--- title: IMAX CORPORATION REPORTS RECORD Q3 2023 RESULTS publisher: "IMAX" description: "Global entertainment technology platform delivers strong Q3 year-over-year growth across all key financial metrics, including Revenue (+51%), Gross Margin (+98%) and Adjusted EBITDA (+174%) (1) Network growth accelerates while system signings climb to 120 to-date — more than double what the Company" canonical: "https://www.imax.com/pr/imax-corporation-reports-record-q3-2023-results" date: 2023-10-25 last_updated: 2023-10-25 --- IMAX CORPORATION REPORTS RECORD Q3 2023 RESULTS =============================================== Wed, Oct 25, 2023 * Global entertainment technology platform delivers strong Q3 year-over-year growth across all key financial metrics, including Revenue (+51%), Gross Margin (+98%) and Adjusted EBITDA (+174%)(1) * Network growth accelerates while system signings climb to 120 to-date — more than double what the Company delivered in all of 2022 (47) * Q3 marks the Company's second highest grossing quarter of all time at the global IMAX box office * Box office strength drives significant operating leverage, delivering in the third quarter $12 millionin Net Income, Adjusted EPS(1)of $0.35, record Adjusted EBITDA(1)of $45 millionand Adjusted EBITDA Margin(1)of 47% * Robust cash flow generation continues, with cash from operations of $55 millionthrough nine months, compared with $0.5 millionfor the same period in 2022 NEW YORK, Oct. 25, 2023/PRNewswire/ -- IMAX Corporation(NYSE: IMAX) today reported strong top and bottom-line financial results for the third quarter of 2023, demonstrating the value of its unique global entertainment technology platform and diversified content portfolio.   [![An infographic highlighting IMAX's recent quarter.](https://mma.prnewswire.com/media/2256846/IMAX_Q3_23_Earnings_FINAL.jpg "An infographic highlighting IMAX's recent quarter.")](https://mma.prnewswire.com/media/2256846/IMAX_Q3_23_Earnings_FINAL.html) "IMAX financial results for the third quarter are spectacular by any measure — versus budget, versus our historical performance and in the context of a highly dynamic business environment for media and entertainment," said Richard L. Gelfond, Chief Executive Officer of IMAX. "We are programming by far the strongest and most diverse content portfolio in our history — Hollywoodblockbusters, local language films, marquee theatrical releases by streamers, concert films, docs, Live events – and we couldn't be more pleased with the results across our global network." "Our outsized performance with Hollywoodblockbusters coupled with the expansion of our successful local language strategy is fueling strong network growth around the world, with robust sales activity in Chinaand North Americaas well as key growth markets across Europeand Southeast Asia." "It is clear that IMAX is the preferred way to experience blockbuster entertainment globally, and our global footprint, differentiated technology, and asset-lite model have made us a consistent winner. As we enter the fourth quarter, we remain on track to deliver significant growth in system signings, installations, and Adjusted EBITDA for the full year and one of the best years in our history at the global box office." (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. **Third Quarter Financial Highlights** **Three Months Ended** **Nine Months Ended** **September 30,** **September 30,** _In millions of U.S.Dollars, except per share data_ **2023** **2022** **YoY %** **Change** **2023** **2022** **YoY % Change** Total Revenue $ 103.9 $ 68.8 51 % $ 288.8 $ 202.8 42 % Gross Margin $ 62.7 $ 31.7 98 % $ 170.7 $ 107.5 59 % Gross Margin (%) 60 % 46 % 59 % 53 % Net Income (Loss)(2) $ 12.0 $ (9.0) N/A $ 22.8 $ (25.4) N/A Diluted Net Income (Loss) per share(2) $ 0.22 $ (0.16) N/A $ 0.41 $ (0.44) N/A Adjusted Net Income (Loss)(1)(2) $ 19.4 $ (3.0) N/A $ 42.8 $ (7.3) N/A Adjusted Net Income (Loss) per