IMAX Corporation Reports Fourth Quarter and Full Year 2012 Financial Results

IMAX Corporation Reports Fourth Quarter and Full Year 2012 Financial Results

NEW YORK, Feb. 21, 2013 /PRNewswire/ --

HIGHLIGHTS


-- Adjusted EPS increases 95% to $0.80 for full year; Q4 2012 adjusted EPS
of $0.23
-- Full year revenues increase 20% to $284.3 million with fourth quarter
revenues of $77.8 million
-- Network scale and global film portfolio drive approximately 50% box
office growth in full year 2012
IMAX Corporation (NYSE: IMAX; TSX: IMX) today reported its financial results for the fourth quarter of 2012, driven by continued theatre network growth and strong box office performance, derived from a diverse global film portfolio. Fourth quarter 2012 revenues were $77.8 million, adjusted EBITDA as calculated in accordance with the Company's Credit Facility was $27.4 million, adjusted net income was $15.7 million, or $0.23 per diluted share, and reported net income was $12.9 million, or $0.19 per diluted share.

(Logo: http://photos.prnewswire.com/prnh/20111107/MM01969LOGO )

Full year 2012 revenues were $284.3 million, adjusted EBITDA as calculated in accordance with the Company's Credit Facility was $106.8 million, adjusted net income was $54.3 million, or $0.80 per diluted share, and reported net income was $41.3 million, or $0.61 per diluted share. For reconciliations of adjusted net income to reported net income and for the definition of adjusted EBITDA and free cash flow, please see the tables at the end of this press release.

"Our fourth quarter results once again demonstrated the operating leverage inherent in the IMAX business model and was a strong finish to a successful year for the Company," said IMAX Chief Executive Officer Richard L. Gelfond. "We executed on all key fronts, with the combination of network expansion and an increasingly global portfolio approach to our film slate translating into solid financial results."

Network Growth Update

In the fourth quarter of 2012, the Company signed contracts for 38 theatre systems, of which 28 were systems in new theatre locations, and installed 46 theatre systems, of which 43 were systems in new theatre locations. For the full year of 2012, the Company signed contracts for 142 theatre systems, of which 121 were systems in new theatre locations, and installed 125 theatre systems, of which 107 were systems in new theatre locations.

The total IMAX® theatre network consisted of 731 systems as of Dec. 31, 2012, of which 598 were in commercial multiplexes. There were 276 theatre systems in backlog as of Dec. 31, 2012, compared to 263 theatre systems in backlog as of Dec. 31, 2011. For a breakdown of theatre system signings, installations and backlog by type, please see the end of this press release.

"We believe the financial and strategic accomplishments of 2012 re-confirmed IMAX's position as a unique global player in the film industry and laid a solid foundation for long-term growth," Mr. Gelfond concluded. "Our 2013 objectives are straight forward - continue to expand our footprint worldwide, maximize the scalability of our business and further leverage our differentiated end-to-end technology platform to enable more leading filmmakers and studios to create an entertainment experience that cannot be found anywhere else."

