UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
November 16, 2009
Date of report (Date of earliest event reported)
Date of report (Date of earliest event reported)
IMAX Corporation
(Exact Name of Registrant as Specified in Its Charter)
| Canada (State or Other Jurisdiction of Incorporation) |
0-24216 (Commission File Number) |
98-0140269 (I.R.S. Employer Identification Number) |
2525 Speakman Drive, Mississauga, Ontario, Canada, L5K 1B1
(Address of Principal Executive Offices) (Postal Code)
(Address of Principal Executive Offices) (Postal Code)
(905) 403-6500
(Registrant’s Telephone Number, Including Area Code)
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
| o | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry into a Material Definitive Agreement |
On November 16, 2009, IMAX Corporation (the “Company”) amended and restated the terms of its
existing senior secured credit facility (the “Prior Credit Facility”), which had been scheduled to
mature on October 31, 2010. The amended and restated facility (the “New Credit Facility”), with a
scheduled maturity of October 31, 2013, has a maximum borrowing capacity of $75 million, consisting
of revolving loans of up to $40 million, subject to a borrowing base calculation (as described
below) and including a sublimit of $20 million for letters of credit, and a term loan of $35
million. Certain of the Company’s subsidiaries will serve as guarantors (the “Guarantors”) of the
Company’s obligations under the New Credit Facility. The New Credit Facility is collateralized by
a first priority security interest in all of the present and future assets of the Company and the
Guarantors.
The terms of the New Credit Facility are set forth in the Amended and Restated Credit
Agreement (the “Credit Agreement”), dated November 16, 2009, among the Company, Wachovia Capital
Finance Corporation (Canada), as agent, lender, sole lead arranger and sole bookrunner,
(“Wachovia”) and Export Development Canada, as lender (“EDC”, together with Wachovia, the
“Lenders”) and in various collateral and security documents entered into by the Company and the
Guarantors. Each of the Guarantors has also entered into a guarantee in respect of the Company’s
obligations under the New Credit Facility.
The revolving portion of the New Credit Facility permits maximum aggregate borrowings equal to
the lesser of:
| (i) | $40.0 million, and | ||
| (ii) | a collateral calculation based on the percentages of the book values of the Company’s net investment in sales-type leases, financing receivables, certain trade accounts receivable, finished goods inventory allocated to backlog contracts and the appraised values of the expected future cash flows related to operating leases and the Company’s owned real property, reduced by certain accruals and accounts payable and subject to other conditions, limitations and reserve right requirements. |
On November 17, 2009, the Company borrowed $35 million from the term loan portion of the New
Credit Facility. Also on November 17, 2009, the Company repaid $20 million in outstanding
indebtedness under the revolving portion of the New Credit Facility which had been carried over
from the Prior Credit Facility.
The revolving portion of the New Credit Facility bears interest, at the Company’s option, at
either (i) LIBOR plus a margin of 2.75% per annum, or (ii) Wachovia’s prime rate plus a margin of
1.25% per annum. The term loan portion of the New Credit Facility bears interest, at the Company’s
option, at either (i) LIBOR plus a margin of 3.75% per annum, or (ii) Wachovia’s prime rate plus a
margin of 2.25% per annum.
The New Credit Facility provides that so long as the term loan remains outstanding, the
Company will be required to maintain: (i) a ratio of funded debt (as defined in the Credit
Agreement) to EBITDA (as defined in the Credit Agreement) of not more than 2:1 through December 31,
2010, and (ii) a ratio of funded debt to EBITDA of not more than 1.75:1 thereafter. If the Company
repays the term loan in full, it will remain subject to such ratio requirements only if Excess
Availability (as defined in the Credit Agreement) is less than $10.0 million or Cash and Excess
Availability (as defined in the Credit Agreement) is less than $15.0 million. The Company will
also be required to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of
not less than 1.1:1.0; provided, however, that if the Company will have repaid the term loan in
full, it will remain subject to such ratio requirement only if Excess Availability is less than
$10.0 million or Cash and Excess Availability is less than $15.0 million. At all times under the
terms of the New Credit Facility, the Company is required to maintain minimum Excess Availability
of not less than $5.0 million and minimum Cash and Excess Availability of not less than $15.0
million.
The New Credit Facility contains typical affirmative and negative covenants, including
covenants that limit or restrict the ability of the Company and the guarantors to: incur certain
additional indebtedness; make certain loans, investments or guarantees; pay dividends; make certain
asset sales; incur certain liens or other encumbrances; conduct certain transactions with
affiliates and enter into certain corporate transactions.
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The New Credit Facility also contains customary events of default, including upon an
acquisition or change of control or upon a change in the business and assets of the Company or a
Guarantor that in each case is reasonably expected to have a material adverse effect on the Company
or a guarantor. If an event of default occurs and is
continuing under the New Credit Facility, the Lenders may, among other things, terminate their
commitments and require immediate repayment of all amounts owed by the Company.
On November 17, 2009, the Company issued a press release announcing its entry into the New
Credit Facility. A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 is incorporated by reference into this Item 2.03.
