--- title: IMAX CORPORATION REPORTS Q2 2023 RESULTS publisher: "IMAX" description: "Global entertainment technology platform delivers strong Q2 year-over-year growth across all key metrics, including Revenue (+32%), Gross Margin (+31%) and Adjusted EBITDA (+29%) (1) Systems signings climb to 84 to-date — significantly more than the Company delivered in all of 2022 (47) — as system" canonical: "https://www.imax.com/pr/imax-corporation-reports-q2-2023-results" date: 2023-07-26 last_updated: 2023-07-26 --- IMAX CORPORATION REPORTS Q2 2023 RESULTS ======================================== Wed, Jul 26, 2023 * Global entertainment technology platform delivers strong Q2 year-over-year growth across all key metrics, including Revenue (+32%), Gross Margin (+31%) and Adjusted EBITDA (+29%)(1) * Systems signings climb to 84 to-date — significantly more than the Company delivered in all of 2022 (47) — as system installations grow to 29 through June * Strong IMAX share of global box office across summer blockbuster season highlighted by record-breaking 20% indexing with $35 millionIMAX debut of "Oppenheimer" * Cash flow improvement continues, with cash from operations of — $25.9 million in first half of 2023 versus —$(5.3) million use of cash in the first half of 2022 NEW YORK, July 26, 2023/PRNewswire/ -- IMAX Corporation(NYSE: IMAX) today reported strong top and bottom-line financial results for the second quarter of 2023, demonstrating the value of its unique global entertainment technology platform and content portfolio.    [![An infographic highlighting IMAX's recent quarter.](https://mma.prnewswire.com/media/2163144/IMAX_2Q_23_Earnings_Infographic.jpg "An infographic highlighting IMAX's recent quarter.")](https://mma.prnewswire.com/media/2163144/IMAX_2Q_23_Earnings_Infographic.html) "IMAX continues to be a winner in a dynamic global marketplace for entertainment, as demonstrated by our strong results in the second quarter," said Richard L. Gelfond, Chief Executive Officer of IMAX. "We again proved that IMAX can drive results in virtually any business environment thanks to our global scale, asset-lite model, and diversified revenue mix across technology licensing and Hollywoodand local language global box office." "It is increasingly clear that the future of the movie business is IMAX, as moviegoers show growing preference for the premium IMAX Experience®, our market share remains robust, and our network and content portfolio expand in the most promising international growth markets for global cinema." "This past weekend demonstrates the paradigm shift at hand in moviegoing, as IMAX drove strong double-digit market share with a trio of Hollywoodand local releases — led by the stunning performance of 'Oppenheimer' — lifting the Company to one of its best weekends of all time at the global box office." "We remain confident we will continue to drive growth in 2023 across global box office, system signings, installations, and adjusted EBITDA. And the accelerated pace of system signings and installations we're seeing globally this year are a very positive long-term growth indicator for our business." (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 Financial Highlights** **Three Months Ended** **Six Months Ended** **June 30,** **June 30,** _In millions of U.S.Dollars, except per share data_ **2023** **2022** **YoY % Change** **2023** **2022** **YoY % Change** Total Revenue $ 98.0 $ 74.0 32 % $ 184.9 $ 134.0 38 % Gross Margin $ 57.9 $ 44.0 31 % $ 107.9 $ 75.8 42 % Gross Margin (%) 59 % 60 % 58 % 57 % Net Income (Loss)(2) $ 8.4 $ (2.9) N/A $ 10.8 $ (16.5) N/A Diluted Net Income (Loss) per share(2) $ 0.15 $ (0.05) N/A $ 0.20 $ (0.28) N/A Adjusted Net Income (Loss)(1)(2) $ 14.4 $ 3.9 266 % $ 23.4 $ (4.3) N/A Adjusted Net Income (Loss) per share(1)(2) $ 0.26 $ 0.07 271 % $ 0.42 $ (0.07) N/A Adjusted EBITDA per Credit Facility(1)(3) $ 32.8 $ 25.4 29 % $ 60.1 $ 40.2 49 % Adjusted EBITDA Margin (%)(1)(2) 35.4 % 35.9 % (1.3 %) 34.9 % 32.3 % 8.2 % Weighted average shares outstanding (in millions): Basic 54.6 57.3 (5 %) 54.3 57.9 (6 %) Diluted 55.3 57.9 (4 %) 55.1 57.9 (5 %) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Non-GAAP Financial Measure. See the discussion at the end of this earnings release for a description of the non-GAAP financial measures used herein, as well as reconciliations to the most comparable GAAP