Fourth Quarter Segment Results


-- IMAX systems revenue was $24.3 million in the quarter, compared to $29.8
million in the fourth quarter of 2011, primarily reflecting the
installation of 14 full, new theatre systems under sales and sales-type
lease arrangements in the most recent fourth quarter, compared to 17
full, new theatre systems in the prior year period. The Company also
installed three digital system upgrades under sales or sales-type lease
arrangements in the fourth quarter of 2012, compared to one upgrade in
the fourth quarter of 2011.
-- Revenue from joint revenue sharing arrangements increased 103.4% to
$17.0 million, from $8.4 million in the prior-year period. During the
quarter, the Company installed 29 new theatres under joint revenue
sharing arrangements, compared to 39 in the year-ago period. The
Company ended 2012 with 316 theatres operating under joint revenue
sharing arrangements, as compared to 257 theatres at the end of 2011.
-- Production and IMAX DMR® (Digital Re-Mastering) revenues increased
56.3% to $19.2 million in the fourth quarter of 2012 from $12.3 million
in the fourth quarter of 2011. Gross box office from DMR titles was a
record $152.0 million in the fourth quarter of 2012, compared to $97.6
million in the prior year period. The average global DMR box office per
screen in the fourth quarter of 2012 was $264,400, compared to $221,600
in the prior year period.
Conference Call
The Company will host a conference call today at 8:30 AM ET to discuss its fourth quarter and full year 2012 financial results. To access the call via telephone, interested parties should dial (800) 820-0231 approximately 5 to 10 minutes before it begins. International callers should dial (416) 640-5926. The participant passcode for the call is 4550645. This call is also being webcast by Thomson Financial and can be accessed on the 'Investor Relations' section of www.imax.com. A replay of the call will be available via webcast on the 'Investor Relations' section of www.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 4550645.

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 theatres 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 offices in London, Tokyo, Shanghai and Beijing. As of Dec. 31, 2012, there were 731 IMAX theatres (598 commercial multiplexes, 19 commercial destinations and 114 institutions) in 53 countries.

IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D Experience®, The IMAX Experience® and IMAX Is Believing® 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).

This press 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, general economic, market or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by the Company; the performance of IMAX DMR films; competitive actions by other companies; conditions in the in-home and out-of-home entertainment industries; the signing of theater system agreements; changes in laws or regulations; conditions, changes and developments in the commercial exhibition industry; the failure to convert theater system backlog into revenue; 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 failure to respond to change and advancements in digital technology; risks related to the acquisition of AMC Entertainment Holdings, Inc. by Dalian Wanda Group Co., Ltd.; risks related to new business initiatives; the potential impact of increased competition in the markets within which the Company operates; risks related to the Company's inability to protect the Company's intellectual property; risks related to Eastman Kodak bankruptcy and the possibility of constrained film supply; risks related to the Company's implementation of a new enterprise resource planning system; risks related to the Company's prior restatements and the related litigation; and other factors, many of which are beyond the control of the Company. These factors and other risks and uncertainties are discussed in IMAX's most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q.

For additional information please contact:


Investors: Media:
IMAX Corporation, New York IMAX Corporation, New York
Teri Loxam/Blaire Lomasky Ann Sommerlath
212-821-0100 212-821-0155
tloxam@imax.com asommerlath@imax.com
blomasky@imax.com
-----------------

Business Media: Entertainment Media:
Sloane & Company, New York Principal Communications Group, Los Angeles
Whit Clay Melissa Zuckerman/Paul Pflug
212-446-1864 323-658-1555
wclay@sloanepr.com melissa@pcommgroup.com
paul@pcommgroup.com
--- -------------------






Additional Information

Theatre Network Details:

Three Months Twelve Months
Ended December 31, Ended December 31,
------------------ ------------------
Theatre System Signings: 2012 2011 2012 2011
---- ---- ---- ----


Full new sales and sales-type lease arrangements 11 13 43 58
New joint revenue sharing arrangements 17 11 78 132
---
Total new theatres 28 24 121 190
--- --- --- ---

Upgrades and other 10 (1) 2 21 (1) (2) 19
Total Theatre Signings 38 26 142 209
=== === === ===

Three Months Twelve Months
Ended December 31, Ended December 31,
------------------ ------------------
Theatre System Installations: 2012 2011 2012 2011
---- ---- ---- ----

Full new sales and sales-type lease arrangements 14 17 47 51
New joint revenue sharing arrangements 29 39 60 86
---
Total new theatres 43 56 107 137
--- --- --- ---

Upgrades and other 3 1 18 33
Total Theatre Installations 46 57 125 170
=== === === ===


As of
Ended December 31,
------------------
Theatre Backlog: 2012 2011
---- ----

New sales and sales-type lease arrangements 128 134
New joint revenue sharing arrangements 137 119
Total new theatres 265 253
--- ---

Upgrades under sales and sales-type lease arrangements 11 (1) 10
Total Theatres in Backlog 276 263
=== ===

_______________

(1) Includes one laser-based system
for a commercial theater and
four laser-based systems for
institutional theaters.
(2) Includes three IMAX theatres
acquired from another existing
customer that had been operating
under a joint revenue sharing
arrangement. These theaters were
purchased from the Company under
a sales arrangement.


