IMAX CORPORATION REPORTS THIRD QUARTER 2022 RESULTS
- IMAX global entertainment technology platform drives double-digit growth across Revenue, Gross Margin and Adjusted EBITDA as well as positive Net Income within
IMAX China - Total IMAX Gross Box Office increased 25% year over year to
$177.1 million , with 30% of box office coming from Local Language blockbusters - Strong upcoming blockbuster film slate represents significant expected tailwind, as 2022 concludes with "Black Panther: Wakanda Forever" and "Avatar: The Way of Water," the first of four planned sequels to the highest grossing movie of all time with more than
$270 million in IMAX box office receipts - IMAX completes acquisition of streaming technology company SSIMWAVE, enhancing its capabilities to deliver the best images on any screen, out of home and in home
- IMAX increased its Share-Repurchase Authorization by
$200 million and repurchased 418 thousand shares in third quarter; cumulative 10.4 million under the program as ofSeptember 30th , or 16% of total shares outstanding
"IMAX demonstrated the strength of its differentiated model in the third quarter — leaning into its diversified global content portfolio to grow revenue, box office, and EBITDA despite a temporary slowdown in the
"We also took a significant step in the quarter to advance our long-term growth strategy with the acquisition of streaming technology company SSIMWAVE. In the short-term, SSIMWAVE is expected to generate incremental revenue for IMAX and be accretive in 2023, and in the long-term open a new world of possibility for our image enhancement capabilities — across not only streaming and theatrical, but gaming, VR and AR."
Financial Summary
- Revenue increased 21% to
$68.8 million from$56.6 million in the year-ago period. - IMAX China Net Income of
$4.2 million or$3.0 million attributable to common shareholders. - Net loss(2) was
($9.0) million , or ($0.16 ) per share, compared to($8.4) million , or ($0.14 ) per share in Q3 2021. Q3 2022 included a$4.3 million , or$0.08 per share, valuation allowance against its deferred tax assets as well as$1.0 million , or$0.02 per share, in acquisition-related expenses. - Adjusted Net loss(1,2) was
($3.0) million , or ($0.05 ) per share, improved from an Adjusted Net Loss(1,2) of($5.0) million , or ($0.08 ) per share in Q3 2021. - Adjusted EBITDA(1,3) of
$16.5 million was up from$13.1 million in Q3 2021 and marked the 8th straight quarter of positive Adjusted EBITDA. On a trailing 12-month basis, Adjusted EBITDA(1,3) was$100.7 million as ofSeptember 30th .
Third Quarter Financial Highlights
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||
|
|
||||||||||||||||||||||
In millions of |
2022 |
2021 |
YoY % |
2022 |
2021 |
YoY % |
|||||||||||||||||
Total Revenue |
$ |
68.8 |
$ |
56.6 |
21 |
% |
$ |
202.8 |
$ |
146.3 |
39 |
% |
|||||||||||
Gross Margin |
$ |
31.7 |
$ |
27.5 |
15 |
% |
$ |
107.5 |
$ |
70.4 |
53 |
% |
|||||||||||
Gross Margin (%) |
46 |
% |
49 |
% |
53 |
% |
48 |
% |
|||||||||||||||
Net Loss(2) |
$ |
(9.0) |
$ |
(8.4) |
N/A |
$ |
(25.4) |
$ |
(32.4) |
N/A |
|||||||||||||
Diluted Net Loss per share(2) |
$ |
(0.16) |
$ |
(0.14) |
N/A |
$ |
(0.44) |
$ |
(0.55) |
N/A |
|||||||||||||
Adjusted Net Loss(1)(2) |
$ |
(3.0) |
$ |
(5.0) |
N/A |
$ |
(7.3) |
$ |
(26.8) |
N/A |
|||||||||||||
Adjusted Net Loss per share(1)(2) |
$ |
(0.05) |
$ |
(0.08) |
N/A |
$ |
(0.13) |
$ |
(0.44) |
N/A |
|||||||||||||
Adjusted EBITDA per Credit Facility(1)(3) |
$ |
16.5 |
$ |
13.1 |
26 |
% |
$ |
56.7 |
$ |
24.6 |
130 |
% |
|||||||||||
Adjusted EBITDA Margin (%)(1)(2) |
25.5 |
% |
26.3 |
% |
(3) |
% |
30.0 |
% |
19.9 |
% |
50 |
% |
|||||||||||
Weighted average shares outstanding (in millions): |
|||||||||||||||||||||||
Basic and Diluted |
56.0 |
59.2 |
(5) |
% |
57.3 |
59.2 |
(3) |
% |
_______________
(1) Non-GAAP Financial Measure. See the discussion at the end of this earnings release for a description of the non-GAAP financial measures used herein, as well as reconciliations to the most comparable GAAP amounts.
(2) Attributable to common shareholders.
(3) Adjusted EBITDA per Credit facility attributable to common shareholders.
