Press

IMAX Corporation Reports Second Quarter 2015 Financial Results
Jul 23, 2015
HIGHLIGHTS
- Record box office of $343 million in Q2 2015 results in over a half a billion of IMAX global box office generated in the first half of the year
- Stellar global per screen average of $415 thousand in Q2 2015, driven by a 41% increase in domestic and 33% increase in international per screen averages compared to Q2 2014
- Company increases annual installation guidance to 120 new theatres after another above target quarter of 35 new commercial installations in Q2 2015
- $107.2 million of revenues in Q2, IMAX's highest revenue generating quarter ever, was up 35% from same period last year, driving adjusted EPS of $0.40, 60% growth over Q2 2014

NEW YORK, July 23, 2015 /PRNewswire/ -- IMAX Corporation (NYSE: IMAX) today reported second quarter 2015 revenues of $107.2 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $50.4 million, adjusted net income after non-controlling interest of $28.7 million, or $0.40 per diluted share, and reported net income after non-controlling interest of $24.4 million, or $0.34 per diluted share. The Company also reported a very strong second quarter global per screen average of $414,600.

IMAX Logo.

"The second quarter of 2015 was one of the strongest in IMAX's history, delivering our highest revenue ever, growing adjusted EPS by 60% compared to the same period last year, record box office and quarterly per screen averages that we have not seen since Avatar in 2010," stated IMAX CEO Richard L. Gelfond. "We believe the strength of this quarter clearly demonstrates the impact that a strong slate of blockbuster films can have on IMAX and the operating leverage that results."

Network Growth Update

The total IMAX® theatre network consisted of 976 systems as of June 30, 2015, of which 852 were in commercial multiplexes. There were 391 theatres in backlog as of June 30, 2015, compared to 419 in backlog as of June 30, 2014.  In the second quarter of 2015, the Company signed contracts for 30 theatres, of which 28 were for new locations and 2 were for upgrades.  In the quarter, the Company also installed 35 theatres, all of which were for new theatre locations.  For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

"Momentum also continued to build on the network side of our business with higher than expected installations and strong signings activity in the quarter," continued Gelfond, who is in Vienna for the world premiere of Mission Impossible: Rogue Nation at the historic Vienna Opera House, which has been transformed into an IMAX theatre for this event.  "Tonight's M:I5 event is the continuation of the transformation of IMAX's brand from the smaller successes onto center stage.  More agreements to use IMAX cameras as well as IMAX premieres such as Furious 7 and Jurassic World are a powerful marketer for our brand and also signal the increasingly important role IMAX plays in the entertainment ecosystem."

Second-Quarter Segment Results

  • Revenue from sales and sales-type leases was $18.7 million in the second quarter of 2015, compared to $14.5 million in the second quarter of 2014, primarily reflecting the installation of 15 full theatre systems (14 new, 1 used) under sales and sales-type lease arrangements in the most recent second quarter, compared to the 11 sales-type theatres the Company installed in the prior-year period. In addition, there were no upgrades in existing locations in the second quarter of 2015, compared to 4 xenon upgrades in the second quarter of 2014.
  • Revenue from joint revenue-sharing arrangements was $31.6 million in the quarter, compared to $19.4 million in the prior-year period.  During the quarter, the Company installed 20 new theatres under joint revenue-sharing arrangements, compared to 19 in the same period in 2014.  The Company had 477 theatres operating under joint revenue-sharing arrangements as of June 30, 2015, as compared to 408 joint-venture theatres one year prior.
  • Production and IMAX DMR® (Digital Re-Mastering) revenues were $36.6 million in the second quarter of 2015, compared to $24.0 million in the second quarter of 2014.  Gross box office from DMR titles was $343.0 million in the second quarter of 2014, compared to $216.0 million in the prior-year period.  The average global DMR box office per screen in the second quarter of 2014 was $414,600 compared to $299,800 in the prior-year period.

