NEW YORK, Feb. 19, 2020/PRNewswire/ -- IMAX Corporation(NYSE:IMAX) today reported full-year 2019 revenues of $395.7 million, gross profit of $214.2 million, net income of $58.6 million, or $0.95per diluted share, and net income attributable to common shareholders of $46.9 million, or $0.76per diluted share. Adjusted net income attributable to common shareholders for the year ended December 31, 2019was $64.8 million, or $1.05per diluted share. Adjusted EBITDA attributable to common shareholders was $149.3 million.

IMAX Logo. (PRNewsFoto/IMAX Corporation)

HIGHLIGHTS

Company achieved record full-year 2019 box office of $1.1 billion, up 7% over the prior year
Full-year 2019 revenue increased 6% versus 2018 to $396 million, a new record
Full-year 2019 net income attributable to common shareholders increased 105% versus 2018 to $47 millionand full-year 2019 net income increased 74% to $59 million; Adjusted net income attributable to common shareholders increased 12% year-over-year to $65 million
Full-year 2019 earnings per share attributable to common shareholders increased 111% to $0.76; Adjusted net earnings per share attributable to common shareholders increased 15% to $1.05
Company's total commercial multiplex network grew to 1,529 theatres, 73% of which are in international markets

		Three Months Ended					12 Months Ended
		December 31,					December 31,
In millions, except per share data		2019		2018	YoY %		2019		2018	YoY %
					Change					Change
Total Revenue	$	124.3	$	109.0	14%	$	395.7	$	374.4	6%

Gross Margin		62.4		54.6	14%		214.2		207.9	3%
Gross Margin (%)		50.2%		50.1%			54.1%		55.5%

Net Income	$	21.4	$	3.8	461%	$	58.6	$	33.6	74%
Net Income⁽¹⁾		18.2		1.7	973%		46.9		22.8	105%
Adjusted Net Income (1)		21.5		16.4	31%		64.8		57.8	12%
Diluted Net Income Per Share⁽¹⁾	$	0.29	$	0.03	867%	$	0.76	$	0.36	111%
Adj. Net Income Per Share⁽¹⁾	$	0.35	$	0.26	35%	$	1.05	$	0.91	15%

Adjusted EBITDA	$	47.0	$	36.4	29%	$	149.3	$	133.2	12%
Adj. EBITDA Margin (%)		41.7%		37.3%			41.7%		39.6%

⁽¹⁾Attributable to common shareholders

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.

The Company also reported fourth quarter 2019 revenues of $124.3 million, gross profit of $62.4 million, net income of $21.4 million, or $0.35per diluted share, and net income attributable to common shareholders of $18.2 million, or $0.29per diluted share. Adjusted net income attributable to common shareholders for the fourth quarter was $21.5 million, or $0.35per diluted share. Adjusted EBITDA attributable to common shareholders was $47.0 million. For reconciliations of reported results to non-GAAP financial results, and for the definition and reconciliation of Adjusted EBITDA, please see the end of this press release.

"IMAXis among the world's premiere entertainment experiences, and our record 2019 financial results reflect sharp focus, strong execution, and disciplined cost management as we continue to grow our global footprint, diversify our content portfolio, and enhance our pioneering end-to-end technology," said IMAXCEO Richard L. Gelfond.

"Across 2019, our business demonstrated significant strength by setting a number of new records for the Company including annual revenue as well as global, international, and local language box office — underscoring the increasing geographic diversification of our business."

"In a world of nearly infinite entertainment choices, audiences continue to choose IMAX. Immersive entertainment experiences continue to connect fans and drive culture around the globe. We are committed to building on strong demand for The IMAX Experience^®to strengthen our unique position in the entertainment ecosystem and deliver value for our shareholders."

"In terms of the health crisis in China, where movie theatres nationwide remain closed, we are continuing to monitor the situation closely and needless to say the safety of our team and audiences is our top priority," said Mr. Gelfond. "We look forward to circumstances improving and IMAXcontinuing to satisfy China'sstrong demand for premium quality content and entertainment experiences."