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| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| Exhibit No. | Description | |||
| 99.1 | Press Release, dated November 17, 2009, furnished pursuant to Item 1.01. |
|||
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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) |
||||
| Date: November 18, 2009 | By: | /s/ ROBERT D. LISTER | ||
| Name: | Robert D. Lister | |||
| Title: | Senior Executive Vice President and General Counsel |
|||
| By: | /s/ JOSEPH SPARACIO | |||
| Name: | Joseph Sparacio | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
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 |
IMAX CORPORATION |
Exhibit 99.1 | ||
| IMAX CORPORATION 2525 Speakman Drive Mississauga, Ontario, Canada L5K 1B1 Tel: (905) 403-6500 Fax: (905) 403-6450 www.imax.com |
IMAX CORPORATION ENTERS INTO NEW $75 MILLION CREDIT FACILITY
– New facility extends to October 2013 and allows for increased borrowing capacity –
– Company Announces Redemption of All Remaining Senior Notes by December 21, 2009 –
TORONTO – November 16, 2009 – IMAX Corporation (NASDAQ: IMAX; TSX: IMX) today announced
that it has entered into a new credit facility with Wachovia Capital Finance Corporation pursuant
to which Wachovia, with the participation of Export Development Canada, has committed to provide a
four-year senior secured $75 million credit facility. The credit facility consists of revolving
loans of up to $40 million and a term loan of $35 million. The Company intends to use the new
facility to finance its future growth and working capital requirements. The credit facility
matures on October 31, 2013 and replaces the Company’s previous $40 million credit facility which
was to mature in October of 2010.
Borrowings under the credit facility will bear interest at variable rates based on LIBOR or
Wachovia’s prime rate plus variable margins at the Borrower’s option, under which applicable
interest rates currently range from 3% to 4% per annum.
As previously announced on October 2, 2009, the Company called $75 million of its Senior Notes for
redemption on December 1, 2009. Today, the Company announced that it has given notice to its
trustee of its intent to redeem its remaining $29.4 million principal amount of its 9 5/8% Senior
Notes due December 1, 2010 (the “Notes”). The redemption notice stipulates a redemption date of
December 21, 2009 at a price of 100.00%, plus accrued and unpaid interest. Upon completion of the
current redemptions, the Company will have redeemed the full $160 million 9 5/8% Senior Notes due
December 2010.
“This new credit facility and the redemption of our remaining senior notes are, without a doubt,
two of the most important milestones in our Company’s history,” said Richard L. Gelfond, Chief
Executive Officer of IMAX Corporation. “These initiatives should result in upwards of $15 million
in annual interest expense savings in comparison to 2008, and, most importantly, this new
capital structure positions us to realize the future growth potential for the IMAX brand.”
This news release is for information purposes only and is not an offer to buy any securities
of IMAX Corporation. A formal notice of redemption is being provided separately to holders of the
Notes in accordance with the terms of the indenture governing the Notes.
About IMAX Corporation
IMAX Corporation is one of the world’s leading entertainment technology companies, specializing in immersive motion picture technologies. The worldwide IMAX network is among the most important and successful theatrical distribution platforms for major event Hollywood films around the globe, with IMAX® theatres delivering the world’s best cinematic presentations using proprietary IMAX, IMAX® 3D, and IMAX DMR® technology. IMAX DMR is the Company’s groundbreaking digital re-mastering technology that allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality of The IMAX Experience®. The IMAX brand is recognized throughout the world for extraordinary and immersive entertainment experiences for consumers. As of September 30, 2009, there were 403 IMAX theatres (280 commercial, 123 institutional) operating in 44 countries.
IMAX Corporation is one of the world’s leading entertainment technology companies, specializing in immersive motion picture technologies. The worldwide IMAX network is among the most important and successful theatrical distribution platforms for major event Hollywood films around the globe, with IMAX® theatres delivering the world’s best cinematic presentations using proprietary IMAX, IMAX® 3D, and IMAX DMR® technology. IMAX DMR is the Company’s groundbreaking digital re-mastering technology that allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality of The IMAX Experience®. The IMAX brand is recognized throughout the world for extraordinary and immersive entertainment experiences for consumers. As of September 30, 2009, there were 403 IMAX theatres (280 commercial, 123 institutional) operating in 44 countries.
IMAX®, IMAX® 3D, IMAX DMR®, Experience It In
IMAX®, An IMAX 3D Experience® and The IMAX Experience® are
trademarks of IMAX Corporation. More information about the Company can be found at www.imax.com.
You may also connect with IMAX on Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax)
and YouTube (www.youtube.com/imaxmovies).
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This press release contains forward looking statements that are based on 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. Important factors that could affect these statements include, but are not
limited to, general economic, market or business conditions, including the length and severity of
the current economic downturn, the opportunities that may be presented to and pursued by the
Company, the performance of IMAX DMR films, conditions in the in-home and out-of home entertainment
industries, the signing of theatre system agreements, changes and developments in the commercial
exhibition industry, the failure to convert theatre system backlog into revenue, investments and
operations in foreign jurisdictions, foreign currency fluctuations and the Company’s prior
restatements and the related litigation and ongoing inquiries by the SEC and the OSC. These
factors and other risks and uncertainties are discussed in the Company’s most recent Annual Report
on Form 10-K and most recent Quarterly Reports on Form 10-Q.
For additional information please contact:
Media:
|
Investors: | |
IMAX Corporation, New York Sarah Gormley 212-821-0155 sgormley@imax.com |
IMAX Corporation, New York Heather Anthony 212-821-0121 hanthony@imax.com |
|
Entertainment Media: Rogers & Cowan, Los Angeles Elliot Fischoff/Jason Magner 310-854-8128 jmagner@rogersandcowan.com |
Business Media: Sloane & Company, New York Whit Clay 212-446-1864 wclay@sloanepr.com |
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