Conference Call

The Company will host a conference call today at 8:30 AM ET to discuss its second quarter 2015 financial results. To access the call via telephone, interested parties in the US and Canada should dial (888) 438-5519 approximately 5 to 10 minutes before the call begins.  International callers should dial (719) 325-2469. The conference ID for the call is 1711636. A replay of the call will be available via webcast on the 'Investor Relations' section of www.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 1711636.

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 June 30, 2015, there were 976 IMAX theatres (852 commercial multiplexes, 20 commercial destinations and 104 institutions) in 65 countries.

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, 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 the Company's inability to protect the Company's 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; risks related to the Company's dependence on a sole supplier for its analog film; risks related to cybersecurity; 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

Teri Loxam

212-821-0100

tloxam@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








June 30, 2015











Three Months








Ended June 30,






Theater Signings:

2015


2014







Full new sales and sales-type lease arrangements

19


17







New joint revenue sharing arrangements

9


3






  Total new theaters

28


20

















Upgrades of IMAX theater systems

2

(1)

4

(1)(2)





Total Theater Signings

30


24


















Three Months








Ended June 30,






Theater Installations:

2015


2014







Full new sales and sales-type lease arrangements

15


11







New joint revenue sharing arrangements

20


19






  Total new theaters

35


30







Upgrades of IMAX theater systems

-


4

(2)





Total Theater Installations

35


34


















As of June 30,






Theater Backlog:

2015


2014







New sales and sales-type lease arrangements

162


155







New joint revenue sharing arrangements

205


242






  Total new theaters

367


397

















Upgrades of IMAX theater systems

24


22






Total Theaters in Backlog

391

(3)

419

(3)

















As of June 30,






Theater Network:

2015


2014






Commercial Multiplex Theaters:










Sales and sales-type lease arrangements

375


327







Joint revenue sharing arrangements

477


408






Total Commercial Multiplex Theaters

852


735
















Commercial Destination Theaters

20


19






Institutional Theaters

104


114






Total IMAX Theater Network

976


868














(1)

Includes two signings for the installation of laser-based digital systems in existing theater locations (2014 – 2 signings).

(2)

Includes one signing and two installations of upgrades to a xenon-based digital system under short-term operating lease arrangements.

(3)

Includes 73 laser theater system configurations (2014 – 66), including upgrades. The Company continues to develop and roll out its laser projection system.

 

Additional Information (continued)

2015 DMR Films:  
In addition to the 23 IMAX DMR films released to the IMAX theater network during the first six months of 2015, 13 additional IMAX DMR films have been announced so far to be released in the remaining six months of 2015:

  • Monk Comes Down the Mountain: An IMAX 3D Experience (China Film Group, July 2015);
  • Monster Hunt: An IMAX 3D Experience (Edko Films, July 2015)
  • Ant-Man: An IMAX 3D Experience (Walt Disney Studios, July 2015);
  • Pixels: An IMAX 3D Experience (Sony Pictures Entertainment, July 2015);
  • Mission: Impossible – Rogue Nation: The IMAXExperience (Paramount Pictures, July 2015);
  • The Man from U.N.C.L.E: The IMAXExperience (Warner Bros. Pictures, August 2015);
  • Everest: An IMAX3D Experience (Universal Studios, September 2015);
  • The Walk: The IMAXExperience (Sony Pictures Entertainment, October 2015);
  • Crimson Peak: The IMAXExperience (Universal Studios, October 2015);
  • Spectre : The IMAX Experience (Sony Pictures Entertainment, November 2015);
  • The Hunger Games: Mockingjay Part 2: An IMAX3D Experience (Lionsgate, November 2015); 
  • In the Heart of the Sea: The IMAX Experience (Warner Bros. Pictures, December 2015); and
  • Star Wars: The Force Awakens: An IMAX3D Experience (Walt Disney Studios, December 2015).

