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IMAX CORPORATION REPORTS SECOND QUARTER 2022 RESULTS

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  • Strong Year-Over-Year Growth across Key Metrics Underscores Company's Position as a Premier Global Technology Platform for Entertainment and Events

  • Global Box Office of $247.7 Million (+128.1% YoY) Driven by "Top Gun: Maverick", "Doctor Strange in the Multiverse of Madness" and "Jurassic World Dominion" as Dramatic Surge in Moviegoing Expands across Demographics and Regions

  • Company Repurchased 2.7M Shares in Second Quarter; 6.4M Since 2020, or 11% of total shares outstanding

  • IMAX Expects to Release 15 Local Language Titles across 50 Global Markets in the Third Quarter

  • IMAX China Network 91% Operational — up from 65% on April 26

NEW YORK, July 28, 2022 /PRNewswire/ -- IMAX Corporation (NYSE: IMAX) today reported solid financial results for the Second Quarter of 2022 demonstrating its leadership position in the global resurgence of moviegoing. Total Gross Box Office increased to $247.7 million from $108.6 million in the second quarter of 2021. Revenue increased to $74.0 million from $51.0 million and Gross Margin increased to $44.0 million from $25.6 million in the year-ago period.

IMAX Logo. (PRNewsFoto/IMAX Corporation)
IMAX Logo. (PRNewsFoto/IMAX Corporation)

For the Second Quarter of 2022, the net loss attributable to common shareholders was ($2.9) million, or ($0.05) per share, compared to ($9.2) million, or ($0.16) per share, last year and Adjusted Net Income attributable to common shareholders(1) was $3.9 million, or $0.07 per share, compared to an Adjusted Net Loss attributable to common shareholders(1) of ($7.0) million, or ($0.12) per share, last year. The Company's Second Quarter 2022 Adjusted Net Income attributable to common shareholders(1) includes a $3.2 million, or $0.06 per share impairment of a film investment, due in part to Covid related lockdowns and depressed box office levels in China. The Company's Second Quarter 2022 Adjusted Net Income attributable to common shareholders(1) also includes a $5.1 million, or $0.09 per share, valuation allowance against its deferred tax assets.

Adjusted EBITDA per Credit Facility(1) of $25.4 million was up from $8.7 million in the second quarter of 2021. On a trailing 12-month basis, Adjusted EBITDA per Credit Facility(1) was $97.3 million as of June 30th.

"IMAX is playing a leading role in the global resurgence in moviegoing, as demonstrated by our strong financial results, global box office growth, and market share gains we delivered in the second quarter. In fact, our second quarter results in North America were on par with our record-breaking 2019, as consumers continue to seek out IMAX as a destination for fandom," said Richard L. Gelfond, CEO of IMAX Corporation.

(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.

"With three consecutive $25 million-plus global openings for the first time in its history, IMAX continued to affirm its position as a critical launch platform for major entertainment franchises. As the year progresses with key titles such as Brad Pitt's 'Bullet Train', Dwayne 'The Rock' Johnson's 'Black Adam', 'Black Panther: Wakanda Forever' and 'Avatar: The Way of Water' and a remarkable offering of franchise tentpoles through 2023, we are focused on driving future growth for the Company across our global network, content portfolio, and technology platform."

"We are encouraged by recent activity to strengthen key partnerships with global exhibitors, including agreements for new theatres and installations across Asia, Europe, the Middle East, and North America. We also continue to enhance and diversify our content portfolio, with Hollywood blockbusters, more of which feature IMAX DNA; local language blockbusters across a growing international footprint; IMAX documentaries; and exclusive live events and experiences from a growing roster of new partners."

 

Second Quarter Financial Highlights






Three Months Ended




June 30,


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


2022



2021



YoY %
Change


Total Revenue


$

74.0



$

51.0




45

%











Gross Margin


$

44.0



$

25.6




72

%

Gross Margin (%)



60

%



50

%














Net Loss attributable to common shareholders


$

(2.9)



$

(9.2)



N/A


Diluted Net Loss per share attributable to common shareholders


$

(0.05)



$

(0.16)



N/A


Adjusted Net Income (Loss) attributable to common shareholders(1)


$

3.9



$

(7.0)



N/A


Adjusted Net Income (Loss) per share attributable to common shareholders(1)


$

0.07



$

(0.12)



N/A












Adjusted EBITDA per Credit Facility attributable to common shareholders(1)


$

25.4



$

8.7




192

%

Adjusted EBITDA Margin attributable to common shareholders (%)(1)



35.9

%



20.6

%



74

%

_______________

(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.

