--- title: IMAX Corporation Reports Fourth Quarter And Full Year 2020 Results publisher: "IMAX" description: "HIGHLIGHTS - Strong box office across Asia drove IMAX results, offering encouraging signs of pent-up demand among global audiences with a robust Hollywood slate scheduled ahead - IMAX posted another quarter of sequential improvement in key financial metrics, validating the Company's superior" canonical: "https://www.imax.com/pr/imax-corporation-reports-fourth-quarter-and-full-year-2020" date: 2021-03-04 last_updated: 2021-03-04 --- IMAX Corporation Reports Fourth Quarter And Full Year 2020 Results ================================================================== Thu, Mar 4, 2021 **HIGHLIGHTS** **\- Strong box office across Asia drove IMAX results, offering encouraging signs of pent-up demand among global audiences with a robust Hollywood slate scheduled ahead** **\- IMAX posted another quarter of sequential improvement in key financial metrics, validating the Company's superior asset-light business model and strategic market position in the entertainment industry** **\- IMAX ended the quarter with $317 million of cash and cash equivalents** **\- IMAX installed 71 systems and signed agreements for 65 systems for the full year, demonstrating continued partner demand for IMAX® theater systems, contributing to a strong 527 system backlog despite the COVID-19 pandemic** NEW YORK, March 4, 2021/PRNewswire/ -- IMAX Corporation (NYSE: IMAX) today reported results for the fourth quarter and full year 2020 driven by the strong recovery of the Asian box office, which offered an encouraging sign of continued demand for _The_ IMAX_Experience®_ around the world.   [![IMAX Logo. (PRNewsFoto/IMAX Corporation)](https://mma.prnewswire.com/media/74988/imax_corporation_logo.jpg "IMAX Logo. (PRNewsFoto/IMAX Corporation)")](https://mma.prnewswire.com/media/74988/imax_corporation_logo.html) Results for the fourth quarter reflect the strong performance of the IMAX network in Chinaand Japan, where local language releases recorded robust box office at near pre-pandemic levels, tapping into pent-up demand for big screen experiences. Additionally, fourth quarter results benefitted from the Company's continued growth in its global network, demonstrating strong exhibitor and consumer demand for _The_ IMAX_Experience_®_._IMAX installed 33 systems and signed 11 agreements in the fourth quarter, ending the year with 527 systems in backlog. "As the world's only global blockbuster entertainment platform, we are encouraged to see that audiences are eager to return to the movies where the virus is under control and they feel safe, and this promising trend is reflected in our consistent financial improvement since the start of the pandemic," said IMAX CEO, Richard L. Gelfond. "IMAX continues to lead the recovery of the movie industry in markets like Chinaand Japanas audiences seek out _The_ IMAX_Experience®_, driving record-breaking performances among local language films, gaining market share, and growing our relationships with local exhibitors, studios, and filmmakers." "Given strong demand for The IMAX Experience in Asia, the extremely promising pipeline of Hollywoodblockbusters, and the accelerating pace of vaccinations in North Americaand Europe, we remain confident and optimistic that the global film industry is poised for a strong and sustainable recovery in the second half of 2021." "As we manage through the pandemic, IMAX continues to benefit from its strong, differentiated business model and unique position in the entertainment ecosystem. Our global footprint offers access to open markets and thriving local language film industries. Our premium experience and strong brand help ensure that our passionate, engaged fans will be among the first to return to theaters. Finally, our asset-light, flexible model enables us to manage costs, capitalize on opportunities in this dynamic environment, and generate the improving financial results we posted in the fourth quarter." IMAX reported fourth quarter 2020 revenues of $56.0 million, gross margin of $20.3 million, and a net (loss) attributable to common shareholders of ($21.2) million, or ($0.36) per diluted share, and operating cash inflows of $7.8 million. IMAX achieved positive EBITDA per Credit Facility(1)and free cash flow for the first time since the first quarter of 2020, despite capacity limitations and continued delays in the Hollywoodfilm slate. The Company has posted sequential quarterly improvement in EBITDA, cash flow, revenue, and box office since the global impact of the pandemic first took hold in the second quarter of 2020. As a result, the Company continued to strengthen its balance sheet, ending the year with $317 millionin cash and cash equivalents, up from $305 millionat the close of the third quarter. IMAX results reflect the COVID-19 related partial closure