HIGHLIGHTS
- Company achieved fourth-quarter global box office of
$278 million , up 13% over the prior year. IMAX domestic box office increased 17% in the second half of 2017, compared to an industry decline of 6%.- Installed 165 new IMAX® theater systems during 2017, bringing the Company's total commercial multiplex network to 1,272 theaters, 68% of which are in international markets.
- Company signed agreements for 170 new theater systems in 2017, resulting in year-end backlog of 494 new systems, plus five upgrades.
- SG&A, excluding stock-based compensation, was down 5% year-over-year to
$90 million , following the Company's cost-reduction initiative. - Over the four-day Presidents' Day and
Chinese New Year weekend, the Company achieved record February box office of$53 million , led by the release of Marvel Studios' Black Panther and three local-language titles released inChina .
Adjusted net income attributable to common shareholders for the fourth quarter was
"We saw tangible improvements to box office performance and operating leverage in the second half last year, largely the result of our implementing several initiatives aimed at refining our programming strategy and containing costs," said
Fourth-Quarter 2017 Results
U.S. Tax Cuts and Jobs Act (Tax Act)
In the fourth quarter of 2017,
Network Update
During the quarter, the Company installed 70 theaters, of which 69 were for new theater locations and one was an upgrade. The total
Box Office Update
Gross box office from IMAX DMR® films increased by 13% to
Please reference the chart below for a breakout of box office and per-screen averages on a regional basis:
Box Office (M's) |
Per Screen Average (000's) |
||||
Q4 2017 |
Q4 2016 |
Q4 2017 |
Q4 2016 |
||
Global |
$ 278.1 |
$ 246.5 |
$ 227.0 |
$ 233.3 |
|
Domestic |
116.9 |
101.0 |
286.1 |
255.4 |
|
Greater China |
63.3 |
60.0 |
131.1 |
168.4 |
|
Other Intl. |
97.9 |
85.5 |
290.2 |
280.5 |
|
FY 2017 |
FY 2016 |
FY 2017 |
FY 2016 |
||
Global |
$ 976.5 |
$ 965.7 |
$ 838.4 |
$ 963.8 |
|
Domestic |
357.8 |
368.5 |
883.4 |
934.9 |
|
Greater China |
290.8 |
295.7 |
666.1 |
932.3 |
|
Other Intl. |
327.9 |
301.5 |
1,014.7 |
1,037.2 |
Fourth-Quarter Segment Results
Network Business
- Network business revenue was
$53.8 million in the quarter, compared with$47.6 million in the prior-year period. Margins for the network business were 64.3% in the most recent quarter, compared to 65.8% in the prior-year period. - IMAX DMR revenues were
$31.7 million in the fourth quarter of 2017, compared to$27.6 million in the fourth quarter of 2016. Gross margin for the IMAX DMR segment was 60.6%, compared to 60.8% in the prior-year comparative period. - Revenue from joint revenue-sharing arrangements was
$20.7 million in the quarter, compared with$18.5 million in the prior-year comparative period. Gross margin for joint revenue-sharing arrangements was 67.8%, compared to 70.7% in the prior-year comparative period.
Theater Business
- Theater business segment revenue was
$55.5 million in the quarter, compared with$53.0 million in the prior-year comparative period. - The Company's gross margin on full, new sales and sales-type leases were 68.7% compared with 63.7% in the year-ago period, with the increase primarily a result of the deal-types for the systems recognized in the respective periods.
- The Company expects to install approximately 145 new
IMAX theater systems in 2018.
