IMAX Corporation Reports Third Quarter 2013 Financial Results

IMAX Corporation Reports Third Quarter 2013 Financial Results

HIGHLIGHTS

- IMAX signs contracts for 99 theatres in the third quarter, bringing year-to-date signings to 158

- IMAX expands backlog to historical high of 356 theatres, a 25% increase year-over-year

- Third quarter box office of $133 million brings year-to-date box office to $482 million, a 3% increase year-over-year

NEW YORK, Oct. 24, 2013 /PRNewswire/ -- IMAX Corporation (NYSE:IMAX; TSX:IMX) today reported third quarter 2013 revenues of $51.7 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $14.8 million, adjusted net income of $4.4 million, or $0.06 per diluted share, and reported net income of $1.6 million, or $0.02 per diluted share.

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

"We continued to make significant progress this quarter toward our key strategic initiatives, including strong signings, controlling SG&A and continued advancements on differentiation," stated Richard L. Gelfond, IMAX Chief Executive Officer. "Looking ahead, our great start to Q4, including IMAX's strong performance on Gravity and Stalingrad, reminds us of the importance of assessing our portfolio of films on an annual basis, which we believe is a relatively predictable driver of box office performance over the long-term."

Network Growth Update

The total IMAX® theatre network consisted of 785 systems as of September 30, 2013, of which 653 were in commercial multiplexes. There were 356 theatre systems in backlog as of September 30, 2013, compared to 285 theatre systems in backlog as of September 30, 2012. IMAX has signed contracts for 158 theatres year-to-date, already surpassing the 142 signings for all of 2012. Neither the backlog number, nor the YTD signings, include the 80 additional theatres still optional under the Wanda contract. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

In the third quarter of 2013, the Company signed contracts for 99 theatre systems, of which 88 were in new theatre locations and 11 were a combination of signings for laser systems and upgrades of certain of the Company's film theatres to digital systems in existing theatre locations. In the quarter, the Company installed 28 theatre systems, of which 19 were in new theatre locations.

"Strong third quarter signings, historic high backlog and many fourth quarter deals either signed or in discussions, provide increased visibility into strong network growth over the long-term," Gelfond continued, "This unit growth, along with our ongoing focus on controlling costs and optimizing our film portfolio, give us confidence in our operating leverage and cash flow potential for the long-term."

Third-Quarter Segment Results


-- Revenue from sales and sales-type leases was $6.4 million in the third
quarter of 2013, compared to $21.9 million in the third quarter of 2012,
primarily reflecting the installation of 5 full, new theatre systems
under sales and sales-type lease arrangements in the most recent third
quarter, compared to the 14 sales and sales-type theatres the Company
installed in the third quarter of 2012. The Company also installed 1
operating lease in a new location. In addition there were 9 digital
system upgrades in existing locations in the third quarter of 2013,
compared to 5 upgrades in the third quarter of 2012.
-- Revenue from joint revenue-sharing arrangements was $12.0 million in the
quarter, compared to $13.2 million in the prior-year period. During the
quarter, the Company installed 13 new theatres under joint
revenue-sharing arrangements, compared to 14 in the year-ago period.
The Company had 351 theatres operating under joint revenue-sharing
arrangements as of September 30, 2013, as compared to 287 theatres one
year prior.
-- Production and IMAX DMR® (Digital Re-Mastering) revenues were $14.5
million in the third quarter of 2013, compared to $25.2 million in the
third quarter of 2012. Gross box office from DMR titles was $132.5
million in the third quarter of 2013, compared to $173.2 million in the
prior-year period. The average global DMR box office per screen in the
third quarter of 2013 was $207,500 compared to $312,000 in the
prior-year period.
Conference Call

The Company will host a conference call today at 8:30 AM ET to discuss its third quarter 2013 financial results. To access the call via telephone, interested parties should dial (800) 711-9538 approximately 5 to 10 minutes before it begins. International callers should dial (416) 640-5925. The participant passcode for the call is 1695965. 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 1695965.

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 September 30, 2013, there were 785 IMAX theatres (653 commercial multiplexes, 19 commercial destinations and 113 institutions) in 55 countries.

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

For additional information please contact:






Investors: Media:

IMAX Corporation, New York IMAX Corporation, New York

Teri Loxam Ann Sommerlath

212-821-0100 212-821-0155

tloxam@imax.com asommerlath@imax.com



Business Media:

Sloane & Company, New York Entertainment Media:

Whit Clay Principal Communications Group, Los Angeles

212-446-1864 Melissa Zuckerman/Paul Pflug

wclay@sloanepr.com 323-658-1555

melissa@pcommgroup.com

paul@pcommgroup.com
--- -------------------




Additional Information


Signings and Installations
--------------------------

Sep. 30, 2013

Three
Months

Ended Sep.
30,
-----------

Theatre
Signings: 2013 2012
---- ----

Full new sales and sales-type
lease arrangements 6 4

New joint revenue sharing
arrangements 82 28


Total new
theatres 88 32


Upgrades of IMAX theatre
systems 11 (1) 9 (2)

Total
Theatre
Signings 99 41
=== ===


Three
Months

Ended Sep.
30,
-----------

Theatre
Installations: 2013 2012
---- ----

Full new sales and sales-type
lease arrangements 6 (3) 14

New joint revenue sharing
arrangements 13 14
--- ---

Total new
theatres 19 28


Upgrades of IMAX theatre
systems 9 (1) 5

Total
Theatre
Installations 28 33
=== ===


As of Sep.
30,
-----------

Theatre
Backlog: 2013 2012
---- ----

New sales and sales-type
lease arrangements 142 133

New joint revenue sharing
arrangements 191 149

Total new
theatres 333 282


Upgrades of IMAX theatre
systems 23 3

Total
Theatres in
Backlog 356 (4) 285 (5)
=== ===


As of Sep.
30,
-----------

Theatre
Network: 2013 2012
---- ----

Commercial Multiplex
Theatres:

Sales and sales-type lease
arrangements 302 269

Joint revenue sharing
arrangements 351 287

Total
Commercial
Multiplex
Theatres 653 556


Commercial
Destination
Theatres 19 20

Institutional
Theatres 113 113

Total IMAX
Theatre
Network 785 689
=== ===


(1) Includes upgrades to xenon-based digital systems under
short-term operating lease arrangements (4 signings, 3
installations).

(2) Includes 3 IMAX theaters acquired from another existing
customer that has been operating under a joint revenue sharing
arrangement. These theaters were purchased from the Company
under a sales arrangement.

(3) Includes one full xenon-based digital system under a short-
term operating lease arrangement.

(4) Includes 23 upgrades to a digital theater system, in an
existing IMAX theater location (5 xenon, 18 laser of which 3
are under joint revenue sharing arrangements).

(5) Includes 3 upgrades to a digital theater system, in an
existing IMAX theater location (2 xenon, 1 laser).


Additional Information (continued)

2013 DMR Films Announced to Date:

To date, IMAX has announced 37 titles to be released in 2013. The Company released 35 titles in 2012. 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, China only);
-- 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, China only);
-- 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, Japan only);
-- Jurassic Park: An IMAX 3D Experience (Universal Pictures, April 2013);
-- Oblivion: The IMAX 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);
-- Fast & Furious 6: The IMAX Experience (Universal, May 2013,
international only);
-- After Earth: The IMAX Experience (Sony, May 2013);
-- Man of Steel: The IMAX Experience (Warner Bros., June 2013);
-- World War Z: An IMAX 3D Experience (Paramount Pictures, June 2013,
international only);
-- Despicable Me 2: An IMAX 3D Experience (Universal Pictures, July 2013,
international only);
-- White House Down: The IMAX Experience (Colombia Pictures and Sony
Pictures, July 2013; international only);
-- Man of Tai Chi: The IMAX Experience (China Film Group, Wanda Group and
Village Roadshow Pictures, July 2013; China only);
-- Pacific Rim: An IMAX 3D Experience (Warner Bros., July 2013);
-- The Lone Ranger : The IMAX Experience (Walt Disney Pictures, August
2013; international only);
-- Elysium: The IMAX Experience (Sony, August 2013);
-- Riddick Sequel: The IMAX Experience (Universal Pictures, September
2013);
-- Mortal Instruments: City of Bones: The IMAX Experience (Sony, August
2013; domestic only);
-- The Wizard of Oz: An IMAX 3D Experience (Warner Bros., September 2013;
domestic only);
-- Metallica Through the Never: An IMAX 3D Experience (Picturehouse,
September 2013);
-- Young Detective Dee: The IMAX Experience (Huayi Brothers, September
2013; China only);
-- Stalingrad: An IMAX 3D Experience (AR Films, October 2013; Russia and
the CIS only );
-- Gravity: An IMAX 3D Experience (Warner Bros., October 2013);
-- Captain Phillips: The IMAX Experience (Colombia Pictures and Sony
Pictures, October 2013);
-- The Young and Prodigious: T.S. Spivet: An IMAX 3D Experience (Gaumont,
October 2013; France only);
-- Ender's Game: The IMAX Experience (Lionsgate, November 2013);
-- Thor: The Dark World: An IMAX 3D Experience (Walt Disney Pictures,
November 2013; international only);
-- 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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

In accordance with United States Generally Accepted Accounting Principles

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

(Unaudited)


Three Months Nine Months

Ended September Ended September
30, 30,
--------------- ----------------

2013 2012* 2013 2012*
---- ---- ---- ----

Revenues

Equipment and
product sales $9,623 $24,327 $40,649 $55,756

Services 29,061 40,316 98,019 102,312

Rentals 10,987 14,013 38,782 42,912

Finance income 2,071 2,055 6,079 5,537

Other - - 375 -
--- --- --- ---

51,742 80,711 183,904 206,517
------ ------ ------- -------

Costs and
expenses
applicable to
revenues

Equipment and
product sales 4,086 10,652 20,561 27,727

Services 16,339 21,107 54,783 55,378

Rentals 4,059 4,202 11,687 12,968

Other - - - -
--- --- --- ---

24,484 35,961 87,031 96,073
------ ------ ------ ------

Gross margin 27,258 44,750 96,873 110,444

Selling, general
and
administrative
expenses 19,778 19,432 59,364 59,032

(including share-
based (2012 - expense
compensation of $2.8 million
expense of $2.8 and $10.3
million and $8.8 million,
million for the respectively))
three and nine
months ended
September 30,
2013,
respectively

Research and
development 3,974 2,528 11,267 7,623

Amortization of
intangibles 409 166 1,146 532

Receivable
provision, net
of recoveries 224 241 279 829

Impairment of
available-for-
sale investment - - - 150
--- --- --- ---

Income from
operations 2,873 22,383 24,817 42,278

Interest income 14 22 39 73

Interest expense (315) (373) (1,008) (1,375)
---- ---- ------ ------

Income from
operations
before income
taxes 2,572 22,032 23,848 40,976

Provision for
income taxes (619) (6,787) (6,564) (11,484)

Loss from equity-
accounted
investments (344) (334) (998) (1,038)
---- ---- ---- ------

Net income $1,609 $14,911 $16,286 $28,454
====== ======= ======= =======


Net income per
share -basic &
diluted:

Net income per
share -basic $0.02 $0.23 $0.24 $0.43
===== ===== ===== =====

Net income per
share -
diluted $0.02 $0.22 $0.24 $0.42
===== ===== ===== =====


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

Basic 67,309 65,930 66,969 65,718

Fully Diluted 69,116 68,301 68,853 68,187


Additional
Disclosure:


Depreciation
and
amortization(1) $8,826 $8,038 $29,027 $24,704


(1) Includes $0.1 million and $0.3 million of amortization of deferred financing costs charged to
interest expense for the three and nine months ended September 30, 2013, respectively (2012 -
less than $0.1 million and $0.1 million, respectively).


* Reflects a revision resulting from an adjustment to reflect an unfunded postretirement
obligation of the Company.




IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

In accordance with United States Generally Accepted Accounting Principles

(in thousands of U.S. dollars)


As at As at

September 31, December 31,

2013 2012
---- ----

(unaudited)

Assets

Cash and cash equivalents $25,955 $21,336

Accounts receivable, net of allowance for doubtful accounts of $1,513 (December 31, 2012 - $1,564) 44,321 42,007

Financing receivables 99,591 94,193

Inventories 14,306 15,794

Prepaid expenses 4,576 3,833

Film assets 6,305 3,737

Property, plant and equipment 126,930 113,610

Other assets 27,739 23,963

Deferred income taxes 31,052 36,461

Goodwill 39,027 39,027

Other intangible assets 27,688 27,911
------ ------

Total assets $447,490 $421,872
======== ========


Liabilities

Bank indebtedness $5,000 $11,000

Accounts payable 17,051 15,144

Accrued and other liabilities 67,181 68,695

Deferred revenue 73,789 73,954

Total liabilities 163,021 168,793
------- -------




Shareholders' equity

Capital stock, common shares - no par value. Authorized - unlimited number.

Issued and outstanding - 67,518,740 (December 31, 2012 - 66,482,425) 323,744 313,744

Other equity 33,642 28,892

Deficit (70,880) (87,166)

Accumulated other comprehensive loss (2,037) (2,391)
------ ------

Total shareholders' equity 284,469 253,079
------- -------

Total liabilities and shareholders' equity $447,490 $421,872
======== ========







IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In accordance with United States Generally Accepted Accounting Principles

(In thousands of U.S. dollars)

(Unaudited)

Nine Months

Ended September
30,
----------------

2013 2012*
---- ----

Cash provided by (used in):

Operating Activities

Net income $16,286 $28,454

Adjustments to reconcile net income
to cash from operations:

Depreciation and amortization 29,027 24,704

Write-downs, net of recoveries 279 1,516

Change in deferred income taxes 5,579 9,431

Stock and other non-cash
compensation 9,348 11,099

Gain on curtailment of
postretirement benefits (2,185) -

Unrealized foreign currency
exchange loss (gain) 275 (152)

Loss from equity-accounted
investments 998 1,038

Investment in film assets (16,772) (13,508)

Changes in other non-cash
operating assets and liabilities (9,860) (8,672)

Net cash provided by operating
activities 32,975 53,910
------ ------


Investing Activities

Purchase of property, plant and
equipment (6,167) (2,599)

Investment in joint revenue sharing
equipment (16,363) (15,174)

Investment in new business ventures (2,500) (381)

Acquisition of other intangible
assets (1,812) (5,046)
------ ------

Net cash used in investing
activities (26,842) (23,200)
------- -------


Financing Activities

Increase in bank indebtedness 12,000 9,917

Repayment of bank indebtedness (18,000) (35,000)

Common shares issued -stock
options exercised 6,745 5,831

Credit facility amendment fees paid (2,089) -

Share issuance expenses (202) -
---- ---

Net cash used in financing
activities (1,546) (19,252)
------ -------


Effects of exchange rate changes on
cash 32 (146)
--- ----


Increase in cash and cash
equivalents during the period 4,619 11,312


Cash and cash equivalents,
beginning of period 21,336 18,138
------ ------

Cash and cash equivalents, end
of period $25,955 $29,450
======= =======






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; and other. The IMAX systems segment is comprised of the design,
manufacture, sale or lease IMAX theater projection system equipment. The theater system maintenance segment consists of the maintenance of IMAX theater
projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment is comprised of the installation IMAX theater projection
system equipment to an exhibitor in exchange for a certain percentage of box-office receipts, concession revenue and in some cases a small upfront or initial
payment. The film production and IMAX DMR segment is comprised of the production of films and performance of film re-mastering services. The film distribution
segment includes the distribution of films for which the Company has distribution rights. The film post-production segment includes the provision of film post-
production and film print services. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous
items.