of the Company's network as well as the inclusion of a number of notable non-cash items, including: a valuation allowance to reduce the value of deferred tax assets of $4.9 millionor $0.08per share; a $3.0 millionprovision for current expected credit losses reflecting a reduction in the credit quality of the theater receivables balances and the heightened collection risk associated with certain movie studios in foreign markets; and, a $2.9 millionwrite-down of excess and obsolete inventory. The company also recorded a $4.1 millioncharge associated with the final judgement in a legal matter and received $1.9 millionof COVID-19 government relief benefits. **Fourth Quarter and December Year-to-Date Financial Highlights** **Three Months Ended** **Year Ended** **December 31,** **December 31,** _In thousands except per share data_ **2020** **2019** **YoY %** **Change** **2020** **2019** **YoY %** **Change** Total Revenue $ 56.0 $ 124.3 (54.9) % $ 137.0 $ 395.7 (65.4) % Gross Margin $ 20.3 $ 62.4 (67.4) % $ 21.5 $ 214.2 (89.9) % Gross Margin (%) 36.3 % 50.2 % 15.7 % 54.1 % Net (Loss) Income attributable to common shareholders $ (21.2) $ 18.2 N/A $ (143.8) $ 46.9 N/A Diluted Net (Loss) Income per share attributable to common shareholders $ (0.36) $ 0.29 N/A $ (2.43) $ 0.76 N/A Adjusted Net (Loss) Income attributable to common shareholders(1) $ (12.7) $ 21.5 N/A $ (112.1) $ 64.8 N/A Adjusted Net (Loss) Income per share attributable to common shareholders(1) $ (0.21) $ 0.35 N/A $ (1.89) $ 1.05 N/A Adjusted EBITDA per Credit Facility attributable to common shareholders(1) $ 10.0 $ 47.0 (78.7) % $ (13.1) $ 149.3 (108.8) % Adjusted EBITDA Margin attributable to common shareholders (%) (1) 20.8 % 41.7 % (50.0) % (10.8) % 41.7 % (125.9) % (1)     Non-GAAP Financial Measure Note: For the definition and reconciliations of reported results to non-GAAP financial results, please refer to the discussion of non-GAAP financial measures at the end of this earnings release. **Fourth Quarter and December Year-to-Date Segment Results**(1) **IMAX Technology Network** **IMAX Technology Sales and Maintenance** **Revenue** **Gross Margin** **Gross Margin %** **Revenue** **Gross Margin** **Gross Margin %** **4Q20** $ 17.7 $ 7.3 41.4 % $ 36.4 $ 13.6 37.5 % **4Q19** 43.3 24.7 56.9 % 77.3 39.5 51.2 % **% change** (59.1) % (70.2) % (52.9) % (65.5) % **YTD 4Q20** $ 46.1 $ 4.2 9.2 % $ 79.8 $ 28.0 35.1 % **YTD 4Q19** 197.4 127.0 64.3 % 179.9 86.4 48.0 % **% change** (76.6) % (96.7) % (55.6) % (67.6) % \_\_\_\_\_\_\_\_\_\_\_\_\_ (1)  Please refer to the Company's Form 10-K for the period ended December 31, 2020for additional segment information **IMAX Technology Network** * IMAX Technology Network revenues decreased 59.1% to $17.7 millionin the fourth quarter of 2020, compared to $43.3 millionin the prior-year period. The partial closure of the Company's network through the quarter and the release of fewer films, both a result of the COVID-19 global pandemic, drove the decline in gross box office and revenue. * Gross margin for the IMAX Technology Network declined 70.2% to $7.3 millionin the fourth quarter of 2020. The decline was driven by lower segment revenue and ongoing fixed costs associated with the installed IMAX network. **IMAX Technology Sales and Maintenance** * IMAX Technology Sales and Maintenance revenues decreased 52.9% to $36.4 millionin the fourth quarter of 2020, compared with $77.3 millionin the prior year period. The decline in revenue was the result of installing 12 fewer sales-type-lease and 5 fewer hybrid systems in the quarter. * Total gross margin for IMAX Technology Sales and Maintenance was $13.6 millioncompared to $39.5 millionin the prior year period. The decrease in gross margin was the result of lower sales activity and revenue in the quarter. **Cash Balances and Outstanding Debt** Total cash and cash equivalents as of December 31, 2020were $317 million. Total debt, excluding deferred financing fees, was $306 millionas of December 31, 2020. **Share Count and Capital Return** The weighted average diluted shares outstanding at the end of the fourth quarter of 2020 declined 4.4% to 58.9 million, compared to 61.5 million in the fourth quarter of 2019, due primarily to share repurchase activity during the twelve-month period. During the fourth quarter of 2020, the Company did not repurchase any stock. A total of $89.4 millionremains available under the Company's outstanding share repurchase authorization, which was extended in June 2020and now expires in June 2021. **Supplemental Materials** For more information about the Company's results, please refer to the IMAX Investor Relations website located at [investors.imax.com](https://c212.net/c/link/?t=0&l=en&o=3086159-1&h=441540287&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=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](https://c212.net/c/link/?t=0&l=en&o=3086159-1&h=441540287&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=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, SECfilings and public conference calls and webcasts, for additional information about the Company **Conference Call** The Company will host a conference call today at 4:30PM ETto discuss its fourth quarter and full year 2020 financial results. This call is being webcast by PGI and can be accessed at [investors.imax.com](https://c212.net/c/link/?t=0&l=en&o=3086159-1&h=441540287&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=investors.imax.com). To access the call via telephone, interested parties in the US and Canadashould dial (800) 437-2398 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 792-1240. The conference ID for the call is 3139582. A replay of the call will be available via webcast at [investors.imax.com](https://c212.net/c/link/?t=0&l=en&o=3086159-1&h=441540287&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=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 3139582. **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 December 31, 2020, there were 1,650 IMAX theater systems (1,562 commercial multiplexes, 12 commercial destinations, 76 institutional) operating in 84 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchangeunder 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®, 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](http://www.imax.com). You may also connect with IMAX on Instagram ([https://www.instagram.com/imax](https://c212.net/c/link/?t=0&l=en&o=3086159-1&h=2034273947&u=https%3A%2F%2Fwww.instagram.com%2Fimax&a=https%3A%2F%2Fwww.instagram.com%2Fimax)), Facebook ([www.facebook.com/imax](http://www.facebook.com/imax)), Twitter ([www.twitter.com/imax](http://www.twitter.com/imax)) and YouTube ([www.youtube.com/imaxmovies](https://c212.net/c/link/?t=0&l=en&o=3086159-1&h=1562934794&u=http%3A%2F%2Fwww.youtube.com%2Fimaxmovies&a=www.youtube.com%2Fimaxmovies)). For additional information please contact: **_Investors:_** **_Media:_** IMAX Corporation, New York IMAX Corporation, New York Brett Harriss Mark Jafar 212-821-0187 212-821-0102 [bharriss@IMAX.com](mailto:bharriss@IMAX.com) [mjafar@imax.com](mailto: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. Important factors that could affect these 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), plans and references to the future success of IMAX Corporationtogether with its consolidated subsidiaries (the "Company") and expectations regarding the Company's future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, the impact of COVID-19 on the Company's business, financial conditions and results of operations and on the businesses of our customers and exhibitor partners;__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 Statesand Canada; 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 and broader entertainment industry, including both the in-home and out-of-home entertainment markets; 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 entertainment technology; risks relating to consolidation among commercial exhibitors and movie studios; risks related to new business initiatives 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; general economic, market or business conditions; the failure to convert IMAX Theater System backlog into revenue; changes in laws or regulations; the failure to fully realize the projected cost savings and benefits from any of the Company's restructuring initiatives; assumptions related to the foregoing; other 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 and Quarterly Reports 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._ **Primary****Reporting Groups** The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements; (iii) IMAX Systems, (iv) IMAX Maintenance; (v) Other Theater Business; (vi) New Business Initiatives; (vii) Film Distribution; and (viii) Film Post-Production. The Company organizes its reportable segments into the following four 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 the Joint Revenue Sharing Arrangement ("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; (iii) New Business Initiatives, which is a segment that includes activities related to the exploration of new lines of business and new initiatives outside of the Company's core business; and (iv) Film Distribution and Post-Production, which includes activities related to the licensing of film content, the distribution of films primarily for the Company's institutional theater partners (through the Film Distribution segment) and the provision of film post-production and quality control services (through the Film Post-Production segment). **Signings and Installations** **Twelve Months** **Ended December 31,** **Theater System Signings:** **2020** **2019** New IMAX Theater Systems Sales and sales-type lease