IMAX Corporation Reports Third-Quarter 2015 Financial Results

IMAX Corporation Reports Third-Quarter 2015 Financial Results

HIGHLIGHTS

- Revenues of $85.1 million and Adjusted EBITDA of $26.3 million, up approximately 40% and 50% over the third quarter of last year, respectively

- IMAX increases theatre installation outlook for full-year 2015 to approximately 130 new systems

- Company buys back 1 million shares of IMAX stock in the third quarter, at an average price of $34.25

- IMAX Corp. successfully completes IPO of IMAX China, raising net proceeds of $162 million to be reported on IMAX Corp.'s consolidated balance sheet

NEW YORK, Oct. 28, 2015 /PRNewswire/ -- IMAX Corporation (NYSE: IMAX) today reported third quarter 2015 revenues of $85.1 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $26.3 million, adjusted net income after non-controlling interest of $12.0 million, or $0.17 per diluted share, and reported net income after non-controlling interest of $8.6 million, or $0.12 per diluted share. The Company also reported a third quarter global per-screen average of $220,500.

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

"In addition to our strong third-quarter financial results, over the last few months we have accomplished several important strategic and financial objectives," said Richard L. Gelfond, CEO of IMAX Corporation. "We successfully listed shares of IMAX China on the Hong Kong Stock Exchange, we bought back 1 million shares of IMAX Corporation's stock at an average price of $34.25 and we have been installing IMAX theatre systems at an accelerated pace around the globe."

Network Growth Update

The total IMAX® theatre network consisted of 1,008 systems as of September 30, 2015, of which 887 were located in commercial multiplexes. In the quarter, the Company installed 44 theatres, 34 of which were for new theatre locations, and signed contracts for 35 IMAX theatre systems, of which 33 were for new locations and 2 were for upgrades. As of September 30, 2015, there were 384 theatres in backlog compared to 397 as of December 31, 2014 and 439 as of September 30, 2014. For a breakdown of theatre system signings, installations, network and backlog by type, please see the tables at the end of this press release.

Gelfond concluded, "We look forward to the upcoming releases of the latest Bond installment, Spectre, the final Hunger Games chapter and, of course, the much-anticipated Star Wars. We believe the combination of our network growth, heightened levels of demand for The IMAX Experience® and our strong balance sheet will enable us to capitalize on the upcoming fourth quarter film slate as well as the exciting film slates of 2016 and 2017."

Third-Quarter Segment Results


-- Revenue from sales and sales-type leases was $26.6 million in the third
quarter of 2015, compared to $6.6 million in the third quarter of 2014,
primarily reflecting the installation of 12 full theatre systems under
sales and sales-type lease arrangements in the most recent third
quarter, compared to the 6 sales-type theatres the Company installed in
the prior-year period. In addition, there were 8 upgrades (7 laser and 1
xenon) in existing locations in the third quarter of 2015, compared to
no upgrades in the third quarter of 2014.
-- Revenue from joint revenue-sharing arrangements was $19.8 million in the
quarter, compared to $15.2 million in the prior-year period. During the
quarter, the Company installed 22 new theatres under joint
revenue-sharing arrangements, compared to 14 in the same period in 2014.
Of these installations, 8 were for hybrid joint revenue-sharing compared
to 5 hybrid joint revenue-sharing installations in the prior year. The
Company had 498 theatres operating under joint revenue-sharing
arrangements as of September 30, 2015, as compared to 422 joint-venture
theatres one year prior.
-- Production and IMAX DMR® (Digital Re-Mastering) revenues were $20.9
million in the third quarter of 2015, compared to $18.4 million in the
third quarter of 2014. Gross box office from DMR titles was $189.8
million in the third quarter of 2015, compared to $169.0 million in the
prior-year period. The average global DMR box office per screen in the
third quarter of 2014 was $220,500 compared to $227,900 in the
prior-year period.
Conference Call

The Company will host a conference call today at 4:30 PM ET to discuss its third quarter 2015 financial results. To access the call via telephone, interested parties in the US and Canada should dial (800) 524-8850 approximately 5 to 10 minutes before the call begins. International callers should dial (416) 204-9702. The conference ID for the call is 252835. 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 252835.

About IMAX Corporation

IMAX, an innovator in entertainment technology, combines proprietary software, architecture and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX theatres to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe.

IMAX is headquartered in New York, Toronto and Los Angeles, with offices in London, Tokyo, Shanghai and Beijing. As of September 30, 2015, there were 1,008 IMAX theatres (887 commercial multiplexes, 19 commercial destinations and 102 institutions) in 66 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).

