IMAX Corporation Reports First-Quarter 2016 Financial Results Highlights

IMAX Corporation Reports First-Quarter 2016 Financial Results Highlights

NEW YORK, April 21, 2016 /PRNewswire/ --

HIGHLIGHTS


-- Adjusted EPS of $0.22, up 214% over prior-year period, attributable to
robust global box office growth and operating expense leverage
-- Global Box Office of $272 million, up 64% from Q1 2015, driven by strong
growth domestically and continued strength in international markets.
-- Revenues increased 48% from prior-year period to $92.1 million,
primarily due to strong box office
-- Adjusted EBITDA grew 97% year-over-year to $31.5 million, resulting in
adjusted EBITDA margins of 37.4%, up over 1,000 basis points from Q1
2015
-- Signings growth of 71%, with 36 new signings up from 21 in Q1 2015
IMAX Corporation (NYSE: IMAX) today reported first-quarter 2016 revenues of $92.1 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $31.5 million, and adjusted net income after non-controlling interest of $15.5 million, or $0.22 per diluted share, representing a 214% increase over the prior-year period. GAAP net income after non-controlling interest was $9.5 million, or $0.14 per diluted share. The Company also reported a first-quarter global per-screen average of $284,400, up 40% over Q1 2015. For reconciliations of adjusted net income to reported net income and for the definition of adjusted EBITDA, please see the tables at the end of this press release.

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

"2016 is off to an exceptional start for IMAX," said IMAX CEO Richard L. Gelfond. "The pace of IMAX® theatre signings, installations and box office growth, both domestically and globally, continues to drive real momentum in the business. We saw strong financial results in the first quarter, with 48% revenue growth, over 1,000 basis points of EBITDA margin expansion, and adjusted EPS growth of more than 214% compared to the same period last year. We believe significant opportunity lies ahead as we continue the year with a robust pipeline of films featuring major blockbuster titles including a strong start to the second quarter with The Jungle Book, followed by Captain America: Civil War, Independence Day: Resurgence,Star Trek Beyond, Fantastic Beasts and Where to Find Them, Rogue One: A Star Wars Story and numerous other "IMAX-centric" motion pictures that are ideally sequenced throughout the year. We think we are well-positioned to continue to deliver sustainable long-term growth for our shareholders."

Network Growth Update

The total IMAX theatre network consisted of 1,066 systems as of March 31, 2016, of which 952 were in commercial multiplexes. There were 388 theatres in backlog as of March 31, 2016, compared to 372 in backlog as of December 31, 2015. In the first quarter of 2016, the Company signed contracts for 36 theatres, of which 35 were for new locations and one was an upgrade. In the quarter, the Company also installed 19 theatres, of which 10 were for new theatre locations and nine were upgrades. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

"We continue to see substantial signings momentum in key geographical areas including China, Japan and India," continued Gelfond. "This sustained international expansion, coupled with a North American outlook about which we are very optimistic, reflects the strong opportunity within our business moving forward."

First-Quarter Segment Results


-- Revenue from sales and sales-type leases was $18.0 million in the first
quarter of 2016, compared to $8.6 million in the first quarter of 2015,
primarily reflecting nine digital system upgrades in existing locations,
compared to two upgrades (one sale and one operating lease) in the first
quarter of 2015. In addition, the company installed five full new
theatre systems under sales and sales-type lease arrangements in the
most recent first quarter, compared to the five sales-type theatres the
Company installed in the first quarter of 2015.
-- Revenue from joint revenue-sharing arrangements was $23.4 million in the
quarter, compared to $15.9 million in the prior-year period. Gross
margins on joint revenue-sharing arrangements grew from 66.9% in Q1
2015, to 76.9% in the first quarter of 2016. During the quarter, the
Company installed five new theatres under joint revenue-sharing
arrangements, compared to six in 2015. The Company had 534 theatres
operating under joint revenue-sharing arrangements as of March 31, 2016,
as compared to 457 joint-venture theatres one year prior.
-- Production and IMAX DMR® (Digital Re-Mastering) revenues were $29.8
million in the first quarter of 2016, compared to $17.7 million in the
first quarter of 2015. DMR gross margins grew from 74.8% in Q1 2015, to
76.6% in the first quarter of 2016. Gross box office from DMR titles was
$272.0 million in the first quarter of 2016, compared with $165.6
million in the prior-year period. The average global DMR box office per
screen in the first quarter of 2016 was $284,400 compared with $202,900
in same period last year.
-- Gross margin of 56.6% compared to 57.8% last year, which was impacted by
the installation of nine digital upgrades under sales and sales-type
lease arrangements. Excluding the impact of these upgrades, gross
margin grew 480 basis points from 58.6% to 63.4%.
-- Operating expenses, excluding stock based compensation, were lower than
the prior year period and contributed to the significant operating
expense leverage realized in the first quarter. Adjusted EBITDA margins
of 37.4% grew over 1,000 basis points versus a prior year level of
26.9%.
Share Buybacks

As previously disclosed, the Company repurchased 1,627,645 shares in the first quarter of 2016, which includes 181,227 shares purchased in connection with the Company's long-term incentive plan. The Company purchased the shares at an average price of $30.98 for a total value of $50.5 million.