Three Months Nine Months

Ended September Ended September
30, 30,
--------------- ----------------

2013 2012 2013 2012
---- ---- ---- ----

Revenue

IMAX Theater Systems

IMAX Systems

Sales and sales-type leases $6,419 $21,937 $33,321 $49,751

Ongoing rent, fees, and finance income 3,483 3,421 10,111 9,312

Other 2,230 4,997 8,362 10,394
----- ----- ----- ------

12,132 30,355 51,794 69,457
------ ------ ------ ------

Theater system maintenance 8,103 7,042 23,844 20,878
----- ----- ------ ------

Joint revenue sharing arrangements 11,960 13,186 39,672 40,477
------ ------ ------ ------

Film

Production and IMAX DMR 14,547 25,223 54,854 58,805

Film distribution and post-
production 5,000 4,905 13,740 16,900
----- ----- ------ ------

19,547 30,128 68,594 75,705
------ ------ ------ ------

Total $51,742 $80,711 $183,904 $206,517
======= ======= ======== ========


Gross margins

IMAX Theater Systems

IMAX systems(1)

Sales and sales-type leases $3,928 $12,575 $16,390 $25,259

Ongoing rent, fees, and finance income 3,277 3,381 9,758 9,216

Other (302) 564 (29) 287
---- --- --- ---

6,903 16,520 26,119 34,762
----- ------ ------ ------

Theater system maintenance 3,218 2,828 9,432 8,122
----- ----- ----- -----

Joint revenue sharing
arrangements(1) 7,153 9,286 26,796 28,340
----- ----- ------ ------

Film

Production and IMAX DMR(1) 8,596 15,426 30,372 35,714

Film distribution and post-
production 1,388 690 4,154 3,506
----- --- ----- -----

9,984 16,116 34,526 39,220
----- ------ ------ ------

Total $27,258 $44,750 $96,873 $110,444
======= ======= ======= ========


(1) IMAX systems include commission costs of $0.2 million and $0.9 million for the three and nine months ended September 30, 2013, respectively (2012 -$0.9
million and $2.1 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $0.9 million
and $2.0 million for the three and nine months ended September 30, 2013, respectively (2012 -$1.1 million and $2.1 million, respectively). Production and IMAX
DMR segment margins include marketing costs of $0.8 million and $3.1 million for the three and nine months ended September 30, 2013, respectively (2012 -$0.5
million and $2.2 million, respectively). Distribution segment margins include a marketing cost of $0.1 million and $0.2 million for the three and nine months
ended September 30, 2013, respectively (2012 -recovery of less than $0.1 million and an expense of $1.2 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 principles ("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. The Credit Facility provides that the Company will be required to maintain a Fixed Charge Coverage Ratio (as
defined in the Credit Agreement) of not less than 1.1:1. The Company will also be required to maintain minimum EBITDA
(as defined in the Credit Agreement) of $70.0 million between closing and September 30, 2013, which requirement
increases to $80.0 million on December 31, 2013, $90.0 million on December 31, 2014, and $100.0 million on December 31,
2015. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the Credit Agreement) of 2.5:1
between closing and September 30, 2013, which requirement decreases to (i) 2.25:1 on December 31, 2013; (ii) 2.00:1 on
December 31, 2014; and (iii) 1.75:1on December 31, 2015. The ratio of total debt to EBITDA was 0.06:1 as at September
30, 2013, where Total Debt (as defined in the Credit Agreement) is the sum of all obligations evidenced by notes,
bonds, debentures or similar instruments and was $5.0 million. EBITDA is calculated as follows:


3 months ended 12 months ended

September 30, 2013 September 30, 2013(1)
------------------ --------------------

(In thousands of U.S
Dollars)