amounts. (2) Attributable to common shareholders. (3) Adjusted EBITDA per Credit facility attributable to common shareholders. **Second Quarter and June YTD Segment Results**(1) **Content Solutions** **Technology Products and Services** _In millions of U.S.Dollars_ **Revenue** **Gross Margin** **Gross Margin %** **Revenue** **Gross Margin** **Gross Margin %** **2Q23** $ 31.3 $ 20.0 64 % $ 64.0 $ 36.4 57 % **2Q22** 29.5 17.4 59 % 42.9 25.7 60 % **% change** 6 % 15 % 49 % 42 % **YTD 2Q23** $ 63.4 $ 38.0 60 % $ 115.6 $ 66.3 57 % **YTD 2Q22** 50.5 30.0 59 % $ 80.7 44.1 55 % **% change** 26 % 27 % 43 % 50 % \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Please refer to the Company's Form 10-Q for the period ended June 30, 2023, for additional segment information. **Content Solutions Segment** * Content Solutions revenues of $31.3 millionincreased 6% year-over-year. Gross box office from IMAX locations in Q2 2023 of $268.3 million; was up 8% from Q2 2022. Key contributors to second quarter box office performance included:  * Hollywoodtitles led by _Super Mario Bros._with $50 millionin IMAX GBO with strong contributions coming from _Guardians of the Galaxy Vol. 3_, _Fast X_ and _Spider-Man: Across the Spider-Verse_ ($30M+ IMAX GBO per title). * Local language titles _Born to Fly, The First Slam Dunk, Detective Conan: Black Iron Submarine,_ and _Lost in the Stars_contributed on average $6.4 millionin IMAX GBO locally. * Gross margin for Content Solutions was $20.0 million, at a 64% margin, an increase of 15% compared to the second quarter of the prior year period, driven by strong profit flow-through of box office and lower marketing expense reflecting the mix of films year-over-year. **Technology Products and Services Segment** * Technology Products and Services revenues and gross margin increased 49% to $64.0 millionand 42% to $36.4 million, respectively, which reflects growth in box office tied rental revenues as well as a higher number of sale/hybrid installations, as well as amendments and renewals. * During the second quarter the Company installed 20 systems compared to 9 systems in the second quarter of 2022. Of those, 13 systems were under sales and hybrid JRSA arrangements compared to 5 systems in the prior year. **Operating Cash Flow and Liquidity** Net cash provided by operating activities was $25.9 millionfor the first half of 2023 compared to net cash used of ($5.3) millionin the prior year period. As of June 30, 2023, the Company's available liquidity was $420.0 million, including cash and cash equivalents of $95.3 million, $280.0 millionin available borrowing capacity under the Credit Facility and $44.7 millionin available borrowing capacity under IMAX China's revolving facilities. Total debt, excluding deferred financing costs was $262.4 millionas of June 30, 2023. **Share Count and Capital Return** The weighted average basic and diluted shares outstanding in the second quarter of 2023 were 54.6 million and 55.3 million, respectively, compared to 57.3 million in the second quarter of 2022, a decrease of 5% and 3%, respectively. The Company repurchased 130,501 common shares at an average price of $15.20per share, for a total of $2.0 million, excluding commission, year-to-date. In 2021, the Company issued $230.0 millionof 0.500% Convertible Senior Notes due 2026 ("Convertible Notes"). In connection with the pricing of the Convertible Notes, the Company entered into privately negotiated capped call transactions with an initial cap price of $37.2750per share of the Company's common shares. On June 14, 2023, the Company announced a 3-year extension to its share-repurchase program through June 30, 2026. The current share-repurchase program authorizes the Company to repurchase up to $400 millionof its common shares, of which approximately $191.5 millionremains available. **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=3929351-1&h=741264783&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=3929351-1&h=741264783&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=investors.imax.com). The Company expects to provide such updates on Tuesday of each week, although the Company may change this timing without notice. Results will be displayed with a few days lag. The Company may post additional information on the Company's corporate and Investor Relations website which may be material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website in addition to the Company's press releases, SECfilings and public conference calls and webcasts, for additional information about the Company. **Conference Call** The Company will host a conference call today at 4:30 PM ETto discuss its second quarter 2023 financial results. This call is being webcast and can be accessed at [investors.imax.com](https://c212.net/c/link/?t=0&l=en&o=3929351-1&h=741264783&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=investors.imax.com). To access the call via telephone, interested parties please pre-register here: [https://register.vevent.com/register/BIebeab49b8c1d418589a6683e1accbccf](https://c212.net/c/link/?t=0&l=en&o=3929351-1&h=3405604776&u=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBIebeab49b8c1d418589a6683e1accbccf&a=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBIebeab49b8c1d418589a6683e1accbccf+) and you will be provided with a dial-in number and unique pin. To avoid delays, we encourage participants to dial into the conference call ten minutes ahead of the scheduled start time. A replay of the call will be available via webcast at [investors.imax.com](https://c212.net/c/link/?t=0&l=en&o=3929351-1&h=741264783&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=investors.imax.com). **About IMAX Corporation**  IMAX, an innovator in entertainment technology, combines proprietary software, architecture, and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX systems to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe. Streaming technology company SSIMWAVE, an IMAX subsidiary, is a leader in AI-driven video quality solutions for media and entertainment companies. IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of June 30, 2023, there were 1,718 IMAX systems (1,638 commercial multiplexes, 12 commercial destinations, 68 institutional) operating in 87 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchangeunder the stock code "1970." IMAX®, IMAX®3D, Experience It In IMAX®, _The_IMAX _Experience_®, DMR®, Filmed For IMAXTM, IMAX LiveTM, IMAX Enhanced®, and SSIMWAVE®are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. More information about the Company can be found at [www.imax.com](https://c212.net/c/link/?t=0&l=en&o=3929351-1&h=171346939&u=http%3A%2F%2Fwww.imax.com%2F&a=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=3929351-1&h=1329536427&u=https%3A%2F%2Fwww.instagram.com%2Fimax&a=https%3A%2F%2Fwww.instagram.com%2Fimax)), Facebook ([www.facebook.com/imax](https://c212.net/c/link/?t=0&l=en&o=3929351-1&h=1856733882&u=http%3A%2F%2Fwww.facebook.com%2Fimax&a=www.facebook.com%2Fimax)), Twitter ([www.twitter.com/imax](https://c212.net/c/link/?t=0&l=en&o=3929351-1&h=753496793&u=http%3A%2F%2Fwww.twitter.com%2Fimax&a=www.twitter.com%2Fimax)) and YouTube ([www.youtube.com/imaxmovies](https://c212.net/c/link/?t=0&l=en&o=3929351-1&h=1800924474&u=http%3A%2F%2Fwww.youtube.com%2Fimaxmovies&a=www.youtube.com%2Fimaxmovies)). For additional information please contact: **_Investors:_** IMAX Corporation, New York Jennifer Horsley 212-821-0154 [jhorsley@imax.com](mailto:jhorsley@imax.com)  **_Media:_**  IMAX Corporation, New York Mark Jafar 212-821-0102 [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. These forward-looking statements include, but are not limited to, business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, future capital expenditures (including the amount and nature thereof), industry prospects and consumer behavior, statements regarding the closing and expected benefits of the acquisition of IMAX China and the emergence of Cineworld from bankruptcy, as well as 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, 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 Statesand Canada, as well as geopolitical conflicts, such as the conflict between Russiaand Ukraine; risks related to the Company's growth and operations in China; the performance of IMAX DMR® films and other films released to the IMAX network; the signing of IMAX System agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which the Company operates, including competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to consolidation among commercial exhibitors and studios; risks related to brand extensions and new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company's inability to protect