IMAX Corporation Reports Fourth Quarter And Full Year 2013 Financial Results

IMAX Corporation Reports Fourth Quarter And Full Year 2013 Financial Results

HIGHLIGHTS

- Robust performance in Q4 leads to adjusted EPS of $0.44, 91% growth over same period last year, drives full year adjusted EPS to $0.81

- Highest global box office quarter ever for IMAX of $244 million, brings full year 2013 box office to $727 million

- IMAX has record year for signings with 119 signings in Q4 and 277 in the full year, double that of 2012

- IMAX expands backlog to historical high of 384 new commercial theatres, a 45% increase year-over-year

NEW YORK, Feb. 20, 2014 /PRNewswire/ -- IMAX Corporation (NYSE:IMAX; TSX:IMX) today reported robust fourth quarter 2013 financial results driven by the combination of strong installations as well as its highest grossing quarterly global box office ever. The Company reported revenues for the fourth quarter 2013 of $105.1 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $52.2 million, adjusted net income of $30.8 million, or $0.44 per diluted share, and reported net income of $27.8 million, or $0.40 per diluted share. The Company also reported a fourth quarter per screen average of $366,300.

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

Full year 2013 revenues were $287.9 million, adjusted EBITDA as calculated in accordance with the Company's credit facility was $113.2 million, adjusted net income was $55.7 million, or $0.81 per diluted share, and reported net income was $44.1 million, or $0.64 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. The Company also reported a 2013 per screen average of $1.15 million. With the exception of 2010, when the Company's per screen average was much higher driven by Avatar, the Company's per screen averages over the past 5 years have been in a range of approximately $1.1 to $1.2 million.

"IMAX fired on all cylinders in the fourth quarter, with an exceptional number of installations and signings, as well as the highest grossing box office in the Company's history," said IMAX CEO, Richard L. Gelfond. "Breakout performances by films such as Gravity, Hobbit, and Stalingrad internationally, exemplify the power and differentiation of the IMAX format." Gelfond continued, "The strong fourth quarter drove over 90% growth in our EBITDA compared to the same period last year, resulting in margin expansion and strong operating leverage for the full year. Overall, 2013 was a very exciting and productive year at IMAX as we effectively streamlined costs, expanded the network, signed a record number of deals and continued to execute on the film front."

Network Growth Update

In the fourth quarter of 2013, the Company signed contracts for 119 theatre systems and installed 58 theatre systems, of which 4 were upgrades of existing theatre locations, bringing the full year total installations to 112 new theatre systems across 23 countries.

"With our footprint now spanning 57 countries, IMAX is more global than ever before," added Gelfond. "Moving forward, we are focused on managing all aspects of our business to ensure that we take full advantage of attractive movie-going trends unique to each local market and that we secure IMAX's position as the world's premium cinematic experience. Our record level of signings in 2013 will drive ongoing network growth, and we are optimistic about what the future holds."

The total IMAX® theatre network consisted of 837 systems as of December 31, 2013, of which 701 were in commercial multiplexes. IMAX signed contracts for 277 theatres in 2013, across 31 countries, resulting in 407 theatre systems in backlog as of December 31, 2013, compared to 276 theatre systems in backlog as of December 31, 2012. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