share(1)(2) $ 0.35 $ (0.05) N/A $ 0.77 $ (0.13) N/A Adjusted EBITDA per Credit Facility(1)(3) $ 45.1 $ 16.5 174 % $ 105.1 $ 56.7 85 % Adjusted EBITDA Margin (%)(1)(2) 47 % 26 % 81 % 39 % 30 % 30 % Weighted average shares outstanding (in millions): Basic 54.6 56.0 (3 %) 54.4 57.3 (5 %) Diluted 55.5 56.0 (1 %) 55.3 57.3 (4 %) (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. **Third Quarter and September 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 %** **3Q23** $ 44.2 $ 26.4 60 % $ 56.2 $ 33.8 60 % **3Q22** 22.0 9.1 42 % 45.5 21.8 48 % **% change** 101 % 189 % 23 % 55 % **YTD 3Q23** $ 107.6 $ 64.4 60 % $ 171.8 $ 100.1 58 % **YTD 3Q22** 72.5 39.1 54 % $ 126.3 65.9 52 % **% change** 48 % 65 % 36 % 52 % (1) Please refer to the Company's Form 10-Q for the period ended September 30, 2023, for additional segment information. **Content Solutions Segment** * Content Solutions revenues of $44.2 millionincreased 101% year-over-year. Gross box office from IMAX locations in Q3 2023 of $347.1 millionwas up 96% from Q3 2022. Key contributors to third quarter box office performance included: * Hollywoodtitles led by _Oppenheimer_with $180 millionin IMAX GBO with significant contributions coming from _Mission Impossible: Dead Reckoning Part 1_and_Indiana Jones and the Dial of Destiny_. * Local language titles led by the record setting Chinese title _Creation of the Gods: Kingdom of Storms_($32.3 millionin IMAX GBO), with strong contributions coming from _No More Bets_, _Lost in the Stars_, and _Jawan_. * Gross margin for Content Solutions was $26.4 million(at a 60% margin) and increased 189% compared to the third quarter of the prior year period. This outsized growth was driven by the operating leverage in our business that resulted in very pronounced profit flow-through from box office. **Technology Products and Services Segment** * Technology Products and Services revenues and gross margin increased 23% year-over-year to $56.2 millionand 55% year-over-year to $33.8 million, respectively, which reflects growth in box office tied to rental revenues as well as a higher number of sale/hybrid installations. * During the third quarter the Company installed 30 systems compared to 17 systems in the third quarter of 2022. Of those, 16 systems were under sales and hybrid JRSA arrangements, compared to 9 systems in the prior year. **Operating Cash Flow and Liquidity** Net cash provided by operating activities for the nine months through September was $54.6 millioncompared to net cash provided by operating activities of $0.5 millionin the prior year period. As of September 30, 2023, the Company's available liquidity was $308.9 millionor $438.9 millionexcluding the letter of credit associated with the IMAX China privatization transaction. Our liquidity includes cash and cash equivalents of $109.6 million, $150.0 millionin available borrowing capacity under the Credit Facility, $130.0 millionfor the standby letter of credit and $49.2 millionin available borrowing capacity under IMAX China's revolving facilities. Total debt, excluding deferred financing costs, was $258.2 millionas of September 30, 2023. 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. **Share Count and Capital Return** The weighted average basic and diluted shares outstanding in the third quarter of 2023 were 54.6 million and 55.5 million, respectively, compared to 56.0 million for both in the third quarter of 2022, a decrease of 3% and 1%, respectively. The Company repurchased 362,784 common shares at an average price of $16.90per share, for a total of $6.1 million, excluding commission, year-to-date through October 24, 2023. 