Additional Information (continued)

2013 DMR Films Announced to Date:
To date, IMAX has announced 23 titles to be released in 2013. The Company remains in discussions with virtually every major studio regarding future titles and expects the total number of titles in 2013 to be similar to that in 2012.


-- The Grandmaster: The IMAX Experience (Jet Tone Films and Sil-Metropole
Organization, January 2013);
-- Hansel & Gretel: Witch Hunters: An IMAX 3D Experience (Paramount
Pictures, January 2013);
-- Journey to the West: Conquering the Demons: An IMAX 3D Experience (Bingo
Movie Development Ltd, February 2013);
-- Top Gun: An IMAX 3D Experience (Paramount Pictures, February 2013);
-- A Good Day to Die Hard: The IMAX Experience (Twentieth Century Fox,
February 2013);
-- Jack the Giant Slayer: An IMAX 3D Experience (Warner Bros., March 2013);
-- Oz: The Great and Powerful: An IMAX 3D Experience (Walt Disney Pictures,
March 2013);
-- G.I. Joe: Retaliation: An IMAX 3D Experience (Paramount Pictures, March
2013);
-- Dragon Ball Z: Battle of the Gods: An IMAX 3D Experience (Toei Animation
Company, March 2013);
-- Oblivion: The IMAX Experience (Universal Pictures, April 2013);
-- Jurassic Park: An IMAX 3D Experience (Universal Pictures, April 2013);
-- Iron Man 3: An IMAX 3D Experience (Walt Disney Pictures, May 2013);
-- Star Trek: Into Darkness: An IMAX 3D Experience (Paramount Pictures, May
2013);
-- Man of Steel: The IMAX Experience (Warner Bros., June 2013);
-- Pacific Rim: An IMAX 3D Experience (Warner Bros., July 2013);
-- 300: Rise of an Empire: An IMAX 3D Experience (Warner Bros., August
2013);
-- Riddick Sequel: The IMAX Experience (Universal Pictures, September
2013);
-- Gravity: An IMAX 3D Experience (Warner Bros., October 2013);
-- Stalingrad: An IMAX 3D Experience (AR Films, October 2013, Russia and
the CIS only );
-- Seventh Son: An IMAX 3D Experience (Warner Bros., October 2013);
-- The Hunger Games: Catching Fire: The IMAX Experience (Lionsgate,
November 2013);
-- The Hobbit: The Desolation of Smaug: An IMAX 3D Experience (Warner
Bros., December 2013); and
-- Dhoom 3: The IMAX Experience (Yash Raj Films, 2013, India only).



IMAX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
In accordance with United States Generally Accepted Accounting Principles
(In thousands of U.S. dollars, except per share amounts)

Three Months Year Ended
Ended December 31, Ended December 31,
------------------ ------------------
2012 2011* 2012 2011*
---- ---- ---- ----

