EX-99.1 2 imax-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

img199560746_0.jpg 

 

 

IMAX CORPORATION REPORTS RECORD Q3 2023 RESULTS

 

Global entertainment technology platform delivers strong Q3 year-over-year growth across all key financial metrics, including Revenue (+51%), Gross Margin (+98%) and Adjusted EBITDA (+174%)(1)

 

Network growth accelerates while system signings climb to 120 to-date — more than double what the Company delivered in all of 2022 (47)

 

Q3 marks the Company's second highest grossing quarter of all time at the IMAX global box office

 

Box office strength drives significant operating leverage, delivering in the third quarter $12 million in Net Income, Adjusted EPS(1) of $0.35, record Adjusted EBITDA(1) of $45 million, and Adjusted EBITDA(1) Margin of 47%

 

Robust cash flow generation continues, with cash from operations of $55 million through nine months compared with $0.5 million for the same period in 2022

 

NEW YORK, NY — October 25, 2023 — IMAX Corporation (NYSE: IMAX) today reported strong top and bottom-line financial results for the third quarter of 2023, demonstrating the value of its unique global entertainment technology platform and diversified content portfolio.

 

“IMAX financial results for the third quarter are spectacular by any measure — versus budget, versus our historical performance and in the context of a highly dynamic business environment for media and entertainment,” said Richard L. Gelfond, Chief Executive Officer of IMAX. “We are programming by far the strongest and most diverse content portfolio in our history — Hollywood blockbusters, local language films, marquee theatrical releases by streamers, concert films, docs, Live events, and we couldn't be more pleased with the results across our global network.”

 

“Our outsized performance with Hollywood blockbusters coupled with the expansion of our successful local language strategy is fueling strong network growth around the world, with robust sales activity in China and North America as well as key growth markets across Europe and Southeast Asia.”

 

“It is clear that IMAX is the preferred way to experience blockbuster entertainment globally, and our global footprint, differentiated technology, and asset-lite model have made us a consistent winner. As we enter the fourth quarter, we remain on track to deliver significant growth in system signings, installations, and Adjusted EBITDA for the full year and one of the best years in our history at the global box office.”

 

 

 

 

 

_______________

(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.

 

 

 

1


 

 

Third Quarter Financial Highlights

_______________

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

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

2023

 

 

2022

 

 

YoY %
Change

 

2023

 

 

2022

 

 

YoY % Change

Total Revenue

$

103.9

 

 

$

68.8

 

 

51%

 

$

288.8

 

 

$

202.8

 

 

42%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin

$

62.7

 

 

$

31.7

 

 

98%

 

$

170.7

 

 

$

107.5

 

 

59%

Gross Margin (%)

60%

 

 

46%

 

 

 

 

59%

 

 

53%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)(2)

$

12.0

 

 

$

(9.0

)

 

N/A

 

$

22.8

 

 

$

(25.4

)

 

N/A

Diluted Net Income (Loss) per share(2)

$

0.22

 

 

$

(0.16

)

 

N/A

 

$

0.41

 

 

$

(0.44

)

 

N/A

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

$

19.4

 

 

$

(3.0

)

 

N/A

 

$

42.8

 

 

$

(7.3

)

 

N/A

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

$

0.35

 

 

$

(0.05

)

 

N/A

 

$

0.77

 

 

$

(0.13

)

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA per Credit Facility(1)(3)

$

45.1

 

 

$

16.5

 

 

174%

 

$

105.1

 

 

$

56.7

 

 

85%

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

47%

 

 

26%

 

 

81%

 

39%

 

 

30%

 

 

30%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding (in millions):

Basic

 

54.6

 

 

 

56.0

 

 

(3%)

 

 

54.4

 

 

 

57.3

 

 

(5%)

Diluted

 

55.5

 

 

 

56.0

 

 

(1%)

 

 

55.3

 

 

 

57.3

 

 

(4%)

(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)
Adjusted EBITDA per Credit facility attributable to common shareholders.

