IMAX Corporation Reports Third Quarter 2024 Earnings Results
-
Global entertainment platform delivers Net Income of
$14 million (+16% YoY), EPS(1) of26 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) of35 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
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
“As we look forward, we expect 2025 to be our best year ever at the global box office, with more than
“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
“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 |
||||||||||||||||||
|
|
|
|
|
||||||||||||||||||
|
In millions of |
|
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 |
%) |
|
|
|||||||||||||||||||||
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 |
%) |
|
|
||
|
|
|||||||||||||||||||||
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
As of
In 2021, the Company issued
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
The Company is authorized under its share-repurchase program, expiring
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,
Conference Call
The Company will host a conference call today at
About
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
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
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’s Chief Executive Officer (“CEO”) is its CODM, as such term is defined under
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 |
||||
|
|
|
|
|
||||
|
|
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 |
|
|
|||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||
|
|
|
|
|
||||
|
|
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 |
|
|
|||||||
|
|
As of |
||
|
|
2024 |
|
2023 |
|
System Backlog: |
|
|
|
|
Sales Arrangements |
170 |
|
192 |
|
Hybrid JRSA |
95 |
|
107 |
|
Traditional JRSA |
207 |
|
187 |
|
Total System Backlog |
472 |
|
486 |
|
|
|
|
|
|
|
As of |
||
|
|
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 |
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of
(Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
|
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 |
|
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except share amounts)
(Unaudited)
|
|
|
|
|
||||
|
|
|
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 |
|
|
|
|
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 ( |
|
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 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(Unaudited)
|
|
Nine Months Ended |
||||||
|
|
|
||||||
|
|
|
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 |
||||||||
|
|
|
|
|
||||||||
|
(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 |
|
|
|||||||||||
NON-GAAP FINANCIAL MEASURES
(In thousands of
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
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
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 |
|
|
|
||||
|
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 |
|
|
|
|||||||
|
|
Twelve Months Ended |
||||||
|
(In thousands of |
|
|
|
||||
|
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 |
|
|
|
|||||||
Adjusted Net Income Attributable to Common Shareholders and Adjusted Net Income Per Share
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||
|
(In thousands of |
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 |
||||||||||||||
|
|
2024 |
|
|
2023 |
|
||||||||||
|
(In thousands of |
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 |
|
||||
|
|
|||||||||||||||
Free Cash Flow
|
|
Nine Months Ended |
||||||
|
|
|
||||||
|
(In thousands of |
|
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:
212-821-0154
jhorsley@imax.com
Media:
212-821-0102
mjafar@imax.com
Source: