--- title: IMAX Corporation Reports Second Quarter 2021 Results publisher: "IMAX" description: "HIGHLIGHTS - IMAX delivered strong year-over-year growth in Total Revenue and Global Box Office, driven by the initial return of Hollywood blockbuster releases and a significant rebound in the domestic box office - The Company continued to improve its operating results, reporting its best Gross" canonical: "https://www.imax.com/pr/imax-corporation-reports-second-quarter-2021-results" date: 2021-07-27 last_updated: 2021-07-27 --- IMAX Corporation Reports Second Quarter 2021 Results ==================================================== Tue, Jul 27, 2021 **HIGHLIGHTS** **\- IMAX delivered strong year-over-year growth in Total Revenue and Global Box Office, driven by the initial return of Hollywood blockbuster releases and a significant rebound in the domestic box office** **\- The Company continued to improve its operating results, reporting its best Gross Margin of the pandemic era, and third consecutive quarter of positive EBITDA as the recovery of the global film industry gains momentum** **\- The IMAX Global Network is now 90% open - the highest level since the onset of the pandemic - with capacity limitations continuing to ease in many key markets worldwide** **\- IMAX expects to benefit from the robust Hollywood film slate, with major tentpole releases scheduled to arrive in theaters at least every two weeks beginning early September** NEW YORK, July 27, 2021/PRNewswire/ -- IMAX Corporation (NYSE: IMAX) today reported financial results for the second quarter of 2021, including significant improvement in operating results and year-over-year growth in total revenue and global box office — demonstrating strong demand for _The_ IMAX _Experience®_ as theaters continue to reopen around the world.   [![An infographic highlighting IMAX's recent quarter.](https://mma.prnewswire.com/media/1582543/IMAX_Q2_FY21_One_Sheet.jpg "An infographic highlighting IMAX's recent quarter.")](https://mma.prnewswire.com/media/1582543/IMAX_Q2_FY21_One_Sheet.html) "IMAX is helping to lead the global recovery of the film industry and is uniquely positioned to benefit immediately as cinemas reopen, the Hollywoodblockbuster film slate restarts, and audiences return to theaters worldwide," said Richard L. Gelfond, CEO of IMAX Corporation. "We continue to demonstrate that an IMAX release is a window unto itself, proven to draw moviegoers to the theaters, drive premium revenue, and launch event films into the ecosystem." "IMAX delivered continued progress in operating results, demonstrating growing momentum for the Company. Thanks to our asset-lite model, we capitalized on strong year-over-year growth in revenue and global box office to achieve another quarter of improved profitability." "Most encouragingly, the domestic box office is showing the same signs of pent-up demand for moviegoing we've seen throughout Asiaand other key markets — with each successive major tentpole release delivering an incrementally stronger debut." "We believe the table is set for a dramatic rebound for blockbuster moviegoing beginning this fall and throughout 2022, as a powerful slate of Hollywoodtentpoles representing many of the biggest global franchises in entertainment arrives in theaters worldwide." IMAX reported second quarter 2021 revenues of $51.0 million, gross margin of $25.6 million, and a net loss attributable to common shareholders of ($9.2) million, or ($0.16) per diluted share. The Company delivered its best quarterly gross margin and Adjusted EPS(1)of the pandemic era, as well as its third consecutive quarter of positive EBITDA(1), as Hollywoodblockbuster releases returned and drove a significant rebound of the domestic box office. IMAX second quarter 2021 net loss attributable to common shareholders reflects the ongoing impact of COVID-19 on the Company's network and includes a non-cash valuation allowance to reduce the value of deferred tax assets of $3.0 millionor $0.05per share. (1)     Non-GAAP Financial Measure **S****econd Quarter Financial Highlights** **Three Months Ended** **June 30,** _In millions of U.S.Dollars, except per share data_ **2021** **2020** **YoY %** **Change** Total Revenue $ 51.0 $ 8.9 475.4 % Gross Margin (margin loss) $ 25.6 $ (7.7) 433.0 % Gross Margin (%) 50.2 % (86.8) % Net Loss attributable to common shareholders $ (9.2) $ (26.0) 64.5 % Diluted Net Loss