--- title: IMAX CORPORATION REPORTS Q4 AND FULL-YEAR 2022 RESULTS publisher: "IMAX" description: "IMAX expects return to pre-pandemic gross box office level of $1.1 billion in 2023 as year begins with strong reopening of China and record-breaking performance of "Avatar: The Way of Water" of approximately $250 million in global box office    IMAX drives record-breaking Chinese New Year box" canonical: "https://www.imax.com/pr/imax-corporation-reports-q4-and-full-year-2022-results" date: 2023-02-22 last_updated: 2023-02-22 --- IMAX CORPORATION REPORTS Q4 AND FULL-YEAR 2022 RESULTS ====================================================== Wed, Feb 22, 2023 * IMAX expects return to pre-pandemic gross box office level of $1.1 billionin 2023 as year begins with strong reopening of Chinaand record-breaking performance of "Avatar: The Way of Water" of approximately $250 millionin global box office * IMAX drives record-breaking Chinese New Yearbox office of $61.3 millionin 2023, led by "The Wandering Earth 2" — now the highest grossing Chinese film of all time in IMAX * IMAX global entertainment technology platform drives full-year 2022 growth of more than 15% across Revenue, Gross Margin and Adjusted EBITDA(1) * IMAX gross global box office increased 33% year over year to $850 millionleading to record share of both global (3.3%) and domestic (4.8%) gross box office in 2022 * IMAX completes 92 technology system installations for full year 2022 — including 52 in Q4 exceeding mid-range of full year guidance of 80 to 100 * IMAX repurchased 5.4 million shares for full-year 2022 or 9.2% of total shares outstanding NEW YORK, Feb. 22, 2023/PRNewswire/ -- IMAX Corporation(NYSE: IMAX) today reported solid financial results for the fourth quarter of 2022 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/2008044/IMAX_Q422_Earnings.jpg "An infographic highlighting IMAX's recent quarter.")](https://mma.prnewswire.com/media/2008044/IMAX_Q422_Earnings.html) "IMAX fully expects to resume pre-pandemic levels of performance in 2023, as we surge into the year with strong dual tailwinds — the record-breaking performance of 'Avatar: The Way of Water' and the rapid reopening of China," said Richard L. Gelfond, Chief Executive Officer of IMAX. "Already in the new year, we've delivered our highest grossing first-run release ever with the 'Avatar' sequel, our best Chinese New Yearbox office ever, and multi-system agreements — demonstrating our prospects for strong box office and global network growth in 2023." "The first 'Avatar' took IMAX to a new level, and we are seeing early signs that its sequel will help drive growth across our business. 'Avatar: The Way of Water' is our highest grossing release ever in nearly 50 international markets, many of which are underrepresented with IMAX systems and among those we've identified for strategic expansion. Coupled with a strong, consistent Hollywoodslate and our expanding local language content portfolio in priority markets, we see a clear opportunity to further expand and diversify our global footprint this year." "The rapid reopening of Chinahas been stunning and a powerful reminder of what we can deliver in the market given the strength of our brand, experience, and content portfolio of Hollywoodand local blockbusters. With Hollywoodtentpoles like 'Avatar: The Way of Water' and 'Ant-Man and the Wasp: Quantumania' gaining day-and-date Chinese releases, and Chinese-made blockbusters like 'The Wandering Earth 2' and 'Full River Red' drawing big audiences, Chinais fast reasserting itself as one of the world's biggest moviegoing markets." **Fourth Quarter and December Full-Year Financial Highlights** **Three Months Ended** **Year Ended** **December 31,** **December 31,** _In millions of U.S.Dollars, except per share data_ **2022** **2021** **YoY % Change** **2022** **2021** **YoY % Change** Total Revenue $ 98.0 $ 108.6 (10 %) $ 300.8 $ 254.9 18 % Gross Margin $ 48.8 $ 64.0 (24 %) $ 156.4 $ 134.4 16 % Gross Margin (%) 50 % 59 % 52 % 53 % Net Income (Loss)(2)(3) $ 2.6 $ 10.1 (74 %) $ (22.8) $ (22.3) N/A Net Income (Loss) per share(2)(3) $ 0.05 $ 0.17 (71 %) $ (0.40) $ (0.38) N/A Adjusted Net Income (Loss)(1)(2)(3) $ 10.6 $ 18.4 (43 %) $ 3.2 $ (8.4) N/A Adjusted Net