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Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Cineplex Fourth Quarter Year-End 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Rayhan Azmat. Sir, please begin.
Rayhan Azmat: Good morning, everyone. I would like to welcome you to Cineplex's Fourth Quarter 2025 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 made today are forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding the information currently available. Actual results may differ materially from those expressed in forward-looking statements. Information regarding factors that could cause results to vary can be found in the company's most recently filed annual information form and management discussion and analysis. Following today's remarks, we will close the call with our customary question-and-answer period. I will now turn the call over to Ellis Jacob.
Ellis Jacob: Thank you, Rayhan, and good morning, everyone. I'm pleased to present our fourth quarter and full year 2025 results with you today. We will start with a look at the fourth quarter, which featured a broad and compelling film slate that appeal to audiences across a wide range of genres. The quarter's performance was led by James Cameron's third installment in the Avatar franchise, Avatar: Fire and Ash, which delivered a strong performance and over-indexed at Cineplex powered by audience demand for our premium experiences. Following close behind was family titled Zootopia 2, which provided incredible results and has become the highest grossing Disney animation release of all time globally. The musical Wicked: For Good enchanted audiences and contributed meaningfully to the quarter's performance. In addition, Five Nights at Freddy's 2 delivered the largest December opening ever for a horror film. Together, these results reinforce the familiar truth, when compelling content is available, guests choose to experience it at our theaters. While the quarter included several standout films and strong performances in our premium formats, Q4 results were down compared to last year, driven primarily by the weakest October since 2020. After the slow start to the quarter, the slate strengthened significantly through November, December, supported by the wide range of high-performing titles and leading to our strongest December since 2019. In fact, our fourth quarter box office performance exceeded the domestic market by 218 basis points, marking the third consecutive quarter where we outpaced the North American industry performance. Our premium formats remain one of Cineplex's competitive advantages with guests overwhelmingly choosing to view films in one of the many enhanced formats we offer. In Q4, 43% of our box office came from premium experiences versus 41% in 2024. Our premium formats continue to play a major role in the performance of 2025's biggest titles with our top 5 films averaging 62% of our box office from premium formats. The strong demand for premium experiences, combined with strategic pricing and a continued focus on the guest experience contributed to new all-time records. In Q4, we delivered the highest quarterly box office per patron in our history at $13.87 and a Q4 record for concession per patron at $9.92. Our distribution business, Cineplex Pictures, also had a strong fourth quarter. The Housemaid opened in Q4 and has delivered impressive holding power into January. And Now You See Me: Now You Don't, performed exceptionally well in Canada. Our distribution team continues to demonstrate that we can drive better results as a distributor because of our deep understanding of the Canadian moviegoer allowing us to effectively position and market titles to maximize their potential in this market. The success of our distribution business in the fourth quarter was also highlighted by Jujutsu Kaisen, the anime title performed well and as part of our broader resurgence in the genre. Earlier in 2025, Demon Slayer: Infinity Castle, became the highest-grossing foreign-language film of all time at the domestic box office. Its performance reinforce how anime tentpoles can drive exceptional results when they tap into large, passionate fan bases built over years of televised storytelling. This dynamic extends beyond anime with the Stranger Things series finale, which sold out at 97% of our locations during the year-end. These events reinforce that audiences are choosing to come to our theaters for moments they could easily watch at home, drawn to share and immersive cultural experiences that resonate more deeply in our cinemas. The fourth quarter once again showcased the value of our data-driven audience targeting and localized market expertise. International content represented more than 11% of our Q4 box office nearly double the North American average further demonstrating our ability to identify titles that resonate with specific demographic groups. One of the standout performance this quarter was Dhurandhar, which became the highest grossing Hindi language film in North America where Cineplex delivered an impressive 31% market share and ranked among our top 5 films for the quarter. This underscores how alternative an international content remain key differentiators for Cineplex and positions us well for 2026, which includes a number of highly anticipated international releases including Blades of the Guardians, and Scare Out, both of which they do at the start of Lunar New Year, as well as the sequel to Dhurandhar in March and Ramayana Part 1 later this year during the Indian