Exhibit 99.1

 

 

 

 

IMAX CORPORATION REPORTS SECOND QUARTER

2020 RESULTS

 

HIGHLIGHTS

 

409 IMAX® theaters reopened in China over the July 24th weekend. The Company now has 624 theaters or approximately 40% of its global network generating revenue and is ready to benefit from an IMAX-friendly slate

 

A strong balance sheet, with $319 million in consolidated cash as of June 30, 2020, and an amended credit agreement, with covenant flexibilty through Q3 2021, positions the Company well to manage through the ongoing COVID-19 related challenges

 

Cost reduction measures taken at the outset of the pandemic reduced the Company’s average monthly cash burn to approximately $10 million, as demonstrated by the second quarter and in line with previous guidance

 

IMAX signed agreements to add 29 theater systems, headlined by the international 17-theater CGV and 10-theater Wanda deals, demonstrating continued global demand for The IMAX Experience® from existing partners in established markets

 

As a result of the global pandemic, second quarter 2020 revenue decreased 92% versus 2019 to $8.9 million. Second quarter 2020 net (loss) attributable to common shareholders was ($26) million. Non-GAAP adjusted EBITDA (loss) was ($18.5) million versus $41.4 million in the prior-year period

 

 

 

Three Months Ended

 

 

 

June 30,

 

In thousands except per share data

 

2020

 

 

2019

 

 

YoY %

Change

 

Total Revenue

 

$

8.9

 

 

$

104.8

 

 

 

(91.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Margin Loss) Gross Margin

 

$

(7.7

)

 

$

59.6

 

 

 

(112.9

%)

(Margin Loss) Gross Margin (%)

 

 

(86.8

%)

 

 

56.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss) income attributable to common shareholders

 

$

(26.0

)

 

$

11.4

 

 

N/A

 

Diluted Net (Loss) income per share attributable to common shareholders

 

$

(0.44

)

 

$

0.19

 

 

N/A

 

Adjusted Net (Loss) Income(1)

 

$

(26.1

)

 

$

19.7

 

 

N/A

 

Adj. Net (Loss) Income Per Share(1)

 

$

(0.44

)

 

$

0.32

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA per Credit Facility attributable to common shareholders(1)

 

$

(18.5

)

 

$

41.4

 

 

N/A

 

Adj. EBITDA Margin attributable to common shareholders (%) (1)

 

 

(219.3

%)

 

 

43.8

%

 

N/A

 

_____________

(1)

Non-GAAP Financial Measure

 

Note: For the definition and reconciliations of reported results to non-GAAP financial results, please refer to the discussion of non-GAAP financial measures at the end of this earnings release.

1


 

NEW YORK –July 28, 2020 – IMAX Corporation (NYSE:IMAX) today reported second quarter 2020 revenues of $8.9 million, gross margin (loss) of ($7.7) million, and a net (loss) attributable to common shareholders of ($26.0) million, or ($0.44) per diluted share. For reconciliations of reported results to non-GAAP financial results, please see the end of this press release.

 

Results in the second quarter reflect the closure of substantially all of the theaters in the Company’s global network driven by the Coronavirus pandemic. These closures reduced IMAX Technology Network and IMAX Maintenance revenue to essentially zero and caused a margin loss for the quarter. During the second quarter, the Company accrued $3.2 million in payroll subsidies and tax credits from the Canadian and US governments as part of their COVID-19 relief programs which benefitted SG&A expense, cost of sales, and R&D expense.

 

“As the only global theatrical platform for blockbuster entertainment, IMAX is uniquely advantaged as theaters begin to reopen on a rolling basis throughout the world. Our model gives us the flexibility to reopen where safe, program locally relevant content to maximize revenues, and play a leadership role as the industry returns,” said IMAX CEO Richard L. Gelfond.

 

“We are seeing early signs of progress, with approximately 40% of our global network currently generating revenue. This includes 409 IMAX® theaters in China, which are scheduled to debut Hollywood and local language films over the coming weeks. Additionally, the South Korean blockbuster “Peninsula” continues to perform well across markets in Asia and Europe, drawing $26.5 million in global box office despite capacity limitations and highlighting solid demand among moviegoers in lower-risk markets worldwide.”