Income (Loss) per share(1)(2)(3) $ 0.19 $ 0.31 (39 %) $ 0.06 $ (0.14) N/A Adjusted EBITDA per Credit Facility(1)(4) $ 27.8 $ 44.0 (37 %) $ 84.5 $ 68.6 23 % Adjusted EBITDA Margin (%)(1)(2) 30.6 % 45.0 % (32 %) 30.2 % 31.0 % (3 %) Weighted average shares outstanding (in millions): Basic 54.8 58.9 (7 %) 56.7 59.1 (4 %) Diluted 55.7 59.8 (7 %) 57.4 59.1 (3 %) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (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) Includes a tax valuation allowance resulting in a negative impact of $2.1 millionor $0.04per share for the three months ended December 31, 2022(2021 — $0.5 millionor $0.01per share) and $16.5 millionor $0.29per share for the year ended December 31, 2022(2021 — $14.7 millionor $0.25per share). (4) Adjusted EBITDA per Credit facility attributable to common shareholders. **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 %** **4Q22** $ 45.9 $ 27.0 59 % $ 48.0 $ 23.2 48 % **4Q21** 51.3 36.8 72 % 53.4 26.2 49 % **% change** (11) % (27) % (10) % (11) % **YTD 4Q22** $ 156.6 $ 95.4 61 % $ 130.6 $ 63.6 49 % **YTD 4Q21** 116.8 66.5 57 % 126.8 64.3 51 % **% change** 34 % 43 % 3 % (1) % \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Please refer to the Company's Form 10-K for the year ended December 31, 2022for additional segment information. **IMAX Technology Network** * IMAX Technology Network revenues decreased 11% to $45.9 millionin the fourth quarter of 2022. Box office from IMAX locations in Q4 of $252 millionwas down 9.3% from Q4 of 2021 driven by China. Avatar delivered $140 millionin box office in the last two weeks of December with 11% market share on less than 1% of screens and comprising more than half of Q4's total IMAX box office. * Gross margin for the IMAX Technology Network was $27.0 millionin the fourth quarter of 2022, compared to $36.8 millionin the prior year period driven by lower revenues and higher marketing investments. **IMAX Technology Sales and Maintenance** * IMAX Technology Sales and Maintenance revenues and gross margin decreased 10% to $48.0 millionand 11% to $23.2 million, respectively, in the fourth quarter of 2022 which reflects a one-time release of $6.3 millionin deferred maintenance revenue that benefitted Q4 of 2021. * During the fourth quarter the Company installed 52 systems compared to 30 systems in the fourth quarter of 2021, of those, 24 systems were under sales and sales-type lease and hybrid JRSA arrangements compared to 26 systems in the prior year. **Operating Cash Flow and Liquidity** Net cash provided by operating activities was $17.3 millionfor full-year 2022, compared to $6.1 millionfor full-year 2021. As of December 31, 2022, the Company's available liquidity was $415.5 millionincluding its balance of cash and cash equivalents of $97.4 million, $275.0 millionin available borrowing capacity under the Credit Facility and $43.1 millionin available borrowing capacity under IMAX China's revolving facilities. Total debt, excluding deferred financing costs was $270.7 millionas of December 31, 2022. **Share Count and Capital Return** The weighted average basic and diluted shares outstanding in the fourth quarter of 2022 were 54.8 million and 55.7 million, respectively, compared to 58.9 million and 59.8 million in the fourth quarter of 2021. During the fourth quarter of 2022, the Company repurchased 1.9 million shares at an average price of $14.01for a total of $26.6 million. For the full year, the Company repurchased 5.4 million shares at an average price of $15.19for a total of $82.0 millionand 9.2% of the beginning of year share count. 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. Additionally, for the full year, IMAX China repurchased 3.0 million shares at an average price of $1.02for a total cost of $3.0 million.      