IMAX Corporation Reports Fourth-Quarter And Full-Year 2015 Financial Results

IMAX Corporation Reports Fourth-Quarter And Full-Year 2015 Financial Results

- 2015 IMAX Global Box Office reaches $1 billion, a 31% increase over 2014, and significantly surpasses worldwide industry box office growth of approximately 10%

- 2015 Adjusted EBITDA grew 30% year-over-year to $140.8 million, resulting in adjusted EBITDA margins of 40.5%, up from 38.3% in the year-ago period

- 2015 adjusted EPS of $1.02 grew 36%, driven by strong box office growth and network installations that were partially offset by FX and investments in new ventures

- IMAX saw sizeable installations growth in 2015 - with 136 new installations up from 113 in 2014

- IMAX raises installation guidance for 2016 from 115-120 range to 135-140 range, consistent with elevated levels seen in 2015

- IMAX successfully listed shares of IMAX China (HKSE: 1970) on the Hong Kong Stock Exchange at HKD$31 on Oct. 8, 2015, and has seen its share price increase 45% through Feb. 24, 2016

NEW YORK, Feb. 24, 2016 /PRNewswire/ -- IMAX Corporation (NYSE: IMAX) today reported results for the fourth quarter and full year 2015, including its highest-ever quarter in revenue and among the highest-ever quarters for adjusted EBITDA and adjusted net earnings per diluted share ("EPS") in the Company's history.

http://photos.prnewswire.com/prnvar/20111107/MM01969LOGO

"2015 was undoubtedly a historic year for IMAX - we delivered a record $1 billion in global box office, added 136 theatres to our network to bring our global total to over 1000 screens, launched our highly anticipated laser projection system, and of course, successfully listed our China business on the Hong Kong Stock Exchange," said IMAX CEO Richard L. Gelfond. "IMAX is clearly benefiting from a global trend in the film industry to make more big-budget blockbuster movies. And with so many major movie franchises releasing important sequels in 2016 and 2017, we believe we're extremely well positioned for success in the years ahead."

Fourth-Quarter 2015 Results


The Company reported revenues of $119.3 million, up 16.5% from the year-ago period. Adjusted EBITDA, as calculated in accordance with the Company's credit facility, grew 5.8% to $48.1 million. Adjusted net income after non-controlling interest of $27.3 million grew 12.6%. Adjusted diluted earnings per share of $0.39 also grew 14.7%. Reported net income after non-controlling interest was $22.5 million, or $0.32 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 fourth-quarter global per-screen average of $318,600, up 9% over the year-ago period.


-- Revenue
-- Sales and Sales-Type Leases (STLs) revenue of $33.0 million,
compared to $33.2 million in the fourth quarter of 2014, primarily
reflects the installation of 24 full, new theatre systems under
sales and sales-type lease arrangements, compared to 26
installations last year. In addition there were two system upgrades
in existing locations, compared to two upgrades in the year ago
period.
-- Revenue from joint revenue-sharing arrangements was $31.9 million in
the quarter, compared to $23.0 million in the prior-year period.
During the quarter, the Company installed 32 new theatres under
joint revenue-sharing arrangements, compared to 29 in the year ago
period. The Company had 529 theatres operating under joint
revenue-sharing arrangements as of Dec. 31, 2015, as compared to 451
theatres one year prior.
-- Production and IMAX DMR(R) (Digital Re-Mastering) revenues were
$31.9 million in the fourth quarter of 2015, compared to $25.6
million in the fourth quarter of 2014. Gross box office from DMR
titles was $288.4 million in the fourth quarter of 2015, up 27.1%
from $226.9 million in the prior-year period. The average global
DMR box office per screen in the fourth quarter of 2015 was $318,600
compared to $292,200 in the prior-year period.
-- Network
-- Signings -52 theatre systems were signed in the fourth quarter of
2015, of which none were upgrades, bringing total signings for the
year to 138, of which five were upgrades. Backlog level was
replenished to 372 systems at year end.
-- Installations - 62 theatre systems were installed in the quarter, of
which six were upgrades of existing theatre locations.
Full-Year 2015 Results


Full-year 2015 revenues of $373.8 million grew 28.7%. Adjusted EBITDA, as calculated in accordance with the Company's credit facility, rose 29.8% to $140.8 million. Adjusted net income of $73.0 million grew 39.0% and adjusted net earnings per diluted share of $1.02 grew 36.0%. Reported net income attributable to common shareholders was $55.8 million, or $0.78 per diluted share. The Company also reported a global 2015 per-screen average of $1,155,800, up 13.2% from the prior year.