Revenues
Equipment and product sales $22,405 $26,657 $78,161 $85,016
Services 34,294 26,349 136,606 106,720
Rentals 18,356 9,394 61,268 34,810
Finance income 1,986 1,753 7,523 6,162
Other 732 2,523 732 3,848
--- ----- --- -----
77,773 66,676 284,290 236,556
------ ------ ------- -------
Costs and expenses applicable to revenues
Equipment and product sales 9,811 10,147 37,538 38,742
Services 17,239 21,262 72,617 69,277
Rentals 8,434 4,823 21,402 14,301
Other - 612 - 1,018
--- --- --- -----
35,484 36,844 131,557 123,338
------ ------ ------- -------
Gross margin 42,289 29,832 152,733 113,218
Selling, general and administrative expenses 22,529 17,093 81,560 73,157
(including share-based compensation expense of $2.9 million and $13.1 million for the three
months and year ended December 31, 2012, respectively (2011 - expense of $2.7 million and
$11.7 million, respectively))
Provision for arbitration award - - - 2,055
Research and development 3,788 1,803 11,411 7,829
Amortization of intangibles 174 125 706 465
Receivable provisions, net of recoveries (305) 804 524 1,570
Asset impairments - 20 - 28
Impairment of available-for-sale investment - - 150 -
--- --- --- ---
Income from operations 16,103 9,987 58,382 28,114
Interest income 12 13 85 57
Interest recovery (expense) 686 (402) (689) (1,827)
Income from continuing operations before income taxes 16,801 9,598 57,778 26,344
(Provision for) recovery of income taxes (3,594) (2,861) (15,079) (9,293)
Loss from equity-accounted investments (324) (479) (1,362) (1,791)
---- ---- ------ ------
Net Income $12,883 $6,258 $41,337 $15,260
======= ====== ======= =======

Net income per share - basic & diluted:
Net income per share - basic $0.19 $0.10 $0.63 $0.24
===
Net income per share - diluted $0.19 $0.09 $0.61 $0.22
===

Weighted average number of shares outstanding (000's):
Basic 66,264 64,799 65,854 64,504
Fully Diluted 68,281 67,460 67,933 67,859

Additional Disclosure:
Depreciation and amortization(1) $8,084 7,143 $32,788 25,163

_______________

(1) Includes less than $0.1 million and
$0.2 million of amortization of
deferred financing costs charged
to interest expense for the three
months and year ended December 31,
2012 (2011 -less than $0.1
million and $0.4 million
respectively).
* Reflects a revision resulting from
an adjustment to reflect an
unfunded postretirement obligation
of the Company.






IMAX CORPORATION
CONSOLIDATED BALANCE SHEETS
In accordance with United States Generally Accepted Accounting Principles
(In thousands of U.S. dollars)

As at December 31,
------------------
2012 2011*
---- ----

Assets
Cash and cash equivalents $21,336 $18,138
Accounts receivable, net of allowance for doubtful accounts of $1,564 (December 31, 2011 - $1,840) 42,007 46,659
Financing receivables 94,193 86,714
Inventories 15,794 19,747
Prepaid expenses 3,833 3,126
Film assets 3,737 2,388
Property, plant and equipment 113,610 101,253
Other assets 23,963 14,238
Deferred income taxes 36,461 51,046
Goodwill 39,027 39,027
Other intangible assets 27,911 24,913
------ ------
Total assets $421,872 $407,249
======== ========

Liabilities
Bank indebtedness $11,000 $55,083
Accounts payable 15,144 28,985
Accrued and other liabilities 68,695 58,855
Deferred revenue 73,954 74,458
Total liabilities 168,793 217,381
------- -------

Commitments and contingencies

Shareholders' equity
Capital stock common shares - no par value. Authorized - unlimited number.
Issued and outstanding - 66,482,425 (December 31, 2011 - 65,052,740) 313,744 303,395
Other equity 28,892 17,510
Deficit (87,166) (128,503)
Accumulated other comprehensive loss (2,391) (2,534)
------ ------
Total shareholders' equity 253,079 189,868
------- -------
Total liabilities and shareholders' equity $421,872 $407,249
======== ========






IMAX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
In accordance with United States Generally Accepted Accounting Principles
(In thousands of U.S. dollars)
Years Ended December 31,
2012 2011*
---- ----