Fourth-Quarter Consolidated Results
The gross margin across all segments in the fourth quarter of 2017 was
Full-Year 2017 Results
Full-year 2017 revenue was
The full-year systems installation total was 170 theater systems, of which 5 were upgrades, compared with 182 and 16, respectively, in the prior-year period. Continuing to build upon the Company's record signings momentum from 2016,
"As we look to 2018, our primary focus is on expanding the earnings power of our core business," said Gelfond. "We believe the combination of the initiatives we implemented last year, coupled with a growing international presence and reduced spend on non-core businesses and R&D, should help facilitate operating leverage in the future. Our overarching efforts this year are aimed at growing the network, controlling costs and generating more box office across our theaters. And I am pleased to say that 2018 is off to a solid start. We recently achieved record box office in February, led by Black Panther, which did
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. In addition, the Company maintains a Twitter account: @IMAX_Investors. The Company intends to use Twitter to disclose the box office information, as well as other information that may be of interest to the Company's investor community.
The information posted on the Company's website and/or via its Twitter account may be deemed material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website and its Twitter account in addition to the Company's press releases,
Conference Call
The Company will host a conference call today at
About
IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D Experience®, The IMAX Experience®, IMAX Is Believing® and
This press release contains forward looking statements that are based on
For additional information please contact:
Investors: Michael K. Mougias 212-821-0187
Business Media: Sloane & Company, New York Whit Clay 212-446-1864 |
Media: IMAX Corporation, New York Ann Sommerlath 212-821-0155
Entertainment Media: Principal Communications Group, Los Angeles Melissa Zuckerman/Paul Pflug 323-658-1555 |
Additional Information |
||||||||
IMAX Theater Information |
||||||||
December 31, 2017 |
||||||||
Years Ended December 31, |
||||||||
2017 |
2016 |
|||||||
Theater System Signings: |
||||||||
Full new sales and sales-type lease arrangements |
85 |
61 |
||||||
New traditional joint revenue sharing arrangements |
35 |
246 |
||||||
New hybrid joint revenue sharing arrangements |
50 |
7 |
||||||
Total new theaters |
170 |
314 |
||||||
Upgrades of IMAX theater systems |
7 |
5 |
||||||
Total Theater Signings |
177 |
319 |
||||||
Years Ended December 31, |
||||||||
2017 |
2016 |
|||||||
Theater System Installations: |
||||||||
Full new sales and sales-type lease arrangements |
60 |
56 |
||||||
New traditional joint revenue sharing arrangements |
86 |
76 |
||||||
New hybrid joint revenue sharing arrangements |
19 |
33 |
||||||
Short-term operating lease arrangement |
- |
1 |
||||||
Total new theaters |
165 |
166 |
||||||
Upgrades of IMAX theater systems |
5 |
16 |
||||||
Total Theater Installations |
170 |
182 |
||||||
As of December 31, |
||||||||
Theater Backlog: |
2017 |
2016 |
||||||
New sales and sales-type lease arrangements |
161 |
140 |
||||||
New joint revenue sharing arrangements |
||||||||
Hybrid arrangements |
121 |
92 |
||||||
Traditional arrangements |
212 |
263 |
||||||
Total new theaters |
494 |
495 |
||||||
Upgrades of IMAX theater systems |
5 |
3 |
||||||
Total Theater Backlog |
499 |
498 |
||||||
As of December 31, |
||||||||