On April 20, 2016, the Company's board of directors approved an incremental $50.0 million increase to the repurchase allowance under the Company's previously-announced share repurchase program, for an aggregate repurchase allowance of $200.0 million. All other terms of the repurchase program remain unchanged. In addition, on February 22, 2016, the Company amended the terms of its credit facility to increase the general restricted payment basket thereunder (which covers, among other things, the repurchase of shares) from $150.0 million to $350.0 million in the aggregate after the amendment date.

Conference Call

The Company will host a conference call today at 8:30 AM ET to discuss its first-quarter 2016 financial 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 1374767. 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 1374767.

Canadian Securities Update

The Company has received an exemption decision issued by the Ontario Securities Commission dated April 1, 2016, for relief from the formal issuer bid requirements under Canadian securities laws. The exemption decision permits the Company to repurchase up to 10% of its outstanding common shares in any 12-month period through the facilities of the New York Stock Exchange under repurchase programs that the Company may implement from time to time. Canadian securities laws regulate an issuer's ability to make repurchases of its own securities.

The Company sought the exemption so that it can make repurchases under its repurchase programs in excess of the maximum allowable in reliance on the existing "other published markets" exemption from the formal issuer bid requirements available under Canadian securities laws. The "other published markets" exemption caps the Company's ability to repurchase its securities through the facilities of the NYSE at 5% of the issuer's outstanding securities during any 12-month period.

The conditions of the exemption decision are as follows: (i) any repurchases made in reliance on the exemption decision must be permitted under, and part of repurchase programs established and conducted in accordance with, U.S. securities laws and NYSE rules, (ii) the aggregate number of common shares acquired in reliance on the exemption decision by the Company and any person or company acting jointly or in concert with the Company within any 12 months does not exceed 10% of the outstanding common shares at the beginning of the 12-month period, (iii) the common shares are not listed and posted for trading on an exchange in Canada, (iv) the exemption decision applies only to the acquisition of common shares by the Company within 36 months of the date of the decision, and (v) prior to purchasing common shares in reliance on the exemption decision, the Company discloses the terms of the exemption decision and the conditions applicable thereto in a press release that is issued on SEDAR and includes such language as part of the news release required to be issued in accordance with the "other published markets exemption" in respect of any repurchase program that may be implemented by the Company.

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 Mar. 31, 2016, there were 1,066 IMAX theatres (952 commercial multiplexes, 17 commercial destinations and 97 institutions) in 68 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®, 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).

www.imax.com

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 consolidated subsidiaries (the "Company") and expectations regarding the Company's future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, the signing of theater 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 its 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 theater 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 and Quarterly Reports on Form 10-Q.

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: Entertainment Media:

Sloane & Company, New York Principal Communications Group, Los Angeles

Whit Clay Melissa Zuckerman/Paul Pflug

212-446-1864 323-658-1555

wclay@sloanepr.com melissa@pcommgroup.com

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






Additional Information


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

March 31, 2016

Three Months

Ended March 31,
---------------

Theater Signings: 2016 2015
----

Full new sales and sales-type
lease arrangements 28 12

New joint revenue sharing
arrangements 7 8

Total new
theaters 35 20


Upgrades of IMAX theater systems 1 (1) 1 (2)

Total Theater
Signings 36 21
===


Three Months

Ended March 31,
---------------

Theater
Installations: 2016 2015
----

Full new sales and sales-type
lease arrangements 5 5

New joint revenue sharing
arrangements 5 6
--- ---

Total new
theaters 10 11

Upgrades of IMAX theater systems 9 (3)(4) 2 (3)(4)

Total Theater
Installations 19 13
===


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

Theater Backlog: 2016 2015 2015
----

New sales and sales-type lease
arrangements 169 160 145

New joint revenue sharing
arrangements 213 218 212

Total new
theaters 382 378 357


Upgrades of IMAX theater systems 6 25 15

Total Theaters in
Backlog 388 (5)(6) 403 (5)(7) 372 (5)(8)
=== === ===


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

Theater Network: 2016 2015 2015
----

Commercial
Multiplex
Theaters:

Sales and sales-type lease
arrangements 418 363 414

Joint revenue sharing arrangements 534 457 529

Total Commercial
Multiplex
Theaters 952 820 943


Commercial
Destination
Theaters 17 18 19

Institutional
Theaters 97 105 99

Total IMAX
Theater Network 1,066 943 1,061
=====



(1) Includes one signing for the
installation of an upgrade to a laser-
based digital system under sales and
sales-type lease arrangements in
existing theater locations.

