Thank you. Good morning, everyone.

Before beginning the call, we would like to remind you that certain statements being made are forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding the information currently available.

Actual results could differ materially from those expressed in the forward-looking statements. Factors that could cause results to vary include among other things, adverse factors generally encountered in the film exhibition industry, risks associated with national and world events, discovery of undisclosed material liabilities and general economic conditions.

I will now turn the call over to our President and CEO, Ellis Jacob.

Thank you, Melissa. Good morning and welcome to Cineplex Inc.

2019 third quarter conference call. We are pleased you could join us this morning.

I will begin by providing a top line overview of our third quarter results and a summary of our key accomplishments during the period. Then we will look at some of the upcoming films for the rest of the year and into 2020.

At the conclusion of my remarks our Chief Financial Officer, Gord Nelson, will provide an overview of our financials and then we will follow with the question and answer period. With growth across all of our businesses, Cineplex delivered an impressive third quarter, including record total revenue of $418.4 million up 8.3% and a 21.2% increase in adjusted EBITDA as we leverage the strong film product and further executed on our diversification strategy.

In addition to the increases and attendance and box office revenue, which were largely the result of the quarter strong film slate, we also achieved third quarter records for food service and amusement revenue, and achieved an all-time quarterly record for digital place based media revenue. These positive results are a great example of how our diversified businesses continue to build scale and make more meaningful contributions to our bottom line.

New third quarter records were also achieved for BPP of $10.16 and CPP of $6.68 as we grew transactions side through expanded offerings in our theatres. Top performing film to the quarter included the Lion King, Spider Man Far From Home, Fast and Furious, [indiscernible] Hobbs and Shaw, It Chapter Two and Once Upon a Time in Hollywood, all of which helped drive the 1.8% increase in attendance this quarter.

Now, let's take a look at some of our key accomplishments during the third quarter. Exemplifying our commitment to providing Canadians with an unparalleled movie going experience we open Canada's second 4DX auditorium at Scotiabank Theatre Chinook in Calgary, Alberta.

And just this past Tuesday, subsequent to quarter end we opened our third 4DX auditorium at Cineplex Cinemas Winston Churchill in Oakville, Ontario. For those of you who haven't tried it yet, 4DX is a fully immersive experience with motion seats and environmental effects like wind, mist and scent that work in concert with the action on the big screen.

We will continue to expand our footprint of both 4DX and screen experiences in the coming months. Also during the quarter, we were pleased to announce plans for new Cineplex VIP cinemas at Royal Mountain, Montreal, Quebec, which is expected to open in 2022.

Within theatre food service, we continue to expand our alcohol service to an additional 12 theatres to-date totaling 83 locations within three provinces. That's over half of our circuit.

And in addition to our Uber Eats offering at 101 theatres, we also began a pilot program with Skip the Dishes, ensuring guests can enjoy our signature popcorn and other popular concession items anytime they want right to their door. Key contributors to the record CPP I mentioned earlier included growth in alcohol and merchandise sales and also within Cineplex VIP Cinema as we continue to expand food and beverage offerings at this increasingly popular premium experience.

Looking at alternative programming, we continue to bring new non-Hollywood content to audiences across Canada, both in our traditional auditoriums and our 24 dedicated event screen auditoriums. During the quarter we featured live events from André Rieu, Fleabag by Phoebe Waller-Bridge and Margaret Atwood's book launch of The Testaments.

Anime features along with documentaries from BTS, [indiscernible] sensation, and the feature Game Changers were all part of the quarter's lineup. Our International Film programming also featured several strong performers in Hindi, Punjabi and Filipino.

With the film Hello, Love Goodbye becoming the highest grossing Filipino title in Cineplex history. Switching gears to our online offerings.

Our guests are becoming more comfortable with and more reliant on mobile technology inside and outside of our theatres, which is why the Cineplex mobile app is such an important asset for us. During the quarter online and mobile ticketing represented 31% of total theatre admissions, up from 24% in the third quarter of 2018.

Total registered users for the Cineplex store increased by 43% in the third quarter. We also saw 181% increase in device activation as compared to the prior year period.

Growth in the store is largely driven by increases in consumer use of the Cineplex apps embedded on smart TV, and leveraging the Cineplex ecosystem by providing store offers go guest who visit our theatres and purchase concession combos. Moving to media.