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 $187.3 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=4006046-1&h=545361759&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=4006046-1&h=545361759&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 8:30 AM ETto discuss its third 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=4006046-1&h=545361759&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/BI507a09f12d7e4417a07562a7285253bd](https://c212.net/c/link/?t=0&l=en&o=4006046-1&h=1826070258&u=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBI507a09f12d7e4417a07562a7285253bd&a=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBI507a09f12d7e4417a07562a7285253bd)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=4006046-1&h=545361759&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 September 30, 2023, there were 1,731 IMAX systems (1,651 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=4006046-1&h=2994447022&u=https%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=4006046-1&h=1133535099&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=4006046-1&h=3087189519&u=https%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=4006046-1&h=2563281363&u=https%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=4006046-1&h=3941616856&u=https%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 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; 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; 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, as supplemented by those discussed in the Company's Quarterly Report 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**'**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 September 30,** **Nine Months Ended September 30,** **System Signings:** **2023** **2022** **2023** **2022** New IMAX Systems Sales and sales-type lease arrangements 7 3 44 9 Hybrid JRSA — 1 — 3 Traditional JRSA 7 7 32 9 Total new IMAX Systems 14 11 76 21 Upgrades of IMAX systems 6 4 18 14 **Total IMAX System signings** **20** **15** **94** **35** **Three Months Ended September 30,** **Nine Months Ended September 30,** **System Installations:** **2023** **2022** **2023** **2022** New IMAX Systems Sales and sales-type lease arrangements 14 7 30 14 Hybrid JRSA — 2 2 5 Traditional JRSA 4 7 7 16 Total new IMAX Systems 18 16 39 35 Upgrades of IMAX Systems 12 1 20 5 **Total IMAX System installations** **30** **17** **59** **40** **September 30,** **IMAX System Backlog:** **2023** **2022** Sales and sales-type lease arrangements 192 170 Hybrid JRSA 107 127 Traditional JRSA 187 192 **Total IMAX System backlog** **486** **489** **September 30,** **IMAX Network:** **2023** **2022** Commercial Multiplex Theaters Sales and sales-type lease arrangements 743 696 Hybrid JRSA 137 150 Traditional JRSA 771 776 **Total Commercial Multiplex Theaters** **1,651** **1,622** Commercial Destination Theaters 12 12 Institutional Theaters 68 69 **Total IMAX network** **1,731** **1,703** **IMAX CORPORATION** **CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS** _(In thousands of U.S.dollars, except per share amounts)_ _(Unaudited)_ **Three Months Ended** **Nine Months Ended** **September 30,** **September 30,** **2023** **2022** **2023** **2022** **Revenues** Technology sales $ 18,273 $ 18,065 $ 65,455 $ 35,270 Image enhancement and maintenance services 60,250 36,233 154,244 117,285 Technology rentals 23,008 12,540 62,612 43,726 Finance income 2,365 1,917 6,510 6,478 **103,896** **68,755** **288,821** **202,759** **Costs and expenses applicable to revenues** Technology sales 7,948 10,061 28,951 20,264 Image enhancement and maintenance services 26,646 20,563 69,470 56,259 Technology rentals 6,587 6,430 19,747 18,728 **41,181** **37,054** **118,168** **95,251** **Gross margin** **62,715** **31,701** **170,653** **107,508** Selling, general and administrative expenses 36,282 32,905 109,336 100,181 Research and development 2,771 1,115 7,388 3,667 Amortization of intangible assets 1,107 1,111 3,328 3,412 Credit loss expense, net 523 808 1,589 8,149 Asset impairments — — — 4,470 Executive transition costs — — 1,353 — **Income (loss) from operations** **22,032** **(4,238)** **47,659** **(12,371)** Unrealized investment