- Global entertainment platform delivers Net Income of $14
million (+16% YoY), EPS(1) of 26 cents (+18% YoY), and Cash from
Operations of $35 million (+23% YoY)
- Strong profitability highlighted by Total Adjusted EBITDA(2) of
$39 million at a 42% margin; and Adjusted EPS(1)(2) of 35 cents,
matching a third quarter record
- Network growth accelerates as IMAX expects to deliver on
high-end of full-year installation guidance, with 49 system
installs (+63% YoY) worldwide in Q3
- Sales activity robust as system signings climb to 119 to-date —
outpacing 129 signings for full-year 2023
- Strong, diverse year-end slate including “Gladiator II,”
“Wicked,” “Moana 2,” and “Mufasa: The Lion King” poised to drive
momentum heading into 2025
- IMAX expects to deliver record of more than $1.2 billion in
global box office in 2025 as promising slate solidifies
IMAX Corporation (NYSE: IMAX) today reported solid financial
results for the third quarter of 2024, demonstrating the value of
its unique global entertainment platform and broad content
portfolio.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20241030263871/en/
An infographic highlighting IMAX's recent
quarter. (Graphic: Business Wire)
“IMAX continues to set the table for a new, sustained era of
growth with a 2025 and 2026 slate that is as promising as we’ve
ever seen,” said Rich Gelfond, CEO of IMAX. “With an exceptional
content pipeline, accelerating system installations, and robust
sales activity worldwide, we are very well-positioned to execute
and capitalize on the opportunity ahead over the next several
years.”
“As we look forward, we expect 2025 to be our best year ever at
the global box office, with more than $1.2 billion in IMAX grosses
worldwide. Our slate next year is highlighted by at least 14 Filmed
for IMAX® releases worldwide shot with our cameras, for our screens
— a historical indicator of higher indexing for our platform and
further proof that filmmakers and audiences prefer the
awe-inspiring IMAX Experience ®.”
“Demand for the IMAX platform is strong among our global
exhibition partners. We installed nearly 50 new and upgraded
systems worldwide in the third quarter — one of our best third
quarters for installs ever — and continue to strike agreements in
key growth markets, including Australia, France, Japan, and Saudi
Arabia.”
“Our third quarter performance further demonstrates our ability
to deliver results in any environment, reflecting our flexible,
asset-lite business model and diversified content portfolio. With a
strong slate ahead, we look forward to fully capitalizing on our
model, our strong brand and technology, and our unique global scale
to deliver for our shareholders.”
- Diluted Net Income Per Share
- 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.
Third Quarter Financial Highlights
Three Months Ended
Nine Months Ended
September 30,
September 30,
In millions of U.S. Dollars, except per
share data
2024
2023
YoY %
Change
2024
2023
YoY %
Change
Total Revenue
$
91.5
$
103.9
(12
%)
$
259.5
$
288.8
(10
%)
Gross Margin
$
51.0
$
62.7
(19
%)
$
141.8
$
170.7
(17
%)
Gross Margin (%)
55.8
%
60.4
%
54.6
%
59.1
%
Total Adjusted EBITDA(1)(2)
$
38.7
$
50.5
(23
%)
$
101.7
$
118.8
(14
%)
Total Adjusted EBITDA Margin (%)(1)(2)
42.3
%
48.6
%
39.2
%
41.1
%
Net Income(3)
$
13.9
$
12.0
16
%
$
20.8
$
22.8
(9
%)
Diluted Net Income Per Share(3)
$
0.26
$
0.22
18
%
$
0.39
$
0.41
(5
%)
Adjusted Net Income(1)(3)
$
18.9
$
19.4
(3
%)
$
36.5
$
42.8
(15
%)
Adjusted Earnings Per Share(1)(3)
$
0.35
$
0.35
—
%
$
0.68
$
0.77
(12
%)
Weighted average shares outstanding (in
millions):
Basic
52.7
54.6
(4
%)
52.6
54.4
(3
%)
Diluted
54.1
55.5
(3
%)
53.6
55.3
(3
%)
- 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.
- Total Adjusted EBITDA is before adjustments for non-controlling
interests. Total Adjusted EBITDA per Credit Facility attributable
to common shareholders, excluding non-controlling interests, was
$35.6 million and $90.5 million for each of the three and nine
months ended September 30, 2024 (2023 - $45.1 million and $105.1
million). The Company’s Credit Facility covenant is calculated on a
trailing twelve month basis.
