the window-making at longer, also is beneficial overall, because you're getting a longer period of time for these films to play through.

Speaker #4: And you look at a movie like Devil Wears Prada and how well it's done, and it was pretty tough to get a movie ticket on the weekend to see that movie.

Speaker #4: So those are all positives for us going forward, and we are excited about both the slate and the ability to push the movies in a big way.

Ellis Jacob: Those are all positives for us going forward. We are excited about both the slate and the ability to push the movies in a big way.

Gord Nelson: On the second question on media, Adam. A couple call-outs on media. You know, last year was an incredibly strong year for the media business. If you actually went back to 2024, we had, you know, we actually had the same attendance levels in Q1 2024, and our media revenue is up 12% versus that quarter. We were down CAD 3.2 million versus last year, as we noted. Roughly CAD 2.2 million of that was related to kind of reduced spend from pharma. You know, the extra color on pharma for your interest is that, you know, a number of the weight loss drugs had their patents expiring at the end of 2025.

Speaker #5: And on the second question then on media then, Adam, so a couple of callouts on media. So last year was an incredibly strong year for the media business.

Speaker #5: If you actually went back to 2024, we actually had the same attendance levels in the first quarter of 2024. And our media revenue is up 12% versus that quarter.

Speaker #5: We were down 3.2 million dollars versus last year as we've noted. Roughly 2.2 million of that was related to kind of reduced spend from pharma.

Speaker #5: And so the extra color on pharma for your interest is that a number of the weight loss drugs had their patents expiring at the end of 2025.

Gord Nelson: There was significant spending throughout 2025, in particular in Q1, to get their brand awareness out there. Yes, the Olympics had a little bit of an impact. We do not foresee that the FIFA will have the same level of impact in our business as the Olympics had, you know, as we will look to take advantage of FIFA in our LBE locations, and then kind of just sort of general excitement around it occurring in Canada.

Speaker #5: And so there was significant spending throughout 2025, and particularly in the first quarter, to get the brand awareness out there. So yes, the Olympics had a little bit of an impact.

Speaker #5: We do not foresee that the FIFA will have the same level of impact in our business as the Olympics had as we will take look to take advantage of FIFA in our LVE locations.

Speaker #5: And then kind of just for general excitement around it occurring in Canada.

Speaker #3: Thank you. Just thanks for that, Ellis and Gord. Gord, can you just elaborate a little bit further as to how the early trend is so far for media in Q2?

Adam Shine: Thank you. Just thanks for that, Ellis and Gord. Gord, can you just elaborate a little bit further as to how the early trend is so far for media into Q2?

Speaker #4: Yeah. So, look, we continue to see strength. I would say, as you look at sort of the remainder of the year, Ellis has highlighted the strength of the product, and Adam, I think you're aware of some of the domestic box office predictions out there.

Gord Nelson: Yeah. We continue to see strength. I would say if you look at sort of the remainder of the year, you know, Ellis has highlighted, you know, strength of the product. Adam, I think you're aware of sort of some of the domestic box office predictions out there. General economic conditions are, you know, are obviously tougher. Overall advertising spend was down in Q1 in Canada, so not just for Cineplex. If we see attendance growth in the remainder of the year, we would expect that our media business should grow in relation to that attendance growth.

Speaker #4: General economic conditions are obviously tougher. Overall advertising spend is down in Q1, in Canada, so not just for Cineplex. So as we see attendance growth in the remainder of the year, we would expect that our media business should grow in relation to that attendance growth.

Speaker #3: Okay, great. I'll queue up again. Thank you very much.

Adam Shine: Okay, great. I'll queue up again. Thank you very much.

Speaker #4: Thank you.

Ellis Jacob: Thank you.

Operator: As a reminder, to ask a question, please press star one one. Our next question comes from Cheryl Zhang with TD Cowen.

Speaker #1: As a reminder to ask a question, please press star 11. Our next question comes from Cheryl Zheng with TD Cowen.

Cheryl Zhang: Good morning, Ellis and Gord. Thanks for taking our questions, and congratulations, Ellis, on the well-deserved recognition.