 

 

2


 

Third Quarter and September YTD 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 %

3Q23

 

$

44.2

 

 

$

26.4

 

 

60%

 

$

56.2

 

 

 

$

33.8

 

 

60%

3Q22

 

 

22.0

 

 

 

9.1

 

 

42%

 

 

45.5

 

 

 

 

21.8

 

 

48%

% change

 

101%

 

 

189%

 

 

 

 

23%

 

 

 

55%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD 3Q23

 

$

107.6

 

 

$

64.4

 

 

60%

 

$

171.8

 

 

 

$

100.1

 

 

58%

YTD 3Q22

 

 

72.5

 

 

 

39.1

 

 

54%

 

$

126.3

 

 

 

 

65.9

 

 

52%

% change

 

48%

 

 

65%

 

 

 

 

36%

 

 

 

52%

 

 

 

_______________

(1)
Please refer to the Company’s Form 10-Q for the period ended September 30, 2023, for additional segment information.

 

Content Solutions Segment

Content Solutions revenues of $44.2 million increased 101% year-over-year. Gross box office from IMAX locations in Q3 2023 of $347.1 million was up 96% from Q3 2022. Key contributors to third quarter box office performance included:
o
Hollywood titles led by Oppenheimer with $180 million in IMAX GBO with significant contributions coming from Mission Impossible: Dead Reckoning Part 1 and Indiana Jones and the Dial of Destiny.
o
Local language titles led by the record setting Chinese title Creation of the Gods: Kingdom of Storms ($32.3 million in IMAX GBO), with strong contributions coming from No More Bets, Lost in the Stars, and Jawan.
Gross margin for Content Solutions was $26.4 million (at a 60% margin) and increased 189% compared to the third quarter of the prior year period. This outsized growth was driven by the operating leverage in our business that resulted in very pronounced profit flow-through from box office.

 

Technology Products and Services Segment

Technology Products and Services revenues and gross margin increased 23% year-over-year to $56.2 million and 55% year-over-year to $33.8 million, respectively, which reflects growth in box office tied to rental revenues as well as a higher number of sale/hybrid installations.
During the third quarter the Company installed 30 systems compared to 17 systems in the third quarter of 2022. Of those, 16 systems were under sales and hybrid JRSA arrangements, compared to 9 systems in the prior year.

 

 

3


 

 

Operating Cash Flow and Liquidity

Net cash provided by operating activities for the nine months through September, was $54.6 million compared to net cash provided by operating activities of $0.5 million in the prior year period.

 

As of September 30, 2023, the Company’s available liquidity was $308.8 million or $438.8 million excluding the letter of credit associated with the IMAX China privatization transaction. Our liquidity includes cash and cash equivalents of $109.6 million, $150.0 million in available borrowing capacity under the Credit Facility, $130.0 million for the standby letter of credit and $49.2 million in available borrowing capacity under IMAX China’s revolving facilities. Total debt, excluding deferred financing costs, was $258.2 million as of September 30, 2023.

 

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 in the third quarter of 2023 were 54.6 million and 55.5 million, respectively, compared to 56.0 million for both in the third quarter of 2022, a decrease of 3% and 1%, respectively.

 

The Company repurchased 374,080 common shares at an average price of $16.93 per share, for a total of $6.3 million, excluding commission, year-to-date through October 24, 2023.

 

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 million of its common shares, of which approximately $187 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 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 Tuesday of each week, although the Company may change this timing without notice. Results will be displayed with a few days 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 8:30 AM ET to discuss its third 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/BI507a09f12d7e4417a07562a7285253bd 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.

 

 

4


 

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. Streaming technology company SSIMWAVE, an IMAX subsidiary, is a leader in AI-driven video quality solutions for media and entertainment companies.

 

IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of September 30, 2023, there were 1,731 IMAX systems (1,651 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 (https://www.instagram.com/imax), 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

jhorsley@imax.com

Media:

IMAX Corporation, New York

Mark Jafar

212-821-0102

mjafar@imax.com

 

 

 

5


 

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, 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, statements regarding the emergence of Cineworld from bankruptcy, as well as 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; 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; 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, as supplemented by those discussed in the Company's Quarterly Report on Form 10-Q. 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.

 

 

6


 

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.