per share attributable to common shareholders $ (0.16) $ (0.44) 63.6 % Adjusted Net Loss attributable to common shareholders(1) $ (7.0) $ (26.1) 73.2 % Adjusted Net Loss per share attributable to common shareholders(1) $ (0.12) $ (0.44) 72.7 % Adjusted EBITDA per Credit Facility attributable to common shareholders(1) $ 8.7 $ (18.5) 147.3 % Adjusted EBITDA Margin attributable to common shareholders (%) (1) 20.6 % (219.3) % 109.4 % \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1)     Non-GAAP Financial Measure Note: For the definition and reconciliations of reported results to non-GAAP financial results, please refer to the discussion of non-GAAP financial measures at the end of this earnings release. **Second Quarter and June Year-to-Date Segment Results**(1) **IMAX Technology ****Network** **IMAX Technology Sales and Maintenance** _In millions of U.S.Dollars_ **Revenue** **Gross Margin** **(Margin Loss)** **Gross Margin %** **Revenue** **Gross Margin** **Gross Margin %** **2Q21** $ 19.7 $ 8.7 44.0 % $ 28.7 $ 16.1 56.1 % **2Q20** 0.4 (6.5) N/A 4.6 0.2 4.9 % **% change** N/A 232.5 % 522.7 % N/A **YTD 2Q21** $ 40.0 $ 18.8 47.0 % $ 45.7 $ 23.2 50.7 % **YTD 2Q20** 17.0 (3.7) (21.8) % 19.7 5.0 25.1 % **% change** 134.9 % 606.9 % 131.9 % 368.0 % \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1)     Please refer to the Company's Form 10-Q for the period ended June 30, 2021for additional segment information. **IMAX Technology Network** * IMAX Technology Network revenues increased to $19.7 millionin the second quarter of 2021, compared to $0.4 millionin the prior-year period when substantially all of the theaters in the IMAX network were closed. The continued reopening of the Company's network, particularly in the US, and strong performance of Hollywoodreleases drove the increase in gross box office and revenue. * Gross margin for the IMAX Technology Network of $8.7 millionin the second quarter of 2021 increased by more than $15 millionas improved box office performance drove higher revenue. **IMAX Technology Sales and Maintenance** * IMAX Technology Sales and Maintenance revenues increased to $28.7 millionin the second quarter of 2021, compared with $4.6 millionin the prior year period. The increase in revenue was the result of a larger number of IMAX theater system installations and higher IMAX Maintenance sales associated with the continued reopening of the Company's global network. * Total gross margin for IMAX Technology Sales and Maintenance increased to $16.1 millioncompared to $0.2 millionin the prior year period. The increase in gross margin was the result of a higher level of theater system installations and maintenance revenue partially offset by increased costs associated with an increased level of business activity. **Cash Balances and Outstanding Debt** Total cash and cash equivalents as of June 30, 2021were $214.1 million. Total debt, excluding deferred financing costs was $241.0 millionas of June 30, 2021. **Share Count and Capital Return** The weighted average basic and diluted shares outstanding in the second quarter of 2021 increased 1% to 59.4 million, compared to 58.8 million in the second quarter of 2020. During the second quarter of 2021, the Company did not repurchase any shares. A total of $89.4 millionremains available under the Company's outstanding share repurchase authorization, which was extended an additional year through to June 2022. **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=3240978-1&h=3749288798&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=3240978-1&h=3749288798&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=investors.imax.com.)The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one-week lag. The Company may post additional information on the Company's corporate and Investor Relations website which may be material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website in addition to the Company's press releases, SECfilings and public conference calls and webcasts, for additional information about the Company. **Conference Call** The Company will host a conference call today at 4:30PM ETto discuss its second quarter 2021 financial results. This call is being webcast by PGI and can be accessed at [investors.imax.com.](https://c212.net/c/link/?t=0&l=en&o=3240978-1&h=3749288798&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=investors.imax.com.)To access the call