arrangements 28 49 Hybrid joint revenue sharing lease arrangements 18 48 Traditional joint revenue sharing arrangements 2 7 Total new IMAX Theater Systems **48** **104** Upgrades of IMAX Theater Systems 17 39 Total IMAX Theater System signings **65** **143** **Twelve Months** **Ended December 31,** **Theater System Installations:** **2020** **2019** New IMAX Theater Systems Sales and sales-type lease arrangements 27 55 Hybrid joint revenue sharing lease arrangements 5 20 Traditional joint revenue sharing arrangements 23 54 Total new IMAX Theater Systems **55** **129** Upgrades of IMAX Theater Systems 16 57 **Total IMAX Theater System installations** **71** **186** **Twelve Months** **Ended December 31,** **Theater Sales Backlog:** **2020** **2019** Sales and sales-type lease arrangements 185 178 Hybrid joint revenue sharing lease arrangements 147 140 Traditional joint revenue sharing lease arrangements 195 (1) 213 (1) **Total Theaterbacklog** **527** (2) **531** (3) **Twelve Months** **Ended December 31,** **Theater Network:** **2020** **2019** Commercial Multiplex Theaters Sales and sales-type lease arrangements 672 659 Hybrid joint revenue sharing lease arrangements 140 139 Traditional joint revenue sharing lease arrangements 750 731 **Total Commercial Multiplex Theaters** **1,562** **1,529** Commercial Destination Theaters 12 14 Institutional Theaters 76 81 **Total Theaternetwork** **1,650** **1,624** \_\_\_\_\_\_\_\_\_\_\_\_\_ (1)  Includes 46 IMAX Theater Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2019 — 47). (2)  Includes 148 new IMAX with Laser projection system configurations and 95 upgrades of existing locations to IMAX with Laser projection system configurations. (3)  Includes 144 new IMAX with Laser projection system configurations and 92 upgrades of existing locations to IMAX with Laser projection system configurations. **IMAX CORPORATION** **CONSOLIDATED STATEMENTS OF OPERATIONS** _(In thousands of U.S.dollars, except per share amounts)_ **Three Months Ended** **December 31,** **Year Ended** **_(Unaudited)_** **December 31,** **2020** **2019** **2020** **2019** **Revenues** Technology sales $ 25,626 $ 61,616 $ 49,728 $ 118,245 Image enhancement and maintenance services 20,209 43,570 59,318 188,547 Technology rentals 7,534 16,286 17,841 77,961 Finance income 2,621 2,807 10,116 10,911 **55,990** **124,279** **137,003** **395,664** **Costs and expenses applicable to revenues** Technology sales 17,533 30,513 33,170 63,627 Image enhancement and maintenance services 11,549 21,970 53,598 88,175 Technology rentals 6,595 9,437 28,695 29,690 **35,677** **61,920** **115,463** **181,492** **Gross margin** **20,313** **62,359** **21,540** **214,172** Selling, general and administrative expenses 25,238 34,189 108,485 123,456 Research and development 1,056 1,486 5,618 5,203 Amortization of intangibles 1,380 1,391 5,394 4,955 Credit loss expense 3,026 473 18,608 2,430 Asset impairments \- \- 1,151 \- Legal judgment and arbitration awards 4,105 \- 4,105 \- Exit costs, restructuring charges and associated impairments \- \- \- 850 **(Loss) income from operations** **(14,492)** **24,820** **(121,821)** **77,278** (Loss) gain in fair value of investments (1,142) 2,026 (2,081) (517) Retirement benefits non-service expense (168) (257) (600) (737) Interest income 546 473 2,388 2,105 Interest expense (2,390) (987) (7,010) (2,793) **(Loss) income before taxes** **(17,646)** **26,075** **(129,124)** **75,336** Income tax expense (1,898) (4,782) (26,504) (16,768) Equity in (losses) gains of investees, net of tax \- 59 (1,858) 3 **Net (loss) income** **(19,544)** **21,352** **(157,486)** **58,571** Net loss (income) attributable to non-controlling interests (1,701) (3,181) 13,711 (11,705) **Net (loss) income attributable to common shareholders** **$** **(21,245)** **$** **18,171** **$** **(143,775)** **$** **46,866** **Net (loss) income per share attributable to common shareholders basic and diluted:** Net (loss) income per share — basic and diluted **$** **(0.36)** **$** **0.29** **$** **(2.43)** **$** **0.76** Weighted average number of shares outstanding (000's): Basic 58,872 61,228 59,237 61,310 Fully Diluted 58,872 61,542 59,237 61,489 Additional Disclosure: Depreciation and amortization(1) $ 12,312 $ 17,987 $ 53,606 $ 63,487 (1) Includes $0.3 millionand $0.9 millionof amortization of deferred financing costs charged to interest expense for the three months and year ended December 31, 2020, respectively ($0.1 millionand $0.5 million, respectively). **IMAX CORPORATION** **CONSOLIDATED BALANCE SHEETS** **In accordance with United States Generally Accepted Accounting Principles** _(In thousands of dollars, except share amounts)_ **As of December 31,** **2020** **2019** **Assets** Cash and cash equivalents $ 317,379 $ 109,484 Accounts receivable, net of allowance for credit losses 56,300 99,513 Financing