--- title: IMAX CORPORATION REPORTS THIRD QUARTER 2022 RESULTS publisher: "IMAX" description: "IMAX global entertainment technology platform drives double-digit growth across Revenue, Gross Margin and Adjusted EBITDA as well as positive Net Income within IMAX China Total IMAX Gross Box Office increased 25% year over year to $177.1 million , with 30% of box office coming from Local Language" canonical: "https://www.imax.com/pr/imax-corporation-reports-third-quarter-2022-results" date: 2022-10-31 last_updated: 2022-10-31 --- IMAX CORPORATION REPORTS THIRD QUARTER 2022 RESULTS =================================================== Mon, Oct 31, 2022 * IMAX global entertainment technology platform drives double-digit growth across Revenue, Gross Margin and Adjusted EBITDA as well as positive Net Income within IMAX China * Total IMAX Gross Box Office increased 25% year over year to $177.1 million, with 30% of box office coming from Local Language blockbusters * Strong upcoming blockbuster film slate represents significant expected tailwind, as 2022 concludes with "Black Panther: Wakanda Forever" and "Avatar: The Way of Water," the first of four planned sequels to the highest grossing movie of all time with more than $270 millionin IMAX box office receipts * IMAX completes acquisition of streaming technology company SSIMWAVE, enhancing its capabilities to deliver the best images on any screen, out of home and in home * IMAX increased its Share-Repurchase Authorization by $200 millionand repurchased 418 thousand shares in third quarter; cumulative 10.4 million under the program as of September 30th, or 16% of total shares outstanding NEW YORK, Oct. 31, 2022/PRNewswire/ -- IMAX Corporation(NYSE: IMAX) today reported solid financial results for the third quarter of 2022 demonstrating the value of its unique global entertainment technology platform and content portfolio.   [![An infographic highlighting IMAX's recent quarter.](https://mma.prnewswire.com/media/1934030/IMAX_3Q_22_Earnings_Infographic.jpg "An infographic highlighting IMAX's recent quarter.")](https://mma.prnewswire.com/media/1934030/IMAX_3Q_22_Earnings_Infographic.html) "IMAX demonstrated the strength of its differentiated model in the third quarter — leaning into its diversified global content portfolio to grow revenue, box office, and EBITDA despite a temporary slowdown in the Hollywoodpipeline," said Richard L. Gelfond, CEO of IMAX Corporation.  "As we look toward the end of 2022 and beyond, we see significant potential tailwinds on the horizon, most notably the release of "Black Panther: Wakanda Forever" and "Avatar: The Way of Water", the long-awaited sequel to the highest grossing IMAX film of all time." "We also took a significant step in the quarter to advance our long-term growth strategy with the acquisition of streaming technology company SSIMWAVE. In the short-term, SSIMWAVE is expected to generate incremental revenue for IMAX and be accretive in 2023, and in the long-term open a new world of possibility for our image enhancement capabilities — across not only streaming and theatrical, but gaming, VR and AR."   **Financial Summary** * Revenue increased 21% to $68.8 millionfrom $56.6 millionin the year-ago period. * IMAX China Net Income of $4.2 millionor $3.0 millionattributable to common shareholders. * Net loss(2)was ($9.0) million, or ($0.16) per share, compared to ($8.4) million, or ($0.14) per share in Q3 2021. Q3 2022 included a $4.3 million, or $0.08per share, valuation allowance against its deferred tax assets as well as $1.0 million, or $0.02per share, in acquisition-related expenses. * Adjusted Net loss(1,2)was ($3.0) million, or ($0.05) per share, improved from an Adjusted Net Loss(1,2)of ($5.0) million, or ($0.08) per share in Q3 2021. * Adjusted EBITDA(1,3)of $16.5 millionwas up from $13.1 millionin Q3 2021 and marked the 8th straight quarter of positive Adjusted EBITDA. On a trailing 12-month basis, Adjusted EBITDA(1,3)was $100.7 millionas of September 30th. **Third Quarter Financial Highlights** **Three Months Ended** **Nine Months Ended** **September 30,** **September 30,** _In millions of U.S.Dollars, except per share data_ **2022** **2021** **YoY % Change** **2022** **2021** **YoY % Change** Total Revenue $ 68.8 $ 56.6 21 % $ 202.8 $ 146.3 39 % Gross Margin $ 31.7 $ 27.5 15 % $ 107.5 $ 70.4 53 % Gross Margin (%) 46 % 49 % 53 % 48 % Net Loss(2) $ (9.0) $ (8.4) N/A $ (25.4) $ (32.4) N/A Diluted Net Loss per share(2) $ (0.16) $ (0.14) N/A $ (0.44) $ (0.55) N/A Adjusted Net Loss(1)(2) $ (3.0) $ (5.0) N/A $ (7.3) $ (26.8) N/A Adjusted Net Loss per