 

“We believe that our solid financial position gives IMAX the strength to be ready as the rest of our network comes back online. At the end of the second quarter, the Company had $319 million in consolidated cash and recently amended its credit agreement for increased financial flexibility through September 2021.”

 

“We continue to look ahead to an exceptionally strong slate through 2021, as studios affirm their commitment to the theatrical release by rescheduling their key blockbuster titles. Additionally, major global exhibitors continue to underscore the value of The IMAX Experience, with new agreements including a 10-theatre deal with Wanda Film in China and a multinational 17-theatre deal with CGV.”

 

“We remain unwavering in our stance that the health and safety of audiences must be the priority as theaters reopen and we support by the work of local governments and our partners to put public health first.”

 

2


Second Quarter and June Year-to-Date Segment Results(1)

 

 

 

IMAX Technology Network

 

 

IMAX Technology Sales and Maintenance

 

 

 

Revenue

 

 

(Margin Loss) Gross

Margin

 

 

(Margin Loss) Gross

Margin %

 

 

Revenue

 

 

Gross

Margin

 

 

Gross

Margin %

 

2Q20

 

$

0.4

 

 

$

(6.5

)

 

N/A

 

 

$

4.6

 

 

 

$

0.2

 

 

 

4.9

%

2Q19

 

64.8

 

 

 

43.3

 

 

 

66.8

%

 

34.8

 

 

 

 

15.4

 

 

 

44.1

%

% change

 

 

(99.4

%)

 

 

(115.1

%)

 

 

 

 

 

 

(86.8

%)

 

 

 

(98.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD 2Q20

 

$

17.0

 

 

$

(3.7

)

 

 

(21.8

%)

 

$

19.7

 

 

 

$

5.0

 

 

 

25.1

%

YTD 2Q19

 

110.8

 

 

 

75.0

 

 

 

67.7

%

 

 

65.0

 

 

 

 

28.5

 

 

 

43.8

%

% change

 

 

(84.7

%)

 

 

(104.9

%)

 

 

 

 

 

 

(69.7

%)

 

 

 

(82.6

%)

 

 

 

 

_____________

(1) Please refer to the Company’s Form 10-Q for the period ended June 30, 2020 for additional segment information

 

IMAX Technology Network

 

IMAX Technology Network revenues decreased 99% to $0.4 million in the second quarter of 2020, compared to $64.8 million in the prior-year period. The closure of the Company’s network due to the COVID-19 pandemic impacted results.

 

Margin (loss) for the IMAX Technology Network was ($6.5) million in the second quarter of 2020 and was driven by the lack of revenue and ongoing fixed costs associated with our installed IMAX network.

IMAX Technology Sales and Maintenance

 

IMAX Technology Sales and Maintenance revenues decreased 87% to $4.6 million in the second quarter of 2020, compared with $34.8 million in the prior year period. Seven fewer sales type lease installations principally resulted in lower IMAX system revenue. IMAX maintenance revenue declined to nil as regular maintenance services were suspended due to the COVID-19 theater closures.

 

Total gross margin for IMAX Technology Sales and Maintenance was $0.2 million compared to $15.4 million in the prior year period. Lower revenue was partially offset by the shift in certain overhead costs from cost of sales to SG&A.

 

Cash Balances and Outstanding Debt

Total cash and cash equivalents as of June 30, 2020 were $319 million. Total debt was $300.2 million as of June 30, 2020.

 

Share Count and Capital Return

 

 

The weighted average diluted shares outstanding at the end of the second quarter of 2020 declined 4.4% to 58.8 million, compared to 61.5 million in the second quarter of 2019, due primarily to share repurchase activity during the twelve-month period. During the second quarter of 2020, the Company did not repurchase any stock. A total of $89.4 million remains available under the Company’s outstanding share repurchase authorization, which was extended in June and now expires in June 2021.

 

During the second quarter of 2020, IMAX China repurchased a total of 423 thousand shares at an average price of $1.50 for a total value of approximately $640 thousand.