gains 364 35 436 99 Retirement benefits non-service expense (77) (140) (232) (417) Interest income 738 257 1,838 1,176 Interest expense (1,483) (1,323) (5,045) (4,354) **Income (loss) before taxes** **21,574** **(5,409)** **44,656** **(15,867)** Income tax expense (6,555) (2,348) (14,901) (8,091) **Net income (loss)** **15,019** **(7,757)** **29,755** **(23,958)** Less: net (income) loss attributable to non-controlling interests (3,029) (1,196) (6,960) (1,455) **Net income (loss) attributable to common shareholders** **$** **11,990** **$** **(8,953)** **$** **22,795** **$** **(25,413)** **Net income (loss) per share attributable to common shareholders:** Basic **$** **0.22** **$** **(0.16)** **$** **0.42** **$** **(0.44)** Diluted **$** **0.22** **$** **(0.16)** **$** **0.41** **$** **(0.44)** **Weighted average shares outstanding (in thousands):** Basic 54,618 56,039 54,424 57,301 Diluted 55,535 56,039 55,261 57,301 **Additional Disclosure:** Depreciation and amortization $ 19,279 $ 15,640 $ 46,477 $ 42,663 Amortization of deferred financing costs $ 492 $ 712 $ 1,742 $ 2,465 **IMAX CORPORATION** **CONDENSED CONSOLIDATED BALANCE SHEETS** _(In thousands of U.S.dollars, except share amounts)_ _(Unaudited)_ **September 30,** **December 31,** **2023** **2022** **Assets** Cash and cash equivalents $ 109,603 $ 97,401 Accounts receivable, net of allowance for credit losses 135,962 136,142 Financing receivables, net of allowance for credit losses 125,322 129,384 Variable consideration receivables, net of allowance for credit losses 59,042 44,024 Inventories 45,365 31,534 Prepaid expenses 13,042 12,343 Film assets, net of accumulated amortization 5,232 5,277 Property, plant and equipment, net of accumulated depreciation 238,140 252,896 Investment in equity securities — 1,035 Other assets 20,119 15,665 Deferred income tax assets, net of valuation allowance 11,961 9,900 Goodwill 52,815 52,815 Other intangible assets, net of accumulated amortization 34,343 32,738 **Total assets** **$** **850,946** **$** **821,154** **Liabilities** Accounts payable $ 37,699 $ 25,237 Accrued and other liabilities 123,863 117,286 Deferred revenue 66,272 70,940 Revolving credit facility borrowings, net of unamortized debt issuance costs 23,903 36,111 Convertible notes and other borrowings, net of unamortized discounts and debt issuance costs 228,449 226,912 Deferred income tax liabilities 13,349 14,900 **Total liabilities** **493,535** **491,386** **Commitments, contingencies and guarantees** **Non-controlling interests** **661** **722** **Shareholders' equity** Capital stock common shares — no par value. Authorized — unlimited number. 54,607,095 issued and outstanding (December 31, 2022— 54,148,614 issued and outstanding) 390,097 376,715 Other equity 179,970 185,678 Statutory surplus reserve 3,932 3,932 Accumulated deficit (272,318) (293,124) Accumulated other comprehensive loss (14,637) (9,846) **Total shareholders' equity attributable to common shareholders** **287,044** **263,355** Non-controlling interests 69,706 65,691 **Total shareholders' equity** **356,750** **329,046** **Total liabilities and shareholders' equity** **$** **850,946** **$** **821,154** **IMAX CORPORATION** **CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** _(In thousands of U.S.dollars)_ _(Unaudited)_ **Nine Months Ended** **September 30,** **2023** **2022** **Operating Activities** Net income (loss) $ 29,755 $ (23,958) Adjustments to reconcile net income (loss) to cash provided by operating activities: Depreciation and amortization 46,477 42,663 Amortization of deferred financing costs 1,742 2,465 Credit loss expense, net 1,589 8,149 Write-downs 872 5,707 Deferred income tax benefit (3,724) (3,374) Share-based and other non-cash compensation 17,830 19,510 Unrealized foreign currency exchange loss 52 1,310 Unrealized investment gains (436) (99) Changes in assets and liabilities: Accounts receivable (2,392) (18,050) Inventories (13,771) (10,131) Film assets (14,575) (14,174) Deferred revenue (4,670) (5,989) Changes in other operating assets and liabilities (4,141) (3,548) **Net cash provided by operating activities** **54,608** **481** **Investing Activities** Purchase of property, plant and equipment (2,541) (5,248) Investment in equipment for joint revenue sharing arrangements (10,705) (14,543) Interest in film classified as a financial instrument — (4,731) Acquisition of other intangible assets (5,418) (3,246) Acquisition of SSIMWAVE, net of cash and cash equivalents acquired — (12,639) **Net cash used in investing activities** **(18,664)** **(40,407)** **Financing Activities** Revolving credit facility borrowings 31,032 4,890 Repayments of revolving credit facility borrowings (43,057) (3,600) Credit facility amendment fees paid — (2,277) Other borrowings 315 — Repurchase of common shares (4,263) (53,581) Repurchase of common shares, IMAX China — (3,043) Taxes withheld and paid on employee stock awards vested (6,458) (3,393) Principal payment under finance lease obligations (480) (890) Dividends paid to non-controlling interests (1,438) (2,701) **Net cash used in financing activities** **(24,349)** **(64,595)** Effects of exchange rate changes on cash 607 1,961 **Increase (decrease) in cash and cash equivalents during period** **12,202** **(102,560)** **Cash and cash equivalents, beginning of period** **97,401** **189,711** **Cash and cash equivalents, end of period** **$** **109,603** **$** **87,151** **_Segment Revenue and Gross Margin_** **Three Months Ended** **Nine Months Ended** **September 30,** **September 30,** _(In thousands of U.S.Dollars)_ **2023** **2022** **2023** **2022** **Revenue** Content Solutions $ 44,214 $ 21,967 $ 107,605 $ 72,499 Technology Products and Services 56,169 45,542 171,813 126,262 Sub-total for reportable segments 100,383 67,509 279,418 198,761 All Other(1) 3,513 1,246 9,403 3,998 Total $ 103,896 $ 68,755 $ 288,821 $ 202,759 **Gross Margin** Content Solutions $ 26,407 $ 9,140 $ 64,397 $ 39,121 Technology Products and Services 33,761 21,752 100,066 65,875 Sub-total for reportable segments 60,168 30,892 164,463 104,996 All Other(1) 2,547 809 6,190 2,512 Total $ 62,715 $ 31,701 $ 170,653 $ 107,508 (1) All Other includes the results from the Company's streaming and consumer technology business, as well as 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) transaction-related expenses, and (v) executive transition 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) transaction-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 September 30, 2023** **For the Three Months Ended September 30, 2022** **Attributable to** **Attributable to** **Non-controlling** **Less:** **Non-controlling** **Less:** **Interests and** **Attributable to** **Attributable to** **Interests and** **Attributable to** **Attributable to** **Common** **Non-controlling** **Common** **Common** **Non-controlling** **Common** _(In thousands of U.S.Dollars)_ **Shareholders** **Interests** **Shareholders** **Shareholders** **Interests** **Shareholders** Reported net income (loss) $ 15,019 $ 3,029 $ 11,990 $ (7,757) $ 1,196 $ (8,953) Add (subtract): Income tax expense 6,555 1,041 5,514 2,348 (22) 2,370 Interest expense, net of interest income 253 (145) 398 354 (39) 393 Depreciation and amortization, including film asset amortization 19,279 1,304 17,975 15,640 1,214 14,426 Amortization of deferred financing costs(1) 492 — 492 712 — 712 EBITDA $ 41,598 $ 5,229 $ 36,369 $ 11,297 $ 2,349 $ 8,948 Share-based and other non-cash compensation 5,297 155 5,142 5,544 (27) 5,571 Unrealized investment gains (364) (93) (271) (35) — (35) Transaction-related expenses 3,086 — 3,086 955 — 955 Write-downs, including asset impairments and credit loss expense 921 164 757 1,083 66 1,017 Adjusted EBITDA per Credit Facility $ 50,538 $ 5,455 $ 45,083 $ 18,844 $ 2,388 $ 16,456 Revenues attributable to common