Theater Network: |
2017 |
2016 |
||||||
Commercial Multiplex Theaters: |
||||||||
Sales and sales-type lease arrangements |
525 |
467 |
||||||
Joint revenue sharing arrangements |
747 |
640 |
||||||
Total Commercial Multiplex Theaters |
1,272 |
1,107 |
||||||
Commercial Destination |
12 |
16 |
||||||
Institutional |
86 |
92 |
||||||
Total Theater Network |
1,370 |
1,215 |
Additional Information (continued)
2018 DMR Films:
To date, the Company has announced the following 31 DMR titles to be released in 2018 to the
(1) The Commuter: The
(2) 12 Strong: The
(3) Padmaavat: The
(4) Maze Runner: The Death Cure: The
(5) Fifty Shades Freed: The
(6) Monster Hunt 2: The
(7) Detective
(8)
(9) Marvel's Black Panther: The
(10)
(11) A Wrinkle in Time: The
(12) Tomb Raider: The
(13) Pacific Rim Uprising: The
(14) Ready Player One: The
(15) Rampage: The
(16) Avengers: Infinity War: The
(17) Deadpool 2: The
(18) Solo: A Star Wars Story: The
(19) The Incredibles 2: The
(20) Jurassic World: Fallen Kingdom: The
(21) Ant-Man and the Wasp: The
(22) Mission Impossible: Fallout: The
(23) Predator: The
(24) The Darkest Minds: The
(25)
(26) Venom: The
(27) X-Men: Dark Phoenix: The
(28) Fantastic Beasts: The Crimes of Grindelwald: The
(29) Ralph Breaks the Internet: Wreck-It-Ralph 2: The
(30) Alita: Battle Angel: An
(31) Aquaman: The
In addition, the Company in conjunction with
IMAX CORPORATION |
||||||||||||
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 |
Years Ended |
|||||||||||
Ended December 31, |
Ended December 31, |
|||||||||||
2017 |
2016 |
2017 |
2016 |
|||||||||
Revenues |
||||||||||||
Equipment and product sales |
$ |
39,700 |
$ |
41,318 |
$ |
103,294 |
$ |
122,382 |
||||
Services |
62,330 |
44,009 |
195,594 |
166,862 |
||||||||
Rentals |
21,138 |
18,777 |
72,281 |
77,315 |
||||||||
Finance income |
2,384 |
2,509 |
9,598 |
9,500 |
||||||||
Other |
- |
300 |
- |
1,275 |
||||||||
125,552 |
106,913 |
380,767 |
377,334 |
|||||||||
Costs and expenses applicable to revenues |
||||||||||||
Equipment and product sales |
15,819 |
20,605 |
48,172 |
69,680 |
||||||||
Services |
40,951 |
25,263 |
120,629 |
83,780 |
||||||||
Rentals |
8,634 |
5,719 |
26,720 |
21,086 |
||||||||
Other |
- |
- |
- |
110 |
||||||||
65,404 |
51,587 |
195,521 |
174,656 |
|||||||||
Gross margin |
60,148 |
55,326 |
185,246 |
202,678 |
||||||||
Selling, general and administrative expenses |
25,329 |
32,039 |
110,400 |
124,745 |
||||||||
(including share-based compensation expense of $4.2 million and $20.4 million for the three months and year ended December 31, 2017, respectively (2016 - expense of $8.0 million and $30.5 million, respectively)) |
||||||||||||
Research and development |
6,217 |
4,712 |
20,855 |
16,315 |
||||||||
Amortization of intangibles |
837 |
542 |
3,019 |
2,079 |
||||||||
Receivable provisions, net of recoveries |
559 |
323 |
2,647 |
954 |
||||||||
(Impairment recoveries) asset impairments |
- |
(1,000) |
1,225 |
417 |
||||||||
Exit costs, restructuring charges and associated impairments |
2,479 |
- |
16,174 |
- |
||||||||
Income from operations |
24,727 |
18,710 |
30,926 |
58,168 |
||||||||
Interest income |
266 |
273 |
1,027 |
1,490 |
||||||||
Interest expense |
(524) |
(480) |
(1,942) |
(1,805) |
||||||||
Income from operations before income taxes |
24,469 |
18,503 |
30,011 |
57,853 |
||||||||
Provision for income taxes |
(15,905) |
(6,577) |
(16,790) |
(16,212) |
||||||||
Gain (loss) from equity-accounted investments, net of tax |
134 |
150 |
(703) |
(2,321) |
||||||||
Net income |
8,698 |
12,076 |
12,518 |
39,320 |
||||||||
