NEW YORK, Oct. 20, 2016 /CNW/ --
HIGHLIGHTS
- IMAX increases installation guidance to a range of 155 to 160
theatres, up from prior guidance of 155 theatres
- Signed a record 162 theatre systems in the third quarter,
bringing first nine month signings to 293, eclipsing the 138 system
signings for all of 2015
- Installed 48 new IMAX® theatres—a third-quarter Company
record
- Domestic Per Screen Average of $174,200 in third quarter, up 8% vs. the prior
year period
- Announced pilot virtual reality facilities in Los Angeles and Manchester, England, both to open late
2016
IMAX Corporation (NYSE: IMAX) today reported
third-quarter 2016 revenues of $86.6
million and net income attributable to common shareholders
of $2.5 million, or $0.04 per share. Adjusted net income attributable
to common shareholders was $7.9
million, or $0.12 per diluted
share. EBITDA as calculated in accordance with the Company's credit
facility was $24.5 million. For
reconciliations of adjusted net income to reported net income,
adjusted net income per diluted share to reported net income per
diluted share, and for the definition and reconciliation of EBITDA
as calculated in accordance with the Company's credit facility,
please see the end of this press release.
"The third quarter was strategic on several fronts that we
believe will support the continued long-term growth and health of
our business – including record signings and installation activity,
the repurchase of 500,000 common shares under our buy-back program
and reaching key milestones in the coming launch of our pilot
location-based virtual reality offering," said IMAX CEO
Richard L. Gelfond. "In just the
first nine months of the year, we signed a record 293 theatre
agreements, the majority of which came from existing partners
looking to expand their IMAX footprint. As importantly, our
accelerated install pace continued into the third quarter as well,
with a record 48 new theatre installs–signaling continued
demand from exhibitors to open their IMAX® theatres ahead of the
highly anticipated upcoming film slate."
Network Update:
During the quarter, the Company installed 50 theatres, of which 48
were for new theatre locations and 2 were upgrades. The Company
also signed contracts for 162 theatres in the third quarter of
2016. The total IMAX theatre network consisted of 1,145 systems as
of Sept. 30, 2016, of which 1,037
were in commercial multiplexes. There were 547 theatres in backlog
as of Sept. 30, 2016, up 23.8% from
the 442 in backlog as of June 30,
2016. For a breakdown of theatre system signings,
installations, network and backlog by type, please see the end of
this press release.
Box Office Update:
Gross box office from IMAX DMR® titles was $186.3 million in the third quarter of 2016,
compared with $189.8 million in the
prior-year period. The average global DMR box office per-screen
average in the third quarter of 2016 was $184,700.
"From a box office perspective, we were encouraged by a number
of key markets - including the domestic market - which saw IMAX per
screen averages rise 8% in the third quarter. While global box
office overall was flat versus the third quarter of last year, box
office is cyclical and we can expect periods that are stronger than
others – such as the first five months of 2016. We anticipate box
office will pick up again in the fourth quarter with titles such as
Marvel's Doctor Strange, which includes more than an hour of
footage specially formatted exclusively for IMAX, the Harry Potter
spin-off Fantastic Beasts and Where to Find Them, and
of course Rogue One: A Star Wars Story. With the anticipated
strength of the tentpole-heavy film slate over the next 24 months
coupled with the heightened demand from filmmakers to differentiate
their movies using IMAX® cameras and the ideal content spacing, we
believe we are well-positioned to take advantage of the years
ahead."
Third-Quarter Segment Results
- Revenue from sales and sales-type leases was $21.8 million in the third quarter of 2016,
compared with $26.6 million in the
third quarter of 2015. The Company installed 15 full theatre
systems under sales and sales-type lease arrangements in the most
recent quarter, compared with the 12 full sales-type theatres
installed in the third quarter of 2015. The Company also recognized
2 upgrades under sales and sales-type lease arrangements in the
most recent quarter, compared to 8 in the same period last
year.
- Revenue from joint revenue-sharing arrangements was
$19.7 million in the quarter,
compared with $19.8 million in the
prior-year period. During the quarter, the Company installed 33 new
theatres under joint revenue-sharing arrangements, compared with 22
in the third quarter of 2015. The Company had 592 theatres
operating under joint revenue-sharing arrangements as of
Sept. 30, 2016, as compared to 498
joint revenue-sharing theatres one year prior.
- Production and DMR revenues were $21.5
million in the third quarter of 2016, compared with
$20.9 million in the third quarter of
2015. As mentioned above, gross box office from DMR titles was
$186.3 million in the third quarter
of 2016, compared with $189.8 million
in the prior-year period. The global DMR per screen average in the
third quarter of 2016 was $184,700,
compared with $220,500 in same period
last year.
- Gross margin across all segments in the third quarter of 2016
was 51.9%, compared to 49.8% in the third quarter of 2015.
- Operating expenses (which include SG&A and R&D, and
excludes stock-based compensation) were $27.5 million in the quarter, compared with
$23.4 million in the third quarter of
2015.
"While we remain focused on our core business, in the third
quarter we expanded our efforts to deliver differentiated
entertainment experiences with the coming launch of our premium
location-based VR offering, IMAX VR™," Gelfond said. "I am
pleased to report that we have already made significant progress on
this initiative and have received strong interest for centre
partnerships, content deals and many other opportunities that we
hope to begin announcing over the coming months. While we are still
in the early test phase of this effort, we are optimistic about VR
and the potential sizeable opportunity that it presents our
business."