via telephone, interested parties in the US and Canadashould dial (800) 437-2398 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 792-1240. The conference ID for the call is 8107291. A replay of the call will be available via webcast at [investors.imax.com](https://c212.net/c/link/?t=0&l=en&o=3240978-1&h=1466960828&u=https%3A%2F%2Fwww.imax.com%2Fcontent%2Finvestor-relations&a=investors.imax.com)or via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 8107291. **About IMAX Corporation**  IMAX, an innovator in entertainment technology, combines proprietary software, architecture and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX theaters to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe. IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of June 30, 2021, there were 1,654 IMAX theater systems (1,569 commercial multiplexes, 12 commercial destinations, 73 institutional) operating in 85 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchangeunder the stock code "1970." IMAX®, IMAX® Dome, IMAX® 3D, IMAX® 3D Dome, Experience It In IMAX®, The IMAX Experience®, An IMAX Experience®, An IMAX 3D Experience®, IMAX DMR®, DMR®, IMAX nXos® and Films to the Fullest®, are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. More information about the Company can be found at [www.imax.com](https://c212.net/c/link/?t=0&l=en&o=3240978-1&h=1902661064&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=3240978-1&h=878828440&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=3240978-1&h=368395401&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=3240978-1&h=1471657194&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=3240978-1&h=269036297&u=http%3A%2F%2Fwww.youtube.com%2Fimaxmovies&a=www.youtube.com%2Fimaxmovies)). For additional information please contact: **_Investors: _**IMAX Corporation, New York Brett Harriss 212-821-0187 [bharriss@IMAX.com](mailto:bharriss@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; risks related to the Company's growth and operations in China; the performance of IMAX DMR®films; the signing of IMAX Theater System agreements; conditions, changes and developments in the commercial exhibition industry; 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 recent consolidation among commercial exhibitors and studios; 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 cyber-security and data privacy; risks related to the Company's inability to protect the Company's intellectual property; risks related to the Company's indebtedness and compliance with its debt agreements; general economic, market or business conditions; the failure to convert IMAX Theater System backlog into revenue; changes in laws or regulations; the failure to fully realize the projected cost savings and benefits from any of the Company's restructuring initiatives; 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 and Quarterly Reports on Form 10-Q._ _The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise._ **Primary****Reporting Groups** The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements; (iii) IMAX Systems, (iv) IMAX Maintenance; (v) Other Theater Business; (vi) New Business Initiatives; (vii) Film Distribution; and (viii) Film Post-Production. The Company organizes its reportable segments into the following four categories, identified by the nature of the product sold or service provided: (i)      IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from the Joint Revenue Sharing Arrangement ("JRSA") segment; (ii)    IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment; (iii)  New Business Initiatives, which is a segment that includes activities related to the exploration of new lines of business and new initiatives outside of the Company's core business; and (iv)   Film Distribution and Post-Production, which includes activities related to the licensing of film content, the distribution of films primarily for the Company's institutional theater partners (through the Film Distribution segment) and the provision of film post-production and quality control services (through the Film Post-Production segment). **IMAX Network and Backlog** **Three Months** **Ended June 30,** **Theater System Signings:** **2021** **2020** New IMAX Theater Systems: Sales and sales-type lease arrangements 3 12 Hybrid joint revenue sharing arrangements — 17 Traditional joint revenue sharing arrangements 3 — Total new