Good morning or good afternoon, and welcome to the Cineplex Q1 2025 earnings conference. My name is Adam, and 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. 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. With that, I'll now hand the floor to Rayhan Azmat to begin. Rayhan, please go ahead when you're ready. 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. 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. 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 experienced 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 softer 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. Taking a closer look at the exhibition business, in the first quarter, the box office performance delivered revenue of CAD 100.19 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 Dog Man. The March box office underperformed in comparison to the prior year due to the tremendous success of Dune: Part Two and Kung Fu Panda 4, as both over-indexed to the North American box office at Cineplex in 2024. 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% 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 Bros. Movie. 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, it is continuing a similar momentum where we have now fully recovered the Q1 box office shortfall on a year-to-date basis. As of today, we have achieved 105% of prior year box office and expect strong comparatives going forward. 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 our traditional studio partners, a significant highlight was Amazon MGM's commitment to theatrical releases. We plan to invest over CAD 1 billion annually in theatrical film production and distribution. This commitment includes a slate of 12-15 films annually, receiving exclusive theatrical windows, demonstrating their well-placed confidence in the theatrical experience. 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. 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 CAD 29.7 million. This growth was driven by strong results across both our cinema advertising and digital place-based media segments. Cinema media revenues showed remarkable resilience, growing 38% to CAD 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. In our digital place-based media business, revenue increased by 26.5% to CAD 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. Our location-based entertainment business continues to expand, with the revenue increasing 10.5% to CAD 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 is not dependent on content. The Rec Room and Playdium locations are contributing steadily, and we have been encouraged by the potential from recent new builds. Before I close, I wanted to share a brief update on our appeal of the Competition Tribunal's decision regarding our online booking fee. On October 23, 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. 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 a 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 spinoff film Ballerina, distributed by Cineplex Pictures, which has extended its partnership deal with Lionsgate until the end of 2026. 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 M3GAN 2.0, and Apple's F1 starring Brad Pitt, which tells the story of a former Formula 1 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. Heroes both big and small hit the screens in Superman, The Smurfs Movie, The Fantastic Four: First Steps, and The 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 Rites will terrify moviegoers in the summer. 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. 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: Ares, 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 Ash. 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 LBE segment presents an opportunity to capture our target guests with new menu items and value offerings launching in the quarter. Our market position remains strong, supported by a diversified business model and premium entertainment offerings. 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. 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 resilient; it becomes essential. It's where people go to escape, to connect, and to find a bit of joy where they need it most. With that, I will turn things over to Gord Nelson. Thank you, Ellis. 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 SEDAR+ 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 outlook. For my comments on operations, all amounts following 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 CAD 264.3 million, representing a 10.3% decrease compared to the same period last year. A 14.5% decline in attendance led to adjusted EBITDA being negative CAD 10.8 million as compared to positive CAD 4.6 million in the prior year. 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. Let us take a closer look at our segments. In the film, entertainment, and content segment, box office revenues decreased 18.5% to CAD 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 CAD 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. 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 costs. As a result of the product challenges during the quarter, segment EBITDA was negative CAD 12.4 million. As we look forward, when product is there, the operating leverage is strong in this segment. 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 CAD 25 million to positive CAD 13 million for the month from negative CAD 12 million in the prior year. Our media business delivered exceptional results, with total media revenues growing 32.9% to CAD 29.7 million. Cinema media revenues increased 38% to CAD 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 CAD 12.6 million. 