I am very pleased to report that our media business reported a 30.6% increase in revenue as a result of growth in both cinema media which was up 13%; and digital place-based media which was up 67.2%. Growth in show time and preshow advertising sales resulted in the increased cinema media revenue for the third quarter, with automotive continuing to lead as a top category.

And as I mentioned earlier, digital place-based media reported an all-time quarterly record as a result of increased project installation revenue for new and existing clients. Speaking of new clients, in the third quarter, we also announced that Cineplex Digital Media was selected to manage and enhance AMC theatres' digital network at approximately 630 locations across the United States.

This includes box office signage, theatre menu boards and other ancillary signage. Moving on to amusement, gaming and leisure.

It has been a particularly exciting time for our location-based entertainment team and this quarter we opened our very first reinvented Playdium concept in Brampton, Ontario. Retrofitted from what was once our Orion 8, theatre the new Playdium is designed specifically for teens and best friends and family.

We are pleased with the response from the community so far as the new Playdium becomes Brampton's ultimate place to play, featuring the latest video games, a road course, bowling and virtual reality, as well as a range of fresh food and beverage offerings that are fun to eat. And just this weekend, subsequent to quarter end, we celebrated the grand opening of our second new Playdium location in Whitney, Ontario.

Our plan remains to open 10 to 15 Playdium locations and mid-sized markets over the next three to five years. Earlier in the fall, I spoke about the newly announced Cineplex VIP Cinemas opening at Royalmount in Montreal.

As a direct result of regulatory amendments made by the Quebec government in partnership with Cineplex, we also announced plans for the province's first location of The Rec Room at Royalmount in Montreal. The scientific [ph] on the city's new hotspot, the entertainment complex is expected to open in 2022 and will feature incredible dining options, exciting live entertainment, over 100 amusement games and attractions including virtual reality.

Shifting our focus to Topgolf. Last quarter, I shared that we have secured a site for our first location within the GTA.

While I wish I could share specifics, we are still conducting our due diligence on the site and hope to have an announcement shortly. Turning to esports.

World Gaming Network held its second annual Rocket League North American Championship Tournament with its grand finals event taking place at the hugely popular Fan Expo Canada in August. We entered into this industry early in its evolution in North America, and today it's fast becoming one of the largest esports businesses with many opportunities.

As such, during the quarter, Cineplex initiated a review process and engaged a financial advisor to identify a strategic equity partner to further develop the World Gaming Network business. We are -- while we are still early in the process, at its conclusion, we may retain a minority interest in the operations of the business.

Gord will go into more detail as it relates to our reporting shortly. Moving on to the SCENE loyalty program.

This quarter, we celebrated our 10 million member milestone reaching 10.1 million members as of September 30th. As a tool for growth the value SCENE is significant.

It drives increased customer frequency and provides more channels for us to communicate directly and regularly with our guests. SCENE also increases overall awareness and spent, not just at our network of 165 theatres across Canada, but also across the entire Cineplex ecosystem of businesses.

But perhaps the most valuable benefit of SCENE is the tremendous insights into customer behavior through the rich data we have collected. Using this information we had and continues to help us better understand our guests needs, enabling us to analyze and influence behaviors across the business.

Now let's take a look at some of the films for the balance of the year and into 2020. The fourth quarter got off to a good start, largely because of the huge success of Joker, which has the highest ever opening weekend in the month of October and has become the highest grossing film to open in the month reaching $316 million and the best big box office to date.

Looking ahead the remainder of the year has a great lineup of films including Ford Versus Ferrari, A Beautiful Day in the Neighborhood, Frozen 2, Jumanji, The Next Level and Star Wars The Rise of Skywalker, which are already generating some strong bucks. So much so that the first week of Cineplex presales with Frozen 2 has already set a record for advanced ticket sales for an animated film at the same point in time.

There are two other films I would like to mention both opening on December 25th, Mercy Portal [ph] which is expected to be a big holiday release in Quebec, and Little Woman directed by Greta Gerwig and starring Emma Watson in the re-imagine classic. As you can see, we have what appears to be a promising film slate for the remainder of year and are encouraged by the 2020 film slate that's been announced to date.