share(1)(2) $ (0.05) $ (0.08) N/A $ (0.13) $ (0.44) N/A Adjusted EBITDA per Credit Facility(1)(3) $ 16.5 $ 13.1 26 % $ 56.7 $ 24.6 130 % Adjusted EBITDA Margin (%)(1)(2) 25.5 % 26.3 % (3) % 30.0 % 19.9 % 50 % Weighted average shares outstanding (in millions): Basic and Diluted 56.0 59.2 (5) % 57.3 59.2 (3) % \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1)     Non-GAAP Financial Measure. See the discussion at the end of this earnings release for a description of the non-GAAP financial measures used herein, as well as reconciliations to the most comparable GAAP amounts. (2)     Attributable to common shareholders. (3)     Adjusted EBITDA per Credit facility attributable to common shareholders. **Third Quarter and September Year-to-Date Segment Results**(1) **IMAX Technology Network** **IMAX Technology Sales and Maintenance** _In millions of U.S.Dollars_ **Revenue** **Gross Margin** **Gross Margin %** **Revenue** **Gross Margin** **Gross Margin %** **3Q22** $ 32.5 $ 17.7 54 % $ 33.0 $ 15.4 47 % **3Q21** 25.6 10.9 43 % 27.7 14.9 54 % **% change** 27 % 62 % 19 % 3 % **YTD 3Q22** $ 110.8 $ 68.4 62 % $ 82.6 $ 40.5 49 % **YTD 3Q21** 65.5 29.7 45 % 73.4 38.1 52 % **% change** 69 % 130 % 13 % 6 % \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1)     Please refer to the Company's Form 10-Q for the period ended September 30, 2022for additional segment information. **IMAX Technology Network** * IMAX Technology Network revenues increased 27% to $32.5 millionin the third quarter of 2022, compared to $25.6 millionin the prior-year period. The strength of local language titles as well as key titles such as "Thor: Love and Thunder" and "Nope" drove the increase in gross box office and revenue. * Gross margin for the IMAX Technology Network increased to $17.7 millionin the third quarter of 2022, compared to $10.9 millionin the prior year period as improved box office performance drove higher revenue. **IMAX Technology Sales and Maintenance** * IMAX Technology Sales and Maintenance revenues increased 19% to $33.0 millionin the third quarter of 2022, compared with $27.7 millionin the prior year period. During the third quarter the Company installed 10 systems under sales and sales-type lease arrangements and hybrid JRSA compared to 9 systems in the third quarter of 2021. * Total gross margin for IMAX Technology Sales and Maintenance increased 3% to $15.4 millionin the third quarter of 2022 compared to $14.9 millionin the prior year period. **Cash Balances and Outstanding Debt**  Total cash and cash equivalents as of September 30, 2022were $87.2 million. Total debt, excluding deferred financing fees, was $237.6 millionas of September 30, 2022.  As of September 30, 2022, the Company's available liquidity was $437.4 millionincluding its balance of cash and cash equivalents of $87.2 million, $300.0 millionin available borrowing capacity under the Credit Facility and $50.2 millionin available borrowing capacity under IMAX China'srevolving facilities. **Share Count and Capital Return** The weighted average basic and diluted shares outstanding at the end of the third quarter of 2022 was 56.0 million compared to 59.2 million in the third quarter of 2021. During the third quarter of 2022, the Company repurchased 0.4 million shares at an average price of $14.62for a total of $6.1 million, and IMAX Chinarepurchased 1.5 million shares at an average price of $0.79for a total of $1.2 million. As of September 30, 2022, a total of $220.1 millionremains available under the Company's outstanding share repurchase authorization. **Supplemental Materials** For more information about the Company's results, please refer to the IMAX Investor Relations website located at [investors.imax.com](http://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](http://investors.imax.com). The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one-week lag.  The Company may post additional information on the Company's corporate and Investor Relations website which may be material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website in addition to the Company's press releases, SECfilings and public conference calls and webcasts, for additional information about the Company. **Conference Call** The Company will host a conference call today at 4:30 PM ETto discuss its third quarter 2022 financial results. This call is being webcast and can be accessed at [investors.imax.com](http://investors.imax.com). To access the call via telephone, there is a new process: interested parties please pre-register here: [https://register.vevent.com/register/BI38d122a3ee2046378a62d5b70836c40a](https://c212.net/c/link/?t=0&l=en&o=3693818-1&h=3230045514&u=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBI38d122a3ee2046378a62d5b70836c40a&a=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBI38d122a3ee2046378a62d5b70836c40a). and you will be provided with a dial-in number and unique pin.  