Net income $1,609 $29,169

Add:

Loss from equity
accounted investments 344 1,322

Provision for income
taxes 619 10,159

Interest expense, net of
interest income 301 271

Depreciation and
amortization, including
film asset amortization 8,699 36,716

Write-downs net of
recoveries including
asset impairments and
receivable provisions 224 370

Stock and other non-cash
compensation 3,031 12,469

Gain on curtailment of
postretirement benefits - (2,185)

$14,827 $88,291
======= =======


(1) Ratio of funded debt calculated using twelve months ended EBITDA.




IMAX CORPORATION

OTHER INFORMATION

(in thousands of U.S. dollars)


Adjusted Net Income and Adjusted Diluted Per Share Calculations - Quarter Ended September 30,
2013 vs. 2012:

The Company reported net income of $1.6 million or $0.02 per basic and diluted share for the
third quarter of 2013, as compared to net income of $14.9 million or $0.23 per basic share
and $0.22 per diluted share for the third quarter of 2012. The quarter ended September 30,
2012 included the exceptional performance of The Dark Knight Rises: The IMAX Experience. Net
income for the third quarter of 2013 includes a $2.8 million charge, or $0.04 per diluted
share, for stock-based compensation (2012 - $2.8 million or $0.04 per diluted share).
Adjusted net income, which consists of net income excluding stock-based compensation expense
and the related tax impact, was $4.4 million, or $0.06 per diluted share, in the third
quarter of 2013, as compared to adjusted net income of $17.8 million, or $0.26 per diluted
share, for the third quarter of 2012. A reconciliation of net income, the most directly
comparable U.S. GAAP measure, to adjusted net income and adjusted net income per diluted


Three Months Three Months
Ended Ended

September 30, September 30,
2013 2012
-------------- --------------

Net Diluted Net Diluted
Income EPS Income EPS
------- -------- ------- --------

Reported $1,609 $0.02 $14,911 $0.22

Adjustments:

Stock-based
compensation 2,838 0.04 2,756 0.04

Tax benefit on
item listed
above (85) - 114 -

Adjusted $4,362 $0.06 $17,781 $0.26
====== ===== ======= =====


Weighted average
diluted shares
outstanding 69,116 68,301
====== ======




Adjusted Net Income and Adjusted Diluted Per Share Calculations - Nine Months Ended September
30, 2013 vs. 2012:

The Company reported net income of $16.3 million or $0.24 per basic and diluted share for the
nine months ended September 30, 2013, as compared to net income of $28.5 million or $0.43 per
basic and $0.42 per diluted share for the nine months ended September 30, 2012. Net income
for the nine months ended September 30, 2013 includes a $8.8 million charge, or $0.12 per
diluted share, for stock-based compensation (2012 - $10.3 million or $0.15 per diluted
share). Adjusted net income, which consists of net income excluding stock-based compensation
expense and the related tax expense, was $24.9 million, or $0.36 per diluted share, in the
nine months ended September 30, 2013, as compared to adjusted net income of $38.6 million, or
$0.57 per diluted share, for the nine months ended September 30, 2012. 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:


Nine Months Nine Months

Ended September Ended September
30, 2013 30, 2012
--------------- ---------------

Net Diluted Net Diluted
Income EPS Income EPS
------- -------- ------- --------

Net income $16,286 $0.24 $28,454 $0.42

Add:

Stock-based
compensation 8,772 0.12 10,252 0.15

Tax expense on
items listed
above (159) - (86) -
---- --- --- ---

Adjusted net
income $24,899 $0.36 $38,620 $0.57
======= ===== ======= =====


Weighted average
diluted shares
outstanding 68,853 68,187
====== ======







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:



Nine
Months
Ended

(In thousands of U.S. September
Dollars) 30, 2013
---------


Net cash provided by
operating activities $32,975

Net cash (used in)
investing activities (26,842)

Free cash flow $6,133
======


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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