Cash provided by (used in):
Operating Activities
Net income $41,337 $15,260
Adjustments to reconcile
net income to cash from
operations:
Depreciation and amortization 32,788 25,163
Write-downs, net of recoveries 1,607 1,954
Change in deferred income taxes 14,724 7,994
Stock and other non-cash
compensation 14,220 12,814
Provision for arbitration award - 2,055
Foreign currency exchange (gain)
loss (329) 1,255
Loss from equity-accounted
investments 1,362 1,791
Gain on non-cash contribution to
equity-accounted investees - (404)
Investment in film assets (16,817) (12,256)
Changes in other non-cash
operating assets and
liabilities (15,262) (49,379)
Net cash provided by operating
activities 73,630 6,247


Investing Activities
Purchase of property, plant
and equipment (6,055) (5,528)
Investment in joint revenue
sharing equipment (23,257) (33,290)
Investment in new business
ventures (381) (2,483)
Acquisition of other
intangible assets (5,826) (22,206)
Net cash used in investing
activities (35,519) (63,507)


Financing Activities
Increase in bank
indebtedness 9,917 75,083
Repayment of bank
indebtedness (54,000) (37,500)
Common shares issued -
stock options exercised 8,920 7,864
Proceeds from disgorgement
of stock sale profits 314 -
Credit Facility amendment
fees paid - (306)
--- ----
Net cash (used in) provided by
financing activities (34,849) 45,141


Effects of exchange rate
changes on cash (64) (133)
--- ----

Increase (decrease) in cash
and cash equivalents
during year 3,198 (12,252)

Cash and cash equivalents,
beginning of year 18,138 30,390

Cash and cash equivalents,
end of year $21,336 $18,138
======= =======






IMAX CORPORATION
SELECTED FINANCIAL DATA
In accordance with United States Generally Accepted Accounting Principles
(In thousands of U.S. dollars)

The Company has seven reportable segments identified by category of product sold or service provided: IMAX systems; theater system maintenance; joint revenue sharing arrangements; film production and IMAX DMR; film distribution; film post-
production; theater operations; and other. The IMAX systems segment designs, manufactures, sells or leases IMAX theater projection system equipment. The theater system maintenance segment maintains IMAX theater projection system equipment
in the IMAX theater network. The joint revenue sharing arrangements segment provides IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concessions revenue. The film production and IMAX
DMR segment produces films and performs film re-mastering services. The film distribution segment distributes films for which the Company has distribution rights. The film post-production segment provides film post-production and film
print services. The other segment includes theater operations from certain IMAX theaters, camera rentals and other miscellaneous items.

Three Months Year Ended
Ended December 31, Ended December 31,
------------------ ------------------
2012 2011 2012 2011
---- ---- ---- ----
Revenue
IMAX systems
Sales and sales-type leases $20,237 $26,552 $69,988 $81,310
Ongoing rent, fees, and finance income 4,105 3,270 13,417 11,890

24,342 29,822 83,405 93,200
------ ------ ------ ------
Theater system maintenance 7,751 6,570 28,629 24,840
----- ----- ------ ------
Joint revenue sharing arrangements 17,049 8,382 57,526 30,764
------ ----- ------ ------
Film
Production and IMAX DMR 19,245 12,312 78,050 50,592
Distribution 3,100 3,217 14,222 16,074
Post-production 2,126 2,549 7,904 8,235

24,471 18,078 100,176 74,901
------ ------ ------- ------
Other 4,160 3,824 14,554 12,851
----- ----- ------ ------
Total $77,773 $66,676 $284,290 $236,556
======= ======= ======== ========

Gross margins
IMAX systems(1)
Sales and sales-type leases $11,715 $17,088 $36,974 $45,251
Ongoing rent, fees, and finance income 4,055 3,372 13,271 11,678

15,770 20,460 50,245 56,929
------ ------ ------ ------
Theater system maintenance 2,848 2,525 10,970 9,437
----- ----- ------ -----
Joint revenue sharing arrangements(1) 8,968 3,813 37,308 17,605
----- ----- ------ ------
Film
Production and IMAX DMR(1) 13,641 2,339 49,355 23,574
Distribution(1) 223 494 2,356 3,025
Post-production 581 181 1,954 2,985

