--- title: IMAX Corporation Reports Second Quarter 2015 Financial Results publisher: "IMAX" description: "HIGHLIGHTS - Record box office of $343 million in Q2 2015 results in over a half a billion of IMAX global box office generated in the first half of the year - Stellar global per screen average of $415 thousand in Q2 2015, driven by a 41% increase in domestic and 33% increase in international per" canonical: "https://www.imax.com/pr/imax-corporation-reports-second-quarter-2015-financial-results" date: 2015-07-23 last_updated: 2015-07-23 --- IMAX Corporation Reports Second Quarter 2015 Financial Results ============================================================== Thu, Jul 23, 2015 **HIGHLIGHTS** **\- Record box office of $343 million in Q2 2015 results in over a half a billion of IMAX global box office generated in the first half of the year** **\- Stellar global per screen average of $415 thousand in Q2 2015, driven by a 41% increase in domestic and 33% increase in international per screen averages compared to Q2 2014** **\- Company increases annual installation guidance to 120 new theatres after another above target quarter of 35 new commercial installations in Q2 2015** **\- $107.2 million of revenues in Q2, IMAX's highest revenue generating quarter ever, was up 35% from same period last year, driving adjusted EPS of $0.40, 60% growth over Q2 2014** NEW YORK, July 23, 2015/PRNewswire/ -- **IMAX Corporation(NYSE: IMAX)**today reported second quarter 2015 revenues of $107.2 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $50.4 million, adjusted net income after non-controlling interest of $28.7 million, or $0.40per diluted share, and reported net income after non-controlling interest of $24.4 million, or $0.34per diluted share. The Company also reported a very strong second quarter global per screen average of $414,600. ![IMAX Logo.](http://photos.prnewswire.com/prnvar/20111107/MM01969LOGO "IMAX Logo.") "The second quarter of 2015 was one of the strongest in IMAX'shistory, delivering our highest revenue ever, growing adjusted EPS by 60% compared to the same period last year, record box office and quarterly per screen averages that we have not seen since _Avatar_in 2010," stated IMAXCEO Richard L. Gelfond. "We believe the strength of this quarter clearly demonstrates the impact that a strong slate of blockbuster films can have on IMAXand the operating leverage that results." **Network Growth Update** The total IMAX® theatre network consisted of 976 systems as of June 30, 2015, of which 852 were in commercial multiplexes. There were 391 theatres in backlog as of June 30, 2015, compared to 419 in backlog as of June 30, 2014.  In the second quarter of 2015, the Company signed contracts for 30 theatres, of which 28 were for new locations and 2 were for upgrades.  In the quarter, the Company also installed 35 theatres, all of which were for new theatre locations.  For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release. "Momentum also continued to build on the network side of our business with higher than expected installations and strong signings activity in the quarter," continued Gelfond, who is in Viennafor the world premiere of _Mission Impossible: Rogue Nation_at the historic Vienna Opera House, which has been transformed into an IMAXtheatre for this event.  "Tonight's M:I5 event is the continuation of the transformation of IMAX'sbrand from the smaller successes onto center stage.  More agreements to use IMAXcameras as well as IMAXpremieres such as _Furious 7_and _Jurassic World_are a powerful marketer for our brand and also signal the increasingly important role IMAXplays in the entertainment ecosystem." **Second-Quarter Segment Results** * Revenue from sales and sales-type leases was $18.7 millionin the second quarter of 2015, compared to $14.5 millionin the second quarter of 2014, primarily reflecting the installation of 15 full theatre systems (14 new, 1 used) under sales and sales-type lease arrangements in the most recent second quarter, compared to the 11 sales-type theatres the Company installed in the prior-year period. In addition, there were no upgrades in existing locations in the second quarter of 2015, compared to 4 xenon upgrades in the second quarter of 2014. * Revenue from joint revenue-sharing arrangements was $31.6 millionin the quarter, compared to $19.4 millionin the prior-year period.  During the quarter, the Company installed 20 new theatres under joint revenue-sharing arrangements, compared to 19 in the same period in 2014.  