- Global entertainment platform delivers Revenue of $79 million and strong profitability, including
Net Income of $3.3 million up 33% YoY
and Total Adjusted EBITDA Margin(1) of 40.5% up more
than 300 basis points YoY.
- IMAX system installations climb +67% YoY to 15 in Q1; sales
activity gaining momentum with 17 signings for new and upgraded
IMAX systems worldwide year-to-date.
- IMAX Global Box Office (GBO) of $261
million marks Company's third highest grossing Q1 ever,
driven by "Dune: Part Two", "Godzilla x Kong: New Empire";
IMAX-exclusive "Queen Rock Montreal"; and local language releases,
which contributed 21% of quarterly GBO.
- IMAX delivers 5.9% of Domestic Box Office in Q1 — Company's
highest quarterly market share ever in North America — and strong 3.4% of Global Box
Office.
NEW
YORK, April 25, 2024 /PRNewswire/ -- IMAX
Corporation (NYSE: IMAX) today reported financial results for the
first quarter of 2024, demonstrating the value of its unique global
entertainment platform and broad content portfolio.
"IMAX powers awe-inspiring experiences for audiences around the
world; our technology, deep relationships with creators, and global
scale combine to make us a wholly differentiated platform, and as a
result, one of the most consistent winners in global media and
entertainment," said Rich Gelfond,
CEO of IMAX.
"Our industry leading momentum is fueled in part by our
strategic expansion of the IMAX value proposition; increasingly,
our technology is driving content creation as much as it is content
delivery. "Oppenheimer", "Dune — Part Two", and "Godzilla x Kong"
demonstrate that more and more of today's commercially and
critically successful blockbusters are shot with IMAX cameras for
the IMAX platform — which drives our global box office and makes
our systems even more of a 'must have' for global
exhibitors."
"We currently have more films in production shooting with IMAX
cameras than at any time in our history, and an unprecedented run
of Filmed for IMAX® titles scheduled for 2025 —
including every one of our releases slated for the critical summer
blockbuster season. We are also opening the aperture of The IMAX
Experience® by working with a wider variety of creators
than ever across local language, documentaries, and music, gaming,
sports, and live events."
"IMAX is very well-positioned to accelerate growth and margin
expansion with a promising slate for the duration of the year,
2025, and 2026, and strong sales activity across key global markets
we're targeting for expansion."
_______________
(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
|
2024
|
|
|
2023
|
|
|
YoY %
Change
|
|
Total
Revenue
|
$
|
79.1
|
|
|
$
|
86.9
|
|
|
|
(9)
|
%
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
$
|
46.9
|
|
|
$
|
50.1
|
|
|
|
(6)
|
%
|
Gross Margin
(%)
|
|
59.3
|
%
|
|
|
57.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjusted
EBITDA(1)(2)
|
$
|
32.1
|
|
|
$
|
32.3
|
|
|
|
(1)
|
%
|
Total Adjusted
EBITDA Margin (%)(1)(2)
|
|
40.5
|
%
|
|
|
37.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income(3)
|
$
|
3.3
|
|
|
$
|
2.5
|
|
|
|
33
|
%
|
Diluted Net Income per
share(3)
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
|
50
|
%
|
Adjusted Net
Income(1)(3)
|
$
|
7.9
|
|
|
$
|
9.0
|
|
|
|
(12)
|
%
|
Adjusted Net Income Per
Share(1)(3)
|
$
|
0.15
|
|
|
$
|
0.16
|
|
|
|
(6)
|
%
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding (in millions):
|
|
|
Basic
|
|
52.5
|
|
|
|
54.1
|
|
|
|
(3)
|
%
|
Diluted
|
|
53.4
|
|
|
|
55.0
|
|
|
|
(3)
|
%
|
_______________
(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)
|
Total Adjusted EBITDA
is before adjustments for non-controlling interests. Total Adjusted
EBITDA per Credit Facility attributable to common shareholders,
excluding non-controlling interests, was $28.1 million and $27.3
million for each of the three months ended March 31, 2024 and 2023,
respectively.
|
|
|
(3)
|
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 %
|
1Q24
|
|
$
|
34.0
|
|
|
$
|
22.1
|
|
|
65 %
|
|
$
|
43.2
|
|
|
|
$
|
23.6
|
|
|
55 %
|
1Q23
|
|
|
32.1
|
|
|
|
18.0
|
|
|
56 %
|
|
|
51.7
|
|
|
|
|
29.9
|
|
|
58 %
|
%
change
|
|
6 %
|
|
|
23 %
|
|
|
|
|
(16 %)
|
|
|
|
(21 %)
|
|
|
|
_______________
Please refer to the Company's Form 10-Q for the period ended
March 31, 2024 for additional segment
information.
