--- title: IMAX Corporation Reports Third-Quarter 2015 Financial Results publisher: "IMAX" description: "HIGHLIGHTS - Revenues of $85.1 million and Adjusted EBITDA of $26.3 million, up approximately 40% and 50% over the third quarter of last year, respectively - IMAX increases theatre installation outlook for full-year 2015 to approximately 130 new systems - Company buys back 1 million shares of IMAX" canonical: "https://www.imax.com/pr/imax-corporation-reports-third-quarter-2015-financial-results" date: 2015-10-28 last_updated: 2015-10-28 --- IMAX Corporation Reports Third-Quarter 2015 Financial Results ============================================================= Wed, Oct 28, 2015 **HIGHLIGHTS** **\- Revenues of $85.1 million and Adjusted EBITDA of $26.3 million, up approximately 40% and 50% over the third quarter of last year, respectively** **\- IMAX increases theatre installation outlook for full-year 2015 to approximately 130 new systems** **\- Company buys back 1 million shares of IMAX stock in the third quarter, at an average price of $34.25** **\- IMAX Corp. successfully completes IPO of IMAX China, raising net proceeds of $162 million to be reported on IMAX Corp.'s consolidated balance sheet** NEW YORK, Oct. 28, 2015/PRNewswire/ -- **IMAX Corporation(NYSE: IMAX)**today reported third quarter 2015 revenues of $85.1 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $26.3 million, adjusted net income after non-controlling interest of $12.0 million, or $0.17per diluted share, and reported net income after non-controlling interest of $8.6 million, or $0.12per diluted share. The Company also reported a third quarter global per-screen average of $220,500. ![IMAX Logo. ](http://photos.prnewswire.com/prnvar/20111107/MM01969LOGO "IMAX Logo. ") "In addition to our strong third-quarter financial results, over the last few months we have accomplished several important strategic and financial objectives," said Richard L. Gelfond, CEO of IMAX Corporation. "We successfully listed shares of IMAX Chinaon the Hong Kong Stock Exchange, we bought back 1 million shares of IMAX Corporation'sstock at an average price of $34.25and we have been installing IMAXtheatre systems at an accelerated pace around the globe."  **Network Growth Update** The total IMAX® theatre network consisted of 1,008 systems as of September 30, 2015, of which 887 were located in commercial multiplexes. In the quarter, the Company installed 44 theatres, 34 of which were for new theatre locations, and signed contracts for 35 IMAXtheatre systems, of which 33 were for new locations and 2 were for upgrades.  As of September 30, 2015, there were 384 theatres in backlog compared to 397 as of December 31, 2014and 439 as of September 30, 2014.  For a breakdown of theatre system signings, installations, network and backlog by type, please see the tables at the end of this press release. Gelfond concluded, "We look forward to the upcoming releases of the latest Bond installment, _Spectre_, the final _Hunger Games_chapter and, of course, the much-anticipated _Star Wars_.  We believe the combination of our network growth, heightened levels of demand for The IMAX Experience® and our strong balance sheet will enable us to capitalize on the upcoming fourth quarter film slate as well as the exciting film slates of 2016 and 2017." **Third-Quarter Segment Results** * Revenue from sales and sales-type leases was $26.6 millionin the third quarter of 2015, compared to $6.6 millionin the third quarter of 2014, primarily reflecting the installation of 12 full theatre systems under sales and sales-type lease arrangements in the most recent third quarter, compared to the 6 sales-type theatres the Company installed in the prior-year period. In addition, there were 8 upgrades (7 laser and 1 xenon) in existing locations in the third quarter of 2015, compared to no upgrades in the third quarter of 2014. * Revenue from joint revenue-sharing arrangements was $19.8 millionin the quarter, compared to $15.2 millionin the prior-year period.  During the quarter, the Company installed 22 new theatres under joint revenue-sharing arrangements, compared to 14 in the same period in 2014. Of these installations, 8 were for hybrid joint revenue-sharing compared to 5 hybrid joint revenue-sharing installations in the prior year. The Company had 498 theatres operating under joint revenue-sharing arrangements as of September 30, 2015, as compared to 422 joint-venture theatres one year prior. * Production and IMAX DMR® (Digital Re-Mastering) revenues were $20.9 millionin the third quarter of 2015, compared to $18.4 millionin the third quarter of 2014.  Gross box office from DMR titles was $189.8 millionin the third quarter of 2015, compared to $169.0 millionin the prior-year period.  