Some such as Birds of Prey, The King's Men, A Quiet Place: Part II, Mulan, The James Bond movie No Time To Die, Trolls, World Tour, Black Widow, Fast and Furious, Wonder Woman 1984, Top Gun Mavericks, Minions The Rise of Gru, Tennant and an untitled Spiderman film. Before I turn things over to Gord, let me take a moment to discuss a few questions and concerns I have received about some of the new streaming platforms that are available.

Our industry and specifically Cineplex has experienced many disruptions over the years from various economic cycles and technological advances including VHS, cable, DVD, the internet and now streaming. But time and time again over the past 30 plus years movie, going as long excel the myth changes in the industry.

The reason is when there's great content available our guests want to see the film in the way it was meant to be seen, on a big screen with great sound, and amenities, and seek out that social movie theatre experience. And that's why we remain ever focused on keeping movie going top of mind by putting the guests first.

Today, we offer our guests nine different ways to watch a movie including 2D, 3D, 4DX, Screen X, Ultra AVX, IMAX, D-BOX, VIP Cinema and the Clubhouse, always bringing the very latest in innovation and technology for a totally immersive experience that cannot be replicated at home. In summary, Cineplex experienced a very strong third quarter by capitalizing on the robust film lineup and continuing to execute our diversification strategy.

Looking ahead, I'm encouraged by the outlook of some products for the remainder of the year and the ongoing growth of our diversified businesses. Adding to this with our strategic focus on spending for growth, we remain confident that we are positioning Cineplex well for the future.

Finally, I'd like to congratulate the entire Cineplex team for being recognized as one of the top 40 most valuable Canadian brands for 2019. The study conducted by Brand Z was based on in depth consumer research.

And I'm extremely proud to see that Cineplex was highlighted numerous times for our customer experience, emotional connection, excellent reputation, clear purpose and good citizenship. In addition to this tremendous recognition, our team was also honored with the best brand experience award with call us to our Uber Eats partnership, SCENE loyalty program, VIP Cinemas Experience, brand meaningfulness and brand innovation.

With that, I'll turn the call over the Gord.

Thanks Ellis. I am pleased to present the third quarter financial results for Cineplex Inc.

For your further reference, our financial statement and MD&A have been filed on SEDAR this morning and are also available on our Investor Relations website at cineplex.com. Before I review the results, I would like to note that Q3 2009 [ph], is Cineplex's third quarter reporting under the new accounting standard for leases IFRS-16.

I would like to remind you of the new non-GAAP measure, we are providing adjusted EBITDA after leases or adjusted EBITDA to assist with the comparability to prior year periods. With respect to the transition to IFRS-16 leases, we have noted that there continues to be confusion in the market with respect to the consistent reporting of key financial metrics provided by financial data provider services, including Bloomberg, Capital IQ and FactSet.

This confusion in the marketplace is not unique to Cineplex and applies to many organizations with large lease portfolios. The inconsistency relates to the use of an operating earnings metric before or after a lease cost and a debt measure which either includes or excludes a lease obligation liability.

I caution investors to use additional diligence when reviewing metrics provided by data provider's services. We continue and will be working with these providers to help rectify the situation and give investors more accurate information.

As Ellis mentioned, during the third quarter, Cineplex initiated a review process The World Gaming Network's online esports business, including [indiscernible] engaging a third party advisor to identify a strategic equity partner. As a result of this process, the operations of World Gaming Network are reported separately in the financial statements categorized as discontinued operations.

All the results I will discuss today exclude any impact of World Gaming Network in the current and competitive periods, as prior year amounts have been restated to reflect this treatment. Gross results from all lines of business resulted in total revenue increasing 8.3% to a third quarter record of $418.4 million and adjusted EBITDA increasing by 21.2% to $62.3 million.

Turning to specific items, Cineplex's third quarter box office revenue increased 2.6% to $177.9 million compared to $173.3 million in the prior year. The increase was due to the third quarter VPP record of $10.16, an increase of $0.09 or 0.9% from $10.07 reported in 2018 as well as the 1.8% increase in attendance.

The third quarter benefit from a wider appeal of a film slate than in 2018. Food service revenue increased 8.6% to $125.6 million.

Included in food service revenue is $8.5 million from the record. Excluding revenue from LBE, theatre food service increased by 8.9% from the prior year to a third quarter record of $117.1 million due to the 6.9% increase in concession revenue per patron to third quarter record of $6.68 and the 1.8% increase in attendance.