Festival, Diwali. Our programming strength form an important competitive advantage, reflecting the power of our analytical capabilities and reinforcing the essential role this content plays in the future of theatrical. Turning to our media business, Cinema Media continued to perform well despite a softer advertising market. Q4 revenues increased 12.5% over the prior year despite a decrease in attendance. As a result, our Cinema Media per patron reached a Q4 record of $3.33. Advertisers remain attractive to the high attention environment that only theatrical can offer. Our team continues to leverage data and analytics to optimize campaign performance and demonstrate clear value to our agency partners and clients. We successfully closed the sale of Cineplex Digital Media to Creative Realities, Inc. on November 7, 2025. The transaction unlocks meaningful value for shareholders while strengthening our balance sheet. The initial cash proceeds of approximately $60 million provides flexibility for share buybacks, debt reduction and general corporate purposes. Importantly, Cineplex Media will continue as CDN's exclusive advertising sales agent for its digital out-of-home networks across Canada ensuring continuity for clients and maintaining a strong presence in this market. Turning to our location-based entertainment business, revenue increased 6.8% to $35.9 million in the fourth quarter, driven by the contribution of new locations opened in the prior year. This performance comes against the backdrop of broader industry trends where many operators seeing same-store revenue decline in the same range we are. Despite the softer top line results, we continue to demonstrate strong operational discipline, which helped us maintain flat same-store margins. This reflects the expertise of our teams and our ongoing efforts to optimize the operations of our locations. During the quarter, we announced that construction of a new Playdium is underway at Vaughan Mills, one of Canada's most visited shopping and entertainment destination. This location will further strengthen our position in the GTA and expand our ability to offer guests a dynamic social entertainment experience, anchored in gaming, attractions and food and beverage. Our Cineplex Club program remains a powerful driver of engagement and frequency. Membership has now surpassed 225,000 members and we continue to see strong adoption of the annual plan, which helps reduce churn and support small consistent visitation throughout the year. CineClub members visit more often chose premium formats at a higher rate and spend more on concessions. All signs the program is delivering meaningful value both for our guests and our business. Our new Monday surprise premieres have also been extremely well received, offering moviegoers early access to select titles and creating a sense of exclusivity that strengthens loyalty and deepens engagement. Our broader loyalty ecosystem has also taken an important step forward with the expansion of Scene+ to include Shell as a national partner. This addition enhances the everyday utility of Scene+ by connecting entertainment, groceries, travel, dining and now gas into a holistic value proposition. The ability for guests to own and redeem points across such a wide range of touch points in their daily lives, strengthened Scene+ as one of Canada's leading loyalty programs. I'd like to provide a brief update on our appeal of the Competition Tribunal's decision regarding our online booking fee. The Federal Court of Appeal has upheld the Competition Tribune on September 2024 decision related to Cineplex' presentation of its online booking fee including the $39 million administrative monetary penalty. We respectfully disagree with the Federal Court of Appeals' decision, and we continue to believe that our online booking fee has always been presented in a clear and permanent manner that fully complies with the spirit and letter of the law. We have reviewed the Federal Court of Appeals' decision and will seek leave to appeal to the Supreme Court of Canada and seek the state of this penalty. As we look back on the full year, we started with the soft first quarter, but Q2 to Q4 benefited from a relatively consistent release schedule and a diverse slate of quality films contributing to a solid and steady performance through the balance of the year. From April through December, we delivered box office revenues of 105% of the prior year and outperformed the domestic market over the same period, reflecting the unique strength of our programming strategy and the engagement we continue to see from Canadian moviegoers. Our investment in premium experiences continue to resonate with 44.8% of our box office from Q2 through Q4 generated from premium experiences the highest proportion since the same time frame in 2018. Audiences embraced a wide range of genres and formats. Superman and The Fantastic Four: First Steps, both became the highest grossing films in their franchise. Live action firms, remakes of Lilo & Stitch and How to Train Your Dragon, both outperformed their original films. A Minecraft movie delivered the biggest opening ever for video game adaptation. Best Picture nominee, F1, the movie became Apple's highest grossing film of all time, driven by exceptional performance in our premium formats. Horror film, The Conjuring: Last Rites became the highest grossing in its time chart and the original title Sinners and Weapons will both standout performances and exceeded expectations. Despite this breadth of success, no film surpassed $500 million at the domestic box office. The first time this has occurred since 2016. We do not expect this anomaly to occur again. What gives us more confidence is that the 2026 film slate is shaping up to be significantly stronger than 2025 with both mega blockbusters and depth. Audience engagement to trailers and teasers is suggesting that consumers are meaningfully more interested in 2026 titles than they were in 2025. The 2026 lineup features a remarkable collection of strong intellectual property with incredible brand recognition, including: The Super Mario Galaxy Movie, Toy Story 5, a live-action remake of Moana, Spider-Man: Brand New Day, Dune: Part 3, and Avengers: Doomsday. The slate also includes compelling original titles such as Pixar's Hoppers, Steven Spielberg's Disclosure Day and Chris Nolan's epic The Odyssey. Cineplex Pictures will be distributing the highly anticipated film, Michael, which is the most watched biopic trailer ever. It is also acting as a distributor for the new installment from the Hunger Games franchise, Sunrise on the Reaping. These releases position 2026 as a year with significant strength and greater depth than 2025. With our focus on premium experiences, innovative programming, loyalty engagement and increasing diverse slate, Cineplex is well positioned to capture demand as it develops over the course of the year. Before I close, I'm pleased to announce the appointment of Sean McGuckin to our Board of Directors. As the former Group Head and CFO at Scotiabank, Sean brings intensive leadership experience in finance, governance and executive management and his strategic insight will be a huge asset. We look forward to the valuable perspective he will bring to the board. I would also like to extend our sincere thanks to Rob Bruce for his many years of dedicated service and meaningful contributions to Cineplex. His leadership, counsel and support have played an important role in guiding the company, and we are deeply appreciative of his commitment throughout his tenure. I will now turn the call over to Gord Nelson, our Chief Financial Officer, to walk you through the financials in more detail. Thank you.
Gord Nelson: Thanks, Ellis. I am pleased to present a condensed summary of the fourth quarter and full year 2025 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. So 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. As Ellis mentioned, the fourth quarter was supported by several highly anticipated releases. Our EBITDA remained relatively flat to the prior year despite lower attendance. Total revenue for the quarter was $334.8 million, a decrease of 1.8% from Q4 2024, driven primarily by lower attendance. Adjusted EBITDAaL was $35.1 million, just below the $35.8 million reported in the prior year, reflecting the impact of the lower theater volumes related to a weak start to the quarter, partially offset by strong per patron performance and continued cost discipline. Our consolidated EBITDAaL margin remained steady at 10.5%, consistent with the prior year. So, now let's take a closer look at the segments. In the Film Entertainment and Content segment, box office revenue for the quarter was $140.7 million, down 4.7% and reflecting the 8.9% decrease in attendance to 10.1 million guests. October results were impacted by a softer film slate and competing live events, such as the MLB Playoffs and World Series, which featured our Toronto Blue Jays and generated record-breaking viewership across Canada. As a result, the Canadian market underperformed the North American market by 480 basis points in October. These softer results were partially offset by a strong rebound in the latter half of November and through December led by Wicked: For Good, Zootopia 2 and Avatar: Fire and Ash. The strength in the latter half of the period contributed to Cineplex outperforming the North American box office by 218 basis points for the fourth quarter. Our Q4 BPP of $13.87 was the highest delivered in any quarter on record and represents an increase of 4.6% from last year. This was supported by strategic pricing initiatives and a strong mix of premium products. Similarly, concession per patron reached a Q4 record of $9.92 and our second highest quarterly result ever, up 5.4% driven by continued enhancements in menu offerings, purchase incidents and service execution. While our cash rent paid and payable is lower due to closed locations and the renegotiation of leases upon renewal, theater occupancy increased approximately $3 million over the prior year primarily due to tax and insurance recoveries reflected in the prior year. Segment adjusted EBITDAaL for Film Entertainment and Content was $14.9 million compared to $26.6 million last year reflecting the attendance decline and higher film settlement rates on this quarter's top-performing titles. In our Media segment, Cinema Media revenue increased 12.5% to $33.8 million, driven primarily by higher demand for showtime advertising with strong contributions from pharmaceutical, retail and fragrance and cosmetic clients. The launch of programmatic cinema in the fourth quarter also unlocked incremental demand from connected TV budgets, bringing new advertisers into the cinema environment, particularly within the consumer packaged goods category. Cinema Media per patron increased 23.3% to a Q4 record of $3.33, reflecting strong advertising engagement, especially during an uneven attendance quarter. As a result of the revenue increase, segment adjusted EBITDAaL was $28.3 million, up from $24.9 million in the prior