The full-year installation total grew to 154 theatre systems, of which 18 were upgrades, compared with 121 and eight, respectively, in the prior-year period. The total IMAX(R) theatre network consisted of 1,061 systems as of Dec. 31, 2015, of which 943 were in commercial multiplexes. IMAX signed contracts for 138 theatres in 2015, across 24 countries, resulting in 372 theatre systems in backlog as of Dec. 31, 2015, compared to 397 theatre systems in backlog as of Dec. 31, 2014. The Company's top three markets for signings were China, the United States and Japan. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

"As we look to 2016, we are very encouraged by what we see in the marketplace regarding our network expansion opportunities not only in China, but in other strategically important markets such as Japan, the Middle East and continental Europe," said Mr. Gelfond. "With more than 1,000 theatres in our global network, $1 billion in box office running through our screens, and more than $300 million in cash and virtually no debt, we believe we have significant opportunities to take our Company to the next level."

Conference Call
The Company will host a conference call on Feb. 24 at 4:30pm ET to discuss its fourth-quarter and full-year 2015 results. To access the call via telephone, interested parties in the US and Canada should dial (800) 505-9568 approximately 5 to 10 minutes before the call begins. International callers should dial (416) 204-9271. The conference ID for the call is 4081404. 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 4081404.

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, 2015, there were 1,061 IMAX theatres (943 commercial multiplexes, 19 commercial destinations and 99 institutions) in 67 countries. On Oct. 8, 2015, shares of IMAX China, a subsidiary of IMAX Corp., began trading on the Hong Kong Stock Exchange under the stock code "HK.1970."

IMAX(R), IMAX(R) 3D, IMAX DMR(R), Experience It In IMAX(R), An IMAX 3D Experience(R), The IMAX Experience(R), IMAX Is Believing(R) and IMAX nXos(R) 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 , the signing of theatre system agreements; conditions, changes and developments in the commercial exhibition industry; the performance of IMAX DMR films; the potential impact of increased competition in the markets within which the Company operates; competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks 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 Company's largest customer accounting for a significant portion of the Company's revenue and backlog; risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security; 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; general economic, market or business conditions; the failure to convert theatre system backlog into revenue; changes in laws or regulations; 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

Jessica Kourakos Ann Sommerlath

212-821-0100 212-821-0155

jkourakos@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
--------------

December 31, 2015

Twelve Months

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

Theater Signings: 2015 2014
----

Full new sales and sales-type
lease arrangements 55 (1) 81 (1)

New joint revenue sharing
arrangements 78 23

Total new
theaters 133 104


Upgrades of IMAX theater systems 5 (2)(3) 14 (2)(3)

Total Theater
Signings 138 118
===


Twelve Months

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

Theater
Installations: 2015 2014
----

Full new sales and sales-type
lease arrangements 56 46

New joint revenue sharing
arrangements 80 67
--- ---

Total new
theaters 136 113

Upgrades of IMAX theater systems 18 (4)(5) 8 (4)

Total Theater
Installations 154 121
===


As of December 31,
------------------

Theater Backlog: 2015 2014
----

New sales and sales-type lease
arrangements 145 153

New joint revenue sharing
arrangements 212 217

Total new
theaters 357 370


Upgrades of IMAX theater systems 15 27

Total Theaters in
Backlog 372 (6)(7) 397 (6)(8)
=== ===


As of December 31,
------------------

Theater Network: 2015 2014
----

Commercial
Multiplex
Theaters:

Sales and sales-type lease
arrangements 414 358

Joint revenue sharing arrangements 529 451

Total Commercial
Multiplex
Theaters 943 809


Commercial
Destination
Theaters 19 19

Institutional
Theaters 99 106

Total IMAX
Theater Network 1,061 934
=====


______________________



(1) Includes four signings which
replaced theatres under an existing
arrangement in backlog (2014 - four
signings).

(2) Includes three signings for the
installation of laser-based
digital systems under sales and
sales-type lease arrangements in
existing theatre locations (2014 -
five signings).