 

Second Quarter and June Year-to-Date Segment Results(1)












IMAX Technology
Network



IMAX Technology Sales and
Maintenance






















In millions of U.S. Dollars


Revenue



Gross Margin



Gross Margin %



Revenue



Gross Margin



Gross Margin %


2Q22


$

46.1



$

30.9




67

%


$

24.3




$

12.8




53

%

2Q21


19.7




8.7




44

%



28.7





16.1




56

%

% change



134

%



255

%






(15)

%




(20)

%
























YTD 2Q22


$

78.3



$

50.6




65

%


$

49.6




$

25.0




50

%

YTD 2Q21



40.0




18.8




47

%



45.7





23.2




51

%

% change



96

%



169

%






9

%




8

%




_______________

(1)     Please refer to the Company's Form 10-Q for the period ended June 30, 2022 for additional segment information.

IMAX Technology Network

  • IMAX Technology Network revenues increased 134% to $46.1 million in the second quarter of 2022, compared to $19.7 million in the prior-year period. The strength of key titles such as "Doctor Strange in the Multiverse of Madness", "Top Gun: Maverick" and "Jurassic World Dominion" drove the increase in gross box office and revenue.

  • Gross margin for the IMAX Technology Network increased to $30.9 million in the second quarter of 2022, compared to $8.7 million in the prior year period as improved box office performance drove higher revenue.

IMAX Technology Sales and Maintenance

  • IMAX Technology Sales and Maintenance revenues decreased 15% to $24.3 million in the second quarter of 2022, compared with $28.7 million in the prior year period. The decrease in revenue was driven by seven fewer installations, including upgrades, compared to the second quarter 2021, partially offset by increased maintenance revenues.

  • Total gross margin for IMAX Technology Sales and Maintenance decreased 20% to $12.8 million in the second quarter of 2022 compared to $16.1 million in the prior year period. The decrease in gross margin was the result of fewer system installations completed, partially offset by increased maintenance margin.

Cash Balances and Outstanding Debt

Total cash and cash equivalents as of June 30, 2022 were $110.1 million. Total debt, excluding deferred financing fees, was $230.0 million as of June 30, 2022.

Share Count and Capital Return

The weighted average basic and diluted shares outstanding at the end of the second quarter of 2022 was 57.3 million and 57.9 million, respectively, compared to 59.4 million in the second quarter of 2021. During the second quarter of 2022, the Company repurchased 2,702,548 shares at an average price of $15.92 for a total of $43.0 million and IMAX China did not repurchase any shares. As of June 30, 2022, a total of $26.2 million remains available under the Company's outstanding share repurchase authorization.

Supplemental Materials

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

Investor Relations Website and Social Media

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

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

Conference Call

The Company will host a conference call today at 4:45 PM ET to discuss its second quarter 2022 financial results. This call is being webcast by PGI and can be accessed at investors.imax.com. To access the call via telephone, interested parties in the US and Canada should dial (888) 220-8451 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 484-0475. The conference ID for the call is 7250150. A replay of the call will be available via webcast at investors.imax.com or via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 7250150.

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 theaters to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe.

IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of June 30, 2022, there were 1,694 IMAX theater systems (1,610 commercial multiplexes, 12 commercial destinations, 72 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® Dome, IMAX® 3D, IMAX® 3D Dome, Experience It In IMAX®, The IMAX Experience®, An IMAX Experience®, An IMAX 3D Experience®, IMAX DMR®, DMR®, Filmed For IMAX, IMAX LIVE, IMAX Enhanced, IMAX nXos® and Films to the Fullest®, 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

Heather Anthony

212-821-0121

hanthony@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 related to the adverse impact of the COVID-19 pandemic; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada, as well as geopolitical conflicts, such as the conflict between Russia and Ukraine; risks related to the Company's growth and operations in China; the performance of IMAX DMR® films; the signing of IMAX Theater System agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which the Company operates, including competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to consolidation among commercial exhibitors and studios; risks related to brand extensions and new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company's inability to protect the Company's intellectual property; risks related to climate change; risks related to weather conditions and natural disasters that may disrupt or harm the Company's business; risks related to the Company's indebtedness and compliance with its debt agreements; general economic, market or business conditions; risks related to political, economic and social instability, including with respect to the Russia-Ukraine conflict; the failure to convert IMAX Theater System backlog into revenue; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in our periodic filings with the SEC; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX's most recent Annual Report on Form 10-K. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Primary Reporting Groups

The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements ("JRSA"); (iii) IMAX Systems; (iv) IMAX Maintenance; (v) Other Theater Business; (vi) Film Distribution; and (vii) Film Post-Production. The Company's activities that do not met the criteria to be considered a reportable segment are disclosed within All Other. The Company organizes its reportable segments into the following three categories, identified by the nature of the product sold or service provided:

(i)            IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from JRSA segment;

(ii)            IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment; and

(iii)            Film Distribution and Post-Production, which includes activities related to the distribution of large-format documentary films, primarily to institutional theaters, and the distribution of exclusive experiences ranging from live performances to interactive events with leading artists and creators (through the Film Distribution segment) and the provision of film post-production and quality control services.

In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced, an initiative to bring The IMAX Experience® into the home, out of the New Business Initiatives segment and into All Other for segment reporting purposes. IMAX Enhanced™ was the only component of the New Business Initiatives segment. Prior period comparatives have been reclassified to conform with the current period presentation. Please refer to the Company's Form 10-Q for the period ended June 30, 2022 for additional segment information.

 

IMAX Network and Backlog







Three Months
Ended June 30,



Theater System Signings:


2022




2021



New IMAX Theater Systems









Sales and sales-type lease arrangements



2





3



Hybrid JRSA



1







Traditional JRSA







3



      Total new IMAX theaters Systems



3





6



Upgrades of IMAX theater systems



10





2



Total IMAX Theater System signings



13





8














Three Months
Ended June 30,



Theater System Installations:


2022




2021



New IMAX Theater Systems(1)









Sales and sales-type lease arrangements



3





9



Hybrid JRSA



1





2



Traditional JRSA



3





4



      Total new IMAX Theater Systems



7





15



Upgrades of IMAX theater systems



2





1



Total IMAX Theater System installations



9





16














June 30,



Theater System Backlog:


2022




2021



Sales and sales-type lease arrangements



170





185



Hybrid JRSA



128





142



Traditional JRSA



194


(2)



187


(2)

Total Theater System backlog



492


(3)



514


(4)












June 30,



Theater Network:


2022




2021



Commercial Multiplex Theaters









Sales and sales-type lease arrangements



687





672



Hybrid JRSA



149





143



Traditional JRSA



774





754



Total Commercial Multiplex Theaters



1,610





1,569



Commercial Destination Theaters



12





12



Institutional Theaters



72





73



Total Theater network(5)



1,694





1,654



_______________

(1)     For the three months ended June 30, 2022, includes four IMAX Theater Systems that were relocated from their original locations (2021 — nil). When a theater system under a sales or sales-type lease arrangement is relocated, the amount of revenue earned by the Company may vary from transaction-to-transaction and is usually less than the amount earned for a new sale. In certain situations when a theater system is relocated, the original location is upgraded to an IMAX Laser Theater System.

(2)     Includes 43 IMAX Theater Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2021 — 44).

(3)     Includes 201 new IMAX Laser Theatre systems configurations and 111 upgrades of existing locations to IMAX Laser Theater Systems configurations.

(4)     Includes 155 new IMAX Laser Theatre systems configurations and 96 upgrades of existing locations to IMAX Laser Theater Systems configurations.

(5)     Period-to-period changes are reported net of the effect of permanently closed theaters.

 

IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)





Three Months Ended




Six Months Ended





June 30,




June 30,





2022



2021




2022



2021


Revenues
















Technology sales


$

8,229



$

15,173





$

17,205




$

21,348


Image enhancement and maintenance services



44,958




24,711






81,052





46,326


Technology rentals



18,525




8,130






31,186





16,489


Finance income



2,256




2,941






4,561





5,546






73,968




50,955






134,004





89,709


Costs and expenses applicable to revenues
















Technology sales



4,218




6,496






10,203





11,549


Image enhancement and maintenance services



19,953




12,357






35,696





22,121


Technology rentals



5,761




6,499






12,298





13,155






29,932




25,352






58,197





46,825


Gross margin



44,036




25,603






75,807





42,884


Selling, general and administrative expenses



37,095




28,807






67,276





54,016


Research and development



1,356




2,200






2,552





3,671


Amortization of intangible assets



1,104




1,190






2,301





2,331


Credit loss expense (reversal), net



112




(1,872)






7,341