year. On a full year basis, EBITDAaL margin in this segment increased to 80.5% from 79.2% in the prior year. Location-based entertainment revenue for the quarter was $35.9 million, an increase of 6.8% from the prior year, driven primarily by the three new locations that opened in late 2024 and contributed a full quarter results this year versus only partial contribution last year. Same-store revenue declined 4.1% consistent with trends observed across the broader LBE industry. Despite these revenue declines, same-store adjusted EBITDAaL margin of 23.1% remained stable year-over-year, demonstrating the operational improvements and cost discipline we've executed on. These efficiencies helped to mitigate the impact of minimum wage increases. Overall, adjusted store level EBITDAaL for the quarter was $7.6 million compared to $7.9 million last year with an overall margin of 21.1%. At the segment level, adjusted EBITDAaL margin improved to 16.4%, up from 10.2% due to fewer preopening costs in 2025. G&A expenses for the quarter were $14 million, down $5.2 million from the prior year. This decrease was primarily driven by lower LTIP expenses due to increased forfeitures associated with the cost restructuring program and a lower share price. In November, we completed the sale of Cineplex Digital Media and received $60 million in initial cash proceeds. We recognized a gain of $3.3 million and have presented the gain in net income from discontinued operations. Importantly, Cineplex will continue as the exclusive advertising sales agent for CDMs, digital out-of-home networks nationwide under a long-term agreement, preserving continuity and value in our media business. We ended the quarter with $134 million in cash on the balance sheet and no drawings under our $100 million covenant-light credit facility. The December cash balance is higher than prior period due to the $60 million in initial cash proceeds received on the sale of CDM in addition to working capital, NCIB and operating results impacting this balance sheet. With respect to CapEx, net cash capital expenditures for the fourth quarter were $8.1 million, reflecting lower gross spending following the completion of our major LBE openings in late 2024. For the full year, net CapEx was $32.7 million, lower than the $65.9 million in the prior year, which included the three new LBE locations, in Vaughan, [ single. ] Our guidance for 2026 is $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 and growth opportunities. During the fourth quarter, we purchased -- we repurchased approximately $7 million in common shares for cancellation under the NCIB, and we repurchased an additional $5 million in shares in January 2026. We expect the remaining funds from the sale of CDM to be allocated towards a contribution -- combination of debt reduction, opportunistic buybacks or other corporate purposes consistent with our capital priorities. As Ellis mentioned, with respect to the Federal Court of Appeal, upholding the Competition Bureau of September 2024 decision related to the presentation of our online booking fee, we had previously accrued for the $39 million administrative monetary penalty during the third quarter of 2024. There's no impact to our financial statements as a result of this decision, and we will seek leave to appeal to the Supreme Court of Canada and seek a stay of this penalty. Full year results reflect consistent performance across our business. For 2025, total revenues increased 0.8% to $1.2 billion, supported by record per patron metric, strong media performance and stabilized margins in the LBE segment despite macroeconomic impacts. Adjusted EBITDAaL increased to $91.6 million, up from $90 million in the prior year reflecting continued operational discipline and the strength of our teams despite slightly lower attendance. While our consolidated results in 2025 showed modest growth relative to 2024, a notably weak film slate in the first quarter and the start to Q4 hindered our results. We have said that quality content and the consistency brings guests to our theaters and looking ahead to 2026, we expect to benefit from year-over-year improvements in the strength and depth of the film slate. So in summary, we have a strong pipeline of product coming in 2026, particularly in Q2 through Q4. We remain focused on creating long-term value for shareholders and our long history of disciplined operations and capital management will lead us there. With that, I would like to turn things over to the conference operator for questions.
Operator: [Operator Instructions] Our first question or comment comes from the line of Derek Lessard from TD Cowen.
Derek Lessard: Ellis and Gord, hope you're doing well. I just wanted to maybe hit down on the media business. Obviously, it was a pretty good quarter. But you did talk about the launch of programmatic cinema. Could you maybe just add some color around this business and then further around the comments of how it's unlocking new advertisers for you?
Gord Nelson: Sure. So we had adopted programmatic slowly ramping it up over the past year or so. It's been very effective, particularly in the out-of-home networks. And we've launched it in Q4 as it relates to kind of opportunities in the cinema market. And so, although we've had programmatic and our learnings in the out-of-home market, we're really seeing value we can move budgets away from connected TVs into our programmatic markets, and we saw some great insights in that first quarter of deployment in 2025 -- in the fourth quarter of 2025.