Third Quarter and September Year-to-Date Segment Results(1)
IMAX Technology Network |
IMAX Technology Sales and Maintenance |
||||||||||||||||||||||||
In millions of |
Revenue |
Gross Margin |
Gross Margin % |
Revenue |
Gross Margin |
Gross Margin % |
|||||||||||||||||||
3Q22 |
$ |
32.5 |
$ |
17.7 |
54 |
% |
$ |
33.0 |
$ |
15.4 |
47 |
% |
|||||||||||||
3Q21 |
25.6 |
10.9 |
43 |
% |
27.7 |
14.9 |
54 |
% |
|||||||||||||||||
% change |
27 |
% |
62 |
% |
19 |
% |
3 |
% |
|||||||||||||||||
YTD 3Q22 |
$ |
110.8 |
$ |
68.4 |
62 |
% |
$ |
82.6 |
$ |
40.5 |
49 |
% |
|||||||||||||
YTD 3Q21 |
65.5 |
29.7 |
45 |
% |
73.4 |
38.1 |
52 |
% |
|||||||||||||||||
% change |
69 |
% |
130 |
% |
13 |
% |
6 |
% |
_______________
(1) Please refer to the Company's Form 10-Q for the period ended
IMAX Technology Network
- IMAX Technology Network revenues increased 27% to
$32.5 million in the third quarter of 2022, compared to$25.6 million in the prior-year period. The strength of local language titles as well as key titles such as "Thor: Love and Thunder" and "Nope" drove the increase in gross box office and revenue. - Gross margin for the IMAX Technology Network increased to
$17.7 million in the third quarter of 2022, compared to$10.9 million in the prior year period as improved box office performance drove higher revenue.
IMAX Technology Sales and Maintenance
- IMAX Technology Sales and Maintenance revenues increased 19% to
$33.0 million in the third quarter of 2022, compared with$27.7 million in the prior year period. During the third quarter the Company installed 10 systems under sales and sales-type lease arrangements and hybrid JRSA compared to 9 systems in the third quarter of 2021. - Total gross margin for IMAX Technology Sales and Maintenance increased 3% to
$15.4 million in the third quarter of 2022 compared to$14.9 million in the prior year period.
Cash Balances and Outstanding Debt
Total cash and cash equivalents as of
As of
Share Count and Capital Return
The weighted average basic and diluted shares outstanding at the end of the third quarter of 2022 was 56.0 million compared to 59.2 million in the third quarter of 2021. During the third quarter of 2022, the Company repurchased 0.4 million shares at an average price of
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 investors.imax.com. The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one-week lag.
The Company may post additional information on the Company's corporate and Investor Relations website which may be material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website in addition to the Company's press releases,
Conference Call
The Company will host a conference call today at
About IMAX Corporation
IMAX, an innovator in entertainment technology, combines proprietary software, architecture, and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX theaters to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe.
IMAX is headquartered in
IMAX®, IMAX® Dome, IMAX® 3D, IMAX® 3D Dome, Experience It In IMAX®, The IMAX Experience®, An IMAX Experience®, An IMAX 3D Experience®, IMAX DMR®, DMR®, Filmed For IMAX™, IMAX LIVE™, IMAX Enhanced®, IMAX nXos®, Films to the Fullest®, SSIMWAVE®, SSIMPLUS®, Viewer Score® are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. More information about the Company can be found at www.imax.com. You may also connect with IMAX on 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: 212-821-0154
|
Media: 212-821-0102
|
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
Primary Reporting Groups
The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements ("JRSA"); (iii) IMAX Systems; (iv) IMAX Maintenance; (v) Other Theater Business; (vi) Film Distribution; and (vii) Film Post-Production. The Company's activities that do not meet the criteria to be considered a reportable segment are disclosed within All Other. The Company organizes its reportable segments into the following three categories, identified by the nature of the product sold or service provided:
(i) IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from JRSA segment;
(ii) IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment; and
(iii) Film Distribution and Post-Production, which includes activities related to the distribution of large-format documentary films, primarily to institutional theaters, and the distribution of exclusive experiences ranging from live performances to interactive events with leading artists and creators (through the Film Distribution segment) and the provision of film post-production and quality control services.
In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced®, an initiative to bring The IMAX Experience® into the home, out of the New Business Initiatives segment and into All Other for segment reporting purposes. IMAX Enhanced was the only component of the New Business Initiatives segment. Prior period comparatives have been reclassified to conform with the current period presentation. Following its acquisition in Q3 2022, SSIMWAVE is being included within All Other for segment reporting purposes. Please refer to the Company's Form 10-Q for the period ended
IMAX Network and Backlog |
|||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||
Theater System Signings: |
2022 |
2021 |
2022 |
2021 |
|||||||||||||
New IMAX Theater Systems |
|||||||||||||||||
Sales and sales-type lease arrangements |
3 |
4 |
9 |
13 |
|||||||||||||
Hybrid JRSA |
1 |
— |
3 |
— |
|||||||||||||
Traditional JRSA |
7 |
5 |
9 |
8 |
|||||||||||||
Total new IMAX theaters Systems |
11 |
9 |
21 |
21 |
|||||||||||||
Upgrades of IMAX theater systems |
4 |
2 |
14 |
4 |
|||||||||||||
Total IMAX Theater System signings |
15 |
11 |
35 |
25 |
|||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||
Theater System Installations: |
2022 |
2021 |
2022 |
2021 |
|||||||||||||
New IMAX Theater Systems(1) |
|||||||||||||||||
Sales and sales-type lease arrangements |
7 |
6 |
14 |
17 |
|||||||||||||
Hybrid JRSA |
2 |
2 |
5 |
6 |
|||||||||||||
Traditional JRSA |
7 |
6 |
16 |
15 |
|||||||||||||
Total new IMAX Theater Systems |
16 |
14 |
35 |
38 |
|||||||||||||
Upgrades of IMAX theater systems |
1 |
3 |
5 |
7 |
|||||||||||||
Total IMAX Theater System installations |
17 |
17 |
40 |
45 |
|
||||||||||
Theater System Backlog: |
2022 |
2021 |
||||||||
Sales and sales-type lease arrangements |
170 |
182 |
||||||||
Hybrid JRSA |
127 |
139 |
||||||||
Traditional JRSA |
192 |
(2) |
185 |
(2) |
||||||
Total Theater System backlog |
489 |
(3) |
506 |
(4) |
||||||
|
||||||||||
Theater Network: |
2022 |
2021 |
||||||||
|
||||||||||
Sales and sales-type lease arrangements |
696 |
676 |
||||||||
Hybrid JRSA |
150 |
144 |
||||||||
Traditional JRSA |
776 |
760 |
||||||||
|
1,622 |
1,580 |
||||||||
|
12 |
12 |
||||||||
|
69 |
72 |
||||||||
|
1,703 |
1,664 |
_______________
(1) For the three months ended
(2) Includes 41 IMAX Theater Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2021 — 44).