IMAX theaters Systems 6 29 Upgrades of IMAX theater systems 2 — **Total IMAX Theater System signings** 8 29 **Three Months** **Ended June 30,** **Theater System Installations:** **2021** **2020** New IMAX Theater Systems: Sales and sales-type lease arrangements 9 2 Hybrid joint revenue sharing lease arrangements 2 1 Traditional joint revenue sharing arrangements 4 — Total new IMAX Theater Systems 15 3 Upgrades of IMAX theater systems 1 — **Total IMAX Theater System installations** 16 3 **June 30,** **Theater System Backlog:** **2021** **2020** Sales and sales-type lease arrangements 185 190 Hybrid joint revenue sharing arrangements 142 154 Traditional joint revenue sharing arrangements 187 (1) 215 (1) **Total Theater System backlog** **514** (2) **559** (3) **June 30,** **Theater Network:** **2021** **2020** Commercial Multiplex Theaters Sales and sales-type lease arrangements 672 659 Hybrid joint revenue sharing lease arrangements 143 138 Traditional joint revenue sharing lease arrangements 754 730 **Total Commercial Multiplex Theaters** **1,569** **1,527** Commercial Destination Theaters 12 13 Institutional Theaters 73 75 **Total Theaternetwork(4)** **1,654** **1,615** \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Includes 44 IMAX Theater Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2020 — 46). (2) Includes 146 new IMAX with Laser projection system configurations and 91 upgrades of existing locations to IMAX with Laser projection system configurations. (3) Includes 154 new IMAX with Laser projection system configurations and 94 upgrades of existing locations to IMAX with Laser projection system configurations. (4) Period-to-period changes are reported net of the effect of permanently closed theaters. **IMAX CORPORATION ****CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS **_(In thousands of U.S.dollars, except per share amounts) (Unaudited**)**_ **Three Months Ended** **Six Months Ended** **June 30,** **June 30,** **2021** **2020** **2021** **2020** **Revenues** Technology sales $ 15,173 $ 2,687 $ 21,348 $ 8,349 Image enhancement and maintenance services 24,711 3,799 46,326 24,520 Technology rentals 8,130 (137) 16,489 5,834 Finance income 2,941 2,506 5,546 5,054 **50,955** **8,855** **89,709** **43,757** **Costs and expenses applicable to revenues** Technology sales 6,496 2,546 11,549 6,415 Image enhancement and maintenance services 12,357 7,244 22,121 25,060 Technology rentals 6,499 6,753 13,155 14,884 **25,352** **16,543** **46,825** **46,359** **Gross margin (margin loss)** **25,603** **(7,688)** **42,884** **(2,602)** Selling, general and administrative expenses 28,807 29,796 54,016 58,432 Research and development 2,200 1,232 3,671 3,432 Amortization of intangibles 1,190 1,344 2,331 2,665 Credit loss (reversal) expense, net (1,872) 1,440 (1,567) 11,657 Asset impairments — — — 1,151 Legal judgment and arbitration awards (1,770) — (1,770) **Loss from operations** **(2,952)** **(41,500)** **(13,797)** **(79,939)** Realized and unrealized investment gains (losses) 33 2,025 5,281 (2,514) Retirement benefits non-service expense (116) (130) (230) (246) Interest income 559 891 1,142 1,256 Interest expense (1,690) (1,581) (3,994) (2,229) **Loss before taxes** **(4,166)** **(40,295)** **(11,598)** **(83,672)** Income tax (expense) benefit (1,946) 10,248 (5,014) (5,257) Equity in losses of investees, net of tax — — — (529) **Net Loss** **(6,112)** **(30,047)** **(16,612)** **(89,458)** Less: Net (income) loss attributable to non-controlling interests (3,099) 4,080 (7,439) 14,137 **Net loss attributable to common shareholders** **$** **(9,211)** **$** **(25,967)** **$** **(24,051)** **$** **(75,321)** **Net loss per share attributable to common shareholders -** **basic and diluted:** Net loss per share — basic and diluted **$** **(0.16)** **$** **(0.44)** **$** **(0.41)** **$** **(1.26)** Weighted average number of shares outstanding (000's): Basic 59,367 58,808 59,190 59,613 Fully Diluted 59,367 58,808 59,190 59,613 Additional Disclosure: Depreciation and amortization $ 12,994 $ 11,764 $ 25,671 $ 26,883 **IMAX CORPORATION ****CONDENSED CONSOLIDATED BALANCE SHEETS **_(In thousands of dollars, except share amounts) _**_(Unaudited)_** **June 30,** **December 31,** **2021** **2020** **Assets** Cash and cash equivalents $ 214,125 $ 317,379 Accounts receivable, net 68,755 56,300 Financing receivables, net 133,221 131,810 Variable