CPG growth was attributed in part to expanded food offerings, including those available at Cineplex's VIP cinemas, outtakes, pricing changes and additional license location. Total media revenue increased $10.1 million or 30.6% to $43.3 million for the quarter.

Cinema revenue which is primarily theatre based, increased 13%. Digital play based media revenues increased 57.2% compared to the prior year, primarily due to higher project installation revenues.

For the quarter project revenue was up 273.4% due to the increased installations, including AMC, A&W and McDonald's. At the end of the third quarter, our location count of 14,559 locations represents an increase of 8.5% over the prior year, and an increase of 7.8% during the first nine months of 2019.

Amusement revenue increased $4.3 million or 8% due to continued revenue growth from P1AG as well as the additional locations of The Rec Room and our new Playdium. P1AG revenues increased by $2 million due to an increase in revenue in Canada and the US.

Margins on the P1AG business increased 450 basis points as compared to the prior year to 14.3% for the third quarter and are 13.3% on a year to date basis. P1AG EBITDAaL for the third quarter increased 52.1% to $6.4 million.

With respect to location based entertainment, which includes results from The Rec Room and the new Playdium total revenue grew $2.8 million over the prior year, primarily due to the additional location. We opened our first re-imagine Playdium in Brampton on September 16, 2019.

Store level EBITDAaL from location based entertainment increased $0.6 million or 17% to $4.1 million and a store level EBITDAaL margin increased to 20.7% from 20.6% in the prior year. Turning briefly to our key expense line items.

Film costs for the quarter came in at 52.7% of box office revenue as compared to 52.1% reported in the prior year, reflecting the relative mix of films in the quarters. Cost of food service for Q3 2019, excluding $2.2 million incurred at LBE was 21.5% as compared to 20.5% in the prior year.

Cost of food service at LBE was 26.1%, down against 28.2% reported in the prior year due to improved cost management. The increase in theatre concession costs was primarily due to the mix of food and beverage items sold, including the impact of increased number of locations with alcohol sales.

Other costs of $191 million decreased $26 million or 12%, primarily due to the impact of the adoption of IFRS 16 partially offset by increased cost due to an increase in business volumes in the non-exhibition businesses, new theatre locations, increased operating hours in the exhibition business and minimum wage increases. Other costs include theatre occupancy expenses, other operating expenses, and general and administrative expenses.

Theatre occupancy expenses were $18.2 million for the quarter versus a prior year, actual of $53.2 million, a reduction of $34.9 million. This was primarily due to the impact of IFRS 16 which reduced rent expense by $38.8 million.

Additional details on the movement arising from the transition to IFRS 16 can be found in our MD&A. Other operating expenses were $156.7 million for the quarter versus a prior year actual of $145.8 million, an increase of $10.9 million.

Other costs are net of $4.5 million of cash rent related to the lease obligations arising on the adoption of IFRS 16. Increases included an increase in media expenses of $8.7 million due to increase in media business volumes and revenue mix shift, a $2.2 million increase in LBE expenses due to increase number of locations and a $1.2 million increase due to new and acquired theatres net of a reduction of $0.4 million due to disposed theatres.

Same-theatre payroll increased by $2.3 million mainly due to increased operating hours, additional attendance, expanded concepts and minimum wage increases. G&A expenses were $16 million for the quarter which was $2.2 million -- sorry $2 million lower than the prior year due to $8.8 million decrease in restructuring costs, and in addition to other cost reductions $8.4 million decrease in share based compensation costs.

Interest expense increased $11.4 million during the quarter to $18.3 million, primarily due to the inclusion of $11.6 million in lease related interest arising on the transition to IFRS 16. Net CapEx for the third quarter was $27.1 million flat against the prior year.

We are continuing to confirm our net CapEx guidance of $165 million for 2019 and $170 million for 2020. Net income for the quarter from continuing operations was up $2.8 million or 31.1% to $15.1 million and basic EPS was up $0.05 or 26.3% per share to $0.24 per share, primarily on the strength of the results for the quarter offset by the impacts of the adoption of IFRS 16, which negatively impacted our net income by approximately $3.8 million in the current period and approximately $6.4 million or $0.10 per share as compared to the third quarter of 2018.