(3) Includes two signings for the
installation of an upgrade to a
xenon-based digital system under
sales and sales-type lease
arrangements (2014 - three signings
under sales and sales-type lease
arrangements, three signings under
short-term operating lease
arrangements and three signings
under joint revenue sharing
arrangements).

(4) Includes two installations of an
upgrade to a xenon-based digital
system, one of which is under a
sales and sales-type lease
arrangement and another under a
short-term operating lease
arrangement (2014 - three under
sales and sales-type lease
arrangements, two under short-term
lease arrangement, one under an
operating lease arrangement and two
under joint revenue sharing
arrangement).

(5) Includes 16 installations of an
upgrade to a laser-based digital
system (10 under sales and sales-
type lease arrangements, one under
an operating lease arrangement and
five under joint revenue sharing
arrangements)

(6) Includes 24 laser-based digital
theatre system configurations (2014
- 71), including upgrades. The
Company continues to develop and
roll out its laser-based digital
projection system. See "Research
and Development" in this Part I for
additional information.

(7) Includes 15 upgrades to a digital
theatre system, in existing IMAX
theatre locations (2 xenon and 13
laser).

(8) Includes 27 upgrades to a digital
theatre system, in existing IMAX
theatre locations (2 xenon and 25
laser, of which 4 are under joint
revenue sharing arrangements).


Additional Information (continued)

2015 DMR Films:

In 2015, 44 films were converted through the IMAX DMR process and released to theatres in the IMAX network by film studios as compared to 40 films in 2014. These films were:


-- Taken 3: The IMAX Experience (20th Century Fox, January 2015, select
international markets);
-- American Sniper: The IMAX Experience (Warner Bros. Pictures, January
2015);
-- Game of Thrones: The IMAX Experience (Season 4, Episodes 9 and
10)(Warner Bros. Pictures, January 2015);
-- Kingsman: The Secret Service: The IMAX Experience (20th Century Fox,
January 2015, international only);
-- Jupiter Ascending: An IMAX 3D Experience (Warner Bros. Pictures,
February 2015);
-- Fifty Shades of Grey: The IMAX Experience (Universal Studios, February
2015, Domestic only);
-- Wolf Totem: An IMAX 3D Experience (China Film Group, February 2015,
China only);
-- Dragon Blade: An IMAX 3D Experience (Shanghai Film Group, February 2015,
China only);
-- Focus: The IMAX Experience (Warner Bros. Pictures, February 2015);
-- Chappie: The IMAX Experience (Sony Pictures Entertainment, March 2015);
-- Cinderella: The IMAX Experience (Walt Disney Studios, March 2015);
-- The Divergent Series: Insurgent: An IMAX 3D Experience (Summit
Entertainment, March 2015);
-- Furious 7: The IMAX Experience (Universal Studios, April 2015);
-- The Water Diviner: The IMAX Experience (Warner Bros. Pictures, April
2015);
-- Dragon Ball Z: Revival of 'F': An IMAX 3D Experience (Toei Animation,
April 2015, Japan only);
-- The Avengers: Age of Ultron: An IMAX 3D Experience (Walt Disney Studios,
May 2015);
-- Tomorrowland: The IMAX Experience (Walt Disney Studios, May 2015);
-- San Andreas: An IMAX 3D Experience (Warner Bros. Pictures, May 2015);
-- Mad Max: Fury Road: An IMAX 3D Experience (Warner Bros. Pictures, May
2015);
-- Inside Out: An IMAX 3D Experience (Walt Disney Pictures, June 2015,
select theatres);
-- The Monk Comes Down the Mountain: An IMAX 3D Experience (Columbia
Pictures, June 2015, China only);
-- Jurassic World: An IMAX 3D Experience (Universal Studios, June 2015);
-- Minions: An IMAX 3D Experience (Universal Pictures, July 2015,
international only);
-- Terminator Genisys: The IMAX Experience (Paramount Pictures, July 2015);
-- Monster Hunt: An IMAX 3D Experience (Edko Films, July 2015, China only);
-- Ant Man: An IMAX 3D Experience (Walt Disney Pictures, July 2015);
-- Pixels: An IMAX 3D Experience (Sony Pictures, July 2015);
-- Mission: Impossible Rogue Nation: The IMAX Experience (Paramount
Pictures, July 2015);
-- Attack on Titan: Part 1: The IMAX Experience (Toho Pictures, August
2015, China only);
-- To the Fore: The IMAX Experience (Emperor Motion Pictures, August 2015,
China only);
-- The Man from U.N.C.L.E: The IMAX Experience (Warner Bros. Pictures,
August 2015);
-- Go Away Mr. Tumor: The IMAX Experience (Wanda Media Co. Ltd., August
2015, China only);
-- The Transporter Refueled: The IMAX Experience (EuropaCorp, September
2015);
-- Everest: An IMAX 3D Experience (Universal Studios, September 2015);
-- Attack on Titan: Part 2: The IMAX Experience (Toho Pictures, September
2015, China only);
-- Lost in Hong Kong: The IMAX Experience (PULIN Production, September
2015, China only);
-- The Walk: The IMAX Experience (Sony Pictures Entertainment, October
2015);
-- Crimson Peak: The IMAX Experience (Universal Studios, October 2015);
-- The Martian: An IMAX 3D Experience (20th Century Fox, October 2015);
-- Spectre: The IMAX Experience (Sony Pictures Entertainment, November
2015);
-- The Hunger Games: Mockingjay Part 2: An IMAX 3D Experience (Lionsgate,
November 2015);
-- In the Heart of the Sea: An IMAX 3D Experience (Warner Bros. Pictures,
December 2015);
-- Star Wars: The Force Awakens: An IMAX 3D Experience (Walt Disney
Studios, December 2015); and
-- Mojin: The Lost Legend (aka "The Ghouls"): An IMAX 3D Experience (Wanda
Media Co. Ltd., China only).
2016 DMR Films:

To date, the Company has announced the following 26 DMR titles to be released in 2016 to the IMAX theatre network. The Company remains in active negotiations with all of the major Hollywood studios for additional films to fill out its short and long-term film slate, and anticipates that a similar number of IMAX DMR titles will be released to the IMAX theatre network in 2016 to the films that were released to the IMAX theatre network in 2015.





-- The Revenant: The IMAX Experience (20th Century Fox, January 2016);
-- The Finest Hours: An IMAX 3D Experience (Walt Disney Studios, January
2016);
-- Kung Fu Panda 3: An IMAX 3D Experience (Oriental Dreamworks, January
2016, China only);
-- The Monkey King 2: An IMAX 3D Experience (Filmko Entertainment, February
2016, China only);
-- Crouching Tiger, Hidden Dragon: Sword of Destiny: An IMAX 3D Experience
(Netflix Distribution, LLC, February 2016);
-- Deadpool: The IMAX Experience (20th Century Fox, February 2016);
-- Gods of Egypt: An IMAX 3D Experience (Lionsgate Entertainment, February
2016);
-- Zootopia: An IMAX 3D Experience (Walt Disney Studios, February 2016);
-- 10 Cloverfield Lane: The IMAX Experience (Paramount Pictures, March
2016);
-- The Divergent Series: Allegiant: The IMAX Experience (Lionsgate
Entertainment, March 2016);
-- Batman v Superman: Dawn of Justice: An IMAX 3D Experience (Warner Bros.
Pictures, March 2016);
-- The Crew: An IMAX 3D Experience (Russia-1 Channel, April 2016);
-- The Jungle Book: An IMAX 3D Experience (Walt Disney Studios, April
2016);
-- Captain America: Civil War: An IMAX 3D Experience (Walt Disney Studios,
May 2016);
-- Alice in Wonderland: Through the Looking Glass: An IMAX 3D Experience
(Walt Disney Studios, May 2016);
-- Warcraft: An IMAX 3D Experience (Universal Studios, June 2016);
-- Finding Dory: An IMAX 3D Experience (Walt Disney Studios, June 2016);
-- Independence Day Resurgence: An IMAX 3D Experience (20th Century Fox,
June 2016);
-- The Legend of Tarzan: An IMAX 3D Experience (Warner Bros. Pictures, July
2016);
-- Star Trek Beyond: An IMAX 3D Experience (Paramount Pictures, July 2016);
-- Suicide Squad: An IMAX 3D Experience (Warner Bros. Pictures, August
2016);
-- Deepwater Horizon: The IMAX Experience (Lionsgate Entertainment,
September 2016);
-- The Duelist: The IMAX Experience (Non-Stop Production LLC, October 2016,
Russia only);
-- Doctor Strange: An IMAX 3D Experience (Walt Disney Studios, November
2016);
-- Fantastic Beasts and Where to Find Them: An IMAX 3D Experience (Warner
Bros. Pictures, November 2016); and
-- Rogue One: A Star Wars Story: An IMAX 3D Experience (Walt Disney
Studios, December 2016).