To date, the Company has announced the following 14 titles to be released to the IMAX theater network in 2016:

  • The Finest Hours: The IMAXExperience (Walt Disney Studios, January 2016);
  • Warcraft: An IMAX3D Experience (Universal Studios, March 2016);
  • Batman v Superman: Dawn of Justice: The IMAX Experience (Warner Bros. Pictures, March 2016);
  • The Jungle Book: The IMAXExperience (Walt Disney Studios, April 2016);
  • Captain America: Civil War: The IMAXExperience (Walt Disney Studios, May 2016);
  • Alice in Wonderland: Through the Looking Glass: The IMAXExperience (Walt Disney Studios, May 2016);
  • Finding Dory: The IMAXExperience (Walt Disney Studios, June 2016);
  • Tarzan: The IMAX Experience (Warner Bros. Pictures, July 2016);
  • Knights of the Roundtable: King Arthur: The IMAX Experience (Warner Bros. Pictures, July 2016);
  • Suicide Squad: The IMAXExperience (Warner Bros. Pictures, August 2016);
  • Geostorm: The IMAX Experience (Warner Bros. Pictures, October 2016);
  • Doctor Strange: An IMAX3D Experience (Walt Disney Studios, November 2016);
  • Fantastic Beasts and Where to Find Them: The IMAX Experience (Warner Bros. Pictures, November 2016); and
  • Rogue One: An IMAX3D Experience (Walt Disney Studios, December 2016).

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 a similar number of IMAX DMR films will be released to the IMAX network in 2015 to the 40 films that were released to the IMAX network in 2014.

 

 


IMAX CORPORATION


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


In accordance with United States Generally Accepted Accounting Principles


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


(Unaudited)






Three Months


Six Months




Ended June 30,


Ended June 30,




2015


2014


2015


2014


Revenues 













Equipment and product sales 

$

25,305


$

19,502


$

39,741


$

25,856


Services 


50,958



39,742



82,674



68,614


Rentals 


28,527



17,841



42,341



28,632


Finance income 


2,229



2,060



4,474



4,240


Other 


141



-



141



-





107,160



79,145



169,371



127,342


Costs and expenses applicable to revenues 













Equipment and product sales  


13,521



9,366



21,061



13,085


Services  


19,495



17,180



34,302



31,530


Rentals 


5,109



4,805



8,992



8,525





38,125



31,351



64,355



53,140


Gross margin 


69,035



47,794



105,016



74,202


Selling, general and administrative expenses  


29,023



23,498



57,375



44,810



(including share-based compensation expense of $5.1 million and $10.7 million for the three and six months ended June 30 2015, respectively (2014 - expense of $4.7 million and $7.9 million, respectively)) 













Research and development 


2,347



3,309



6,889



6,908


Amortization of intangibles 


443



416



873



818


Receivable provisions, net of recoveries 


343



329



348



616


Impairment of investments 


350



650



350



650


Income from operations 


36,529



19,592



39,181



20,400


Interest income 


259



24



505



40


Interest expense 


(403)



(268)



(707)



(534)


Income from operations before income taxes 


36,385



19,348



38,979



19,906


Provision for income taxes 


(9,256)



(5,407)



(9,931)



(5,479)


Loss from equity-accounted investments, net of tax 


(749)



(162)



(1,183)



(424)


Income from continuing operations 


26,380



13,779



27,865



14,003


Net income from discontinued operations, net of tax 


-



-



-



355


Net income 

$

26,380


$

13,779


$

27,865


$

14,358


Less: Net income attributable to non-controlling interests 


(2,030)



(472)



(3,124)



(472)


Net income attributable to Common Shareholders 

$

24,350


$

13,307


$

24,741


$

13,886
















Net income per share - basic: 














Net income per share from continuing operations 

$

0.34


$

0.19


$

0.35


$

0.20



Net income per share from discontinued operations 


-



-



-



0.01




$

0.34


$

0.19


$

0.35


$

0.21
















Net income per share - diluted: 