Share Buybacks
The Company repurchased 500,000 shares in the third quarter of
2016. The Company purchased the shares at an average price of
$29.32, for a total value of
$14.7 million. The Company did not
repurchase any shares in connection with the administration of the
Company's long-term incentive plan in the third quarter of
2016.
Supplemental Earnings Materials
For more information
about our results, please refer to the earnings slides posted on
the IMAX Investor Relations website located at
www.imax.com/content/investor-relations.
Investor Relations Website and Social Media
Beginning the week of October 24,
2016, and on a weekly basis thereafter, the Company intends
to post quarter-to-date box office results on the IMAX Investor
Relations website located at
www.imax.com/content/investor-relations. 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. In addition, the Company has created a new
Twitter account: @IMAX_IR. The Company intends to use Twitter to
disclose the foregoing box office information, as well as other
information that may be of interest to the Company's investor
community.
The information posted on the Company's website and/or via its
Twitter account may be deemed material to investors. Accordingly,
investors, media and others interested in the Company should
monitor the Company's website and its Twitter account in addition
to the Company's press releases, SEC filings and public conference
calls and webcasts.
Conference Call
The Company will host a conference
call today at 8:30 AM ET to
discuss its third-quarter 2016 financial results. To access the
call via telephone, interested parties in the US and Canada should dial (800) 505-9568
approximately 5 to 10 minutes before the call begins. Other
international callers should dial (416) 204-9271. The conference ID
for the call is 6905161. A replay of the call will be available via
webcast on the IMAX Investor Relations website located at
www.imax.com/content/investor-relations or via telephone by dialing
(888) 203-1112 (US and Canada), or
(647) 436-0148 (international). The Conference ID for the telephone
replay is 6905161.
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 theatres 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 offices in
London, Tokyo, Shanghai and Beijing. As of Sep. 30,
2016, there were 1,145 IMAX theatres (1,037 commercial
multiplexes, 16 commercial destinations and 92 institutions) in 74
countries. On Oct. 8, 2015, shares of
IMAX China, a subsidiary of IMAX Corp., began trading on the Hong
Kong Stock Exchange under the stock code "HK.1970."
IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D
Experience®, The IMAX Experience®, IMAX Is Believing® and IMAX
nXos® are trademarks of IMAX Corporation. More information about
the Company can be found at www.imax.com. You may also connect with
IMAX on Facebook (www.facebook.com/imax), Twitter
(www.twitter.com/imax) and YouTube
(www.youtube.com/imaxmovies).
This press 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. Important factors
that could affect these statements include, but are not limited to,
references to future capital expenditures (including the amount and
nature thereof), business and technology strategies and measures to
implement strategies, competitive strengths, goals, expansion and
growth of business, operations and technology, 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,
the signing of theater system agreements; conditions, changes
and developments in the commercial exhibition industry; the
performance of IMAX DMR films; the potential impact of increased
competition in the markets within which the Company operates;
competitive actions by other companies; the failure to respond to
change and advancements in digital technology; 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; risks
related to the Company's growth and operations in China; the Company's largest customer
accounting for a significant portion of the Company's revenue and
backlog; risks related to 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; risks
related to the Company's inability to protect its intellectual
property; risks related to the Company's implementation of a new
enterprise resource planning system; general economic, market or
business conditions; the failure to convert theater system backlog
into revenue; changes in laws or regulations; and other factors,
many of which are beyond the control of the Company. These
factors, other risks and uncertainties and financial details are
discussed in IMAX's most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q.
For additional information please contact:
Investors: IMAX Corporation, New York Jessica Kourakos
212-821-0100
jkourakos@imax.com
Michael
Mougias
212-821-0187
mmougias@imax.com
Business
Media:
Sloane & Company,
New York Whit Clay
212-446-1864
wclay@sloanepr.com
|
Media: IMAX Corporation, New York Ann Sommerlath 212-821-0155
asommerlath@imax.com
Entertainment
Media:
Principal
Communications Group, Los Angeles
Melissa
Zuckerman/Paul Pflug
323-658-1555
melissa@pcommgroup.com
paul@pcommgroup.com
|
Additional
Information
|
Signings and
Installations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended September
30,
|
|
|
|
Theater
Signings:
|
2016
|
|
2015
|
|
|
|
Full new sales and
sales-type lease arrangements
|
5
|
|
11
|
|
|
|
New joint revenue
sharing arrangements
|
156
|
|
22
|
|
|
|
Total new
theaters
|
161
|
|
33
|
|
|
|
Upgrade of IMAX
theater systems
|
1
|
|
2
|
|
|
|
Total Theater
Signings
|
162
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended September
30,
|
|
|
|
Theater
Installations:
|
2016
|
|
2015
|
|
|
|
Full new sales and
sales-type lease arrangements
|
15
|
|
12
|
|
|
|
New joint revenue
sharing arrangements
|
33
|
|
22
|
|
|
|
Total new
theaters
|
48
|
|
34
|
|
|
|
Upgrade of IMAX
theater systems
|
2
|
(1)
|
10
|
(1)
|
|
|
Total Theater
Installations
|
50
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September
30,
|
|
|
|
Theater
Backlogs:
|
2016
|
|
2015
|
|
|
|
New sales and
sales-type lease arrangements
|
158
|
|
175
|
|
|
|
New joint revenue
sharing arrangements
|
389
|
|
209
|
|
|
|
Total new
theaters
|
547
|
(2)(3)
|
384
|
(2)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September
30,
|
|
|
|
Theater
Network:
|
2016
|
|
2015
|
|
|
|
Commercial Multiplex
Theaters:
|
|
|
|
|
|
|
Sales and sales-type
lease arrangements
|
445
|
|
389
|
|
|
|
Joint revenue sharing
arrangements
|
592
|
|
498
|
|
|
|
Total Commercial
Multiplex Theaters
|
1,037
|
|
887
|
|
|
|
|
|
|
|
|
|
|
Commercial Destination
Theaters
|
16
|
|
19
|
|
|
|
Institutional
Theaters
|
92
|
|
102
|
|
|
|
Total Theater
Installations
|
1,145
|
|
1,008
|
|
|
______________________
(1) Includes two
installations of an upgrade to a laser-based digital system under
sales and sales-type lease arrangements (2015 – nine
laser-based digital systems, seven under sales and sales-type lease
arrangements, one under a short-term operating lease arrangement
and one under a joint revenue sharing arrangement).