Fourth Quarter and Full-Year Segment Results


		Network Business					Theatre Business
		Revenue		Gross Margin	Gross Margin %		Revenue		Gross Margin	Gross Margin %

4Q19	$	43.0	$	24.4	56.8%	$	77.6	$	39.7	51.2%
4Q18	$	41.7		24.7	59.2%		61.9		29.1	47.1%
% change		3.3%		(0.9%)			25.3%		36.4%

YTD 4Q19	$	196.8	$	126.7	64.4%	$	180.5	$	86.8	48.1%
YTD 4Q18	$	184.2		121.6	66.0%		168.4		85.8	50.9%
% change		6.9%		4.1%			7.2%		1.2%

Network Business

Network business revenues increased 6.9% to $196.8 millionin 2019, compared to $184.2 millionin the prior-year period. The strong overall increase in network business revenues was primarily driven by a $76.4 million, or 7.4%, increase in IMAXglobal box office to $1.1 billion.
Total gross margin for the network business was 64.4% in the most recent quarter, compared to 66.0% in the prior-year period. The year-over-year decrease in total gross margin was primarily driven by increased contractual marketing expense.

Theatre Business

Theatre business segment revenues increased 7.2% to $180.5 millionin 2019, compared with $168.4 millionin the prior-year period.
Total gross margin for the theatre business was 48.1% compared to 50.9% in the prior-year period. The year-over-year decline in total gross margin was primarily driven by the geographic and system mix of installations in the first quarter of 2018. The theatre business gross margin increased steadily throughout 2019, landing at 51.2% for the entire segment in the fourth quarter of 2019, and 53.0% specifically for sales and sales type lease theatres.

Cash Balances and Outstanding Debt

Total cash and cash equivalents as of December 31, 2019was $109.5 million. Total bank indebtedness was $18.2 millionas of December 31, 2019and represented a decrease compared to $37.8 millionas of December 31, 2018. As of December 31, 2019, $280.0 millionwas available under the Company's $300.0 millioncredit facility due June 28, 2023.

Share Count and Capital Return

The weighted average diluted shares outstanding at the end of the fourth quarter of 2019 declined 2.7% to 61.5 million, compared to 63.2 million in fourth quarter 2018, due primarily to share repurchase activity. During 2019 a total of 134 thousand shares were repurchased at an average price of $19.76for a total value of approximately $2.7 million. A total of $125.9 millionremains available under the Company's outstanding share repurchase authorization, which expires in June 2020.
During 2019, IMAX Chinarepurchased a total of 8.05 million shares at an average price of $2.38for a total value of approximately $19.2 million.

Supplemental Materials

For more information about the Company's results, please refer to the IMAX Investor Relations website located at 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 www.imax.com/content/investor-relations. 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 information posted on the Company's website may be deemed 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.

Conference Call

The Company will host a conference call today at 4:30PM ETto discuss its fourth quarter and full year 2019 financial results. This call is being webcast by Nasdaq and can be accessed at www.imax.com/content/investor-relations. To access the call via telephone, interested parties in the US and Canadashould dial (888) 204-4368 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 794-4605. The conference ID for the call is 9833755. A replay of the call will be available via webcast at www.imax.com/content/investor-relationsor via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 9833755.

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, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of December 31, 2019, there were 1,624 IMAXtheatre systems (1,529 commercial multiplexes, 14 commercial destinations, 81 institutional) operating in 81 countries and territories. Shares of IMAX China, a subsidiary of IMAX Corp., trade 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. You may also connect with IMAXon Instagram (https://www.instagram.com/imax), Facebook(www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube(www.youtube.com/imaxmovies).

For additional information please contact:

Investors:

IMAX Corporation, New York

Heather Anthony

212-821-0121

hanthony@imax.com

Media:

IMAX Corporation, New York

Mark Jafar

212-821-0155

mjafar@imax.com

Forward-Looking Statements

This earnings 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, references to future capital expenditures (including the amount and nature thereof), business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, 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 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, including the adverse impact of the coronavirus outbreak in China; the performance of IMAX DMR^®films; the signing of 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; 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; general economic, market or business conditions; the failure to convert 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; 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. 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.

PrimaryReporting Groups

The Company has four primary reporting groups identified by nature of product sold or service provided: (1) Network Business, representing variable revenue generated by box-office results and which includes the reportable segments of IMAX DMR and contingent rent from the JRSAs and IMAXsystems segments; (2) Theater Business, representing revenue generated by the sale and installation of theater systems and maintenance services, primarily related to the IMAX Systems and Theater System Maintenance reportable segments, and also includes fixed hybrid revenues and upfront installation costs from the JRSA segment; (3) New Business, which includes home entertainment, and other new business initiatives that are in the development, start-up and/or wind-up phases, and (4) Other; which includes the film post-production and distribution segments and certain IMAXtheaters that the Company owns and operates, camera rentals and other miscellaneous items.