As of December 31, 2022, a total of $193.4 millionremains available under the Company's outstanding share repurchase authorization. **Supplemental Materials** For more information about the Company's results, please refer to the IMAX Investor Relations website located at [investors.imax.com](https://c212.net/c/link/?t=0&l=en&o=3790856-1&h=3002910906&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=3790856-1&h=3002910906&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 4:30 PM ETto discuss its fourth quarter 2022 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=3790856-1&h=3002910906&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/BI2197088c38524f54b874f4773ab6fb7a](https://c212.net/c/link/?t=0&l=en&o=3790856-1&h=669013525&u=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBI38d122a3ee2046378a62d5b70836c40a&a=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBI2197088c38524f54b874f4773ab6fb7a). 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=3790856-1&h=3002910906&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. IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of December 31, 2022, there were 1,716 IMAX systems (1,633 commercial multiplexes, 12 commercial destinations, 71 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 IMAX™, IMAX Live™, 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=3790856-1&h=2498006734&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=3790856-1&h=3521976478&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=3790856-1&h=4034496399&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=3790856-1&h=2990241772&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=3790856-1&h=4119193615&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, references to business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, future capital expenditures (including the amount and nature thereof), industry prospects and consumer behavior, plans and references to the future success of IMAX 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 IMAX System backlog into revenue; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in our periodic filings with the SEC; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX's most recent Annual Report on Form 10-K. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise._ **Primary Reporting Groups** The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements ("JRSA"); (iii) IMAX Systems; (iv) IMAX Maintenance; (v) Other Theater Business; (vi) Film Distribution; and (vii) Film Post-Production. The Company's activities that do not meet the criteria to be considered a reportable segment are disclosed within All Other. The Company organizes its reportable segments into the following three categories, identified by the nature of the product sold or service provided: (i)  IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from JRSA segment; (ii)  IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment; and (iii)  Film Distribution and Post-Production, which includes activities related to the distribution of large-format documentary films, primarily to institutional theaters, and the distribution of exclusive experiences ranging from live performances to interactive events with leading artists and creators (through the Film Distribution segment) and the provision of film post-production and quality control services. The Company presents its segment information at a disaggregated level to provide more relevant information to the users of its financial statements. Transactions between the IMAX DMR segment and the Film Post-Production segment are valued at exchange value. Inter-segment profits are eliminated upon consolidation, as well as for the disclosures below. In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced®, an initiative to bring _The_ IMAX _Experience_®into the home, out of the New Business Initiatives segment and into All Other for segment reporting purposes. IMAX Enhanced was the only component of the New Business Initiatives segment. Prior period comparatives have been reclassified to conform with the current period presentation. In the first quarter of 2023, the Company has updated its internal reporting, including the information provided to the CODM to assess segment performance and allocate resources, and, as a result, will update its reportable segments in its quarterly report on Form 10-Q for the period ending March 31, 2023. Following these changes, the Company will have two reportable segments: (i) Technology Products and Services, which will principally include the sale, lease, and maintenance of IMAX Systems, previously included within the JRSA, IMAX Systems, IMAX Maintenance, Other