(2) Includes 20 laser-based
digital theater system configurations (2015 – 69), including
upgrades. The Company continues to develop and roll out its
laser-based digital projection system.
(3) Includes five upgrades to
a laser-based digital theater system, in existing IMAX theater
locations.
(4) Includes 20 upgrades to a
digital theater system, in existing IMAX theater locations (two
xenon configurations and 18 laser configurations, of which four are
under joint revenue sharing arrangements).
|
Additional Information (continued)
In addition to the 42 IMAX DMR films released to the IMAX
theater network during the first nine months ended September 30, 2016, 5 additional IMAX DMR films
have been announced so far to be released in the remaining three
months of 2016:
- Inferno: The IMAX Experience (Sony
Pictures, October 2016);
- Jack Reacher: Never Go Back: The IMAX
Experience (Paramount Pictures, October 2016);
- Doctor Strange: The IMAX Experience (Walt Disney
Studios, November 2016);
- Fantastic Beasts and Where to Find Them: The IMAX
Experience (Warner Bros. Pictures, November 2016); and
- Rogue One: A Star Wars Story: The IMAX
Experience (Walt Disney Studios, December 2016).
In addition, the Company will be releasing an IMAX documentary
film, Voyage of Time, on October 7,
2016.
To date, the Company has announced the following 24 titles to be
released in 2017 to the IMAX theater network:
- xXx: Return of Xander Cage:
The IMAX Experience (Paramount Pictures, January 2017);
- Resident Evil: The Final Chapter: The IMAX
Experience (Sony Pictures, February
2017);
- Attraction: The IMAX Experience (Art Pictures
Studio, January 2017, Russia only);
- The Lego Batman Movie: The IMAX Experience
(Warner Bros. Pictures, February
2017);
- The Great Wall: The IMAX Experience (Legendary
East Ltd., February 2017);
- Logan: The IMAX Experience (20th Century Fox,
March 2017);
- Kong: Skull Island: The IMAX Experience (Warner
Bros. Pictures, March 2017);
- Beauty and The Beast: The IMAX Experience (Walt
Disney Studios, March 2017);
- Ghost in the Shell: The IMAX Experience
(Paramount Pictures, March
2017);
- Fast 8: The IMAX Experience (Universal Pictures,
April 2017);
- Guardians of the Galaxy Vol. 2: The IMAX
Experience (Walt Disney Studios, May
2017);
- Pirates of the Caribbean: Dead Men Tell No Tales: The
IMAX Experience (Walt Disney Studios, May 2017);
- Wonder Woman: The IMAX Experience (Warner Bros.
Pictures, June 2017);
- The Mummy: The IMAX Experience (Universal
Pictures, June 2017);
- Transformers: The Last Knight: The IMAX
Experience (Paramount Pictures, June
2017);
- Spider-Man: Homecoming: The IMAX Experience (Sony
Pictures-distributed and Marvel Studios and Sony Pictures-
produced, July 2017);
- Dunkirk: The IMAX
Experience (Warner Bros. Pictures, July 2017);
- The Solutrean: The IMAX Experience (Sony
Pictures, September 2017);
- The Lego Ninjago Movie: The IMAX Experience
(Warner Bros. Pictures, September
2017);
- Blade Runner 2049: The IMAX Experience
(Warner Bros. Pictures, October
2017);
- Geostorm: The IMAX Experience (Warner Bros.
Pictures, October 2017);
- Thor: Ragnarök: The IMAX Experience (Walt Disney
Studios, November 2017);
- Justice League: The IMAX
Experience (Warner Bros. Pictures, November 2017); and
- Star Wars: Episode VIII: The IMAX Experience
(Walt Disney Studios, December
2017).
The Company remains in active negotiations with all of the major
Hollywood studios for additional
films to fill out its short and long-term film slate, and
anticipates that the number of IMAX DMR films to be released to the
IMAX network in 2017 will be similar to the 47 IMAX DMR films
slated for release in 2016.