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 Years Ended

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

2015 2014 2015 2014
---- ---- ---- ----

Revenues

Equipment and product sales $46,113 $41,084 $118,937 $78,705

Services 46,266 40,794 161,964 142,607

Rentals 24,645 18,427 83,651 60,705

Finance income 2,309 2,152 9,112 8,524

Other - - 141 -
--- --- --- ---

119,333 102,457 373,805 290,541
------- ------- ------- -------

Costs and expenses applicable to revenues

Equipment and product sales 20,625 17,871 63,635 36,997

Services 20,654 15,910 70,855 62,228

Rentals 6,171 4,932 20,027 17,928
----- ----- ------ ------

47,450 38,713 154,517 117,153
------ ------ ------- -------

Gross margin 71,883 63,744 219,288 173,388

Selling, general and administrative expenses 32,997 24,937 115,345 93,260

(including share-based compensation expense of $7.0 million and $21.9 million for the three months and year
ended December 31, 2015, respectively (2014 - expense of $3.8 million and $15.1 million, respectively))

Research and development 3,119 4,628 12,730 16,096

Amortization of intangibles 558 465 1,860 1,724

Receivable provisions, net of recoveries 43 276 752 918

Asset impairments 160 314 405 314

Impairment of investments 75 2,556 425 3,206
--- ----- --- -----

Income from operations 34,931 30,568 87,771 57,870

Interest income 241 216 968 405

Interest expense (491) (121) (1,661) (924)
---- ---- ------ ----

Income from operations before income taxes 34,681 30,663 87,078 57,351

Provision for income taxes (7,644) (7,799) (20,052) (14,466)

Loss from equity-accounted investments, net of tax (792) (350) (2,402) (1,071)
---- ---- ------ ------

Income from continuing operations 26,245 22,514 64,624 41,814

Income from discontinued operations, net of tax - - - 355
--- --- --- ---

Net income 26,245 22,514 64,624 42,169

Less: net income attributable to non-controlling interests (3,752) (1,522) (8,780) (2,433)
------ ------ ------ ------

Net income attributable to common shareholders $22,493 $20,992 $55,844 $39,736
======= ======= ======= =======


Net income per share attributable to common shareholders - Basic:

Net income per share from continuing operations $0.33 $0.30 $0.79 $0.57

Net income per share from discontinued operations - - - 0.01
--- ----

$0.33 $0.30 $0.79 $0.58
===== ===== ===== =====

Net income per share attributable to common shareholders - Diluted:

Net income per share from continuing operations $0.32 $0.30 $0.78 $0.56

Net income per share from discontinued operations - - - -
--- ---

$0.32 $0.30 $0.78 $0.56
===== ===== ===== =====


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

Basic 69,364 68,769 69,526 68,346

Fully Diluted 70,764 69,958 71,058 69,754


Additional Disclosure:

Depreciation and amortization(1) $11,612 $9,819 $42,803 $33,756


(1) Includes $0.4 million and $1.0 million of amortization of deferred financing costs charged to interest expense for the three months and year ended December 31, 2015 (2014 - $0.1 million and $0.5 million, respectively).









IMAX CORPORATION

CONSOLIDATED BALANCE SHEETS

In accordance with United States Generally Accepted Accounting Principles

(In thousands of U.S. dollars)




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

2015 2014
---- ----

Assets

Cash and cash equivalents $317,449 $106,503

Accounts receivable, net of allowance for doubtful accounts of $1,146 (December 31, 2014 - $947) 97,981 76,051

Financing receivables 117,231 105,700

Inventories 38,753 17,063

Prepaid expenses 6,498 4,946

Film assets 14,571 15,163

Property, plant and equipment 218,267 183,424

Other assets 26,527 23,047

Deferred income taxes 25,766 23,058

Other intangible assets 28,950 27,551

Goodwill 39,027 39,027

Total assets $931,020 $621,533
======== ========


Liabilities

Bank indebtedness $29,667 $4,710

Accounts payable 23,455 26,145

Accrued and other liabilities 95,748 75,425

Deferred revenue 104,993 88,566

Total liabilities 253,863 194,846
------- -------


Commitments and contingencies


Non-controlling interests 3,307 43,912
----- ------


Shareholders' equity

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

Issued and outstanding - 69,673,244 (December 31, 2014 - 68,988,050) 448,310 344,862

