IMAX CORPORATION REPORTS Q1 2023 RESULTS

  • Global entertainment technology platform drives strong year-over-year growth across all key metrics, including Revenue (+45%), Gross Margin (+58%) and Adjusted EBITDA (+84%)(1)
  • System sales climb to 63 signings year-to-date through April — significantly more than the Company delivered in all of 2022 (47)
  • Strong global box office performance of $273 million highlighted by multiple IMAX records, including:
    • Highest grossing Q1 ever
    • Greatest Q1 global market share ever
    • Highest grossing quarter ever for local language films
    • Highest grossing local language release ever
  • Promising upcoming blockbuster slate includes “Guardians of the Galaxy Vol. 3”, “Fast X”, “The Flash”, “Indiana Jones and the Dial of Destiny”, and “Mission Impossible — Dead Reckoning Part One”
  • Dramatic improvement in Q1 cash flow, with cash from operations of $21.2 million versus ($3.8) million use of cash in Q1 2022

NEW YORK, April 27, 2023 /PRNewswire/ — IMAX Corporation (NYSE: IMAX) today reported strong top and bottom-line financial results for the first quarter of 2023, demonstrating the value of its unique global entertainment technology platform and content portfolio. 


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“IMAX is off to an extremely strong start in 2023, with extraordinary growth in system sales and global box office soaring to an all-time record in the first quarter,” said Richard L. Gelfond, Chief Executive Officer of IMAX. “IMAX has already struck more deals for new and upgraded systems around the world in 2023 than it did in all of 2022, setting the stage for accelerating network expansion. With a very strong summer slate, robust sales activity, and our busiest period of the year for installations ahead, we believe we have a substantial opportunity to drive further growth in our business and results for our shareholders this year and beyond.”

“What’s clear in our results is that IMAX is more global than ever. Many of our signings came in high-value, strong box office international markets where we see significant potential to grow our footprint and drive revenue. Furthermore, nearly a third of our record-breaking global box office in the quarter came from non-Hollywood films — a strong validation of our strategy to diversify our content portfolio and become a leading platform for local language blockbusters around the world.”

“We remain confident we will drive significant growth in 2023 across global box office, system signings, installations, and adjusted EBITDA. And the rapid acceleration of sales activity is a very positive indicator for long-term growth across our global network, box office, and financial results.”







(1)

Non-GAAP Financial Measure. See the discussion at the end of this earnings release for a description of the non-GAAP financial measures used herein, as well as reconciliations to the most comparable GAAP amounts.

First Quarter Financial Highlights



Three Months Ended March 31,


In millions of U.S. Dollars, except per share data

2023



2022



YoY %
Change


Total Revenue

$

86.9



$

60.0




45

%










Gross Margin

$

50.1



$

31.8




58

%

Gross Margin (%)


58

%



53

%













Net Income (Loss)(2)(3)

$

2.5



$

(13.6)



N/A


Diluted Net Income (Loss) per share(2)(3)

$

0.04



$

(0.23)



N/A


Adjusted Net Income (Loss)(1)(2)(3)

$

9.0



$

(8.2)



N/A


Adjusted Net Income (Loss) per share(1)(2)(3)

$

0.16



$

(0.14)



N/A











Adjusted EBITDA per Credit Facility(1)(4)

$

27.3



$

14.8




84

%

Adjusted EBITDA Margin (%)(1)(2)


34.4

%



27.5

%



25

%










Weighted average shares outstanding (in millions):


Basic


54.1




58.6




(8)

%

Diluted


55.0




58.6




(6)

%








(1)

Non-GAAP Financial Measure. See the discussion at the end of this earnings release for a description of the non-GAAP financial measures used herein, as well as reconciliations to the most comparable GAAP amounts.



(2)

Attributable to common shareholders.



(3)

Includes a tax valuation allowance resulting in a negative impact of $1.6 million or $0.03 per share for the three months ended March 31, 2023 (2022 — $5.0 million or $0.09 per share).



(4)

Adjusted EBITDA per Credit facility attributable to common shareholders.

