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UNITED STATES

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

 

February 23, 2022

 

Date of report (Date of earliest event reported)

 

IMAX Corporation

(Exact Name of Registrant as Specified in Its Charter)

 

 

Canada		001-35066		98-0140269
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

 

2525 Speakman Drive	902 Broadway, Floor 20
Mississauga, Ontario, Canada L5K 1B1	New York, New York, USA 10010
(905) 403-6500	(212) 821-0100

 

(Address of principal executive offices, zip code, telephone numbers)

N/A

(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:

 

☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Shares, no par value		IMAX		The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter):

 

Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02Results of Operations and Financial Condition

 

On February 23, 2022, IMAX Corporation (the “Company”) issued a press release announcing the Company’s financial and operating results for the quarter and year ended December 31, 2021, a copy of which is attached as Exhibit 99.1.

 

The information in this current report on Form 8-K, including the Exhibit attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01Financial Statements and Exhibits

 

(d)Exhibits

 

Exhibit No.		Description
99.1		Press Release dated February 23, 2022.
104		Cover Page Interactive Data File (formatted as inline XBRL).

 

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SIGNATURE

 

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: February 23, 2022	By:	/s/ Richard L. Gelfond
	Name:	Richard L. Gelfond
	Title:	Chief Executive Officer & Director

 

3

Exhibit 99.1

 

 

IMAX CORPORATION REPORTS Q4 AND FULL-YEAR 2021 RESULTS

 

 

 

 

 

 

NEW YORK, NY — February 23, 2022 — IMAX Corporation (NYSE: IMAX) today reported financial results for the fourth quarter and full-year 2021 demonstrating its superiority at the global box office and the increasing diversification of its business — across platforms and around the world.

 

For the full-year 2021, IMAX drove solid improvement in results over the prior year, with net loss attributable to common shareholders improving from ($143.8) million to ($22.3) million and Adjusted EBITDA⁽¹⁾increasing to $68.6 million from ($13.1) million in the prior year.

 

The Company’s fourth quarter was highlighted by its strongest quarterly results since 2019 across key financial metrics, including: revenue growth of 94% to $108.6 million; improvement in net income attributable to common shareholders to $10.1 million, or $0.17 per share, versus a loss of ($21.2) million, or ($0.36) per share, in the prior-year period; improvement in adjusted net income attributable to common shareholders⁽¹⁾ to $18.4 million, or $0.31 per share, versus an adjusted loss⁽¹⁾ of ($12.7) million, or ($0.21) per share, in the prior-year period; improvement in Adjusted EBITDA⁽¹⁾ to $44.0 million versus $10.0 million in the prior-year period.

 

Notably, the Company’s quarterly results met or exceeded pre-pandemic levels across key metrics. IMAX delivered Operating Income, Global Box Office, and Gross Margin in the fourth quarter of 2021 that exceeded the fourth quarter of 2019; as well as quarterly Adjusted EPS⁽¹⁾ and Adjusted EBITDA⁽¹⁾ substantially in-line with the fourth quarter of 2019.

 

 

 

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“In the fourth quarter alone, IMAX turned in a dominating performance at the global box office, launched a major streaming partnership with Disney+, and created a series of exclusive events connecting theatrical and streaming in a way that few brands can,” said Richard L. Gelfond, CEO of IMAX Corporation. “World-class creators of all types are choosing our technology and platform to connect with fans around the globe — opening a world of opportunity to reimagine and grow The IMAX Experience^®.”

 

“Our results for the fourth quarter underscore that IMAX is a premier, global technology platform for entertainment and events. The fact that IMAX is driving results at or above what we achieved in 2019 — which was by many measures, our best year ever — reaffirms that we are not an exhibitor and have moved beyond recovery mode. With strong a balance sheet that affords us security and capital allocation flexibility, we are well-positioned to capitalize on our momentum and continue to evolve and grow our business.”

 

“Our full-year results are highlighted by a dramatic, positive swing in profitability of more than $80 million in Adjusted EBITDA⁽¹⁾. Furthermore, IMAX captured a greater share of the global box office than ever in 2021.

These achievements demonstrate our ability to quickly capitalize on improving market trends, and underscore how well-positioned IMAX remains for the highly- anticipated 2022 film slate, which boasts more expected IMAX DNA than ever.”

 

“Global audiences are choosing IMAX, and we’re meeting that demand with our most dynamic, diverse content portfolio ever. We’re delivering more ‘IMAX DNA’ in the biggest Hollywood blockbusters; a rapidly expanding slate of local language films from studios and filmmakers across China, Japan, India, Russia, and France; exclusive events and experiences with creators and artists ranging from Kanye West to The Beatles; and a growing library of IMAX Enhanced™ content to streaming platforms and consumer devices.”

 

Fourth Quarter and December Year-to-Date Financial Highlights

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Fourth Quarter and December Year-to-Date Segment Results⁽¹⁾

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IMAX Technology Network

IMAX Technology Sales and Maintenance

 

Cash Balances and Outstanding Debt

Total cash and cash equivalents as of December 31, 2021 were $189.7 million. Total debt, excluding deferred financing costs was $233.6 million as of December 31, 2021.