receivables, net of allowance for credit losses 131,810 128,038 Variable consideration receivable, net of allowance for credit losses 40,526 40,040 Inventories 39,580 42,989 Prepaid expenses 10,420 10,237 Film assets 5,777 17,921 Property, plant and equipment, net of accumulated depreciation 277,397 306,849 Investment in equity securities 13,633 15,685 Other assets 21,673 25,034 Deferred income tax assets 17,983 23,905 Other intangible assets, net of accumulated amortization 26,245 30,347 Goodwill 39,027 39,027 **Total assets** **$** **997,750** **$** **889,069** **Liabilities** Bank indebtedness, net of unamortized debt issuance costs $ 305,676 $ 18,229 Accounts payable 20,837 20,414 Accrued and other liabilities 99,354 112,779 Deferred revenue 87,982 94,552 Deferred income tax liabilities 19,134 — **Total liabilities** **532,983** **245,974** **Commitments and contingencies** **Non-controlling interests** **759** **5,908** **Shareholders' equity** Capital stock common shares — no par value. Authorized — unlimited number. 58,921,731 issued and 58,921,008 outstanding (December 31, 2019— 61,362,872 issued and 61,175,852 outstanding) 407,031 423,386 Less: Treasurystock, 723 shares at cost (December 31, 2019— 187,020) (11) (4,038) Other equity 180,330 171,789 Accumulated deficit (202,849) (40,253) Accumulated other comprehensive income (loss) 988 (3,190) **Total shareholders' equity attributable to common shareholders** **385,489** **547,694** Non-controlling interests 78,519 89,493 **Total shareholders' equity** **464,008** **637,187** **Total liabilities and shareholders' equity** **$** **997,750** **$** **889,069** **IMAX CORPORATION** **CONSOLIDATED STATEMENTS OF CASH FLOWS** _(In thousands of dollars)_ **Years Ended December 31,** **2020** **2019** **Cash provided by (used in):** **Operating Activities** Net (loss) income $ (157,486) $ 58,571 Adjustments to reconcile net (loss) income to cash from operations: Depreciation and amortization 53,606 63,487 Credit loss expense 18,608 2,430 Write-downs 17,729 4,376 Deferred income tax expense 23,618 6,762 Share-based and other non-cash compensation 22,038 23,570 Unrealized foreign currency exchange (gain) loss (1,355) 32 Loss in fair value of investments 2,081 517 Equity in losses (income) of investees 1,858 (3) Changes in assets and liabilities: — Accounts receivable 33,597 (8,621) Inventories 1,637 1,942 Film assets (7,665) (23,437) Deferred revenue (6,637) (12,242) Changes in other operating assets and liabilities (24,640) (27,008) **Net cash (used in) provided by operating activities** **(23,011)** **90,376** **Investing Activities** Purchase of property, plant and equipment (697) (7,421) Investment in equipment for joint revenue sharing arrangements (6,654) (40,489) Acquisition of other intangible assets (1,904) (2,931) Investment in equity securities — (15,153) **Net cash used in investing activities** **(9,255)** **(65,994)** **Financing Activities** Increase in revolving credit facility borrowings 287,610 35,000 Repayment of revolving credit facility borrowings — (55,000) Credit facility amendment fees paid (1,073) — Settlement of restricted share units and options (3,075) (9,795) Treasurystock repurchased for future settlement of restricted share units (11) (4,038) Repurchase of common shares, IMAX China (1,534) (19,162) Taxes withheld and paid on employee stock awards vested (512) (590) Common shares issued - stock options exercised — 2,404 Repurchase of common shares (36,624) (2,659) Issuance of subsidiary shares to non-controlling interests (net of return on capital) — 1,106 Dividends paid to non-controlling interests (4,214) (4,384) **Net cash provided by (used in) financing activities** **240,567** **(57,118)** Effects of exchange rate changes on cash (406) 630 **Increase (decrease) in cash and cash equivalents during year** **207,895** **(32,106)** **Cash and cash equivalents, beginning of year** **109,484** **141,590** **Cash and cash equivalents, end of year** $ **317,379** $ **109,484** **Three Months Ended** **Year Ended** **December 31,** **December 31,** **2020** **2019** **2020** **2019** **Revenue** IMAX Technology Network IMAX DMR $ 10,204 $ 26,857 $ 28,265 $ 120,765 Joint revenue sharing arrangements, contingent rent 7,534 16,484 17,841 76,673 17,738 43,341 46,106 197,438 IMAX Technology Sales and Maintenance IMAX Systems 26,381 56,817 54,055 107,321 Joint revenue sharing arrangements, fixed fees 860 4,489 2,056 11,014 IMAX Maintenance 8,774 13,336 21,999 53,151 Other Theater Business 405 2,624 1,666 8,390 36,420 77,266 79,776 179,876 New Business Initiatives 738 846 2,226 2,754 Film Distribution and Post-Production 1,178 2,419 8,719 12,210 56,074 123,872 136,827 392,278 Other (84) 407 176 3,386 Total revenues $ 55,990 $ 124,279 $ 137,003 $ 395,664 **Gross Margin (Margin Loss)** IMAX Technology Network IMAX DMR(1) $ 6,239 $ 16,990 $ 13,731 $ 78,592 Joint revenue sharing arrangements, contingent rent(1) 1,110 7,669 (9,500) 48,446 7,349 24,659 4,231 127,038 IMAX Technology Sales and Maintenance IMAX Systems (1) 10,319 31,445 24,816 58,168 Joint revenue sharing arrangements, fixed fees(1) 419 1,312 529 2,613 IMAX Maintenance 3,423 5,964 3,068 23,010 Other Theater Business (515) 803 (438) 2,624 13,646 39,524 27,975 86,415 New Business Initiatives 633 665 1,878 2,106 Film Distribution and Post-Production (1)(2) (806) (1,745) (10,198) (1,262) 20,822 63,103 23,886 214,297 Other (509) (744) (2,346) (125) Total Segment Margin $ 20,313 $ 62,359 $ 21,540 $ 214,172 **\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** (1)   IMAX DMR segment margins include marketing cost of $0.6 millionand $3.4 millionfor the three months and year ended December 31, 2020, respectively (2019 — $4.8 millionand $22.5 million, respectively). JRSA gross margin includes advertising, marketing and commission expense of $0.5 millionand $1.8 millionfor the three months and year ended December 31, 2020, respectively (2019 — $3.4 millionand $4.5 million, respectively). IMAX Systems gross margin includes marketing and commission costs of $1.0 millionand $2.0 millionfor the three months and year ended December 31, 2020, respectively, (2019 — $0.5 millionand $2.0 million, respectively). Film Distribution segment gross margin includes marketing expense of $0.3 millionand $0.7 millionfor the three months and year ended December 31, 2020, respectively (2019 — recovery of $0.3 millionand expense of $0.4 million, respectively). (2)   Film Distribution margins were significantly influenced by impairment loss recorded of $0.1 millionand $10.0 millionfor the three months and year ended December 31, 2020to write-down the carrying value of certain documentary and alternative content film assets (2019 – $1.2 millionand $1.4 million). **IMAX CORPORATION ****NON-GAAP FINANCIAL MEASURES **_(in thousands of U.S.dollars)_ In this release, the Company presents adjusted net (loss) income attributable to common shareholders and adjusted net (loss) income attributable to common shareholders per diluted share, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin, and free cash flow as supplemental measures of the Company's performance, which are not recognized under U.S.GAAP. Adjusted net (loss) income attributable to common shareholders and adjusted net (loss) income attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) COVID-19 government relief benefits, (iii) legal judgment and arbitration awards; (iv) exit costs, restructuring charges and associated impairments, (v) gain (loss) in the fair value of investments, as well as the related tax impact of these adjustments, and (vi) income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries. 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 (loss) income 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 (loss) income attributable to common shareholders and the associated per share amounts to adjusted net (loss) income attributable to common shareholders and adjusted net (loss) income attributable to common shareholders per diluted share is presented in the table below. Net (loss) income 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. Accordingly, beginning in the first quarter of 2020, the Company updated its reconciliations of these non-GAAP financial measures to reflect this approach. In addition to the non-GAAP financial measures discussed above, management also uses "EBITDA," as such term is defined in the 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) interest expense, net of interest income; (ii) income tax expense or benefit; and (iii) depreciation and amortization, including film asset amortization. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) gain or loss in fair value of investments; (iii) write-downs, net of recoveries, including asset impairments and credit loss expense; (iv) legal judgment and arbitration award; (v) gain or loss from equity accounted investments; and (vi) exit costs, restructuring charges and associated impairments. A reconciliation of net 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 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. Accordingly, beginning in the first quarter of 2020, the Company updated its reconciliations of these non-GAAP financial measures to reflect this approach. Free cash flow is defined as cash provided by operating activities minus cash used in investing activities (from the condensed consolidated statements of cash flows). Cash provided by operating activities consist of net (loss) income, plus depreciation and amortization, plus the change in deferred income taxes, plus other non-cash items, plus changes in working capital, less investment in film assets, plus other changes in operating assets and liabilities. Cash used