- Attributable to common shareholders.
Third Quarter Segment
Results(1)
Content Solutions
Technology Products and
Services
Revenue
Gross Margin
Gross
Margin %
Revenue
Gross Margin
Gross
Margin %
3Q24
$
30.1
$
16.4
55
%
$
58.0
$
32.0
55
%
3Q23
44.2
26.4
60
%
56.2
33.8
60
%
% change
(32
%)
(38
%)
3
%
(5
%)
YTD24
$
99.2
$
54.7
55
%
$
152.0
$
81.3
54
%
YTD23
107.6
64.4
60
%
171.8
100.1
58
%
% change
(8
%)
(15
%)
(12
%)
(19
%)
- Please refer to the Company’s
Form 10-Q for the period ended September 30, 2024 for additional
segment information.
Content Solutions Segment
- Content Solutions revenues of $30 million decreased 32%
year-over-year driven by the mix of content, which included
“Oppenheimer” — the Company’s fifth highest grossing title of all
time — in the year prior. Despite the decline, the third quarter
2024 was the third highest grossing third quarter in IMAX
history
- Gross margin for Content Solutions of $16 million decreased 38%
compared to the third quarter of the prior year period.
Technology Products and Services Segment
- Technology Products and Services revenues and gross margin
increased 3% year-over-year to $58 million and decreased 5%
year-over-year to $32 million, respectively, driven by system
installation growth that is outpacing the prior year and offset the
lower box office related rental revenue.
- During the third quarter the Company installed 49 systems
compared to 30 systems in the third quarter of 2023, an increase of
63% year-over-year. Of those, 20 systems were under sales
arrangements, compared to 16 systems in the prior year.
- Commercial network growth continues with the number of IMAX
locations increasing 4% year-over-year to 1,714 systems. The
Company ended Q3 2024 with a backlog of 472 IMAX systems.
Operating Cash Flow and
Liquidity
Net cash provided by operating activities for year-to-date
September 2024 was $59 million compared to $55 million in the prior
year period. Third quarter 2024 net cash provided by operating
activities was $35 million compared to $29 million in the prior
year period with the increase reflecting improvements in working
capital.
As of September 30, 2024, the Company’s available liquidity was
$413 million. The Company’s liquidity includes cash and cash
equivalents of $105 million, $253 million in available borrowing
capacity under the Credit Facility, and $56 million in available
borrowing capacity under IMAX China’s revolving facilities. Total
debt, excluding deferred financing costs, was $280 million as of
September 30, 2024.
In 2021, the Company issued $230.0 million of 0.500% Convertible
Senior Notes due 2026 (“Convertible Notes”). In connection with the
pricing of the Convertible Notes, the Company entered into
privately negotiated capped call transactions with an initial cap
price of $37.2750 per share of the Company’s common shares.
Share Count and Capital
Return
The weighted average basic and diluted shares outstanding in the
third quarter of 2024 were 52.7 million and 54.1 million,
respectively, compared to 54.6 million and 55.5 million in the
third quarter of 2023, a decrease of 3.5% and 2.6%,
respectively.
For the nine months ended September 30, 2024, the Company
repurchased 1,166,370 common shares at an average price of $13.99
for a total of $16 million, excluding commissions.
The Company is authorized under its share-repurchase program,
expiring June 30, 2026 to repurchase up to $400 million of its
common shares, of which approximately $151 million remains
available.
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 monthly basis, the Company posts quarter-to-date box office
results on the IMAX Investor Relations website located at
investors.imax.com. The Company expects to provide such updates
within five business days of month-end, although the Company may
change this timing without notice.
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, SEC filings 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 ET to
discuss its third quarter 2024 financial results. This call is
being webcast and can be accessed at investors.imax.com. To access
the call via telephone, interested parties please pre-register
here:
https://register.vevent.com/register/BId903a31ed4674fefba1f8b3fdf34072c
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.
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 systems to connect with audiences in extraordinary ways,
making IMAX’s network 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, 2024, there were 1,788 IMAX systems (1,714
commercial multiplexes, 12 commercial destinations, 62
institutional) operating in 89 countries and territories. Shares of
IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade
on the Hong Kong Stock Exchange under the stock code “1970”.
