SEC Filing | IMAX Corporation

View:

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest reported): OCTOBER 3, 2001 IMAX CORPORATION (Exact name of registrant as specified in its chapter) CANADA 0-24216 98-0140269 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 2525 SPEAKMAN DRIVE, MISSISSAUGA, ONTARIO L5K 1B1 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (905) 403-6500 NONE (Former name or former address, if changed since last report)

ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE. Mitey Cinemas, Inc., a wholly-owned subsidiary of the IMAX Corporation (the "Corporation"), has purchased approximately U.S.$48 million in face value of the Corporation's 5 3/4% Convertible Subordinated Notes (the "Notes") due on April 1, 2003. The repurchased Notes will be retired by the Corporation. After giving effect to these transactions, approximately U.S.$52 million of the original issue of U.S.$100 million will remain outstanding. The aggregate purchase price for the Notes purchased was approximately U.S.$7.8 million. A press release announcing the repurchase is filed herewith as Exhibit 99.1 and a pro forma condensed consolidated balance sheet and income statement of the Corporation as of June 30, 2001 giving effect to the repurchase are filed herewith as Exhibit 99.2. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. The following exhibits are filed herewith. Exhibit 99.1 - Press Release dated October 3, 2001 Exhibit 99.2 - Pro Forma Condensed Balance Sheet and Income Statement 2

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IMAX CORPORATION (Registrant) By: "Robert D. Lister" ------------------------------------------ Date: OCTOBER 26, 2001 Name: Robert D. Lister Title: Exec. Vice President, Legal Affairs & General Counsel By: "G. Mary Ruby" ------------------------------------------ Name: G. Mary Ruby Title: Sr. Vice President, Legal Affairs & Corporate Secretary 3

EXHIBIT 99.1 [IMAX LOGO] IMAX CORPORATION 2525 Speakman Drive Mississauga, Ontario, Canada L5K 1B1 Tel: (905)403-6500 Fax: (905)403-6450 www.IMAX.com IMAX CORPORATION ANNOUNCEMENT Toronto, Canada - October 03, 2001 -- IMAX Corporation (Nasdaq:IMAX; TSE:IMX) today announced that its wholly owned subsidiary Mitey Cinemas, Inc. has purchased approximately $48 million in face value of IMAX's 5 3/4% Convertible Subordinated Notes due on April 1, 2003. These Notes will be retired by the parent company. After giving effect to these transactions, approximately $52 million of the $100 million original Notes issue will remain outstanding. "This is a significant first step in IMAX's goal to de-leverage the company and begins the process of reducing our debt," commented IMAX co-CEOs Richard L. Gelfond and Bradley J. Wechsler. "Our affiliate was able to purchase the convertible notes at a substantial discount which we believe will improve the outlook for IMAX's business." IMAX Corporation and its subsidiaries comprise one of the world's leading entertainment technology companies, with particular emphasis on film and digital imaging technologies, including giant-screen images, 3D presentations, digital post-production and digital projection. There were more than 225 IMAX(R) theatres operating in 30 countries around the world as of June 30, 2001. IMAX Corporation is a publicly-traded company listed on both the Toronto and Nasdaq stock exchanges. More information on the Company can be found at www.imax.com. This press release contains forward looking statements that are based on management assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could effect these statements include the timing of theatre system deliveries, the mix of theatre systems shipped, the timing of the recognition of revenues and expenses on film production and distribution agreements, the viability of new businesses and fluctuations in foreign currency and in the large format and general commercial exhibition market. These factors and other risks and uncertainties are discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2000 and in the subsequent reports filed by the Company with the Securities and Exchange Commission. IMAX(R) is a registered trademark of IMAX Corporation. For additional information please contact: IMAX Corporation, Toronto IMAX Corporation, New York Victoria Dinnick Stephen Abraham (Analysts) 905-403-6366 212-821-0140 vdinnick@imax.com sabraham@imax.com