Theater Business segments, and (ii) Content Solutions, which will principally include content enhancement and distribution services, previously included within the IMAX DMR, Film Distribution and Film Post-Production segments. The Company's activities that do not meet the criteria to be considered a reportable segment will be reported within All Other. **IMAX Network and Backlog**  **Three Months Ended December 31,** **Year Ended December 31,** **System Signings:** **2022** **2021** **2022** **2021** New IMAX Systems Sales and sales-type lease arrangements 9 7 18 20 Hybrid JRSA — — 3 — Traditional JRSA — 1 9 9 Total new IMAX Systems **9** **8** **30** **29** Upgrades of IMAX systems 3 3 17 7 **Total IMAX System signings** **12** **11** **47** **36** **Three Months Ended December 31,** **Year Ended December 31,** **System Installations:** **2022** **2021** **2022** **2021** New IMAX Systems(1) Sales and sales-type lease arrangements 14 18 28 35 Hybrid JRSA 1 3 6 9 Traditional JRSA 6 3 22 18 Total new IMAX Systems **21** **24** **56** **62** Upgrades of IMAX systems 31 6 36 13 **Total IMAX System installations** **52** **30** **92** **75** **Year Ended December 31,** **System Backlog:** **2022** **2021** Sales and sales-type lease arrangements 162 173 Hybrid JRSA 120 132 Traditional JRSA 168 (2) 184 (2) **Total System backlog** **450** (3) **489** (4) **Year Ended December 31,** **System Network:** **2022** **2021** Commercial Multiplex Systems Sales and sales-type lease arrangements 702 690 Hybrid JRSA 151 146 Traditional JRSA 780 763 **Total Commercial Multiplex Systems** **1,633** **1,599** Commercial Destination Systems 12 12 Institutional Systems 71 72 **Total System network(5)** **1,716** **1,683** \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) For the three months ended December 31, 2022, includes four IMAX Systems that were relocated from their original locations (2021 — nine). For the year ended December 31, 2022, includes twelve IMAX Systems that were relocated from their original location (2021 ― nine). When a system under a sales or sales-type lease arrangement is relocated, the amount of revenue earned by the Company may vary from transaction-to-transaction and is usually less than the amount earned for a new sale. In certain situations when a system is relocated, the original location is upgraded to an IMAX Laser System. (2) Includes 38 IMAX Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2021 — 44 ). (3) Includes 200 new IMAX with Laser projection system configurations and 89 upgrades of existing locations to IMAX Laser Systems configurations. (4) Includes 158 new IMAX with Laser projection system configurations and 92 upgrades of existing locations to IMAX Laser Systems configurations. (5) Period-to-period changes are reported net of the effect of permanently closed locations. **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,** **2022** **2021** **2022** **2021** **Revenues** Technology sales $ 33,888 $ 31,645 $ 69,158 $ 66,153 Image enhancement and maintenance services 44,094 54,234 161,379 131,148 Technology rentals 18,060 20,082 61,786 46,790 Finance income 2,004 2,611 8,482 10,792 **98,046** **108,572** **300,805** **254,883** **Costs and expenses applicable to revenues** Technology sales 17,346 19,260 37,610 37,039 Image enhancement and maintenance services 25,575 19,480 81,834 58,062 Technology rentals 6,278 5,797 25,006 25,376 **49,199** **44,537** **144,450** **120,477** **Gross margin** **48,847** **64,035** **156,355** **134,406** Selling, general and administrative expenses 37,862 34,929 138,043 117,322 Research and development 1,633 1,248 5,300 6,944 Amortization of intangible assets 1,417 1,291 4,829 4,877 Credit loss expense (reversal), net 398 933 8,547 (3,951) Asset impairments — — 4,470 — Legal judgment and arbitration awards — — — (1,770) **Income (loss) from operations** **7,537** **25,634** **(4,834)** **10,984** Realized and unrealized investment (losses) gains (29) 29 70 5,340 Retirement benefits non-service expense (139) (116) (556) (463) Interest income 252 538 1,428 2,218 Interest expense (1,523) (1,558) (5,877) (7,092) **Income (loss) before taxes** **6,098** **24,527** **(9,769)** **10,987** Income tax expense (2,017) (11,148) (10,108) (20,564) **Net income (loss)** **4,081** **13,379** **(19,877)** **(9,577)** Net income attributable to non-controlling interests (1,468) (3,279) (2,923) (12,752) **Net income (loss) attributable to common shareholders** **$** **2,613** **$** **10,100** **$** **(22,800)** **$** **(22,329)** **Net income (loss) per share attributable to common shareholders - basic and diluted:** Net income (loss) per share — basic and diluted **$** **0.05** **$** **0.17** **$** **(0.40)** **$** **(0.38)** Weighted average shares outstanding (in thousands): Basic 54,816 58,886 56,674 59,126 Diluted 55,659 59,805 56,674 59,126 Additional Disclosure: Depreciation and amortization $ 13,998 $ 15,512 $ 56,661 $ 56,082 Amortization of deferred financing costs $ 712 $ 764 $ 3,177 $ 2,513 **IMAX CORPORATION ****CONSOLIDATED BALANCE SHEETS **_(In thousands of dollars, except share amounts)_ **As of December 31,** **2022** **2021** **Assets** Cash and cash equivalents $ 97,401 $ 189,711 Accounts receivable, net of allowance for credit losses 136,142 110,050 Financing receivables, net of allowance for credit losses 129,384 141,049 Variable consideration receivable, net of allowance for credit losses 44,024 44,218 Inventories 31,534 26,924 Prepaid expenses 12,343 11,802 Film assets, net of accumulated amortization 5,277 4,241 Property, plant and equipment, net of accumulated depreciation 252,896 260,353 Investment in equity securities 1,035 1,087 Other assets 15,665 17,799 Deferred income tax assets, net of valuation allowance 9,900 13,906 Goodwill 52,815 39,027 Other intangible assets, net of accumulated amortization 32,738 23,080 **Total assets** **$** **821,154** **$** **883,247** **Liabilities** Accounts payable $ 25,237 $ 15,943 Accrued and other liabilities 117,286 111,896 Deferred revenue 70,940 81,281 Revolving credit facility borrowings, net of unamortized debt issuance costs 36,111 2,472 Convertible notes and other borrowings, net of unamortized discounts and debt issuance costs 226,912 223,641 Deferred income tax liabilities 14,900 17,642 **Total liabilities** **491,386** **452,875** **Commitments, contingencies and guarantees** **Non-controlling interests** **722** **758** **Shareholders' equity** Capital stock common shares — no par value. Authorized — unlimited number. 54,148,614 issued and outstanding (December 31, 2021— 58,653,642 issued and  outstanding) 376,715 409,979 Other equity 185,678 174,620 Statutory surplus reserve 3,932 3,932 Accumulated deficit (293,124) (234,975) Accumulated other comprehensive (loss) income (9,846) 2,527 **Total shareholders' equity attributable to common shareholders** **263,355** **356,083** Non-controlling interests 65,691 73,531 **Total shareholders' equity** **329,046** **429,614** **Total liabilities and shareholders' equity** **$** **821,154** **$** **883,247** **IMAX CORPORATION ****CONSOLIDATED STATEMENTS OF CASH FLOWS **_(In thousands of dollars)_ **Years Ended December 31,** **2022** **2021** **Operating Activities** Net loss $ (19,877) $ (9,577) Adjustments to reconcile net loss to cash provided by operating activities: Depreciation and amortization 56,661 56,082 Amortization of deferred financing costs 3,177 2,513 Credit loss expense (reversal), net 8,547 (3,951) Write-downs, including asset impairments 7,176 1,764 Deferred income tax (benefit) expense (2,073) 2,996 Share-based and other non-cash compensation 27,573 26,079 Unrealized foreign currency exchange loss 1,108 256 Realized and unrealized investment gains (70) (5,340) Changes in assets and liabilities: Accounts receivable (29,003) (52,453) Inventories (5,529) 11,451 Film assets (19,598) (14,810) Deferred revenue (11,572) (6,591) Changes in other operating assets and liabilities 801 (2,354) **Net cash provided by operating activities** **17,321** **6,065** **Investing Activities** Acquisition of SSIMWAVE Inc., net of cash and cash equivalents acquired (15,939) — Purchase of property, plant and equipment (8,424) (3,590) Investment in equipment for joint revenue sharing arrangements (19,803) (10,094) Interest in film classified as a financial instrument (4,731) — Acquisition of other intangible assets (4,394) (4,092) Proceeds from sale of equity securities — 17,769 **Net cash used in investing activities** **(53,291)** **(7)** **Financing Activities** Proceeds from issuance of convertible notes, net — 223,675 Debt issuance costs related to convertible notes — (1,161) Purchase of capped calls related to convertible notes — (19,067) Revolving credit facility borrowings 37,871 3,600 Repayment of revolving credit facility borrowings (3,600) (307,609) Credit facility amendment fees paid (2,279) (527) Repurchase of common shares, IMAX Corporation (80,124) (13,905) Repurchase of common shares, IMAX China (3,043) (10,060) Taxes withheld and paid on employee stock awards vested (3,687) (3,660) Common shares issued - stock options exercised — 883 Principal payment under finance lease obligations (948) — Dividends paid to non-controlling interests (2,704) (4,889) **Net cash used in financing activities** **(58,514)** **(132,720)** Effects of exchange rate changes on cash 2,174 (1,006) **Decrease in cash and cash equivalents during year** **(92,310)** **(127,668)** **Cash and cash equivalents, beginning of year** **189,711** **317,379** **Cash and cash equivalents, end of year** $ **97,401** $ **189,711** **_Segment Revenue and Gross Margin (Margin Loss)_** **Three Months Ended** **Year Ended** **December 31,** **December 31,** **2022** **2021** **2022** **2021** **Revenue** IMAX Technology Network IMAX DMR $ 27,803 $ 31,221 $ 94,867 $ 70,659 JRSA, contingent rent 18,060 20,076 61,768 46,184 45,863 51,297 156,635 116,843 IMAX Technology Sales and Maintenance IMAX Systems 30,127 30,543 62,933 65,660 JRSA, fixed fees 2,318 1,630 4,804 5,406 IMAX Maintenance 13,044 20,143 56,608 53,339 Other Theater Business(1) 2,558 1,080 6,255 2,363 48,047 53,396 130,600 126,768 Film Distribution and Post-Production 1,517 1,723 6,935 5,724 Sub-total for reportable segments 95,427 106,416 294,170 249,335 All Other(2) 2,619 2,156 6,635 5,548 Total $ 98,046 $ 108,572 $ 300,805 $ 254,883 **Gross Margin (Margin Loss)** IMAX Technology Network IMAX DMR $ 14,999 $ 22,377 $ 57,964 $ 44,782 JRSA, contingent rent 12,005 14,462 37,394 21,761 27,004 36,839 95,358 66,543 IMAX Technology Sales and Maintenance IMAX Systems 16,697 13,336 35,129 34,982 JRSA, fixed fees 510 560 589 1,343 IMAX Maintenance 5,466 12,212 27,109 27,572 Other Theater Business 493 129 807 398 23,166 26,237 63,634 64,295 Film Distribution and Post-Production (2,658) (149) (6,128) 848 Sub-total for reportable segments 47,512 62,927 152,864 131,686 All Other(2) 1,335 1,109 3,491 2,721 Total $ 48,847 $ 64,036 $ 156,355 $ 134,407 \_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) The revenue from this segment principally includes after-market sales of IMAX system parts and 3D glasses.  (2) All Other includes the results from IMAX Enhanced, SSIMWAVE, and other ancillary activities. In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced out of the New Business Initiatives segment into All Other for segment reporting purposes. Prior period comparatives have been revised to conform with the current period presentation. **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) legal judgment and arbitration awards; (iv) realized and unrealized investment gains or losses, (v) acquisition-related expenses, 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 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 diluted share is 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 such term is defined in the Company's 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) 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) write-downs, net of recoveries, including asset impairments and credit loss expense; and (v) legal judgment and arbitration awards. 