As Ellis mentioned earlier, we have steadfastly focused on creating a diversified entertainment and media company in the future. We are prepared to prudently use both of our operating cash flow and our credit facilities to invest in the businesses.

We continue to remain comfortable with where Cineplex, Inc. has positioned today.

We are still in the early execution based at a number of our diversification initiatives. And our balance sheet allows us to continue to invest in these growth initiatives to deliver future value for our shareholders.

That concludes our remarks for this morning. And we now like to turn the call over to the conference operator for questions.

Yes, yeah. Good morning, everybody and congrats on the quarter and the awards, which I think are well deserved.

I think my first question is maybe for Gord what was going on with your EBITDA margin in the media business? It looks like there was a significant compression in the quarter?

And maybe if you could just follow up to that is should we expect it to go back to normal life levels?

Yes. I mean we highlighted in my comments was that the costs increasing in media was related to a mix shift.

So when you look at the components of revenue in the third quarter, I highlighted in my comments and we put in our MD&A the growth in the installation revenue in the project based revenue. So that's a lower margin business than the services business and then the cinema media business.

So it's really related to the amount of the installation revenue that occurred during the third quarter.

Okay. And I guess, once you want to complete these rollouts with your new customers, you expect sort of a shift back?

Yes, absolutely.

Okay. All right.

And just sort of and maybe if you could remind us again, when you expect it to reach peak spend and, and assuming I guess there's no assuming no delays with Topgolf?

With Topgolf, as I said, we are still, anxious and awaiting final due diligence and we will confirm that in a short period of time with our first location. And Gord on the spend.

Yes. So I mean, and that's why we have the higher mouth that was kind of retained in the 2020 guidance of the $170 million.

So the peaks spend would probably be in 2020, as we're getting that site ready for opening in 2021.

Okay, that's it for me. I'll re-queue.

Thanks.

Thank you.

Thanks a lot. Maybe one question for Ellis and a couple for Gord.

Ellis just, maybe in terms of some of the headlines we saw in recent weeks on The Irishman. Obviously it is going to debut on the streamer after about a 26 day window.

I think there was some talk in the market that Netflix was may be prepared to do 45 days, but that theatre operators didn't want to go less than 60 days. Maybe you can talk about that?

I don't know if those metrics are true or not. Obviously, they were part of product negotiations.

But can you speak to the concern around maybe setting the precedent for that type of movie or could that -- could there have been some degree of accommodation for obviously, a special movie like that? Maybe I'll leave it there and move on after with Gord.

Yeah, it's a great question. And, we've said repeatedly, we like to give great movies, great experiences in our theatres.

But we have a number of partners that we work with closely. And we feel that it's important that with theatrical window it is observed by all of the players coming to our theatres.

And no different for Netflix and no different for any of the other suppliers. And yes, we would welcome them into our theatres.

And I think that's part of their whole building of their business, which they continue to evolve is to get that theatrical release creates a lot of positive buzz for their product. And I always say we are still the engine that drives the train.

So it's a decision. And we will continue to keep, speaking with them.

And we'll see over the next couple of quarters where things end up.

Okay, maybe for Gord. On one of the U.S.

peer calls, they talked about the fact that the recruitment on DCIP would perhaps peak out next year and then sort of run its course ultimately, in 2021. Can you give us just a quick little update perhaps where things stand with respect to CDCP appear?

And then, with respect to the gap in your box office revenue performance and industry, there were some adjustments to industry numbers, some restatements to last year. But I think, your industry data point that you provided, I presume reflects that adjustment.

Yeah. So I will take the first question on CDCP.

And for everyone is not familiar with CDCP, it's the Canadian digital cinema partnership where we set up -- really there's a third party entity they have set up for the funding and planning into the digital production rollouts in Canada DCIP, which Adam referred to as the similar type of partnerships set up in the U.S. We do show on our statement of changes in cash flow, in net cash received from CDCP line it was roughly $12.5 million on a year-to-date basis in the third quarter of this year.

And very similar to the comments that were made in the U.S. as we expect that to continue until the early to the midpoint of 2021.

So that will continue along to that point of time. And with respect to the industry question, I'll just turn that over to Ellis.

Yeah. So Adam, as you mentioned, our under compared to the box office for the industry.

Number of factors come into play in the quarter. We have taken two of large theatres where we are converting them to loungers.