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, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin, free cash flow and return on invested capital 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) and non-recurring charges 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) and non-recurring charges 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 Company is required to maintain a minimum level of "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 the credit agreement includes additional adjustments beyond interest, taxes, depreciation and amortization). EBITDA and Adjusted EBITDA per Credit Facility (each as defined below) should not be construed as substitutes for net income or as better measures of liquidity as determined in accordance with U.S. GAAP. The Company believes that EBITDA, Adjusted EBITDA per Credit Facility and Adjusted EBITDA margin are relevant and useful information widely used by analysts, investors and other interested parties in the Company's industry. Accordingly, the Company is disclosing this information to permit a more comprehensive analysis of its operating performance and to provide additional information with respect to the Company's ability to comply with its credit agreement requirements.

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 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.

Signings and Installations

		12 Months Ended December 31,
	Theater System Signings:	2019		2018
	Full new sales and sales-type lease arrangements	49		57
	New traditional joint revenue sharing arrangements	7		55
	New hybrid joint revenue sharing lease arrangements	48		10
	Total new theaters	104		122
	Upgrades of IMAX theater systems	39		112	⁽¹⁾
	Total theater signings	143		234


		12 Months Ended December 31,
	Theater System Installations:	2019		2018
	Full new sales and sales-type lease arrangements	55	⁽²⁾	63
	New traditional joint revenue sharing arrangements	54		72
	New hybrid joint revenue sharing lease arrangements	20		14
	Total new theaters	129		149
	Upgrades of IMAX theater systems	57		23
	Total theater installations	186		172

		12 Months Ended December 31,
		12 Months Ended December 31,
	Theater Sales Backlog:	2019		2018
	Sales and sales-type lease arrangements	178		177
	Joint revenue sharing arrangements
	Hybrid lease arrangements	140		118
	Traditional arrangements	213	⁽³⁾	269	⁽⁵⁾
	Total theater backlog	531	⁽⁴⁾	564	⁽⁶⁾

		12 Months Ended December 31,
		12 Months Ended December 31,
	Theater Network:	2019		2018
	Commercial Multiplex Theaters:
	Sales and sales-type lease arrangements	659		611
	Traditional joint revenue sharing arrangements	731		674
	Hybrid joint revenue sharing lease arrangements	139		124
	Total Commercial Multiplex Theaters	1,529		1,409

	Commercial Destination Theaters	14		14
	Institutional Theaters	81		82
	Total theater network	1,624		1,505

(1) Includes 105 theater systems related to existing AMC, Regal and Pathé theaters to be upgraded to IMAX with Laser projection systems on new lease terms ranging from 10 to 12 years.
(2) Includes one IMAX digital theater system that was relocated from a previous location. This installation is incremental to the IMAX theater network but full revenue for the digital theater system was not received.
(3) Includes 47 theater systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement.
(4) Includes 153 new laser projection system configurations (144 of which are IMAX with Laser projection system configurations and 9 of which are GT Lasers) and 97 upgrades of existing locations to laser projection system configurations (92 of which are for the IMAX with Laser projection system configurations and 5 of which are GT Lasers).
(5) Includes 46 theater systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement.
(6) Includes 83 new laser projection system configurations (73 of which are IMAX with Laser projection system configurations and 10 of which are GT Lasers) and 100 upgrades of existing locations to laser projection system configurations (98 of which are for the IMAX with Laser projection system configurations and 2 of which are GT Lasers).