IMAX
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands of
U.S. dollars, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
Nine
Months
|
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment and product
sales
|
|
$
|
30,835
|
|
$
|
33,083
|
|
$
|
81,064
|
|
$
|
72,824
|
Services
|
|
|
37,195
|
|
|
33,024
|
|
|
122,853
|
|
|
115,698
|
Rentals
|
|
|
16,007
|
|
|
16,665
|
|
|
58,538
|
|
|
59,006
|
Finance
income
|
|
|
2,288
|
|
|
2,329
|
|
|
6,991
|
|
|
6,803
|
Other
|
|
|
225
|
|
|
-
|
|
|
975
|
|
|
141
|
|
|
|
|
86,550
|
|
|
85,101
|
|
|
270,421
|
|
|
254,472
|
Costs and expenses
applicable to revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment and product
sales
|
|
|
15,690
|
|
|
21,949
|
|
|
49,075
|
|
|
43,010
|
Services
|
|
|
20,393
|
|
|
15,899
|
|
|
58,517
|
|
|
50,201
|
Rentals
|
|
|
5,504
|
|
|
4,864
|
|
|
15,367
|
|
|
13,856
|
Other
|
|
|
64
|
|
|
-
|
|
|
110
|
|
|
-
|
|
|
|
|
41,651
|
|
|
42,712
|
|
|
123,069
|
|
|
107,067
|
Gross
margin
|
|
|
44,899
|
|
|
42,389
|
|
|
147,352
|
|
|
147,405
|
Selling, general and
administrative expenses
|
|
|
30,686
|
|
|
24,973
|
|
|
92,706
|
|
|
82,348
|
|
(including
share-based compensation expense of $7.7 million and $22.5
million
for the three and nine months ended September 30, 2016,
respectively (2015 -
expense of $4.3 million and $14.9 million,
respectively))
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
4,460
|
|
|
2,722
|
|
|
11,603
|
|
|
9,611
|
Amortization of
intangibles
|
|
|
531
|
|
|
429
|
|
|
1,537
|
|
|
1,302
|
Receivable
provisions, net of recoveries
|
|
|
275
|
|
|
361
|
|
|
631
|
|
|
709
|
Asset
impairments
|
|
|
1,223
|
|
|
245
|
|
|
1,223
|
|
|
245
|
Impairment of
investments
|
|
|
-
|
|
|
-
|
|
|
194
|
|
|
350
|
Income from
operations
|
|
|
7,724
|
|
|
13,659
|
|
|
39,458
|
|
|
52,840
|
Interest
income
|
|
|
370
|
|
|
222
|
|
|
1,217
|
|
|
727
|
Interest
expense
|
|
|
(469)
|
|
|
(463)
|
|
|
(1,325)
|
|
|
(1,170)
|
Income from
operations before income taxes
|
|
|
7,625
|
|
|
13,418
|
|
|
39,350
|
|
|
52,397
|
Provision for income
taxes
|
|
|
(2,551)
|
|
|
(2,477)
|
|
|
(9,635)
|
|
|
(12,408)
|
Loss from
equity-accounted investments, net of tax
|
|
|
(690)
|
|
|
(427)
|
|
|
(2,471)
|
|
|
(1,610)
|
Net
income
|
|
|
4,384
|
|
|
10,514
|
|
|
27,244
|
|
|
38,379
|
Less: net income
attributable to non-controlling interests
|
|
|
(1,859)
|
|
|
(1,904)
|
|
|
(7,401)
|
|
|
(5,028)
|
Net income
attributable to common shareholders
|
|
$
|
2,525
|
|
$
|
8,610
|
|
$
|
19,843
|
|
$
|
33,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share attributable to common shareholders - basic &
diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
– basic
|
|
$
|
0.04
|
|
$
|
0.12
|
|
$
|
0.29
|
|
$
|
0.47
|
Net income per share
– diluted
|
|
$
|
0.04
|
|
$
|
0.12
|
|
$
|
0.29
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (000's):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
67,090
|
|
|
69,699
|
|
|
68,053
|
|
|
69,582
|
|
Fully
Diluted
|
|
|
67,746
|
|
|
70,860
|
|
|
68,721
|
|
|
71,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Disclosure:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(1)
|
|
$
|
12,115
|
|
$
|
10,467
|
|
$
|
34,179
|
|
$
|
31,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes $0.1
million and $0.4 million of amortization of deferred financing
costs charged to interest expense for the three and nine months
ended September 30, 2016, respectively (2015 - $0.3 million and
$0.7 million, respectively).
|
IMAX
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands of
U.S. dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
at
|
|
As
at
|
|
September
30
|
|
December
31
|
|
2016
|
|
2015
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
218,104
|
|
$
|
317,449
|
Accounts receivable,
net of allowance for doubtful accounts of $1,026 (December 31, 2015
— $1,146)
|
|
89,247
|
|
|
97,981
|
Financing
receivables
|
|
118,897
|
|
|
117,231
|
Inventories
|
|
51,015
|
|
|
38,753
|
Prepaid
expenses
|
|
11,603
|
|
|
6,498
|
Film
assets
|
|
15,165
|
|
|
14,571
|
Property, plant and
equipment
|
|
233,984
|
|
|
218,267
|
Other
assets
|
|
26,419
|
|
|
26,136
|
Deferred income
taxes
|
|
26,233
|
|
|
26,666
|
Other intangible
assets
|
|
29,605
|
|
|
28,950
|
Goodwill
|
|
39,027
|
|
|
39,027
|
Total
assets
|
$
|
859,299
|
|
$
|
931,529
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Bank
indebtedness
|
$
|
27,806
|
|
$
|
29,276
|
Accounts
payable
|
|
16,733
|
|
|
23,455
|
Accrued and other
liabilities
|
|
90,485
|
|
|
95,748
|
Deferred
revenue
|
|
97,220
|
|
|
104,993
|
Total
liabilities
|
|
232,244
|
|
|
253,472
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
2,693
|
|
|
3,307
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Capital stock common
shares — no par value. Authorized — unlimited number.