(3) Includes 201 new
(4) Includes 157 new
(5) Period-to-period changes are reported net of the effect of permanently closed theaters.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of (Unaudited) |
||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
|
|
|||||||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||||||
Revenues |
||||||||||||||||||||
Technology sales |
$ |
18,065 |
$ |
13,160 |
$ |
35,270 |
$ |
34,508 |
||||||||||||
Image enhancement and maintenance services |
36,233 |
30,588 |
117,285 |
76,914 |
||||||||||||||||
Technology rentals |
12,540 |
10,219 |
43,726 |
26,708 |
||||||||||||||||
Finance income |
1,917 |
2,635 |
6,478 |
8,181 |
||||||||||||||||
68,755 |
56,602 |
202,759 |
146,311 |
|||||||||||||||||
Costs and expenses applicable to revenues |
||||||||||||||||||||
Technology sales |
10,061 |
6,230 |
20,264 |
17,779 |
||||||||||||||||
Image enhancement and maintenance services |
20,563 |
16,461 |
56,259 |
38,582 |
||||||||||||||||
Technology rentals |
6,430 |
6,424 |
18,728 |
19,579 |
||||||||||||||||
37,054 |
29,115 |
95,251 |
75,940 |
|||||||||||||||||
Gross margin |
31,701 |
27,487 |
107,508 |
70,371 |
||||||||||||||||
Selling, general and administrative expenses |
32,905 |
28,377 |
100,181 |
82,393 |
||||||||||||||||
Research and development |
1,115 |
2,025 |
3,667 |
5,696 |
||||||||||||||||
Amortization of intangible assets |
1,111 |
1,255 |
3,412 |
3,586 |
||||||||||||||||
Credit loss expense (reversal), net |
808 |
(3,317) |
8,149 |
(4,884) |
||||||||||||||||
Asset impairments |
— |
— |
4,470 |
— |
||||||||||||||||
Legal judgment and arbitration awards |
— |
— |
— |
(1,770) |
||||||||||||||||
Loss from operations |
(4,238) |
(853) |
(12,371) |
(14,650) |
||||||||||||||||
Realized and unrealized investment gains |
35 |
30 |
99 |
5,311 |
||||||||||||||||
Retirement benefits non-service expense |
(140) |
(117) |
(417) |
(347) |
||||||||||||||||
Interest income |
257 |
538 |
1,176 |
1,680 |
||||||||||||||||
Interest expense |
(1,323) |
(1,540) |
(4,354) |
(5,534) |
||||||||||||||||
Loss before taxes |
(5,409) |
(1,942) |
(15,867) |
(13,540) |
||||||||||||||||
Income tax expense |
(2,348) |
(4,402) |
(8,091) |
(9,416) |
||||||||||||||||
Net loss |
(7,757) |
(6,344) |
(23,958) |
(22,956) |
||||||||||||||||
Less: net income attributable to non-controlling interests |
(1,196) |
(2,034) |
(1,455) |
(9,473) |
||||||||||||||||
Net loss attributable to common shareholders |
$ |
(8,953) |
$ |
(8,378) |
$ |
(25,413) |
$ |
(32,429) |
||||||||||||
Net loss per share attributable to common shareholders - basic and diluted: |
||||||||||||||||||||
Net loss per share - basic and diluted: |
$ |
(0.16) |
$ |
(0.14) |
$ |
(0.44) |
$ |
(0.55) |
||||||||||||
Weighted average number of shares outstanding (000's): |
||||||||||||||||||||
Basic |
56,039 |
59,244 |
57,301 |
59,207 |
||||||||||||||||
Diluted |
56,039 |
59,244 |
57,301 |
59,207 |
||||||||||||||||
Additional Disclosure: |
||||||||||||||||||||
Depreciation and amortization |
$ |
15,640 |
$ |
14,899 |
$ |
42,663 |
$ |
40,570 |
||||||||||||
Amortization of deferred financing costs |
$ |
712 |
$ |
741 |
$ |
2,465 |
$ |
1,749 |
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of (Unaudited) |
||||||||
|
|
|||||||
2022 |
2021 |
|||||||
Assets |
||||||||
Cash and cash equivalents |
$ |
87,151 |
$ |
189,711 |
||||
Accounts receivable, net of allowance for credit losses |
125,686 |
110,050 |
||||||
Financing receivables, net of allowance for credit losses |
122,618 |
141,049 |
||||||
Variable consideration receivables, net of allowance for credit losses |
43,643 |
44,218 |
||||||
Inventories |
36,378 |
26,924 |
||||||
Prepaid expenses |
13,145 |
11,802 |
||||||
Film assets, net of accumulated amortization |
4,535 |
4,241 |
||||||
Property, plant and equipment, net of accumulated depreciation |
251,518 |
260,353 |
||||||
Investment in equity securities |
1,095 |
1,087 |
||||||
Other assets |
16,294 |
17,799 |
||||||
Deferred income tax assets, net of valuation allowance |
14,369 |
13,906 |
||||||
|
61,718 |
39,027 |
||||||
Other intangible assets, net of accumulated amortization |
22,077 |