The Company had 477 theatres operating under joint revenue-sharing arrangements as of June 30, 2015, as compared to 408 joint-venture theatres one year prior. * Production and IMAX DMR® (Digital Re-Mastering) revenues were $36.6 millionin the second quarter of 2015, compared to $24.0 millionin the second quarter of 2014.  Gross box office from DMR titles was $343.0 millionin the second quarter of 2014, compared to $216.0 millionin the prior-year period.  The average global DMR box office per screen in the second quarter of 2014 was $414,600compared to $299,800in the prior-year period. **Conference Call** The Company will host a conference call today at 8:30 AM ETto discuss its second quarter 2015 financial results. To access the call via telephone, interested parties in the US and Canadashould dial (888) 438-5519 approximately 5 to 10 minutes before the call begins.  International callers should dial (719) 325-2469. The conference ID for the call is **1711636.**A replay of the call will be available via webcast on the 'Investor Relations' section of [www.imax.com](http://www.imax.com/)or via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 1711636. **About IMAX Corporation** IMAX, an innovator in entertainment technology, combines proprietary software, architecture and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAXtheatres to connect with audiences in extraordinary ways, and, as such, IMAX'snetwork is among the most important and successful theatrical distribution platforms for major event films around the globe. IMAXis headquartered in New York, Torontoand Los Angeles, with offices in London, Tokyo, Shanghaiand Beijing.  As of June 30, 2015, there were 976 IMAXtheatres (852 commercial multiplexes, 20 commercial destinations and 104 institutions) in 65 countries. IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D Experience®, The IMAX Experience®, IMAX Is Believing® and IMAXnXos® are trademarks of IMAX Corporation. More information about the Company can be found at [www.imax.com](http://www.imax.com). You may also connect with IMAXon Facebook([www.facebook.com/imax](http://www.facebook.com/imax)), Twitter ([www.twitter.com/imax](http://www.twitter.com/imax)) and YouTube([www.youtube.com/imaxmovies](http://www.youtube.com/imaxmovies)). _This press release contains forward looking statements that are based on IMAXmanagement's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include, but are not limited to,_ _the signing of theater system agreements; conditions, changes and developments in the commercial exhibition industry; the performance of IMAX DMR films; the potential impact of increased competition in the markets within which the Company operates; competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United Statesand Canada; risks related to the Company's growth and operations in China; the Company's largest customer accounting for a significant portion of the Company's revenue and backlog; risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to the Company's inability to protect the Company's intellectual property; risks related to the Company's implementation of a new enterprise resource planning system; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; risks related to the Company's dependence on a sole supplier for its analog film; risks related to cybersecurity; and other factors, many of which are beyond the control of the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX'smost recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q._ For additional information please contact: **_Investors:_** IMAX Corporation, New York Teri Loxam 212-821-0100 [tloxam@imax.com](mailto:tloxam@imax.com) **_Business Media:_** Sloane & Company, New York Whit Clay 212-446-1864 [wclay@sloanepr.com](mailto:wclay@sloanepr.com) **_Media:_** IMAX Corporation, New York Ann Sommerlath 212-821-0155 [asommerlath@imax.com](mailto:asommerlath@imax.com) **_Entertainment Media:_** Principal Communications Group, Los Angeles Melissa Zuckerman/Paul Pflug 323-658-1555 [melissa@pcommgroup.com](mailto:melissa@pcommgroup.com) [paul@pcommgroup.com](mailto:paul@pcommgroup.com) **Additional Information** **Signings and Installations** June 30, 2015 **Three Months** **Ended June 30,** **Theater Signings:** **2015** **2014** Full new sales and sales-type lease arrangements 19 17 New joint revenue sharing arrangements 9 3 **Total new theaters** **28** **20** Upgrades of IMAX theater systems 2 (1) 4 (1)(2) **Total Theater Signings** **30** **24** **Three