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. Prior to the third quarter of 2022, the Company defined free cash flow as net cash provided by or used in operating activities minus cash used in investing activities (from the Consolidated Statements of Cash Flows). In the third quarter of 2022, the Company updated its definition of free cash flow to deduct only normal recurring capital expenditures, including the Company's 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 December 31, 2022 (1)** **For the Three Months Ended December 31, 2021 (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 income $ 4,081 $ 1,468 $ 2,613 $ 13,379 $ 3,279 $ 10,100 Add (subtract): Income tax expense 2,016 786 1,230 11,148 1,557 9,591 Interest expense, net of interest income 559 (15) 574 257 (91) 348 Depreciation and amortization, including film asset amortization 13,998 1,109 12,889 15,512 1,345 14,167 Amortization of deferred financing costs(2) 712 — 712 764 — 764 EBITDA $ 21,366 $ 3,348 $ 18,018 $ 41,060 $ 6,090 $ 34,970 Stock and other non-cash compensation 8,063 205 7,858 7,521 290 7,231 Realized and unrealized investment losses (gains) 29 — 29 (29) — (29) Acquisition-related expenses 166 — 166 — — — Write-downs, including asset impairments and credit loss expense 1,867 162 1,705 1,819 (23) 1,842 Adjusted EBITDA per Credit Facility $ 31,491 $ 3,715 $ 27,776 $ 50,371 $ 6,357 $ 44,014 Revenues attributable to common shareholders(3) 98,046 7,273 90,773 108,572 10,738 97,834 Adjusted EBITDA margin attributable to common shareholders 32.1 % 51.1 % 30.6 % 46.4 % 59.2 % 45.0 % **For the Twelve Months Ended December 31, 2022 (1)** **For the Twelve Months Ended December 31, 2021 (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 $ (19,877) $ 2,923 $ (22,800) $ (9,577) $ 12,752 $ (22,329) Add (subtract): Income tax expense 10,108 1,256 8,852 20,564 4,049 16,515 Interest expense, net of interest income 1,272 (251) 1,523 2,362 (356) 2,718 Depreciation and amortization, including film asset amortization 56,661 4,820 51,841 56,082 5,255 50,827 Amortization of deferred financing costs(2) 3,177 — 3,177 2,513 — 2,513 EBITDA $ 51,341 $ 8,748 $ 42,593 $ 71,944 $ 21,700 $ 50,244 Stock and other non-cash compensation 27,573 760 26,813 26,079 1,114 24,965 Realized and unrealized investment gains (70) — (70) (5,340) (1,571) (3,769) Acquisition-related expenses 1,122 — 1,122 — — — Write-downs (Recoveries), including asset impairments and credit loss expense 15,723 1,723 14,000 (2,187) (1,159) (1,028) Legal judgment and arbitration awards — — — (1,770) — (1,770) Adjusted EBITDA per Credit Facility $ 95,689 $ 11,231 $ 84,458 $ 88,726 $ 20,084 $ 68,642 Revenues attributable to common shareholders(3) 300,805 20,883 279,922 254,883 33,556 221,327 Adjusted EBITDA margin attributable to common shareholders 31.8 % 53.8 % 30.2 % 34.8 % 59.9 % 31.0 % \_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) The Senior Secured Net Leverage Ratio is calculated using Adjusted EBITDA per Credit Facility determined on a trailing twelve-month basis. (2) The amortization of deferred financing costs is recorded within Interest Expense in the Condensed Consolidated Statement of Operations. (3) _(In thousands of U.S.Dollars)_ **Three months ended December 31, 2022** **Three months ended December 31, 2021** **Year ended December 31, 2022** **Year ended December 31, 2021** Total revenues $ 98,046 $ 108,572 $ 300,805 $ 254,883 Greater Chinarevenues $ 25,728 $ 37,167 $ 73,330 $ 112,801 Non-controlling interest ownership percentage(4) 28.27 % 28.89 % 28.48 % 29.75 % Deduction for non-controlling interest share of revenues (7,273) (10,738) (20,883) (33,556) Revenues attributable to common shareholders $ 90,773 $ 97,834 $ 279,922 $ 221,327 (4)  Weighted average ownership percentage for change in non-controlling interest share **_Adjusted Net Income (Loss) Attributable to Common Shareholders and Adjusted Diluted Per Share Calculations_** **Three Months Ended** **Three Months Ended** **December 31, 2022** **December 31, 2021** **_(In thousands of U.S.dollars, except per share amounts)_** **Net Income** **Diluted EPS** **Net Income** **Diluted EPS** Net income attributable to common shareholders $ 2,613 $ 0.05 $ 10,100 $ 0.17 Adjustments(1): Share-based compensation 7,730 0.14 7,140 0.12 COVID-19 government relief benefits, net — — 1,674 0.03 Realized and unrealized investment losses (gains) 29 — (29) — Acquisition-related expenses 166 — — — Tax impact on items listed above 17 — (492) (0.01) Adjusted net income(1) $ 10,555 $ 0.19 $ 18,393 $ 0.31 Weighted average basic shares outstanding 54,816 58,886 Weighted average diluted shares outstanding 55,659 59,805 **Year Ended** **Year Ended** **December 31, 2022** **December 31, 2021** **_(In thousands of U.S.dollars, except per share