 

 

7


 

IMAX Network and Backlog

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

System Signings:

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

New IMAX Systems

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and sales-type lease arrangements

 

 

7

 

 

 

3

 

 

 

44

 

 

 

9

 

 

Hybrid JRSA

 

 

 

 

 

1

 

 

 

 

 

 

3

 

 

Traditional JRSA

 

 

7

 

 

 

7

 

 

 

32

 

 

 

9

 

 

Total new IMAX Systems

 

 

14

 

 

 

11

 

 

 

76

 

 

 

21

 

 

Upgrades of IMAX systems

 

 

6

 

 

 

4

 

 

 

18

 

 

 

14

 

 

Total IMAX System signings

 

 

20

 

 

 

15

 

 

 

94

 

 

 

35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

System Installations:

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

New IMAX Systems

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and sales-type lease arrangements

 

 

14

 

 

 

7

 

 

 

30

 

 

 

14

 

 

Hybrid JRSA

 

 

 

 

 

2

 

 

 

2

 

 

 

5

 

 

Traditional JRSA

 

 

4

 

 

 

7

 

 

 

7

 

 

 

16

 

 

Total new IMAX Systems

 

 

18

 

 

 

16

 

 

 

39

 

 

 

35

 

 

Upgrades of IMAX Systems

 

 

12

 

 

 

1

 

 

 

20

 

 

 

5

 

 

Total IMAX System installations

 

 

30

 

 

 

17

 

 

 

59

 

 

 

40

 

 

 

 

 

 

 

 

 

September 30,

 

 

IMAX System Backlog:

 

 

 

 

 

2023

 

 

2022

 

 

Sales and sales-type lease arrangements

 

 

 

 

 

 

192

 

 

 

170

 

 

Hybrid JRSA

 

 

 

 

 

 

107

 

 

 

127

 

 

Traditional JRSA

 

 

 

 

 

 

187

 

 

 

192

 

 

Total IMAX System backlog

 

 

 

 

 

 

486

 

 

 

489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

IMAX Network:

 

 

 

 

 

2023

 

 

2022

 

 

Commercial Multiplex Theaters

 

 

 

 

 

 

 

 

 

 

 

Sales and sales-type lease arrangements

 

 

 

 

 

 

743

 

 

 

696

 

 

Hybrid JRSA

 

 

 

 

 

 

137

 

 

 

150

 

 

Traditional JRSA

 

 

 

 

 

 

771

 

 

 

776

 

 

Total Commercial Multiplex Theaters

 

 

 

 

 

 

1,651

 

 

 

1,622

 

 

Commercial Destination Theaters

 

 

 

 

 

 

12

 

 

 

12

 

 

Institutional Theaters

 

 

 

 

 

 

68

 

 

 

69

 

 

Total IMAX network

 

 

 

 

 

 

1,731

 

 

 

1,703

 

 

 

 

8


 

IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Technology sales

 

$

18,273

 

 

$

18,065

 

 

$

65,455

 

 

$

35,270

 

Image enhancement and maintenance services

 

 

60,250

 

 

 

36,233

 

 

 

154,244

 

 

 

117,285

 

Technology rentals

 

 

23,008

 

 

 

12,540

 

 

 

62,612

 

 

 

43,726

 

Finance income

 

 

2,365

 

 

 

1,917

 

 

 

6,510

 

 

 

6,478

 

 

 

 

 

103,896

 

 

 

68,755

 

 

 

288,821

 

 

 

202,759

 

Costs and expenses applicable to revenues

 

 

 

 

 

 

 

 

 

 

 

 

Technology sales

 

 

7,948

 

 

 

10,061

 

 

 

28,951

 

 

 

20,264

 

Image enhancement and maintenance services

 

 

26,646

 

 

 

20,563

 

 

 

69,470

 

 

 

56,259

 

Technology rentals

 

 

6,587

 

 

 

6,430

 

 

 

19,747

 

 

 

18,728

 

 

 

 

41,181

 

 

 

37,054

 

 

 

118,168

 

 

 

95,251

 

Gross margin

 

 

62,715

 

 

 

31,701

 

 

 

170,653

 

 

 

107,508

 

Selling, general and administrative expenses

 

 

36,282

 

 

 

32,905

 

 

 

109,336

 

 

 

100,181

 

Research and development

 

 

2,771

 

 

 

1,115

 

 

 

7,388

 

 

 

3,667

 

Amortization of intangible assets

 

 

1,107

 

 

 

1,111

 

 

 

3,328

 

 

 

3,412

 

Credit loss expense, net

 

 

523

 

 

 

808

 

 

 

1,589

 

 

 

8,149

 

Asset impairments

 

 

 

 

 

 

 

 

 

 

 

4,470

 

Executive transition costs

 

 

 

 

 

 

 

 

1,353

 

 

 

 

Income (loss) from operations

 

 

22,032

 

 

 

(4,238

)

 

 

47,659

 

 

 

(12,371

)

Unrealized investment gains

 

 

364

 

 

 

35

 

 

 

436

 

 

 

99

 

