IMAX Corporation Reports Second Quarter 2013 Financial Results

IMAX Corporation Reports Second Quarter 2013 Financial Results

HIGHLIGHTS

-- Second quarter 2013 revenues increase 17% from prior year period to $82.3 million, driven by recurring revenue

-- Network growth and strong per screen averages drive 27% box office growth in Q2 2013 from prior year period

-- Strong second quarter signings, combined with recent CJ CGV and Wanda/AMC deals, position IMAX well for future footprint expansion

NEW YORK, July 25, 2013 /PRNewswire/ -- IMAX Corporation (NYSE:IMAX; TSX:IMX) today reported second quarter 2013 revenues of $82.3 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $32.2 million, adjusted net income of $15.0 million, or $0.22 per diluted share, and reported net income of $11.8 million, or $0.17 per diluted share.

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

"In the second quarter we remained focused on executing our strategy of expanding the network and delivering solid global box office and per screen performance, which resulted in strong recurring revenue growth," said Richard L. Gelfond, IMAX Chief Executive Officer. "Strategic investments - including our innovative laser projection system - along with some non-recurring items, contributed to higher operating expenses in the quarter."

"When you take into account the healthy backlog at the end of the second quarter, along with the substantial signing activity over the past few weeks, including last night's Wanda/AMC announcement, the result is a strong pipeline for continued network expansion over the coming years," Gelfond continued. "We believe that this, together with our world-class brand and our increasing ability to tailor our programming globally, positions the Company well for long-term growth and an exciting future."

Network Growth Update

The total IMAX® theatre network consisted of 767 systems as of June 30, 2013, of which 634 were in commercial multiplexes. There were 284 theatre systems in backlog as of June 30, 2013, compared to 280 theatre systems in backlog as of June 30, 2012. With the inclusion of the recently announced 35 theatre agreement with CJ CGV as well as the 45 to 130 theatre agreement with Wanda/AMC, the Company's total year-to-date signings are between 140 and 225, depending on whether Wanda/AMC exercises their option for 80 additional theatres under their most recent agreement. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

In the second quarter of 2013, the Company signed contracts for 34 theatre systems, of which 25 were in new theatre locations and 9 were a combination of signings for laser systems and upgrades of certain of the Company's film theatres to digital systems in existing theatre locations. In the quarter, the Company installed 30 theatre systems, of which 29 were in new theatre locations.

Second-Quarter Segment Results


-- Revenue from sales and sales-type leases was $17.1 million in the second
quarter of 2013, compared to $14.9 million in the second quarter of
2012, primarily reflecting the installation of 11 full, new theatre
systems under sales and sales-type lease arrangements in the most recent
second quarter, the same number of theatre installs the Company booked
this period last year, and the recognition of revenue related to
previously installed digital upgrades. The Company also installed 1
digital system upgrade under a sales arrangement in the second quarter
of 2013, compared to zero such upgrades in the second quarter of 2012.
-- Revenue from joint revenue-sharing arrangements was $18.3 million in the
quarter, compared to $15.6 million in the prior-year period. During the
quarter, the Company installed 18 new theatres under joint
revenue-sharing arrangements, compared to 9 in the year-ago period. The
Company had 336 theatres operating under joint revenue-sharing
arrangements as of June 30, 2013, as compared to 274 theatres one year
prior.
-- Production and IMAX DMR® (Digital Re-Mastering) revenues were $26.0
million in the second quarter of 2013, compared to $19.7 million in the
second quarter of 2012. Gross box office from DMR titles was $219.7
million in the second quarter of 2013, compared to $173.5 million in the
prior-year period. The average global DMR box office per screen in the
second quarter of 2013 was $353,300, compared to $341,900 in the
prior-year period.
Conference Call
The Company will host a conference call today at 8:30 AM ET to discuss its second quarter 2013 financial results. To access the call via telephone, interested parties should dial (800) 820-0231 approximately 5 to 10 minutes before it begins. International callers should dial (416) 640-5926. The participant passcode for the call is 1118760. This call is also being webcast by Thomson Financial and can be accessed on the 'Investor Relations' section of www.imax.com. A replay of the call will be available via webcast on the 'Investor Relations' section of www.imax.com or via telephone by dialing (888) 203-1112 (US and Canada) or (647) 436-0148 (international). The Conference ID for the telephone replay is 1118760.