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)


		Three Months Ended				12 Months Ended
		December 31,				December 31,
		2019		2018		2019		2018
Revenues
Equipment and product sales		$	61,616	$	46,409	$	118,245	$	106,591
Services			43,570		42,769		188,547		181,740
Rentals			16,286		16,667		77,961		74,472
Finance income			2,807		3,119		10,911		11,598
			124,279		108,964		395,664		374,401
Costs and expenses applicable to revenues
Equipment and product sales			30,513		25,233		63,627		54,853
Services			21,970		21,428		88,175		84,236
Rentals			9,437		7,661		29,690		27,383
			61,920		54,322		181,492		166,472
Gross margin			62,359		54,642		214,172		207,929
Selling, general and administrative expenses			34,189		30,380		123,456		117,477
Research and development			1,486		2,186		5,203		13,728
Amortization of intangibles			1,391		1,249		4,955		4,145
Receivable provisions, net of recoveries			473		1,463		2,430		3,130
Legal arbitration award			-		4,237		-		11,737
Executive transition cost			-		2,994		-		2,994
Exit costs, restructuring charges and associated impairments			-		8,384		850		9,542
Income from operations			24,820		3,749		77,278		45,176
Change in fair value of equity securities			2,026		-		(517)		-
Retirement benefits non-service expense			(257)		(125)		(737)		(499)
Interest income			473		723		2,105		1,844
Interest expense			(987)		(613)		(2,793)		(2,916)
Income before income taxes			26,075		3,734		75,336		43,605
Provision for income taxes			(4,782)		22		(16,768)		(9,518)
Income (loss) from equity-accounted investments, net of tax			59		15		3		(492)
Net income			21,352		3,771		58,571		33,595
Less: net income attributable to non-controlling interests			(3,181)		(2,077)		(11,705)		(10,751)
Net income attributable to common shareholders		$	18,171	$	1,694	$	46,866	$	22,844

Net income per share attributable to common shareholders - basic and diluted:
Net income per share — basic and diluted		$	0.29	$	0.03	$	0.76	$	0.36

Weighted average number of shares outstanding (000's):
	Basic		61,228		61,924		61,310		63,075
	Fully Diluted		61,542		62,127		61,489		63,207

Additional Disclosure:
Depreciation and amortization⁽¹⁾		$	17,987	$	15,453	$	63,487	$	57,437

⁽¹⁾Includes $0.1 million and $0.5 million of amortization of deferred financing costs charged to interest expense for the three months and year ended December 31, 2019, respectively (2018 - $0.1 million and $1.1 million, respectively).

IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In accordance with United States Generally Accepted Accounting Principles
(In thousands of U.S. dollars)

	December 31,
	2019	2018
Assets
Cash and cash equivalents	$ 109,484		$ 141,590
Accounts receivable, net of allowance for doubtful accounts of $5,138 (December 31, 2018 — $3,174)	99,513		93,309
Financing receivables, net of allowance for uncollectible amounts	128,038		127,432
Variable consideration receivable from contracts	40,040		35,985
Inventories	42,989		44,560
Prepaid expenses	10,237		10,294
Film assets	17,921		16,367
Property, plant and equipment	306,849		280,658
Investment in equity securities	15,685		1,022
Other Assets	25,034		17,997
Deferred income taxes	23,905		31,264
Other intangible assets	30,347		34,095
Goodwill	39,027		39,027
Total assets	$ 889,069		$ 873,600

Liabilities
Bank indebtedness	$ 18,229		$ 37,753
Accounts payable	20,414		32,057
Accrued and other liabilities	112,779		97,724
Deferred revenue	94,552		106,709
Total liabilities	245,974		274,243

Commitments and contingencies

Non-controlling interests	5,908		6,439

Shareholders' equity

Capital stock (note 16) common shares — no par value. Authorized — unlimited number 61,362,872 issued and 61,175,852 outstanding (December 31, 2018 — 61,478,168 issued and 61,433,589 outstanding)	423,386		422,455
Less: Treasury stock, 187,020 shares at cost (December 31, 2018 — 44,579)	(4,038)		(916)
Other equity	171,789		179,595
Accumulated deficit	(40,253)		(85,385)
Accumulated other comprehensive loss	(3,190)		(3,588)
Total shareholders' equity attributable to common shareholders	547,694		512,161
Non-controlling interests	89,493		80,757
Total shareholders' equity	637,187		592,918
Total liabilities and shareholders' equity	$ 889,069		$ 873,600

IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In accordance with United States Generally Accepted Accounting Principles
(In thousands of U.S. dollars)

	Years Ended December 31,
	2019		2018

Cash provided by (used in):
Operating Activities
Net income	$	58,571	$	33,595
Adjustments to reconcile net income to cash from operations:
Depreciation and amortization		63,487		57,437
Write-downs, net of recoveries		6,806		11,770
Deferred income taxes		6,762		(6,923)
Stock and other non-cash compensation		23,570		23,723
Unrealized foreign currency exchange loss		33		631
Change in fair value of equity investment		517		—
Loss from equity-accounted investments		730		95
(Gain) loss on non-cash contribution to equity-accounted investees		(733)		397
Investment in film assets		(23,437)		(23,200)
Changes in other non-cash operating assets and liabilities		(45,929)		12,447
Net cash provided by operating activities		90,377		109,972

Investing Activities
Purchase of property, plant and equipment		(7,421)		(13,368)
Investment in joint revenue sharing equipment		(40,489)		(34,810)
Acquisition of other intangible assets		(2,931)		(8,696)
Investment in equity securities		(15,153)		—
Net cash used in investing activities		(65,994)		(56,874)

Financing Activities
Increase in bank indebtedness		35,000		65,000
Repayment of bank indebtedness		(55,000)		(50,667)
Treasury stock repurchased for future settlement of restricted share units		(4,038)		(916)
Settlement of restricted share units and options		(9,795)		(5,249)
Repurchase of common shares, IMAX China		(19,162)		(6,084)
Taxes withheld and paid on employee stock awards vested		(590)		(1,437)
Common shares issued - stock options exercised		2,404		1,017
Repurchase of common shares		(2,659)		(71,479)
Issuance of subsidiary shares to non-controlling interests (net of return on capital)		1,106		7,796
Dividends paid to non-controlling interests		(4,384)		(6,934)
Credit facility amendment fees paid		—		(1,909)
Net cash used in financing activities		(57,118)		(70,862)

Effects of exchange rate changes on cash		630		629

Decrease in cash and cash equivalents during period		(32,106)		(17,135)
Cash and cash equivalents, beginning of period		141,590		158,725
Cash and cash equivalents, end of period	$	109,484	$	141,590

IMAX CORPORATION SELECTED FINANCIAL DATA In accordance with United States Generally Accepted Accounting Principles (in thousands of U.S. dollars)

		Three Months Ended		12 Months Ended
		December 31,			December 31,
		2019	2018		2019	2018
	Revenue
	Network business
	IMAX DMR	$ 26,857	$ 25,207		$ 120,765	$ 110,793
	Joint revenue sharing arrangements – contingent rent	16,228	16,452		75,932	73,371
	IMAX systems – contingent rent	(50)	—		139	—
		43,035	41,659		196,836	184,164
	Theater business
	IMAX systems
	Sales and sales-type leases	54,098	37,887		96,310	88,432
	Ongoing fees and finance income	3,025	3,242		11,613	12,224
	Joint revenue sharing arrangements – fixed fees	4,489	5,885		11,014	9,706
	Theater system maintenance	13,336	12,222		53,151	49,684
	Other theater	2,624	2,651		8,390	8,358
		77,572	61,887		180,478	168,404
	New business	846	770		2,754	5,769
	Other
	Film distribution and film post-production	2,419	3,806		12,210	12,962
	Other	407	842		3,386	3,102
		2,826	4,648		15,596	16,064
	Total revenues	$ 124,279	$ 108,964		$ 395,664	$ 374,401


	Gross Margin
	Network business
	IMAX DMR⁽¹⁾	$ 16,990	$ 15,250		$ 78,592	$ 72,773
	Joint revenue sharing arrangements – contingent rent⁽¹⁾	7,498	9,415		47,935	48,856
	IMAX systems – contingent rent	(50)	—		139	—
		24,438	24,665		126,666	121,629
	Theater business
	IMAX systems⁽¹⁾
	Sales and sales-type leases	28,689	19,338		47,118	47,986
	Ongoing fees and finance income	2,977	3,194		11,422	12,033
	Joint revenue sharing arrangements – fixed fees⁽¹⁾	1,312	1,206		2,613	1,982
	Theater system maintenance	5,964	4,702		23,010	21,991
	Other theater	803	707		2,624	1,806
		39,745	29,147		86,787	85,798
	New business	665	(489)		2,106	(350)
	Other
	Film distribution and film post-production⁽¹⁾	(1,745)	1,443		(1,262)	1,763
	Other	(744)	(124)		(125)	(911)
		(2,489)	1,319		(1,387)	852
	Total segment margin	$ 62,359	$ 54,642		$ 214,172	$ 207,929