To avoid delays, we encourage participants to dial into the conference call ten minutes ahead of the scheduled start time. A replay of the call will be available via webcast at [investors.imax.com](http://investors.imax.com). **About IMAX Corporation**  IMAX, an innovator in entertainment technology, combines proprietary software, architecture, and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX 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 September 30, 2022, there were 1,703 IMAX theater systems (1,622 commercial multiplexes, 12 commercial destinations, 69 institutional) operating in 87 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchangeunder the stock code "1970."  IMAX®, IMAX® Dome, IMAX® 3D, IMAX® 3D Dome, Experience It In IMAX®, The IMAX Experience®, An IMAX Experience®, An IMAX 3D Experience®, IMAX DMR®, DMR®, Filmed For IMAX™, IMAX LIVE™, IMAX Enhanced®, IMAX nXos®,  Films to the Fullest®, SSIMWAVE®, SSIMPLUS®, Viewer Score® 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](http://www.imax.com). You may also connect with IMAX on Instagram ([https://www.instagram.com/imax](https://www.instagram.com/imax)), 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)). For additional information please contact: Investors: IMAX Corporation, New York  Jennifer Horsley  212-821-0154 [jhorsley@IMAX.com](mailto:jhorsley@IMAX.com)  Media:  IMAX Corporation, New York  Mark Jafar  212-821-0102 [mjafar@imax.com](mailto:mjafar@imax.com)  **Forward-Looking Statements** _This earnings release contains forward looking statements that are based on IMAX management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. These forward-looking statements include, but are not limited to, references to business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, future capital expenditures (including the amount and nature thereof), industry prospects and consumer behavior,  plans and references to the future success of IMAX Corporationtogether with its consolidated subsidiaries (the "Company") and expectations regarding the Company's future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, risks related to the adverse impact of the COVID-19 pandemic;__risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United Statesand Canada, as well as geopolitical conflicts, such as the conflict between Russiaand Ukraine; risks related to the Company's growth and operations in China; the performance of IMAX DMR®films; 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 consolidation among commercial exhibitors and studios; risks related to brand extensions and new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company's inability to protect the Company's intellectual property;_ _risks related to climate change; risks related to weather conditions and natural disasters that may disrupt or harm the Company's business; risks related to the Company's indebtedness and compliance with its debt agreements; general economic, market or business conditions; risks related to political, economic and social instability, including with respect to the Russia\-Ukraineconflict; the failure to convert IMAX Theater System backlog into revenue; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in our periodic filings with the SEC; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company_. _These factors, other risks and uncertainties and financial details are discussed in IMAX's most recent Annual Report on Form 10-K. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise._ **Primary Reporting Groups** The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements ("JRSA"); (iii) IMAX Systems; (iv) IMAX Maintenance; (v) Other Theater Business; (vi) Film Distribution; and (vii) Film Post-Production. The Company's activities that do not meet the criteria to be considered a reportable segment are disclosed within All Other. The Company organizes its reportable segments into the following three categories, identified by the nature of the product sold or service provided: (i)            IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from JRSA segment; (ii)            IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment; and (iii)            Film Distribution and Post-Production, which includes activities related