Content Solutions Segment
- Content Solutions revenue of $34 million increased 6%
year-over-year driven by incremental revenue from alternative
content including the Queen Rock Montreal concert film coupled with
the strong March box office from "Dune: Part 2" and "Godzilla x
Kong: New Empire". Gross box office from IMAX locations of
$261 million compares to box office
of $273 million in Q1 2023.
- Gross margin for Content Solutions of $22 million increased 23%
year-over-year. Gross margin percent of 65% increased 900
basis points year-over-year driven by lower marketing expenses and
the performance of alternative content.
Technology Products and Services Segment
- Technology Products and Services revenues and gross margin
decreased 16% to $43 million and 21% to $24 million, respectively,
reflecting lower system renewals and mix of fewer sale/hybrid
installations.
- During the first quarter the Company installed 15 systems
compared to 9 systems in the first quarter of 2023. Of those, 5
systems were under sales arrangements compared to 8 systems in the
prior year.
- The Commercial network grew 4% year-over-year with the number
of IMAX locations increasing to 1,697.
- IMAX system backlog stands at 442 systems at the end of March
including 377 new systems representing potential future network
growth of approximately 21%.
Operating Cash Flow and Liquidity
Net cash used in operating activities for the first quarter of
2024 was $11.0 million compared to
net cash provided by operating activities of $21.2 million in the first quarter of 2023. The
change year over year reflects the timing of box office and related
collections. The first quarter of 2023 operating cash flows
benefited from strong box office at the end of 2022 and in early
2023 driven by the film slate, which included Avatar: The
Way of Water. In comparison, the first quarter of 2024
operating cash flows were negatively impacted from lower levels of
box office in the fourth quarter 2023, and early 2024 due to the
weaker film slate stemming from the Hollywood Actors and Writers
strikes.
As of March 31, 2024, the
Company's available liquidity was $367.0
million. The Company's liquidity includes cash and cash
equivalents of $81.0 million,
$231.0 million in available borrowing
capacity under the Credit Facility, and $55.0 million in available borrowing capacity
under IMAX China's revolving facilities. Total debt, excluding
deferred financing costs, was $302.0
million as of March 31,
2024.
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.
Share Count and Capital Return
The weighted average basic and diluted shares outstanding used
in the calculation of adjusted EPS for the first quarter of 2024
were 52.5 million and 53.4 million, respectively, compared to 54.1
million and 55.0 million, respectively for the first quarter of
2023, a decrease year-over-year of 2.9% for both basic and diluted
shares outstanding.
During the first quarter of 2024, the Company repurchased 1.2
million common shares at an average price of $13.99 per share, for a total of $16.2 million, excluding commission.
On June 14, 2023, the Company
announced a 3-year extension to its share-repurchase program
through June 30, 2026. The current
share-repurchase program authorizes the Company to repurchase up to
$400.0 million of its common shares,
of which approximately $150.8 million
remains available.
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 monthly 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
within five business days of month-end, although the Company may
change this timing without notice.
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 8:30 AM ET to discuss its first quarter 2024
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/BI46ca10609420421dbc164d6f147fe1ff 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,
making IMAX's network 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, 2024, there were 1,772 IMAX systems (1,697 commercial
multiplexes, 12 commercial destinations, 63 institutional)
operating in 89 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 IMAX®, IMAX LIVETM, IMAX
Enhanced®, IMAX StreamSmartTM, and
SSIMWAVE® are trademarks and trade names of IMAX
Corporation or its subsidiaries that are registered or otherwise
protected under laws of various jurisdictions. For more
information, visit www.imax.com. You can also connect with IMAX on
Instagram (www.instagram.com/company/imax), Facebook
(www.facebook.com/imax), LinkedIn (www.linkedin.com/company/imax),
X (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
jhorsley@imax.com
|
Media:
IMAX Corporation, New
York
Mark Jafar
212-821-0102
mjafar@imax.com
|
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 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; risks related to the Company's growth and operations in
China; the performance of IMAX
remastered 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 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 associated with the
Company's use of artificial intelligence and exploration of
additional use cases of artificial intelligence; 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; the failure
to convert 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 the Company's 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 the Company'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 Company's 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 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 Company's segments.