Months** **Ended June 30,** **Theater Installations:** **2015** **2014** Full new sales and sales-type lease arrangements 15 11 New joint revenue sharing arrangements 20 19 **Total new theaters** **35** **30** Upgrades of IMAX theater systems \- 4 (2) **Total Theater Installations** **35** **34** **As of June 30,** **Theater Backlog:** **2015** **2014** New sales and sales-type lease arrangements 162 155 New joint revenue sharing arrangements 205 242 **Total new theaters** **367** **397** Upgrades of IMAX theater systems 24 22 **Total Theaters in Backlog** **391** (3) **419** (3) **As of June 30,** **Theater Network:** **2015** **2014** Commercial Multiplex Theaters: Sales and sales-type lease arrangements 375 327 Joint revenue sharing arrangements 477 408 **Total Commercial Multiplex Theaters** **852** **735** Commercial Destination Theaters 20 19 Institutional Theaters 104 114 **Total IMAX Theater Network** **976** **868** (1) Includes two signings for the installation of laser-based digital systems in existing theater locations (2014 – 2 signings). (2) Includes one signing and two installations of upgrades to a xenon-based digital system under short-term operating lease arrangements. (3) Includes 73 laser theater system configurations (2014 – 66), including upgrades. The Company continues to develop and roll out its laser projection system. **Additional Information (continued)** **_2015 DMR Films:_**  In addition to the 23 IMAX DMR films released to the IMAXtheater network during the first six months of 2015, 13 additional IMAX DMR films have been announced so far to be released in the remaining six months of 2015: * _Monk Comes Down the Mountain:__An_ IMAX_3D Experience_ (China Film Group, July 2015); * _Monster Hunt:__An_ IMAX_3D Experience_ (Edko Films, July 2015) * _Ant-Man: An_ IMAX_3D Experience_ (Walt Disney Studios, July 2015); * _Pixels: An_ IMAX_3D Experience_ (Sony Pictures Entertainment, July 2015); * _Mission: Impossible – Rogue Nation: The_ IMAX_Experience_ (Paramount Pictures, July 2015); * _The Man from U.N.C.L.E: The_ IMAX_Experience_ (Warner Bros. Pictures, August 2015); * _Everest: An_ IMAX_3D Experience_ (Universal Studios, September 2015); * _The Walk: The_ IMAX_Experience_ (Sony Pictures Entertainment, October 2015); * _Crimson Peak: The_ IMAX_Experience_ (Universal Studios, October 2015); * _Spectre : The_ IMAX_Experience_ (Sony Pictures Entertainment, November 2015); * _The Hunger Games: Mockingjay Part 2: An_ IMAX_3D Experience_ (Lionsgate, November 2015);  * _In the Heart of the Sea: The_ IMAX_Experience_ (Warner Bros. Pictures, December 2015); and * _Star Wars: The Force Awakens: An_ IMAX_3D Experience_ (Walt Disney Studios, December 2015). To date, the Company has announced the following 14 titles to be released to the IMAXtheater network in 2016: * _The Finest Hours: The_ IMAX_Experience_ (Walt Disney Studios, January 2016); * _Warcraft: An_ IMAX_3D Experience_ (Universal Studios, March 2016); * _Batman v Superman: Dawn of Justice: The_ IMAX_Experience_ (Warner Bros. Pictures, March 2016); * _The Jungle Book: The_ IMAX_Experience_ (Walt Disney Studios, April 2016); * _Captain America: Civil War: The_ IMAX_Experience_ (Walt Disney Studios, May 2016); * _Alice in Wonderland: Through the Looking Glass: The_ IMAX_Experience_ (Walt Disney Studios, May 2016); * _Finding Dory: The_ IMAX_Experience_ (Walt Disney Studios, June 2016); * _Tarzan: The_ IMAX_Experience_ (Warner Bros. Pictures, July 2016); * _Knights of the Roundtable: King Arthur: The_ IMAX_Experience_ (Warner Bros. Pictures, July 2016); * _Suicide Squad: The_ IMAX_Experience_ (Warner Bros. Pictures, August 2016); * _Geostorm: The_ IMAX_Experience_ (Warner Bros. Pictures, October 2016); * _Doctor Strange: An_ IMAX_3D Experience_ (Walt Disney Studios, November 2016); * _Fantastic Beasts and Where to Find Them: The IMAX Experience_ (Warner Bros. Pictures, November 2016); and * _Rogue One: An_ IMAX_3D Experience_ (Walt Disney Studios, December 2016). The Company remains in active negotiations with all of the major Hollywoodstudios for additional films to fill out its short and long-term film slate, and anticipates that a similar number of IMAX DMR films will be released to the IMAXnetwork in 2015 to the 40 films that were released to the IMAXnetwork in 2014. **IMAX CORPORATION** **CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS** **In accordance with United States Generally Accepted Accounting Principles** _(In thousands of U.S. dollars, except per share amounts)_ **_(Unaudited)_** **Three