Fourth-Quarter Segment Results




-- Revenue from sales and sales-type leases was $32.6 million in the fourth
quarter of 2013, compared to $20.2 million in the fourth quarter of
2012, primarily reflecting the installation of 24 full, new theatre
systems under sales and sales-type lease arrangements in the most recent
fourth quarter, compared to the 14 in the fourth quarter of 2012. In
addition there were 4 digital system upgrades in existing locations in
the fourth quarter of 2013, compared to 3 upgrades in the fourth quarter
of 2012.
-- Revenue from joint revenue-sharing arrangements was $24.5 million in the
quarter, compared to $17.0 million in the prior-year period. During the
quarter, the Company installed 30 new theatres under joint
revenue-sharing arrangements, compared to 29 in the year ago period.
The Company had 382 theatres operating under joint revenue-sharing
arrangements as of December 31, 2013, as compared to 316 theatres one
year prior.
-- Production and IMAX DMR® (Digital Re-Mastering) revenues were $28.6
million in the fourth quarter of 2013, compared to $19.2 million in the
fourth quarter of 2012. Gross box office from DMR titles was $244.5
million in the fourth quarter of 2013, compared to $152.0 million in the
prior-year period. The average global DMR box office per screen in the
fourth quarter of 2013 was $366,300 compared to $264,400 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 2013 financial results. To access the call via telephone, interested parties in the US and Canada should dial (800) 820-0231 approximately 5 to 10 minutes before the call begins. International callers should dial (416) 640-5926. The conference ID for the call is 9729185. 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 9729185.

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, 2013, there were 837 IMAX theatres (701 commercial multiplexes, 19 commercial destinations and 117 institutions) in 57 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, 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 wholly-owned 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, 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; 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; the Company's largest customer accounting for a significant portion of the Company's revenue and backlog; 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 the Company's implementation of a new enterprise resource planning system; the failure to convert theater system backlog into revenue; risks related to the Company's dependence on a sole supplier for its analog film; 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.



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
--------------------------

Dec. 31, 2013

Three Twelve
Months Months

Ended Dec. Ended Dec.
31, 31,
----------- -----------

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

Full new sales and sales-type
lease arrangements 18 11 56 43

New joint revenue sharing
arrangements 98 17 190 78
--- ---

Total new
theatres 116 28 246 121


Upgrades of IMAX theatre
systems 3 10 31 (1) 21 (2)

Total
Theatre
Signings 119 38 277 142
=== === === ===


Three Twelve
Months Months

Ended Dec. Ended Dec.
31, 31,
----------- -----------

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

Full new sales and sales-type
lease arrangements 24 14 47 (3) 47

New joint revenue sharing
arrangements 30 29 65 60
--- --- ---

Total new
theatres 54 43 112 (3) 107


Upgrades of IMAX theatre
systems 4 3 21 (1) 18

Total
Theatre
Installations 58 46 133 125
=== === === ===


As of Dec.
31,
-----------

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

New sales and sales-type
lease arrangements 125 128

New joint revenue sharing
arrangements 259 137

Total new
theatres 384 265


Upgrades of IMAX theatre
systems 23 11

Total
Theatres in
Backlog 407 (4) 276 (5)
=== ===


As of Dec.
31,
-----------

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

Commercial Multiplex
Theatres:

Sales and sales-type lease
arrangements 319 282

Joint revenue sharing
arrangements 382 316

Total
Commercial
Multiplex
Theatres 701 598


Commercial
Destination
Theatres 19 19

Institutional
Theatres 117 114

Total IMAX
Theatre
Network 837 731
=== ===
______________________



(1) Includes
upgrades to
xenon-
based
digital
systems
under
short-term
operating
lease
arrangements
(10
signings,
10
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 the
following
items: (i)
one new
xenon-
based
digital
system
under a
short-term
operating
lease
arrangement;
(ii) one
theater
system
which has
increased
the
Company's
institutional
theater
network;
and (iii)
one IMAX
Private
Theater
(the first
of its kind
in the IMAX
theater
network).

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

(5) Includes 11
upgrades to
a digital
theater
system, in
an existing
IMAX
theater
location (6
xenon and 5
laser).