Less: net income attributable to non-controlling interests |
(3,867) |
(3,131) |
(10,174) |
(10,532) |
||||||||
Net income attributable to common shareholders |
$ |
4,831 |
$ |
8,945 |
$ |
2,344 |
$ |
28,788 |
||||
Net income per share attributable to common shareholders - basic and diluted: |
||||||||||||
Net income per share – basic |
$ |
0.08 |
$ |
0.14 |
$ |
0.04 |
$ |
0.43 |
||||
Net income per share – diluted |
$ |
0.08 |
$ |
0.13 |
$ |
0.04 |
$ |
0.42 |
||||
Weighted average number of shares outstanding (000's): |
||||||||||||
Basic |
64,658 |
66,152 |
65,380 |
67,575 |
||||||||
Fully Diluted |
64,790 |
66,950 |
65,540 |
68,263 |
||||||||
Additional Disclosure: |
||||||||||||
Depreciation and amortization(1) |
$ |
27,040 |
$ |
12,306 |
$ |
66,807 |
$ |
46,485 |
||||
(1) Includes $0.2 million and $0.6 million of amortization of deferred financing costs charged to interest expense for the three months and year ended December 31, 2017 (2016 - $0.1 million and $0.5 million, respectively). |
IMAX CORPORATION |
|||||
CONSOLIDATED BALANCE SHEETS |
|||||
In accordance with United States Generally Accepted Accounting Principles |
|||||
(In thousands of U.S. dollars) |
|||||
As at December 31, |
|||||
2017 |
2016 |
||||
Assets |
|||||
Cash and cash equivalents |
$ |
158,725 |
$ |
204,759 |
|
Accounts receivable, net of allowance for doubtful accounts of $1,613 (December 31, 2016 — $1,250) |
130,546 |
96,349 |
|||
Financing receivables |
129,494 |
122,125 |
|||
Inventories |
30,788 |
42,121 |
|||
Prepaid expenses |
7,549 |
6,626 |
|||
Film assets |
5,026 |
16,522 |
|||
Property, plant and equipment |
276,781 |
245,415 |
|||
Other assets |
26,757 |
33,195 |
|||
Deferred income taxes |
30,708 |
20,779 |
|||
Other intangible assets |
31,211 |
30,416 |
|||
Goodwill |
39,027 |
39,027 |
|||
Total assets |
$ |
866,612 |
$ |
857,334 |
|
Liabilities |
|||||
Bank indebtedness |
$ |
25,357 |
$ |
27,316 |
|
Accounts payable |
24,235 |
19,990 |
|||
Accrued and other liabilities |
100,140 |
93,208 |
|||
Deferred revenue |
113,270 |
90,266 |
|||
Total liabilities |
263,002 |
230,780 |
|||
Commitments and contingencies |
|||||
Non-controlling interests |
1,353 |
4,980 |
|||
Shareholders' equity |
|||||
Capital stock common shares — no par value. Authorized — unlimited number. |
|||||
64,902,201 — issued and 64,695,550 — outstanding (December 31, 2016 — 66,224,467 — issued and 66,159,902 — outstanding) |
445,797 |
439,213 |
|||
Less: Treasury stock, 206,651 shares at cost (December 31, 2016 — 64,565) |
(5,133) |
(1,939) |
|||
Other equity |
175,300 |
177,304 |
|||
Accumulated deficit |
(87,592) |
(47,366) |
|||
Accumulated other comprehensive loss |
(626) |
(5,200) |
|||
Total shareholders' equity attributable to common shareholders |
527,746 |
562,012 |
|||
Non-controlling interests |
74,511 |
59,562 |
|||
Total shareholders' equity |
602,257 |
621,574 |
|||
Total liabilities and shareholders' equity |
$ |
866,612 |
$ |
857,334 |
IMAX CORPORATION |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
In accordance with United States Generally Accepted Accounting Principles |
||||||||
(In thousands of U.S. dollars) |
||||||||
Years Ended December 31, |
||||||||
2017 |
2016 |
|||||||
Cash provided by (used in): |
||||||||
Operating Activities |
||||||||
Net income |
$ |
12,518 |
$ |
39,320 |
||||
Adjustments to reconcile net income to cash from operations: |
||||||||
Depreciation and amortization |
66,807 |
46,485 |
||||||
Write-downs, net of recoveries |
29,568 |
5,940 |
||||||
Change in deferred income taxes |
(4,017) |
4,940 |
||||||