3


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 information posted on the Company’s corporate and Investor Relations website may be deemed 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.

 

Conference Call

The Company will host a conference call today at 4:30PM ET to discuss its second quarter 2020 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) 367-2403 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 490-5367. The conference ID for the call is 9071085. 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 9071085.

 

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 New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of June 30, 2020, there were 1,615 IMAX theater systems (1,527 commercial multiplexes, 13 commercial destinations, 75 institutional) operating in 81 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 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).

 

4


For additional information please contact:

 

Investors:

IMAX Corporation, New York

Brett Harriss

212-821-0187

bharriss@IMAX.com

 

 

Media:

IMAX Corporation, New York

Mark Jafar

212-821-0102

mjafar@imax.com

 

 

 

###

 

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. Important factors that could affect these statements include, but are not limited to, references to future capital expenditures (including the amount and nature thereof), business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, 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 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 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; competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to recent consolidation among commercial exhibitors and studios; risks related to 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; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; the failure to fully realize the projected cost savings and benefits from any of the Company’s restructuring initiatives; the impact of COVID-19 on our financial condition and results of operations and on the businesses of our customers and exhibitor partners; and other factors, many of which are beyond the control of the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. 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.

 

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) New

5


Business Initiatives; (vii) Film Distribution; and (viii) Film Post-production. The Company organizes its reportable segments into the following four 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 the Joint Revenue Sharing Arrangement (“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;

 

 

(iii)

New Business Initiatives, which is a segment that includes activities related to the exploration of new lines of business and new initiatives outside of the Company’s core business; and

 

 

(iv)

Film Distribution and Post-production, which includes activities related to the licensing of film content, the distribution of films primarily for the Company’s institutional theater partners (through the Film Distribution segment) and the provision of film post-production and quality control services (through the Film Post-production segment).

 

6


Signings and Installations

 

 

 

Three Months

Ended June 30,

 

 

Theater System Signings:

 

2020

 

 

 

2019

 

 

Full new sales and sales-type lease arrangements

 

 

12

 

 

 

 

7

 

 

New hybrid joint revenue sharing lease arrangements

 

 

17

 

 

 

 

45

 

 

New traditional joint revenue sharing arrangements

 

 

-

 

 

 

 

2

 

 

Total new IMAX theaters

 

 

29

 

 

 

 

54

 

 

Upgrades of IMAX theater systems

 

 

-

 

 

 

 

19

 

 

Total theater signings

 

 

29

 

 

 

 

73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

Ended June 30,

 

 

Theater System Installations:

 

2020

 

 

 

2019

 

 

Full new sales and sales-type lease arrangements

 

 

2

 

 

 

 

9

 

 

New hybrid joint revenue sharing lease arrangements

 

 

1

 

 

 

 

5

 

 

New traditional joint revenue sharing arrangements

 

 

-

 

 

 

 

13

 

 

Total new IMAX theaters

 

 

3

 

 

 

 

27

 

 

Upgrades of IMAX theater systems

 

 

 

 

 

 

8

 

 

Total theater installations

 

 

3

 

 

 

 

35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

Ended June 30,

 

 

Theater Sales Backlog:

 

2020

 

 

 

2019

 

 

Sales and sales-type lease arrangements

 

 

190

 

 

 

 

182

 

 

Hybrid JRSA

 

 

154

 

 

 

 

154

 

 

Traditional JRSA

 

 

215

 

(1)

 

 

276

 

(1)

Total theater backlog

 

 

559

 

(2)

 

 

612

 

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

Ended June 30,

 

 

Theater Network:

 

2020

 

 

 

2019

 

 

Commercial Multiplex Theaters:

 

 

 

 

 

 

 

 

 

 

Sales and sales-type lease arrangements

 

 

659

 

 

 

 

619

 

 

Hybrid joint revenue sharing lease arrangements

 

 

138

 

 

 

 

133

 

 

Traditional joint revenue sharing lease arrangements

 

 

730

 

 

 

 

693

 

 

Total Commercial Multiplex Theaters(4)

 

 

1,527

 

 

 

 

1,445

 

 

Commercial Destination Theaters

 

 

13

 

 

 

 

15

 

 

Institutional Theaters

 

 

75

 

 

 

 

81

 

 

Total theater network

 

 

1,615

 

 

 

 

1,541

 

 

_____________

(1)   Includes 46 IMAX Theater Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2019 — 60).