(2) Includes one signing for the
installation of an upgrade to a xenon-
based digital system under a sales and
sales-type lease arrangement.

(3) Includes eight installations of an
upgrade to a laser-based digital
system under sales and sales-type
lease arrangements (2015 - one laser-
based digital system under a sales and
sales-type lease arrangement).

(4) Includes one installation of an upgrade
to a xenon-based digital system under
a sale arrangement (2015 - one under a
short-term operating lease
arrangement).

(5) Includes 21 laser-based digital
theater system configurations (Q1 2015
- 69, Q4 2015 - 24), including
upgrades. The Company continues to
develop and roll out its laser-based
digital projection system.

(6) Includes six upgrades to a digital
theater system, in existing IMAX
theater locations (one xenon
configuration and five laser
configurations).

(7) Includes 25 upgrades to a digital
theater system, in existing IMAX
theater locations (two xenon
configurations and 23 laser
configurations, of which five are
under joint revenue sharing
arrangements).

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






IMAX Greater China Business Metrics Supplement


Three Months ended March 31,
----------------------------

2016 2015
---- ----


IMAX Greater China Box Office $83.4 million $62.9 million

IMAX Greater China Per Screen Avg. $290,000 $295,400


Greater China Theatre Installations 7 (1) 5

Greater China Backlog 227 219

Greater China Network:

Commercial Multiplex 295 220

Institution 17 19
--- ---

Total 312 239
=== ===



(1) Includes two upgrades to
laser-based digital
technology.


Additional Information (continued)

2016 DMR Films:

In addition to the 11 IMAX DMR films released to the IMAX theater network during the first three months of 2016, 17 additional IMAX DMR films have been announced so far to be released in the remaining nine months of 2016:


-- The Crew: An IMAX 3D Experience (Russia-1 Channel, April 2016, Russia
only);
-- 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);
-- X-Men: Apocalypse: An IMAX 3D Experience (20th Century Fox, 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);
-- Ghostbusters: An IMAX 3D Experience (Sony 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 IMAXExperience (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).
In addition, the Company will be releasing an IMAX original production, A Beautiful Planet, on April 29, 2016 and a documentary film, Voyage of Time, on October 7, 2016.

To date, the Company has announced the following 9 titles to be released in 2017 to the IMAX theater network:


-- Attraction: An IMAX 3D Experience (Art Pictures Studio, January 2017,
Russia only);
-- The Maze Runner: The Death Cure: The IMAX Experience (20th Century Fox,
February 2017);
-- Wolverine: The IMAX Experience (20th Century Fox, March 2017);
-- Kong: Skull Island: An IMAX 3D Experience (Warner Bros. Pictures, March
2017);
-- Guardians of the Galaxy Vol. 2: An IMAX 3D Experience (Walt Disney
Studios, May 2017);
-- Pirates of the Caribbean: Dead Men Tell No Tales: An IMAX 3D Experience
(Walt Disney Studios, May 2017);
-- Spider-Man: Homecoming: An IMAX 3D Experience (Sony Pictures, July
2017);
-- Thor: Ragnarok: An IMAX 3D Experience (Walt Disney Studios, November
2017);
-- Star Wars: Episode VIII: An IMAX 3D Experience (Walt Disney Studios,
December 2017);
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 films will be released to the IMAX network in 2016 to the 44 films that were released to the IMAX network in 2015.








IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)


Three Months

Ended March 31,
---------------

2016 2015
---- ----

Revenues

Equipment and product sales $23,740 $14,436

Services 44,273 31,716

Rentals 21,779 13,814

Finance income 2,336 2,245
----- -----

92,128 62,211
------ ------

Costs and expenses applicable to
revenues

Equipment and product sales 17,791 7,540

Services 17,596 14,807

Rentals 4,565 3,883
----- -----

39,952 26,230
------ ------

Gross margin 52,176 35,981

Selling, general and
administrative expenses 31,584 28,352

(including
share-based
compensation
expense of
$8.5 million
for the three
months ended
March 31,
2016 (2015 -
expense of
$5.6
million))