23,080 |
||||||
Total assets |
$ |
800,227 |
$ |
883,247 |
||||
Liabilities |
||||||||
Accounts payable |
$ |
22,607 |
$ |
15,943 |
||||
Accrued and other liabilities |
119,138 |
111,896 |
||||||
Deferred revenue |
76,461 |
81,281 |
||||||
Revolving credit facility borrowings, net of unamortized debt issuance costs |
2,660 |
2,472 |
||||||
Convertible Notes and other borrowings, net |
226,527 |
223,641 |
||||||
Deferred income tax liabilities |
14,900 |
17,642 |
||||||
Total liabilities |
462,293 |
452,875 |
||||||
Commitments and contingencies |
||||||||
Non-controlling interests |
736 |
758 |
||||||
Shareholders' equity |
||||||||
Capital stock common shares — no par value. Authorized — unlimited number. |
||||||||
55,973,443 issued and outstanding ( |
388,953 |
409,979 |
||||||
Other equity |
179,571 |
174,620 |
||||||
Statutory surplus reserve |
3,932 |
3,932 |
||||||
Accumulated deficit |
(282,944) |
(234,975) |
||||||
Accumulated other comprehensive (loss) income |
(16,173) |
2,527 |
||||||
Total shareholders' equity attributable to common shareholders |
273,339 |
356,083 |
||||||
Non-controlling interests |
63,859 |
73,531 |
||||||
Total shareholders' equity |
337,198 |
429,614 |
||||||
Total liabilities and shareholders' equity |
$ |
800,227 |
$ |
883,247 |
(In thousands of (Unaudited) |
||||||||||
Nine Months Ended |
||||||||||
|
||||||||||
2022 |
2021 |
|||||||||
Operating Activities |
||||||||||
Net loss |
$ |
(23,958) |
$ |
(22,956) |
||||||
Adjustments to reconcile net loss to cash provided by (used in) operating activities: |
||||||||||
Depreciation and amortization |
42,663 |
40,570 |
||||||||
Amortization of deferred financing costs |
2,465 |
1,749 |
||||||||
Credit loss expense (reversal), net |
8,149 |
(4,884) |
||||||||
Write-downs |
5,707 |
878 |
||||||||
Deferred income tax benefit |
(3,374) |
(1,687) |
||||||||
Share-based and other non-cash compensation |
19,510 |
18,558 |
||||||||
Unrealized foreign currency exchange loss |
1,310 |
555 |
||||||||
Realized and unrealized investment gains |
(99) |
(5,311) |
||||||||
Changes in assets and liabilities: |
||||||||||
Accounts receivable |
(18,050) |
(24,336) |
||||||||
Inventories |
(10,131) |
653 |
||||||||
Film assets |
(14,174) |
(10,035) |
||||||||
Deferred revenue |
(5,989) |
(1,434) |
||||||||
Changes in other operating assets and liabilities |
(3,548) |
(11,902) |
||||||||
Net cash provided by (used in) operating activities |
481 |
(19,582) |
||||||||
Investing Activities |
||||||||||
Acquisition of SSIMWAVE, net of cash and cash equivalents acquired |
(12,639) |
— |
||||||||
Purchase of property, plant and equipment |
(5,248) |
(2,353) |
||||||||
Investment in equipment for joint revenue sharing arrangements |
(14,543) |
(5,361) |
||||||||
Interest in film classified as a financial instrument |
(4,731) |
— |
||||||||
Acquisition of other intangible assets |
(3,246) |
(3,399) |
||||||||
Proceeds from sale of equity securities |
— |
17,769 |
||||||||
Net cash (used in) provided by investing activities |
(40,407) |
6,656 |
||||||||
Financing Activities |
||||||||||
Proceeds from issuance of convertible notes, net |
— |
223,675 |
||||||||
Debt issuance costs related to convertible notes |
— |
(1,163) |
||||||||
Purchase of capped calls related to convertible notes |
— |
(19,067) |
||||||||
Revolving credit facility borrowings |
4,890 |
3,600 |
||||||||
Repayments of revolving credit facility borrowings |
(3,600) |
(300,243) |
||||||||
Credit facility amendment fees paid |
(2,277) |
(474) |
||||||||
Repurchase of common shares, |
(53,581) |
(4,610) |
||||||||
Repurchase of common shares, |
(3,043) |
(5,016) |
||||||||
Taxes withheld and paid on employee stock awards vested |
(3,393) |
(3,045) |
||||||||
Common shares issued - stock options exercised |
— |
883 |
||||||||
Principal payment under finance lease obligations |
(890) |
— |
||||||||
Dividends paid to non-controlling interests |
(2,701) |
(5,027) |
||||||||
Net cash used in financing activities |
(64,595) |
(110,487) |
||||||||
Effects of exchange rate changes on cash and cash equivalents |
1,961 |
(958) |
||||||||