So when we take screen out that affects our box office. We've also got the issue of the drive ends.

This summer the drive ends did extremely well that's 40 drive ends across Canada. We unfortunately or fortunately only have one of them which is in the province of Quebec.

So -- and they over performed compared to the prior year. And there's also a number of theatres that are IMAX locations that never used to report in the past and they are now included in those totals.

And there was also an IMAX film called Super Dogs which played very well in those IMAX locations from an educational perspective and also box office. And finally there are theatres that are being built in Canada as we talked about in Fort McMurray.

There was a new theatre put in, in Lawrenceville, in Quebec, there was a new theatre put in. And the differences is every time you add those, it increases the size of the market.

And because our share is as high as it is, the percentage looks like it's impacted more than one would see on a regular basis. And the other thing is, we continue to look at the square footage and what we are using the theatre for.

So in the case of Orion Gate, that was a theatre that was, delivering us with box office, we've converted it to a Playdium, so that doesn't come into the totals. And then we look at other opportunities as we move forward through the whole process.

And we've still got a number of things on the goal that we continue to on. And to me, it's all about how do we use the available square footage and increase the value that we are getting out of that square footage within all of our complexes.

Very good. I appreciate the color.

Thanks I'll queue up again.

Thank you.

Thanks. Good morning, everyone.

A few questions. First, maybe touch on The Rec Room saw some good growth this quarter.

But you also added a few locations that you didn't have before. So it looks like from a revenue per location perspective or same store sales, wondering if you can talk a little bit about the performance there.

And also the mix between food and gaming. Looks like the mix for food was down wondering if there's anything specific whether it's macro related or spending consumer spending related that's impacting that in the quarter?

Thanks.

Sure. Thanks, Jeff.

It's Gord. So as we look at sort of those same store results and as we kind of get past the first 12 to 18 months in a number of locations, we do see the honeymoon period come into play, such that the same store revenue numbers decline after that first 12 to 18 months of operation.

What we have seen as -- and again we have a limited number of locations as there today. So, in each one of them has performed differently over the various quarters.

I think we highlighted in the first quarter that same stores, our expectation was the honeymoon impact goes around 12%. So I would say the second quarter was significantly less than that, it's almost neutral.

And then the third quarter was a bit higher than the average. So I would say, we're still seeing trends that the numbers are plus or minus around the 12% range.

And so in the third quarter, we saw something that was just a little bit higher than what we've seen in the first two quarters. So still, again, limited number of locations, live another experience, each one of them is unique and has their own set of criteria.

With respect to the second part of your question, which was on food and beverage versus amusement. What we are seeing also is that for a number of these locations, and you may be familiar with some of the announcements related to the void and some of their new experiences, is that we're actually expanding some of the amusement options that are out there.

In particular, we've kind of called it the void experience, which wasn't at the West Edmonton Mall on opening. So we do have some expanded amusement options which is driving the growth.

But with that said, we are seeing what the market has seen in terms of some of that late night food and beverage spend has been a bit a bit softer in recent quarters than it has been historically.

And then my next question is on to the digital media. Again, you seeing some good implementation and installation of locations, seeing some good momentum there.

I wonder if you can talk about that pipeline of installations for the near to medium term, as well as the recurring revenue stream that, I guess, that you should be generating from that business beyond kind of the lumpy installation business?

Sure. So we expect to kind of continue to see in the short term for the rest of '19 is some of that continued revenue growth that we've seen in the first three quarters of this year.

So we're continuing to roll out with some of the clients that we mentioned earlier. We have a lot of prospects that we've announced.

I think we've continued to call it A&W as a customer. And if you do recall, it was about three years ago, we sort of laid out the contract with A&W.

And as was mentioned time and time again, is that when we're in the QSR space, and we have the franchisee relationship, there's often a long deployment period. So we have a number of contracts in place.

Our agreement is in place with QSR operators. So those take time, but we are very encouraged by the results that we're seeing in the short term in terms of significant growth.

With respect -- so that creates the lumpiness. With respect to the recurring is that lumpy installation revenues, typically the precursor for recurring revenue stream, I would make a comment that a component of the recurring revenue stream is based on advertising sales, in our digital mall networks so that can go up and down, as well as the level of creative services that individual customers request during that time period.

If I can just be a little bit more specific. What was the recurring revenue stream?