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(1):
|
|
2024
|
|
|
2023
|
|
Sales
Arrangements
|
|
|
5
|
|
|
|
15
|
|
Hybrid JRSA
|
|
|
—
|
|
|
|
—
|
|
Traditional JRSA
|
|
|
3
|
|
|
|
13
|
|
Total IMAX System Signings
|
|
|
8
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
System
Installations(2):
|
|
2024
|
|
|
2023
|
|
Sales
Arrangements
|
|
|
5
|
|
|
|
8
|
|
Hybrid JRSA
|
|
|
1
|
|
|
|
—
|
|
Traditional JRSA
|
|
|
9
|
|
|
|
1
|
|
Total IMAX System Installations
|
|
|
15
|
|
|
|
9
|
|
|
|
|
|
March
31,
|
|
System
Backlog:
|
|
2024
|
|
|
2023
|
|
Sales
Arrangements
|
|
|
164
|
|
|
|
170
|
|
Hybrid JRSA
|
|
|
101
|
|
|
|
118
|
|
Traditional JRSA
|
|
|
177
|
|
|
|
180
|
|
Total IMAX System
Backlog
|
|
|
442
|
|
|
|
468
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
System
Network:
|
|
2024
|
|
|
2023
|
|
Commercial Multiplex
Theaters
|
|
|
|
|
|
|
Sales
Arrangements
|
|
|
768
|
|
|
|
704
|
|
Hybrid JRSA
|
|
|
138
|
|
|
|
149
|
|
Traditional
JRSA
|
|
|
791
|
|
|
|
778
|
|
Total Commercial
Multiplex Theaters
|
|
|
1,697
|
|
|
|
1,631
|
|
Commercial Destination
Theaters
|
|
|
12
|
|
|
|
12
|
|
Institutional
Theaters
|
|
|
63
|
|
|
|
68
|
|
Total System
Network
|
|
|
1,772
|
|
|
|
1,711
|
|
______________
(1)
|
System signings include
new signings of 8 in Q1 2024 and 27 in Q1 2023.
|
|
|
(2)
|
System installations
include new systems installations of 12 in Q1 2024 and 7 in Q1
2023.
|
IMAX
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(In thousands of
U.S. dollars, except per share amounts)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2024
|
|
|
2023
|
|
Revenues
|
|
|
|
|
|
|
Technology
sales
|
|
$
|
7,904
|
|
|
$
|
17,822
|
|
Image enhancement and
maintenance services
|
|
|
50,348
|
|
|
|
47,127
|
|
Technology
rentals
|
|
|
18,601
|
|
|
|
20,058
|
|
Finance
income
|
|
|
2,270
|
|
|
|
1,939
|
|
|
|
|
|
79,123
|
|
|
|
86,946
|
|
Costs and expenses
applicable to revenues
|
|
|
|
|
|
|
Technology
sales
|
|
|
4,767
|
|
|
|
7,232
|
|
Image enhancement and
maintenance services
|
|
|
21,195
|
|
|
|
23,085
|
|
Technology
rentals
|
|
|
6,272
|
|
|
|
6,578
|
|
|
|
|
|
32,234
|
|
|
|
36,895
|
|
Gross
margin
|
|
|
46,889
|
|
|
|
50,051
|
|
Selling, general and
administrative expenses
|
|
|
31,257
|
|
|
|
34,148
|
|
Research and
development
|
|
|
2,187
|
|
|
|
1,855
|
|
Amortization of
intangible assets
|
|
|
1,343
|
|
|
|
1,074
|
|
Credit loss expense,
net
|
|
|
35
|
|
|
|
220
|
|
Restructuring and
executive transition costs
|
|
|
—
|
|
|
|
1,353
|
|
Income from
operations
|
|
|
12,067
|
|
|
|
11,401
|
|
Realized and unrealized
investment gains
|
|
|
30
|
|
|
|
44
|
|
Retirement benefits
non-service expense
|
|
|
(107)
|
|
|
|
(77)
|
|
Interest
income
|
|
|
534
|
|
|
|
407
|
|
Interest