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. All of our mall networks saw growth, including newer additions like Cadillac Fairview and Cominar, but also increases from our longer-term clients such as Oxford Properties and Ivanhoé Cambridge. In addition, project revenue increased 32.7% over the prior year. In 2024, we entered into an agreement with Suncor to install a digital network in their Petro-Canada stations. Deployments began in 2024 and ramped up in Q1, generating the strong lifts in sales. Location-based entertainment continued to expand, with revenues increasing 10.5% to CAD 38.1 million, primarily due to an increase of three locations, which opened in Q4 of the prior year. Store-level EBITDA increased by 1% to CAD 9.8 million, whereas store-level EBITDA margin moderated to 25.7%. This reflects elevated costs in the initial few months as we optimize operations in our new locations. Although same-store revenue declined 8.1% due to a number of factors, the same-store EBITDA margin was 28.2%, which is marginally higher than the prior year due to strong operating discipline. The LBE segment EBITDA decreased CAD 0.4 million, primarily due to the same-store volume decline and additional one-time costs related to the opening of the new locations. I want to speak briefly about our capital priorities and then cash flow and capital allocation during the 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 returns. 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 CAD 66 million. In simple terms, this decrease is attributable primarily to the following items: negative EBITDA of CAD 10.8 million, a seasonal use of working capital of approximately CAD 23.3 million, cash interest of CAD 15.1 million, and net CapEx of CAD 14.1 million, primarily related to the four builds completed in late 2024. 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. As we look forward, we expect the strong operating leverage of the business to return, as was evidenced by my comment on the April EBITDA results. 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 31, which reflects the strong December period. With respect to CapEx, our guidance for 2025 is now more muted at approximately CAD 40 million-CAD 50 million, which includes the CAD 14.1 million in Q1. Given the current uncertainty regarding tariffs and other matters, we will defer spend until there is more certainty. With respect to the current macroeconomic environment and uncertainty, I would like to take a few moments to discuss these matters. As a reminder, our business is primarily based on providing compelling entertainment experiences to our guests in Canada and not transferring physical goods across borders. 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. 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: film rent, employee costs, and occupancy costs. All intangible items that are not caught by any current tariff discussions represent 70% of our overall costs. The next largest cost category is food costs, which represents approximately 8% of our overall costs. 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 on our business. With respect to currency exposure, less than 5% of our costs are incurred in U.S. dollars, and as Ellis mentioned previously, during times of economic uncertainty, the exhibition business has historically been resilient. 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 recent results. In summary, we are excited for the future of the business and remain highly focused on creating long-term value for shareholders. I would like to turn things over to the conference operator. 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 now to enter the queue. Please remember to unmute locally when asking your question. Our first question comes from Adam Schon 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 do not know if anybody believes that a movie tariff will indeed occur. Can you talk maybe about potential progress across some of the U.S. states? Certainly, Gavin Newsom in California is trying to raise 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. states perhaps stimulating additional film production activity as compared to necessarily drawing productions from abroad back into the U.S.? We will start there. Yeah, I think a lot of movies are not only filmed in California, they are filmed in other parts of the U.S. I think that will be part of the incentives will continue to increase production in other areas of the U.S. From an overall perspective, it will lead to, I feel, additional movies being produced right across the board. In international situations, that will also continue to be used depending on the overall cost of the film. I'm not overly concerned about the comments that have been made over the last number of days. Given what we saw out of Guzzo a few months back, are you seeing any incremental benefits just in terms of drawing more people into your own theaters? On locations that are close to our existing theaters, they've improved, but a lot of these locations aren't close to us, so we don't find the total benefits as a result. Okay. 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 in BPP so far in Q2? Yeah. The reason it was low in 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. I feel in this quarter that we are in, that will change because of the premium offerings, because of the pricing, and that will definitely be on the positive side going forward. Okay. We'll leave it there. Thank you very much. Thanks, Adam. The next question comes from Derek Lessard from TD Cowen. Derek, please go ahead. Your line is open. Yeah, good morning, everybody. Ellis, I think I can hear a faint sound of some excitement back in your voice. I guess I just want to maybe hit on the same-store sales decline, Gord, on the LBE side. Was there 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. Yeah. Derek, okay, there's a few things there. Obviously, last year was a leap year, so there's an extra day in last year's operations. The timing is now school holidays around Christmas into the new year impacted, so there's less holidays in 2025 versus 2024. Family Day occurred during some sort of adverse weather