(2) Includes 154 new IMAX with Laser projection system configurations and 94 upgrades of existing locations to IMAX with Laser projection system configurations.

(3) Includes 139 new IMAX with Laser projection system configurations and 118 upgrades of existing locations to IMAX with Laser projection system configurations.

(4)   Period to period changes are net of the effects of permanently closed theaters.         

7


IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology sales

 

$

2,687

 

 

$

19,694

 

 

$

8,349

 

 

$

34,894

 

Image enhancement and maintenance services

 

 

3,799

 

 

 

56,662

 

 

 

24,520

 

 

 

100,809

 

Technology rentals

 

 

(137

)

 

 

25,863

 

 

 

5,834

 

 

 

44,033

 

Finance income

 

 

2,506

 

 

 

2,578

 

 

 

5,054

 

 

 

5,259

 

 

 

 

 

8,855

 

 

 

104,797

 

 

 

43,757

 

 

 

184,995

 

Costs and expenses applicable to revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology sales

 

 

2,546

 

 

 

11,939

 

 

 

6,415

 

 

 

21,374

 

Image enhancement and maintenance services

 

 

7,244

 

 

 

26,781

 

 

 

25,060

 

 

 

46,024

 

Technology rentals

 

 

6,753

 

 

 

6,524

 

 

 

14,884

 

 

 

12,904

 

 

 

 

 

16,543

 

 

 

45,244

 

 

 

46,359

 

 

 

80,302

 

(Margin loss) gross margin

 

 

(7,688

)

 

 

59,553

 

 

 

(2,602

)

 

 

104,693

 

Selling, general and administrative expenses

 

 

29,796

 

 

 

32,136

 

 

 

58,432

 

 

 

59,785

 

Research and development

 

 

1,232

 

 

 

1,222

 

 

 

3,432

 

 

 

2,358

 

Amortization of intangibles

 

 

1,344

 

 

 

1,218

 

 

 

2,665

 

 

 

2,293

 

Credit loss expense

 

 

1,440

 

 

 

927

 

 

 

11,657

 

 

 

1,358

 

Asset impairments

 

 

-

 

 

 

-

 

 

 

1,151

 

 

 

-

 

Exit costs, restructuring charges and associated impairments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

850

 

(Loss) income from operations

 

 

(41,500

)

 

 

24,050

 

 

 

(79,939

)

 

 

38,049

 

Gain (loss) in fair value of equity investment

 

 

2,025

 

 

 

(4,544

)

 

 

(2,514

)

 

 

(2,053

)

Retirement benefits non-service expense

 

 

(130

)

 

 

(160

)

 

 

(246

)

 

 

(320

)

Interest income

 

 

891

 

 

 

572

 

 

 

1,256

 

 

 

1,142

 

Interest expense

 

 

(1,581

)

 

 

(636

)

 

 

(2,229

)

 

 

(1,317

)

(Loss) income before taxes

 

 

(40,295

)

 

 

19,282

 

 

 

(83,672

)

 

 

35,501

 

Income tax benefit (expense)

 

 

10,248

 

 

 

(5,308

)

 

 

(5,257

)

 

 

(8,956

)

Equity in losses of investees, net of tax

 

-

 

 

 

(138

)

 

 

(529

)

 

 

(222

)

Net (loss) income

 

 

(30,047

)

 

 

13,836

 

 

 

(89,458

)

 

 

26,323

 

Less: Net loss (income) attributable to non-controlling interests

 

 

4,080

 

 

 

(2,439

)

 

 

14,137

 

 

 

(6,661

)

Net (loss) income attributable to common shareholders

 

$

(25,967

)

 

$

11,397

 

 

$

(75,321

)

 

$

19,662

 

Net (loss) income per share attributable to common shareholders -

      basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share — basic and diluted

 

$

(0.44

)

 

$

0.19

 

 