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 June 30, 2013, there were 767 IMAX theatres (634 commercial multiplexes, 19 commercial destinations and 114 institutions) in 54 countries.

IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D Experience®, The IMAX Experience® and IMAX Is Believing® are trademarks of IMAX Corporation. More information about the Company can be found at www.imax.com. You may also connect with IMAX on Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).

This press release contains forward looking statements that are based on IMAX management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include, but are not limited to, general economic, market or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by the Company; the performance of IMAX DMR films; competitive actions by other companies; conditions in the in-home and out-of-home entertainment industries; the signing of theater system agreements; changes in laws or regulations; conditions, changes and developments in the commercial exhibition industry; the failure to convert theater system backlog into revenue; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada; risks related to the Company's growth and operations in China; the failure to respond to change and advancements in digital technology; risks related to the acquisition of AMC Entertainment Holdings, Inc. by Dalian Wanda Group Co., Ltd.; risks related to new business initiatives; the potential impact of increased competition in the markets within which the Company operates; risks related to the Company's inability to protect the Company's intellectual property; risks related to Eastman Kodak bankruptcy and the possibility of constrained film supply; risks related to the Company's implementation of a new enterprise resource planning system; risks related to the Company's prior restatements and the related litigation; and other factors, many of which are beyond the control of the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

For additional information please contact:






Investors: Media:

IMAX Corporation, New York IMAX Corporation, New York

Teri Loxam Ann Sommerlath

212-821-0100 212-821-0155

tloxam@imax.com asommerlath@imax.com



Business Media:

Sloane & Company, New York Entertainment Media:

Whit Clay Principal Communications Group, Los Angeles

212-446-1864 Melissa Zuckerman/Paul Pflug

wclay@sloanepr.com 323-658-1555

melissa@pcommgroup.com

paul@pcommgroup.com
--- -------------------
Additional Information

Theatre Network Details:



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

June 30, 2013

Three
Months

Ended June
30,
-----------

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

Full new sales and sales-type
lease arrangements 18 (1) 10

New joint revenue sharing
arrangements 7 28


Total new
theatres 25 38


Upgrades of IMAX theatre
systems 9 (2)(3) 2

Total
Theatre
Signings 34 40
=== ===


Three
Months

Ended June
30,
-----------

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

Full new sales and sales-type
lease arrangements 11 11

New joint revenue sharing
arrangements 18 9
--- ---

Total new
theatres 29 20


Upgrades of IMAX theatre
systems 1 -

Total
Theatre
Installations 30 20
=== ===


As of June
30,
-----------

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

New sales and sales-type
lease arrangements 140 144

New joint revenue sharing
arrangements 124 135

Total new
theatres 264 279


Upgrades of IMAX theatre
systems 20 1

Total
Theatres in
Backlog 284 280
=== ===


As of June
30,
-----------

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

Commercial Multiplex
Theatres:

Sales and sales-type lease
arrangements 298 255

Joint revenue sharing
arrangements 336 274

Total
Commercial
Multiplex
Theatres 634 529


Commercial
Destination
Theatres 19 20

Institutional
Theatres 114 114

Total IMAX
Theatre
Network 767 663
=== ===


(1) Includes one signing which replaced a theater under
an existing arrangement in backlog.

(2) Includes five signings for laser-based digital
systems in existing theater locations.

(3) Includes three signings for xenon-based digital
systems under short-term operating lease arrangements.









Additional Information (continued)



2013 DMR Films Announced to Date:
To date, IMAX has announced 34 titles to be released in 2013. The Company released 35 titles in 2012. The Company remains in discussions with virtually every major studio regarding future titles and expects the total number of titles in 2013 to be similar to that in 2012.