First Quarter Segment Results(1)




Content Solutions



Technology Products and Services






















In millions of U.S. Dollars


Revenue



Gross
Margin



Gross
Margin %



Revenue



Gross
Margin



Gross
Margin %


1Q23


$

32.1



$

18.0




56

%


$

51.7




$

29.9




58

%

1Q22



21.0




12.6




60

%



37.9





18.4




49

%

% change



53

%



43

%






36

%




63

%











(1)

Please refer to the Company’s Form 10-Q for the period ended March 31, 2023 for additional segment information.

Content Solutions Segment

  • Content Solutions revenues of $32.1 million increased 53% year-over-year. Gross box office from IMAX locations in Q1 2023 of $273.4 million, which was up 58% from Q1 2022. Key contributors to first quarter box office performance included:
    • Record local language box office contribution of approximately 30%, driven by IMAX’s highest ever Chinese New Year holiday of $61.3 million.
    • Avatar: The Way of Water delivered over $109 million in IMAX box office bringing the run total to $250 million, making it IMAX’s highest ever first-run release.
  • Gross margin for Content Solutions was $18.0 million, at a 56% margin, an increase of 43% compared to the prior year period.

Technology Products and Services Segment

  • Technology Products and Services revenues and gross margin increased 36% to $51.7 million and 63% to $29.9 million, respectively, which reflects growth in box office tied rental revenues as well as a higher number of sale/hybrid installs and renewals.
  • During the first quarter the Company installed 9 systems compared to 14 systems in the first quarter of 2022. Of those, 8 systems were under sales, sales-type lease and hybrid JRSA arrangements compared to 7 systems in the prior year.

Operating Cash Flow and Liquidity

Net cash provided by operating activities was $21.2 million for the first quarter of 2023 compared to net cash used of ($3.8) million in the prior year period.

As of March 31, 2023, the Company’s available liquidity was $423 million, including cash and cash equivalents of $99 million, $280 million in available borrowing capacity under the Credit Facility and $44 million in available borrowing capacity under IMAX China’s revolving facilities. Total debt, excluding deferred financing costs was $266 million as of March 31, 2023.

Share Count and Capital Return

The weighted average basic and diluted shares outstanding in the first quarter of 2023 were 54.0 million and 55.0 million, respectively, compared to 58.6 million in the first quarter of 2022.

During the first quarter of 2023, the Company repurchased 0.1 million common shares at an average price of $14.87 per share, for a total of $1.6 million.

In 2021, the Company issued $230.0 million of 0.500% Convertible Senior Notes due 2026 (“Convertible Notes”).  In connection with the pricing of the Convertible Notes, the Company entered into privately negotiated capped call transactions with an initial cap price of $37.2750 per share of the Company’s common shares.

As of March 31, 2023, a total of $192 million remains available under the Company’s outstanding share repurchase authorization.

Supplemental Materials

For more information about the Company’s results, please refer to the IMAX Investor Relations website located at investors.imax.com.

Investor Relations Website and Social Media

On a weekly basis, the Company posts quarter-to-date box office results on the IMAX Investor Relations website located at investors.imax.com. The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one-week lag.

The Company may post additional information on the Company’s corporate and Investor Relations website which may be material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company’s website in addition to the Company’s press releases, SEC filings and public conference calls and webcasts, for additional information about the Company.

Conference Call

The Company will host a conference call today at 4:30 PM ET to discuss its first quarter 2023 financial results. This call is being webcast and can be accessed at investors.imax.com. To access the call via telephone, interested parties please pre-register here: https://register.vevent.com/register/BI74037df222dd44cda33eba34abac2311 and you will be provided with a dial-in number and unique pin. To avoid delays, we encourage participants to dial into the conference call ten minutes ahead of the scheduled start time. A replay of the call will be available via webcast at investors.imax.com.

About IMAX Corporation

IMAX, an innovator in entertainment technology, combines proprietary software, architecture, and equipment to create experiences that take you beyond the edge of your seat to a world you’ve never imagined. Top filmmakers and studios are utilizing IMAX systems to connect with audiences in extraordinary ways, and, as such, IMAX’s network is among the most important and successful theatrical distribution platforms for major event films around the globe.

IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of March 31, 2023, there were 1,711 IMAX systems (1,631 commercial multiplexes, 12 commercial destinations, 68 institutional) operating in 87 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchange under the stock code “1970.”

IMAX®, IMAX® 3D, Experience It In IMAX®, The IMAX Experience®, DMR®, Filmed For IMAXTM, IMAX LiveTM, IMAX Enhanced®, and SSIMWAVE® are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. More information about the Company can be found at www.imax.com. You may also connect with IMAX on Instagram ( Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).

For additional information please contact:

Investors:

IMAX Corporation, New York

Jennifer Horsley

212-821-0154

[email protected]

Media:

IMAX Corporation, New York

Mark Jafar

212-821-0102

[email protected]

Forward-Looking Statements

This earnings release contains forward looking statements that are based on IMAX management’s assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. These forward-looking statements include, but are not limited to, references to business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, future capital expenditures (including the amount and nature thereof), industry prospects and consumer behavior, plans and references to the future success of IMAX Corporation together with its consolidated subsidiaries (the “Company”) and expectations regarding the Company’s future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, risks related to the adverse impact of the COVID-19 pandemic; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada, as well as geopolitical conflicts, such as the conflict between Russia and Ukraine; risks related to the Company’s growth and operations in China; the performance of IMAX DMR® films and other films released to the IMAX network; the signing of IMAX System agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which the Company operates, including competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to consolidation among commercial exhibitors and studios; risks related to brand extensions and new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company’s inability to protect the Company’s intellectual property; risks related to climate change; risks related to weather conditions and natural disasters that may disrupt or harm the Company’s business; risks related to the Company’s indebtedness and compliance with its debt agreements; general economic, market or business conditions; risks related to political, economic and social instability, including with respect to the RussiaUkraine conflict; the failure to convert IMAX System backlog into revenue; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in our periodic filings with the SEC; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX’s most recent Annual Report on Form 10-K. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Primary Reporting Groups

The Companys Chief Executive Officer (“CEO”) is its Chief Operating Decision Maker (“CODM”), as such term is defined under U.S. GAAP. The CODM assesses segment performance based on segment revenues and segment gross margins. Selling, general and administrative expenses, research and development costs, the amortization of intangible assets, provision for (reversal of) current expected credit losses, certain write-downs, interest income, interest expense, and income tax (expense) benefit are not allocated to the Companys segments.

In the first quarter of 2023, the Company revised its internal segment reporting, including the information provided to the CODM to assess segment performance and allocate resources. Accordingly, the Company has two reportable segments: (i) Content Solutions, which principally includes content enhancement and distribution services, previously included within the IMAX DMR, Film Distribution and Film Post-Production segments, and (ii) Technology Products and Services, which principally includes the sale, lease, and maintenance of IMAX Systems, previously included within the JRSA, IMAX Systems, IMAX Maintenance, and Other Theater Business segments. The Company’s activities that do not meet the criteria to be considered a reportable segment are reported within All Other. Prior period comparatives have been revised to conform with the current period presentation.

The Company has the following reportable segments:

(i) 

Content Solutions, which principally includes the digital remastering of films and other content into IMAX formats for distribution to the IMAX network. To a lesser extent, the Content Solutions segment also earns revenue from the distribution of large-format documentary films and exclusive experiences ranging from live performances to interactive events with leading artists and creators, as well as film post-production services.



(ii) 

Technology Products and Services, which includes results from the sale or lease of IMAX Systems, as well as from the maintenance of IMAX Systems. To a lesser extent, the Technology Product and Services segment also earns revenue from certain ancillary theater business activities, including after-market sales of IMAX System parts and 3D glasses.

Transactions between segments are valued at exchange value. Inter-segment profits are eliminated upon consolidation, as well as for the disclosures below.

IMAX Network and Backlog




Three Months Ended
March 31,



System Signings:


2023



2022



New IMAX Systems








Sales and sales-type lease arrangements



14




4



Hybrid JRSA






1



Traditional JRSA



13




2



Total new IMAX Systems



27




7



Upgrades of IMAX systems



1






Total IMAX System signings



28




7













Three Months Ended
March 31,



System Installations:


2023



2022



New IMAX Systems








Sales and sales-type lease arrangements



7




4



Hybrid JRSA






2



Traditional JRSA






6



Total new IMAX Systems



7




12



Upgrades of IMAX Systems



2




2



Total IMAX System installations



9




14






March 31,



IMAX System Backlog:


2023



2022



Sales and sales-type lease arrangements



170




171



Hybrid JRSA



118




131



Traditional JRSA



180




185



Total IMAX System backlog



468




487













March 31,



IMAX Network:


2023



2022



Commercial Multiplex Theaters








Sales and sales-type lease arrangements



704




691



Hybrid JRSA



149




148



Traditional JRSA



778




767



Total Commercial Multiplex Theaters



1,631




1,606



Commercial Destination Theaters



12




12



Institutional Theaters



68




72



Total IMAX network



1,711




1,690



IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except per share amounts)

(Unaudited)






Three Months Ended





March 31,





2023



2022


Revenues







Technology sales


$

17,822



$

8,976


Image enhancement and maintenance services



47,127




36,094


Technology rentals



20,058




12,661


Finance income



1,939




2,305






86,946




60,036


Costs and expenses applicable to revenues







Technology sales



7,232




5,985


Image enhancement and maintenance services



23,085




15,743


Technology rentals



6,578




6,537






36,895




28,265


Gross margin



50,051




31,771


Selling, general and administrative expenses



34,148




30,181


Research and development



1,855




1,197


Amortization of intangible assets



1,074




1,196


Credit loss expense, net



220




7,229


Executive transition costs



1,353





Income (loss) from operations



11,401




(8,032)


Realized and unrealized investment gains



44




34


Retirement benefits non-service expense



(77)




(139)


Interest income



407




502


Interest expense



(1,767)




(1,705)


Income (loss) before taxes



10,008




(9,340)


Income tax expense



(4,885)




(2,610)


Net income (loss)



5,123




(11,950)


Less: net income attributable to non-controlling interests



(2,669)




(1,659)


Net income (loss) attributable to common shareholders


$

2,454



$

(13,609)










Net income (loss) per share attributable to common shareholders – basic and diluted:


Net income (loss) per share attributable to common shareholders —  basic


$

0.05



$

(0.23)


Net income (loss) per share attributable to common shareholders — diluted


$

0.04



$

(0.23)


Weighted average shares outstanding —  basic (in thousands)



54,064




58,574


Weighted average shares outstanding —  diluted (in thousands)



54,991




58,574


Additional Disclosure:







Depreciation and amortization


$

13,320



$

12,741


Amortization of deferred financing costs


$

625



$

1,023


IMAX CORPORATION


CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands of U.S. dollars, except share amounts)


(Unaudited)






March 31,



December 31,




2023



2022


Assets







Cash and cash equivalents


$

99,246



$

97,401


Accounts receivable, net of allowance for credit losses



123,382




136,142


Financing receivables, net of allowance for credit losses



131,187




129,384


Variable consideration receivables, net of allowance for credit losses



47,380




44,024


Inventories



37,492




31,534


Prepaid expenses



14,296




12,343


Film assets, net of accumulated amortization



6,347




5,277


Property, plant and equipment, net of accumulated depreciation



248,279




252,896


Investment in equity securities



1,050




1,035


Other assets



15,480




15,665


Deferred income tax assets, net of valuation allowance



11,218




9,900


Goodwill



52,815




52,815


Other intangible assets, net of accumulated amortization



33,349




32,738


Total assets


$

821,521



$

821,154


Liabilities







Accounts payable


$

25,783



$

25,237


Accrued and other liabilities



113,729




117,286


Deferred revenue



73,550




70,940


Revolving credit facility borrowings, net of unamortized debt issuance costs



31,025




36,111


Convertible notes and other borrowings, net of unamortized discounts and debt issuance costs



227,549




226,912


Deferred income tax liabilities



16,046




14,900


Total liabilities



487,682




491,386


Commitments, contingencies and guarantees







Non-controlling interests



731




722


Shareholders’ equity







Capital stock common shares — no par value. Authorized — unlimited number.







54,589,933 issued and outstanding (December 31, 2022 — 54,148,614 issued and
outstanding)



389,500




376,715


Other equity



170,871




185,678


Statutory surplus reserve



3,932




3,932


Accumulated deficit



(292,409)




(293,124)


Accumulated other comprehensive loss



(7,876)




(9,846)


Total shareholders’ equity attributable to common shareholders



264,018




263,355


Non-controlling interests



69,090




65,691


Total shareholders’ equity



333,108




329,046


Total liabilities and shareholders’ equity


$

821,521



$

821,154


IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)




Three Months Ended




March 31,




2023



2022


Operating Activities









Net income (loss)


$


5,123



$


(11,950)


Adjustments to reconcile net income (loss) to cash provided by (used in) operating
activities:









Depreciation and amortization




13,320





12,741


Amortization of deferred financing costs




625





1,023


Credit loss expense, net




220





7,229


Write-downs




304





381


Deferred income tax benefit




(193)





(109)


Share-based and other non-cash compensation




5,135





6,189


Unrealized foreign currency exchange (gain) loss




(78)





58


Realized and unrealized investment gains




(44)





(34)


Changes in assets and liabilities:









Accounts receivable




12,374





(2,654)


Inventories




(5,946)





(534)


Film assets




(3,884)





(5,107)


Deferred revenue




2,606





(830)


Changes in other operating assets and liabilities




(8,344)





(10,186)


Net cash provided by (used in) operating activities




21,218





(3,783)


Investing Activities









Purchase of property, plant and equipment




(364)





(728)


Investment in equipment for joint revenue sharing arrangements




(2,157)





(4,587)


Interest in film classified as a financial instrument








(4,731)


Acquisition of other intangible assets




(1,760)





(551)


Net cash used in investing activities




(4,281)





(10,597)


Financing Activities









Revolving credit facility borrowings




25,717






Repayments of revolving credit facility borrowings




(31,180)






Credit facility amendment fees paid








(1,783)


Other borrowings




315






Repurchase of common shares




(3,656)





(6,272)


Repurchase of common shares, IMAX China








(1,844)


Taxes withheld and paid on employee stock awards vested




(6,233)





(3,136)


Net cash used in financing activities




(15,037)





(13,035)


Effects of exchange rate changes on cash




(55)





4


Increase (decrease) in cash and cash equivalents during period




1,845





(27,411)


Cash and cash equivalents, beginning of period




97,401





189,711


Cash and cash equivalents, end of period


$


99,246



$


162,300


Segment Revenue and Gross Margin




Three Months Ended




March 31,


(In thousands of U.S. Dollars)


2023



2022


Revenue







Content Solutions


$

32,101



$

20,988


Technology Products and Services



51,667




37,863


Sub-total for reportable segments



83,768




58,851


All Other(1)



3,178




1,185


Total


$

86,946



$

60,036









Gross Margin







Content Solutions


$

17,995



$

12,625


Technology Products and Services



29,891




18,416


Sub-total for reportable segments



47,886




31,041


All Other(1)



2,165




730


Total


$

50,051



$

31,771









(1)

All Other includes the results from IMAX Enhanced, SSIMWAVE, and other ancillary activities.

IMAX CORPORATION
NON-GAAP FINANCIAL MEASURES
(in thousands of U.S. dollars)

In this release, the Company presents adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin as supplemental measures of the Company’s performance, which are not recognized under U.S. GAAP. Adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) COVID-19 government relief benefits, net, (iii) realized and unrealized investment gains or losses; (iv) acquisition-related expenses, and (v) executive transaction costs, as well as the related tax impact of these adjustments.

The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company’s financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net income (loss) attributable to common shareholders. Although share-based compensation is an important aspect of the Company’s employee and executive compensation packages, it is a non-cash expense and is excluded from certain internal business performance measures.

A reconciliation from net income (loss) attributable to common shareholders and the associated per share amounts to adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share are presented in the table below. Net income (loss) attributable to common shareholders and the associated per share amounts are the most directly comparable GAAP measures because they reflect the earnings relevant to the Company’s shareholders, rather than the earnings attributable to non-controlling interests.

In addition to the non-GAAP financial measures discussed above, management also uses “EBITDA,” as well as “Adjusted EBITDA per Credit Facility,” as defined in the Company’s Credit Agreement. As allowed by the Credit Agreement, Adjusted EBITDA per Credit Facility includes adjustments in addition to the exclusion of interest, taxes, depreciation and amortization. Accordingly, this non-GAAP financial measure is presented to allow a more comprehensive analysis of the Company’s operating performance and to provide additional information with respect to the Company’s compliance against its Credit Agreement requirements, when applicable. In addition, the Company believes that Adjusted EBITDA per Credit Facility presents relevant and useful information widely used by analysts, investors and other interested parties in the Company’s industry to evaluate, assess and benchmark the Company’s results.

EBITDA is defined as net income or loss excluding (i) income tax expense or benefit; (ii) interest expense, net of interest income; (iii) depreciation and amortization, including film asset amortization; and (iv) amortization of deferred financing costs. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) realized and unrealized investment gains or losses; (iii) acquisition-related expenses; (iv) legal judgment and arbitration awards; (v) executive transition costs, and (vi) write-downs, net of recoveries, including asset impairments and credit loss expense.

A reconciliation of net income (loss) attributable to common shareholders, which is the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA per Credit Facility is presented in the table below. Net income (loss) attributable to common shareholders is the most directly comparable GAAP measure because it reflects the earnings relevant to the Company’s shareholders, rather than the earnings attributable to non-controlling interests.

In this release, the Company also presents free cash flow, which is not recognized under U.S. GAAP, as a supplemental measure of the Company’s liquidity. The Company’s definition of free cash flow deducts only normal recurring capital expenditures, including its investment in joint revenue sharing arrangements, the purchase of property, plant and equipment and the acquisition of other intangible assets (from the Consolidated Statements of Cash Flows), from net cash provided by or used in operating activities. Management believes that free cash flow is a supplemental measure of the cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented below.

These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts.

Adjusted EBITDA per Credit Facility



For the Three Months Ended March 31, 2023


For the Three Months Ended March 31, 2022



Attributable to






Attributable to







Non-controlling


Less:




Non-controlling


Less:





Interests and


Attributable to


Attributable to


Interests and


Attributable to


Attributable to


(In thousands of U.S. Dollars)

Common
Shareholders


Non-controlling
Interests


Common
Shareholders


Common
Shareholders


Non-controlling
Interests


Common
Shareholders


Reported net income (loss)

$


5,123


$


2,669


$


2,454


$


(11,950)


$


1,659


$


(13,609)


Add (subtract):



















Income tax expense



4,885




793




4,092




2,610




487




2,123


Interest expense, net of interest income



735




(11)




746




180




(106)




286


Depreciation and amortization, including film asset
amortization



13,320




1,301




12,019




12,741




1,301




11,440


Amortization of deferred financing costs(1)



625







625




1,023







1,023


EBITDA

$


24,688


$


4,752


$


19,936


$


4,604


$


3,341


$


1,263


Share-based and other non-cash compensation



5,633




194




5,439




6,189




203




5,986


Unrealized investment gains



(44)







(44)




(34)







(34)


Acquisition-related expenses



156







156











Write-downs, including asset impairments and credit
loss expense



524




82




442




7,610




18




7,592


Executive transition costs



1,353







1,353











Adjusted EBITDA per Credit Facility

$


32,310


$


5,028


$


27,282


$


18,369


$


3,562


$


14,807


Revenues attributable to common shareholders(2)

$


86,946


$


7,537


$


79,409


$


60,036


$


6,140


$


53,896


Adjusted EBITDA margin attributable to common
shareholders

37.2 %


66.7 %


34.4 %


30.6 %


58.0 %


27.5 %






















For the Twelve Months Ended March 31, 2023


For the Twelve Months Ended March 31, 2022



Attributable to






Attributable to







Non-controlling


Less:




Non-controlling


Less:





Interests and


Attributable to


Attributable to


Interests and


Attributable to


Attributable to


(In thousands of U.S. Dollars)

Common
Shareholders


Non-controlling
Interests


Common
Shareholders


Common
Shareholders


Non-controlling
Interests


Common
Shareholders


Reported net (loss) income

$


(2,804)


$


3,933


$


(6,737)


$


(11,027)


$


10,071


$


(21,098)


Add (subtract):



















Income tax expense



12,382




1,562




10,820




20,106




3,562




16,544


Interest expense, net of interest income



1,827




(156)




1,983




1,130




(376)




1,506


Depreciation and amortization, including film asset
amortization



57,240




4,820




52,420




56,146




5,407




50,739


Amortization of deferred financing costs(1)



2,779







2,779




3,227







3,227


EBITDA

$


71,424


$


10,159


$


61,265


$


69,582


$


18,664


$


50,918


Share-based and other non-cash compensation



27,017




751




26,266




26,847




1,071




25,776


Unrealized investment gains



(81)







(81)




(126)







(126)


Acquisition-related expenses



1,278







1,278











Write-downs, including asset impairments and credit
loss expense



8,638




1,787




6,851




4,905




(961)




5,866


Legal judgement and arbitration awards












(1,770)







(1,770)


Executive transition costs



1,353







1,353











Adjusted EBITDA per Credit Facility

$


109,629


$


12,697


$


96,932


$


99,438


$


18,774


$


80,664


Revenues attributable to common shareholders(2)

$


327,715


$


22,280


$


305,435


$


276,165


$


31,997


$


244,168


Adjusted EBITDA margin attributable to common
shareholders

33.5 %


57.0 %


31.7 %


36.0 %


58.7 %


33.0 %









(1)

The amortization of deferred financing costs is recorded within Interest Expense in the Condensed Consolidated Statement of Operations.



(2)

Revenues attributable to common shareholders calculated as follows:


Three months ended



Three months ended



Twelve months ended



Twelve months ended


(In thousands of U.S. Dollars)

March 31, 2023



March 31, 2022



March 31, 2023



March 31, 2022


Total revenues





$


86,946







$


60,036







$


327,715






$


276,165


Greater China revenues

$


26,566







$


21,476







$


78,420







$


108,759





Non-controlling interest ownership percentage(3)


28.37 %








28.59 %








28.41 %








29.42 %





Deduction for non-controlling interest share of
revenues







(7,537)









(6,140)









(22,280)








(31,997)


Revenues attributable to common shareholders





$


79,409







$


53,896







$


305,435






$


244,168




(3)

Weighted average ownership percentage for change in non-controlling interest share.

Adjusted Net Income (Loss) Attributable to Common Shareholders and Adjusted Net Income (Loss) Per Diluted Share




Three Months Ended March 31,




2023



2022


(In thousands of U.S. Dollars, except per share amounts)


Net Income



Per Share



Net Loss



Per Share


Net income (loss) attributable to common shareholders


$

2,454



$

0.04



$

(13,609)



$

(0.23)


Adjustments(1):













Share-based compensation



5,536




0.10




5,959




0.10


COVID-19 government relief benefits, net









(193)





Unrealized investment gains



(45)







(34)





Acquisition-related expenses



156











Executive transition costs



1,353




0.02








Tax impact on items listed above



(429)




(0.01)




(367)




(0.01)


Adjusted net income (loss)(1)


$

9,025



$

0.16



$

(8,244)



$

(0.14)















Weighted average shares outstanding — basic






54,064







58,574


Weighted average shares outstanding — diluted






54,991







58,574









(1)

Reflects amounts attributable to common shareholders.

Free Cash Flow




Three Months Ended


(In thousands of U.S. Dollars)


March 31, 2023


Net cash provided by operating activities


$


21,218


Net cash used in investing activities




(4,281)


Free cash flow


$


16,937


SOURCE IMAX Corporation

IMAX CORPORATION REPORTS Q1 2023 RESULTS



Originally published at https://www.prnewswire.com/news-releases/imax-corporation-reports-q1-2023-results-301810172.html

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