Net income per share from continuing operations 

$

0.34


$

0.19


$

0.34


$

0.19



Net income per share from discontinued operations 


-



-



-



0.01




$

0.34


$

0.19


$

0.34


$

0.20


Weighted average number of shares outstanding (000's): 














Basic 


69,843



68,228



69,526



68,068



Fully Diluted 


71,688



69,452



71,349



69,448
















Additional Disclosure: 














Depreciation and amortization(1)

$

11,091


$

8,390


$

20,724


$

15,945




(1)

Includes $0.2 million and $0.4 million of amortization of deferred financing costs charged to interest expense for the three and six months ended June 30, 2015, respectively (2014 - $0.1 million and $0.3 million, respectively).

 


IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

In accordance with United States Generally Accepted Accounting Principles

(in thousands of U.S. dollars)



As at


As at


June 30,


December 31,


2015


2014


(unaudited)




Assets






Cash and cash equivalents

$

146,383


$

106,503

Accounts receivable, net of allowance for doubtful accounts of $1,222 (December 31, 2014 — $947)


91,464



76,051

Financing receivables


108,492



105,700

Inventories


34,186



17,063

Prepaid expenses


6,799



4,946

Film assets


14,842



15,163

Property, plant and equipment


207,099



183,424

Other assets


28,342



23,047

Deferred income taxes


21,673



23,058

Other intangible assets


28,811



27,551

Goodwill


39,027



39,027

Total assets

$

727,118


$

621,533







Liabilities






Bank indebtedness

$

22,278


$

4,710

Accounts payable


21,349



26,145

Accrued and other liabilities


66,614



75,425

Deferred revenue


98,062



88,566

Total liabilities


208,303



194,846







Commitments and contingencies












Non-controlling interests


85,532



43,912







Shareholders' equity






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






    70,182,090 — issued and 70,152,426 — outstanding (December 31, 2014 — 68,988,050)


378,247



344,862

Less: Treasury stock held in trust, 29,664 shares at cost


(1,214)



-

Other equity


42,666



47,319

Retained earnings (accumulated deficit)


17,998



(6,259)

Accumulated other comprehensive loss


(4,414)



(3,147)

Total shareholders' equity


433,283



382,775

Total liabilities and shareholders' equity

$

727,118


$

621,533














 


IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In accordance with United States Generally Accepted Accounting Principles

(In thousands of U.S. dollars)

(Unaudited)



Six Months



Ended June 30,



2015


2014

Cash provided by (used in):





Operating Activities






Net income

$

27,865


$

14,358


Net income from discontinued operations


-



(355)

Adjustments to reconcile net income to cash from operations:







Depreciation and amortization


20,724



15,945


Write-downs, net of recoveries


1,457



1,579


Change in deferred income taxes


2,232



2,789


Stock and other non-cash compensation


10,861



8,090


Unrealized foreign currency exchange loss


851



64


Loss from equity-accounted investments


1,923



574


Gain on non-cash contribution to equity-accounted investees


(740)



-

Investment in film assets


(7,404)



(5,147)

Changes in other non-cash operating assets and liabilities


(39,271)



(3,219)

Net cash provided by operating activities from discontinued operations


-



572


Net cash provided by operating activities


18,498



35,250








Investing Activities






Purchase of property, plant and equipment


(34,920)



(16,581)

Investment in joint revenue sharing equipment


(11,613)



(10,801)

Acquisition of other intangible assets


(2,972)



(970)


Net cash used in investing activities


(49,505)



(28,352)








Financing Activities






Issuance of subsidiary shares to a non-controlling interest


40,000



40,491

Share issuance costs from the issuance of subsidiary shares to a non-controlling interest


(2,000)



(3,556)

Common shares issued - stock options exercised


22,850



2,657

Increase in bank indebtedness


17,568



-

Credit facility amendment fees paid


(1,161)



-

Treasury stock purchased for future settlement of restricted share units


(1,214)