the Company's intellectual property; risks related to climate change; risks related to weather conditions and natural disasters that may disrupt or harm the Company's business; risks related to the Company's indebtedness and compliance with its debt agreements; general economic, market or business conditions; risks related to political, economic and social instability, including with respect to the Russia\-Ukraineconflict; the failure to convert system backlog into revenue; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in the Company's periodic filings with the SEC; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. These factors, other risks and uncertainties and financial details are discussed in the Company's most recent Annual Report on Form 10-K. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise._ **Primary Reporting Groups** The Company**'**s Chief Executive Officer ("CEO") is its Chief Operating Decision Maker ("CODM"), as such term is defined under U.S.GAAP. The CODM assesses segment performance based on segment revenues and segment gross margins. Selling, general and administrative expenses, research and development costs, the amortization of intangible assets, provision for (reversal of) current expected credit losses, certain write-downs, interest income, interest expense, and income tax (expense) benefit are not allocated to the Company**'**s segments. In the first quarter of 2023, the Company revised its internal segment reporting, including the information provided to the CODM to assess segment performance and allocate resources. Accordingly, the Company has two reportable segments: (i) Content Solutions, which principally includes content enhancement and distribution services, previously included within the IMAX DMR, Film Distribution and Film Post-Production segments, and (ii) Technology Products and Services, which principally includes the sale, lease, and maintenance of IMAX Systems, previously included within the JRSA, IMAX Systems, IMAX Maintenance, and Other Theater Business segments. The Company's activities that do not meet the criteria to be considered a reportable segment are reported within All Other. Prior period comparatives have been revised to conform with the current period presentation. The Company has the following reportable segments: (i) Content Solutions, which principally includes the digital remastering of films and other content into IMAX formats for distribution to the IMAX network. To a lesser extent, the Content Solutions segment also earns revenue from the distribution of large-format documentary films and exclusive experiences ranging from live performances to interactive events with leading artists and creators, as well as film post-production services. (ii) Technology Products and Services, which includes results from the sale or lease of IMAX Systems, as well as from the maintenance of IMAX Systems. To a lesser extent, the Technology Product and Services segment also earns revenue from certain ancillary theater business activities, including after-market sales of IMAX System parts and 3D glasses. Transactions between segments are valued at exchange value. Inter-segment profits are eliminated upon consolidation, as well as for the disclosures below. **IMAX Network and Backlog** **Three Months Ended June 30,** **Six Months Ended June 30,** **System Signings:** **2023** **2022** **2023** **2022** New IMAX Systems Sales and sales-type lease arrangements 23 2 37 6 Hybrid JRSA — 1 — 2 Traditional JRSA 12 — 25 2 Total new IMAX Systems 35 3 62 10 Upgrades of IMAX systems 11 10 12 10 **Total IMAX System signings** **46** **13** **74** **20** **Three Months Ended June 30,** **Six Months Ended June 30,** **System Installations:** **2023** **2022** **2023** **2022** New IMAX Systems Sales and sales-type lease arrangements 9 3 16 7 Hybrid JRSA 2 1 2 3 Traditional JRSA 3 3 3 9 Total new IMAX Systems 14 7 21 19 Upgrades of IMAX Systems 6 2 8 4 **Total IMAX System installations** **20** **9** **29** **23** **June 30,** **IMAX System Backlog:** **2023** **2022** Sales and sales-type lease arrangements 193 170 Hybrid JRSA 109 128 Traditional JRSA 194 194 **Total IMAX System backlog** **496** **492** **June 30,** **IMAX Network:** **2023** **2022** Commercial Multiplex Theaters Sales and sales-type lease arrangements 731 687 Hybrid JRSA 138 149 Traditional JRSA 769 