The average global DMR box office per screen in the third quarter of 2014 was $220,500compared to $227,900in the prior-year period. **Conference Call** The Company will host a conference call today at 4:30 PM ETto discuss its third quarter 2015 financial results. To access the call via telephone, interested parties in the US and Canadashould dial (800) 524-8850 approximately 5 to 10 minutes before the call begins.  International callers should dial (416) 204-9702. The conference ID for the call is 252835**.**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 252835**.** **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 September 30, 2015, there were 1,008 IMAXtheatres (887 commercial multiplexes, 19 commercial destinations and 102 institutions) in 66 countries. On Oct. 8, 2015, shares of IMAX China, a subsidiary of IMAX Corp., began trading on the Hong Kong Stock Exchangeunder the stock code "HK.1970." 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** **Jessica Kourakos** 212-821-0110 [jkourakos@imax.com](mailto:jkourakos@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) **Signings and Installations** Sept. 30, 2015 **Three Months** **Ended Sept. 30,** **Theater Signings:** **2015** **2014** Full new sales and sales-type lease arrangements 11 22 New joint revenue sharing arrangements 22 14 **Total new theaters** **33** **36** Upgrades of IMAX theater systems 2 (1) 6 (2) **Total Theater Signings** **35** **42** **Three Months** **Ended Sept. 30,** **Theater Installations:** **2015** **2014** Full new sales and sales-type lease arrangements 12 6 New joint revenue sharing arrangements 22 14 **Total new theaters** **34** **20** Upgrades of IMAX theater systems 10 (3) \- **Total Theater Installations** **44** **20** **As of Sept. 30,** **Theater Backlog:** **2015** **2014** New sales and sales-type lease arrangements 160 169 New joint revenue sharing arrangements 204 244 **Total new theaters** **364** **413** Upgrades of IMAX theater systems 20 26 **Total Theaters in Backlog** **384** (4)(5) **439** (4)(6) **As of Sept. 30,** **Theater Network:** **2015** **2014** Commercial Multiplex Theaters: Sales and sales-type lease arrangements 389 329 Joint revenue sharing arrangements 498 422 **Total Commercial Multiplex Theaters** **887** **751** Commercial Destination Theaters 19 19 Institutional Theaters 102 110 **Total IMAX Theater Network** **1,008** **880** (1) Includes one signing for the installation of a laser-based digital system and one signing for the installation of a xenon-based digital system under sale and sales-type lease arrangements in existing theater locations. (2) Includes one signing for the installation of a laser-based digital system under a sale and sales-type lease arrangement and five signings for the installation of a xenon-based digital system, of which 4 were under joint revenue sharing arrangements and one under a short-term operating lease arrangement in existing theater locations. (3) Includes 9 installations of an upgrade to a laser-based digital system (7 under a sale and sales-type lease arrangement, 1 under an operating lease arrangement and 1 under a joint revenue sharing arrangement) and 1 installation of an upgrade to a xenon-based digital system under a sales and sales-type lease arrangement. (4) Includes 69 laser theater system configurations (2014 – 69), including upgrades. The Company continues to develop and roll out its laser projection system. (5) Includes 20 upgrades to a digital theater system, in existing IMAX theater locations (2 xenon and 18 laser, of which 4 are under joint revenue sharing arrangements). (6) Includes 26 upgrades to a digital theater system, in existing IMAX theater locations (3 xenon and 23 laser, of which 4 are under joint revenue sharing arrangements). **IMAX Greater China Business Metrics Supplement** **Three Months ended September 30,** **Nine Months Ended September 30,** **2015** **2014** **2015** **2014** IMAX Greater China Box Office $70.4 million $48.4 million $245.4 million $145.6 million IMAX Greater China Per Screen Avg. $301,000 $287,200 $1.1 million $918,200 Greater China Theatre Installations 25 13 43 26 Greater China Backlog 218 247 218 247 Greater China Network: Commercial Mulitplex 258 176 258 176 Institution 17 22 17 22 **Total** **275** **198** **275** **198** **Film Slate** In addition to the 37 IMAX DMR films released to the IMAXtheater network during the first nine months of 2015, 7 additional IMAX DMR films have been announced so far to be released in the remaining three months of 2015: * _Crimson Peak: The_ IMAX_Experience_ (Universal Studios, October 2015); * _The Martian: An_ IMAX_3D Experience_ (Twentieth Century Fox, October 2015)_;_ * _Spectre: The_ IMAX_Experience_ (Sony Pictures Entertainment, November 2015); * _The Hunger Games: Mockingjay Part 2: The_ IMAX_Experience_ (Lionsgate, November 2015);  * _In the Heart of the Sea: An_ IMAX_3D Experience_ (Warner Bros. Pictures, December 2015); * _Mojin: The Lost Legend: An_ IMAX_3D Experience_(aka "_The Ghouls_")(Wanda Media Co. Ltd., 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 15 titles to be released to the IMAXtheater network in 2016: * _The Finest Hours: An_ IMAX_3D Experience_ (Walt Disney Studios, January 2016); * _Batman v Superman: Dawn of Justice: An_ IMAX_3D__Experience_ (Warner Bros. Pictures, March 2016); * _Flight Crew: An_ IMAX3D _Experience_ (Russia\-1 Channel, April 2016); * _The Jungle Book: An_ IMAX_3D Experience_ (Walt Disney Studios, April 2016); * _Captain America: Civil War: An_ IMAX_3D Experience_ (Walt Disney Studios, May 2016); * _Alice Through the Looking Glass: An_ IMAX_3D Experience_ (Walt Disney Studios, May 2016); * _Warcraft: An_ IMAX_3D Experience_ (Universal Studios, June 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); * _The Duelist: The_ IMAX_Experience_ (Non-Stop Production LLC, 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). In addition, in conjunction with Walt Disney Studios, the Company will be releasing an IMAXoriginal production, _A Beautiful Planet_, on April 29, 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 2016 to 44 slated for release in 2015. **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** **Nine Months** **Ended September 30,** **Ended September 30,** **2015** **2014** **2015** **2014** **Revenues**  Equipment and product sales  $ 33,083 $ 11,765 $ 72,824 $ 37,621 Services  33,024 33,199 115,698 101,813 Rentals  16,665 13,646 59,006 42,278 Finance income  2,329 2,132 6,803 6,372 Other  \- \- 141 \- 85,101 60,742 254,472 188,084 **Costs and expenses applicable to revenues**  Equipment and product sales 21,949 6,041 43,010 19,126 Services 15,899 14,788 50,201 46,318 Rentals  4,864 4,471 13,856 12,996 42,712 25,300 107,067 78,440 **Gross margin**  42,389 35,442 147,405 109,644 Selling, general and administrative expenses 24,973 23,513 82,348 68,323 (including share-based compensation expense of $4.3 million and $14.9 million for the three and nine months ended September 30 2015, respectively (2014 - expense of $3.4 million and $11.3 million, respectively))  Research and development  2,722 4,560 9,611 11,468 Amortization of intangibles  429 441 1,302 1,259 Receivable provisions, net of recoveries  361 26 709 642 Asset impairments  245 \- 245 \- Impairment of investments  \- \- 350 650 **Income from operations**  13,659 6,902 52,840 27,302 Interest income  222 149 727 189 Interest expense  (463) (269) (1,170) (803) **Income from operations before income taxes**  13,418 6,782 52,397 26,688 Provision for income taxes  (2,477) (1,188) (12,408) (6,667) Loss from equity-accounted investments, net of tax  (427) (297) (1,610) (721) **Income from continuing operations** 10,514 5,297 38,379 19,300 Net income from discontinued operations, net of tax  \- \- \- 355 **Net income** $ 10,514 $ 5,297 $ 38,379 $ 19,655 Less: Net income attributable to non-controlling interests  (1,904) (439) (5,028) (911) **Net income attributable to Common Shareholders** $ 8,610 $ 4,858 $ 33,351 $ 18,744 **Net income per share - basic:**  Net income per share from continuing operations  $ 0.12 $ 0.07 $ 0.47 $ 0.26 Net income per share from discontinued operations  \- \- \- 0.01 $ 0.12 $ 0.07 $ 0.47 $ 0.27 **Net income per share - diluted:**  Net income per share from continuing operations  $ 0.12 $ 0.07 $ 0.46 $ 0.26 Net income per share from discontinued operations  \- \- \- 0.01 $ 0.12 $ 0.07 $ 0.46 $ 0.27 **Weighted average number of shares outstanding (000's):** Basic  69,699 68,480 69,582 68,206 Fully Diluted  70,860 69,602 71,102 69,597 **Additional Disclosure:** Depreciation and amortization(1) $ 10,467 $ 7,992 $ 31,191 $ 23,937 (1) Includes $0.3 million and $0.7 million of amortization of deferred financing costs charged to interest expense for the three and nine months ended September 30, 2015, respectively (2014 - $0.1 million and $0.4 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** **September 30,** **December 31,** **2015** **2014** (unaudited) **Assets** Cash and cash equivalents $ 117,361 $ 106,503 Accounts receivable, net of allowance for doubtful accounts of $1,558 (December 31, 2014 — $947) 87,534 76,051 Financing receivables 113,984 105,700 Inventories 35,562 17,063 Prepaid expenses 7,106 4,946 Film assets 15,460 15,163 Property, plant and equipment 212,967 183,424 Other assets 34,645 23,047 Deferred income taxes 21,458 23,058 Other intangible assets 28,719 27,551 Goodwill 39,027 39,027 **Total assets** **$** **713,823** **$** **621,533** **Liabilities** Bank indebtedness $ 22,278 $ 4,710 Accounts payable 18,118 26,145 Accrued and other liabilities 72,519 75,425 Deferred revenue 106,301 88,566 **Total liabilities** **219,216** **194,846** **Commitments and contingencies** **Non-controlling interests** **87,851** **43,912** **Shareholders' equity** Capital stock, common shares — no par value. Authorized — unlimited number. 