IMAX®, IMAX® 3D, Experience It In IMAX®, The IMAX Experience®,
DMR®, Filmed For IMAX®, IMAX LIVETM, IMAX Enhanced®, IMAX
StreamSmartTM, and SSIMWAVE® are trademarks and trade names of IMAX
Corporation or its subsidiaries that are registered or otherwise
protected under laws of various jurisdictions. For more
information, visit www.imax.com. You can also connect with IMAX on
Instagram (www.instagram.com/company/imax), Facebook
(www.facebook.com/imax), LinkedIn (www.linkedin.com/company/imax),
X (www.twitter.com/imax), and YouTube
(www.youtube.com/imaxmovies).
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 Corporation together 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 States and Canada, as well as geopolitical
conflicts; risks related to the Company’s growth and operations in
China; the performance of IMAX remastered films and other films
released to the IMAX network; the signing of IMAX 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
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
associated with the Company’s use of artificial intelligence and
exploration of additional use cases of artificial intelligence;
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; the failure to convert 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 the Company’s 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 the Company’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’s Chief Executive Officer (“CEO”) is its CODM, as
such term is defined under U.S. GAAP. The CODM assesses segment
performance based on segment revenues and segment gross margins.
Selling, general and administrative expenses, research and
development costs, the amortization of intangible assets, provision
for (reversal of) current expected credit losses, certain
write-downs, interest income, interest expense, and income tax
(expense) benefit are not allocated to the Company’s segments.
In the first quarter of 2023, the Company revised its internal
segment reporting, including the information provided to the CODM
to assess segment performance and allocate resources. Accordingly,
the Company has two reportable segments:
- Content Solutions, which principally includes the digital
remastering of films and other content into IMAX formats for
distribution to the IMAX network. To a lesser extent, the Content
Solutions segment also earns revenue from the distribution of
large-format documentary films and exclusive experiences ranging
from live performances to interactive events with leading artists
and creators, as well as film post-production services.
- Technology Products and Services, which includes results from
the sale or lease of IMAX Systems, as well as from the maintenance
of IMAX Systems. To a lesser extent, the Technology Product and
Services segment also earns revenue from certain ancillary theater
business activities, including after-market sales of IMAX System
parts and 3D glasses.
Transactions between segments are valued at exchange value.
Inter-segment profits are eliminated upon consolidation, as well as
for the disclosures below.
IMAX Network and Backlog
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
System Signings(1):
Sales Arrangements
10
13
40
54
Traditional JRSA
6
7
71
40
Total IMAX System Signings
16
20
111
94
- System signings include new signings of
15 in Q3 2024, 14 in Q3 2023, 42 in the first three quarters of
2024 and 76 in the first three quarters of 2023.
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
System Installations(1):
Sales Arrangements
20
16
35
35
Hybrid JRSA
—
—
1
2
Traditional JRSA
29
14
52
22
Total IMAX System Installations
49
30
88
59
- System installations include new systems
installations of 17 in Q3 2024, 18 in Q3 2023, 45 in the first
three quarters of 2024 and 39 in the first three quarters of
2023.
As of September 30,
2024
2023
System Backlog:
Sales Arrangements
170
192
Hybrid JRSA
95
107
Traditional JRSA
207
187
Total System Backlog
472
486
As of September 30,
2024
2023
System Network:
Commercial Multiplex Systems
Sales Arrangements
820
743
Hybrid JRSA
129
137
Traditional JRSA
765
771
Total Commercial Multiplex Systems
1,714
1,651
Commercial Destination Systems
12
12
Institutional Systems
62
68
Total System Network
1,788
1,731
IMAX CORPORATION 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,
2024
2023
2024
2023
Revenues
Technology sales
$
26,305
$
18,273
$
54,629
$
65,455
Image enhancement and maintenance
services
46,891
60,250
149,428
154,244
Technology rentals
16,122
23,008
48,766
62,612
Finance income
2,134
2,365
6,713
6,510
91,452
103,896
259,536
288,821
Costs and expenses applicable to
revenues
Technology sales
10,605
7,948
24,594
28,951