to the distribution of large-format documentary films, primarily to institutional theaters, and the distribution of exclusive experiences ranging from live performances to interactive events with leading artists and creators (through the Film Distribution segment) and the provision of film post-production and quality control services. In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced®, an initiative to bring The IMAX Experience® into the home, out of the New Business Initiatives segment and into All Other for segment reporting purposes. IMAX Enhanced was the only component of the New Business Initiatives segment. Prior period comparatives have been reclassified to conform with the current period presentation. Following its acquisition in Q3 2022, SSIMWAVE is being included within All Other for segment reporting purposes. Please refer to the Company's Form 10-Q for the period ended September 30, 2022for additional segment information. **IMAX Network and Backlog** **Three Months Ended September 30,** **Nine Months Ended September 30,** **Theater System Signings:** **2022** **2021** **2022** **2021** New IMAX Theater Systems Sales and sales-type lease arrangements 3 4 9 13 Hybrid JRSA 1 — 3 — Traditional JRSA 7 5 9 8 Total new IMAX theaters Systems 11 9 21 21 Upgrades of IMAX theater systems 4 2 14 4 **Total IMAX Theater System signings** **15** **11** **35** **25** **Three Months Ended September 30,** **Nine Months Ended September 30,** **Theater System Installations:** **2022** **2021** **2022** **2021** New IMAX Theater Systems(1) Sales and sales-type lease arrangements 7 6 14 17 Hybrid JRSA 2 2 5 6 Traditional JRSA 7 6 16 15 Total new IMAX Theater Systems 16 14 35 38 Upgrades of IMAX theater systems 1 3 5 7 **Total IMAX Theater System installations** **17** **17** **40** **45** **September 30,** **Theater System Backlog:** **2022** **2021** Sales and sales-type lease arrangements 170 182 Hybrid JRSA 127 139 Traditional JRSA 192 (2) 185 (2) **Total Theater System backlog** **489** (3) **506** (4) **September 30,** **Theater Network:** **2022** **2021** Commercial Multiplex Theaters Sales and sales-type lease arrangements 696 676 Hybrid JRSA 150 144 Traditional JRSA 776 760 **Total Commercial Multiplex Theaters** **1,622** **1,580** Commercial Destination Theaters 12 12 Institutional Theaters 69 72 **Total Theaternetwork(5)** **1,703** **1,664** \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1)     For the three months ended September 30, 2022, includes two IMAX Theater Systems that were relocated from their original locations (2021 — nil). For the nine months ended September 30, 2022, includes eight IMAX Theater Systems that were relocated from their original location. (2021 ― nil). When a theater system under a sales or sales-type lease arrangement is relocated, the amount of revenue earned by the Company may vary from transaction-to-transaction and is usually less than the amount earned for a new sale. In certain situations when a theater system is relocated, the original location is upgraded to an IMAX Laser Theater System. (2)     Includes 41 IMAX Theater Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2021 — 44). (3)     Includes 201 new IMAX Laser Theatresystems configurations and 116 upgrades of existing locations to IMAX Laser Theater Systems configurations. (4)     Includes 157 new IMAX Laser Theatresystems configurations and 95 upgrades of existing locations to IMAX Laser Theater Systems configurations. (5)     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** **Nine Months Ended** **September 30,** **September 30,** **2022** **2021** **2022** **2021** **Revenues** Technology sales $ 18,065 $ 13,160 $ 35,270 $ 34,508 Image enhancement and maintenance services 36,233 30,588 117,285 76,914 Technology rentals 12,540 10,219 43,726 26,708 Finance income 1,917 2,635 6,478 8,181 **68,755** **56,602** **202,759** **146,311** **Costs and expenses applicable to revenues** Technology sales 10,061 6,230 20,264 17,779 Image enhancement and maintenance services 20,563 16,461 56,259 38,582 Technology rentals 6,430 6,424 18,728 19,579 **37,054** **29,115** **95,251** **75,940** **Gross margin** **31,701** **27,487** **107,508** **70,371** Selling, general and administrative expenses 32,905 28,377 100,181 82,393 Research and development 1,115 2,025 3,667 5,696 Amortization of intangible assets 1,111 1,255 3,412 3,586 Credit loss expense (reversal), net 808 (3,317) 8,149 (4,884) Asset impairments — — 4,470 — Legal judgment and arbitration awards — — — (1,770) **Loss from