Retirement benefits non-service expense

 

 

(77

)

 

 

(140

)

 

 

(232

)

 

 

(417

)

Interest income

 

 

738

 

 

 

257

 

 

 

1,838

 

 

 

1,176

 

Interest expense

 

 

(1,483

)

 

 

(1,323

)

 

 

(5,045

)

 

 

(4,354

)

Income (loss) before taxes

 

 

21,574

 

 

 

(5,409

)

 

 

44,656

 

 

 

(15,867

)

Income tax expense

 

 

(6,555

)

 

 

(2,348

)

 

 

(14,901

)

 

 

(8,091

)

Net income (loss)

 

 

15,019

 

 

 

(7,757

)

 

 

29,755

 

 

 

(23,958

)

Less: net (income) loss attributable to non-controlling interests

 

 

(3,029

)

 

 

(1,196

)

 

 

(6,960

)

 

 

(1,455

)

Net income (loss) attributable to common shareholders

 

$

11,990

 

 

$

(8,953

)

 

$

22,795

 

 

$

(25,413

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common shareholders:

 

Basic

 

$

0.22

 

 

$

(0.16

)

 

$

0.42

 

 

$

(0.44

)

Diluted

 

$

0.22

 

 

$

(0.16

)

 

 

0.41

 

 

 

(0.44

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding (in thousands):

 

Basic

 

 

54,618

 

 

 

56,039

 

 

 

54,424

 

 

 

57,301

 

Diluted

 

 

55,535

 

 

 

56,039

 

 

 

55,261

 

 

 

57,301

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional Disclosure:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

19,279

 

 

$

15,640

 

 

$

46,477

 

 

$

42,663

 

Amortization of deferred financing costs

 

$

492

 

 

$

712

 

 

$

1,742

 

 

$

2,465

 

 

 

9


 

IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

109,603

 

 

$

97,401

 

Accounts receivable, net of allowance for credit losses

 

 

135,962

 

 

 

136,142

 

Financing receivables, net of allowance for credit losses

 

 

125,322

 

 

 

129,384

 

Variable consideration receivables, net of allowance for credit losses

 

 

59,042

 

 

 

44,024

 

Inventories

 

 

45,365

 

 

 

31,534

 

Prepaid expenses

 

 

13,042

 

 

 

12,343

 

Film assets, net of accumulated amortization

 

 

5,232

 

 

 

5,277

 

Property, plant and equipment, net of accumulated depreciation

 

 

238,140

 

 

 

252,896

 

Investment in equity securities

 

 

 

 

 

1,035

 

Other assets

 

 

20,119

 

 

 

15,665

 

Deferred income tax assets, net of valuation allowance

 

 

11,961

 

 

 

9,900

 

Goodwill

 

 

52,815

 

 

 

52,815

 

Other intangible assets, net of accumulated amortization

 

 

34,343

 

 

 

32,738

 

Total assets

 

$

850,946

 

 

$

821,154

 

Liabilities

 

 

 

 

 

 

Accounts payable

 

$

37,699

 

 

$

25,237

 

Accrued and other liabilities

 

 

123,863

 

 

 

117,286

 

Deferred revenue

 

 

66,272

 

 

 

70,940

 

Revolving credit facility borrowings, net of unamortized debt issuance costs

 

 

23,903

 

 

 

36,111

 

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

 

 

228,449

 

 

 

226,912

 

Deferred income tax liabilities

 

 

13,349

 

 

 

14,900

 

Total liabilities

 

 

493,535

 

 

 

491,386

 

Commitments, contingencies and guarantees

 

 

 

 

 

 

Non-controlling interests

 

 

661

 

 

 

722

 

Shareholders' equity

 

 

 

 

 

 

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

 

 

 

 

 

 

54,607,095 issued and outstanding (December 31, 2022 — 54,148,614 issued and outstanding)

 

 

390,097

 

 

 

376,715

 

Other equity

 

 

179,970

 

 

 

185,678

 

Statutory surplus reserve

 

 

3,932

 

 

 

3,932

 

Accumulated deficit

 

 

(272,318

)

 

 

(293,124

)

Accumulated other comprehensive loss

 

 

(14,637

)

 

 

(9,846

)

Total shareholders' equity attributable to common shareholders

 

 

287,044

 

 

 

263,355

 

Non-controlling interests

 

 

69,706

 

 

 

65,691

 

Total shareholders' equity

 

 

356,750

 

 

 