Decrease in cash and cash equivalents during period |
(102,560) |
(124,371) |
||||||||
Cash and cash equivalents, beginning of period |
189,711 |
317,379 |
||||||||
Cash and cash equivalents, end of period |
$ |
87,151 |
$ |
193,008 |
Segment Revenue and Gross Margin (Margin Loss) |
||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||
|
|
|||||||||||||||||
In thousands of |
2022 |
2021 |
2022 |
2021 |
||||||||||||||
Revenue |
||||||||||||||||||
IMAX Technology Network |
||||||||||||||||||
IMAX DMR |
$ |
19,919 |
$ |
15,701 |
$ |
67,064 |
$ |
39,438 |
||||||||||
JRSA, contingent rent |
12,540 |
9,887 |
43,708 |
26,108 |
||||||||||||||
32,459 |
25,588 |
110,772 |
65,546 |
|||||||||||||||
IMAX Technology Sales and Maintenance |
||||||||||||||||||
IMAX Systems |
15,957 |
13,236 |
32,806 |
35,117 |
||||||||||||||
JRSA, fixed fees |
998 |
1,036 |
2,486 |
3,776 |
||||||||||||||
IMAX Maintenance |
13,939 |
13,055 |
43,564 |
33,196 |
||||||||||||||
Other Theater Business(1) |
2,107 |
363 |
3,697 |
1,283 |
||||||||||||||
33,001 |
27,690 |
82,553 |
73,372 |
|||||||||||||||
Film Distribution and Post-Production |
2,049 |
1,598 |
5,418 |
4,001 |
||||||||||||||
Sub-total for reportable segments |
67,509 |
54,876 |
198,743 |
142,919 |
||||||||||||||
All Other(2) |
1,246 |
1,726 |
4,016 |
3,392 |
||||||||||||||
Total |
$ |
68,755 |
$ |
56,602 |
$ |
202,759 |
$ |
146,311 |
||||||||||
Gross Margin (Margin Loss) |
||||||||||||||||||
IMAX Technology Network |
||||||||||||||||||
IMAX DMR |
$ |
11,408 |
$ |
7,293 |
$ |
42,965 |
$ |
22,405 |
||||||||||
JRSA, contingent rent |
6,302 |
3,626 |
25,389 |
7,299 |
||||||||||||||
17,710 |
10,919 |
68,354 |
29,704 |
|||||||||||||||
IMAX Technology Sales and Maintenance |
||||||||||||||||||
IMAX Systems |
9,029 |
8,086 |
18,432 |
21,646 |
||||||||||||||
JRSA, fixed fees |
(154) |
280 |
79 |
783 |
||||||||||||||
IMAX Maintenance |
6,406 |
6,462 |
21,643 |
15,360 |
||||||||||||||
Other Theater Business |
168 |
64 |
314 |
269 |
||||||||||||||
15,449 |
14,892 |
40,468 |
38,058 |
|||||||||||||||
Film Distribution and Post-Production |
(2,082) |
416 |
(3,470) |
997 |
||||||||||||||
Sub-total for reportable segments |
31,077 |
26,227 |
105,352 |
68,759 |
||||||||||||||
All Other(2) |
624 |
1,260 |
2,156 |
1,612 |
||||||||||||||
Total |
$ |
31,701 |
$ |
27,487 |
$ |
107,508 |
$ |
70,371 |
_______________
(1) The revenue from this segment principally includes after-market sales of
(2) All Other includes the results from IMAX Enhanced, SSIMWAVE, and other ancillary activities. In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced out of the New Business Initiatives segment into All Other for segment reporting purposes. Prior period comparatives have been revised to conform with the current period presentation. The results of SSIMWAVE, which was acquired on
NON-GAAP FINANCIAL MEASURES
(in thousands of
In this release, the Company presents adjusted net loss attributable to common shareholders and adjusted net loss attributable to common shareholders per basic and diluted share, EBITDA, Adjusted EBITDA per Credit Facility, and Adjusted EBITDA margin as supplemental measures of the Company's performance, which are not recognized under
The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company's financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net loss attributable to common shareholders. Although share-based compensation is an important aspect of the Company's employee and executive compensation packages, it is a non-cash expense and is excluded from certain internal business performance measures.
A reconciliation of net loss attributable to common shareholders and the associated per share amounts to adjusted net loss attributable to common shareholders and adjusted net loss attributable to common shareholders per diluted share is presented in the table below. Net loss attributable to common shareholders and the associated per share amounts are the most directly comparable GAAP measures because they reflect the earnings relevant to the Company's shareholders, rather than the earnings attributable to non-controlling interests.
In addition to the non-GAAP financial measures discussed above, management also uses "EBITDA," as such term is defined in the Company's Credit Agreement, and which is referred to herein as "Adjusted EBITDA per Credit Facility." As allowed by the Credit Agreement, Adjusted EBITDA per Credit Facility includes adjustments in addition to the exclusion of interest, taxes, depreciation and amortization. Adjusted EBITDA per Credit Facility measure is presented to allow a more comprehensive analysis of the Company's operating performance and to provide additional information with respect to the Company's compliance against its Credit Agreement requirements when applicable. In addition, the Company believes that Adjusted EBITDA per Credit Facility presents relevant and useful information widely used by analysts, investors and other interested parties in the Company's industry to evaluate, assess and benchmark the Company's results.
EBITDA is defined as net income or loss excluding (i) income tax expense or benefit; (ii) interest expense, net of interest income; (iii) depreciation and amortization, including film asset amortization; and (iv) amortization of deferred financing costs. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) realized and unrealized investment gains or losses; (iii) acquisition-related expenses; (iv) write-downs, net of recoveries, including asset impairments and credit loss expense; and (v) legal judgment and arbitration awards.
A reconciliation of net loss attributable to common shareholders, which is the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA per Credit Facility is presented in the table below. Net loss attributable to common shareholders is the most directly comparable GAAP measure because it reflects the earnings relevant to the Company's shareholders, rather than the earnings attributable to non-controlling interests.
In this release, the Company also presents free cash flow, which is not recognized under
These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts.
Adjusted EBITDA per Credit Facility |
||||||||||||||||||||||||||||||
For the Three Months Ended |
For the Three Months Ended |
|||||||||||||||||||||||||||||
Attributable to |
Less: |
Attributable to |
Less: |
|||||||||||||||||||||||||||
Interests and |
Attributable to |
Attributable to |
Interests and |
Attributable to |
Attributable to |
|||||||||||||||||||||||||
Common |
Non-controlling |
Common |
Common |
Non-controlling |
Common |
|||||||||||||||||||||||||
Shareholders |
Interests |
Shareholders |
Shareholders |
Interests |
Shareholders |
|||||||||||||||||||||||||
(In thousands of |
||||||||||||||||||||||||||||||
Reported net loss |
$ |
(7,757) |
$ |
1,196 |
$ |
(8,953) |
$ |
(6,344) |
$ |
2,034 |
$ |
(8,378) |
||||||||||||||||||
Add (subtract): |
||||||||||||||||||||||||||||||
Income tax expense |
2,348 |
(22) |
2,370 |
4,402 |
634 |
3,768 |
||||||||||||||||||||||||
Interest expense, net of interest income |
354 |
(39) |
393 |
261 |
(90) |
351 |
||||||||||||||||||||||||
Depreciation and amortization, including film |
15,640 |
1,214 |
14,426 |
14,899 |
1,723 |
13,176 |
||||||||||||||||||||||||
Amortization of deferred financing costs(2) |
712 |
— |
712 |
741 |
— |
741 |
||||||||||||||||||||||||
EBITDA |
$ |
11,297 |
$ |
2,349 |
$ |
8,948 |
$ |
13,959 |
$ |
4,301 |
$ |
9,658 |
||||||||||||||||||
Share-based and other non-cash compensation |
5,544 |
(27) |
5,571 |
6,226 |
233 |
5,993 |
||||||||||||||||||||||||
Unrealized investment gains |
(35) |
— |
(35) |
(30) |
— |
(30) |
||||||||||||||||||||||||
Acquisition-related expenses |
955 |
— |
955 |
— |
— |
— |
||||||||||||||||||||||||
Write-downs (recoveries), including asset impairments |
1,083 |
66 |
1,017 |
(2,901) |
(381) |
(2,520) |
||||||||||||||||||||||||
Adjusted EBITDA per Credit Facility |
$ |
18,844 |
$ |
2,388 |
$ |
16,456 |
$ |
17,254 |
$ |
4,153 |
$ |
13,101 |
||||||||||||||||||
Revenues attributable to common shareholders(3) |
68,755 |
4,257 |
64,498 |
56,602 |
6,699 |
49,903 |
||||||||||||||||||||||||
Adjusted EBITDA margin attributable to common |
27.4 |
% |
56.1 |
% |
25.5 |
% |
30.5 |
% |
62.0 |
% |
26.3 |
% |
For the Nine Months Ended |
For the Nine Months Ended |
|||||||||||||||||||||||||||||
Attributable to |
Less: |
Attributable to |
Less: |
|||||||||||||||||||||||||||
Interests and |
Attributable to |