Speaker #6: Hey, good morning, Ellis and Gord. Thanks for taking our questions and congratulations, Ellis, on the well-deserved recognition.

Cheryl Zhang: Good morning, Ellis and Gord. Thanks for taking our questions, and congratulations, Ellis, on the well-deserved recognition.

Speaker #4: Thank you very much.

Ellis Jacob: Thank you very much.

Cheryl Zhang: First question is on CPP. You called out higher purchase incidents as the main driver of growth. Can you provide some color around what's driving that and what you're seeing in terms of consumer purchasing behavior?

Speaker #6: So our first question is on CPP. So you called out higher purchase incidents as the main driver of growth. Can you provide some color around what's driving that and what you're seeing in terms of consumer purchasing behavior?

Speaker #4: Yeah, so Cheryl, the one thing that we've always found is theatrical exhibition is very resilient in general economic conditions. And when customers come out, they want an indulgence, and they want to spend.

Gord Nelson: Cheryl, you know, the one thing that we've always found is theatrical exhibition is very resilient to general economic conditions. When customers come out, they want an indulgence and they want to spend both in buying a ticket and also at the concession stand. When I look at the CPP being up roughly 4.5% in Q1, approximately 3.25% of that is pricing, and the remainder is sort of the basket size and the incidence of purchase at the concession stand. Guests feel like they wanna come out, and they wanna spend, and they wanna buy and have their total experience when they come out.

Speaker #4: Both in buying a ticket and also at the concession stand. So when I look at the CPP being up roughly four and a half percent in the first quarter, approximately three and a quarter percent of that is pricing and the remainder is sort of the basket size and the incidence of purchase at the concession stand.

Speaker #4: So guests feel that they want to come out, and they want to spend, and they want to buy and have their total experience when they come out.

Ellis Jacob: As economic conditions get tougher, they stay closer to home, and the movie theater becomes a great entertainment option. It's very important that we provide them with the choices.

Speaker #5: And as economic conditions get tougher, they stay closer to home, and the movie theater becomes a great entertainment option. And it's very, very important that we provide them with the choices.

Ellis Jacob: As economic conditions get tougher, they stay closer to home, and the movie theater becomes a great entertainment option. It's very important that we provide them with the choices.

Speaker #6: Absolutely. And that's great color, thank you. So, on LVE, were there any changes in consumer behavior in Q1 versus Q4? I guess, how has the trend been so far in Q2?

Cheryl Zhang: Absolutely, and that's great color. Thank you. On LBE, were there any changes in consumer behavior in Q1 versus Q4? I guess, how has it trended so far in Q2? Then maybe just to follow up on that, you mentioned that there were initiatives that helped improve operating efficiency there. I wonder if you could provide some color around that.

Speaker #6: And maybe just to follow up on that, you mentioned that there were initiatives that helped improve operating efficiency there. I wonder if you could provide some color around that.

Gord Nelson: Sure. I mean, the trends that we were seeing in Q1 are just really a continuation of some of the consumer trends that we've seen throughout 2025. Particularly the one that's most noticeable, across not only our business but, you know, the restaurant sector and just general, the alcohol spirits beverage in general is reduced consumption of alcoholic beverages across Canada and the US. We're continuing to see spend in alcohol decrease. That's one trend that we can continue to see. Obviously with economic conditions too, and the cost of fuels, we're seeing, you know, a little bit of a spend. It's a bit more of a discretionary spend in the LBE business.

Speaker #4: Sure. So, I mean, the trends that we were seeing in Q1 are just really a continuation of some of the consumer trends that we've seen throughout 2025.

Speaker #4: And particularly the one that's most noticeable across not only our business but the restaurant sector, and just generally the spirits and beverage industry in general, is reduced consumption of alcoholic beverages.

Speaker #4: Across Canada and the US. So we're continuing to see spend in alcohol decrease. And that's one trend that we can continue to see. Obviously, with economic conditions too and the cost of fuels, we're seeing a little bit of a spend.