expense
|
|
|
(1,945)
|
|
|
|
(1,767)
|
|
Income before
taxes
|
|
|
10,579
|
|
|
|
10,008
|
|
Income tax
expense
|
|
|
(5,159)
|
|
|
|
(4,885)
|
|
Net
income
|
|
|
5,420
|
|
|
|
5,123
|
|
Less: net income
attributable to non-controlling interests
|
|
|
(2,146)
|
|
|
|
(2,669)
|
|
Net income
attributable to common shareholders
|
|
$
|
3,274
|
|
|
$
|
2,454
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to common shareholders:
|
|
Basic
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
Diluted
|
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding (in thousands):
|
|
|
|
|
|
|
Basic
|
|
|
52,501
|
|
|
|
54,064
|
|
Diluted
|
|
|
53,406
|
|
|
|
54,991
|
|
Additional
Disclosure:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
|
15,164
|
|
|
$
|
13,320
|
|
Amortization of
deferred financing costs
|
|
$
|
492
|
|
|
$
|
625
|
|
IMAX
CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
(In thousands of
dollars, except share amounts)
|
|
|
|
March 31,
|
|
|
December
31,
|
|
|
|
2024
|
|
|
2023
|
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
81,017
|
|
|
$
|
76,200
|
|
Accounts receivable,
net of allowance for credit losses
|
|
|
140,579
|
|
|
|
136,259
|
|
Financing receivables,
net of allowance for credit losses
|
|
|
125,614
|
|
|
|
127,154
|
|
Variable consideration
receivables, net of allowance for credit losses
|
|
|
64,503
|
|
|
|
64,338
|
|
Inventories
|
|
|
36,153
|
|
|
|
31,584
|
|
Prepaid
expenses
|
|
|
12,711
|
|
|
|
12,345
|
|
Film assets, net of
accumulated amortization
|
|
|
8,050
|
|
|
|
6,786
|
|
Property, plant and
equipment, net of accumulated depreciation
|
|
|
240,450
|
|
|
|
243,299
|
|
Other assets
|
|
|
19,634
|
|
|
|
20,879
|
|
Deferred income tax
assets, net of valuation allowance
|
|
|
7,712
|
|
|
|
7,988
|
|
Goodwill
|
|
|
52,815
|
|
|
|
52,815
|
|
Other intangible
assets, net of accumulated amortization
|
|
|
34,902
|
|
|
|
35,022
|
|
Total
assets
|
|
$
|
824,140
|
|
|
$
|
814,669
|
|
Liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
18,734
|
|
|
$
|
26,386
|
|
Accrued and other
liabilities
|
|
|
101,038
|
|
|
|
111,013
|
|
Deferred
revenue
|
|
|
60,999
|
|
|
|
67,105
|
|
Revolving credit
facility borrowings, net of unamortized debt issuance
costs
|
|
|
68,034
|
|
|
|
22,924
|
|
Convertible notes and
other borrowings, net of unamortized discounts and debt issuance
costs
|
|
|
229,435
|
|
|
|
229,131
|
|
Deferred income tax
liabilities
|
|
|
12,521
|
|
|
|
12,521
|
|
Total
liabilities
|
|
|
490,761
|
|
|
|
469,080
|
|
Commitments,
contingencies and guarantees
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
649
|
|
|
|
658
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Capital stock common
shares — no par value. Authorized — unlimited number.