-

Settlement of restricted share units


(4,988)



(790)


Net cash provided by financing activities


71,055



38,802








Effects of exchange rate changes on cash


(168)



(159)








Increase in cash and cash equivalents during the period


39,880



45,541








Cash and cash equivalents, beginning of period


106,503



29,546

Cash and cash equivalents, end of period

$

146,383


$

75,087









 

 

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 Ended June 30,


Six Months Ended June 30,





2015



2014


2015


2014

Revenue 












IMAX Theater Systems 













IMAX Systems 














Sales and sales-type leases 

$

18,674


$

14,478


$

27,289


$

18,985



Ongoing rent, fees, and finance income 


3,691



3,518



7,190



6,771



Other 


4,674



3,730



8,099



5,242





27,039



21,726



42,578



30,998


Theater system maintenance 


9,158



8,673



18,008



16,868


Joint revenue sharing arrangements 


31,594



19,363



47,462



30,219















Film 













Production and IMAX DMR 


36,603



24,050



54,279



39,235


Film distribution and post-production 


2,766



5,333



7,044



10,022





39,369



29,383



61,323



49,257

Total 

$

107,160


$

79,145


$

169,371


$

127,342















Gross margin 












IMAX Theater Systems 













IMAX systems(1)














Sales and sales-type leases 

$

10,038


$

8,255


$

14,945


$

9,914



Ongoing rent, fees, and finance income 


3,499



3,334



6,777



6,448



Other 


(114)



454



(154)



16





13,423



12,043



21,568



16,378


Theater system maintenance 


3,089



2,781



6,370



5,782


Joint revenue sharing arrangements(1)


24,069



13,378



34,686



20,661















Film 













Production and IMAX DMR(1)


28,488



18,634



41,713



29,708


Film distribution and post-production 


(34)



958



679



1,673





28,454



19,592



42,392



31,381

Total 

$

69,035


$

47,794


$

105,016


$

74,202


(1)

IMAX systems include marketing and commission costs of $0.6 million and $0.9 million for the three and six months ended June 30, 2015, respectively (2014 — $0.7 million and $0.9 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.3 million and $1.4 million for the three and six months ended June 30, 2015, respectively (2014 — $1.0 million and $1.2 million, respectively). Production and DMR segment margins include marketing costs of $3.6 million and $4.9 million for the three and six months ended June 30, 2015, respectively (2014 — $2.0 million and $3.2 million, respectively). Distribution segment margins include marketing costs of less than $0.1 million and cost recovery of $0.1 million for the three and six months ended June 30, 2015, respectively (2014 — $0.2 million and $0.4 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 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 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, 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 million. The Company will also be required to maintain minimum EBITDA (as defined in the Credit Agreement) of $90.0 million until December 30, 2015, which requirement increases to $100.0 million on December 31, 2015. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the Credit Agreement) of 2.5:1.0 until December 30, 2015, which requirement decreases to (i) 2.25:1.0 on December 31, 2015; (ii) 2.0:1.0 on December 31, 2016; and (iii) 1.75:1.0 on December 31, 2017. The ratio of total debt to EBITDA was 0.17:1 as at June 30, 2015, 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 $22.3 million. EBITDA is calculated as follows:





For the


For the 



3 months ended


12 months ended 


June 30, 2015


June 30, 2015(1)

(In thousands of U.S Dollars) 






Net income 

$

26,380


$

55,676

Add (subtract):  







Loss from equity accounted investments 


749



1,830


Provision for income taxes 


9,256



18,918


Interest expense, net of interest income 


144



227


Depreciation and amortization, including film asset amortization 


10,861



37,876


Write-downs net of recoveries including asset impairments and receivable provisions 


1,329



5,172


Stock and other non-cash compensation 


5,195



18,238


EBITDA attributable to non-controlling interests(2)


(3,538)



(8,519)



$

50,376


$

129,418



(1)

Ratio of funded debt calculated using twelve months ended EBITDA.