Research and development 3,708 4,542

Amortization of intangibles 491 430

Receivable provisions, net of
recoveries 126 5

Income from operations 16,267 2,652

Interest income 467 246

Interest expense (398) (304)
---- ----

Income from operations before
income taxes 16,336 2,594

Provision for income taxes (3,718) (675)

Loss from equity-accounted
investments, net of tax (441) (434)
---- ----

Net income 12,177 1,485

Less: net income attributable to
non-controlling interests (2,650) (1,094)
------ ------

Net income attributable to
common shareholders $9,527 $391
====== ====


Net income per share attributable to common
shareholders -basic & diluted:

Net income per share - basic $0.14 $ -
===== === ===

Net income per share - diluted $0.14 $ -
===== === ===


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

Basic 69,379 69,210

Fully Diluted 70,120 70,676


Additional Disclosure:

Depreciation and amortization(1) $10,438 $9,633



(1) Includes $0.1 million of amortization of deferred financing costs charged to interest expense for the three
months ended March 31, 2016 (2015 -$0.2 million).









IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars)

(Unaudited)



March 31 December 31

2016 2015
---- ----


Assets

Cash and cash
equivalents $259,752 $317,449

Accounts receivable, net
of allowance for
doubtful accounts of
$1,061 (December 31,
2015 -$1,146) 91,933 97,981

Financing receivables 119,649 117,231

Inventories 44,564 38,753

Prepaid expenses 8,844 6,498

Film assets 14,703 14,571

Property, plant and
equipment 220,211 218,267

Other assets 26,278 26,136

Deferred income taxes 25,197 25,766

Other intangible assets 29,137 28,950

Goodwill 39,027 39,027

Total assets $879,295 $930,629
======== ========


Liabilities

Bank
indebtedness $28,786 $29,276

Accounts payable 20,952 23,455

Accrued and other
liabilities 76,234 95,748

Deferred revenue 102,049 104,993

Total liabilities 228,021 253,472
------- -------


Commitments and
contingencies


Non-controlling interests 3,263 3,307
----- -----


Shareholders' equity

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

Issued and outstanding -
68,276,139 (December 31,
2015 -69,673,244) 440,248 448,310

Other equity 165,395 163,094

Accumulated (deficit)
earnings (5,854) 19,930

Accumulated other
comprehensive loss (3,732) (7,443)

Total shareholders'
equity attributable to
common shareholders 596,057 623,891

Non-controlling interests 51,954 49,959
------ ------

Total shareholders'
equity 648,011 673,850
------- -------

Total
liabilities
and
shareholders'
equity $879,295 $930,629
======== ========









IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

Three Months Ended March 31,
----------------------------

2016 2015
---- ----


Cash provided by (used in):

Operating Activities

Net income $12,177 $1,485

Adjustments to reconcile net income
to cash from operations:

Depreciation and amortization 10,438 9,633

Write-downs, net of recoveries 648 128

Change in deferred income taxes (185) 191

Stock and other non-cash
compensation 8,667 5,666

Unrealized foreign currency
exchange loss (557) 1,351

Loss from equity-accounted
investments 818 785

Gain on non-cash contribution to
equity-accounted investees (377) (352)

Investment in film assets (3,919) (3,013)

Changes in other non-cash
operating assets and liabilities (22,746) (9,805)

Net cash provided by operating
activities 4,964 6,069
----- -----


Investing Activities

Purchase of property, plant and
equipment (4,585) (22,582)

Investment in joint revenue sharing
equipment (3,988) (4,815)

Acquisition of other intangible
assets (770) (665)

Net cash used in investing
activities (9,343) (28,062)
------ -------


Financing Activities

Increase in bank indebtedness - 11,371

Repayment of bank indebtedness (500) -

Repurchase of common shares (44,618) -

Settlement of restricted share
units (5,849) (3,905)

Taxes paid on secondary sale and
repatriation dividend (2,991) -

Common shares issued -stock
options exercised 740 11,407

Credit facility amendment fees paid - (1,003)

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

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

interests - private offering - (2,000)

Net cash (used in) provided by
financing activities (53,218) 55,870
------- ------