operations** **(4,238)** **(853)** **(12,371)** **(14,650)** Realized and unrealized investment gains 35 30 99 5,311 Retirement benefits non-service expense (140) (117) (417) (347) Interest income 257 538 1,176 1,680 Interest expense (1,323) (1,540) (4,354) (5,534) **Loss before taxes** **(5,409)** **(1,942)** **(15,867)** **(13,540)** Income tax expense (2,348) (4,402) (8,091) (9,416) **Net loss** **(7,757)** **(6,344)** **(23,958)** **(22,956)** Less: net income attributable to non-controlling interests (1,196) (2,034) (1,455) (9,473) **Net loss attributable to common shareholders** **$** **(8,953)** **$** **(8,378)** **$** **(25,413)** **$** **(32,429)** **Net loss per share attributable to common shareholders - basic and diluted:**                                                                                                                                    Net loss per share - basic and diluted: **$** **(0.16)** **$** **(0.14)** **$** **(0.44)** **$** **(0.55)** Weighted average number of shares outstanding (000's): Basic 56,039 59,244 57,301 59,207 Diluted 56,039 59,244 57,301 59,207 Additional Disclosure: Depreciation and amortization $ 15,640 $ 14,899 $ 42,663 $ 40,570 Amortization of deferred financing costs $ 712 $ 741 $ 2,465 $ 1,749 **IMAX CORPORATION** **CONDENSED CONSOLIDATED BALANCE SHEETS** _(In thousands of U.S.Dollars, except share amounts)_ _(Unaudited)_ **September 30,** **December 31,** **2022** **2021** **Assets** Cash and cash equivalents $ 87,151 $ 189,711 Accounts receivable, net of allowance for credit losses 125,686 110,050 Financing receivables, net of allowance for credit losses 122,618 141,049 Variable consideration receivables, net of allowance for credit losses 43,643 44,218 Inventories 36,378 26,924 Prepaid expenses 13,145 11,802 Film assets, net of accumulated amortization 4,535 4,241 Property, plant and equipment, net of accumulated depreciation 251,518 260,353 Investment in equity securities 1,095 1,087 Other assets 16,294 17,799 Deferred income tax assets, net of valuation allowance 14,369 13,906 Goodwill 61,718 39,027 Other intangible assets, net of accumulated amortization 22,077 23,080 **Total assets** **$** **800,227** **$** **883,247** **Liabilities** Accounts payable $ 22,607 $ 15,943 Accrued and other liabilities 119,138 111,896 Deferred revenue 76,461 81,281 Revolving credit facility borrowings, net of unamortized debt issuance costs 2,660 2,472 Convertible Notes and other borrowings, net 226,527 223,641 Deferred income tax liabilities 14,900 17,642 **Total liabilities** **462,293** **452,875** **Commitments and contingencies** **Non-controlling interests** **736** **758** **Shareholders' equity** Capital stock common shares — no par value. Authorized — unlimited number. 55,973,443 issued and outstanding (December 31, 2021— 58,653,642 issued and outstanding) 388,953 409,979 Other equity 179,571 174,620 Statutory surplus reserve 3,932 3,932 Accumulated deficit (282,944) (234,975) Accumulated other comprehensive (loss) income (16,173) 2,527 **Total shareholders' equity attributable to common shareholders** **273,339** **356,083** Non-controlling interests 63,859 73,531 **Total shareholders' equity** **337,198** **429,614** **Total liabilities and shareholders' equity** **$** **800,227** **$** **883,247** **IMAX CORPORATION ****CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** _(In thousands of U.S.Dollars)_ _(Unaudited)_ **Nine Months Ended** **September 30,** **2022** **2021** **Operating Activities** Net loss $ (23,958) $ (22,956) Adjustments to reconcile net loss to cash provided by (used in) operating activities: Depreciation and amortization 42,663 40,570 Amortization of deferred financing costs 2,465 1,749 Credit loss expense (reversal), net 8,149 (4,884) Write-downs 5,707 878 Deferred income tax benefit (3,374) (1,687) Share-based and other non-cash compensation 19,510 18,558 Unrealized foreign currency exchange loss 1,310 555 Realized and unrealized investment gains (99) (5,311) Changes in assets and liabilities: Accounts receivable (18,050) (24,336) Inventories (10,131) 653 Film assets (14,174) (10,035) Deferred revenue (5,989) (1,434) Changes in other operating assets and liabilities (3,548) (11,902) **Net cash provided by (used in) operating activities** **481** **(19,582)** **Investing Activities** Acquisition of SSIMWAVE, net of cash and cash equivalents acquired (12,639) — Purchase of property, plant and equipment (5,248) (2,353) Investment in equipment for joint revenue sharing arrangements (14,543) (5,361) Interest in film classified as a financial instrument (4,731) — Acquisition of other