Additional Information (continued)

2013 DMR Films:

In 2013, 38 films were converted through the IMAX DMR process and released to theaters in the IMAX network by film studios as compared to 35 films in 2012. These films were:


-- 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);
-- Top Gun: An IMAX 3D Experience (Paramount Pictures, February 2013);
-- Journey to the West: Conquering the Demons: An IMAX 3D Experience (Bingo
Movie Development Ltd, February 2013, China only);
-- A Good Day to Die Hard: The IMAX Experience (Twentieth Century Fox,
February 2013);
-- Jack the Giant Slayer: An IMAX 3D Experience (Warner Bros. Pictures,
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 Pictures, May 2013,
select international markets);
-- After Earth: The IMAX Experience (Columbia Pictures, May 2013);
-- Man of Steel: The IMAX Experience (Warner Bros. Pictures, June 2013);
-- World War Z: An IMAX 3D Experience (Paramount Pictures, June 2013,
select international markets);
-- Despicable Me 2: An IMAX 3D Experience (Universal Pictures, July 2013,
select international markets);
-- White House Down: The IMAX Experience (Sony Pictures, July 2013, select
international markets);
-- Man of Tai Chi: The IMAX Experience (China Film Group, Wanda Group,
Village Roadshow, July 2013, China only);
-- Lone Ranger: The IMAX Experience (Walt Disney Pictures, July 2013,
select international markets);
-- Pacific Rim: An IMAX 3D Experience (Warner Bros. Pictures, July 2013);
-- Elysium: The IMAX Experience (Sony Pictures, August 2013);
-- The Mortal Instruments: City of Bones: The IMAX Experience (Sony
Pictures, August 2013);
-- Riddick Sequel: The IMAX Experience (Universal Pictures, September
2013);
-- The Wizard of Oz: An IMAX 3D Experience (Picturehouse, September 2013);
-- Young Detective Dee: Rise of the Sea Dragon: An IMAX 3D Experience
(Huayi Bros., September 2013, China only);
-- Metallica Through the Never: An IMAX 3D Experience (Warner Bros.
Pictures, September 2013);
-- Gravity: An IMAX 3D Experience (Warner Bros. Pictures, October 2013);
-- Stalingrad: An IMAX 3D Experience (AR Films, October 2013, Russia and
the CIS only);
-- Captain Phillips: The IMAX Experience (Sony Pictures, October 2013);
-- The Young and Prodigious T.S. Spivet: An IMAX 3D Experience (Epithète
Films., October 2013, France only);
-- Thor: The Dark World: An IMAX 3D Experience (Walt Disney Pictures,
October 2013, select international markets);
-- Ender's Game: The IMAX Experience (Lionsgate, November 2013);
-- The Hunger Games: Catching Fire: The IMAX Experience (Lionsgate,
November 2013);
-- The Hobbit: The Desolation of Smaug: An IMAX 3D Experience (Warner Bros.
Pictures, December 2013);
-- Dhoom 3: The IMAX Experience (Yash Raj Films, December 2013, India
only); and
-- Police Story: An IMAX 3D Experience (China Vision, December 2013, China
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,
--------------- ------------------

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

Revenues

Equipment and product sales $38,014 $22,405 $78,663 $78,161

Services 42,463 33,936 139,464 135,071

Rentals 22,511 18,356 61,293 61,268

Finance income 2,063 1,986 8,142 7,523

Other - 732 375 732
--- --- --- ---

105,051 77,415 287,937 282,755
------- ------ ------- -------

Costs and expenses applicable to revenues

Equipment and product sales 16,956 9,811 37,517 37,538

Services 15,483 16,741 68,844 70,570

Rentals 5,286 8,434 16,973 21,402

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

37,725 34,986 123,334 129,510
------ ------ ------- -------

Gross margin 67,326 42,429 164,603 153,245

Selling, general and administrative expenses 23,305 22,529 82,669 81,560

(including share-based compensation expense of $3.2 million and $11.9 million for the
three months and year ended December 31, 2013, respectively (2012 - expense of $2.8
million and $13.1 million, respectively))

Research and development 3,504 3,788 14,771 11,411

Amortization of intangibles 472 174 1,618 706

Receivable provisions, net of recoveries 166 (305) 445 524

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

Income from operations 39,879 16,243 65,100 58,894

Interest income 16 12 55 85

Interest expense (338) 686 (1,345) (689)