|
|
|
|
|
|
66,813,963 — issued
and 66,813,787 — outstanding (December 31, 2015 — 69,673,244 —
issued
and outstanding)
|
|
435,829
|
|
|
448,310
|
Less: Treasury stock
held in trust, 176 shares at cost
|
|
(6)
|
|
|
-
|
Other
equity
|
|
180,358
|
|
|
168,425
|
Accumulated (deficit)
earnings
|
|
(43,816)
|
|
|
15,499
|
Accumulated other
comprehensive loss
|
|
(4,562)
|
|
|
(7,443)
|
Total
shareholders' equity attributable to common
shareholders
|
|
567,803
|
|
|
624,791
|
Non-controlling
interests
|
|
56,559
|
|
|
49,959
|
Total
shareholders' equity
|
|
624,362
|
|
|
674,750
|
Total liabilities
and shareholders' equity
|
$
|
859,299
|
|
$
|
931,529
|
IMAX
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands of
U.S. dollars)
|
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Cash provided by
(used in):
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
27,244
|
|
$
|
38,379
|
|
Adjustments to
reconcile net income to cash from operations:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
34,179
|
|
|
31,191
|
|
Write-downs, net of
recoveries
|
|
|
2,903
|
|
|
2,928
|
|
Change in deferred
income taxes
|
|
|
(517)
|
|
|
5,097
|
|
Stock and other
non-cash compensation
|
|
|
22,896
|
|
|
15,204
|
|
Unrealized foreign
currency exchange (gain) loss
|
|
|
(206)
|
|
|
716
|
|
Loss from
equity-accounted investments
|
|
|
2,769
|
|
|
2,756
|
|
Gain on non-cash
contribution to equity-accounted investees
|
|
|
(298)
|
|
|
(1,146)
|
|
Investment in film
assets
|
|
|
(14,162)
|
|
|
(12,069)
|
|
Changes in other
non-cash operating assets and liabilities
|
|
|
(29,504)
|
|
|
(41,033)
|
|
Net cash provided
by operating activities
|
|
|
45,304
|
|
|
42,023
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
|
(10,033)
|
|
|
(38,443)
|
|
Investment in joint
revenue sharing equipment
|
|
|
(25,524)
|
|
|
(20,969)
|
|
Investment in new
business ventures
|
|
|
-
|
|
|
(2,000)
|
|
Acquisition of other
intangible assets
|
|
|
(2,931)
|
|
|
(3,622)
|
|
Net cash used in
investing activities
|
|
|
(38,488)
|
|
|
(65,034)
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Increase in bank
indebtedness
|
|
|
-
|
|
|
17,568
|
|
Repayment of bank
indebtedness
|
|
|
(1,500)
|
|
|
-
|
|
Repurchase of common
shares
|
|
|
(100,378)
|
|
|
(34,279)
|
|
Settlement of
restricted share units and options
|
|
|
(8,376)
|
|
|
(7,859)
|
|
Common shares issued
- stock options exercised
|
|
|
7,196
|
|
|
23,838
|
|
Taxes paid on
secondary sale and repatriation dividend
|
|
|
(2,991)
|
|
|
-
|
|
Taxes withheld and
paid on employee stock awards vested
|
|
|
(230)
|
|
|
(223)
|
|
Treasury stock
purchased for future settlement of restricted share
units
|
|
|
(6)
|
|
|
(2,141)
|
|
Credit facility
amendment fees paid
|
|
|
-
|
|
|
(1,310)
|
|
Issuance of
subsidiary shares to non-controlling interests - private
offering
|
|
|
-
|
|
|
40,000
|
|
Share issuance costs
from the issuance of subsidiary shares to
non-controlling
|
|
|
|
|
|
|
|
interests - private
offering
|
|
|
-
|
|
|
(2,000)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(106,285)
|
|
|
33,594
|
|
|
|
|
|
|
|
|
|
Effects of exchange
rate changes on cash
|
|
|
124
|
|
|
275
|
|
|
|
|
|
|
|
|
|
(Decrease)
increase in cash and cash equivalents during period
|
|
|
(99,345)
|
|
|
10,858
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
|
317,449
|
|
|
106,503
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
218,104
|
|
$
|
117,361
|
|
IMAX
CORPORATION SELECTED FINANCIAL DATA In
accordance with United States Generally Accepted Accounting
Principles (in thousands of U.S. dollars)
|
|
The Company has seven
reportable segments identified by category of product sold or
service provided: IMAX systems; theater system maintenance; joint
revenue sharing arrangements; film production and IMAX DMR; film
distribution; film post-production; and other. The IMAX systems
segment includes the design, manufacture, sale or lease of IMAX
theater projection system equipment. The theater system maintenance
segment includes the maintenance of IMAX theater projection system
equipment in the IMAX theater network. The joint revenue sharing
arrangements segment includes the provision of IMAX theater
projection system equipment to an exhibitor in exchange for a share
of the box-office and concession revenues. The film production and
IMAX DMR segment includes the production of films and the
performance of film re-mastering services. The film distribution
segment includes the distribution of films for which the Company
has distribution rights. The film post-production segment provides
film post-production and film print services. The other segment
includes certain IMAX theaters that the Company owns and operates,
camera rentals and other miscellaneous items.