Speaker #4: It's a bit more of a discretionary spend in the LVE business.

Speaker #6: Thank you.

Cheryl Zhang: Thank you.

Gord Nelson: Sorry. In terms of efficiencies then and operating costs, obviously we've looked at where spending is going, and we've managed and looked at the tools that we have in place, and the systems in place to better optimize the labor scheduling in our boxes. We've been able to optimize our scheduling in relation to the business levels that we're seeing through. Whether that means the business levels at the bar versus the business levels, you know, at the amusement side of things.

Speaker #4: And in terms of efficiencies then, and operating costs, so obviously, we've looked at kind of where spending is going, and we've managed and looked at the tools that we have in place and the systems in place to better optimize the labor scheduling in our boxes.

Speaker #4: So we've been able to kind of optimize our scheduling in relation to the business levels that we're seeing through. And whether that means the business levels at the bar versus the business levels at the amusement side of things.

Speaker #6: Okay. That's helpful. Thanks so much, Rikyu.

Cheryl Zhang: Okay. That's helpful. Thanks so much. I'll requeue.

Speaker #4: Thank you.

Ellis Jacob: Thank you.

Operator: That concludes today's question and answer session. I'd like to turn the call back to Ellis Jacob for closing remarks.

Speaker #1: That concludes today's question-and-answer session. I'd like to turn the call back to Ellis Jacob for closing remarks.

Ellis Jacob: Thank you. Thank you all again for joining us this morning. We are excited for the remainder of 2026 and beyond and look forward to seeing you at our venues. Have a great day and a wonderful week. We got any other questions? Sarah, are you gonna double-check and confirm that there are no further questions?

Speaker #4: Thank you all again for joining us this morning. We are excited for the remainder of 2026 and beyond and look forward to seeing you at our venues.

Speaker #4: Have a great day and a wonderful week. We've got any other questions?

Speaker #5: So we're just going to double-check and confirm that there are no further questions.

Speaker #1: We do have a follow-up from Cheryl Zheng with TD Cowen. Your line is now open.

Operator: We do have a follow-up from Cheryl Zhang with TD Cowen. Your line is now open.

Cheryl Zhang: Hello.

Speaker #6: Hello? Oh, okay. Great. Wasn't sure I was still connected. Yeah. And just quickly, maybe recently, there was a media report on you exploring a potential sale of.

Ellis Jacob: Hi, Cheryl.

Cheryl Zhang: Oh, okay. Great. wasn't sure I was still connected. Yeah, just quickly, maybe, recently, there was a media report on you exploring a potential sale. I'm curious if you have any thoughts on that and any thoughts on the potential strategic review.

Speaker #6: I'm curious if you have any thoughts on that and any thoughts on the potential strategic review.

Ellis Jacob: You know, there's a lot of discussions out there, but we don't really comment on rumors. Our focus now is to strengthen the company, the balance sheet, and enjoy the product as we move forward through the 2026 and 2027 year.

Speaker #4: There's a lot of discussions out there, but we don't really comment on rumors. We are focused now on strengthening the company, the balance sheet, and enjoying the product as we move forward through the 2026 and 2027 year.

Speaker #6: Okay. Understood. Thank you.

Cheryl Zhang: Okay. Understood. Thank you.

Speaker #4: Thank you.

Ellis Jacob: Thank you.

Operator: As a reminder, that is star one one if you'd like to ask a question at this time. I'm showing no further questions in queue. Again, please press star one one to ask a question. We have a question from the line of Maher Yaghi with Scotiabank.

Speaker #1: As a reminder, that is star 11 if you'd like to ask a question at this time. I'm showing no further questions in queue. Again, please press star 11 to ask a question.

Speaker #1: We have a question from the line of Mayor Yagi, Wisconsin Bank.

Maher Yaghi: Great. Thank you. Been trying to get on the call. Perfect. Thanks for taking my question. I wanted to ask you know, I've been hearing industry discussions suggesting theatrical windows may be stabilizing or lengthening. Are you seeing any tangible benefit in, you know, can you confirm that and, you know, maybe, you know, some discussion about the premium mix that you're seeing in your theaters?