intangible assets (3,246) (3,399) Proceeds from sale of equity securities — 17,769 **Net cash (used in) provided by investing activities** **(40,407)** **6,656** **Financing Activities** Proceeds from issuance of convertible notes, net — 223,675 Debt issuance costs related to convertible notes — (1,163) Purchase of capped calls related to convertible notes — (19,067) Revolving credit facility borrowings 4,890 3,600 Repayments of revolving credit facility borrowings (3,600) (300,243) Credit facility amendment fees paid (2,277) (474) Repurchase of common shares, IMAX Corporation (53,581) (4,610) Repurchase of common shares, IMAX China (3,043) (5,016) Taxes withheld and paid on employee stock awards vested (3,393) (3,045) Common shares issued - stock options exercised — 883 Principal payment under finance lease obligations (890) — Dividends paid to non-controlling interests (2,701) (5,027) **Net cash used in financing activities** **(64,595)** **(110,487)** Effects of exchange rate changes on cash and cash equivalents 1,961 (958) **Decrease in cash and cash equivalents during period** **(102,560)** **(124,371)** **Cash and cash equivalents, beginning of period** **189,711** **317,379** **Cash and cash equivalents, end of period** $ **87,151** $ **193,008** **_Segment Revenue and Gross Margin (Margin Loss)_** **Three Months Ended** **Nine Months Ended** **September 30,** **September 30,** _In thousands of U.S.Dollars_ **2022** **2021** **2022** **2021** **Revenue** IMAX Technology Network IMAX DMR $ 19,919 $ 15,701 $ 67,064 $ 39,438 JRSA, contingent rent 12,540 9,887 43,708 26,108 32,459 25,588 110,772 65,546 IMAX Technology Sales and Maintenance IMAX Systems 15,957 13,236 32,806 35,117 JRSA, fixed fees 998 1,036 2,486 3,776 IMAX Maintenance 13,939 13,055 43,564 33,196 Other Theater Business(1) 2,107 363 3,697 1,283 33,001 27,690 82,553 73,372 Film Distribution and Post-Production 2,049 1,598 5,418 4,001 Sub-total for reportable segments 67,509 54,876 198,743 142,919 All Other(2) 1,246 1,726 4,016 3,392 Total $ 68,755 $ 56,602 $ 202,759 $ 146,311 **Gross Margin (Margin Loss)** IMAX Technology Network IMAX DMR $ 11,408 $ 7,293 $ 42,965 $ 22,405 JRSA, contingent rent 6,302 3,626 25,389 7,299 17,710 10,919 68,354 29,704 IMAX Technology Sales and Maintenance IMAX Systems 9,029 8,086 18,432 21,646 JRSA, fixed fees (154) 280 79 783 IMAX Maintenance 6,406 6,462 21,643 15,360 Other Theater Business 168 64 314 269 15,449 14,892 40,468 38,058 Film Distribution and Post-Production (2,082) 416 (3,470) 997 Sub-total for reportable segments 31,077 26,227 105,352 68,759 All Other(2) 624 1,260 2,156 1,612 Total $ 31,701 $ 27,487 $ 107,508 $ 70,371 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1)     The revenue from this segment principally includes after-market sales of IMAX Theatersystem parts and 3D glasses.  (2)     All Other includes the results from IMAX Enhanced, SSIMWAVE, and other ancillary activities. In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced out of the New Business Initiatives segment into All Other for segment reporting purposes. Prior period comparatives have been revised to conform with the current period presentation. The results of SSIMWAVE, which was acquired on September 22, 2022, were not material to the period. **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, and Adjusted EBITDA margin 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 or losses; (v) acquisition-related expenses, as well as the related tax impact of these adjustments, and (vi) income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries. The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company's financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net 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 of 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; (iii) depreciation and amortization, including film asset amortization; and (iv) amortization of deferred financing costs. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) realized and unrealized investment gains or losses; (iii) acquisition-related expenses; (iv) write-downs, net of recoveries, including asset impairments and credit loss expense; and (v) legal judgment and arbitration awards. A reconciliation of net 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. In this release, the Company also presents free cash flow, which is not recognized under U.S.GAAP, as a supplemental measure of the Company's liquidity. Prior to the third quarter of 2022, the Company defined free cash flow as net cash provided by or used in operating activities minus cash used in investing activities (from the Condensed Consolidated Statements of Cash Flows). In the third quarter of 2022, the Company updated its definition of free cash flow to deduct only normal recurring capital expenditures, including the Company's investment in joint revenue sharing arrangements, the purchase of property, plant and equipment and the acquisition of other intangible assets (from the Condensed Consolidated Statements of Cash Flows), from net cash provided by or used in operating activities. Management believes that free cash flow is a supplemental measure of the cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented below. These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts. **_Adjusted EBITDA per Credit Facility_** **For the Three Months Ended September 30, 2022 (1)** **For the Three Months Ended September 30, 2021 (1)** **Attributable to Non-controlling** **Less:** **Attributable to Non-controlling** **Less:** **Interests and** **Attributable to** **Attributable to** **Interests and** **Attributable to** **Attributable to** **Common** **Non-controlling** **Common** **Common** **Non-controlling** **Common** **Shareholders** **Interests** **Shareholders** **Shareholders** **Interests** **Shareholders** _(In thousands of U.S.Dollars)_ Reported net loss $ (7,757) $ 1,196 $ (8,953) $ (6,344) $ 2,034 $ (8,378) Add (subtract): Income tax expense 2,348 (22) 2,370 4,402 634 3,768 Interest expense, net of interest income 354 (39) 393 261 (90) 351 Depreciation and amortization, including film asset amortization 15,640 1,214 14,426 14,899 1,723 13,176 Amortization of deferred financing costs(2) 712 — 712 741 — 741 EBITDA $ 11,297 $ 2,349 $ 8,948 $ 13,959 $ 4,301 $ 9,658 Share-based and other non-cash compensation 5,544 (27) 5,571 6,226 233 5,993 Unrealized investment gains (35) — (35) (30) — (30) Acquisition-related expenses 955 — 955 — — — Write-downs (recoveries), including asset impairments and credit loss expense 1,083 66 1,017 (2,901) (381) (2,520) Adjusted EBITDA per Credit Facility $ 18,844 $ 2,388 $ 16,456 $ 17,254 $ 4,153 $ 13,101 Revenues attributable to common shareholders(3) 68,755 4,257 64,498 56,602 6,699 49,903 Adjusted EBITDA margin attributable to common shareholders 27.4 % 56.1 % 25.5 % 30.5 % 62.0 % 26.3 % **For the Nine Months Ended September 30, 2022 (1)** **For the Nine Months Ended September 30, 2021 (1)** **Attributable to Non-controlling** **Less:** **Attributable to Non-controlling** **Less:** **Interests and** **Attributable to** **Attributable to** **Interests and** **Attributable to** **Attributable to** **Common** **Non-controlling** **Common** **Common** **Non-controlling** **Common** **Shareholders** **Interests** **Shareholders** **Shareholders** **Interests** **Shareholders** _(In thousands of U.S.Dollars)_ Reported net loss $ (23,958) $ 1,455 $ (25,413) $ (22,956) $ 9,473 $ (32,429) Add (subtract): Income tax expense 8,091 470 7,621 9,416 2,492 6,924 Interest expense, net of interest income 713 (236) 949 2,105 (265) 2,370 Depreciation and amortization, including film asset amortization 42,663 3,711 38,952 40,570 3,910 36,660 Amortization of deferred financing costs(2) 2,465 — 2,465 1,749 — 1,749 EBITDA $ 29,974 $ 5,400 $ 24,574 $ 30,884 $ 15,610 $ 15,274 Share-based and other non-cash compensation 19,510 555 18,955 18,558 824 17,734 Unrealized investment gains (99) — (99) (5,311) (1,571) (3,740) Acquisition-related expenses 955 — 955 — — — Write-downs (recoveries), including asset impairments and credit loss expense 13,856 1,561 12,295 (4,006) (1,136) (2,870) Legal judgment and arbitration awards — — — (1,770) — (1,770) Adjusted EBITDA per Credit Facility $ 64,196 $ 7,516 $ 56,680 $ 38,355 $ 13,727 $ 24,628 Revenues attributable to common shareholders(3) 202,759 13,609 189,149 146,311 22,819 123,492 Adjusted EBITDA margin attributable to common shareholders 31.7 % 55.2 % 30.0 % 26.2 % 60.2 % 19.9 % **For the Twelve Months Ended September 30, 2022 (1)** **For the Twelve Months Ended September 30, 2021 (1)** **Attributable to Non-controlling** **Less:** **Attributable to Non-controlling** **Less:** **Interests and** **Attributable to** **Attributable to** **Interests and** **Attributable to** **Attributable to** **Common** **Non-controlling** **Common** **Common** **Non-controlling** **Common** **Shareholders** **Interests** **Shareholders** **Shareholders** **Interests** **Shareholders** _(In thousands of U.S.Dollars)_ Reported net loss $ (10,579) $ 4,734 $ (15,313) $ (42,500) $ 11,174 $ (53,674) Add (subtract): Income tax expense 19,239 2,027 17,212 11,314 3,209 