|
|
|
|
|
|
Three
Months
|
|
Nine
Months
|
|
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
|
|
|
|
2016
|
|
|
2015
|
|
2016
|
|
2015
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX Theater
Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX
Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and sales-type
leases
|
|
$
|
21,804
|
|
$
|
26,635
|
|
$
|
58,522
|
|
$
|
53,924
|
|
|
Ongoing rent, fees,
and finance income
|
|
|
3,883
|
|
|
3,518
|
|
|
11,986
|
|
|
10,708
|
|
|
Other
|
|
|
4,904
|
|
|
3,221
|
|
|
14,394
|
|
|
11,320
|
|
|
|
|
|
30,591
|
|
|
33,374
|
|
|
84,902
|
|
|
75,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Theater System
Maintenance
|
|
|
10,293
|
|
|
9,337
|
|
|
30,031
|
|
|
27,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint Revenue Sharing
Arrangements
|
|
|
19,698
|
|
|
19,797
|
|
|
66,940
|
|
|
67,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Film
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and IMAX
DMR
|
|
|
21,549
|
|
|
20,865
|
|
|
78,767
|
|
|
75,144
|
|
Film distribution and
post-production
|
|
|
4,419
|
|
|
1,728
|
|
|
9,781
|
|
|
8,772
|
|
|
|
|
|
25,968
|
|
|
22,593
|
|
|
88,548
|
|
|
83,916
|
Total
|
|
$
|
86,550
|
|
$
|
85,101
|
|
$
|
270,421
|
|
$
|
254,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margins
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX Theater
Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX
systems(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and sales-type
leases
|
|
$
|
12,936
|
|
$
|
9,775
|
|
$
|
26,795
|
|
$
|
24,720
|
|
|
Ongoing rent, fees,
and finance income
|
|
|
3,807
|
|
|
3,334
|
|
|
11,457
|
|
|
10,111
|
|
|
Other
|
|
|
69
|
|
|
(267)
|
|
|
(251)
|
|
|
(421)
|
|
|
|
|
|
16,812
|
|
|
12,842
|
|
|
38,001
|
|
|
34,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Theater System
Maintenance
|
|
|
3,398
|
|
|
3,521
|
|
|
10,207
|
|
|
9,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint Revenue Sharing
Arrangements(1)
|
|
|
10,980
|
|
|
12,130
|
|
|
44,716
|
|
|
46,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Film
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and IMAX
DMR(1)
|
|
|
12,448
|
|
|
13,929
|
|
|
52,398
|
|
|
55,642
|
|
Film distribution and
post-production(1)
|
|
|
1,261
|
|
|
(33)
|
|
|
2,030
|
|
|
646
|
|
|
|
|
|
13,709
|
|
|
13,896
|
|
|
54,428
|
|
|
56,288
|
Total
|
|
$
|
44,899
|
|
$
|
42,389
|
|
$
|
147,352
|
|
$
|
147,405
|
__________________
|
(1)
|
IMAX systems include
marketing and commission costs of $0.8 million and $1.9 million for
the three and nine months ended September 30, 2016, respectively
(2015 - $0.9 million and $1.8 million, respectively). Joint revenue
sharing arrangements segment margins include advertising, marketing
and commission costs of $1.4 million and $2.9 million for the three
and nine months ended September 30, 2016, respectively (2015 - $1.3
million and $2.7 million, respectively). Production and DMR segment
margins include marketing costs of $4.2 million and $11.7 million
for the three and nine months ended September 30, 2016,
respectively (2015 - $3.4 million and $8.3 million, respectively).
Distribution segment margins include marketing expense of $0.6
million and $2.1 million for the three and nine months ended
September 30, 2016, respectively (2015 - cost recovery of less than
$0.1 million and cost recovery of $0.1 million,
respectively).
|
IMAX
CORPORATION OTHER INFORMATION (in thousands of
U.S. dollars)
|
|
Non-GAAP
Financial Measures:
|
|
In this release, the
Company presents adjusted net income, adjusted net income per
diluted share, adjusted net income attributable to common
shareholders and adjusted net income attributable to common
shareholders per diluted share as supplemental measures of
performance of the Company, which are not recognized under U.S.
GAAP. The Company presents adjusted net income and adjusted net
income per diluted share because it believes that they are
important supplemental measures of its comparable controllable
operating performance and it wants to ensure that its investors
fully understand the impact of its stock-based compensation (net of
any related tax impact) on net income. In addition, the Company
presents adjusted revenue attributable to common shareholders,
adjusted net income attributable to common shareholders and
adjusted net income attributable to common shareholders per diluted
share because it believes that they are important supplemental
measures of its comparable financial results and could potentially
distort the analysis of trends in business performance and it wants
to ensure that its investors fully understand the impact of net
income attributable to non-controlling interests and its
stock-based compensation (net of any related tax impact) in
determining net income attributable to common shareholders.