amounts)_** **Net (Loss) Income** **Diluted EPS** **Net Loss** **Diluted EPS** Net loss attributable to common shareholders $ (22,800) $ (0.40) $ (22,329) $ (0.38) Adjustments(1): Share-based compensation 26,382 0.46 24,815 0.42 COVID-19 government relief benefits, net (373) (0.01) (3,839) (0.06) Legal judgment and arbitration awards — — (1,770) (0.03) Realized and unrealized investment gains (70) — (3,769) (0.06) Acquisition-related expenses 1,122 0.02 — — Tax impact on items listed above (1,054) (0.02) (1,909) (0.03) Income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries — — 381 0.01 Adjusted net income (loss)(1) $ 3,207 $ 0.06 $ (8,420) $ (0.14) Weighted average shares outstanding - basic 56,674 59,126 Weighted average shares outstanding - diluted 57,371 59,126 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Reflects amounts attributable to common shareholders. **_Free Cash Flow_**  **Three Months Ended** **Year Ended** _(In thousands of U.S.Dollars)_ **December 31, 2022** **December 31, 2022** Net cash provided by operating activities $ 16,840 $ 17,321 Net cash used in capital expenditures (9,584) (32,621) Free cash flow $ 7,256 $ (15,300)   [![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=NY22268&sd=2023-02-22 "Cision")View original content to download multimedia:[https://www.prnewswire.com/news-releases/imax-corporation-reports-q4-and-full-year-2022-results-301753604.html](https://www.prnewswire.com/news-releases/imax-corporation-reports-q4-and-full-year-2022-results-301753604.html) SOURCE IMAX Corporation :RIGHT;BORDER:#000 1pt" colspan="1" rowspan="1" nowrap> $ 279,922 $ 221,327 (4)  Weighted average ownership percentage for change in non-controlling interest share **_Adjusted Net Income (Loss) Attributable to Common Shareholders and Adjusted Diluted Per Share Calculations_** **Three Months Ended** **Three Months Ended** **December 31, 2022** **December 31, 2021** **_(In thousands of U.S.dollars, except per share amounts)_** **Net Income** **Diluted EPS** **Net Income** **Diluted EPS** Net income attributable to common shareholders $ 2,613 $ 0.05 $ 10,100 $ 0.17 Adjustments(1): Share-based compensation 7,730 0.14 7,140 0.12 COVID-19 government relief benefits, net — — 1,674 0.03 Realized and unrealized investment losses (gains) 29 — (29) — Acquisition-related expenses 166 — — — Tax impact on items listed above 17 — (492) (0.01) Adjusted net income(1) $ 10,555 $ 0.19 $ 18,393 $ 0.31 Weighted average basic shares outstanding 54,816 58,886 Weighted average diluted shares outstanding 55,659 59,805 **Year Ended** **Year Ended** **December 31, 2022** **December 31, 2021** **_(In thousands of U.S.dollars, except per share amounts)_** **Net (Loss) Income** **Diluted EPS** **Net Loss** **Diluted EPS** Net loss attributable to common shareholders $ (22,800) $ (0.40) $ (22,329) $ (0.38) Adjustments(1): Share-based compensation 26,382 0.46 24,815 0.42 COVID-19 government relief benefits, net (373) (0.01) (3,839) (0.06) Legal judgment and arbitration awards — — (1,770) (0.03) Realized and unrealized investment gains (70) — (3,769) (0.06) Acquisition-related expenses 1,122 0.02 — — Tax impact on items listed above (1,054) (0.02) (1,909) (0.03) Income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries — — 381 0.01 Adjusted net income (loss)(1) $ 3,207 $ 0.06 $ (8,420) $ (0.14) Weighted average shares outstanding - basic 56,674 59,126 Weighted average shares outstanding - diluted 57,371 59,126 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Reflects amounts attributable to common shareholders. **_Free Cash Flow_**  **Three Months Ended** **Year Ended** _(In thousands of U.S.Dollars)_ **December 31, 2022** **December 31, 2022** Net cash provided by operating activities $ 16,840 $ 17,321 Net cash used in capital expenditures (9,584) (32,621) Free cash flow $ 7,256 $ (15,300)   [![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=NY22268&sd=2023-02-22 "Cision")View original content to download multimedia:[https://www.prnewswire.com/news-releases/imax-corporation-reports-q4-and-full-year-2022-results-301753604.html](https://www.prnewswire.com/news-releases/imax-corporation-reports-q4-and-full-year-2022-results-301753604.html) SOURCE IMAX Corporation