⁽¹⁾	IMAX DMR segment margins include marketing costs of $4.8 million and $22.5 million for the three months and year ended December 31, 2019, respectively (2018 - $2.8 million and $16.5 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $3.4 million and $4.5 million for the three months and year ended December 31, 2019, respectively (2018 - $1.4 million and $3.6 million, respectively). IMAX system segment margins include marketing and commission costs of $0.5 million and $2.0 million for the three months and year ended December 31, 2019, respectively (2018 - $1.5 million and $2.4 million). Film distribution and post production segment margins include marketing recovery of $0.3 million and expense of $0.4 million for the three months and year ended December 31, 2019, respectively (2018 - $0.2 million and expense of $2.2 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, EBITDA, adjusted EBITDA per Credit Facility, free cash flow and return on invested capital 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) and non-recurring charges 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, its stock-based compensation (net of any related tax impact) and non-recurring charges 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 Company is required to maintain a minimum level of "EBITDA", as such term is defined in the Company's credit agreement (and which is referred to herein as "Adjusted EBITDA per Credit Facility" or "Adjusted EBITDA per Credit Facility excluding Marvel's Inhumans", as the credit agreement includes additional adjustments beyond interest, taxes, depreciation and amortization). EBITDA and Adjusted EBITDA per Credit Facility (each as defined below) should not be construed as substitutes for net income or as better measures of liquidity as determined in accordance with U.S. GAAP. The Company believes that EBITDA and Adjusted EBITDA per Credit Facility excluding Marvel's Inhumansare relevant and useful information widely used by analysts, investors and other interested parties in the Company's industry.

			Three Months Ended			Three Months Ended			12 Months Ended			12 Months Ended
			December 31, 2019			December 31, 2018			December 31, 2019⁽¹⁾			December 31, 2018⁽¹⁾

	Net income	$	21,352		$	3,771		$	58,571		$	33,595
	Add (subtract):		-
	Provision for income taxes		4,782			(22)			16,768			9,518
	Interest expense, net of interest income		381			(110)			423			1,072
	Depreciation and amortization, including film asset amortization		17,987			15,453			63,487			57,437
	EBITDA	$	44,502		$	19,092		$	139,249		$	101,622
	Stock and other non-cash compensation		6,173			5,483			23,570			23,723
	Change in fair value of equity investment		(2,026)			—			517			—
	Write-downs, net of recoveries including asset impairments and receivable provisions		3,822			2,797			6,806			5,338
	Exit costs, restructuring charges and associated impairments		—			8,384			850			9,542
	Legal arbitration award		—			4,237			-			11,737
	Executive transition costs		—			2,994			-			2,994
	(Income) loss from equity accounted investments		(59)			(15)			(3)			492
	Adjusted EBITDA before non-controlling interests	$	52,412		$	42,972		$	170,989		$	155,448
	Adjusted EBITDA attributable to non-controlling interests⁽²⁾		(5,457)			(6,593)			(21,661)			(22,220)
	Adjusted EBITDA per Credit Facility	$	46,955		$	36,379		$	149,328		$	133,228
	Adjusted revenues attributable to common shareholders⁽³⁾	$	112,635		$	97,573		$	358,053		$	336,723
	Adjusted EBITDA margin		41.7	%		37.3	%		41.7	%		39.6	%
_____________
(1)	Senior Secured Net Leverage Ratio calculated using twelve months ended Adjusted EBITDA per Credit Facility.
(2)	The Adjusted EBITDA per Credit Facility calculation specified for purpose of the minimum Adjusted EBITDA covenant excludes the reduction in Adjusted EBITDA from the Company's non-controlling interests.

(3)		Three months ended December 31, 2019					Three months ended December 31, 2018				12 months ended December 31, 2019				12 months ended December 31, 2018
	Total revenues				$	124,279			$	108,964			$	395,664			$	374,401
	Greater China revenues		$	38,481			$	35,553			$	124,294			$	117,520
	Non-controlling interest ownership percentage⁽⁴⁾			30.26%				32.04%				30.26%				32.06%
	Deduction for non-controlling interest share of revenues					(11,644)				(11,391)				(37,611)				(37,678)
	Adjusted revenues attributable to common shareholders				$	112,635			$	97,573			$	358,053			$	336,723

(4)	Weighted average ownership percentage for change in non-controlling interest share

IMAX CORPORATION Adjusted Net Income and Adjusted Diluted Per Share Calculations (In thousands of U.S. dollars) (Unaudited)