Income from continuing operations before income taxes 39,557 16,941 63,810 58,290

Provision for income taxes (9,927) (3,594) (16,629) (15,079)

Loss from equity-accounted investments (1,759) (324) (2,757) (1,362)
------ ---- ------ ------

Income from continuing operations 27,871 13,023 44,424 41,849

Net loss from discontinued operations (42) (140) (309) (512)
--- ---- ---- ----

Net Income $27,829 $12,883 $44,115 $41,337
======= ======= ======= =======


Net income per share - Basic:

Net income per share from continuing operations $0.41 $0.20 $0.66 $0.64

Net loss per share from discontinued operations - - - (0.01)
--- --- --- -----

$0.41 $0.20 $0.66 $0.63
===== ===== ===== =====

Net income per share - Diluted:

Net income per share from continuing operations $0.40 $0.19 $0.64 $0.62

Net loss per share from discontinued operations - - - (0.01)
--- --- --- -----

$0.40 $0.19 $0.64 $0.61
===== ===== ===== =====


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

Basic 67,696 66,264 67,151 65,854

Fully Diluted 69,334 68,281 68,961 67,933



Additional Disclosure:

Depreciation and amortization(1) $8,145 $8,084 $37,172 $32,788




(1) Includes $0.1 million and
$0.5 million of
amortization of deferred
financing costs charged to
interest expense for the
three months and year
ended December 31, 2013
(2012 -less than $0.1
million and $0.2 million
respectively).


* Includes a reclass of the
Company's owned and
operated Nyack theater
from continuing operations
to discontinued
operations.










IMAX CORPORATION

CONSOLIDATED BALANCE SHEETS

In accordance with United States Generally Accepted
Accounting Principles

(In thousands of U.S. dollars)




As at December 31,
------------------

2013 2012
---- ----


Assets

Cash
and
cash
equivalents $29,546 $21,336

Accounts
receivable,
net of
allowance
for
doubtful
accounts
of $887
(December
31, 2012
- 73,074 42,007

Financing
receivables 107,110 94,193

Inventories 9,825 15,794

Prepaid
expenses 3,602 3,833

Film
assets 7,076 3,737

Property,
plant
and
equipment 132,847 113,610

Other
assets 27,034 23,963

Deferred
income
taxes 24,259 36,461

Goodwill 39,027 39,027

Other
intangible
assets 27,745 27,911
------ ------

Total
assets $481,145 $421,872
======== ========


Liabilities

Bank
indebtedness $ - $11,000

Accounts
payable 19,396 15,144

Accrued
and
other
liabilities 65,232 68,695

Deferred
revenue 76,932 73,954

Total
liabilities 161,560 168,793
------- -------


Commitments
and
contingencies


Shareholders'
equity

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

Issued
and
outstanding
-
67,841,233
(December
31,
2012 -
66,482,425) 327,313 313,744

Other
equity 36,452 28,892

Deficit (43,051) (87,166)

Accumulated
other
comprehensive
loss (1,129) (2,391)
------ ------

Total
shareholders'
equity 319,585 253,079
------- -------

Total
liabilities
and
shareholders'
equity $481,145 $421,872
======== ========




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,

2013 2012*
---- ----

Cash provided by (used in):

Operating Activities

Net income $44,115 $41,337

Net loss from discontinued
operations 309 512

Adjustments to reconcile net income
to cash from operations:

Depreciation and amortization 37,172 32,788

Write-downs, net of recoveries 1,336 1,607

Change in deferred income taxes 12,899 14,724

Stock and other non-cash
compensation 12,685 14,220

Unrealized foreign currency
exchange loss (gain) 1,183 (329)

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

Loss from equity-accounted
investments 2,757 1,362

Investment in film assets (20,935) (16,817)

Changes in other non-cash
operating assets and liabilities (33,755) (15,262)

Net cash used in operating
activities from discontinued
operations (548) (512)
---- ----