Other equity 163,094 47,319

Accumulated earnings (deficit) 19,930 (6,259)

Accumulated other comprehensive loss (7,443) (3,147)

Total shareholders' equity attributable to common shareholders 623,891 382,775

Non-controlling interests 49,959 -
------ ---

Total shareholders' equity 673,850 382,775
------- -------

Total liabilities and shareholders' equity $931,020 $621,533
======== ========







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,
------------------------

2015 2014
---- ----


Cash provided by (used in):

Operating Activities

Net income $64,624 $42,169

Income from discontinued
operations, net of tax - (355)

Adjustments to reconcile net income
to cash from operations:

Depreciation and amortization 42,803 33,756

Write-downs, net of recoveries 3,725 5,294

Change in deferred income taxes (1,336) 627

Stock and other non-cash
compensation 22,379 15,467

Unrealized foreign currency
exchange loss 785 1,180

Loss from equity-accounted
investments 3,838 1,774

Gain on non-cash contribution to
equity-accounted investees (1,436) (703)

Investment in film assets (15,119) (19,233)

Changes in other non-cash operating
assets and liabilities (36,578) 6,057

Net cash provided by operating
activities from discontinued
operations - 572

Net cash provided by operating
activities 83,685 86,605



Investing Activities

Purchase of property, plant and
equipment (43,257) (40,104)

Investment in joint revenue sharing
equipment (28,474) (16,838)

Investment in new business ventures (2,000) (2,500)

Proceeds from sale of business
venture - 507

Acquisition of other intangible
assets (5,065) (2,918)

Net cash used in investing
activities (78,796) (61,853)



Financing Activities

Increase in bank indebtedness 25,290 4,710

Repayment of bank indebtedness (333) -

Issuance of subsidiary shares to non-
controlling interests - private
offering 40,000 44,551

Share issuance costs from the
issuance of subsidiary shares to
non-controlling

interests - private offering (2,000) (3,556)

Issuance of subsidiary shares to non-
controlling interests - public
offering 178,226 -

Share issuance expenses - public
offering (16,257) -

Exercise of stock options 35,609 10,834

Treasury stock repurchased for
settlement of share based
compensation (10,000) (790)

Repurchase of common shares (34,276) (3,063)

Dividends paid to non-controlling
interests (9,511) -

Credit facility amendment fees paid (1,533) (427)

Net cash provided by financing
activities 205,215 52,259



Effects of exchange rate changes on
cash 842 (54)
--- ---


Increase in cash and cash equivalents
during year 210,946 76,957


Cash and cash equivalents, beginning
of year 106,503 29,546


Cash and cash equivalents, end of
year $317,449 $106,503
======== ========











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 includes the design, manufacture, sale or lease of IMAX theater projection system equipment. The theater system maintenance segment includes the maintenance of IMAX theater projection system equipment in the IMAX theater network. The
joint revenue sharing arrangements segment includes the provision of IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concession revenues. The film production and IMAX DMR segment includes the production of
films and the 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 provides 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 Years Ended

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

2015 2014 2015 2014
---- ---- ---- ----

Revenue

IMAX Theater Systems

IMAX Systems

Sales and sales-type leases $33,011 $33,246 $86,935 $58,875

Ongoing rent, fees, and finance income 4,485 3,845 15,193 14,117

Other 6,259 3,747 17,579 12,154

43,755 40,838 119,707 85,146
------ ------ ------- ------


Theater System Maintenance 9,599 8,658 36,944 34,042



Joint Revenue Sharing Arrangements 31,861 22,961 99,120 68,418



Film

Production and IMAX DMR 31,945 25,587 107,089 83,172

Film distribution and post-
production 2,173 4,413 10,945 19,763

34,118 30,000 118,034 102,935
------ ------ ------- -------

Total $119,333 $102,457 $373,805 $290,541
======== ======== ======== ========


Gross margins

IMAX Theater Systems

IMAX systems(1)