Image enhancement and maintenance
services
23,087
26,646
73,371
69,470
Technology rentals
6,741
6,587
19,736
19,747
40,433
41,181
117,701
118,168
Gross margin
51,019
62,715
141,835
170,653
Selling, general and administrative
expenses
31,466
36,282
100,287
109,336
Research and development
(265
)
2,771
3,953
7,388
Amortization of intangible assets
1,544
1,107
4,208
3,328
Credit loss (reversal) expense, net
(1,137
)
523
(963
)
1,589
Restructuring and executive transition
costs
—
—
—
1,353
Income from operations
19,411
22,032
34,350
47,659
Realized and unrealized investment
gains
32
364
94
436
Retirement benefits non-service
expense
(109
)
(77
)
(323
)
(232
)
Interest income
625
738
1,720
1,838
Interest expense
(2,240
)
(1,483
)
(6,467
)
(5,045
)
Income before taxes
17,719
21,574
29,374
44,656
Income tax expense
(2,376
)
(6,555
)
(3,538
)
(14,901
)
Net income
15,343
15,019
25,836
29,755
Net income attributable to non-controlling
interests
(1,447
)
(3,029
)
(5,083
)
(6,960
)
Net income attributable to common
shareholders
$
13,896
$
11,990
$
20,753
$
22,795
Net income per share attributable to
common shareholders:
Basic
$
0.26
$
0.22
$
0.39
$
0.42
Diluted
$
0.26
$
0.22
$
0.39
$
0.41
Weighted average shares outstanding (in
thousands):
Basic
52,682
54,618
52,605
54,424
Diluted
54,089
55,535
53,628
55,261
Additional Disclosure:
Depreciation and amortization
$
14,900
$
19,279
$
48,902
$
46,477
Amortization of deferred financing
costs
$
493
$
492
$
1,478
$
1,742
IMAX CORPORATION CONSOLIDATED BALANCE
SHEETS (In thousands of dollars, except share amounts)
(Unaudited)
September 30,
December 31,
2024
2023
Assets
Cash and cash equivalents
$
104,504
$
76,200
Accounts receivable, net of allowance for
credit losses
114,193
136,259
Financing receivables, net of allowance
for credit losses
123,459
127,154
Variable consideration receivables, net of
allowance for credit losses
74,487
64,338
Inventories
37,612
31,584
Prepaid expenses
13,310
12,345
Film assets, net of accumulated
amortization
9,127
6,786
Property, plant and equipment, net of
accumulated depreciation
245,106
243,299
Other assets
22,981
20,879
Deferred income tax assets, net of
valuation allowance
15,687
7,988
Goodwill
52,815
52,815
Other intangible assets, net of
accumulated amortization
34,279
35,022
Total assets
$
847,560
$
814,669
Liabilities
Accounts payable
$
26,018
$
26,386
Accrued and other liabilities
111,283
111,013
Deferred revenue
53,676
67,105
Revolving credit facility borrowings, net
of unamortized debt issuance costs
46,239
22,924
Convertible notes and other borrowings,
net of unamortized discounts and debt issuance costs
230,038
229,131
Deferred income tax liabilities
12,521
12,521
Total liabilities
479,775
469,080
Commitments, contingencies and
guarantees
Non-controlling interests
674
658
Shareholders’ equity
Capital stock common shares — no par
value. Authorized — unlimited number.
52,682,641 issued and outstanding
(December 31, 2023 — 53,260,276 issued and outstanding)
394,603
389,048
Other equity
181,911
185,087
Statutory surplus reserve
3,932
3,932
Accumulated deficit
(279,993
)
(292,845
)
Accumulated other comprehensive loss
(11,015
)
(12,081
)
Total shareholders’ equity attributable
to common shareholders
289,438
273,141
Non-controlling interests
77,673
71,790
Total shareholders’ equity
367,111
344,931
Total liabilities and shareholders’
equity
$
847,560
$
814,669
IMAX CORPORATION CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands of dollars)
(Unaudited)
Nine Months Ended
September 30,
2024
2023
Operating Activities
Net income
$
25,836
$
29,755
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization
48,902
46,477
Amortization of deferred financing
costs
1,478
1,742
Credit loss (reversal) expense, net
(963
)
1,589
Write-downs, including asset
impairments
3,034
872
Deferred income tax benefit
(7,339
)
(3,724
)
Share-based and other non-cash
compensation
17,261
17,830
Unrealized foreign currency exchange
(gain) loss
(527
)
52
Realized and unrealized investment
gain
(94
)
(436
)
Changes in assets and liabilities:
Accounts receivable
23,001
(2,392
)
Inventories
(6,181
)
(13,771
)
Film assets
(17,892
)
(14,575
)
Deferred revenue
(13,393
)
(4,670
)
Changes in other operating assets and
liabilities
(13,771
)
(4,141
)
Net cash provided by operating
activities
59,352
54,608
Investing Activities
Purchase of property, plant and
equipment
(3,816
)
(2,541
)
Investment in equipment for joint revenue
sharing arrangements
(21,728
)
(10,705
)
Acquisition of other intangible assets
(4,802
)
(5,418
)
Net cash used in investing
activities
(30,346
)
(18,664
)
Financing Activities
Revolving credit facility borrowings
55,000
31,032
Repayments of revolving credit facility