Management uses these measures to review operating performance on a
comparable basis from period to period. However, these non-GAAP
measures may not be comparable to similarly titled amounts reported
by other companies. Adjusted net income, adjusted net income per
diluted share, adjusted revenue attributable to common
shareholders, adjusted net income attributable to common
shareholders and adjusted net income attributable to common
shareholders per diluted share should be considered in addition to,
and not as a substitute for, revenue, net income and net income
attributable to common shareholders and other measures of financial
performance reported in accordance with U.S. GAAP.
|
|
The Credit Facility
provides that the Company will be required at all times to satisfy
a Minimum Liquidity Test (as defined in the Credit Agreement) of at
least $50.0 million. The Company will also be required to maintain
minimum adjusted EBITDA (as defined in the credit agreement) of
$100.0 million. The Company must also maintain a Maximum Total
Leverage Ratio (as defined in the credit agreement) of 2.25:1.0,
which requirement decreases to (i) 2.0:1.0 on December 31, 2016;
and (ii) 1.75:1.0 on December 31, 2017. The Company was in
compliance with all of these requirements at September 30, 2016.
The ratio of total debt to adjusted EBITDA was 0.21:1 as at
September 30, 2016, where Total Debt (as defined in the credit
agreement) is the sum of all obligations evidenced by notes, bonds,
debentures or similar instruments and was $28.2
million. Adjusted EBITDA is calculated as follows:
|
|
|
|
For
the
|
|
For
the
|
|
|
|
3 months
ended
|
|
12 months
ended
|
|
|
September 30,
2016
|
|
September 30,
2016
|
(1)
|
(In thousands
of U.S. Dollars)
|
|
|
|
|
|
|
Net income
|
$
|
4,384
|
|
$
|
53,489
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
Loss from equity
accounted investments
|
|
690
|
|
|
3,263
|
|
|
Provision for income
taxes
|
|
2,551
|
|
|
17,279
|
|
|
Interest expense, net
of interest income
|
|
99
|
|
|
358
|
|
|
Depreciation and
amortization, including film asset amortization
|
|
11,984
|
|
|
45,036
|
|
|
Write-downs, net of
recoveries including asset impairments and
|
|
|
|
|
|
|
|
receivable
provisions
|
|
1,654
|
|
|
3,700
|
|
|
Stock and other
non-cash compensation
|
|
7,882
|
|
|
30,071
|
|
|
EBITDA before
non-controlling interests
|
|
29,244
|
|
|
153,196
|
|
|
EBITDA attributable
to non-controlling interests(2)
|
|
(4,738)
|
|
|
(20,006)
|
|
|
EBITDA attributable
to common shareholders
|
$
|
24,506
|
|
$
|
133,190
|
|
|
Adjusted revenues
attributable to common shareholders(3)
|
$
|
77,171
|
|
$
|
350,657
|
|
|
Adjusted EBITDA
margin
|
|
31.8%
|
|
|
38.0%
|
|
__________________
|
|
(1)
|
Ratio of funded debt
calculated using twelve months ended EBITDA.
|
|
(2)
|
The EBITDA
calculation specified for purpose of the minimum EBITDA covenant
excludes the reduction in EBITDA from the Company's non-controlling
interests.
|
|
|
|
|
(3)
|
|
3 months ended
September 2016
|
|
12 months ended
September 2016
|
|
|
Total
revenues
|
|
$
86,550
|
|
|
|
|
$
|
389,754
|
|
|
Greater China
revenues
|
$
29,736
|
|
|
|
$
123,961
|
|
|
|
|
|
Non-controlling
interest ownership percentage
|
31.54%
|
|
|
|
31.54%
|
|
|
|
|
|
Deduction for
non-controlling interest share of revenues
|
|
(9,379)
|
|
|
|
|
|
(39,097)
|
|
|
Adjusted revenues
attributable to common shareholders
|
|
$
77,171
|
|
|
|
|
$
|
350,657
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX
CORPORATION OTHER INFORMATION (in thousands of
U.S. dollars)
|
|
Adjusted Net
Income and Adjusted Diluted Per Share Calculations – Quarter Ended
September 30, 2016 vs. 2015:
|
|
The Company reported
net income of $4.4 million or $0.07 per basic and diluted
share for the third quarter of 2016, as compared to net income of
$10.5 million or $0.15 per basic share and $0.14 per
diluted share for the third quarter of 2015. Net income for the
third quarter of 2016 includes a $7.7 million charge or
$0.11 per diluted share (2015 — $4.3 million or
$0.06 per diluted share) for stock-based compensation.