-- The Grandmaster: The IMAX Experience (Jet Tone Films and Sil-Metropole
Organization, January 2013, China only);
-- Hansel & Gretel: Witch Hunters: An IMAX 3D Experience (Paramount
Pictures, January 2013);
-- Journey to the West: Conquering the Demons: An IMAX 3D Experience (Bingo
Movie Development Ltd, February 2013, China only);
-- Top Gun: An IMAX 3D Experience (Paramount Pictures, February 2013);
-- A Good Day to Die Hard: The IMAX Experience (Twentieth Century Fox,
February 2013);
-- Jack the Giant Slayer: An IMAX 3D Experience (Warner Bros., March 2013);
-- Oz: The Great and Powerful: An IMAX 3D Experience (Walt Disney Pictures,
March 2013);
-- G.I. Joe: Retaliation: An IMAX 3D Experience (Paramount Pictures, March
2013);
-- Dragon Ball Z: Battle of the Gods: An IMAX 3D Experience (Toei Animation
Company, March 2013, Japan only);
-- Jurassic Park: An IMAX 3D Experience (Universal Pictures, April 2013);
-- Oblivion: The IMAX Experience (Universal Pictures, April 2013);
-- Iron Man 3: An IMAX 3D Experience (Walt Disney Pictures, May 2013);
-- Star Trek: Into Darkness: An IMAX 3D Experience (Paramount Pictures, May
2013);
-- Fast & Furious 6: The IMAX Experience (Universal, May 2013,
international only);
-- After Earth: The IMAX Experience (Sony, May 2013);
-- Man of Steel: The IMAX Experience (Warner Bros., June 2013);
-- World War Z: An IMAX 3D Experience (Paramount Pictures, June 2013,
international only);
-- Despicable Me 2: An IMAX 3D Experience (Universal Pictures, July 2013,
international only);
-- White House Down: The IMAX Experience (Colombia Pictures and Sony
Pictures, July 2013; international only);
-- Man of Tai Chi: The IMAX Experience (China Film Group, Wanda Group and
Village Roadshow Pictures, July 2013; China only);
-- Pacific Rim: An IMAX 3D Experience (Warner Bros., July 2013);
-- The Lone Ranger : The IMAX Experience (Walt Disney Pictures, August
2013; international only);
-- Elysium: The IMAX Experience (Sony, August 2013);
-- Riddick Sequel: The IMAX Experience (Universal Pictures, September
2013);
-- Mortal Instruments: City of Bones: The IMAX Experience (Sony, August
2013; domestic only);
-- The Wizard of Oz: An IMAX 3D Experience (Warner Bros., September 2013;
domestic only);
-- Metallica Through the Never: An IMAX 3D Experience (Picturehouse,
September 2013);
-- Stalingrad: An IMAX 3D Experience (AR Films, October 2013; Russia and
the CIS only );
-- Gravity: An IMAX 3D Experience (Warner Bros., October 2013);
-- The Young and Prodigious: T.S. Spivet: An IMAX 3D Experience (Gaumont,
October 2013; France only);
-- Ender's Game: The IMAX Experience (Lionsgate, November 2013);
-- The Hunger Games: Catching Fire: The IMAX Experience (Lionsgate,
November 2013);
-- The Hobbit: The Desolation of Smaug: An IMAX 3D Experience (Warner
Bros., December 2013); and
-- Dhoom 3: The IMAX Experience (Yash Raj Films, 2013, India only).






IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

In accordance with United States Generally Accepted Accounting Principles

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

(Unaudited)


Three Months Six Months

Ended June 30, Ended June 30,
-------------- --------------

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

Revenues

Equipment and product sales $20,347 $17,050 $31,026 $31,429

Services 42,099 34,929 68,958 61,996

Rentals 17,823 16,429 27,795 28,899

Finance income 2,024 1,802 4,008 3,482

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

82,293 70,210 132,162 125,806
------ ------ ------- -------

Costs and expenses applicable to revenues

Equipment and product sales 11,416 7,980 16,475 17,075

Services 23,126 18,651 38,444 34,271

Rentals 4,175 4,746 7,628 8,766

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

38,717 31,377 62,547 60,112
------ ------ ------ ------

Gross margin 43,576 38,833 69,615 65,694

Selling, general and administrative expenses 22,110 20,431 39,586 39,599

(including share-based compensation expense of $3.1 million and $5.9 million for the

three and six months ended June 30, 2013, respectively (2012 - expense of $3.7

million and $7.5 million, respectively))

Research and development 3,659 2,465 7,293 5,095

Amortization of intangibles 373 190 737 366

Receivable provisions, net of recoveries 55 137 55 588

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

Income from operations 17,379 15,460 21,944 19,896

Interest income 12 27 25 51

Interest expense (348) (476) (693) (1,002)
---- ---- ---- ------

Income from operations before income taxes 17,043 15,011 21,276 18,945

Provision for income taxes (4,793) (3,732) (5,945) (4,698)

Loss from equity-accounted investments (434) (245) (654) (704)
---- ---- ---- ----

Net income $11,816 $11,034 $14,677 $13,543
======= ======= ======= =======


Net income per share - basic and diluted:

Net income per share - basic $0.18 $0.17 $0.22 $0.21
===== ===== ===== =====

Net income per share - diluted $0.17 $0.16 $0.21 $0.20
===== ===== ===== =====


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

Basic 66,952 65,822 66,799 65,612

Fully Diluted 68,893 68,374 68,769 68,190


Additional Disclosure:


Depreciation and amortization $11,610 $9,200 $20,201 $16,666


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







IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

In accordance with United States Generally Accepted Accounting Principles

(In thousands of U.S. dollars)

(Unaudited)


June 30, December 31,

2013 2012
---- ----

Assets

Cash and cash equivalents $20,774 $21,336

Accounts receivable, net of allowance for doubtful accounts of $1,495 (December 31, 2012 - $1,564) 62,712 42,007

Financing receivables 100,088 94,193

Inventories 12,770 15,794

Prepaid expenses 4,572 3,833

Film assets 6,005 3,737

Property, plant and equipment 121,859 113,610

Other assets 26,126 23,963

Deferred income taxes 32,050 36,461

Goodwill 39,027 39,027

Other intangible assets 27,787 27,911
------ ------

Total assets $453,770 $421,872
======== ========


Liabilities

Bank indebtedness $18,000 $11,000

Accounts payable 18,356 15,144

Accrued and other liabilities 66,372 68,695

Deferred revenue 73,916 73,954

Total liabilities 176,644 168,793
------- -------


Commitments, contingencies and guarantees


Shareholders' equity

Capital stock (note 15) common shares - no par value. Authorized - unlimited number.

Issued and outstanding - 67,062,106 (December 31, 2012 - 66,482,425) 320,102 313,744

Other equity 32,160 28,892

Deficit (72,489) (87,166)

Accumulated other comprehensive loss (2,647) (2,391)
------ ------

Total shareholders' equity 277,126 253,079
------- -------

Total liabilities and shareholders' equity $453,770 $421,872
======== ========







IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In accordance with United States Generally Accepted Accounting
Principles

(In thousands of U.S. dollars)

(Unaudited)

Six Months

Ended June 30,
--------------

2013 2012*
---- ----

Cash provided by (used in):

Operating Activities

Net income $14,677 $13,543

Adjustments to reconcile net
income to cash from operations:

Depreciation and amortization 20,201 16,666

Write-downs, net of recoveries 55 919

Change in deferred income taxes 4,481 3,578

Stock and other non-cash
compensation 6,317 8,062

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

Unrealized foreign currency
exchange loss (gain) 874 (720)

Loss from equity-accounted
investments 654 704

Investment in film assets (12,033) (11,141)

Changes in other non-cash
operating assets and liabilities (25,021) (11,769)

Net cash provided by operating
activities 8,040 19,842
----- ------


Investing Activities

Purchase of property, plant and
equipment (5,054) (1,775)