774 **Total Commercial Multiplex Theaters** **1,638** **1,610** Commercial Destination Theaters 12 12 Institutional Theaters 68 72 **Total IMAX network** **1,718** **1,694** **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,** **2023** **2022** **2023** **2022** **Revenues** Technology sales $ 29,360 $ 8,229 $ 47,182 $ 17,205 Image enhancement and maintenance services 46,867 44,958 93,994 81,052 Technology rentals 19,546 18,525 39,604 31,186 Finance income 2,206 2,256 4,145 4,561 **97,979** **73,968** **184,925** **134,004** **Costs and expenses applicable to revenues** Technology sales 13,771 4,218 21,003 10,203 Image enhancement and maintenance services 19,739 19,953 42,824 35,696 Technology rentals 6,582 5,761 13,160 12,298 **40,092** **29,932** **76,987** **58,197** **Gross margin** **57,887** **44,036** **107,938** **75,807** Selling, general and administrative expenses 38,906 37,095 73,054 67,276 Research and development 2,762 1,356 4,617 2,552 Amortization of intangible assets 1,147 1,104 2,221 2,301 Credit loss expense, net 846 112 1,066 7,341 Asset impairments — 4,470 — 4,470 Executive transition costs — — 1,353 — **Income (loss) from operations** **14,226** **(101)** **25,627** **(8,133)** Unrealized investment gains 28 30 72 64 Retirement benefits non-service expense (78) (138) (155) (277) Interest income 693 417 1,100 919 Interest expense (1,795) (1,326) (3,562) (3,031) **Income (loss) before taxes** **13,074** **(1,118)** **23,082** **(10,458)** Income tax expense (3,461) (3,133) (8,346) (5,743) **Net income (loss)** **9,613** **(4,251)** **14,736** **(16,201)** Less: net (income) loss attributable to non-controlling interests (1,262) 1,400 (3,931) (259) **Net income (loss) attributable to common shareholders** **$** **8,351** **$** **(2,851)** **$** **10,805** **$** **(16,460)** **Net income (loss) per share attributable to common shareholders:** Basic and diluted **$** **0.15** **$** **(0.05)** **$** **0.20** **$** **(0.28)** **Weighted average shares outstanding (in thousands):** Basic 54,591 57,320 54,328 57,943 Diluted 55,320 57,320 55,145 57,943 **Additional Disclosure:** Depreciation and amortization $ 13,878 $ 14,282 $ 27,198 $ 27,023 Amortization of deferred financing costs $ 625 $ 730 $ 1,250 $ 1,753 **IMAX CORPORATION ****CONDENSED CONSOLIDATED BALANCE SHEETS **_(In thousands of U.S.dollars, except share amounts) __(Unaudited)_ **June 30,** **December 31,** **2023** **2022** **Assets** Cash and cash equivalents $ 95,266 $ 97,401 Accounts receivable, net of allowance for credit losses 125,764 136,142 Financing receivables, net of allowance for credit losses 125,450 129,384 Variable consideration receivables, net of allowance for credit losses 57,340 44,024 Inventories 37,291 31,534 Prepaid expenses 12,349 12,343 Film assets, net of accumulated amortization 8,162 5,277 Property, plant and equipment, net of accumulated depreciation 238,973 252,896 Investment in equity securities 1,046 1,035 Other assets 15,914 15,665 Deferred income tax assets, net of valuation allowance 11,450 9,900 Goodwill 52,815 52,815 Other intangible assets, net of accumulated amortization 33,886 32,738 **Total assets** **$** **815,706** **$** **821,154** **Liabilities** Accounts payable $ 24,092 $ 25,237 Accrued and other liabilities 116,658 117,286 Deferred revenue 67,715 70,940 Revolving credit facility borrowings, net of unamortized debt issuance costs 28,002 36,111 Convertible notes and other borrowings, net of unamortized discounts and debt issuance costs 228,039 226,912 Deferred income tax liabilities 13,587 14,900 **Total liabilities** **478,093** **491,386** **Commitments, contingencies and guarantees** **Non-controlling interests** **732** **722** **Shareholders' equity** Capital stock common shares — no par value. Authorized — unlimited number. 