329,046

 

Total liabilities and shareholders' equity

 

$

850,946

 

 

$

821,154

 

 

 

10


 

IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2023

 

 

2022

 

Operating Activities

 

 

 

 

 

 

Net income (loss)

 

$

29,755

 

 

$

(23,958

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

46,477

 

 

 

42,663

 

Amortization of deferred financing costs

 

 

1,742

 

 

 

2,465

 

Credit loss expense, net

 

 

1,589

 

 

 

8,149

 

Write-downs

 

 

872

 

 

 

5,707

 

Deferred income tax benefit

 

 

(3,724

)

 

 

(3,374

)

Share-based and other non-cash compensation

 

 

17,830

 

 

 

19,510

 

Unrealized foreign currency exchange loss

 

 

52

 

 

 

1,310

 

Unrealized investment gains

 

 

(436

)

 

 

(99

)

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(2,392

)

 

 

(18,050

)

Inventories

 

 

(13,771

)

 

 

(10,131

)

Film assets

 

 

(14,575

)

 

 

(14,174

)

Deferred revenue

 

 

(4,670

)

 

 

(5,989

)

Changes in other operating assets and liabilities

 

 

(4,141

)

 

 

(3,548

)

Net cash provided by operating activities

 

 

54,608

 

 

 

481

 

Investing Activities

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(2,541

)

 

 

(5,248

)

Investment in equipment for joint revenue sharing arrangements

 

 

(10,705

)

 

 

(14,543

)

Interest in film classified as a financial instrument

 

 

 

 

 

(4,731

)

Acquisition of other intangible assets

 

 

(5,418

)

 

 

(3,246

)

Acquisition of SSIMWAVE, net of cash and cash equivalents acquired

 

 

 

 

 

(12,639

)

Net cash used in investing activities

 

 

(18,664

)

 

 

(40,407

)

Financing Activities

 

 

 

 

 

 

Revolving credit facility borrowings

 

 

31,032

 

 

 

4,890

 

Repayments of revolving credit facility borrowings

 

 

(43,057

)

 

 

(3,600

)

Credit facility amendment fees paid

 

 

 

 

 

(2,277

)

Other borrowings

 

 

315

 

 

 

 

Repurchase of common shares

 

 

(4,263

)

 

 

(53,581

)

Repurchase of common shares, IMAX China

 

 

 

 

 

(3,043

)

Taxes withheld and paid on employee stock awards vested

 

 

(6,458

)

 

 

(3,393

)

Principal payment under finance lease obligations

 

 

(480

)

 

 

(890

)

Dividends paid to non-controlling interests

 

 

(1,438

)

 

 

(2,701

)

Net cash used in financing activities

 

 

(24,349

)

 

 

(64,595

)

Effects of exchange rate changes on cash

 

 

607

 

 

 

1,961

 

Increase (decrease) in cash and cash equivalents during period

 

 

12,202

 

 

 

(102,560

)

Cash and cash equivalents, beginning of period

 

 

97,401

 

 

 

189,711

 

Cash and cash equivalents, end of period

 

$

109,603

 

 

$

87,151

 

 

 

11


 

Segment Revenue and Gross Margin

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

September 30,

 

(In thousands of U.S. Dollars)

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Content Solutions

 

$

44,214

 

 

$

21,967

 

 

 

$

107,605

 

 

$

72,499

 

Technology Products and Services

 

 

56,169

 

 

 

45,542

 

 

 

 

171,813

 

 

 

126,262

 

Sub-total for reportable segments

 

 

100,383

 

 

 

67,509

 

 

 

 

279,418

 

 

 

198,761

 

All Other(1)

 

 

3,513

 

 

 

1,246

 

 

 

 

9,403

 

 

 

3,998

 

Total

 

$

103,896

 

 

$

68,755

 

 

 

$

288,821

 

 

$

202,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Content Solutions

 

$

26,407

 

 

$

9,140

 

 

 

$

64,397

 

 

$

39,121

 

Technology Products and Services

 

 

33,761

 

 

 

21,752

 

 

 

 

100,066

 

 

 

65,875

 

Sub-total for reportable segments

 

 

60,168

 

 

 

30,892

 

 

 

 

164,463

 

 

 

104,996

 

All Other(1)

 

 

2,547

 

 

 

809

 

 

 

 

6,190

 

 

 

2,512

 

Total

 

$

62,715

 

 

$

31,701

 

 

 

$

170,653