Derek Lessard: Okay. That's helpful. And then on the BPP, CPP, both records. So how should we be thinking about, I guess, your ability to further pricing and/or mix optimization going forward?
Gord Nelson: Yes. So our comments on, sort of, Q3 as we -- in Q3 results, we launched some additional $5 discount days, which went through the Labor Day weekend in 2025, which did not happen in 2024. So, in Q3, when you look at our full year results, really look at Q3 is a bit of an anomaly, and we mentioned that during the call. So you see the rebound of the growth in both BPP and CPP in the fourth quarter of 2024. And so as we look forward, we have always said we look to pass on kind of CPI increases in terms of BPP and CPP growth. And then as premium mix shifts, we also benefit from that perspective. Now in any given quarter, the film slate and the type of audience that it tracks whether it's kids or whether it's seniors or whether it's people looking to see in the big screens like UltraAVX and IMAX, that impacts the overall BPP. But on a long-term basis is we would look to continue to take price through CPI increases as we have done historically and balancing out the value offerings that we have, which is our Tuesday offerings and our CineClub program and the other offerings that are at.
Operator: Our next question or comment comes from the line of Charles Zhang from Canaccord Genuity.
Zhongye Zhang: Just regarding the court decision. So as you mentioned, Gord, the provision was already made in last Q3, right? Just to confirm.
Ellis Jacob: Correct. Yes.
Zhongye Zhang: Yes. And maybe on OpEx and some costs tied to the online tickets maybe taper off in the future. I mean, do you see any room for like further cost reductions going forward on that aspect?
Gord Nelson: Sorry, I missed the first part of the question related to which aspect?
Zhongye Zhang: Related to the online booking fees.
Gord Nelson: So look, I'm not sure that there are costs related to the online operating OpEx kind of matters related into the online booking fee matter. We always strive for -- from an OpEx perspective is looking for automation and AI to help us drive efficiencies and opportunities for savings. And so, we would continue to do that. Our online ticketing offering is one of our kind of guest service initiatives that we have out there. And as we look to create digital connections with customers, it's just another element of those connections.
Zhongye Zhang: Maybe on media, I mean, Cinema Media definitely delivered strong Q4 results. And also, we're looking at a pretty strong film slate coming this year in '26, including like Super Mario, Spider-Man, Avengers. And I'm wondering how are you thinking about the outlook there for the Cinema Media?
Ellis Jacob: Yes. We are pretty confident on the media side of the business as a result of, like you mentioned, there is some extremely good content that we have in 2026. So we should be able to continue to move forward strongly. And also on the Digital Media side, we are still providing that selling for those particular locations across the country.
Operator: Our next question or comment comes from the line of Maher Yaghi from Scotiabank.
Maher Yaghi: I noticed that your theater occupancy expenses were up 20% year-on-year in Q4, but also 6% on the year, mostly from a line, other occupancy cost line. Can you provide some insight on what is driving this even though you are down four theaters year-on-year? And how do you expect that cost line to behave next year?
Gord Nelson: Yes, sure, Maher, it's Gord here. I called out a couple of items. So in that cost category, so this is typically non-contractual rent. So it would include -- related -- sorry, occupancy, which does not include contractual rent obligations. So it would include common area maintenance costs, it would include property taxes, it would include insurance on the facilities. And those will be the kind of the core main categories in that line item. I called out a few things in that last year, during the quarter, we had some insurance recoveries as well as some property tax recoveries that caused Q4 to be -- last year to be lower than typical run rate. If you look at the quarters -- each of the quarters, that line item for -- or that category for each of the quarters of the year, you'll see that it's a relatively consistent number. So it will go up and down with where property tax assessments go typically.
Maher Yaghi: Okay. And it could increase a bit, I guess, for next year if it's linked a lot to property taxes?
Gord Nelson: Yes. I mean, you would expect -- I mean, we're seeing a couple of things out there. One is we -- you're seeing ongoing increases in property taxes. We are seeing some level of reduction in insurance costs as we look forward. So -- but the big increase will be related to property taxes. But again, when you look at roughly $240 million in total overall occupancy costs, which includes the rent, the rent component is continued to go down.