|
|
|
|
|
|
|
52,622,200 issued and
outstanding (December 31, 2023 — 53,260,276 issued and
outstanding)
|
|
|
393,597
|
|
|
|
389,048
|
|
Other equity
|
|
|
171,877
|
|
|
|
185,087
|
|
Statutory surplus
reserve
|
|
|
3,932
|
|
|
|
3,932
|
|
Accumulated
deficit
|
|
|
(297,284)
|
|
|
|
(292,845)
|
|
Accumulated other
comprehensive loss
|
|
|
(13,320)
|
|
|
|
(12,081)
|
|
Total shareholders'
equity attributable to common shareholders
|
|
|
258,802
|
|
|
|
273,141
|
|
Non-controlling
interests
|
|
|
73,928
|
|
|
|
71,790
|
|
Total shareholders'
equity
|
|
|
332,730
|
|
|
|
344,931
|
|
Total liabilities
and shareholders' equity
|
|
$
|
824,140
|
|
|
$
|
814,669
|
|
IMAX
CORPORATION
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In thousands of
dollars)
|
|
|
|
Three months
ended
|
|
|
|
March
31,
|
|
|
|
2024
|
|
|
2023
|
|
Operating
Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
5,420
|
|
|
$
|
5,123
|
|
Adjustments to
reconcile net income to cash (used in) provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
15,164
|
|
|
|
13,320
|
|
Amortization of
deferred financing costs
|
|
|
492
|
|
|
|
625
|
|
Credit loss expense,
net
|
|
|
35
|
|
|
|
220
|
|
Write-downs, including
asset impairments
|
|
|
109
|
|
|
|
304
|
|
Deferred income tax
expense (benefit)
|
|
|
571
|
|
|
|
(193)
|
|
Share-based and other
non-cash compensation
|
|
|
4,783
|
|
|
|
5,135
|
|
Unrealized foreign
currency exchange loss (gain)
|
|
|
33
|
|
|
|
(78)
|
|
Realized and
unrealized investment gains
|
|
|
(30)
|
|
|
|
(44)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(4,502)
|
|
|
|
12,374
|
|
Inventories
|
|
|
(4,672)
|
|
|
|
(5,946)
|
|
Film assets
|
|
|
(4,912)
|
|
|
|
(3,884)
|
|
Deferred
revenue
|
|
|
(6,075)
|
|
|
|
2,606
|
|
Changes in other
operating assets and liabilities
|
|
|
(17,384)
|
|
|
|
(8,344)
|
|
Net cash (used in)
provided by operating activities
|
|
|
(10,968)
|
|
|
|
21,218
|
|
Investing
Activities
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
|
(1,104)
|
|
|
|
(364)
|
|
Investment in equipment
for joint revenue sharing arrangements
|
|
|
(4,442)
|
|
|
|
(2,157)
|
|
Acquisition of other
intangible assets
|
|
|
(1,594)
|
|
|
|
(1,760)
|
|
Net cash used in
investing activities
|
|
|
(7,140)
|
|
|
|
(4,281)
|
|
Financing
Activities
|
|
|
|
|
|
|
Revolving credit
facility borrowings
|
|
|
45,000
|
|
|
|
25,717
|
|
Repayments of revolving
credit facility borrowings
|
|
|
—
|
|
|
|
(31,180)
|
|
Other
borrowings
|
|
|
—
|
|
|
|
315
|
|
Repayment of other
borrowings
|
|
|
(156)
|
|
|
|
—
|
|
Repurchase of common
shares
|
|
|
(17,856)
|
|
|
|
(3,656)
|
|
Taxes withheld and paid
on employee stock awards vested
|
|
|
(4,194)
|
|
|
|
(6,233)
|
|
Net cash provided
by (used in) financing activities
|
|
|
22,794
|
|
|
|
(15,037)
|
|
Effects of exchange
rate changes on cash
|
|
|
131
|
|
|
|
(55)
|
|
Increase in cash and
cash equivalents during period
|
|
|
4,817
|
|
|
|
1,845
|
|
Cash and cash
equivalents, beginning of period
|
|
|
76,200
|
|
|
|
97,401
|
|
Cash and cash
equivalents, end of period
|
|
$
|
81,017
|
|
|
$
|
99,246
|
|
|
|
|
|
Segment Revenue
and Gross Margin
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
(In thousands of
U.S. Dollars)
|
|
2024
|
|
|
2023
|
|
Revenue
|
|
|
|
|
|
|
Content
Solutions
|
|
$
|
34,013
|
|
|
$
|
32,101
|
|
Technology Products and
Services
|
|
|
43,150
|
|
|
|
51,667
|
|
Sub-total for
reportable segments
|
|
|
77,163
|
|
|
|
83,768
|
|
All
Other(1)
|
|
|
1,960
|
|
|
|
3,178
|
|
Total
|
|
$
|
79,123
|
|
|
$
|
86,946
|
|
|
|
|
|
|
|
|
Gross
Margin
|
|
|
|
|
|
|
Content
Solutions
|
|
$
|
22,099
|
|
|
$
|
17,995
|
|
Technology Products and
Services
|
|
|
23,584
|
|
|
|
29,891
|
|
Sub-total for
reportable segments
|
|
|
45,683
|
|
|
|
47,886
|
|
All
Other(1)
|
|
|
1,206
|
|
|
|
2,165
|
|
Total
|
|
$
|
46,889
|
|
|
$
|
50,051
|
|
_____________
(1)
|
All Other includes the
results from Streaming and Consumer Technology 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
attributable to common shareholders and adjusted net income