Attributable to |
Interests and |
Attributable to |
Attributable to |
|||||||||||||||||||||||||
Common |
Non-controlling |
Common |
Common |
Non-controlling |
Common |
|||||||||||||||||||||||||
Shareholders |
Interests |
Shareholders |
Shareholders |
Interests |
Shareholders |
|||||||||||||||||||||||||
(In thousands of |
||||||||||||||||||||||||||||||
Reported net loss |
$ |
(23,958) |
$ |
1,455 |
$ |
(25,413) |
$ |
(22,956) |
$ |
9,473 |
$ |
(32,429) |
||||||||||||||||||
Add (subtract): |
||||||||||||||||||||||||||||||
Income tax expense |
8,091 |
470 |
7,621 |
9,416 |
2,492 |
6,924 |
||||||||||||||||||||||||
Interest expense, net of interest income |
713 |
(236) |
949 |
2,105 |
(265) |
2,370 |
||||||||||||||||||||||||
Depreciation and amortization, including film |
42,663 |
3,711 |
38,952 |
40,570 |
3,910 |
36,660 |
||||||||||||||||||||||||
Amortization of deferred financing costs(2) |
2,465 |
— |
2,465 |
1,749 |
— |
1,749 |
||||||||||||||||||||||||
EBITDA |
$ |
29,974 |
$ |
5,400 |
$ |
24,574 |
$ |
30,884 |
$ |
15,610 |
$ |
15,274 |
||||||||||||||||||
Share-based and other non-cash compensation |
19,510 |
555 |
18,955 |
18,558 |
824 |
17,734 |
||||||||||||||||||||||||
Unrealized investment gains |
(99) |
— |
(99) |
(5,311) |
(1,571) |
(3,740) |
||||||||||||||||||||||||
Acquisition-related expenses |
955 |
— |
955 |
— |
— |
— |
||||||||||||||||||||||||
Write-downs (recoveries), including asset impairments |
13,856 |
1,561 |
12,295 |
(4,006) |
(1,136) |
(2,870) |
||||||||||||||||||||||||
Legal judgment and arbitration awards |
— |
— |
— |
(1,770) |
— |
(1,770) |
||||||||||||||||||||||||
Adjusted EBITDA per Credit Facility |
$ |
64,196 |
$ |
7,516 |
$ |
56,680 |
$ |
38,355 |
$ |
13,727 |
$ |
24,628 |
||||||||||||||||||
Revenues attributable to common shareholders(3) |
202,759 |
13,609 |
189,149 |
146,311 |
22,819 |
123,492 |
||||||||||||||||||||||||
Adjusted EBITDA margin attributable to common |
31.7 |
% |
55.2 |
% |
30.0 |
% |
26.2 |
% |
60.2 |
% |
19.9 |
% |
For the Twelve Months Ended |
For the Twelve Months Ended |
|||||||||||||||||||||||||||||
Attributable to |
Less: |
Attributable to |
Less: |
|||||||||||||||||||||||||||
Interests and |
Attributable to |
Attributable to |
Interests and |
Attributable to |
Attributable to |
|||||||||||||||||||||||||
Common |
Non-controlling |
Common |
Common |
Non-controlling |
Common |
|||||||||||||||||||||||||
Shareholders |
Interests |
Shareholders |
Shareholders |
Interests |
Shareholders |
|||||||||||||||||||||||||
(In thousands of |
||||||||||||||||||||||||||||||
Reported net loss |
$ |
(10,579) |
$ |
4,734 |
$ |
(15,313) |
$ |
(42,500) |
$ |
11,174 |
$ |
(53,674) |
||||||||||||||||||
Add (subtract): |
||||||||||||||||||||||||||||||
Income tax expense |
19,239 |
2,027 |
17,212 |
11,314 |
3,209 |
8,105 |
||||||||||||||||||||||||
Interest expense, net of interest income |
970 |
(327) |
1,297 |
3,642 |
(355) |
3,997 |
||||||||||||||||||||||||
Depreciation and amortization, including film |
58,175 |
5,056 |
53,119 |
52,575 |
5,009 |
47,566 |
||||||||||||||||||||||||
Amortization of deferred financing costs(2) |
3,229 |
— |
3,229 |
2,056 |
— |
2,056 |
||||||||||||||||||||||||
EBITDA |
$ |
71,034 |
$ |
11,490 |
$ |
59,544 |
$ |
27,087 |
$ |
19,037 |
$ |
8,050 |
||||||||||||||||||
Share-based and other non-cash compensation |
27,031 |
845 |
26,186 |
24,251 |
1,050 |
23,201 |
||||||||||||||||||||||||
Unrealized investment gains |
(128) |
— |
(128) |
(4,169) |
(1,218) |
(2,951) |
||||||||||||||||||||||||
Acquisition-related expenses |
955 |
— |
955 |
— |
— |
— |
||||||||||||||||||||||||
Write-downs (recoveries), including asset impairments |
15,675 |
1,538 |
14,137 |
3,410 |
(603) |
4,013 |
||||||||||||||||||||||||
Legal judgment and arbitration awards |
— |
— |
— |
2,335 |
— |
2,335 |
||||||||||||||||||||||||
Adjusted EBITDA per Credit Facility |
$ |
114,567 |
$ |
13,873 |
$ |
100,694 |
$ |
52,914 |
$ |
18,266 |
$ |
34,648 |
||||||||||||||||||
Revenues attributable to common shareholders(3) |
311,331 |
24,347 |
286,984 |
202,301 |
30,744 |
171,557 |
||||||||||||||||||||||||
Adjusted EBITDA margin attributable to common |
36.8 |
% |
57.0 |
% |
35.1 |
% |
26.2 |
% |
59.4 |
% |
20.2 |
% |
_______________
(1) The Senior Secured Net Leverage Ratio is calculated using Adjusted EBITDA per Credit Facility determined on a trailing twelve-month basis.