54,620,083 issued and outstanding (December 31, 2022— 54,148,614 issued and outstanding) 390,238 376,715 Other equity 175,374 185,678 Statutory surplus reserve 3,932 3,932 Accumulated deficit (284,208) (293,124) Accumulated other comprehensive loss (14,622) (9,846) **Total shareholders' equity attributable to common shareholders** **270,714** **263,355** Non-controlling interests 66,167 65,691 **Total shareholders' equity** **336,881** **329,046** **Total liabilities and shareholders' equity** **$** **815,706** **$** **821,154** **IMAX CORPORATION** **CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS **_(In thousands of U.S.dollars) __(Unaudited)_ **Six Months Ended** **June 30,** **2023** **2022** **Operating Activities** Net income (loss) $ 14,736 $ (16,201) Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: Depreciation and amortization 27,198 27,023 Amortization of deferred financing costs 1,250 1,753 Credit loss expense, net 1,066 7,341 Write-downs 474 5,432 Deferred income tax benefit (3,279) (300) Share-based and other non-cash compensation 12,533 13,966 Unrealized foreign currency exchange loss 175 841 Unrealized investment gains (72) (64) Changes in assets and liabilities: Accounts receivable 9,531 (14,745) Inventories (6,118) (6,949) Film assets (9,241) (10,420) Deferred revenue (3,255) (5,291) Changes in other operating assets and liabilities (19,143) (7,679) **Net cash provided by (used in) operating activities** **25,855** **(5,293)** **Investing Activities** Purchase of property, plant and equipment (1,009) (2,934) Investment in equipment for joint revenue sharing arrangements (4,033) (8,651) Interest in film classified as a financial instrument — (4,731) Acquisition of other intangible assets (3,478) (1,680) **Net cash used in investing activities** **(8,520)** **(17,996)** **Financing Activities** Revolving credit facility borrowings 30,717 — Repayments of revolving credit facility borrowings (38,886) — Credit facility amendment fees paid — (2,028) Other borrowings 315 — Repurchase of common shares (4,011) (49,355) Repurchase of common shares, IMAX China — (1,844) Taxes withheld and paid on employee stock awards vested (6,458) (3,393) Principal payment under finance lease obligations — (890) Dividends paid to non-controlling interests (1,438) — **Net cash used in financing activities** **(19,761)** **(57,510)** Effects of exchange rate changes on cash 291 1,200 **Decrease in cash and cash equivalents during period** **(2,135)** **(79,599)** **Cash and cash equivalents, beginning of period** **97,401** **189,711** **Cash and cash equivalents, end of period** **$** **95,266** **$** **110,112** **_Segment Revenue and Gross Margin_** **Three Months Ended** **Six Months Ended** **June 30,** **June 30,** _(In thousands of U.S.Dollars)_ **2023** **2022** **2023** **2022** **Revenue** Content Solutions $ 31,290 $ 29,544 $ 63,391 $ 50,532 Technology Products and Services 63,976 42,857 115,643 80,720 Sub-total for reportable segments 95,266 72,401 179,034 131,252 All Other(1) 2,713 1,567 5,891 2,752 Total $ 97,979 $ 73,968 $ 184,925 $ 134,004 **Gross Margin** Content Solutions $ 19,996 $ 17,354 $ 37,991 $ 29,979 Technology Products and Services 36,411 25,709 66,302 44,125 Sub-total for reportable segments 56,407 43,063 104,293 74,104 All Other(1) 1,480 973 3,645 1,703 Total $ 57,887 $ 44,036 $ 107,938 $ 75,807 \_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) All Other includes the results from IMAX Enhanced, SSIMWAVE, and other ancillary activities. **IMAX CORPORATION** **NON-GAAP FINANCIAL MEASURES **_(in thousands of U.S.dollars)_ In this release, the Company presents adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin as supplemental measures of the Company's performance, which are not recognized under U.S.GAAP. Adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) COVID-19 government relief benefits, net, (iii) realized and unrealized investment gains or losses; (iv) acquisition-related expenses, and (v) executive transaction costs, as well as the related tax impact of these adjustments. The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company's financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net income (loss) attributable to common shareholders. Although share-based compensation is an important aspect of the Company's employee and executive compensation packages, it is a non-cash expense and is excluded from certain internal business performance measures. A reconciliation from net income (loss) attributable to common shareholders and the associated per share amounts to adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share are presented in the table below. Net income (loss) attributable to common shareholders and the associated per share amounts are the most directly comparable GAAP measures because they reflect the earnings relevant to the Company's shareholders, rather than the earnings attributable