borrowings
(32,000
)
(43,057
)
Repayments of other borrowings
(489
)
—
Proceeds from other borrowings
—
315
Repurchase of common shares
(18,102
)
(4,263
)
Taxes withheld and paid on employee stock
awards vested
(4,978
)
(6,458
)
Common shares issued - stock options
exercised
98
—
Principal payment under finance lease
obligations
(480
)
(480
)
Dividends paid to non-controlling
interests
—
(1,438
)
Net cash used in financing
activities
(951
)
(24,349
)
Effects of exchange rate changes on
cash
249
607
Increase in cash and cash equivalents
during period
28,304
12,202
Cash and cash equivalents, beginning of
period
76,200
97,401
Cash and cash equivalents, end of
period
$
104,504
$
109,603
Segment Revenue and Gross Margin
Three Months Ended
Nine Months Ended
September 30,
September 30,
(In thousands of dollars)
2024
2023
2024
2023
Revenue
Content Solutions
$
30,129
$
44,214
$
99,218
$
107,605
Technology Products and Services
57,971
56,169
152,019
171,813
Sub-total for reportable segments
88,100
100,383
251,237
279,418
All Other(1)
3,352
3,513
8,299
9,403
Total
$
91,452
$
103,896
$
259,536
$
288,821
Gross Margin
Content Solutions
$
16,449
$
26,407
$
54,686
$
64,397
Technology Products and Services
31,964
33,761
81,331
100,066
Sub-total for reportable segments
48,413
60,168
136,017
164,463
All Other(1)
2,606
2,547
5,818
6,190
Total
$
51,019
$
62,715
$
141,835
$
170,653
- All Other includes the results from the Company’s streaming and
consumer technology business, as well as other ancillary
activities.
IMAX CORPORATION NON-GAAP FINANCIAL
MEASURES (In thousands of U.S. dollars)
In this release, the Company presents adjusted net income
attributable to common shareholders and adjusted net income
attributable to common shareholders per basic and diluted share,
EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin
as supplemental measures of the Company’s performance, which are
not recognized under U.S. GAAP. Adjusted net income or loss
attributable to common shareholders and adjusted net income or loss
attributable to common shareholders per basic and diluted share
exclude, where applicable: (i) share-based compensation; (ii)
realized and unrealized investment gains or losses; (iii)
transaction-related expenses; and (iv) restructuring and executive
transition costs, as well as the related tax impact of these
adjustments.
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 income
attributable to common shareholders. Although share-based
compensation is an important aspect of the Company’s employee and
executive compensation packages, it is a non-cash expense and is
excluded from certain internal business performance measures.
A reconciliation from net income (loss) attributable to common
shareholders and the associated per share amounts to adjusted net
income attributable to common shareholders and adjusted net income
attributable to common shareholders per diluted share is presented
in the table below. Net income (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
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. Accordingly, this non-GAAP financial 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 with 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) transaction-related
expenses; (iv) restructuring and executive transition costs; and
(v) write- downs, net of recoveries, including asset impairments
and credit loss expense.
A reconciliation of net income (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 income (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. The Company definition of free cash flow
deducts 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 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
Three Months Ended
(In thousands of U.S. Dollars)
September 30, 2024
September 30, 2023
Revenues
$
91,452
$
103,896
Reported net income
$
15,343
$
15,019
Add (subtract):
Income tax expense
2,376
6,555
Interest expense, net of interest
income
1,123
253
Depreciation and amortization, including
film asset amortization
14,900
19,279
Amortization of deferred financing
costs(1)
493
492
EBITDA
$
34,235
$
41,598
Share-based and other non-cash
compensation
5,508
5,297
Unrealized investment gains
(32
)
(364
)
Transaction-related expenses
—
3,086
Write-downs, including asset impairments
and credit loss expense
(1,025
)
921
Total Adjusted EBITDA
$
38,686
$
50,538
Total Adjusted EBITDA margin
42.3
%
48.6
%
Less: Non-controlling interest
(3,116
)
(5,455
)
Adjusted EBITDA per Credit Facility -
attributable to common shareholders
$
35,570
$
45,083
- The amortization of deferred financing costs is recorded within
Interest Expense in the Condensed Consolidated Statement of
Operations.
Twelve Months Ended
(In thousands of U.S. Dollars)
September 30, 2024(1)
September 30, 2023(1)
Revenues
$
345,554
$
386,867
Reported net income
$
29,147
$
33,836
Add (subtract):
Income tax expense
1,688
16,917
Interest expense, net of interest
income
3,907
2,024
Depreciation and amortization, including
film asset amortization
62,447
60,475
Amortization of deferred financing
costs(2)
1,970
2,454
EBITDA
$
99,159
$
115,706
Share-based and other non-cash
compensation
23,661
25,893
Unrealized investment gains
(123
)
(407
)
Transaction-related expenses
327
3,408
Restructuring and executive transition
costs
1,593
1,353
Write-downs, including asset impairments
and credit loss expense
2,359
4,328
Total Adjusted EBITDA
$
126,976
$
150,281
Total Adjusted EBITDA margin
36.7
%
38.8
%
Less: Non-controlling interest
$
(13,422
)
$
(17,363
)
Adjusted EBITDA per Credit Facility -
attributable to common shareholders
$
113,554
$
132,918
- The Senior Secured Net Leverage Ratio is calculated using
Adjusted EBITDA per Credit Facility determined on a trailing
twelve-month basis.
- The amortization of deferred financing costs is recorded within
Interest Expense in the Condensed Consolidated Statement of
Operations.
Adjusted Net Income Attributable to Common Shareholders and
Adjusted Net Income Per Share
Three Months Ended
September 30, 2024
Three Months Ended
September 30, 2023
(In thousands of U.S. Dollars, except per
share amounts)
Net Income
Per Diluted
Share
Net Income
Per Diluted
Share
Net income attributable to common
shareholders
$
13,896
$
0.26
$
11,990
$
0.22
Adjustments(1):
Share-based compensation
5,332
0.10
5,063
0.09
Unrealized investment gains
(32
)
—
(454
)
(0.01
)
Transaction-related expenses
—
—
3,086
0.06
Tax impact on items listed above
(341
)
(0.01
)
(275
)
—
Adjusted net income(1)
$
18,855
$
0.35
$
19,410
$
0.35
Weighted average shares outstanding —
basic
52,682
54,618
Weighted average shares outstanding —
diluted
54,089
55,535
- Reflects amounts attributable to common shareholders.
Nine Months Ended September
30,
2024
2023
(In thousands of U.S. Dollars, except per
share amounts)
Net Income
Per Share
Net Income
Per Share
Net income attributable to common
shareholders
$
20,753
$
0.39
$
22,795
$
0.41
Adjustments(1):
Share-based compensation
16,686
0.30
17,110
0.31
Unrealized investment gains
(94
)
—
(526
)
(0.01
)
Transaction-related expenses
—
—
3,242
0.06
Restructuring and executive transition
costs
—
—
1,353
0.02
Tax impact on items listed above
(803
)
(0.01
)
(1,184
)
(0.02
)
Adjusted net income(1)
$
36,542
$
0.68
$
42,790
$
0.77
Weighted average shares outstanding —
basic
52,605
54,424
Weighted average shares outstanding —
diluted
53,628
55,261
- Reflects amounts attributable to common shareholders.
Free Cash Flow
Nine Months Ended
September 30,
(In thousands of U.S. Dollars)
2024
2023
Net cash provided by operating
activities
$
59,352
$
54,608
Purchase of property, plant and
equipment
(3,816
)
(2,541
)
Acquisition of other intangible assets
(4,802
)
(5,418
)
Free cash flow before growth CAPEX(1)
50,734
46,649
Investment in equipment for joint revenue
sharing arrangements
(21,728
)
(10,705
)
Free cash flow
$
29,006
$
35,944
- Growth CAPEX is defined as capital expenditures associated with
investments in equipment for joint revenue sharing
arrangements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030263871/en/
Investors: IMAX Corporation, New York Jennifer Horsley
212-821-0154 jhorsley@imax.com
Media: IMAX Corporation, New York Mark Jafar 212-821-0102
mjafar@imax.com
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