shareholders(2) $ 103,896 $ 8,028 $ 95,868 $ 68,755 $ 4,257 $ 64,498 Adjusted EBITDA margin attributable to common shareholders 49 % 68 % 47 % 27 % 56 % 26 % **For the Twelve Months Ended September 30, 2023** **For the Twelve Months Ended September 30, 2022** **Attributable to** **Attributable to** **Non-controlling** **Less:** **Non-controlling** **Less:** **Interests and** **Attributable to** **Attributable to** **Interests and** **Attributable to** **Attributable to** **Common** **Non-controlling** **Common** **Common** **Non-controlling** **Common** _(In thousands of U.S.Dollars)_ **Shareholders** **Interests** **Shareholders** **Shareholders** **Interests** **Shareholders** Reported net income (loss) $ 33,836 $ 8,428 $ 25,408 $ (10,579) $ 4,734 $ (15,313) Add (subtract): Income tax expense 16,917 2,658 14,259 19,239 2,027 17,212 Interest expense, net of interest income 2,024 (286) 2,310 970 (327) 1,297 Depreciation and amortization, including film asset amortization 60,475 5,260 55,215 58,175 5,056 53,119 Amortization of deferred financing costs(1) 2,454 — 2,454 3,229 — 3,229 EBITDA $ 115,706 $ 16,060 $ 99,646 $ 71,034 $ 11,490 $ 59,544 Share-based and other non-cash compensation 25,893 835 25,058 27,031 845 26,186 Unrealized investment gains (407) (93) (314) (128) — (128) Transaction-related expenses 3,408 — 3,408 955 — 955 Write-downs, including asset impairments and credit loss expense 4,328 561 3,767 15,675 1,538 14,137 Executive transition costs 1,353 — 1,353 — — — Adjusted EBITDA per Credit Facility $ 150,281 $ 17,363 $ 132,918 $ 114,567 $ 13,873 $ 100,694 Revenues attributable to common shareholders(2) $ 386,867 $ 28,260 $ 358,607 $ 311,331 $ 24,347 $ 286,984 Adjusted EBITDA margin attributable to common shareholders 39 % 61 % 37 % 37 % 57 % 35 % (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)_ **September 30, 2023** **September 30, 2022** **September 30, 2023** **September 30, 2022** Total revenues $ 103,896 $ 68,755 $ 386,867 $ 311,331 Greater Chinarevenues $ 28,297 $ 14,889 $ 99,703 $ 84,769 Non-controlling interest ownership percentage(3) 28.37 % 28.59 % 28.34 % 28.72 % Deduction for non-controlling interest share of revenues (8,028) (4,257) (28,260) (24,347) Revenues attributable to common shareholders $ 95,868 $ 64,498 $ 358,607 $ 286,984 (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 September 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 $ 11,990 $ 0.22 $ (8,953) $ (0.16) Adjustments(1): Share-based compensation 5,063 0.09 5,431 0.10 COVID-19 government relief benefits, net — — (212) — Unrealized investment gains (454) (0.01) (34) — Transaction-related expenses 3,086 0.06 955 0.02 Tax impact on items listed above (275) — (214) — Adjusted net income (loss)(1) $ 19,410 $ 0.35 $ (3,027) $ (0.05) Weighted average shares outstanding — basic 54,618 56,039 Weighted average shares outstanding — diluted 55,535 56,039 **Nine Months Ended September 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 $ 22,795 $ 0.41 $ (25,413) $ (0.44) Adjustments(1): Stock-based compensation 17,110 0.31 18,651 0.33 COVID-19 government relief benefits, net — — (373) (0.01) Unrealized investment gains (526) (0.01) (98) — Transaction-related expenses 3,242 0.06 955 0.02 Executive transition costs 1,353 0.02 — — Tax impact on items listed above (1,184) (0.02) (1,071) (0.02) Adjusted net income (loss)(1) $ 42,790 $ 0.77 $ (7,349) $ (0.13) Weighted average shares outstanding — basic 54,424 57,301 Weighted average shares outstanding — diluted 55,261 57,301 (1) Reflects amounts attributable to common shareholders. **_Free Cash Flow_** **Nine Months Ended** **Nine Months Ended** _(In thousands of U.S.Dollars)_ **September 30, 2023** **September 30, 2022** Net cash provided by operating activities $ 54,608 $ 481 Net cash used in capital expenditures (18,664) (23,037) Free cash flow $ 35,944 $ (22,556)   [![IMAX Logo. 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