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 attributable to
common shareholders and adjusted net income attributable to common
shareholders per basic and diluted share exclude, where applicable:
(i) share-based compensation; (ii) realized and unrealized
investment gains or losses; (iii) transaction-related
expenses; and (iv) restructuring and executive transition 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 attributable to common shareholders and adjusted net income
attributable to common shareholders per diluted share is 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 such term is defined in the
Company's Credit Agreement, and which is referred to herein as
"Adjusted EBITDA per Credit Facility." As allowed by the Credit
Agreement, Adjusted EBITDA per Credit Facility includes adjustments
in addition to the exclusion of interest, taxes, depreciation and
amortization. Adjusted EBITDA per Credit Facility 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) transaction-related
expenses; (iv) restructuring and executive transition costs; and
(v) 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 definition of free cash flow
deducts only normal recurring capital expenditures, including the
Company's 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
|
|
(In thousands of
U.S. Dollars)
|
For the Three Months
Ended
March 31, 2024(1)
|
|
|
For the Three Months
Ended
March 31, 2023(1)
|
|
Revenues
|
$
|
|
79,123
|
|
|
$
|
|
86,946
|
|
Reported net
income
|
$
|
|
5,420
|
|
|
$
|
|
5,123
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
5,159
|
|
|
|
|
4,885
|
|
Interest expense, net
of interest income
|
|
|
919
|
|
|
|
|
735
|
|
Depreciation and
amortization, including film asset amortization
|
|
|
15,164
|
|
|
|
|
13,320
|
|
Amortization of
deferred financing costs(2)
|
|
|
492
|
|
|
|
|
625
|
|
EBITDA
|
$
|
|
27,154
|
|
|
$
|
|
24,688
|
|
Share-based and other
non-cash compensation
|
|
|
4,783
|
|
|
|
|
5,633
|
|
Unrealized investment
gains
|
|
|
(30)
|
|
|
|
|
(44)
|
|
Transaction-related
expenses
|
|
|
—
|
|
|
|
|
156
|
|
Write-downs, including
asset impairments and credit loss expense
|
|
|
144
|
|
|
|
|
524
|
|
Restructuring and
executive transition costs(4)
|
|
|
—
|
|
|
|
|
1,353
|
|
Total Adjusted
EBITDA
|
$
|
|
32,051
|
|
|
$
|
|
32,310
|
|
Total Adjusted EBITDA
margin
|
|
40.5 %
|
|
|
|
37.2 %
|
|
Less: Non-controlling
interest
|
$
|
|
(3,934)
|
|
|
$
|
|
(5,028)
|
|
Adjusted EBITDA per
Credit Facility - attributable to common shareholders
|
$
|
|
28,117
|
|
|
$
|
|
27,282
|
|
|
|
|
|
|
|
|
|
(In thousands of
U.S. Dollars)
|
For the Twelve
Months Ended
March 31, 2024
|
|
|
For the Twelve
Months Ended
March 31, 2023
|
|
Revenues
|
$
|
|
319,892
|
|
|
$
|
|
327,715
|
|
Reported net income
(loss)
|
$
|
|
33,363
|
|
|
$
|
|
(2,804)
|
|
Add
(subtract):
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
13,325
|
|
|
|
|
12,382
|
|
Interest expense, net
of interest income
|
|
|
2,285
|
|
|
|
|
1,827
|
|
Depreciation and
amortization, including film asset amortization
|
|
|
61,866
|
|
|
|
|
57,240
|
|
Amortization of
deferred financing costs(2)
|
|
|
2,102
|
|
|
|
|
2,779
|
|
EBITDA
|
$
|
|
112,941
|
|
|
$
|
|
71,424
|
|
Share-based and other
non-cash compensation
|
|
|
23,380
|
|
|
|
|
27,017
|
|
Unrealized investment
gains
|
|
|
(451)
|
|
|
|
|
(81)
|
|
Transaction-related
expenses(3)
|
|
|
3,413
|
|
|
|
|
1,278
|
|
Write-downs, including
asset impairments and credit loss expense
|
|
|
2,893
|
|
|
|
|
8,638
|
|
Restructuring and
executive transition costs(4)
|
|
|
1,593
|
|
|
|
|
1,353
|
|
Total Adjusted
EBITDA
|
$
|
|
143,769
|
|
|
$
|
|
109,629
|
|
Total Adjusted EBITDA
margin
|
|
44.9 %
|
|
|
|
33.5 %
|
|
Less: Non-controlling
interest
|
$
|
|
(14,775)
|
|
|
$
|
|
(12,697)
|
|
Adjusted EBITDA per
Credit Facility - attributable to common shareholders
|
$
|
|
128,994
|
|
|
$
|
|
96,932
|
|
______________
(1)
|
The Senior Secured Net
Leverage Ratio is calculated using Adjusted EBITDA per Credit
Facility determined on a trailing twelve-month basis.