$

(1.26

)

 

$

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding (000's):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

58,808

 

 

 

61,331

 

 

 

59,613

 

 

 

61,354

 

 

Fully Diluted

 

 

58,808

 

 

 

61,507

 

 

 

59,613

 

 

 

61,525

 

Additional Disclosure:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization(1)

 

$

11,930

 

 

$

15,593

 

 

$

27,182

 

 

$

29,804

 

_____________

 

 

 

 

 

 

 

 

 

(1)   Includes $0.2 million and $0.3 million of amortization of deferred financing costs charged to interest expense for the three months and six months ended June 30, 2020, respectively ($0.1 million and $0.2 million, respectively).

 

 

8


IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

In accordance with United States Generally Accepted Accounting Principles

(In thousands of dollars, except share amounts)

(Unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

318,986

 

 

$

109,484

 

Accounts receivable, net of allowance for credit losses

 

 

54,839

 

 

 

99,513

 

Financing receivables, net of allowance for credit losses

 

 

123,865

 

 

 

128,038

 

Variable consideration receivable, net of allowance for credit losses

 

 

39,397

 

 

 

40,040

 

Inventories

 

 

60,179

 

 

 

42,989

 

Prepaid expenses

 

 

12,008

 

 

 

10,237

 

Film assets

 

 

13,147

 

 

 

17,921

 

Property, plant and equipment

 

 

287,220

 

 

 

306,849

 

Investment in equity securities

 

 

13,192

 

 

 

15,685

 

Other assets

 

 

24,575

 

 

 

25,034

 

Deferred income tax assets

 

 

46,826

 

 

 

23,905

 

Other intangible assets

 

 

28,204

 

 

 

30,347

 

Goodwill

 

 

39,027

 

 

 

39,027

 

Total assets

 

$

1,061,465

 

 

$

889,069

 

Liabilities

 

 

 

 

 

 

 

 

Bank indebtedness

 

$

297,765

 

 

$

18,229

 

Accounts payable

 

 

13,668

 

 

 

20,414

 

Accrued and other liabilities

 

 

108,917

 

 

 

112,779

 

Deferred revenue

 

 

104,311

 

 

 

94,552

 

Deferred income tax liabilities

 

 

18,475

 

 

 

 

Total liabilities

 

 

543,136

 

 

 

245,974

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Non-controlling interests

 

 

4,237

 

 

 

5,908

 

Shareholders' equity

 

 

 

 

 

 

 

 

Capital stock common shares — no par value. Authorized — unlimited number.

 

 

 

 

 

 

 

 

58,878,749 issued and 58,857,436 outstanding (December 31, 2019 — 61,362,872 issued and 61,175,852 outstanding)

 

 

405,583

 

 

 

423,386

 

Less: Treasury stock, 21,313 shares at cost (December 31, 2019 — 187,020)

 

 

(329

)

 

 

(4,038

)

Other equity

 

 

172,690

 

 

 

171,789

 

Accumulated deficit

 

 

(134,395

)

 

 

(40,253

)

Accumulated other comprehensive loss

 

 

(4,180

)

 

 

(3,190

)

Total shareholders' equity attributable to common shareholders

 

 

439,369

 

 

 

547,694

 

Non-controlling interests

 

 

74,723

 

 

 

89,493

 

Total shareholders' equity

 

 

514,092

 

 

 

637,187

 

Total liabilities and shareholders' equity

 

$

1,061,465

 

 

$

889,069

 

 

9


IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of dollars)

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

Cash (used in) provided by:

 

 

 

 

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(89,458

)

 

$

26,323

 

Adjustments to reconcile net (loss) income to cash from operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

27,182

 

 

 

29,804

 

Credit loss expense

 

 

11,657

 

 

 

1,358

 

Write-downs

 

 

6,806

 

 

 

508

 

Deferred income tax (benefit) expense

 

 

(4,878

)

 

 

1,296

 

Share-based and other non-cash compensation

 

 

10,850

 

 

 

11,710

 

Unrealized foreign currency exchange loss (gain)

 

 

312

 

 

 

(14

)

Loss in fair value of equity securities

 