to non-controlling interests. In addition to the non-GAAP financial measures discussed above, management also uses "EBITDA," as well as "Adjusted EBITDA per Credit Facility," as defined in the Company's Credit Agreement. As allowed by the Credit Agreement, Adjusted EBITDA per Credit Facility includes adjustments in addition to the exclusion of interest, taxes, depreciation and amortization. Accordingly, this non-GAAP financial measure is presented to allow a more comprehensive analysis of the Company's operating performance and to provide additional information with respect to the Company's compliance against its Credit Agreement requirements, when applicable. In addition, the Company believes that Adjusted EBITDA per Credit Facility presents relevant and useful information widely used by analysts, investors and other interested parties in the Company's industry to evaluate, assess and benchmark the Company's results. EBITDA is defined as net income or loss excluding (i) income tax expense or benefit; (ii) interest expense, net of interest income; (iii) depreciation and amortization, including film asset amortization; and (iv) amortization of deferred financing costs. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) realized and unrealized investment gains or losses; (iii) acquisition-related expenses; (iv) executive transition costs; and (v) write-downs, net of recoveries, including asset impairments and credit loss expense. A reconciliation of net income (loss) attributable to common shareholders, which is the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA per Credit Facility is presented in the table below. Net income (loss) attributable to common shareholders is the most directly comparable GAAP measure because it reflects the earnings relevant to the Company's shareholders, rather than the earnings attributable to non-controlling interests. In this release, the Company also presents free cash flow, which is not recognized under U.S.GAAP, as a supplemental measure of the Company's liquidity. The Company's definition of free cash flow deducts only normal recurring capital expenditures, including its investment in joint revenue sharing arrangements, the purchase of property, plant and equipment and the acquisition of other intangible assets (from the Consolidated Statements of Cash Flows), from net cash provided by or used in operating activities. Management believes that free cash flow is a supplemental measure of the cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented below. These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts. **_Adjusted EBITDA per Credit Facility_** **For the Three Months Ended June 30, 2023** **For the Three Months Ended June 30, 2022** **Attributable to** **Attributable to** **Non-controlling** **Less:** **Non-controlling** **Less:** **Interests and** **Attributable to** **Attributable to** **Interests and** **Attributable to** **Attributable to** _(In thousands of U.S.Dollars)_ **Common Shareholders** **Non-controlling Interests** **Common Shareholders** **Common Shareholders** **Non-controlling Interests** **Common Shareholders** Reported net income (loss) $ 9,613 $ 1,262 $ 8,351 $ (4,251) $ (1,400) $ (2,851) Add (subtract): Income tax expense 3,461 38 3,423 3,133 5 3,128 Interest expense, net of interest income 477 (115) 592 179 (91) 270 Depreciation and amortization, including film asset amortization 13,878 1,546 12,332 14,282 1,196 13,086 Amortization of deferred financing costs(1) 625 — 625 730 — 730 EBITDA $ 28,054 $ 2,731 $ 25,323 $ 14,073 $ (290) $ 14,363 Share-based and other non-cash compensation 6,900 281 6,619 7,777 379 7,398 Unrealized investment gains (28) — (28) (30) — (30) Write-downs, including asset impairments and credit loss expense 1,016 153 863 5,163 1,477 3,686 Adjusted EBITDA per Credit Facility $ 35,942 $ 3,165 $ 32,777 $ 26,983 $ 1,566 $ 25,417 Revenues attributable to common shareholders(2) $ 97,979 $ 5,422 $ 92,557 $ 73,968 $ 3,213 $ 70,755 Adjusted EBITDA margin attributable to common shareholders 36.7 % 58.4 % 35.4 % 36.5 % 48.7 % 35.9 % **For the Twelve Months Ended June 30, 2023** **For the Twelve Months Ended June 30, 2022** **Attributable to** **Attributable to** **Non-controlling** **Less:** **Non-controlling** **Less:** **Interests and** **Attributable to** **Attributable to** **Interests and** **Attributable