Speaker #7: Great, thank you. I've been trying to get on the call. Perfect, thanks for taking my question. I wanted to ask you—I've been hearing industry discussions suggesting theatrical windows may be stabilizing or lengthening.

Speaker #7: Are you seeing any tangible benefit in—are you seeing—can you confirm that? And maybe some discussion about the premium mix that you're seeing in your theaters?

Ellis Jacob: Yeah, great question. Definitely we are seeing the benefits of the lengthening window. You look at a movie like Project Hail Mary with Amazon extending the timeframe before it goes to streaming, and it's doing extremely well in the theater. It also helps us reduce consumer confusion because now you know you're not gonna be able to just turn your TV on and see the movie. That really helps, and it's getting stronger as we move forward. As we've always said, we are really the engine that drives the train for the theatrical and the future of the title and its benefits through the other different portfolios.

Speaker #4: Yeah, great question. And definitely, we are seeing the benefits of the lengthening window. You look at a movie like Project Hail Mary, with Amazon extending the timeframe before it goes to streaming.

Speaker #4: And it's doing extremely well in the theater. And it also helps us reduce consumer confusion, because now you know you're not going to be able to just turn your TV on and see the movie.

Speaker #4: And that really helps. And it's getting stronger as we move forward. And as we've always said, we are really the engine that drives the train for the theatrical and the future of the title and its benefits through the other different portfolios.

Maher Yaghi: Look, are you seeing it across the board, these kind of moves? You know, because in the past, that was a worry for investors, I guess. Are you seeing that lengthening happening across different studios, or it's still specific to certain producers?

Speaker #7: Ellis, are you seeing it across the board, these kinds of moves? Because in the past, that was a worry for investors, I guess. But are you seeing that lengthening happening across different studios, or is it still specific to certain studios?

Ellis Jacob: No, at CinemaCon, we got some definitive, you know, lengthening of the windows. Universal talked about it publicly and so did Paramount, which was extremely beneficial. Sony and Disney are already beyond those dates. Overall, you don't have, you know, too many companies not following that policy. With Netflix and Narnia, they are even coming forward, which is very positive overall when you have the biggest streamer moving forward with the lengthening distribution. To me, it's all very positive, and it continues to, you know, justify the fact for studios that the theatrical release is very important for the future of the product.

Speaker #4: At CinemaCon, we got some definitive lengthening of the windows. Universal talked about it publicly, and so did Paramount, which was extremely beneficial. And Sony and Disney are already beyond those dates.

Speaker #4: So overall, you don't have too many companies not following that policy. And with Netflix and Narnia, they are even coming forward, which is very positive overall when you have the biggest streamer moving forward with the lengthening distribution.

Speaker #4: So to me, it's all very positive, and it continues to justify the fact for studios that the theatrical release is very important for the future of the product.

Maher Yaghi: That's great to hear. Okay, my second question, it's on the premium mix again, like just going back. You know, with yields rising, can you talk a little bit about the premium mix? What are you seeing in terms of price elasticity? Any evidence of trade downs in Canada yet or demand is still resilient?

Speaker #7: That's great to hear. Okay. My second question—it's on the premium mix again. Just going back, so with yields rising, can you talk a little bit about the premium mix?

Speaker #7: What are you seeing in terms of price elasticity? Any evidence of trade-downs in Canada yet, or is demand still resilient?

Ellis Jacob: No, demand is very strong with the premium experiences. What is, what we see in a lot of cases is guests are seeing the movie more than once, and they are going to different premium experiences to watch the films. To me, that continues to be beneficial. They don't, you know, push back on the pricing because they feel that it's a special experience that they cannot replicate. To me, we in North America have one of the highest percentages of premium experiences. It's a much bigger differentiator from sitting home and watching it on your TV with your kids crying or your cell phone ringing. Those are all very positive.

Speaker #4: No, demand is very strong with the premium experiences, and what we see in a lot of cases is guests are seeing the movie more than once.