Sales and sales-type leases $20,070 $20,322 $44,790 $34,483

Ongoing rent, fees, and finance income 4,267 3,646 14,378 13,445

Other 700 331 279 129

25,037 24,299 59,447 48,057
------ ------ ------ ------


Theater System Maintenance 2,811 3,385 12,702 12,375



Joint Revenue Sharing
Arrangements(1) 21,556 14,671 68,372 44,714



Film

Production and IMAX DMR(1) 22,003 19,745 77,645 62,922

Film distribution and post-
production(1) 476 1,644 1,122 5,320

22,479 21,389 78,767 68,242
------ ------ ------ ------

Total $71,883 $63,744 $219,288 $173,388
======= ======= ======== ========


__________________

(1) IMAX systems include
marketing and
commission costs of
$1.2 million and
$3.0 million for
the three and
twelve months ended
December 31, 2015,
respectively (2014
-$1.5 million and
$2.7 million,
respectively).
Joint revenue
sharing
arrangements
segment margins
include
advertising,
marketing and
commission costs of
$1.6 million and
$4.3 million for
the three and
twelve months ended
December 31, 2015,
respectively (2014
-$1.1 million and
$3.2 million,
respectively).
Production and DMR
segment margins
include marketing
costs of $5.0
million and $13.3
million for the
three and twelve
months ended
December 31, 2015,
respectively (2014
-$1.8 million and
$7.1 million,
respectively).
Distribution
segment margins
include marketing
costs recovery of
less than $0.1
million and
recovery of $0.1
million for the
three and twelve
months ended
December 31, 2015,
respectively (2014
-$0.1 million
recovery and $0.6
million expense,
respectively).






IMAX CORPORATION

OTHER INFORMATION

(in thousands of U.S. dollars)


Non-GAAP Financial Measures:


In this release, the Company presents adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share as supplemental
measures of performance of the Company, which are not recognized under U.S. GAAP. The Company presents 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 net income. In addition, the Company presents adjusted net income attributable
to common shareholders and adjusted net income attributable to common shareholders per diluted share because it believes that they are important supplemental measures of its comparable financial results and could potentially distort the analysis of
trends in business performance and it wants to ensure that its investors fully understand the impact of net income attributable to non-controlling interests and its stock-based compensation (net of any related tax impact) in determining net income
attributable to common shareholders. 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 net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share should be considered in addition to, and not as
a substitute for, net income and net income attributable to common shareholders and other measures of financial performance reported in accordance with U.S. GAAP.


The Credit Facility provides that the Company will be required at all times to satisfy a Minimum Liquidity Test (as defined in the Credit Agreement) of at least $50.0 million. The Company will also be required to maintain minimum EBITDA (as defined in
the credit agreement) of $100.0 million. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the credit agreement) of 2.25:1.0, which requirement decreases to (i) 2.0:1.0 on December 31, 2016; and (ii) 1.75:1.0 on December 31,
2017. The Company was in compliance with all of these requirements at December 31, 2015. The Maximum Total Leverage Ratio was 0.21:1 as at December 31, 2015, 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 $29.7 million. EBITDA is calculated as follows:


Quarter Ended Year Ended Year Ended

December 31, 2015 December 31, 2015(1) December 31, 2014
----------------- ------------------- -----------------


Net income $26,245 $64,624 $42,169

Add (subtract):

Loss from equity accounted investments 792 2,402 1,071

Provision for income taxes 7,644 20,052 14,683

Interest expense, net of interest income 250 693 519

Depreciation and amortization, including film asset amortization 11,259 41,787 33,230

Write-downs, net of recoveries
including asset impairments and

receivable provisions 797 3,725 5,294

Stock and other non-cash compensation 7,175 22,379 15,467

EBITDA attributable to non-controlling interests(2) (6,015) (14,885) (3,937)


$48,147 $140,777 $108,496
======= ======== ========

Revenues attributed to IMAX common shareholders $106,981 $347,862 $283,001
===

Adjusted EBITDA margin 45.0% 40.5% 38.3%







__________________

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

(2) The EBITDA calculation specified for
purpose of the minimum EBITDA covenant
excludes the reduction in EBITDA from
the Company's non-controlling
interests.