to** **Attributable to** _(In thousands of U.S.Dollars)_ **Common Shareholders** **Non-controlling Interests** **Common Shareholders** **Common Shareholders** **Non-controlling Interests** **Common Shareholders** Reported net income (loss) $ 11,060 $ 6,595 $ 4,465 $ (9,166) $ 5,572 $ (14,738) Add (subtract): Income tax expense 12,710 1,595 11,115 21,293 2,683 18,610 Interest expense, net of interest income 2,125 (180) 2,305 877 (378) 1,255 Depreciation and amortization, including film asset amortization 56,836 5,170 51,666 57,434 5,565 51,869 Amortization of deferred financing costs(1) 2,674 — 2,674 3,258 — 3,258 EBITDA $ 85,405 $ 13,180 $ 72,225 $ 73,696 $ 13,442 $ 60,254 Share-based and other non-cash compensation 26,140 653 25,487 27,713 1,105 26,608 Unrealized investment gains (78) — (78) (123) — (123) Acquisition-related expenses 1,278 — 1,278 — — — Write-downs, including asset impairments and credit loss expense 4,490 463 4,027 11,691 1,091 10,600 Executive transition costs 1,353 — 1,353 — — — Adjusted EBITDA per Credit Facility $ 118,588 $ 14,296 $ 104,292 $ 112,977 $ 15,638 $ 97,339 Revenues attributable to common shareholders(2) $ 351,726 $ 24,489 $ 327,237 $ 299,178 $ 26,789 $ 272,389 Adjusted EBITDA margin attributable to common shareholders 33.7 % 58.4 % 31.9 % 37.8 % 58.4 % 35.7 % (1) The amortization of deferred financing costs is recorded within Interest Expense in the Condensed Consolidated Statement of Operations. (2) Revenues attributable to common shareholders calculated as follows: **Three months ended** **Three months ended** **Twelve months ended** **Twelve months ended** _(In thousands of U.S.Dollars)_ **June 30, 2023** **June 30, 2022** **June 30, 2023** **June 30, 2022** Total revenues $ 97,979 $ 73,968 $ 351,726 $ 299,178 Greater Chinarevenues $ 19,112 $ 11,237 $ 86,295 $ 92,083 Non-controlling interest ownership percentage(3) 28.37 % 28.59 % 28.38 % 29.09 % Deduction for non-controlling interest share of revenues (5,422) (3,213) (24,489) (26,789) Revenues attributable to common shareholders $ 92,557 $ 70,755 $ 327,237 $ 272,389 (3) Weighted average ownership percentage for change in non-controlling interest share. **_Adjusted Net Income (Loss) Attributable to Common Shareholders and Adjusted Net Income (Loss) Per Share_** **Three Months Ended June 30,** **2023** **2022** _(In thousands of U.S.Dollars, except per share amounts)_ **Net Income** **Per Share** **Net (Loss) Income** **Per Share** Net income (loss) attributable to common shareholders $ 8,351 $ 0.15 $ (2,851) $ (0.05) Adjustments(1): Share-based compensation 6,511 0.12 7,261 0.13 COVID-19 government relief benefits, net — — 32 — Unrealized investment gains (27) — (30) — Tax impact on items listed above (480) (0.01) (490) (0.01) Adjusted net income(1) $ 14,355 $ 0.26 $ 3,922 $ 0.07 Weighted average shares outstanding — basic 54,591 57,320 Weighted average shares outstanding — diluted 55,320 57,856 **Six Months Ended June 30,** **2023** **2022** _(In thousands of U.S.dollars, except per share amounts)_ **Net Income** **Per Share** **Net Loss** **Per Share** Net income (loss) attributable to common shareholders $ 10,805 $ 0.20 $ (16,460) $ (0.28) Adjustments(1): Stock-based compensation 12,047 0.22 13,220 0.23 COVID-19 government relief benefits, net — — (161) — Unrealized investment gains (72) — (64) — Acquisition-related expenses 156 — — — Executive transition costs 1,353 0.02 — — Tax impact on items listed above (909) (0.02) (857) (0.01) Adjusted net income (loss)(1) $ 23,380 $ 0.42 $ (4,322) $ (0.07) Weighted average shares outstanding — basic 54,328 57,943 Weighted average shares outstanding — diluted 55,145 57,943 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Reflects amounts attributable to common shareholders. **_Free Cash Flow_** **Six Months Ended** _(In thousands of U.S.Dollars)_ **June 30, 2023** Net cash provided by operating activities $ 25,855 Net cash used in capital expenditures (8,520) Free cash flow $ 17,335   [![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) ![Cision](https://c212.net/c/img/favicon.png?sn=NY67783&sd=2023-07-26 "Cision")View original content to download multimedia:[https://www.prnewswire.com/news-releases/imax-corporation-reports-q2-2023-results-301886673.html](https://www.prnewswire.com/news-releases/imax-corporation-reports-q2-2023-results-301886673.html) SOURCE IMAX Corporation