|
|
|
(2)
|
The amortization of
deferred financing costs is recorded within Interest Expense in the
Condensed Consolidated Statement of Operations.
|
|
|
(3)
|
For the twelve months
ended March 31, 2024 and 2023 reflects costs incurred resulting
from the Company's proposal to acquire the outstanding 96.3 million
shares in IMAX China.
|
|
|
(4)
|
For the twelve months
ended March 31, 2024 and 2023, reflects costs in connection with
the departure of the President, IMAX Entertainment and Executive
Vice President of the Company and other employees to capture
efficiencies and centralize certain operational roles.
|
Adjusted Net
Income Attributable to Common Shareholders and Adjusted Net Income
Per Share
|
|
|
|
_____________
|
|
Three Months Ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
(In thousands of
U.S. Dollars, except per share amounts)
|
|
Net
Income
|
|
|
Per
Share
|
|
|
Net
Income
|
|
|
Per
Share
|
|
Net income attributable
to common shareholders
|
|
$
|
3,274
|
|
|
$
|
0.06
|
|
|
$
|
2,454
|
|
|
$
|
0.04
|
|
Adjustments(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
|
4,707
|
|
|
|
0.09
|
|
|
|
5,536
|
|
|
|
0.10
|
|
Unrealized investment
gains
|
|
|
(30)
|
|
|
|
—
|
|
|
|
(45)
|
|
|
|
—
|
|
Transaction-related
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
156
|
|
|
|
—
|
|
Restructuring and
executive transition costs(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
1,353
|
|
|
|
0.02
|
|
Tax impact on items
listed above
|
|
|
(10)
|
|
|
|
—
|
|
|
|
(429)
|
|
|
|
(0.01)
|
|
Adjusted net
income(1)
|
|
$
|
7,941
|
|
|
$
|
0.15
|
|
|
$
|
9,025
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding — basic
|
|
|
|
|
|
52,501
|
|
|
|
|
|
|
54,064
|
|
Weighted average shares
outstanding — diluted
|
|
|
|
|
|
53,406
|
|
|
|
|
|
|
54,991
|
|
|
|
(1)
|
Reflects amounts
attributable to common shareholders.
|
|
|
(2)
|
For the three months
ended March 31, 2023, reflects costs in connection with the
departure of the President, IMAX Entertainment and Executive Vice
President of the Company.
|
Free Cash
Flow
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
(In thousands of
U.S. Dollars)
|
|
March 31,
2024
|
|
|
March 31,
2023
|
|
Net cash provided by
operating activities
|
|
$
|
|
(10,968)
|
|
|
$
|
|
21,218
|
|
Purchase of property,
plant and equipment
|
|
|
|
(1,104)
|
|
|
|
|
(364)
|
|
Acquisition of other
intangible assets
|
|
|
|
(1,594)
|
|
|
|
|
(1,760)
|
|
Free cash flow before
growth CAPEX
|
|
|
|
(13,666)
|
|
|
|
|
19,094
|
|
Investment in equipment
for joint revenue sharing arrangements
|
|
|
|
(4,442)
|
|
|
|
|
(2,157)
|
|
Free cash
flow
|
|
$
|
|
(18,108)
|
|
|
$
|
|
16,937
|
|
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SOURCE IMAX Corporation