Speaker #4: And they are going to different premium experiences to watch the films. And to me, that continues to be beneficial. And they don't push back on the pricing because they feel that it's a special experience that they cannot replicate.

Speaker #4: And to me, we in North America have one of the highest percentages of premium experiences. And it's a much bigger differentiator from sitting home and watching it on your TV, with your kids crying or your cell phone ringing, so those are all very positive.

Maher Yaghi: Perfect. Okay. I wanted to ask you know, we've been talking about the recovery phase post the pandemic and, you know, it feels like we're getting there, especially with the H2 slate coming up. Maybe this is more like a big, big picture question for you. What markers should we be looking for to quite confidently say that the recovery is in full force and, you know, kind of declaring the, you know, going back pre-pandemic? What are the markers in terms of attendance, in terms of revenue, run rate, that gives us confidence that we're back to normal?

Speaker #7: Perfect. Okay. I wanted to ask you—we've been talking about the recovery phase post the pandemic, and it feels like we're getting there, especially with the second-half slate coming up.

Speaker #7: Maybe this is more like a big-picture question for you. What markers should we be looking for to quite confidently say that the recovery is in full force and kind of declaring the going back pre-pandemic?

Speaker #7: What are the markers, in terms of attendance, in terms of revenue, run rate, that give us confidence that we're back to normal?

Ellis Jacob: Look, looking ahead, we are encouraged by the strength and depth of the balance of 2026's slate, which includes many marquee titles we just talked about in the call, about Star Wars, Toy Story, Minions & Monsters and others as we go through. You know, all the demos are coming back, which is very positive. We will see that continue to improve. The frequency was down, but as content is there, we feel that our guests will come back in a big way. When we look at our, you know, loyalty program, we are seeing that having a positive impact of people starting to return to the movie theaters.

Speaker #4: Looking ahead, we are encouraged by the strength and depth of the balance of 2026's slate, which includes many marquee titles. We just talked about in the call Star Wars, Toy Story, Minions, and Monsters, and others as we go through.

Speaker #4: And all the demos are coming back, which is very positive. And we will see that continue to improve. The frequency was down, but as content is there, we feel that our guests will come back in a big way.

Speaker #4: And when we look at our loyalty program, we are seeing that having a positive impact on people starting to return to the movie theaters.

Maher Yaghi: Is there, like, a number of releases that you'd like to see in a typical year, you know, running above CAD 100 million per title that you think the industry needs to achieve to give us confidence that, you know, it's back to where it was before the pandemic? Are you still looking at it from that kind of a lens or it's more specific to Cineplex?

Speaker #7: Is there a number of releases that you'd like to see in a typical year, running above $100 million per title, that you think the industry needs to achieve to give us confidence that it's back to where it was before the pandemic?

Speaker #7: Are you still looking at it from that kind of a lens, or is it more specific to Cineplex?

Ellis Jacob: No, I feel that we need a good mix of titles. You need the, you know, the big titles, and you also need the titles that will bring in the right demographics and the audiences to our theaters. I think we're in a good position now with a lot of movies with some great directors and producers. We feel pretty comfortable. You know, the H2 of 2026 looks really, really strong. In the Q4, there are so many strong movies that we're really excited about them.

Speaker #4: No, I feel that we need a good mix of titles. You need the big titles, and you also need the titles that will bring in the right demographics and the audiences to our theaters.

Speaker #4: And I think we're in a good position now, with a lot of movies, with some great directors and producers. So we feel pretty comfortable, and the second half of 2026 looks really, really strong.

Speaker #4: And in the fourth quarter, there are so many strong movies that we're really excited about them.

Speaker #7: Okay. Maybe one last question on the CEO search. Any updates you can provide us on that? We hate to see you leave, Ellis, but you did put a date in the calendar, and can you maybe just give us anything new to report on that?

Maher Yaghi: Okay. Maybe one last question on the CEO search. Any updates you can provide us on that? We hate to see you leave, Ellis, but, you know, you did put a date in the calendar, and can you maybe just give us anything new to report on that?

Speaker #4: Yeah, the process is underway, and the board is considering candidates both internally and externally. I am sure they will get through the process and make the best choice for the company.

Ellis Jacob: Yeah. The process is underway, and the board is, you know, considering candidates both internally and externally. I am sure they will get through the process and make the best choice for the company. As we've said before, our focus is continuing to strengthen and grow the business and have the right person to take over the position.

Speaker #4: And as we've said before, our focus is continuing to strengthen and grow the business, and have the right person to take over the position.

Speaker #7: Okay. So nothing yet, but something in—when would you say that should be announced? Sometime in the fall, not too close to the year departure date?

Maher Yaghi: Okay. Nothing, nothing yet, but something in, you know when would you say that should be announced? Sometime in the fall? Not too close to the, you know, your departure date?

Ellis Jacob: We have to wait for the board and the committees to go through the process before we can say a specific date.

Speaker #4: We have to wait for the board and the committees to go through the process before we can say a specific date.

Ellis Jacob: We have to wait for the board and the committees to go through the process before we can say a specific date.

Speaker #7: Okay. Okay. Fair enough. Thank you very much.

Maher Yaghi: Okay. Okay, fair enough. Thank you very much.

Ellis Jacob: Thanks a lot. Thanks, Maher Yaghi.

Speaker #4: Thanks, Mike. Thanks, Rayhan.

Speaker #1: We have a question from the line of Drew McReynolds with RBC Capital Markets.

Operator: We have a question from the line of Drew McReynolds with RBC Capital Markets.

Speaker #8: Yeah, thanks very much. Good morning. Just had some tough time getting on, but we're here, so three for me. First, maybe just a follow-up to Mayer's question in and around box office.

Drew McReynolds: Yeah, thanks very much. Good morning. Just had a tough time getting on, but we're here. Three for me. First, maybe just to follow up to Maher's question in and around box office. Historically, I seem to recall 80% to 85% of kind of box office revenues on major films being realized in the first three weeks. Just wondering if you've seen any evolution of that kind of behavior. Second question, just back to Cineplex Media. Gord, with respect to the tough comp, again, just kind of well spelled out what happened here in Q1. As we go through the remainder of the year, do you see any particularly tough category comp for Cineplex Media?

Speaker #8: Historically, I seem to recall 80, 85 percent of box office revenues on major films being realized in the first three weeks. Just wondering if you've seen any evolution of that kind of behavior.

Speaker #8: And then, second question, just back to Cineplex Media, Gord, with respect to the tough comp, again, you just kind of well spelled out what happened here in Q1.

Speaker #8: As we go through the remainder of the year, do you see any particularly tough category comp for Cineplex Media? And then, lastly, a little bit more kind of restructuring, I think, in the numbers this quarter.

Drew McReynolds: Lastly, a little bit more kind of restructuring, I think, in the numbers this quarter. Just wondering kind of what we should expect for the rest of the year? I assume in terms of the operating leverage dynamic that you've been talking about for 2 or 3 years, I assume just that's largely intact, just given all the moving parts. Thank you.

Speaker #8: Just wondering kind of what we should expect for the rest of the year. And I assume, in terms of the operating leverage dynamic that you've been talking about for two or three years, I assume that's largely intact.

Speaker #8: Just given all the movie parts. Thank you.

Ellis Jacob: Thank you, Drew. On the first question regarding the product and moving forward, we feel very strong and comfortable about, you know, the films out there and their delivery. When you talk about the first three weeks and the bigger numbers, certain movies are in that category where guests want to see it as soon as possible. Now with the longer windows and things changing, you know, I feel that there will be more guests coming back either to see the movie more than once or to see the movie for the first time because the movie length has increased as far as its theatrical release. I hope that answers your question on that.

Speaker #4: Thank you, Drew. On the first question regarding the product and moving forward, we feel very strong and comfortable about the films out there and their delivery.

Speaker #4: When you talk about the first three weeks and the bigger numbers, certain movies are in that category where guests want to see it as soon as possible.