Did that grow this quarter compared to the same period a year ago or early this year?

No, again, so it's relatively flat and again, will resize to almost two elements actually call it so the level of creative work and the amount of advertising revenue stream created that sort of neutral impact.

Okay. And just a couple of more strategic questions.

One on esports. I know that you made the announcement about looking at opportunities.

Maybe just stepping back the strategic view of what how you see this industry kind of moving forward. And why take a minority position of perhaps a new entity or redefined entity?

And then just on SCENE, I think you spoke before about a partnership that you had engaged in with one of the studios on marketing new films using your SCENE data. What if you could just give us a bit of an update as to how that one is moving along?

Sure. I'll start with the esports question.

And we entered the esports space a number of years ago. We are a very Canadian based company.

We have businesses in the US. Our locations are primarily sort of location based entertainment and theatres are primarily based in Canada, virtually entirely based in Canada.

What we have recognized is there's a number of elements of the esports ecosystem. We -- and I give the team great credit for building the world gaming network and the Collegiate Starleague to where it is today.

We have great connections with amateur esports athletes all across North America, as well as viewers of esports content. But what then will we recognize is esports is a global business.

And the impressions that we're seeing on our live events is a small share of that viewership that it's Canadian. And the majority of the viewer is -- viewership is international.

And as we look and how do we grow this business going forward. Our view is we've got great connections with esports athletes in Canada and the US.

We're primarily in the amateur space. The ecosystem is much larger than the space that we're in today; that includes pro-teens that includes content craters, that includes distribution partners.

But mainly the business is global. And how do we grow and we believe the better opportunity is to position ourselves with other members of the ecosystem and global players in the space.

So that is primarily our focus and why we're going through this review process today.

Great.

And Jeff on your second question regarding the partnership with the Studio, as you know, the studio is Lionsgate. And we are working on their first film which is Knives Out which will be released shortly.

And part of it is basically having the media and marketing budget and taking a portion of that and having Cineplex's assets like SCENE and other assets being used to promote those films. And that would be the first film that we will be doing together.

And it's a partnership with Mongol Media and also with marketing Victor Louis [ph]. So you can see the results and we'll see the percentages when the film gets released, I guess eight days from now or two weeks from now.

Okay, thanks.

Good morning. Thanks for taking my question.

Two for me. First one with respect to Cinema media.

Obviously, very nice growth in Q3 as was the case in the first half of the year. Obviously a much stronger year this year than last year.

I was wondering if in addition to the revenue growth, Gord or Ellis, you can talk a little bit about the structural changes that have occurred. I'm referring to perhaps the change in the sector mix in terms of the advertisers and perhaps even the size -- individual sizes of the contracts.

Is there anything that's, when you look at the individual components where there sort of a difference that you can call out that will help us think through the sustainability of the improvement in Cinema media? And then the second question with respect to VIP, obviously can continues to contribute to the nice CPP growth that you have.

I realized that with the last year there's only been a few additions to the VIP account. Wondering if Ellis you reaching sort of that maturity stage for VIP or is there still a little bit more running room there?

Thank you.

Okay. So on your questions, the first one regarding cinema media, we focused and we actually broaden the base of our clients.

And that's really been a big focus. Because in the past, we relied heavily on a number of clients to deliver, the numbers at the end of each quarter.

And by broadening the base, it also takes away the volatility that we have suffered in the past. So that's been positive.

And we are also using technology to help us an inventory management and the ability to market quickly. So those are all been positive for us as we look forward for that Cinema media business.

On VIP, they continue to do extremely well. As you noticed we just, announced another one for the province of Quebec.

We have one opening in Brentwood. And we are also working on a couple of theatres where we will retrofit them to basically put VIPs into those cinemas that have numerous screens that we can better benefit the bottom line with the VIP experience.

And what helps with the VIP is also the experience for the guests and also the ability to make it a one stop shop when it comes to having a great evening out.

Great. Thank you.

I'll pass the line.

Thank you very much for taking the question. Perhaps if you could go back to the focus on increased over the top provisions.

Could you talk to perspectives you might have, where there are opportunities to do showcasing or specific events, working alongside and taking advantage of the increased competition or the numerous over the top providers?

Well, we have a great asset in our Cineplex store. And our still has, close to 8600 different movie titles.