Months** **Six Months** **Ended June 30,** **Ended June 30,** **2015** **2014** **2015** **2014** **Revenues**  Equipment and product sales  $ 25,305 $ 19,502 $ 39,741 $ 25,856 Services  50,958 39,742 82,674 68,614 Rentals  28,527 17,841 42,341 28,632 Finance income  2,229 2,060 4,474 4,240 Other  141 \- 141 \- 107,160 79,145 169,371 127,342 **Costs and expenses applicable to revenues**  Equipment and product sales 13,521 9,366 21,061 13,085 Services 19,495 17,180 34,302 31,530 Rentals  5,109 4,805 8,992 8,525 38,125 31,351 64,355 53,140 **Gross margin**  69,035 47,794 105,016 74,202 Selling, general and administrative expenses 29,023 23,498 57,375 44,810 (including share-based compensation expense of $5.1 million and $10.7 million for the three and six months ended June 30 2015, respectively (2014 - expense of $4.7 million and $7.9 million, respectively))  Research and development  2,347 3,309 6,889 6,908 Amortization of intangibles  443 416 873 818 Receivable provisions, net of recoveries  343 329 348 616 Impairment of investments  350 650 350 650 **Income from operations**  36,529 19,592 39,181 20,400 Interest income  259 24 505 40 Interest expense  (403) (268) (707) (534) **Income from operations before income taxes**  36,385 19,348 38,979 19,906 Provision for income taxes  (9,256) (5,407) (9,931) (5,479) Loss from equity-accounted investments, net of tax  (749) (162) (1,183) (424) **Income from continuing operations** 26,380 13,779 27,865 14,003 Net income from discontinued operations, net of tax  \- \- \- 355 **Net income** $ 26,380 $ 13,779 $ 27,865 $ 14,358 Less: Net income attributable to non-controlling interests  (2,030) (472) (3,124) (472) **Net income attributable to Common Shareholders** $ 24,350 $ 13,307 $ 24,741 $ 13,886 **Net income per share - basic:**  Net income per share from continuing operations  $ 0.34 $ 0.19 $ 0.35 $ 0.20 Net income per share from discontinued operations  \- \- \- 0.01 $ 0.34 $ 0.19 $ 0.35 $ 0.21 **Net income per share - diluted:**  Net income per share from continuing operations  $ 0.34 $ 0.19 $ 0.34 $ 0.19 Net income per share from discontinued operations  \- \- \- 0.01 $ 0.34 $ 0.19 $ 0.34 $ 0.20 **Weighted average number of shares outstanding (000's):** Basic  69,843 68,228 69,526 68,068 Fully Diluted  71,688 69,452 71,349 69,448 **Additional Disclosure:** Depreciation and amortization(1) $ 11,091 $ 8,390 $ 20,724 $ 15,945 (1) Includes $0.2 million and $0.4 million of amortization of deferred financing costs charged to interest expense for the three and six months ended June 30, 2015, respectively (2014 - $0.1 million and $0.3 million, respectively). **IMAX CORPORATION** **CONDENSED CONSOLIDATED BALANCE SHEETS** **In accordance with United States Generally Accepted Accounting Principles** _(in thousands of U.S. dollars)_ **As at** **As at** **June 30,** **December 31,** **2015** **2014** (unaudited) **Assets** Cash and cash equivalents $ 146,383 $ 106,503 Accounts receivable, net of allowance for doubtful accounts of $1,222 (December 31, 2014 — $947) 91,464 76,051 Financing receivables 108,492 105,700 Inventories 34,186 17,063 Prepaid expenses 6,799 4,946 Film assets 14,842 15,163 Property, plant and equipment 207,099 183,424 Other assets 28,342 23,047 Deferred income taxes 21,673 23,058 Other intangible assets 28,811 27,551 Goodwill 39,027 39,027 **Total assets** **$** **727,118** **$** **621,533** **Liabilities** Bank indebtedness $ 22,278 $ 4,710 Accounts payable 21,349 26,145 Accrued and other liabilities 66,614 75,425 Deferred revenue 98,062 88,566 **Total liabilities** **208,303** **194,846** **Commitments and contingencies** **Non-controlling interests** **85,532** **43,912** **Shareholders' equity** Capital stock, common shares — no par value. Authorized — unlimited number. 70,182,090 — issued and 70,152,426 — outstanding (December 31, 2014 — 68,988,050) 378,247 344,862 Less: Treasury stock held in trust, 29,664 shares at cost (1,214) \- Other equity 42,666 47,319 Retained earnings (accumulated deficit) 17,998 (6,259) Accumulated other comprehensive loss (4,414) (3,147) **Total shareholders' equity** **433,283** **382,775** **Total liabilities and shareholders' equity** **$** **727,118** **$** **621,533** **IMAX CORPORATION** **CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** **In accordance with United States Generally Accepted Accounting Principles** _(In thousands of U.S. dollars)_ **_(Unaudited)_** **Six Months** **Ended June 30,** **2015** **2014** **Cash provided by (used in):** **Operating