 

Share Count and Capital Return

Weighted average basic and diluted shares outstanding in the fourth quarter of 2021 were 58.9 million and 59.8 million, respectively, compared to 58.9 million of basic and diluted shares outstanding in the fourth quarter of 2020. During the fourth quarter of 2021, the Company repurchased 524,519 of its shares at an average price of $17.70 for a total of $9.3 million. IMAX China repurchased 3.1 million shares at an average price of $1.61 per share for a total of $5.0 million. A total of $75.5 million remains available under the Company’s outstanding share repurchase authorization, which was extended an additional year through to June 2022.

 

 

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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, SEC filings and public conference calls and webcasts, for additional information about the Company

 

Conference Call

The Company will host a conference call today at 5:00 PM ET to discuss its fourth quarter 2021 financial results. This call is being webcast by PGI and can be accessed at investors.imax.com. To access the call via telephone, interested parties in the US and Canada should dial (800) 220-8474 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 484-0475. The conference ID for the call is 6273867. A replay of the call will be available via webcast at investors.imax.com or via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 6273867.

 

About IMAX Corporation

IMAX is a premier global technology platform for entertainment and events. Through its proprietary software, theater architecture, patented intellectual property, and specialized equipment, IMAX offers a unique end-to-end solution to create superior, immersive content experiences for which the IMAX^® brand is globally renown. Top filmmakers, movie studios, artists, and creators utilize the cutting-edge visual and sound technology of IMAX to connect with audiences in innovative ways. As a result, IMAX is among the most important and successful global distribution platforms for domestic and international tentpole films and, increasingly, exclusive experiences ranging from live performances to interactive events with leading artists and creators.

 

IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of December 31, 2021, there were 1,683 IMAX theater systems (1,599 commercial multiplexes, 12 commercial destinations, 72 institutional) operating in 87 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchange under the stock code “HK.1970.”

 

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^®, IMAX Enhanced^™, IMAX nXos^® and Films to the Fullest^®, 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:

 

 

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Forward-Looking Statements

 

This earnings release contains forward looking statements that are based on IMAX management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. These forward-looking statements include, but are not limited to, references to business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, future capital expenditures (including the amount and nature thereof), industry prospects and consumer behavior, plans and references to the future success of IMAX Corporation together with its consolidated subsidiaries (the "Company") and expectations regarding the Company's future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, risks related to the adverse impact of the COVID-19 pandemic; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada; risks related to the Company’s growth and operations in China; the performance of IMAX DMR^® films; the signing of IMAX Theater System agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which the Company operates, including competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to consolidation among commercial exhibitors and studios; risks related to brand extensions and new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company’s inability to protect the Company’s intellectual property; risks related to climate change; risks related to weather conditions and natural disasters that may disrupt or harm the Company’s business; risks related to the Company’s indebtedness and compliance with its debt agreements; general economic, market or business conditions; the failure to convert IMAX Theater System backlog into revenue; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in our periodic filings with the SEC; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX’s most recent Annual Report on Form 10-K. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

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Primary Reporting Groups

The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements; (iii) IMAX Systems, (iv) IMAX Maintenance; (v) Other Theater Business; (vi) Film Distribution; and (vii) Film Post-Production; and (viii) New Business Initiatives. The Company organizes its reportable segments into the following four categories, identified by the nature of the product sold or service provided:

 

 

 

 

 

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IMAX Network and Backlog

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IMAX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except per share amounts)

 

 

9

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IMAX CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands of dollars, except share amounts)

 

 

10

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IMAX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of dollars)

 

 

 

 

 

 

11

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IMAX CORPORATION

NON-GAAP FINANCIAL MEASURES

(in thousands of U.S. dollars)

In this release, the Company presents adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin, and free cash flow as supplemental measures of the Company’s performance, which are not recognized under U.S. GAAP. Adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) COVID-19 government relief benefits, net, (iii) legal judgment and arbitration awards; (iv) realized and unrealized investment gains or losses, as well as the related tax impact of these adjustments, and (v) income taxes resulting from management’s decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries.

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 (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 from net income (loss) attributable to common shareholders and the associated per share amounts to adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) 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 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) write-downs, net of recoveries, including asset impairments and credit loss expense; (iv) legal judgment and arbitration awards; and (v) the gain or loss from equity accounted investments.

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.

Free cash flow is defined as net cash provided by or used in operating activities minus cash used in investing activities (from the Consolidated Statements of Cash Flows). Management views free cash flow, a non-GAAP measure, as a measure of the Company’s after-tax cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented below.

These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts.

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Adjusted EBITDA per Credit Facility

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(3)

 

Adjusted Net Income (Loss) Attributable to Common Shareholders and Adjusted Diluted Per Share Calculations

 

 

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Free Cash Flow

 

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