Stock and other non-cash compensation |
24,075 |
31,586 |
||||||
Unrealized foreign currency exchange (gain) loss |
(502) |
462 |
||||||
Loss from equity-accounted investments |
306 |
2,685 |
||||||
Gain on non-cash contribution to equity-accounted investees |
397 |
(364) |
||||||
Investment in film assets |
(34,645) |
(22,308) |
||||||
Changes in other non-cash operating assets and liabilities |
(9,141) |
(30,874) |
||||||
Net cash provided by operating activities |
85,366 |
77,872 |
||||||
Investing Activities |
||||||||
Purchase of property, plant and equipment |
(24,143) |
(15,278) |
||||||
Investment in joint revenue sharing equipment |
(42,634) |
(42,910) |
||||||
Investment in new business ventures |
(1,606) |
(1,911) |
||||||
Acquisition of other intangible assets |
(5,214) |
(4,787) |
||||||
Net cash used in investing activities |
(73,597) |
(64,886) |
||||||
Financing Activities |
||||||||
Repayment of bank indebtedness |
(2,000) |
(2,000) |
||||||
Repurchase of common shares |
(46,140) |
(116,518) |
||||||
Settlement of restricted share units and options |
(20,331) |
(17,889) |
||||||
Exercise of stock options |
16,668 |
13,113 |
||||||
Treasury stock repurchased for future settlement of restricted share units |
(5,133) |
(1,996) |
||||||
Taxes withheld and paid on employee stock awards vested |
(600) |
(528) |
||||||
Taxes paid on secondary sales and repatriation dividend |
- |
(2,443) |
||||||
Issuance of subsidiary shares to non-controlling interests - private offering |
- |
2,479 |
||||||
Net cash used in financing activities |
(57,536) |
(125,782) |
||||||
Effects of exchange rate changes on cash |
(267) |
106 |
||||||
Decrease in cash and cash equivalents during year |
(46,034) |
(112,690) |
||||||
Cash and cash equivalents, beginning of year |
204,759 |
317,449 |
||||||
Cash and cash equivalents, end of year |
$ |
158,725 |
$ |
204,759 |
SELECTED FINANCIAL DATA
In accordance with United States Generally Accepted Accounting Principles
(in thousands of U.S. dollars)
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
Three Months |
Years Ended |
||||||||||||||
Ended December 31, |
Ended December 31, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
Revenue(1) |
|||||||||||||||
Network Business |
|||||||||||||||
IMAX DMR |
$ |
31,717 |
$ |
27,636 |
$ |
108,853 |
$ |
106,403 |
|||||||
Joint revenue sharing arrangements - contingent rent |
20,741 |
18,506 |
70,444 |
73,500 |
|||||||||||
IMAX systems - contingent rent |
1,317 |
1,466 |
3,890 |
4,644 |
|||||||||||
53,775 |
47,608 |
183,187 |
184,547 |
||||||||||||
Theater Business |
|||||||||||||||
IMAX systems |
|||||||||||||||
Sales and sales-type leases |
31,675 |
31,002 |
79,853 |
89,525 |
|||||||||||
Ongoing fees and finance income |
2,650 |
2,551 |
10,494 |
11,359 |
|||||||||||
Joint revenue sharing arrangements – fixed fees |
5,582 |
5,967 |
10,118 |
17,913 |
|||||||||||
Theater system maintenance |
11,924 |
10,399 |
45,383 |
40,430 |
|||||||||||
Other theater |
3,696 |
3,100 |
9,145 |
10,888 |
|||||||||||
55,527 |
53,019 |
154,993 |
170,115 |
||||||||||||
New Business |
13,014 |
25 |
24,522 |
626 |
|||||||||||
Other |
|||||||||||||||
Film distribution and post-production |
1,803 |
4,346 |
13,172 |
14,127 |
|||||||||||
Other |
1,433 |
1,915 |
4,893 |
7,919 |
|||||||||||
3,236 |
6,261 |
18,065 |
22,046 |
||||||||||||
Total |
$ |
125,552 |
$ |
106,913 |
$ |
380,767 |
$ |
377,334 |
|||||||
Gross margin |
|||||||||||||||
Network Business |
|||||||||||||||
IMAX DMR |
$ |
19,211 |
$ |
16,798 |
$ |
71,789 |
$ |
69,196 |
|||||||
Joint revenue sharing arrangements – contingent rent |