consideration receivables, net 41,596 40,526 Inventories 37,299 39,580 Prepaid expenses 11,892 10,420 Film assets, net 5,387 5,777 Property, plant and equipment, net 265,517 277,397 Investment in equity securities 1,089 13,633 Other assets 20,330 21,673 Deferred income tax assets, net 18,720 17,983 Goodwill 39,027 39,027 Other intangible assets, net 24,932 26,245 **Total assets** **$** **881,890** **$** **997,750** **Liabilities** Accounts payable $ 15,206 $ 20,837 Accrued and other liabilities 91,557 99,354 Revolving credit facility borrowings, net 9,544 305,676 Convertible notes, net 222,888 — Deferred revenue 87,489 87,982 Deferred income tax liabilities 19,681 19,134 **Total liabilities** **446,365** **532,983** **Commitments and contingencies** **Non-controlling interests** **766** **759** **Shareholders' equity** Capital stock common shares — no par value. Authorized — unlimited number. 59,396,411 issued and 59,395,909 outstanding (December 31, 2020— 58,921,731 issued and 58,921,008 outstanding) 415,857 407,031 Less: Treasurystock, 502 shares at cost (December 31, 2020— 723) (8) (11) Other equity 160,658 180,330 Accumulated deficit (226,900) (202,849) Accumulated other comprehensive income 1,062 988 **Total shareholders' equity attributable to common shareholders** **350,669** **385,489** Non-controlling interests 84,090 78,519 **Total shareholders' equity** **434,759** **464,008** **Total liabilities and shareholders' equity** **$** **881,890** **$** **997,750** **IMAX CORPORATION ****CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS **_(In thousands of dollars) _**_(Unaudited)_** **Six Months Ended** **June 30,** **2021** **2020** **Operating Activities** Net loss $ (16,612) $ (89,458) Adjustments to reconcile net loss to cash used in operating activities: Depreciation and amortization 25,671 26,883 Amortization of deferred financing costs 1,008 299 Credit loss (reversal) expense, net (1,567) 11,657 Write-downs 462 6,806 Deferred income tax expense 33 (4,878) Share-based and other non-cash compensation 12,332 10,850 Unrealized foreign currency exchange (gain) loss (490) 312 Realized and unrealized investment (gains) losses (5,281) 2,514 Equity in losses of investees — 529 Changes in assets and liabilities: Accounts receivable (11,049) 36,971 Inventories 1,867 (16,887) Film assets (5,808) (4,057) Deferred revenue (447) 9,799 Changes in other operating assets and liabilities (17,135) (12,220) **Net cash used in operating activities** **(17,016)** **(20,880)** **Investing Activities** Purchase of property, plant and equipment (1,365) (594) Investment in equipment for joint revenue sharing arrangements (2,397) (3,908) Acquisition of other intangible assets (2,631) (1,221) Proceeds from sale of equity securities 17,769 — **Net cash provided by (used in) investing activities** **11,376** **(5,723)** **Financing Activities** Proceeds from issuance of convertible notes, net 223,675 — Debt issuance costs related to convertible notes (242) — Purchase of capped calls related to convertible notes (19,067) — Revolving credit facility borrowings 3,600 280,244 Repayments of revolving credit facility borrowings (300,243) — Credit facility amendment fees paid (32) (959) Repurchase of common shares — (36,624) Repurchase of common shares, IMAX China — (1,532) Treasurystock purchased for future settlement of restricted share units — (3,086) Taxes withheld and paid on employee stock awards vested (3,045) (251) Common shares issued - stock options exercised 883 — Dividends paid to non-controlling interests (2,099) (2,118) **Net cash (used in) provided by financing activities** **(96,570)** **235,674** Effects of exchange rate changes on cash (1,044) 431 **(Decrease) increase in cash and cash equivalents during period** **(103,254)** **209,502** **Cash and cash equivalents, beginning of period** **317,379** **109,484** **Cash and cash equivalents, end of period** $ **214,125** $ **318,986** **Three Months Ended** **Six Months Ended** **June 30,** **June 30,** _In millions of U.S.Dollars_ **2021** **2020** **2021** **2020** **Revenue** IMAX Technology Network: IMAX DMR $ 11,793 $ 546 $ 23,737 $ 11,175 Joint revenue sharing arrangements, contingent rent(1) 7,862 (137) 16,221 5,834 19,655 409 39,958 17,009 IMAX Technology Sales and Maintenance: IMAX Systems 15,982 4,549 21,881 10,237 Joint revenue sharing arrangements, fixed fees 1,002 369 2,740 1,139 IMAX