(2)

The EBITDA calculation specified for purposes of the minimum EBITDA covenant excludes the reduction in EBITDA from the Company's non-controlling interests.

 

IMAX CORPORATION

OTHER INFORMATION 

(in thousands of U.S. dollars)


Adjusted Net Income and Adjusted Diluted Per Share Calculations – Quarter Ended June 30, 2015 vs. 2014:

The Company reported net income of $26.4 million or $0.37 per basic share and $0.36 per diluted share for the second quarter of 2015, as compared to $13.8 million or $0.20 per basic and diluted share for the second quarter of 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $30.7 million or $0.42 per diluted share for the second quarter of 2015 as compared to adjusted net income of $17.7 million or $0.26 per diluted share for the second quarter of 2014. 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 $28.7 million or $0.40 per diluted share for the second quarter of 2015 as compared to adjusted net income attributable to common shareholders of $17.2 million or $0.25 per diluted share for the second quarter of 2014. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measures, 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:




Three Months Ended


Three Months Ended




June 30, 2015


June 30, 2014




Net Income


Diluted EPS


Net Income


Diluted EPS


Reported net income

$

26,380


$

0.36

(1)

$

13,779


$

0.20

(1)

Adjustments:














Stock-based compensation


5,103



0.07



4,715



0.07



Tax impact on items listed above


(740)



(0.01)



(828)



(0.01)


Adjusted net income


30,743



0.42

(1)


17,666



0.26

(1)


Net income attributable to non-controlling interests


(2,030)



(0.02)



(472)



(0.01)


Adjusted net income attributable to common shareholders

$

28,713


$

0.40

(1)

$

17,194


$

0.25

(1)















Weighted average diluted shares outstanding





71,688






69,452
















(1)

  Includes impact of $0.3 million (2014 ― $0.1 million) of accretion charges associated with redeemable Class C shares of IMAX China.

 

 

Adjusted Net Income and Adjusted Diluted Per Share Calculations – Six Months Ended June 30, 2015 vs. 2014:


The Company reported net income of $27.9 million or $0.39 per basic share and $0.38 per diluted share for the six months ended June 30, 2015, as compared to $14.4 million or $0.21 per basic and diluted share for the six months ended June 30, 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $36.8 million or $0.51 per diluted share for the six months ended June 30, 2015 as compared to adjusted net income of $20.9 million or $0.30 per diluted share for the six months ended June 30, 2014.  Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding stock-based compensation expense and the related tax impact, was $33.7 million, or $0.47 per diluted share, in the six months ended June 30, 2015, as compared to adjusted net income attributable to common shareholders of $20.4 million, or $0.29 per diluted share, for the six months ended June 30, 2014. A reconciliation of net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, 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:




Six Months


Six Months




Ended June 30, 2015


Ended June 30, 2014




Net Income


Diluted EPS


Net Income


Diluted EPS


Reported net income

$

27,865


$

0.38

 (1)

$

14,358


$

0.21

 

(1)


Adjustments:














Stock-based compensation


10,678



0.15



7,903



0.11



Tax impact on items listed above


(1,702)



(0.02)



(1,343)



(0.02)


Adjusted net income 


36,841



0.51

 (1)


20,918



0.30

(1)


Net income attributable to non-controlling interests


(3,124)



(0.04)



(472)



(0.01)


Adjusted net income attributable to common shareholders

$

33,717


$

0.47

 (1)

$

20,446


$

0.29

(1)















Weighted average diluted shares outstanding





71,349






69,448






























(1)

Includes impact of $0.5 million (2014 ― $0.1 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. A reconciliation of cash provided by operating activities to free cash flow is presented in the table below:



For the


6 months ended


June 30, 2015

(In thousands of U.S. Dollars)


Net cash provided by operating activities

$                 18,498

Net cash used in investing activities

 

(49,505)

Free cash flow

$              (31,007)

 

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SOURCE IMAX Corporation