14,066 |
13,085 |
47,337 |
54,705 |
|||||||||||
IMAX systems – contingent rent |
1,317 |
1,466 |
3,890 |
4,644 |
|||||||||||
34,594 |
31,349 |
123,016 |
128,545 |
||||||||||||
Theater Business |
|||||||||||||||
IMAX systems |
|||||||||||||||
Sales and sales-type leases |
19,449 |
17,993 |
47,639 |
44,788 |
|||||||||||
Ongoing fees and finance income |
2,513 |
2,381 |
10,095 |
10,660 |
|||||||||||
Joint revenue sharing arrangements – fixed fees
|
1,462 |
2,036 |
2,349 |
5,132 |
|||||||||||
Theater system maintenance |
4,969 |
3,453 |
18,275 |
13,660 |
|||||||||||
Other theater |
883 |
937 |
1,965 |
1,930 |
|||||||||||
29,276 |
26,800 |
80,323 |
76,170 |
||||||||||||
New Business |
(2,744) |
(1,338) |
(16,176) |
(2,199) |
|||||||||||
Other |
|||||||||||||||
Film distribution and post-production |
(744) |
(2,210) |
(1,006) |
(180) |
|||||||||||
Other |
(234) |
725 |
(911) |
342 |
|||||||||||
(978) |
(1,485) |
(1,917) |
162 |
||||||||||||
Total |
$ |
60,148 |
$ |
55,326 |
$ |
185,246 |
$ |
202,678 |
|||||||
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, adjusted net income attributable to common shareholders per diluted share, EBITDA, Adjusted EBITDA per Credit Facility and Adjusted EBITDA per Credit Facility excluding "Marvel's Inhumans" 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 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. Without the presentation of these adjusted presentation measures the Company believes it 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 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). Adjusted EBITDA per Credit Facility and Adjusted EBITDA per Credit Facility excluding "Marvel's Inhumans" (each as defined below) should not be construed as substitutes for net income, operating income or other operating performance measures that are determined in accordance with U.S. GAAP. The Company believes that EBITDA, Adjusted EBITDA per Credit Facility and Adjusted EBITDA per Credit Facility excluding Marvel's Inhumans are relevant and useful information widely used by analysts, investors and other interested parties in the Company's industry.
Quarter Ended |
Year Ended |
Year Ended |
||||||||
December 31, 2017 |
December 31, 2017 |
(1) |
December 31, 2016 |
|||||||
(In thousands of U.S. Dollars) |
||||||||||
Net income |
$ |
8,698 |
$ |
12,518 |
$ |
39,320 |
||||
Add (subtract): |
||||||||||
Provision for income taxes |
15,905 |
16,790 |
16,212 |
|||||||
Interest expense, net of interest income |
258 |
915 |
315 |
|||||||
Depreciation and amortization, including film asset amortization |
26,900 |
66,245 |
45,953 |
|||||||
EBITDA |
51,761 |
96,468 |
101,800 |
|||||||
Exit costs, restructuring charges and associated impairments |
2,479 |
16,174 |
||||||||
Stock and other non-cash compensation |
4,802 |
23,718 |
31,586 |
|||||||
Write-downs, net of recoveries including asset impairments and receivable provisions |
3,948 |
24,015 |
5,940 |
|||||||
(Gain) loss from equity accounted investments |
(134) |
703 |
2,321 |
|||||||
Adjusted EBITDA before non-controlling interests |
62,856 |
161,078 |
141,647 |
|||||||
Adjusted EBITDA attributable to non-controlling interests(2) |
(7,055) |
(22,927) |
(19,743) |
|||||||
Adjusted EBITDA per Credit Facility |
$ |
55,801 |
$ |
138,151* |
$ |
121,904 |
||||
Adjusted EBITDA per Credit Facility, excluding impact from "Marvel's Inhumans" |
$ |
42,361 |
$ |
126,158* |
$ |
121,904 |
||||
Adjusted revenues attributable to common shareholders (3) |
$ |
113,285 |
$ |
340,460 |
$ |
339,868 |
||||