14,445 3,014 53,665 29,584
------ ----- ------ ------
Other 258 20 545 (337)
--- --- --- ----
Total $42,289 $29,832 $152,733 $113,218
======= ======= ======== ========

_______________

(1) IMAX systems include commission
costs of $0.6 million and $2.7
million for the three and twelve
months ended December 31, 2012,
respectively (2011 -$0.9
million and $2.4 million,
respectively). Joint revenue
sharing arrangements segment
margins include advertising,
marketing and commission costs
of $1.3 million and $3.4 million
for the three and twelve months
ended December 31, 2012,
respectively (2011 -$1.9
million and $5.4 million,
respectively). Production and
DMR segment margins include
marketing costs of $1.1 million
and $3.3 million for the three
and twelve months ended December
31, 2012, respectively (2011 -
$1.9 million and $3.8 million,
respectively). Distribution
segment margins include
marketing costs of $0.3 million
and $1.5 million for the three
and twelve months ended December
31, 2012, respectively (2011 -
$0.2 million and $1.9 million,
respectively).






IMAX CORPORATION
OTHER INFORMATION
(In thousands of U.S. dollars)

Non-GAAP Financial Measures:

In this release, the Company presents adjusted EBITDA, adjusted net income and adjusted net income per diluted share as supplemental measures of performance of the Company, which are not recognized under United States generally accepted accounting principals ("GAAP"). The Company
presents adjusted EBITDA, adjusted net income and adjusted net income per diluted share because it believes that they are important supplemental measures of its comparable controllable operating performance and it wants to ensure that its investors fully understand the impact of
its variable share-based compensation, provision for arbitration award and deferred taxes on its net income. Management uses these measures to review operating performance on a comparable basis from period to period. However, these non-GAAP measures may not be comparable to
similarly titled amounts reported by other companies. Adjusted EBITDA, adjusted net income and adjusted net income per diluted share should be considered in addition to, and not as a substitute for, net income and other measures of financial performance reported in accordance
with GAAP.

Adjusted EBITDA is calculated on a basis consistent with the Company's Credit Facility, which refers to Adjusted EBITDA as EBITDA. As of December 31, 2012, the Credit Facility provided that the Company was required to maintain 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. The Company was also required to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.1:1.0. As of December 31, 2012, under the terms of the Credit Facility,
the Company was 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 ratio of funded debt to EBITDA was 0.10:1 as at December 31, 2012, where Funded Debt (as defined in the
Credit Agreement) is the sum of all obligations evidenced by notes, bonds, debentures or similar instruments and was $11.0 million. EBITDA is calculated as follows:

Quarter Ended December 31, Year Ended December 31,
-------------------------- -----------------------
2012 2011* 2012 2011*
---- ---- ---- ----

Net income $12,883 $6,258 $41,337 $15,260
Add (subtract):
Loss for equity-accounted investments 324 479 1,362 1,791
Provision for income taxes 3,595 2,860 15,079 9,293
Interest (recovery) expense net of interest income (698) 389 604 1,770
Depreciation and amortization including film asset amortization 8,041 7,100 32,618 24,774
Write-downs net of recoveries including asset impairments and 91 1,113 1,607 1,954
receivable provisions
Stock and other non-cash compensation 3,121 2,936 14,220 12,814
Adjusted EBITDA $27,357 $21,135 $106,827 $67,657
===



IMAX CORPORATION
OTHER INFORMATION
(in thousands of U.S. dollars)

Adjusted Net Income and Adjusted Diluted Per Share Calculations - Quarter Ended December 31, 2012 vs. 2011:

The Company reported net income of $12.9 million or $0.20 per basic share and $0.19 per diluted share for the fourth quarter of 2012 as compared to $6.3 million or $0.10 per basic share and $0.09 per diluted share for the fourth quarter of 2011. Net income for the
quarter includes a $2.9 million charge or $0.04 per diluted share (2011 - $2.7 million or $0.04 per diluted share) for stock-based compensation. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax
impact, was $15.7 million or $0.23 per diluted share in the fourth quarter of 2012 as compared to adjusted net income of $8.9 million or $0.13 per diluted share for the fourth quarter of 2011. A reconciliation of net income, the most directly comparable U.S. GAAP
measure, to adjusted net income and adjusted net income per diluted share is presented in the table below:

Three Months Ended Three Months Ended
December 31, 2012 December 31, 2011*
----------------- -----------------
Net Income Diluted EPS Net Income Diluted EPS
---------- ----------- ---------- -----------
Reported $12,883 $0.19 $6,258 $0.09
Adjustments:
Stock-based compensation 2,861 0.04 2,708 0.04
Tax impact on item listed above (77) - (113) -

Adjusted $15,667 $0.23 $8,853 $0.13
======= ===== ====== =====

Weighted average diluted shares outstanding 68,281 67,460
====== ======


Adjusted Net Income and Adjusted Diluted Per Share Calculations - Year Ended December 31, 2012 vs. 2011:

The Company reported net income of $41.3 million or $0.63 per basic share and $0.61 per diluted share for the year ended December 31, 2012 as compared to net income of $15.3 million or $0.24 per basic share and $0.22 per diluted share for the year ended December 31,
2011. Net income for the year ended December 31, 2012 includes a $13.1 million charge or 0.19 per diluted share (2011 - $11.7 million or 0.17 per diluted share) for stock-based compensation. Net income for December 31, 2011 also includes a one-time $2.1 million
pre-tax charge ($0.03 per diluted share) due to an arbitration award arising from an arbitration proceeding brought against the Company in connection with a discontinued subsidiary. Adjusted net income, which consists of net income excluding the impact of stock-
based compensation, the charge for arbitration award and the related tax impact, was $54.3 million or $0.80 per diluted share for the year ended December 31, 2012 as compared to adjusted net income of $28.0 million or $0.41 per diluted share for the year ended
December 31, 2011. A reconciliation of net income, the most directly comparable U.S. GAAP measure, to adjusted net income and adjusted net income per diluted share is presented in the table below:

Year Ended Year Ended
December 31, 2012 December 31, 2011*
----------------- -----------------
Net Income Diluted EPS Net Income Diluted EPS
---------- ----------- ---------- -----------
Net income $41,337 $0.61 $15,260 $0.22
Adjustments:
Stock-based compensation 13,113 0.19 11,681 0.17
Provision for arbitration award - - 2,055 0.03
Tax impact on items listed above (160) - (973) (0.01)

Adjusted net income $54,290 $0.80 $28,023 $0.41
======= ===== ======= =====

Weighted average diluted shares outstanding 67,933 67,859
====== ======


Free Cash Flow:

Free cash flow is defined as cash provided by operating activities minus cash used in investing activities (from the consolidated statements of cash flows). Cash provided by operating activities consist of net income, plus depreciation and amortization, plus the change
in deferred income taxes, plus other non-cash items, plus changes in working capital, less investment in film assets, plus other changes in operating assets and liabilities. Cash used in investing activities includes capital expenditures, acquisitions and other cash
used in investing activities. 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. A reconciliation of cash provided by operating
activities to free cash flow is presented in the table below:

For the For the
Quarter Ended Year Ended
(In thousands of U.S. Dollars) December 31, 2012 December 31, 2012
----------------- -----------------

Net cash provided by operating activities $19,720 $73,630
Net cash (used in) investing activities (12,319) (35,519)
Free cash flow $7,401 $38,111
====== =======




SOURCE IMAX Corporation

Photo:http://photos.prnewswire.com/prnh/20111107/MM01969LOGO
http://photoarchive.ap.org/
IMAX Corporation

Web Site: http://www.imax.com


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Profile: intent