Net cash provided by operating
activities 55,033 73,630
------ ------


Investing Activities

Purchase of property, plant and
equipment (13,016) (6,055)

Investment in joint revenue sharing
equipment (22,775) (23,257)

Investment in new business ventures (4,000) (381)

Acquisition of other intangible
assets (2,486) (5,826)

Net cash used in investing
activities (42,277) (35,519)
------- -------


Financing Activities

Increase in bank indebtedness 12,000 9,917

Repayment of bank indebtedness (23,000) (54,000)

Common shares issued -stock
options exercised 8,970 8,920

Proceeds from disgorgement of stock
sale profits - 314

Credit Facility amendment fees paid (2,151) -

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

Net cash used in financing
activities (4,383) (34,849)
------ -------


Effects of exchange rate changes on
cash (163) (64)
---- ---


Increase in cash and cash
equivalents during year 8,210 3,198


Cash and cash equivalents,
beginning of year 21,336 18,138


Cash and cash equivalents, end
of year $29,546 $21,336
======= =======







* Includes a reclass of the
Company's owned and
operated Nyack theater
from continuing
operations to
discontinued operations.




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 Year Ended

Ended December Ended December
31, 31,
--------------- ---------------

2013 2012(*) 2013 2012(*)
---- ------ ---- ------

Revenue

IMAX Theater Systems

IMAX Systems

Sales and sales-type leases $32,623 $20,237 $65,944 $69,988

Ongoing rent, fees, and finance income 4,134 4,105 14,245 13,417

Other 3,838 3,802 11,182 13,019
----- ----- ------ ------

40,595 28,144 91,371 96,424
------ ------ ------ ------

Theater system maintenance 8,134 7,751 31,978 28,629
----- ----- ------ ------

Joint revenue sharing arrangements 24,458 17,049 64,130 57,526
------ ------ ------ ------


Film

Production and IMAX DMR 28,642 19,245 83,496 78,050

Film distribution and post-
production 3,222 5,226 16,962 22,126
----- ----- ------ ------

31,864 24,471 100,458 100,176
------ ------ ------- -------

Total $105,051 $77,415 $287,937 $282,755
======== ======= ======== ========


Gross margins

IMAX Theater Systems

IMAX systems(1)

Sales and sales-type leases $19,262 $11,715 $35,652 $36,974

Ongoing rent, fees, and finance income 3,630 4,055 13,388 13,271

Other (273) 398 102 1,057
---- --- --- -----

22,619 16,168 49,142 51,302
------ ------ ------ ------

Theater system maintenance 2,664 2,848 12,096 10,970
----- ----- ------ ------

Joint revenue sharing
arrangements(1) 17,769 8,968 44,565 37,308
------ ----- ------ ------


Film

Production and IMAX DMR(1) 23,344 13,641 56,088 49,355

Film distribution and post-
production 930 804 2,712 4,310
--- --- ----- -----

24,274 14,445 58,800 53,665
------ ------ ------ ------

Total $67,326 $42,429 $164,603 $153,245
======= ======= ======== ========







(1) IMAX systems include
marketing and commission
costs of $1.5 million and
$2.5 million for the three
and twelve months ended
December 31, 2013,
respectively (2012 -$0.6
million and $2.7 million,
respectively). Joint
revenue sharing
arrangements segment
margins include
advertising, marketing and
commission costs of $1.6
million and $3.6 million
for the three and twelve
months ended December 31,
2013, respectively (2012 -
$1.3 million and $3.4
million, respectively).
Production and DMR segment
margins include marketing
costs of $1.1 million and
$4.2 million for the three
and twelve months ended
December 31, 2013,
respectively (2012 -$1.1
million and $3.3 million,
respectively).
Distribution segment
margins include marketing
costs of $0.2 million and
$0.4 million for the three
and twelve months ended
December 31, 2013,
respectively (2012 -$0.3
million and $1.5 million,
respectively).