Adjusted EBITDA margin, excluding impact from "Marvel's Inhumans" |
37.4 |
% |
37.1 |
% |
35.9 |
% |
||||
* |
Adjusted EBITDA per Credit Facility of $138.2 million includes the impact of the Company's investment in "Marvel's Inhumans", which resulted in a $13.0 million loss. However, as permitted by the Credit Facility, this loss was offset by addbacks of $13.3 million and $11.7 million for amortization and impairment charges, respectively, relating to the investment, the net effect of which was to increase Adjusted EBITDA per Credit Facility by $12.0 million. This investment represents the Company's first foray into a commercial television property, and therefore the Adjusted EBITDA per Credit Facility metric presented above may not be reflective of the Company's typical operational activity. Further, the Company does not yet know whether it will make similar investments in the future. As a result, the Company is also presenting Adjusted EBITDA per Credit Facility excluding the impact of "Marvel's Inhumans" to better facilitate comparisons to prior and future periods. |
|||||||||
__________________ |
||||||||||
(1) |
Ratio of funded debt calculated using twelve months ended EBITDA. |
|||||||||
(2) |
The Adjusted EBITDA calculation specified for purpose of the minimum Adjusted EBITDA covenant excludes the reduction in Adjusted EBITDA from the Company's non-controlling interests. |
(3) |
Quarter Ended |
Year Ended |
Year Ended |
||||||||||||||
December 31, 2017 |
December 31, 2017 |
December 31, 2016 |
|||||||||||||||
Total revenues |
$ |
125,552 |
$ |
380,767 |
$ |
377,334 |
|||||||||||
Greater China revenues |
$ |
38,339 |
$ |
126,474 |
$ |
118,532 |
|||||||||||
Non-controlling interest ownership percentage (4) |
32.00% |
31.87% |
31.61% |
||||||||||||||
Deduction for non-controlling interest share of revenues |
(12,268) |
(40,307) |
(37,466) |
||||||||||||||
Adjusted revenues attributable to common shareholders |
$ |
113,285 |
$ |
340,460 |
$ |
339,868 |
|||||||||||
(4) |
Weighted average ownership percentage for change in non-controlling interest share |
OTHER INFORMATION
(in thousands of U.S. dollars, except per share amounts)
Adjusted Net Income and Adjusted Diluted Per Share Calculations – Quarter Ended December 31, 2017 vs. 2016:
The Company reported net income of
Net income for the quarter ended December 31, 2017 includes a
Adjusted net income, which consists of net income excluding the impact of stock-based compensation, exit costs, restructuring charges and associated impairments, the related tax impact of these adjustments, and tax charge from the provisional re-measurement of U.S. deferred tax assets and liabilities given changes enacted by the Tax Act was
The Company reported net income attributable to common shareholders of
Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding the impact of stock-based compensation, exit costs, restructuring charges and associated impairments, the related tax impact of these adjustments, and tax charge from the provisional re-measurement of U.S. deferred tax assets and liabilities given changes enacted by the Tax Act, was
A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, 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:
Quarter Ended December 31, |
||||||||||||||
2017 |
2016 |
|||||||||||||
Net Income |
Diluted EPS |
Net Income |
Diluted EPS |
|||||||||||
Reported net income |
$ |
8,698 |
$ |
0.13 |
$ |
12,076 |
$ |
0.18 |
(1) |
|||||
Adjustments: |
||||||||||||||
Stock-based compensation |
4,857 |
0.08 |
8,038 |
0.13 |
||||||||||
Exit costs, restructuring charges and associated impairments |