Adjusted net income, which consists of net income excluding the
impact of stock-based compensation and the related tax impact, was
$9.9 million or $0.15 per diluted share for the third quarter of
2016, as compared to adjusted net income of $13.9 million or $0.19
per diluted share for the third quarter of 2015. Adjusted net
income attributable to common shareholders, which consists of net
income attributable to common shareholders excluding the impact of
stock-based compensation and the related tax impact, was $7.9
million or $0.12 per diluted share for the third quarter of 2016,
as compared to adjusted net income attributable to common
shareholders of $12.0 million or $0.17 per diluted share for the
third quarter of 2015. A reconciliation of net income and net
income attributable to common shareholders, the most directly
comparable U.S. GAAP measure, to adjusted net income, adjusted net
income per diluted share, adjusted net income attributable to
common shareholders and adjusted net income attributable to common
shareholders per diluted share is presented in the table
below:
|
|
|
|
Quarter Ended
September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
Net
Income
|
|
Diluted
EPS
|
|
|
Net
Income
|
|
Diluted
EPS
|
|
Reported net
income
|
$
|
4,384
|
|
$
|
0.07
|
|
|
$
|
10,514
|
|
$
|
0.14
|
(1)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
7,742
|
|
|
0.11
|
|
|
|
4,252
|
|
|
0.06
|
|
|
Tax impact on items
listed above
|
|
(2,210)
|
|
|
(0.03)
|
|
|
|
(901)
|
|
|
(0.01)
|
|
Adjusted net
income
|
|
9,916
|
|
|
0.15
|
|
|
|
13,865
|
|
|
0.19
|
(1)
|
|
Net income
attributable to non-controlling interests
|
|
(1,859)
|
|
|
(0.03)
|
|
|
|
(1,904)
|
|
|
(0.02)
|
|
|
Stock-based
compensation (net of tax of less than $0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
million)
attributable to non-controlling interests
|
|
(128)
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
Adjusted net income
attributable to common shareholders
|
$
|
7,929
|
|
$
|
0.12
|
|
|
$
|
11,961
|
|
$
|
0.17
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
|
|
|
67,746
|
|
|
|
|
|
|
70,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________
|
|
(1)
|
Includes impact of
$0.3 million of accretion charges associated with redeemable Class
C shares of IMAX China.
|
Adjusted Net
Income and Adjusted Diluted Per Share Calculations – Period Ended
September 30, 2016 vs. 2015
|
|
The Company reported
net income of $27.2 million or $0.40 per basic and diluted share
for the nine months ended September 30, 2016, as compared to net
income of $38.4 million or $0.54 per basic share and $0.53 per
diluted share for the nine months ended September 30, 2015. Net
income for the nine months ended September 30, 2016 includes a
$22.5 million charge or $0.32 per diluted share (2015 — $14.9
million or $0.21 per diluted share) for stock-based compensation.
Adjusted net income, which consists of net income excluding the
impact of stock-based compensation and the related tax impact, was
$43.3 million or $0.63 per diluted share for the nine months ended
September 30, 2016, as compared to adjusted net income of $50.7
million or $0.70 per diluted share for the nine months ended
September 30, 2015. Adjusted net income attributable to common
shareholders, which consists of net income attributable to common
shareholders excluding the impact of stock-based compensation and
the related tax impact, was $35.5 million or $0.52 per diluted
share for the nine months ended September 30, 2016, as compared to
adjusted net income attributable to common shareholders of $45.7
million or $0.63 per diluted share for the nine months ended
September 30, 2015. A reconciliation of net income and net income
attributable to common shareholders, the most directly comparable
U.S. GAAP measure, to adjusted net income, adjusted net income per
diluted share, adjusted net income attributable to common
shareholders and adjusted net income attributable to common
shareholders per diluted share is presented in the table
below:
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
Net
Income
|
|
Diluted
EPS
|
|
|
Net
Income
|
|
Diluted
EPS
|
|
Reported net
income
|
$
|
27,244
|
|
$
|
0.40
|
|
|
$
|
38,379
|
|
$
|
0.53
|
(1)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
22,485
|
|
|
0.32
|
|
|
|
14,930
|
|
|
0.21
|
|
|
Tax impact on items
listed above
|
|
(6,394)
|
|
|
(0.09)
|
|
|
|
(2,603)
|
|
|
(0.04)
|
|
Adjusted net
income
|
|
43,335
|
|
|
0.63
|
|
|
|
50,706
|
|
|
0.70
|
(1)
|
|
Net income
attributable to non-controlling interests
|
|
(7,401)
|
|
|
(0.11)
|
|
|
|
(5,028)
|
|
|
(0.07)
|
|
|
Stock-based
compensation (net of tax of $0.1 million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable to
non-controlling interests
|
|
(421)
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
Adjusted net income
attributable to common shareholders
|
$
|
35,513
|
|
$
|
0.52
|
|
|
$
|
45,678
|
|
$
|
0.63
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
|
|
|
68,721
|
|
|
|
|
|
|
71,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________
|
|
(1)
|
Includes impact of
$0.7 million of accretion charges associated with redeemable Class
C shares of IMAX China.
|
Free Cash
Flow: Free cash flow is defined as cash provided by
operating activities minus cash used in investing activities (from
the consolidated statements of cash flows). Cash provided by
operating activities consist of net income, plus depreciation and
amortization, plus the change in deferred income taxes, plus other
non-cash items, plus changes in working capital, less investment in
film assets, plus other changes in operating assets and
liabilities. Cash used in investing activities includes capital
expenditures, acquisitions and other cash used in investing
activities. Management views free cash flow, a non-GAAP measure, as
a measure of the Company's after-tax 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 in the table
below:
|
|
|
|
For
the
|
|
For
the
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
September 30,
2016
|
|
September 30,
2016
|
(In thousands
of U.S. Dollars)
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
9,237
|
|
$
|
45,304
|
Net cash used in
investing activities
|
|
(7,625)
|
|
|
(38,488)
|
|
Free cash
flow
|
$
|
1,612
|
|
$
|
6,816
|
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SOURCE IMAX Corporation