EXHIBIT 99.2 IMAX CORPORATION PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (in thousands of U.S. dollars) AS REPORTED PROFORMA JUNE 30, PROFORMA JUNE 30, 2001 ADJUSTMENTS (SEE NOTES) 2001 (UNAUDITED) DEBITS CREDITS (UNAUDITED) NOTES ----------- ---------- --------- ------------ ----- ASSETS Cash and cash equivalents $ 24,631 $ 7,899 $ 16,732 (3) Investments in marketable debt securities 715 715 Accounts receivable, less allowance for doubtful accounts of $21,750 (2000 - $19,774) 24,350 24,350 Net investment in leases 74,307 74,307 Inventories (note 3) 59,326 59,326 Income taxes recoverable 11,348 11,348 Prepaid expenses 3,697 3,697 Film assets 29,340 29,340 Fixed assets 87,332 87,332 Other assets 27,858 389 27,469 (1) Deferred income taxes 50,046 163 16,853 33,356 (1),(2),(3) Goodwill, net of accumulated amortization of $16,501 (2000 - $ 14,818) 59,357 59,357 ----------- ---------- --------- ----------- Total assets $ 452,307 $ 163 $ 25,141 $ 427,329 =========== ========== ========= =========== LIABILITIES Accounts payable $ 14,778 $ 14,778 Accrued liabilities 44,302 681 43,621 (2) Deferred revenue 94,965 94,965 Convertible subordinated notes due 2003 100,000 47,343 52,657 (3) Senior notes due 2005 200,000 200,000 ----------- ---------- --------- ----------- Total liabilities 454,045 48,024 -- 406,021 ----------- ---------- --------- ----------- SHAREHOLDERS' EQUITY (DEFICIT) Common stock - no par value. Authorized - unlimited number. Issued and outstanding - 31,126,514 (2000 - 30,051,514) 62,762 62,762 Deficit (63,473) 17,242 40,288 (40,427) See P&L Accumulated other comprehensive (loss) income (1,027) (1,027) ----------- ---------- --------- ----------- Total shareholders' equity (deficit) (1,738) 17,242 40,288 21,308 ----------- ---------- --------- ----------- Total liabilities and shareholders' equity (deficit) $ 452,307 $ 65,266 $ 40,288 $ 427,329 =========== ========== ========= =========== NOTES: (1) Write-off of $389,000 of related deferred financing costs as at June 30, 2001. Tax effect at 42%. (2) Reduction of proforma interest expense of $681,000 since last interest payment at April 1, 2001. Tax effect at 42%. (3) Proforma adjustment reflects the market repurchase of $ 47,343,000 of convertible notes as of June 30, 2001 for cash consideration of $7,899,000. The extraordinary gain has been tax effected at 42%.

EXHIBIT 99.2 IMAX CORPORATION PROFORMA CONDENSED CONSOLIDATED INCOME STATEMENT IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (in thousands of U.S. dollars) AS REPORTED PROFORMA SIX MONTHS ENDED SIX MONTHS ENDED JUNE 30, PROFORMA JUNE 30, 2001 ADJUSTMENTS (SEE NOTES) 2001 (UNAUDITED) DEBITS CREDITS (UNAUDITED) NOTES ----------------- --------- ---------- ---------------- ----- REVENUE IMAX systems $ 38,326 $ 38,326 Digital projection systems 12,232 12,232 Films 16,864 16,864 Other 6,274 6,274 ----------- --------- ---------- ----------- 73,696 - - 73,696 COSTS AND EXPENSES 51,981 51,981 ----------- --------- ---------- ----------- GROSS MARGIN 21,715 - - 21,715 Selling, general and administrative expenses 28,620 389 29,009 (1) Restructuring costs 12,860 12,860 Research and development 3,404 3,404 Amortization of intangibles 2,159 2,159 Loss from equity-accounted investees 177 177 ----------- --------- ---------- ----------- EARNINGS (LOSS) FROM OPERATIONS (25,505) 389 - (25,894) Interest income 588 588 Interest expense (10,842) 681 (10,161) (2) Foreign exchange gain (loss) (556) (556) ----------- --------- ---------- ----------- EARNINGS (LOSS) BEFORE INCOME TAXES (36,315) 389 681 (36,023) Recovery of (provision for) income taxes 11,120 286 163 11,243 (1),(2) ----------- --------- ---------- ----------- EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEMS (25,195) 675 844 (24,780) Extraordinary gain on extinguishment of debt, net of income tax expense of $16,567 - 16,567 39,444 22,877 (3) ----------- --------- ---------- ----------- NET EARNINGS (LOSS) $ (25,195) $ 17,242 $ 40,288 $ (1,903) =========== ========= ========== =========== NOTES: (1) Write-off of $389,000 of related deferred financing costs as at June 30, 2001. Tax effect at 42%. (2) Reduction of proforma interest expense of $681,000 since last interest payment at April 1, 2001. Tax effect at 42%. (3) Proforma adjustment reflects the market repurchase of $ 47,343,000 of convertible notes as of June 30, 2001 for cash consideration of $7,899,000. The extraordinary gain has been tax effected at 42%.