2,479 |
0.04 |
- |
- |
||||||||||
Tax impact on items listed above |
360 |
0.01 |
(2,389) |
(0.04) |
||||||||||
Impact of enactment of U.S. Tax Act |
9,323 |
0.14 |
- |
- |
||||||||||
Adjusted net income |
25,717 |
0.40 |
17,725 |
0.27 |
(1) |
|||||||||
Net income attributable to non-controlling interests |
(3,867) |
(0.06) |
(3,131) |
(0.05) |
||||||||||
Stock-based compensation (net of tax of less than $0.1 |
||||||||||||||
million and less than $0.1 million, respectively) |
(76) |
- |
(112) |
- |
||||||||||
Exit costs, restructuring charges and associated impairments |
||||||||||||||
(net of tax of $nil) |
(2) |
- |
- |
- |
||||||||||
Adjusted net income attributable to common shareholders |
$ |
21,772 |
$ |
0.34 |
$ |
14,482 |
$ |
0.22 |
(1) |
|||||
Weighted average diluted shares outstanding |
64,790 |
66,950 |
||||||||||||
Adjusted Net Income and Adjusted Diluted Per Share Calculations – Year Ended December 31, 2017 vs. 2016:
The Company reported net income of
Net income for the year ended December 31, 2017 includes a
Adjusted net income, which consists of net income excluding the impact of stock-based compensation, exit costs, restructuring charges and associated impairments, the related tax impact of these adjustments, and tax charge from the provisional re-remeasurement of U.S. deferred tax assets and liabilities given changes enacted by the Tax Act, was
The Company reported net income attributable to common shareholders of
Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding the impact of stock-based compensation, exit costs, restructuring charges and associated impairments, the related tax impact of these adjustments, and tax charge from the provisional re-remeasurement of U.S. deferred tax assets and liabilities given changes enacted by the Tax Act, was
A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, 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:
Year Ended December 31, |
||||||||||||||
2017 |
2016 |
|||||||||||||
Net Income |
Diluted EPS |
Net Income |
Diluted EPS |
|||||||||||
Reported net income |
$ |
12,518 |
$ |
0.19 |
$ |
39,320 |
$ |
0.58 |
||||||
Adjustments: |
||||||||||||||
Stock-based compensation |
22,653 |
0.35 |
30,523 |
0.45 |
||||||||||
Exit costs, restructuring charges and associated impairments |
16,174 |
0.25 |
- |
- |
||||||||||
Tax impact on items listed above |
(9,218) |
(0.14) |
(8,783) |
(0.13) |
||||||||||
Impact of enactment of U.S. Tax Act |
9,323 |
0.14 |
- |
- |
||||||||||
Adjusted net income |
51,450 |
0.79 |
61,060 |
0.90 |
||||||||||
Net income attributable to non-controlling interests |
(10,174) |
(0.16) |
(10,532) |
(0.16) |
||||||||||
Stock-based compensation (net of tax of $0.2 million, |
||||||||||||||
and $0.2 million, respectively) |
(620) |
(0.01) |
(533) |
(0.01) |
||||||||||
Exit costs, restructuring charges and associated impairments |
||||||||||||||
(net of tax of $0.1 million) |
(181) |
- |
- |
- |
||||||||||
Adjusted net income attributable to common shareholders |
$ |
40,475 |
$ |
0.62 |
$ |
49,995 |
$ |
0.73 |
||||||
Weighted average diluted shares outstanding |
65,540 |
68,263 |
||||||||||||
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. 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 in the table below:
For the |
For the |
|||||||
Three months ended |
Twelve months ended |
|||||||
December 31, 2017 |
December 31, 2017 |
|||||||
Net cash provided by operating activities |
$ |
21,947 |
$ |
85,366 |
||||
Net cash used in investing activities |
(16,264) |
(73,597) |
||||||
Net cash flow |
$ |
5,683 |
$ |
11,769 |