situations across the country. A number of small things leading to that, the 8% same-store decline. As we look out for the entire year, though, we've always said that on average, we expect these boxes to do about CAD 10 million of revenue. With the start in Q1, we have obviously some concerns with where the general economic conditions are. We would think that probably that average is going to be impacted by 3%-5%, so somewhere between CAD 9.5 million-CAD 9.7 million on average for the 16 locations throughout the year, for the full year. Okay. Sorry, Gord. So you're taking into account some economic slowdown? Yeah. Obviously, that will impact. Like today, we're down 8% on the same stores. Over the course of the full year, the impact we believe will be 3-5%. Okay. Okay. That's fine. I guess another question for me is, have you seen or maybe are you anticipating maybe any bump from staycations this year in Canada? We have seen it is all content-driven, and when the product is there, our guests come out in a big way. I think that will continue as we move forward into the balance of the summer and into the balance of the year. We feel pretty strongly about the content and our guests coming out to see these films. Just on sort of the relative value proposition of a theatrical experience versus, say, a concert or professional sporting event, when you look at sort of pre-pandemic to today, the gap has excessively widened, so we become a more attractive value opportunity for out-of-home visits. 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 or any future LBE expansion plans? Yeah, right. Today, as noted in our MD&A, we have one commitment. As we've always said, we believe in the opportunity for up to 30 locations across Canada. We're in what we always refer to as a prudent pause. When you see retailers like Hudson's Bay and others either downsizing or exiting the country, we see opportunities for potential better sites at better economics going forward. We're just in a little bit of a prudent pause as we look for future opportunities. As we've sort of also mentioned historically, from the time we commit to a location to the time we actually shovel in ground and build, depending on the site, sometimes it can be a year to two years. Right. Okay. Thanks for the comment, Gord. Thank you. As a reminder, that's star followed by one to ask a question. The next question comes from Maher Yaghi from Scotiabank. 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 a 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. It could be a shift in where the production is made. 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 operator? At the moment, nothing has been confirmed. 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 both the producers and also some of the exhibitors if they feel that's necessary. I'm not 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 a huge risk 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 are finished in California. It would be very difficult to keep the pieces of the movies in different areas. One area that would impact the U.S. 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. 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 it is in a position now where it is too early to speculate. That is why I think it is better that we see where this ends up. I understand that there are some announcements happening today. Until we know where things are going, I do not want to put us or our guests in an awkward position in any way. 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 spend than other advertisers in Canada, which is good to see. How much more growth do you expect to see from that business? Or have we reached 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. Let's talk about, so you're asking a bit about capacity utilization. The business, there's 12 months of the year. We maybe typically have high capacity utilization in November and into December. There's opportunities, and we've always said there's opportunities to kind of improve that capacity utilization across the full 12 months of the year. Now, advertisers need to be wanting to have campaigns during those periods, but that's where there's opportunity. 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. Pharma was one that we called out. Pharma had a significant improvement year- over- year. When we think about pharma as a category going forward, it's a category that's probably less impacted by general economic conditions than perhaps some of the other categories may be. 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. Programmatic is a big opportunity for us as we look forward to. Again, we look to provide a portfolio of media solutions for our customers. 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 advertisers' needs. We see opportunity, although we do recognize that there's general challenges in advertising, but we were one of the few, if not perhaps the only category of advertising that showed improvement in Q1. Okay. Great. My last question, Gord. When you were talking about the stock buyback that you in the 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, our commentary was kind of unique. I I was speaking specifically about Q1 and just I highlighted a number of things that resulted in the drain of cash. You're absolutely right. As we look forward and we balance the capital priorities of which kind of leverage and capital investments and share buybacks are all part of that equation. Things are looking encouraging going forward. I'll leave it at that for now. Okay. Thank you. Thank you. Final call for questions, star followed by one. We have no further questions, so I'll hand the call back to the management team for any closing comments. Thank you, sir. 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. We hope to see you at the movies very soon. Thank you. This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines. Thank you.