		Three Months Ended		Three Months Ended
		December 31, 2019		December 31, 2018
		Net Income	Diluted EPS	Net Income	Diluted EPS
Reported net income		$ 21,352	$ 0.35	$ 3,771	$ 0.06
Adjustments:			—
Stock-based compensation		5,914	0.10	5,046	0.08
Exit costs, restructuring charges and associated impairments		—	—	8,384	0.13
Legal arbitration award		—	—	4,237	0.07
Executive transition costs		—	—	2,994	0.05
Change in fair value of equity investment		(2,026)	(0.03)	—	—
Impact of enactment of U.S. Tax Act		—	—	—	—
Tax impact on items listed above		(1,095)	(0.02)	(4,586)	(0.07)
Adjusted net income		24,145	0.40	19,846	0.32
Net income attributable to non-controlling interests⁽¹⁾		(3,181)	(0.05)	(2,077)	(0.04)
Stock-based compensation (net of tax of less than $0.1 million and less than $0.1 million, respectively)⁽¹⁾		(112)	(0.01)	(115)	—
Exit costs, restructuring charges and associated impairments (net of tax of $nil and $0.4 million, respectively)⁽¹⁾		—	—	(1,262)	(0.02)
Change in fair value of equity investment		617	0.01	—	—
Adjusted net income attributable to common shareholders		$ 21,469	$ 0.35	$ 16,392	$ 0.26

Weighted average diluted shares outstanding			61,542		62,127


(1) Reflects amounts attributable to non-controlling interests.


	12 Months Ended			12 Months Ended
		December 31, 2019		December 31, 2018
		Net Income	Diluted EPS	Net Income	Diluted EPS
Reported net income		$ 58,571	$ 0.95	$ 33,595	$ 0.53
Adjustments:
Stock-based compensation		22,830	0.37	22,211	0.35
Exit costs, restructuring charges and associated impairments		850	0.01	9,542	0.15
Legal arbitration award		—	—	11,737	0.19
Executive transition costs		—	—	2,994	0.05
Change in fair value of equity investment		517	0.01	—	—
Impact of enactment of U.S Tax Cut and Jobs Act		—	—	—	—
Tax impact on items listed above		(5,614)	(0.09)	(9,873)	(0.16)
Adjusted net income		77,154	1.25	70,206	1.11
Net income attributable to non-controlling interests⁽¹⁾		(11,705)	(0.19)	(10,751)	(0.17)
Stock-based compensation (net of tax of $0.1 million and $0.1 million, respectively)⁽¹⁾		(480)	(0.01)	(394)	(0.01)
Exit costs, restructuring charges and associated impairments (net of tax of $nil and $0.4 million, respectively)⁽¹⁾		—	—	(1,262)	(0.02)
Change in fair value of equity investment		(184)	—	—	—
Adjusted net income attributable to common shareholders		$ 64,785	$ 1.05	$ 57,799	$ 0.91

Weighted average diluted shares outstanding			61,489		63,207


(1) Reflects amounts attributable to non-controlling interests.

Return on Invested Capital:

Return on Invested Capital("ROIC") is not defined under U.S. generally accepted accounting principles. Therefore, ROIC should not be considered a substitute for other measures prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines ROIC as earnings before interest after taxes (before non-controlling interests) divided by total invested capital (total equity plus total debt less goodwill and other intangible assets). The Company believes ROIC is meaningful to investors as it focuses on shareholder value creation. A reconciliation of ROIC is presented in the table below:

		Twelve Months Ended December 31,
	2019		2018

Income from operations	$	77,278	$	45,176
Provision for income taxes		(16,768)		(9,518)
EBIAT	$	60,510	$	35,658

Total shareholders' equity	$	637,187	$	592,918
Total bank indebtedness		18,229		37,753
Less: Goodwill		39,027		39,027
Less: Other intangible assets		30,347		34,095
Total Invested Capital	$	586,042	$	557,549

Return on Invested Capital (Non-GAAP measure)		10.33%		6.40%

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:

		Three Months Ended		12 Months Ended
		December 31, 2019		December 31, 2019

Net cash provided by operating activities		$	23,119	$	90,376
Net cash used in investing activities			(12,340)		(65,994)
	Free cash flow	$	10,779	$	24,382

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SOURCE IMAX Corporation