Maher Yaghi: Yes. Okay. And just a follow-up on that. In terms of theater count for 2026, how should we think about your year-end getting to from a starting base here in Q1? Is it going to continue to decline like we saw in '24 and '25?
Ellis Jacob: No, we don't expect in 2026 that it continues to decline. We will have a number of closures. I'm sure you heard about The Beaches, which was announced. And -- but we feel that the overall box office will be much stronger in 2026 compared to 2025 because of the content that we have and the great product for the balance of the year.
Maher Yaghi: Okay. But the theater count will be roughly the same as you ended in 2025?
Ellis Jacob: No, we'll be down two to three theaters.
Maher Yaghi: Okay. Okay. That was what I was trying to get down to. So in terms of -- just final question here for me. Looking at the last 2 years, you've been holding steady at around $92 million, $94 million of EBITDAaL. And is this -- I assume this is a good starting base for us to use it for '26, but I'm sure you're expecting growth, as you mentioned from your expectations of better movie theater deployments and shows. So -- but roughly speaking, how should we think about 2026 in terms of EBITDAaL cash generation?
Ellis Jacob: Well, the industry is predicting box office increases from 8% to 15% over 2025. And with our international content and our distribution business, we should be well engaged in getting reasonably strong numbers for 2026. And that will result in stronger EBITDAaL as we look forward.
Operator: Our next question or comment comes from the line of Drew McReynolds from RBCCM.
Sarah McKeown: This is Sarah on for Drew. I just had a quick question on expectations for same-store revenue growth for 2026 for LBE? And additionally, when LBE begins to lap the changes in discretionary spending and consumer behavior?
Ellis Jacob: We are confident that our continued focus on marketing expansion, special offers and growth in groups and event sales will positively impact our performance across both same-store and newer locations for LBE. And as we mentioned earlier that we are going to be opening a location in Vaughan, and that will also assist us in continuing to build the business going forward.
Operator: Our next question or comment comes from the line of Drew Reichert from BMO Capital Markets.
Drew Reichert: This is Drew Reichert on for Tim Casey. The film cost as a percentage of box office has trended up slightly year-over-year and has risen steadily over the past few years. How do you see film cost percent playing out in 2026 given film supply and premium mix?
Ellis Jacob: Film cost is really driven by the performance of the films. And one of the challenges we run into is when you have a lot of bigger producing films, the film cost does go up. But I always say I'd rather have higher box office and pay film costs, because you've got more attendance and more guests coming through the theaters. And that's something that we'll continue to focus and pursue. And what helps too for us in certain cases is the increased film cost from Hollywood is basically helped by our international content where we have better film settlements in certain cases.
Drew Reichert: Okay. And just as a follow-up regarding CapEx trends. CapEx was down pretty significantly in 2025, given the three location expansions in Q4, '24. Could we expect further LBE expansions to return post summer 2026?
Gord Nelson: So we have one location which we announced, the Playdium in Vaughan, which is going to open in the first half of this year. And we -- at this point in time, we have described that we have what we -- we described as a prudent pause, we see the disruption in the retail landscape. We think there are going to be -- what we see retailers leaving that there's going to be some great opportunities in great locations that potentially great economics. So we have no further commitments at this time, but we continue to be monitoring opportunities that may exist out there.
Operator: We have a follow-up question from Mr. Derek Lessard from TD Cowen.
Derek Lessard: Just a follow-up for me. Now with the three LBEs done and cash in the bank from the Digital Media sales, just curious how you are prioritizing capital between the buyback leverage and sort of other growth initiatives?
Gord Nelson: Yes. So -- and those are really our priorities. So in terms of, obviously, the maintenance CapEx is first, our leverage is -- we're not where we are, where we want to be in our comfort zone. So that is, I would say, that priority too. And then, as I believe, I described on the call last time, where we exist today is there's a maximum of about $17.5 million that can be allocated to share buybacks. And so we're at $12 million. So when you think of the overall scheme of things, those are some of the factors that are behind our minds as we evaluate how we allocate capital going forward.
Operator: I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks.
Ellis Jacob: Thank you again for joining the call this morning. We are excited about the outlook for 2026. And even the coming weekend, we're looking forward to three movies that are opening: Wuthering Heights, GOAT, and Crime 101. So make sure you are at the movie theater, and we look forward to sharing our first quarter results in May 2026. Have a wonderful day. Thank you.
Operator: Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.