8,105 Interest expense, net of interest income 970 (327) 1,297 3,642 (355) 3,997 Depreciation and amortization, including film asset amortization 58,175 5,056 53,119 52,575 5,009 47,566 Amortization of deferred financing costs(2) 3,229 — 3,229 2,056 — 2,056 EBITDA $ 71,034 $ 11,490 $ 59,544 $ 27,087 $ 19,037 $ 8,050 Share-based and other non-cash compensation 27,031 845 26,186 24,251 1,050 23,201 Unrealized investment gains (128) — (128) (4,169) (1,218) (2,951) Acquisition-related expenses 955 — 955 — — — Write-downs (recoveries), including asset impairments and credit loss expense 15,675 1,538 14,137 3,410 (603) 4,013 Legal judgment and arbitration awards — — — 2,335 — 2,335 Adjusted EBITDA per Credit Facility $ 114,567 $ 13,873 $ 100,694 $ 52,914 $ 18,266 $ 34,648 Revenues attributable to common shareholders(3) 311,331 24,347 286,984 202,301 30,744 171,557 Adjusted EBITDA margin attributable to common shareholders 36.8 % 57.0 % 35.1 % 26.2 % 59.4 % 20.2 % \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1)     The Senior Secured Net Leverage Ratio is calculated using Adjusted EBITDA per Credit Facility determined on a trailing twelve-month basis.  (2)     The amortization of deferred financing costs is recorded within Interest Expense in the Condensed Consolidated Statement of Operations. (3) _(In thousands of U.S.Dollars)_ **Three Months Ended September 30, 2022** **Three Months Ended September 30, 2021** Total revenues $ 68,755 $ 56,602 Greater Chinarevenues $ 14,889 $ 22,203 Non-controlling interest ownership percentage(4) 28.59 % 30.17 % Deduction for non-controlling interest share of revenues (4,257) (6,699) Revenues attributable to common shareholders $ 64,498 $ 49,903 _(In thousands of U.S.Dollars)_ **Nine Months Ended September 30, 2022** **Nine Months Ended September 30, 2021** Total revenues $ 202,759 $ 146,311 Greater Chinarevenues $ 47,602 $ 75,634 Non-controlling interest ownership percentage(4) 28.59 % 30.17 % Deduction for non-controlling interest share of revenues (13,609) (22,819) Revenues attributable to common shareholders $ 189,149 $ 123,492 _(In thousands of U.S.Dollars)_ **Twelve Months Ended September 30, 2022** **Twelve Months Ended September 30, 2021** Total revenues $ 311,331 $ 202,301 Greater Chinarevenues $ 84,769 $ 101,957 Non-controlling interest ownership percentage(4) 28.72 % 30.15 % Deduction for non-controlling interest share of revenues (24,347) (30,744) Revenues attributable to common shareholders $ 286,984 $ 171,557 (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** **September 30, 2022** **September 30, 2021** _(In thousands of U.S.dollars, except per share amounts)_ **Net Loss** **Per Share** **Net Loss** **Per Share** Net loss attributable to common shareholders $ (8,953) $ (0.16) $ (8,378) $ (0.14) Adjustments(1): Stock-based compensation 5,431 0.10 5,876 0.10 COVID-19 government relief benefits, net (212) — (2,048) (0.03) Realized and unrealized investment gains (34) — (30) — Acquisition-related expenses 955 0.02 — — Tax Impact on items listed above (214) — (452) (0.01) Adjusted net loss(1) $ (3,027) $ (0.05) $ (5,032) $ (0.08) Weighted average shares outstanding - basic and diluted 56,039 59,244 **Nine Months Ended** **Nine Months Ended** **September 30, 2022** **September 30, 2021** **_(In thousands of U.S.dollars, except per share amounts)_** **Net Loss** **Per Share** **Net Loss** **Per Share** Net loss attributable to common shareholders $ (25,413) $ (0.44) $ (32,429) $ (0.55) Adjustments(1): Stock-based compensation 18,651 0.33 17,675 0.30 COVID-19 government relief benefits, net (373) (0.01) (5,513) (0.09) Legal judgment and arbitration awards — — (1,770) (0.03) Realized and unrealized investment gains (98) — (3,740) (0.06) Acquisition-related expenses 955 0.02 — — Tax impact on items listed above (1,071) (0.02) (1,417) (0.02) Income tax effects related to the removal of the indefinitely reinvested assertion on the historical earnings of certain subsidiaries — — 381 0.01 Adjusted net loss(1) $ (7,349) $ (0.13) $ (26,813) $ (0.44) Weighted average shares outstanding - basic and diluted 57,301 59,207 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (1)     Reflects amounts attributable to common shareholders. **_Free Cash Flow_** **Three Months Ended** **Nine Months Ended** _(In thousands of U.S.Dollars)_ **September 30, 2022** **September 30, 2022** Net cash provided by operating activities $ 5,774 $ 481 Net cash used in capital expenditures (9,772) (23,037) Free cash flow $ (3,998) $ (22,556)   [![IMAX Logo. 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