Maintenance 11,235 — 20,141 7,370 Other Theater Business(2) 483 (309) 920 954 28,702 4,609 45,682 19,700 **New Business Initiatives** 648 632 1,316 1,110 **Film Distribution and Post-Production** 1,590 3,182 2,403 5,676 50,595 8,832 89,359 43,495 Other 360 23 350 262 Total revenues $ 50,955 $ 8,855 $ 89,709 $ 43,757 **Gross Margin (Margin Loss)** IMAX Technology Network: IMAX DMR(3) $ 6,861 $ (30) $ 15,112 $ 4,413 Joint revenue sharing arrangements, contingent rent(3) 1,790 (6,501) 3,673 (8,119) 8,651 (6,531) 18,785 (3,706) IMAX Technology Sales and Maintenance: IMAX Systems (3) 10,548 2,650 13,560 5,826 Joint revenue sharing arrangements, fixed fees(3) 347 48 503 227 IMAX Maintenance 5,075 (1,908) 8,898 (1,149) Other Theater Business 142 (564) 205 46 16,112 226 23,166 4,950 **New Business Initiatives** 634 512 1,092 873 **Film Distribution and Post-Production** (3)(4) 606 (1,396) 581 (3,331) 26,003 (7,189) 43,624 (1,214) Other (400) (499) (740) (1,388) Total Segment Margin (Margin Loss) $ 25,603 $ (7,688) $ 42,884 $ (2,602) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) For the three months ended June 30, 2020, the Company reported negative revenue due to the continued amortization of lessee incentives that are typically netted against lease revenues, which were abnormally low in the period due to the COVID-19 global pandemic. (2) Principally includes after-market sales of IMAX projection system parts and 3D glasses. The Company is reporting negative revenue for the three months ended June 30, 2020due to an adjustment to prior period revenue. (3) IMAX DMR gross margin includes marketing costs of $1.5 millionand 2.6 million, respectively, for the three and six months ended June 30, 2021(2020 — $nil and $2.4 million, respectively). JRSA gross margin includes advertising, marketing and commission expense of $0.3 millionand $1.1 million, respectively, for the three and six months ended June 30, 2021(2020 — less than $0.1 millionand $0.6 million, respectively). IMAX Systems gross margin includes marketing and commission costs of $0.4 millionand $0.6 million, respectively, for the three and six months ended June 30, 2021(2020 —$0.2 million and $0.4 million, respectively). Film Distribution segment gross margin includes marketing expense of $nil and less than $0.1 million, respectively, for the three and six months ended June 30, 2021, (2020 — less than $0.1 millionand $0.2 million, respectively). (4) During the three and six months ended June 30, 2020, Film Distribution segment results include impairment losses of $2.2million and $4.5 million, respectively, to write-down the carrying value of certain documentary and alternative content film assets due to a decrease in projected box office totals and related revenues based on management's regular quarterly recoverability assessments. No such charges incurred in the three and six months ended June 30, 2021. **IMAX CORPORATION ****NON-GAAP FINANCIAL MEASURES **_(in thousands of U.S.dollars)_ In this release, the Company presents adjusted net loss attributable to common shareholders and adjusted net loss attributable to common shareholders per basic and diluted share, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin, and free cash flow as supplemental measures of the Company's performance, which are not recognized under U.S.GAAP. Adjusted net loss attributable to common shareholders and adjusted net loss attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) COVID-19 government relief benefits, (iii) legal judgment and arbitration awards; (iv) realized and unrealized investment gains, as well as the related tax impact of these adjustments, and (v) income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries. The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company's financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net loss attributable to common shareholders. Although share-based compensation is an important aspect of the Company's employee and executive compensation packages, it is a non-cash expense and is excluded from certain internal business performance measures. A reconciliation from net loss attributable to common shareholders and the associated per share amounts to adjusted net loss attributable to common shareholders and adjusted net loss attributable to common shareholders per diluted share is presented in the table below. Net 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; and (iii) depreciation and amortization, including film asset amortization. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) realized and unrealized investment gains or losses; (iii) write-downs, net of recoveries, including asset impairments and credit loss expense; (iv) legal judgment and arbitration awards; and (v) the gain or loss from equity accounted investments. A reconciliation of net loss attributable to common shareholders, which is the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA per Credit Facility is presented in the table below. Net loss attributable to common shareholders is the most directly comparable GAAP measure because it reflects the earnings relevant to the Company's shareholders, rather than the earnings attributable to non-controlling interests. Free cash flow is defined as cash provided by operating activities minus cash used in investing activities (from the Condensed Consolidated Statements of Cash Flows). Cash provided by operating activities consist of net (loss) income, plus depreciation and amortization, plus the change in deferred income taxes, plus other non-cash items, plus changes in working capital, less investment in film assets, plus other changes in operating assets and liabilities. Cash used in investing activities includes capital expenditures, acquisitions and other cash used in investing activities. Management views free cash flow, a non-GAAP measure, as a measure of the Company's after-tax cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented below. These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts. **_Adjusted EBITDA per Credit Facility_** **For the Three Months Ended June 30, 2021 (1)** **For the Three Months Ended June 30, 2020 (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 $ (6,112) $ 3,099 $ (9,211) $ (30,047) $ (4,080) $ (25,967) Add (subtract): Income tax expense (benefit) 1,946 884 1,062 (10,248) 638 (10,886) Interest expense, net of interest income 432 (89) 521 524 (96) 620 Depreciation and amortization, including film asset amortization 12,994 1,038 11,956 11,764 1,049 10,715 Amortization of deferred financing costs(2) 699 — 699 166 — 166 EBITDA $ 9,959 $ 4,932 $ 5,027 $ (27,841) $ (2,489) $ (25,352) Share-based and other non-cash compensation 6,911 345 6,566 6,541 299 6,242 Unrealized investment gains (33) — (33) (2,025) (612) (1,413) (Recoveries) write-downs, including asset impairments and credit loss expense (1,623) (575) (1,048) 3,843 1,815 2,028 Legal judgment and arbitration awards (1,770) — (1,770) — — — Adjusted EBITDA per Credit Facility $ 13,444 $ 4,702 $ 8,742 $ (19,482) $ (987) $ (18,495) Revenues attributable to common shareholders(3) 50,955 8,421 42,534 8,855 421 8,434 Adjusted EBITDA margin attributable to common shareholders 26.4 % 55.8 % 20.6 % \-220.0 % \-234.4 % \-219.3 % **For the Twelve Months Ended June 30, 2021 (1)** **For the Twelve Months Ended June 30, 2020 (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 $ (84,640) $ 7,865 $ (92,505) $ (57,210) $ (9,093) $ (48,117) Add (subtract): Income tax expense 26,261 2,072 24,189 13,069 6,707 6,362 Interest expense, net of interest income 4,890 (346) 5,236 922 (424) 1,346 Depreciation and amortization, including film asset amortization 51,492 4,468 47,024 60,300 4,897 55,403 Amortization of deferred financing costs(2) 1,611 — 1,611 565 — 565 EBITDA $ (386) $ 14,059 $ (14,445) $ 17,646 $ 2,087 $ 15,559 Share-based and other non-cash compensation 23,520 1,109 22,411 22,710 730 21,980 Realized and unrealized investment (gains) losses (5,714) (1,702) (4,012) 978 274 704 Write-downs, including asset impairments and credit loss expense 16,769 3,102 13,667 23,404 5,420 17,984 Legal judgment and arbitration awards 2,335 — 2,335 — — — Loss from equity accounted investments 1,329 — 1,329 304 — 304 Adjusted EBITDA per Credit Facility $ 37,853 $ 16,568 $ 21,285 $ 65,042 $ 8,511 $ 56,531 Revenues attributable to common shareholders(3) 182,955 29,870 153,085 254,426 21,697 232,729 Adjusted EBITDA margin attributable to common shareholders 20.7 % 55.5 % 13.9 % 25.6 % 39.2 % 24.3 % \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) The Senior Secured Net Leverage Ratio is calculated using Adjusted EBITDA per Credit Facility determined on a trailing twelve-month basis. During the first quarter of 2021, the Company entered into the Second Amendment to the Credit