(2) The amortization of deferred financing costs is recorded within Interest Expense in the Condensed Consolidated Statement of Operations.
(3)
(In thousands of |
Three Months Ended |
Three Months Ended |
|||||||||||||||||||
Total revenues |
$ |
68,755 |
$ |
56,602 |
|||||||||||||||||
|
$ |
14,889 |
$ |
22,203 |
|||||||||||||||||
Non-controlling interest ownership percentage(4) |
28.59 |
% |
30.17 |
% |
|||||||||||||||||
Deduction for non-controlling interest share of revenues |
(4,257) |
(6,699) |
|||||||||||||||||||
Revenues attributable to common shareholders |
$ |
64,498 |
$ |
49,903 |
|||||||||||||||||
(In thousands of |
Nine Months Ended |
Nine Months Ended |
|||||||||||||||||||
Total revenues |
$ |
202,759 |
$ |
146,311 |
|||||||||||||||||
|
$ |
47,602 |
$ |
75,634 |
|||||||||||||||||
Non-controlling interest ownership percentage(4) |
28.59 |
% |
30.17 |
% |
|||||||||||||||||
Deduction for non-controlling interest share of revenues |
(13,609) |
(22,819) |
|||||||||||||||||||
Revenues attributable to common shareholders |
$ |
189,149 |
$ |
123,492 |
(In thousands of |
Twelve Months Ended |
Twelve Months Ended |
|||||||||||||||||||
Total revenues |
$ |
311,331 |
$ |
202,301 |
|||||||||||||||||
|
$ |
84,769 |
$ |
101,957 |
|||||||||||||||||
Non-controlling interest ownership percentage(4) |
28.72 |
% |
30.15 |
% |
|||||||||||||||||
Deduction for non-controlling interest share of revenues |
(24,347) |
(30,744) |
|||||||||||||||||||
Revenues attributable to common shareholders |
$ |
286,984 |
$ |
171,557 |
(4) Weighted average ownership percentage for change in non-controlling interest share
Adjusted Net Loss Attributable to Common Shareholders and Adjusted Diluted Per Share Calculations |
||||||||||||||||
Three Months Ended |
Three Months Ended |
|||||||||||||||
|
|
|||||||||||||||
(In thousands of |
Net Loss |
Per Share |
Net Loss |
Per Share |
||||||||||||
Net loss attributable to common shareholders |
$ |
(8,953) |
$ |
(0.16) |
$ |
(8,378) |
$ |
(0.14) |
||||||||
Adjustments(1): |
||||||||||||||||
Stock-based compensation |
5,431 |
0.10 |
5,876 |
0.10 |
||||||||||||
COVID-19 government relief benefits, net |
(212) |
— |
(2,048) |
(0.03) |
||||||||||||
Realized and unrealized investment gains |
(34) |
— |
(30) |
— |
||||||||||||
Acquisition-related expenses |
955 |
0.02 |
— |
— |
||||||||||||
Tax Impact on items listed above |
(214) |
— |
(452) |
(0.01) |
||||||||||||
Adjusted net loss(1) |
$ |
(3,027) |
$ |
(0.05) |
$ |
(5,032) |
$ |
(0.08) |
||||||||
Weighted average shares outstanding - basic and diluted |
56,039 |
59,244 |
Nine Months Ended |
Nine Months Ended |
|||||||||||||||
|
|
|||||||||||||||
(In thousands of |
Net Loss |
Per Share |
Net Loss |
Per Share |
||||||||||||
Net loss attributable to common shareholders |
$ |
(25,413) |
$ |
(0.44) |
$ |
(32,429) |
$ |
(0.55) |
||||||||
Adjustments(1): |
||||||||||||||||
Stock-based compensation |
18,651 |
0.33 |
17,675 |
0.30 |
||||||||||||
COVID-19 government relief benefits, net |
(373) |
(0.01) |
(5,513) |
(0.09) |
||||||||||||
Legal judgment and arbitration awards |
— |
— |
(1,770) |
(0.03) |
||||||||||||
Realized and unrealized investment gains |
(98) |
— |
(3,740) |
(0.06) |
||||||||||||
Acquisition-related expenses |
955 |
0.02 |
— |
— |
||||||||||||
Tax impact on items listed above |
(1,071) |
(0.02) |
(1,417) |
(0.02) |
||||||||||||
Income tax effects related to the removal of the indefinitely reinvested |
— |
— |
381 |
0.01 |
||||||||||||
Adjusted net loss(1) |
$ |
(7,349) |
$ |
(0.13) |
$ |
(26,813) |
$ |
(0.44) |
||||||||
Weighted average shares outstanding - basic and diluted |
57,301 |
59,207 |
_______________
(1) Reflects amounts attributable to common shareholders.
Free Cash Flow
Three Months Ended |
Nine Months Ended |
|||||||||
(In thousands of |
|
|
||||||||
Net cash provided by operating activities |
$ |
5,774 |
$ |
481 |
||||||
Net cash used in capital expenditures |
(9,772) |
(23,037) |
||||||||
Free cash flow |
$ |
(3,998) |
$ |
(22,556) |
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