And one of the things that I have talked with a number of friends. And one of the challenges law with so many different streaming services, they don't know where to find what they're looking for.

And we give them the capacity to go in and for a small rental fee, they can watch what they want when they want it. And to me, that's also very, very positive.

And in the past, we've also basically done in the theatres, events that are part of those streaming companies like we did Game of Thrones with [indiscernible]. So there are lots of opportunities.

I think going forward both from an event perspective in the cinema and also in our store as we go forward.

Okay. And if you can turn to different subjects.

Could you talk to the experience you've had with introducing alcohol across more theatres? You've been pleased with both the revenue generation and you're okay with the incremental costs associated with that?

Well, it definitely has helped our concession per person. And most of them have relatively new rollout.

And it continues to be an overall positive experience for our guests. And, we have rolled it out close to 83 locations as I mentioned.

And the CPP impact is $0.17 -- $0.07 sorry.

And just to clarify that $0.07 would be in your aggregate, not within those specific locations.

Correct. That's the aggregate.

Perfect. Thank you.

Thanks.

Thanks very much. Good morning.

Three questions for me. First, maybe Gord, can you comment on the SCENE issue in the quarter in terms of that security dynamic?

Was there any impact in terms of the results that we see?

Yes. Just quickly that that SCENE issue was not a breach.

But there were individuals, fraudsters fishing for information and looking to garner points. And we basically canceled the specific cards and reissued them and the situation is totally under control and there's no material financial impact.

Okay, thanks, Ellis. A second, back to The Rec Room, certainly a little bit below our forecast.

Can you remind us the seasonality that you're seeing now, across The Rec Room? And is there anything that you think needs to be just fundamentally evolved in terms of the concept when you look at how everything's performing today?

Yes. So in terms of the seasonality, I mean Q2 and Q3 are typically the weakest two quarters with Q4 obviously being the strongest and Q1 being the second strongest.

Now they're fairly I mean, there's not a wide variance in terms of how the percentage is allocated amongst the four quarters. But definitely Q1 and Q4; and Q4, by far the strongest.

So on the second question, we're continually looking to refine that concept. We've really only introduced our first new generation Playdium during the quarter.

As we mentioned we began to reduce the square footage from something that used to be in the 40,000 to 60,000 square foot range to closer to 40,000 foot range. So we're always fine-tuning menus, we're fine-tuning the allocation of floor space.

And I think what else in the labor models but also would move moved into other geographies too. So we're in Eastern Canada.

We're in smaller towns now. And fine tuning it to determine what works within that local community too.

And that does takes a bit of time to tune up. So it's always going to be a consistent evolution.

I think we have tuned in terms of the overall size, the overall allocation. But each market will have its own fine tuning too.

Okay, thanks Gord. One last one, then maybe back to you, Ellis on SVoD product out there through the theatre.

The interesting dynamic with a lot of the consolidation we've seen in the US, and then subsequently, the launch of these new platforms is there's the movie studio and the direct to consumer SVoD platform embedded in the same company. I know it's a complex web that needs to be navigated.

But do you ultimately expect some kind of alignment among all the major players, when these major players and partners, clearly are running now two kind of different models underneath the hood, if you will.

Yes. And I kind of equated back to the days where you have these same partners running, specific television channels and having movies of the week.

And to me this is going to be more of that content that's going to be available. But as I've said before, and Ernst and Young study that was done by the industry basically came up with the fact that people that stream more actually come to the movie theatre more frequently.

So it increases the awareness and they want to get into that social experience and leave their homes. So I don't think there's going to be any kind of disconnect.

I think it will actually work to our overall advantage and the benefit is that there will be more content that will be available, which will be positive.

Okay, thank you.

Yeah, maybe just a follow up to Drew’s question on The Rec Room. Is your target for store level EBITDA margin still 25%?

So an aggregate across the pool of location. So this is a 30 locations in total.

Yes, we're still around that margin now. What we have -- what we're saying is The Rec Room with the 50-50 roughly allocation between food and beverage and amusement sales, will be less than that target rate.

And the Playdium for the smaller box with more of a square footage allocation to amusement leisure should be above that target rate and we expect go in and around that number.

Okay, thanks. That's helpful.

Thank you all for joining us this morning. We wish you a very happy and healthy holiday season.

So with lots of movie theatre visits and entertainment experiences. Thank you.