Effects of exchange rate changes on
cash (100) (38)
---- ---


(Decrease) increase in cash and
cash equivalents during period (57,697) 33,839


Cash and cash equivalents,
beginning of period 317,449 106,503


Cash and cash equivalents, end of
period $259,752 $140,342
======== ========






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

Ended March 31,
---------------

2016 2015
---- ----

Revenue

IMAX Theater Systems

IMAX Systems

Sales and sales-type leases $17,998 $8,616

Ongoing rent, fees, and
finance income 3,862 3,498

Other 4,481 3,425

26,341 15,539
------ ------


Theater System
Maintenance 9,826 8,850



Joint Revenue
Sharing
Arrangements 23,386 15,868



Film

Production and
IMAX DMR 29,805 17,676

Film
distribution
and post-
production 2,770 4,278

32,575 21,954
------ ------

Total $92,128 $62,211
======= =======


Gross margins

IMAX Theater Systems

IMAX
systems(1)

Sales and sales-type leases $4,319 $4,907

Ongoing rent, fees, and
finance income 3,515 3,278

Other (482) (40)

7,352 8,145
----- -----


Theater System
Maintenance 3,439 3,281



Joint Revenue
Sharing
Arrangements(1) 17,992 10,617



Film

Production and
IMAX DMR(1) 22,823 13,225

Film
distribution
and post-
production(1) 570 713

23,393 13,938
------ ------

Total $52,176 $35,981
======= =======



(1) IMAX systems include marketing and commission costs
of $0.5 million for the three months ended March 31,
2016 (2015 -$0.3 million). Joint revenue sharing
arrangements segment margins include advertising,
marketing and commission costs of $0.1 million for
the three months ended March 31, 2016 (2015 -$0.1
million). Production and DMR segment margins include
marketing costs of $2.3 million for the three months
ended March 31, 2016 (2015 -$1.3 million).
Distribution segment margins include marketing
expense of $0.7 million for the three months ended
March 31, 2016 (2015 -recovery of $0.1 million).









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 March 31, 2016. The
ratio of total debt to EBITDA was 0.19:1 as at March 31, 2016, 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 $29.2 million. EBITDA is calculated as follows:


For the For the For the

3 months ended 12 months ended 3 months ended

March 31, 2016 March 31, 2016 (1) March 31, 2015
-------------- -------------- --------------

(In thousands of U.S. Dollars)

Net income $12,177 $75,316 $1,485

Add (subtract):

Loss from equity accounted investments 441 2,409 434

Provision for income taxes 3,718 23,095 675

Interest expense, net of interest income (69) 566 58

Depreciation and amortization, including film asset amortization 10,297 42,617 9,467

Write-downs, net of recoveries including asset impairments and

receivable provisions 648 4,245 128

Stock and other non-cash compensation 8,667 25,380 5,666

EBITDA before non-controlling interests 35,879 173,628 17,913

EBITDA attributable to non-controlling interests(2) (4,377) (17,329) (1,933)

EBITDA attributable to common shareholders $31,502 $156,299 $15,980
===

Revenue attributable to common shareholders $84,203 $372,672 $59,393
===

Adjusted EBITDA margin 37.4% 41.9% 26.9%




(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 March 31, 2016 vs. 2015:

The Company reported net income of $12.2 million or $0.18 per basic share and $0.17 per diluted share for the quarter ended March 31, 2016 as compared to net income of $1.5 million or $0.02 per basic and diluted share for the quarter ended March 31, 2015. Net income for the quarter ended March
31, 2016 includes an $8.5 million charge or $0.12 per diluted share (2015 - $5.6 million or $0.08 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 $18.3 million
or $0.26 per diluted share for the quarter ended March 31, 2016 as compared to adjusted net income of $6.1 million or $0.09 per diluted share for the quarter ended March 31, 2015. 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 $15.5 million or $0.22 per diluted share for the quarter ended March 31, 2016 as compared to adjusted net income attributable to common shareholders of $5.0 million or $0.07 per diluted share for the
quarter ended March 31, 2015. 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 March 31,
-----------------------

2016 2015
---- ----

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

Reported net income $12,117 $0.17 $1,485 $0.02 (1)

Adjustments:

Stock-based compensation 8,538 0.12 5,575 0.08

Tax impact on items listed above (2,440) (0.03) (962) (0.01)


Adjusted net income 18,275 0.26 6,098 0.09 (1)

Net income attributable to non-controlling interests (2,650) (0.04) (1,094) (0.02)

Stock-based compensation (net of tax) attributable to

non-controlling interests (125) - - -

Adjusted net income attributable to common shareholders $15,500 $0.22 $5,004 $0.07 (1)
======= ===== ====== =====


Weighted average diluted shares outstanding 70,120 70,676
====== ======



(1) Includes impact of $0.2 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


For the

3 months
ended

March 31,
2016
----------

(In thousands of U.S. Dollars)

Net cash provided by operating
activities $4,964

Net cash used in investing activities (9,343)

Free cash flow $(4,379)


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SOURCE IMAX Corporation

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IMAX Corporation

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


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