Investment in joint revenue
sharing equipment (10,393) (13,024)

Investment in new business
ventures (1,000) (381)

Acquisition of other intangible
assets (1,142) (4,223)
------ ------

Net cash used in investing
activities (17,589) (19,403)
------- -------


Financing Activities

Increase in bank indebtedness 12,000 9,917

Repayment of bank indebtedness (5,000) (10,000)

Common shares issued -stock
options exercised 3,992 5,039

Credit facility amendment fees
paid (2,088) -
------ ---

Net cash provided by financing
activities 8,904 4,956
----- -----


Effects of exchange rate changes
on cash 83 47
--- ---


(Decrease) increase in cash and
cash equivalents during the
period (562) 5,442


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

Cash and cash equivalents, end
of period $20,774 $23,580
======= =======




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 Ended June Six Months Ended
30, June 30,
------------------------ ----------------

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

Revenue

Theater Systems

IMAX Systems

Sales and sales-type leases(2) $17,105 $14,948 $26,902 $27,814

Ongoing rent, fees, and finance income 3,687 3,099 6,628 5,891

Other 4,149 3,057 6,132 5,397
----- ----- ----- -----

24,941 21,104 39,662 39,102
------ ------ ------ ------

Theater system maintenance 7,952 6,989 15,741 13,836
----- ----- ------ ------

Joint revenue sharing arrangements 18,336 15,593 27,712 27,291
------ ------ ------ ------

Film

Production and IMAX DMR 25,952 19,744 40,307 33,582

Film distribution and post-
production 5,112 6,780 8,740 11,995
----- ----- ----- ------

31,064 26,524 49,047 45,577
------ ------ ------ ------

Total $82,293 $70,210 $132,162 $125,806
======= ======= ====== ======


Gross margins

Theater Systems

IMAX systems(1)

Sales and sales-type leases(2) $7,154 $8,034 $12,462 $12,684

Ongoing rent, fees, and finance income 3,575 3,073 6,481 5,835

Other 622 180 273 (277)
--- --- --- ----

11,351 11,287 19,216 18,242
------ ------ ------ ------

Theater system maintenance 3,160 2,568 6,214 5,294
----- ----- ----- -----

Joint revenue sharing arrangements(1) 13,507 11,117 19,643 19,054
------ ------ ------ ------

Film

Production and IMAX DMR(1) 14,936 12,358 24,149 20,288

Film distribution and post-
production 622 1,503 393 2,816
--- ----- --- -----

15,558 13,861 24,542 23,104
------ ------ ------ ------

Total $43,576 $38,833 $69,615 $65,694
======= ======= ======= =======


(1) IMAX systems include commission costs of $0.4 million and $0.7 million for the three and six months ended June 30, 2013, respectively (2012 -$0.5 million and $1.2 million,
respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $0.9 million and $1.1 million for the three and six months ended
June 30, 2013, respectively (2012 -$0.7 million and $1.0 million, respectively). Production and IMAX DMR segment margins include marketing costs of $1.4 million and $2.3 million for the
three and six months ended June 30, 2013, respectively (2012 -$1.1 million and $1.7 million, respectively). Distribution segment margins include a marketing cost of less than $0.1
million and an expense of $0.1 million for the three and six months ended June 30, 2013, respectively (2012 -expense of $0.4 million and $1.2 million, respectively).

(2) Includes revenue of $3.1 million and a margin loss of $0.3 million in the three and six months ended June 30, 2013, respectively, for 10 theater systems under a digital upgrade
arrangement which were previously installed, but revenue recognition was deferred.