Activities** Net income $ 27,865 $ 14,358 Net income from discontinued operations \- (355) Adjustments to reconcile net income to cash from operations: Depreciation and amortization 20,724 15,945 Write-downs, net of recoveries 1,457 1,579 Change in deferred income taxes 2,232 2,789 Stock and other non-cash compensation 10,861 8,090 Unrealized foreign currency exchange loss 851 64 Loss from equity-accounted investments 1,923 574 Gain on non-cash contribution to equity-accounted investees (740) \- Investment in film assets (7,404) (5,147) Changes in other non-cash operating assets and liabilities (39,271) (3,219) Net cash provided by operating activities from discontinued operations \- 572 Net cash provided by operating activities 18,498 35,250 **Investing Activities** Purchase of property, plant and equipment (34,920) (16,581) Investment in joint revenue sharing equipment (11,613) (10,801) Acquisition of other intangible assets (2,972) (970) Net cash used in investing activities (49,505) (28,352) **Financing Activities** Issuance of subsidiary shares to a non-controlling interest 40,000 40,491 Share issuance costs from the issuance of subsidiary shares to a non-controlling interest (2,000) (3,556) Common shares issued - stock options exercised 22,850 2,657 Increase in bank indebtedness 17,568 \- Credit facility amendment fees paid (1,161) \- Treasury stock purchased for future settlement of restricted share units (1,214) \- Settlement of restricted share units (4,988) (790) Net cash provided by financing activities 71,055 38,802 Effects of exchange rate changes on cash (168) (159) **Increase in cash and cash equivalents during the period** 39,880 45,541 **Cash and cash equivalents, beginning of period** 106,503 29,546 **Cash and cash equivalents, end of period** $ 146,383 $ 75,087 **IMAX CORPORATION** **SELECTED FINANCIAL DATA** **In accordance with United States Generally Accepted Accounting Principles** _(in thousands of U.S. dollars)_ The Company has seven reportable segments identified by category of product sold or service provided: IMAX systems; theater system maintenance; joint revenue sharing arrangements; film production and IMAX DMR; film distribution; film post-production; and other. The IMAX systems segment includes the design, manufacture, sale or lease of IMAX theater projection system equipment. The theater system maintenance segment includes the maintenance of IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment includes the provision of IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concession revenues. The film production and IMAX DMR segment includes the production of films and the performance of film re-mastering services. The film distribution segment includes the distribution of films for which the Company has distribution rights. The film post-production segment provides film post-production and film print services. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items. **Three Months Ended June 30,** **Six Months Ended June 30,** **2015** **2014** **2015** **2014** **Revenue**  **IMAX Theater Systems** IMAX Systems  Sales and sales-type leases  $ 18,674 $ 14,478 $ 27,289 $ 18,985 Ongoing rent, fees, and finance income  3,691 3,518 7,190 6,771 Other  4,674 3,730 8,099 5,242 27,039 21,726 42,578 30,998 Theater system maintenance  9,158 8,673 18,008 16,868 Joint revenue sharing arrangements  31,594 19,363 47,462 30,219 **Film** Production and IMAX DMR  36,603 24,050 54,279 39,235 Film distribution and post-production  2,766 5,333 7,044 10,022 39,369 29,383 61,323 49,257 **Total** $ 107,160 $ 79,145 $ 169,371 $ 127,342 **Gross margin**  **IMAX Theater Systems** IMAX systems(1) Sales and sales-type leases  $ 10,038 $ 8,255 $ 14,945 $ 9,914 Ongoing rent, fees, and finance income  3,499 3,334 6,777 6,448 Other  (114) 454 (154) 16 13,423 12,043 21,568 16,378 Theater system maintenance  3,089 2,781 6,370 5,782 Joint revenue sharing arrangements(1) 24,069 13,378 34,686 20,661 **Film** Production and IMAX DMR(1) 28,488 18,634 41,713 29,708 Film distribution and post-production  (34) 958 679 1,673 28,454 19,592 42,392 31,381 **Total** $ 69,035 $ 47,794 $ 105,016 $ 74,202 (1) IMAX systems include marketing and commission costs of $0.6 million and $0.9 million for the three and six months ended June 30, 2015, respectively (2014 — $0.7 million and $0.9 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.3 million and $1.4 million for the three and six months ended June 30, 2015, respectively (2014 — $1.0 million and $1.2 