Facility Agreement which, among other things, suspends the Senior Secured Net Leverage Ratio financial covenant in the Credit Agreement through the first quarter of 2022 and, once re-established, permits the Company to use EBITDA from the third and fourth quarters of 2019 in lieu of EBITDA for the corresponding quarters of 2021. (2) The amortization of deferred financing costs is recorded within Interest Expense in the Condensed Consolidated Statements of Operations. (3) **Three months ended June 30, 2021** **Three months ended June 30, 2020** **12 months ended June 30, 2021** **12 months ended June 30, 2020** Total revenues $ 50,955 $ 8,855 $ 182,955 $ 254,426 Greater Chinarevenues $ 27,913 $ 1,393 $ 99,100 $ 71,700 Non-controlling interest ownership percentage(4) 30.17 % 30.19 % 30.14 % 30.26 % Deduction for non-controlling interest share of revenues (8,421) (421) (29,870) (21,697) Revenues attributable to common shareholders $ 42,534 $ 8,434 $ 153,085 $ 232,729 (4)   Weighted average ownership percentage for change in non-controlling interest share **_Adjusted Net Loss Attributable to Common Shareholders and Adjusted Diluted Per Share Calculations_** **Three Months Ended** **Three Months Ended** **June 30, 2021** **June 30, 2020** _(In thousands of U.S.Dollars, except per share amounts)_ **Net Loss** **Per Share** **Net Loss** **Per Share** Reported net loss attributable to common shareholders $ (9,211) $ (0.16) $ (25,967) $ (0.44) Adjustments(1): Share-based compensation 6,451 0.11 6,168 0.10 COVID-19 government relief benefits(2) (1,981) (0.03) (3,151) (0.05) Legal judgment and arbitration awards (1,770) (0.03) — — Unrealized investment gains (33) — (1,413) (0.02) Tax impact on items listed above (428) (0.01) (857) (0.01) Income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries — — (841) (0.02) Adjusted net loss(1) $ (6,972) $ (0.12) $ (26,061) $ (0.44) Weighted average basic shares outstanding 59,367 58,808 Weighted average diluted shares outstanding 59,367 58,808 **Six Months Ended** **Six Months Ended** **June 30, 2021** **June 30, 2020** _(In thousands of U.S.dollars, except per share amounts)_ **Net Loss** **Per Share** **Net Loss** **Per Share** Reported net loss attributable to common shareholders $ (24,051) $ (0.41) $ (75,321) $ (1.26) Adjustments(1): Share-based compensation 11,799 0.20 10,243 0.17 COVID-19 government relief benefits(3) (3,465) (0.06) (3,151) (0.05) Legal judgment and arbitration awards (1,770) (0.03) — — Realized and unrealized investment (gains) losses (3,710) (0.06) 1,752 0.03 Tax impact on items listed above (965) (0.02) (1,195) (0.02) Income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries 381 0.01 12,885 0.21 Adjusted net loss(1) $ (21,781) $ (0.37) $ (54,787) $ (0.92) Weighted average basic shares outstanding 59,190 59,613 Weighted average diluted shares outstanding 59,190 59,613 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1) Reflects amounts attributable to common shareholders. (2) For the three months ended June 30, 2021, the Company recognized $2.0 millionin COVID-19 government relief benefits (2020 — $3.2 million), as reductions to Selling, General and Administrative Expenses ($1.4 million) (2020 — $2.9 million) and Costs and Expenses Applicable to Revenues ($0.6 million) (2020 — $0.3 million) in the Condensed Consolidated Statements of Operations. (3) For the six months ended June 30, 2021, the Company recognized $3.5 millionin COVID-19 government relief benefits (2020 — $3.2 million), as reductions to Selling, General and Administrative Expenses ($2.6 million) (2020 — $2.9 million) and Costs and Expenses Applicable to Revenues ($0.9 million) (2020 — $0.3 million) in the Condensed Consolidated Statements of Operations. **_Free Cash Flow_**  **Three Months Ended** **Six Months Ended** _(In thousands of U.S.Dollars)_ **June 30, 2021** **June 30, 2021** Net cash used in operating activities $ (6,065) $ (17,016) Net cash (used in) provided by investing activities (2,880) 11,376 Free cash flow $ (8,945) $ (5,640)   [![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=NY56309&sd=2021-07-27 "Cision")View original content to download multimedia:[https://www.prnewswire.com/news-releases/imax-corporation-reports-second-quarter-2021-results-301342553.html](https://www.prnewswire.com/news-releases/imax-corporation-reports-second-quarter-2021-results-301342553.html) SOURCE IMAX Corporation