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 share-based compensation and the related
tax impact. 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 1.1:1.0. The Company will also be required to maintain minimum EBITDA (as defined in the Credit Agreement) of $70.0 million
between closing and September 30, 2013, which requirement increases to $80.0 million on December 31, 2013, $90.0 million on December 31, 2014, and $100.0 million on December 31, 2015. The Company must also
maintain a Maximum Total Leverage Ratio (as defined in the Credit Agreement) of 2.5:1.0 between closing and September 30, 2013, which requirement decreases to (i) 2.25:1.0 on December 31, 2013; (ii)
2.00:1:0 on December 31, 2014; and (iii) 1.75:1.0 on December 31, 2015. The ratio of total debt to EBITDA was 0.17:1 as at June 30, 2013, where Total Debt (as defined in the Credit Agreement) is the sum of
all obligations evidenced by notes, bonds, debentures or similar instruments and was $18.0 million. EBITDA is calculated as follows:



Three months ended Twelve months ended

June 30, 2013 June 30, 2013
------------- -------------

(In thousands of U.S Dollars)

Net income $11,816 $42,472

Add:

Loss from equity accounted investments 434 1,312

Provision for income taxes 4,793 16,327

Interest expense, net of interest income(1) 336 320

Depreciation and amortization, including film asset amortization 11,483 36,012

Write-downs net of recoveries including asset impairments and receivable provisions 55 743

Stock and other non-cash compensation 3,317 12,474

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

$32,235 $107,475
======= ========


(1) Includes $0.1 million and $0.3 million of amortization of deferred financing costs charged to interest expense for the three and twelve months ended June 30, 2013, respectively.








IMAX CORPORATION

OTHER INFORMATION

(in thousands of U.S. dollars)

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


The Company reported net income of $11.8 million or $0.18 per basic share and $0.17 per diluted share for the second quarter of 2013, as compared to net income of $11.0 million or $0.17 per basic and $0.16 per diluted share
for the second quarter of 2012. Net income for the second quarter of 2013 includes a $3.1 million charge, or $0.05 per diluted share, for stock-based compensation (2012 - $3.7 million or $0.06 per diluted share). Adjusted
net income, which consists of net income excluding stock-based compensation expense and the related tax benefit, was $15.0 million, or $0.22 per diluted share, in the second quarter of 2013, as compared to adjusted net
income of $14.7 million, or $0.22 per diluted share, for the second 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 Ended Three Months Ended

June 30, 2013 June 30, 2012
------------- -------------

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

Reported net income $11,816 $0.17 $11,034 $0.16

Adjustments:

Stock-based compensation 3,125 0.05 3,694 0.06

Tax benefit of items listed above 31 - 7 -
--- --- --- ---

Adjusted net income $14,972 $0.22 $14,735 $0.22
======= ===== ======= =====


Weighted average diluted shares outstanding 68,893 68,374
====== ======






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


The Company reported net income of $14.7 million or $0.22 per basic share and $0.21 per diluted share for the six months ended June 30, 2013, as compared to net income of $13.5 million or $0.21 per basic and $0.20 per diluted share
for the six months ended June 30, 2012. Net income for the six months ended June 30, 2013 includes a $5.9 million charge, or $0.09 per diluted share, for stock-based compensation (2012 - $7.5 million or $0.11 per diluted share).
Adjusted net income, which consists of net income excluding stock-based compensation expense and the related tax expense, was $20.5 million, or $0.30 per diluted share, in the six months ended June 30, 2013, as compared to
adjusted net income of $20.8 million, or $0.31 per diluted share, for the six months ended June 30, 2012. A reconciliation of net income, the most directly comparable U.S. GAAP measure, to adjusted net income and adjusted net
income per diluted share is presented in the table below:



Six Months Six Months

Ended June 30, 2013 Ended June 30, 2012
------------------- -------------------

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

Net income $14,677 $0.21 $13,543 $0.20

Add:

Stock-based compensation 5,933 0.09 7,496 0.11

Tax expense on items listed above (74) - (194) -
--- --- ---- ---

Adjusted net income $20,536 $0.30 $20,845 $0.31
======= ===== ======= =====


Weighted average diluted shares outstanding 68,769 68,190
====== ======









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:



Six
Months
Ended

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


Net cash provided by
operating activities $8,040

Net cash (used in)
investing activities (17,589)

Free cash flow $(9,549)
======


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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