in investing activities includes capital expenditures, acquisitions and other cash used in investing activities. Management views free cash flow, a non-GAAP measure, as a measure of the Company's after-tax cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented 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_** **For the Three Months Ended December 31, 2020** **For the Three Months Ended December 31, 2019** **Attributable to** **Non-controlling** **Less:** **Attributable to** **Non-controlling** **Less:** **Interests and** **Attributable to** **Attributable to** **Interests and** **Attributable to** **Attributable to** **Common** **Non-controlling** **Common** **Common** **Non-controlling** **Common** **Shareholders** **Interests** **Shareholders** **Shareholders** **Interests** **Shareholders** **_(In thousands of U.S.Dollars)_** Reported net (loss) income $ (19,544) $ 1,701 $ (21,245) $ 21,352 $ 3,181 $ 18,171 Add (subtract): Income tax expense 1,898 717 1,181 4,782 858 3,924 Interest expense, net of interest income 1,537 (90) 1,627 381 (108) 489 Depreciation and amortization, including film asset amortization 12,312 1,099 11,213 17,987 1,266 16,721 EBITDA $ (3,797) $ 3,427 $ (7,224) $ 44,502 $ 5,197 $ 39,305 Share-based and other non-cash compensation 5,693 226 5,467 6,173 143 6,030 Loss (gain) in fair value of investments 1,142 353 789 (2,026) (642) (1,384) Write-downs, including asset impairments and credit loss expense 7,416 533 6,883 3,822 759 3,063 Legal judgment and arbitration awards(4) 4,105 — 4,105 Gain from equity accounted investments — — — (59) — (59) Adjusted EBITDA per Credit Facility $ 14,559 $ 4,539 $ 10,020 $ 52,412 $ 5,457 $ 46,955 Revenues attributable to common shareholders(2) 55,990 7,926 48,064 124,279 11,644 112,635 Adjusted EBITDA margin attributable to common shareholders 26.0 % 57.3 % 20.8 % 42.2 % 46.9 % 41.7 % **For the Twelve Months Ended December 31, 2020 (1)** **For the Twelve Months Ended December 31, 2019 (1)** **Attributable to** **Non-controlling** **Less:** **Attributable to** **Non-controlling** **Less:** **Interests and** **Attributable to** **Attributable to** **Interests and** **Attributable to** **Attributable to** **Common** **Non-controlling** **Common** **Common** **Non-controlling** **Common** **Shareholders** **Interests** **Shareholders** **Shareholders** **Interests** **Shareholders** **_(In thousands of U.S.Dollars)_** Reported net (loss) income $ (157,486) $ (13,711) $ (143,775) $ 58,571 $ 11,705 $ 46,866 Add (subtract): Income tax expense 26,504 5,408 21,096 16,768 3,625 13,143 Interest expense, net of interest income 3,720 (370) 4,090 423 (524) 947 Depreciation and amortization, including film asset amortization 53,606 4,570 49,036 63,487 5,033 58,454 EBITDA $ (73,656) $ (4,103) $ (69,553) $ 139,249 $ 19,839 $ 119,410 Share-based and other non-cash compensation 22,038 968 21,070 23,570 617 22,953 Loss in fair value of investments 2,081 631 1,450 517 165 352 Write-downs, including asset impairments and credit loss expense 36,337 8,364 27,973 6,806 1,040 5,766 Legal judgment and arbitration awards(4) 4,105 — 4,105 — — — Loss from equity accounted investments 1,858 — 1,858 (3) — (3) Exit costs, restructuring charges and associated impairments — — — 850 — 850 Adjusted EBITDA per Credit Facility $ (7,237) $ 5,860 $ (13,097) $ 170,989 $ 21,661 $ 149,328 Revenues attributable to common shareholders(2) 137,003 15,767 121,236 395,664 37,611 358,053 Adjusted EBITDA margin attributable to common shareholders \-5.3 % 37.2 % \-10.8 % 43.2 % 57.6 % 41.7 % \_\_\_\_\_\_\_\_\_\_\_\_ (1) Senior Secured Net Leverage Ratio calculated using twelve months ended Adjusted EBITDA per Credit Facility. During the second quarter of 2020, the Company entered into the Amendment to the Credit Facility Agreement which provides for, among other things, the suspension of the Senior Secured Net Leverage Ratio financial covenant through the first quarter of 2021. (2) **Three months ended** **December 31, 2020** **Three months ended** **December 31, 2019** **12 months ended** **December 31, 2020** **12 months ended** **December 31, 2019** Total revenues $ 55,990 $ 124,279 $ 137,003 $ 395,664 Greater Chinarevenues $ 26,323 $ 38,481 $ 52,331 $ 124,294 Non-controlling interest ownership percentage(3) 30.11 % 30.26 % 30.13 % 30.26 % Deduction for non-controlling interest share of revenues (7,926) (11,644) (15,767) (37,611) Revenues attributable to common shareholders $ 48,064 $ 112,635 $ 121,236 $ 358,053 (2) Weighted average ownership percentage for change in non-controlling interest share (3) Includes a $0.9 millioncharge recorded in the second quarter of 2020 within Selling, General and Administrative Expenses that has been reclassified to Legal Judgment and Arbitration Awards in the fourth quarter of 2020 in order to conform to the current period presentation.  **_Adjusted Net (Loss) Income Attributable to Common Shareholders and Adjusted Diluted Per Share Calculations_** **Three Months Ended** **Three Months Ended** **December 31, 2020** **December 31, 2019** **_(In thousands of U.S.dollars, except per share amounts)_** **Net Loss** **Diluted EPS** **Net Income** **Diluted EPS** Net (loss) income attributable to common shareholders $ (21,245) $ (0.36) $ 18,171 $ 0.29 Adjustments(1): Share-based compensation 5,296 0.09 5,770 0.09 COVID-19 government relief benefits(2) (1,880) (0.03) — — Legal judgment and arbitration awards(3) 4,105 0.07 — — Exit costs, restructuring charges and associated impairments — — — — Loss (gain) in fair value of investments 789 0.01 (1,409) (0.02) Tax impact on items listed above(4) (46) — (1,063) (0.01) Income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries 330 0.01 — — Adjusted net (loss) income(1) $ (12,651) $ (0.21) $ 21,469 $ 0.35 Weighted average basic shares outstanding 58,872 61,228 Weighted average diluted shares outstanding 58,872 61,542 \_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Reflects amounts attributable to common shareholders. (2) The Company recognized $1.9 millionin benefits from the CEWS program as reductions to Selling, General and Administrative Expenses ($1.4 million) and Costs and Expenses Applicable to Revenues ($0.5 million). (3) Includes a $0.9 millioncharge recorded in the second quarter of 2020 within Selling, General and Administrative Expenses that has been reclassified to Legal Judgment and Arbitration Awards in the fourth quarter of 2020 in order to conform to the current period presentation.  (4) For the year ended December 31, 2020, the Company recorded a valuation allowance to reduce the value of the deferred tax assets attributable to certain jurisdictions where management cannot reliably estimate future tax liabilities within the next five years, primarily due to uncertainties associated with the COVID-19 global pandemic. As a result, the calculated tax impact as a percentage of the related non-GAAP adjustments is lower than in the prior year. **Year Ended** **Year Ended** **December 31, 2020** **December 31, 2019** **_(In thousands of U.S.dollars, except per share amounts)_** **Net Loss** **Diluted EPS** **Net Income** **Diluted EPS** Net (loss) income attributable to common shareholders $ (143,775) $ (2.43) $ 46,866 $ 0.76 Adjustments(1): Share-based compensation 20,558 0.35 22,236 0.36 COVID-19 government relief benefits(2) (7,115) (0.12) — — Legal judgment and arbitration awards(3) 4,105 0.07 — — Exit costs, restructuring charges and associated impairments — — 850 0.01 Loss in the fair value of investments 1,450 0.02 333 0.01 Tax impact on items listed above(4) (630) (0.01) (5,500) (0.09) Income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries 13,344 0.23 — — Adjusted net (loss) income(1) $ (112,063) $ (1.89) $ 64,785 $ 1.05 Weighted average basic shares outstanding 59,237 61,310 Weighted average diluted shares outstanding 59,237 61,489 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Reflects amounts attributable to common shareholders. (2) The Company recognized $6.4 millionin benefits from the CEWS program and $0.7 millionin benefits from the U.S.CARES Act, as reductions to Selling, General and Administrative Expenses ($6.0 million), Costs and Expenses Applicable to Revenues ($1.0 million) and Research and Development ($0.1 million) in the Consolidated Statements of Operations. (3) Includes a $0.9 millioncharge recorded in the second quarter of 2020 within Selling, General and Administrative Expenses that has been reclassified to Legal Judgment and Arbitration Awards in the fourth quarter of 2020 in order to conform to the current period presentation.  (4) For the year ended December 31, 2020, the Company recorded a valuation allowance to reduce the value of the deferred tax assets attributable to certain jurisdictions where management cannot reliably estimate future tax liabilities within the next five years, primarily due to uncertainties associated with the COVID-19 global pandemic. As a result, the calculated tax impact as a percentage of the related non-GAAP adjustments is lower than in the prior year. **_Free Cash Flow_** **Three Months** **Ended** **Twelve Months** **Ended** **December 31, 2020** **December 31, 2020** Net cash provided by (used in) operating activities $ 7,807 $ (23,011) Net cash used in investing activities (1,647) (9,255) Free cash flow $ 6,160 $ (32,266) ![Cision](https://c212.net/c/img/favicon.png?sn=NY98542&sd=2021-03-04 "Cision")View original content to download multimedia:[http://www.prnewswire.com/news-releases/imax-corporation-reports-fourth-quarter-and-full-year-2020-results-301240744.html](http://www.prnewswire.com/news-releases/imax-corporation-reports-fourth-quarter-and-full-year-2020-results-301240744.html) SOURCE IMAX Corporation