million, respectively). Production and DMR segment margins include marketing costs of $3.6 million and $4.9 million for the three and six months ended June 30, 2015, respectively (2014 — $2.0 million and $3.2 million, respectively). Distribution segment margins include marketing costs of less than $0.1 million and cost recovery of $0.1 million for the three and six months ended June 30, 2015, respectively (2014 — $0.2 million and $0.4 million, respectively). **IMAX CORPORATION** **OTHER INFORMATION** _(in thousands of U.S. dollars)_ **_Non-GAAP Financial Measures:_** In this release, the Company presents adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share as supplemental measures of performance of the Company, which are not recognized under U.S. GAAP. The Company presents adjusted net income and adjusted net income per diluted share because it believes that they are important supplemental measures of its comparable controllable operating performance and it wants to ensure that its investors fully understand the impact of its stock-based compensation (net of any related tax impact) on net income. In addition, the Company presents adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share because it believes that they are important supplemental measures of its comparable financial results and could potentially distort the analysis of trends in business performance and it wants to ensure that its investors fully understand the impact of net income attributable to non-controlling interests and its stock-based compensation (net of any related tax impact) in determining net income attributable to common shareholders. Management uses these measures to review operating performance on a comparable basis from period to period. However, these non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share should be considered in addition to, and not as a substitute for, net income and net income attributable to common shareholders and other measures of financial performance reported in accordance with U.S. GAAP. The Credit Facility provides that the Company will be required at all times to satisfy a Minimum Liquidity Test (as defined in the Credit Agreement) of at least $50 million. The Company will also be required to maintain minimum EBITDA (as defined in the Credit Agreement) of $90.0 million until December 30, 2015, which requirement increases to $100.0 million on December 31, 2015. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the Credit Agreement) of 2.5:1.0 until December 30, 2015, which requirement decreases to (i) 2.25:1.0 on December 31, 2015; (ii) 2.0:1.0 on December 31, 2016; and (iii) 1.75:1.0 on December 31, 2017. The ratio of total debt to EBITDA was 0.17:1 as at June 30, 2015, where Total Debt (as defined in the Credit Agreement) is the sum of all obligations evidenced by notes, bonds, debentures or similar instruments and was $22.3 million. EBITDA is calculated as follows: **For the** **For the** **3 months ended** **12 months ended** **June 30, 2015** **June 30, 2015****(1)** **_(In thousands of U.S Dollars)_** Net income  $ 26,380 $ 55,676 Add (subtract): Loss from equity accounted investments  749 1,830 Provision for income taxes  9,256 18,918 Interest expense, net of interest income  144 227 Depreciation and amortization, including film asset amortization  10,861 37,876 Write-downs net of recoveries including asset impairments and receivable provisions  1,329 5,172 Stock and other non-cash compensation  5,195 18,238 EBITDA attributable to non-controlling interests(2) (3,538) (8,519) $ 50,376 $ 129,418 (1) Ratio of funded debt calculated using twelve months ended EBITDA. (2) The EBITDA calculation specified for purposes of the minimum EBITDA covenant excludes the reduction in EBITDA from the Company's non-controlling interests. **IMAX CORPORATION** **OTHER INFORMATION**  _(in thousands of U.S. dollars)_ **_Adjusted Net Income and Adjusted Diluted Per Share Calculations – Quarter Ended June 30, 2015 vs. 2014:_** The Company reported net income of $26.4 million or $0.37 per basic share and $0.36 per diluted share for the second quarter of 2015, as compared to $13.8 million or $0.20 per basic and diluted share for the second quarter of 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $30.7 million or $0.42 per diluted share for the second quarter of 2015 as compared to adjusted net income of $17.7 million or $0.26 per diluted share for the second quarter of 2014. Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding the impact of stock-based compensation and the related tax impact, was $28.7 million or $0.40 per diluted share for the second quarter of 2015 as compared to adjusted net income attributable to common shareholders of $17.2 million or $0.25 per diluted share for the second quarter of 2014. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measures, to adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below: **Three Months Ended** **Three Months Ended** **June 30, 2015** **June 30, 2014** **Net Income** **Diluted EPS** **Net Income** **Diluted EPS** Reported net income $ 26,380 $ 0.36 (1) $ 13,779 $ 0.20 (1) Adjustments: Stock-based compensation 5,103 0.07 4,715 0.07 Tax impact on items listed above (740) (0.01) (828) (0.01) Adjusted net income 30,743 0.42 (1) 17,666 0.26 (1) Net income attributable to non-controlling interests (2,030) (0.02) (472) (0.01) Adjusted net income attributable to common shareholders $ 28,713 $ 0.40 (1) $ 17,194 $ 0.25 (1) Weighted average diluted shares outstanding 71,688 69,452 (1) Includes impact of $0.3 million (2014 ― $0.1 million) of accretion charges associated with redeemable Class C shares of IMAX China. **_Adjusted Net Income and Adjusted Diluted Per Share Calculations – Six Months Ended June 30, 2015 vs. 2014:_** The Company reported net income of $27.9 million or $0.39 per basic share and $0.38 per diluted share for the six months ended June 30, 2015, as compared to $14.4 million or $0.21 per basic and diluted share for the six months ended June 30, 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $36.8 million or $0.51 per diluted share for the six months ended June 30, 2015 as compared to adjusted net income of $20.9 million or $0.30 per diluted share for the six months ended June 30, 2014.  Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding stock-based compensation expense and the related tax impact, was $33.7 million, or $0.47 per diluted share, in the six months ended June 30, 2015, as compared to adjusted net income attributable to common shareholders of $20.4 million, or $0.29 per diluted share, for the six months ended June 30, 2014. A reconciliation of net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, to adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below: **Six Months** **Six Months** **Ended June 30, 2015** **Ended June 30, 2014** **Net Income** **Diluted EPS** **Net Income** **Diluted EPS** Reported net income $ 27,865 $ 0.38 (1) $ 14,358 $ 0.21 (1) Adjustments: Stock-based compensation 10,678 0.15 7,903 0.11 Tax impact on items listed above (1,702) (0.02) (1,343) (0.02) Adjusted net income  36,841 0.51 (1) 20,918 0.30 (1) Net income attributable to non-controlling interests (3,124) (0.04) (472) (0.01) Adjusted net income attributable to common shareholders $ 33,717 $ 0.47 (1) $ 20,446 $ 0.29 (1) Weighted average diluted shares outstanding 71,349 69,448 (1) Includes impact of $0.5 million (2014 ― $0.1 million) of accretion charges associated with redeemable Class C shares of IMAX China. **_Free Cash Flow:_** Free cash flow is defined as cash provided by operating activities minus cash used in investing activities (from the consolidated statements of cash flows). Cash provided by operating activities consist of net income, plus depreciation and amortization, plus the change in deferred income taxes, plus other non-cash items, plus changes in working capital, less investment in film assets, plus other changes in operating assets and liabilities. Cash used in investing activities includes capital expenditures, acquisitions and other cash used in investing activities. Management views free cash flow, a non-GAAP measure, as a measure of the Company's after-tax cash flow available to reduce debt, add to cash balances, and fund other financing activities. A reconciliation of cash provided by operating activities to free cash flow is presented in the table below: **For the** **6 months ended** **June 30, 2015** **_(In thousands of U.S. Dollars)_** Net cash provided by operating activities $                 18,498 Net cash used in investing activities (49,505) Free cash flow $              (31,007) Logo - [http://photos.prnewswire.com/prnh/20111107/MM01969LOGO](http://photos.prnewswire.com/prnh/20111107/MM01969LOGO) To view the original version on PR Newswire, visit:[http://www.prnewswire.com/news-releases/imax-corporation-reports-second-quarter-2015-financial-results-300117568.html](http://www.prnewswire.com/news-releases/imax-corporation-reports-second-quarter-2015-financial-results-300117568.html) SOURCE IMAX Corporation