* Includes a reclass of the
Company's owned and
operated Nyack theater
from continuing operations
to discontinued
operations.


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 stock-based compensation (net of any related tax impact) 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 $80.0 million on December 31, 2013, which increases to $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 2.25:1 on December 31, 2013, which requirement decreases to 2.0:1 on December 31, 2014, and 1.75:1 on December 31, 2015. The ratio of total debt to EBITDA was nil:1 as at December 31, 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 $nil. EBITDA is calculated as follows:






For the For the

3 months 12 months
ended ended

December December
31, 2013 31, 2013
--------- ---------

(In thousands of U.S. Dollars)

Net income $27,829 $44,115

Add:

Loss from equity-accounted
investments 1,759 2,757

Provision for income taxes(1) 9,906 16,470

Interest expense, net of
interest income 321 1,290

Depreciation and amortization,
including film asset
amortization 8,011 36,685

Write-downs, net of recoveries
and receivable provisions 1,057 1,336

Stock and other non-cash
compensation 3,337 12,685

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

Adjusted EBITDA $52,220 $113,153
======= ========









(1) Includes a tax recovery
in discontinued
operations of less than
$0.1 million and $0.2
million for the three
and twelve months ended
December 31, 2013,
respectively.


IMAX CORPORATION

OTHER INFORMATION

(in thousands of U.S. dollars)



Adjusted Net Income and Adjusted Diluted Per Share Calculations - Quarter Ended December 31, 2013 vs. 2012:

The Company reported net income of $27.8 million or $0.41 per basic share and $0.40 per diluted share for the fourth quarter of 2013 as compared to $12.9 million or $0.20 per basic share and $0.19 per diluted share for the fourth quarter of 2012. Net income for the quarter includes a $3.2 million charge or $0.04 per diluted share (2012 - $2.9 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 $30.8 million or $0.44 per diluted share in the fourth quarter of 2013 as compared to adjusted net income of $15.7 million or $0.23 per diluted share for the fourth 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 share is presented in the table below:





Three Months Three Months
Ended Ended

December 31, December 31,
2013 2012
------------- -------------

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

Reported $27,829 $0.40 $12,883 $0.19

Adjustments:

Stock-
based
compensation 3,156 0.04 2,861 0.04

Tax
impact
on
item
listed
above (185) - (74) -
---- --- --- ---

Adjusted $30,800 $0.44 $15,670 $0.23
======= ===== ======= =====


Weighted
average
diluted
shares
outstanding 69,334 68,281
====== ======


Adjusted Net Income and Adjusted Diluted Per Share Calculations - Year Ended December 31, 2013 vs. 2012:

The Company reported net income of $44.1 million or $0.66 per basic share and $0.64 per diluted share for the year ended December 31, 2013 as compared to 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. Net income for the year ended December 31, 2013 includes an $11.9 million charge or $0.17 per diluted share (2012 -- $13.1 million or $0.19 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 $55.7 million or $0.81 per diluted share for the year ended December 31, 2013 as compared to adjusted net income of $54.3 million or $0.80 per diluted share for the year ended December 31, 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:








Year Ended Year Ended

December 31, December 31,
2013 2012
------------- -------------

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

Net
income $44,115 $0.64 $41,337 $0.61

Add:

Stock-
based
compensation 11,928 0.17 13,113 0.19

Tax
impact
on
items
listed
above (344) - (160) -
---- --- ---- ---

Adjusted
net
income $55,699 $0.81 $54,290 $0.80
======= ===== ======= =====


Weighted
average
diluted
shares
outstanding 68,961 67,933
====== ======
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

3 months 12 months
ended ended

December December
31, 2013 31, 2013
--------- ---------

(In thousands of U.S.
Dollars)

Net cash provided by
operating activities $22,058 $55,033

Net cash (used in)
investing activities (15,435) (42,277)
------- -------

Free cash flow $6,623 $12,756
====== =======


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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