 

2,514

 

 

 

2,053

 

Equity in losses of investees

 

 

529

 

 

 

222

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

36,971

 

 

 

489

 

Inventories

 

 

(16,887

)

 

 

(3,226

)

Film Assets

 

 

(4,057

)

 

 

(8,214

)

Deferred revenue

 

 

9,799

 

 

 

(1,355

)

Changes in other operating assets and liabilities

 

 

(12,220

)

 

 

(12,437

)

Net cash (used in) provided by operating activities

 

 

(20,880

)

 

 

48,517

 

Investing Activities

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(594

)

 

 

(4,175

)

Purchase of equipment for joint revenue sharing arrangements

 

 

(3,908

)

 

 

(22,235

)

Acquisition of other intangible assets

 

 

(1,221

)

 

 

(1,121

)

Investment in equity securities

 

 

 

 

 

(15,153

)

Net cash used in investing activities

 

 

(5,723

)

 

 

(42,684

)

Financing Activities

 

 

 

 

 

 

 

 

Increase in credit facility borrowings

 

 

280,244

 

 

 

35,000

 

Repayment of credit facility borrowings

 

 

 

 

 

(50,000

)

Credit facility amendment fees paid

 

 

(959

)

 

 

 

Settlement of restricted share units and options

 

 

(2,757

)

 

 

(7,619

)

Treasury stock repurchased for future settlement of restricted share units

 

 

(329

)

 

 

(1,575

)

Repurchase of common shares, IMAX China

 

 

(1,532

)

 

 

(16,813

)

Taxes withheld and paid on employee stock awards vested

 

 

(251

)

 

 

(219

)

Common shares issued - stock options exercised

 

 

 

 

 

2,379

 

Repurchase of common shares

 

 

(36,624

)

 

 

(1,258

)

Issuance of subsidiary shares to non-controlling interests (net of return on capital)

 

 

 

 

 

1,106

 

Dividends paid to non-controlling interests

 

 

(2,118

)

 

 

(2,266

)

Net cash provided by (used in) financing activities

 

 

235,674

 

 

 

(41,265

)

Effects of exchange rate changes on cash

 

 

431

 

 

 

293

 

Increase (decrease) in cash and cash equivalents during period

 

 

209,502

 

 

 

(35,139

)

Cash and cash equivalents, beginning of period

 

 

109,484

 

 

 

141,590

 

Cash and cash equivalents, end of period

 

$

318,986

 

 

$

106,451

 

10


 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IMAX Technology Network

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IMAX DMR

 

$

546

 

 

$

39,293

 

 

$

11,175

 

 

$

67,243

 

Joint revenue sharing arrangements, contingent rent(2)

 

 

(137

)

 

 

25,540

 

 

 

5,834

 

 

 

43,584

 

 

 

 

409

 

 

 

64,833

 

 

 

17,009

 

 

 

110,827

 

IMAX Technology Sales and Maintenance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IMAX Systems

 

 

4,549

 

 

 

16,501

 

 

 

10,237

 

 

 

29,527

 

Joint revenue sharing arrangements, fixed fees

 

 

369

 

 

 

2,548

 

 

 

1,139

 

 

 

5,087

 

IMAX Maintenance

 

 

 

 

 

13,207

 

 

 

7,370

 

 

 

26,158

 

Other Theater Business(3)

 

 

(309

)

 

 

2,580

 

 

 

954

 

 

 

4,206

 

 

 

 

4,609

 

 

 

34,836

 

 

 

19,700

 

 

 

64,978

 

New Business Initiatives

 

 

632

 

 

 

478

 

 

 

1,110

 

 

 

1,312

 

Film Distribution and Post-production

 

 

3,182

 

 

 

3,601

 

 

 

5,676

 

 

 

6,263

 

 

 

 

8,832

 

 

 

103,748

 

 

 

43,495

 

 

 

183,380

 

Other

 

 

23

 

 

 

1,049

 

 

 

262

 

 

 

1,615

 

Total revenues

 

$

8,855

 

 

$

104,797

 

 

$

43,757

 

 

$

184,995

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Margin Loss) Gross Margin