69,193,840 — issued and 69,136,609 — outstanding  (December 31, 2014 — 68,988,050 — issued and outstanding) 373,936 344,862 Less: Treasury stock held in trust, 57,231 shares at cost (2,141) \- Other equity 43,769 47,319 Accumulated deficit (2,544) (6,259) Accumulated other comprehensive loss (6,264) (3,147) **Total shareholders' equity** **406,756** **382,775** **Total liabilities and shareholders' equity** **$** **713,823** **$** **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)_** **Nine Months** **Ended September 30,** **2015** **2014** **Cash provided by (used in):** **Operating Activities** Net income $ 38,379 $ 19,655 Net income from discontinued operations \- (355) Adjustments to reconcile net income to cash from operations: Depreciation and amortization 31,191 23,937 Write-downs, net of recoveries 2,928 1,753 Change in deferred income taxes 5,097 3,157 Stock and other non-cash compensation 15,204 11,609 Unrealized foreign currency exchange loss 716 847 Loss from equity-accounted investments 2,756 1,073 Gain on non-cash contribution to equity-accounted investees (1,146) (352) Investment in film assets (12,069) (8,398) Changes in other non-cash operating assets and liabilities (41,256) 18,372 Net cash provided by operating activities from discontinued operations \- 572 Net cash provided by operating activities 41,800 71,870 **Investing Activities** Purchase of property, plant and equipment (38,443) (24,686) Investment in joint revenue sharing equipment (20,969) (15,908) Investment in new business ventures (2,000) (2,500) Acquisition of other intangible assets (3,622) (1,979) Net cash used in investing activities (65,034) (45,073) **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) Exercise of stock options 23,838 3,672 Increase in bank indebtedness 17,568 \- Credit facility amendment fees paid (1,310) \- Repurchase of common shares (34,279) (2,369) Treasury stock purchased for settlement of share based compensation (10,000) (790) Net cash provided by financing activities 33,817 37,448 Effects of exchange rate changes on cash 275 (86) **Increase in cash and cash equivalents during the period** 10,858 64,159 **Cash and cash equivalents, beginning of period** 106,503 29,546 **Cash and cash equivalents, end of period** $ 117,361 $ 93,705 **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 September 30,** **Nine Months Ended September 30,** **2015** **2014** **2015** **2014** **Revenue**  **IMAX Theater Systems** IMAX Systems  Sales and sales-type leases  $ 26,635 $ 6,644 $ 53,924 $ 25,629 Ongoing rent, fees, and finance income  3,518 3,501 10,708 10,272 Other  3,221 3,165 11,320 8,407 33,374 13,310 75,952 44,308 Theater System Maintenance  9,337 8,516 27,345 25,384 Joint Revenue Sharing Arrangements  19,797 15,238 67,259 45,457 **Film** Production and IMAX DMR  20,865 18,350 75,144 57,585 Film distribution and post-production  1,728 5,328 8,772 15,350 22,593 23,678 83,916 72,935 **Total** $ 85,101 $ 60,742 $ 254,472 $ 188,084 **Gross margin**  **IMAX Theater Systems** IMAX systems(1) Sales and sales-type leases  $ 9,775 $ 4,246 $ 24,720 $ 14,161 Ongoing rent, fees, and finance income  3,334 3,352 10,111 9,799 Other  (267) (218) (421) (202) 12,842 7,380 34,410 23,758 Theater System Maintenance  3,521 3,208 9,891 8,990 Joint Revenue Sharing Arrangements(1) 12,130 9,382 46,816 30,043 **Film** Production and IMAX DMR(1) 13,929 13,469 55,642 43,177 Film distribution and post-production(1) (33) 2,003 646 3,676 13,896 15,472 56,288 46,853 **Total** $ 42,389 $ 35,442 $ 147,405 $ 109,644 (1) IMAX systems include marketing and commission costs of $0.9 million and $1.8 million for the three and nine months ended September 30, 2015, respectively (2014 — $0.3 million and $1.2 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.3 million and $2.7 million for the three and nine months ended September 30, 2015, respectively (2014 — $0.9 million and $2.1 million, respectively). Production and DMR segment margins include marketing costs of $3.4 million and $8.3 million for the three and nine months ended September 30, 2015, respectively (2014 — $2.1 million and $5.3 