IMAX CORPORATION

OTHER INFORMATION

(in thousands of U.S. dollars)


Adjusted Net Income and Adjusted Diluted Per Share Calculations - Quarter Ended December 31, 2015 vs. 2014:


The Company reported net income of $26.2 million or $0.38 per basic share and $0.37 per diluted share for the quarter ended December 31, 2015 as compared to net income of $22.5 million or $0.32 per basic and diluted share for the quarter ended December 31, 2014. Net income for the
quarter ended December 31, 2015 includes a $6.9 million charge or $0.10 per diluted share (2014 - $3.8 million or $0.05 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 $31.7 million or $0.45 per diluted share for the quarter ended December 31, 2015 as compared to adjusted net income of $25.8 million or $0.36 per diluted share for the quarter ended December 31, 2014. Adjusted net income attributable to common shareholders, which
consists of net income attributable to common shareholders excluding the impact of stock-based compensation and the related tax impact, was $27.3 million or $0.39 per diluted share for the quarter ended December 31, 2015 as compared to adjusted net income attributable to common
shareholders of $24.2 million or $0.34 per diluted share for the quarter ended December 31, 2014. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, to adjusted net income, adjusted net income per diluted
share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below:


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

2015 2014
---- ----

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

Reported net income $26,245 $0.37 (1) $22,514 $0.32 (1)

Adjustments:

Stock-based compensation 6,949 0.10 3,800 0.05

Tax impact on items listed above (1,453) (0.02) (563) (0.01)


Adjusted net income 31,741 0.45 (1) 25,751 0.36 (1)

Net income attributable to non-controlling interests (3,752) (0.05) (1,522) (0.02)

Stock-based compensation (net of tax) attributable to

non-controlling interests (703) (0.01) - -

Adjusted net income attributable to common shareholders $27,286 $0.39 (1) $24,229 $0.34 (1)
======= ===== ======= =====


Weighted average diluted shares outstanding 70,764 69,958
====== ======


_____________

(1) Includes
impact of
less than
$0.1
million
(2014 -
$0.1
million) of
accretion
charges
associated
with
redeemable
Class C
shares of
IMAX China.











Adjusted Net Income and Adjusted Diluted Per Share Calculations - Year Ended December 31, 2015 vs. 2014:


The Company reported net income of $64.6 million or $0.92 per basic share and $0.90 per diluted share for the year ended December 31, 2015 as compared to net income of $42.2 million or $0.61 per basic share and $0.59 per diluted share for the year ended December 31, 2014. Net income for
the year ended December 31, 2015 includes a $21.9 million charge or $0.31 per diluted share (2014 - $15.1 million or $0.22 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 $82.4 million or $1.15 per diluted share for the year ended December 31, 2015 as compared to adjusted net income of $54.9 million or $0.78 per diluted share for the year ended December 31, 2014. Adjusted net income attributable to common shareholders, which
consists of net income attributable to common shareholders excluding the impact of stock-based compensation and the related tax impact, was $73.0 million or $1.02 per diluted share for the year ended December 31, 2015 as compared to adjusted net income attributable to common
shareholders of $52.5 million or $0.75 per diluted share for the year ended December 31, 2014. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, to adjusted net income, adjusted net income per diluted
share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below:


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

2015 2014
---- ----

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

Reported net income $64,624 $0.90 (1) $42,169 $0.59 (1)

Adjustments:

Stock-based compensation 21,880 0.31 15,128 0.22

Tax impact on items listed above (4,056) (0.06) (2,370) (0.03)


Adjusted net income 82,448 1.15 (1) 54,927 0.78 (1)

Net income attributable to non-controlling interests (8,780) (0.12) (2,433) (0.03)

Stock-based compensation (net of tax) attributable to

non-controlling interests (703) (0.01) - -

Adjusted net income attributable to common shareholders $72,965 $1.02 (1) $52,494 $0.75 (1)
======= ===== ======= =====


Weighted average diluted shares outstanding 71,058 69,754
====== ======


_____________

(1) Includes
impact of
$0.8
million
(2014 -
$0.4
million) of
accretion
charges
associated
with
redeemable
Class C
shares of
IMAX China.








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 ended 12 months ended

December 31, 2015 December 31, 2015
----------------- -----------------

(In thousands of U.S. Dollars)

Net cash provided by operating activities $41,885 $83,685

Net cash used in investing activities (13,762) (78,796)

Free cash flow $28,123 $4,889
===




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SOURCE IMAX Corporation

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IMAX Corporation

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


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