Speaker #4: But now, with the longer windows and things changing, I feel that there will be more guests coming back—either to see the movie more than once or to see the movie for the first time—because the movie length has increased as far as its theatrical release.

Speaker #4: So, I hope that answers your question on that.

Speaker #8: Yeah, that does.

Drew McReynolds: Yeah, that does.

Gord Nelson: On the other 3 questions then. On the media side of things, you know, I tried to call out where we thought things were gonna come in for the remainder of the year, which is, you know, relatively in line with where we see attendance growth. Just as sort of a reminder to a number of you, the industry projections range anywhere from nine and a half to 10 billion CAD for North American box office, which is roughly a 10% to 15% box office growth, which part of that would be pricing. That gives you some indication of sort of where the year might fall in.

Speaker #4: And then, on the other three questions—and so, on the media side of things—I tried to call it where we've got things we're going to come in for the remainder of the year, which is relatively in line with where we see the attendance growth.

Speaker #4: Just as sort of a reminder to a number of you, domestic box office projections range anywhere from the industry projections, anywhere from nine and a half to ten billion dollars.

Speaker #4: For North American box office, which is roughly at 10 to 15 percent box office growth, which part of that would be pricing. So that gives you some indication of sort of where the year might fall at.

Speaker #4: You asked about specific kinds of verticals and categories. And I called out pharma as a category, which we're going to be impacted in year over year.

Gord Nelson: You asked about specific kind of verticals and categories. I called out pharma, you know, as a category, which we're gonna be impacted in year-over-year. Our team was comfortable that we've done work to build out other categories that will either return or increase versus prior year to kind of soften the impact of the pharma category. In terms of restructuring, we're always kind of looking to optimize our operations. Particularly, you know, kind of post-pandemic and into 2025, 2026, that is at a little bit more elevated levels than it has been historically. I think your last question was on operating leverage.

Speaker #4: But our team is comfortable that we've done work to build out the other categories that will either return or increase versus prior year to kind of soften the impact of the pharma category.

Speaker #4: In terms of restructuring, we're always kind of looking to optimize our operations, and particularly, kind of post-pandemic and into '25, 2026. That is at a little bit more elevated levels than it has been historically.

Speaker #4: And then I think your last question was on operating leverage. And so we continue to use roughly the same metrics—that the incremental EBITDA contribution for each guest is about $13.50 from an exhibition perspective.

Gord Nelson: You know, we continue to use roughly the same metrics that, you know, the incremental EBITDA contribution for each guest is about CAD 13.50 from a exhibition perspective and CAD 1.50 or so for from a media perspective. The numbers that we've previously communicated still hold true.

Speaker #4: And $1.50 or so from a media perspective. So the numbers that we've previously communicated still hold true.

Speaker #8: Okay, that's great. And Ellis, congrats on the recognition. Obviously, no surprise to all of us that have followed you over the years, but I wish you congratulations on that.

Drew McReynolds: Okay. That's great. Ellis, congrats on the recognition. Obviously no surprise to all of us that have followed you over the years, but wish you congratulations on that.

Speaker #4: Thank you very, very much.

Ellis Jacob: Thank you very, very much.

Operator: As a reminder, if you'd like to ask a question at this time, please press star one one on your touch-tone phones. That's star one one to ask a question at this time. I'm showing no further questions in queue at this point.

Speaker #1: As a reminder, if you'd like to ask a question at this time, please press *11 on your touch-tone phone. That's *11 to ask a question at this time.

Speaker #1: I'm showing no further questions in queue at this point.

Speaker #4: Thank you very much, and I appreciate you joining us this morning. Sorry for the difficulties in getting your questions through. As I've said before, we're excited for the remainder of 2026 and beyond, and look forward to seeing you at one of our venues, having a great time.

Ellis Jacob: Thank you very much. Appreciate you joining us this morning. Sorry for difficulties in getting your questions through. As I've said before, we're excited for the remainder of 2026 and beyond, look forward to seeing you at one of our venues, having a great time. Have a great day and a wonderful week. Thank you.

Speaker #4: Have a great day and a wonderful week. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.