million, respectively). Distribution segment margins include marketing cost recovery of less than $0.1 million and cost recovery of $0.1 million for the three and nine months ended September 30, 2015, respectively (2014 — expense of $0.3 million and expense of $0.7 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 $50.0 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 0.16:1 as at September 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** **September 30, 2015** **September 30, 2015****(1)** **_(In thousands of U.S Dollars)_** Net income  $ 10,514 $ 60,893 Add (subtract): Loss from equity accounted investments  427 1,960 Provision for income taxes  2,477 20,207 Interest expense, net of interest income  241 348 Depreciation and amortization, including film asset amortization  10,200 40,215 Write-downs net of recoveries including asset impairments and receivable provisions  1,471 6,469 Stock and other non-cash compensation  4,343 19,062 EBITDA attributable to non-controlling interests(2) (3,399) (11,031) $ 26,274 $ 138,123 (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 September 30, 2015 vs. 2014:_** The Company reported net income of $10.5 million or $0.15 per basic share and $0.14 per diluted share for the third quarter of 2015, as compared to $5.3 million or $0.08 per basic and diluted share for the third quarter of 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $13.9 million or $0.19 per diluted share for the third quarter of 2015 as compared to adjusted net income of $8.3 million or $0.12 per diluted share for the third 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 $12.0 million or $0.17 per diluted share for the third quarter of 2015 as compared to adjusted net income attributable to common shareholders of $7.8 million or $0.11 per diluted share for the third 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** **Three Months** **Ended September 30, 2015** **Ended September 30, 2014** **Net Income** **Diluted EPS** **Net Income** **Diluted EPS** Reported net income $ 10,514 $ 0.14 (1) $ 5,297 $ 0.08 (1) Adjustments: Stock-based compensation 4,252 0.06 3,425 0.05 Tax impact on items listed above (901) (0.01) (464) (0.01) Adjusted net income 13,865 0.19 (1) 8,258 0.12 (1) Net income attributable to non-controlling interests (1,904) (0.02) (439) (0.01) Adjusted net income attributable to common shareholders $ 11,961 $ 0.17 (1) $ 7,819 $ 0.11 (1) Weighted average diluted shares outstanding 70,860 69,602 (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 – Nine Months Ended September 30, 2015 vs. 2014:_** The Company reported net income of $38.4 million or $0.54 per basic share and $0.53 per diluted share for the nine months ended September 30, 2015, as compared to $19.7 million or $0.28 per basic and diluted share for the nine months ended September 30, 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $50.7 million or $0.70 per diluted share for the nine months ended September 30, 2015 as compared to adjusted net income of $29.2 million or $0.41 per diluted share for the nine months ended September 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 $45.7 million, or $0.63 per diluted share, in the nine months ended September 30, 2015, as compared to adjusted net income attributable to common shareholders of $28.3 million, or $0.40 per diluted share, for the nine months ended September 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: **Nine Months** **Nine Months** **Ended September 30, 2015** **Ended September 30, 2014** **Net Income** **Diluted EPS** **Net Income** **Diluted EPS** Reported net income attributable to Common Shareholders $ 38,379 $ 0.53 (1) $ 19,655 $ 0.28 (1) Add: Stock-based compensation 14,931 0.21 11,328 0.16 Tax expense on items listed above (2,603) (0.04) (1,807) (0.03) Adjusted net income  50,707 0.70 (1) 29,176 0.41 (1) Net income attributable to non-controlling interests (5,028) (0.07) (911) (0.01) Adjusted net income attributable to Common Shareholders $ 45,679 $ 0.63 (1) $ 28,265 $ 0.40 (1) Weighted average diluted shares outstanding 71,102 69,597 (1) Includes impact of $0.7 million (2014 - $0.3 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** **Nine Months Ended** **September 30, 2015** **_(In thousands of U.S. Dollars)_** Net cash provided by operating activities                                                                          $ 41,800 Net cash used in investing activities (65,034) Free cash flow $ (23,234) 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-third-quarter-2015-financial-results-300168111.html](http://www.prnewswire.com/news-releases/imax-corporation-reports-third-quarter-2015-financial-results-300168111.html) SOURCE IMAX Corporation