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, 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 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 theater system backlog into revenue; changes in laws or regulations; risks related to the Company's dependence on a sole supplier for its analog film; risks related to cybersecurity; 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

212-821-0110 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
--- -------------------








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

Sept. 30, 2015

Three Months

Ended Sept. 30,
---------------

Theater Signings: 2015 2014
--------

Full new sales and sales-type
lease arrangements 11 22

New joint revenue sharing
arrangements 22 14

Total new
theaters 33 36


Upgrades of IMAX theater systems 2 (1) 6 (2)

Total Theater
Signings 35 42
========


Three Months

Ended Sept. 30,
---------------

Theater
Installations: 2015 2014
--------

Full new sales and sales-type
lease arrangements 12 6

New joint revenue sharing
arrangements 22 14
--- ---

Total new
theaters 34 20

Upgrades of IMAX theater systems 10 (3) -

Total Theater
Installations 44 20
========


As of Sept. 30,
---------------

Theater Backlog: 2015 2014
--------

New sales and sales-type lease
arrangements 160 169

New joint revenue sharing
arrangements 204 244

Total new
theaters 364 413


Upgrades of IMAX theater systems 20 26

Total Theaters in
Backlog 384 (4)(5) 439 (4)(6)
======== =====


As of Sept. 30,
---------------

Theater Network: 2015 2014
--------

Commercial
Multiplex
Theaters:

Sales and sales-type lease
arrangements 389 329

Joint revenue sharing arrangements 498 422

Total Commercial
Multiplex
Theaters 887 751


Commercial
Destination
Theaters 19 19

Institutional
Theaters 102 110

Total IMAX
Theater Network 1,008 880
========



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

(2) Includes one
signing for
the
installation
of a laser-
based digital
system under a
sale and
sales-type
lease
arrangement
and five
signings for
the
installation
of a xenon-
based digital
system, of
which 4 were
under joint
revenue
sharing
arrangements
and one under
a short-term
operating
lease
arrangement in
existing
theater
locations.

(3) Includes 9
installations
of an upgrade
to a laser-
based digital
system (7
under a sale
and sales-
type lease
arrangement, 1
under an
operating
lease
arrangement
and 1 under a
joint revenue
sharing
arrangement)
and 1
installation
of an upgrade
to a xenon-
based digital
system under a
sales and
sales-type
lease
arrangement.

(4) Includes 69
laser theater
system
configurations
(2014 - 69),
including
upgrades. The
Company
continues to
develop and
roll out its
laser
projection
system.

(5) Includes 20
upgrades to a
digital
theater
system, in
existing IMAX
theater
locations (2
xenon and 18
laser, of
which 4 are
under joint
revenue
sharing
arrangements).

(6) Includes 26
upgrades to a
digital
theater
system, in
existing IMAX
theater
locations (3
xenon and 23
laser, of
which 4 are
under joint
revenue
sharing
arrangements).






IMAX Greater China Business Metrics Supplement


Three Months ended Nine Months Ended
September 30, September 30,

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


IMAX Greater China Box Office $70.4 million $48.4 million $245.4 million $145.6 million

IMAX Greater China Per Screen Avg. $301,000 $287,200 $1.1 million $918,200


Greater China Theatre Installations 25 13 43 26

Greater China Backlog 218 247 218 247

Greater China Network:

Commercial Mulitplex 258 176 258 176

Institution 17 22 17 22

Total 275 198 275 198


Film Slate

In addition to the 37 IMAX DMR films released to the IMAX theater network during the first nine months of 2015, 7 additional IMAX DMR films have been announced so far to be released in the remaining three months of 2015:


-- Crimson Peak: The IMAX Experience (Universal Studios, October 2015);
-- The Martian: An IMAX 3D Experience (Twentieth Century Fox, October
2015);
-- Spectre: The IMAX Experience (Sony Pictures Entertainment, November
2015);
-- The Hunger Games: Mockingjay Part 2: The IMAX Experience (Lionsgate,
November 2015);
-- In the Heart of the Sea: An IMAX 3D Experience (Warner Bros. Pictures,
December 2015);
-- Mojin: The Lost Legend: An IMAX 3D Experience (aka "The Ghouls")(Wanda
Media Co. Ltd., December 2015); and
-- Star Wars: The Force Awakens: An IMAX 3D Experience (Walt Disney
Studios, December 2015).
To date, the Company has announced the following 15 titles to be released to the IMAX theater network in 2016:


-- The Finest Hours: An IMAX 3D Experience (Walt Disney Studios, January
2016);
-- Batman v Superman: Dawn of Justice: An IMAX 3D Experience (Warner Bros.
Pictures, March 2016);
-- Flight 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 Through the Looking Glass: An IMAX 3D Experience (Walt Disney
Studios, May 2016);
-- Warcraft: An IMAX 3D Experience (Universal Studios, June 2016);
-- Finding Dory: The IMAX Experience (Walt Disney Studios, June 2016);
-- Tarzan: The IMAX Experience (Warner Bros. Pictures, July 2016);
-- Knights of the Roundtable: King Arthur: The IMAX Experience (Warner
Bros. Pictures, July 2016);
-- Suicide Squad: The IMAX Experience (Warner Bros. Pictures, August 2016);
-- The Duelist: The IMAX Experience (Non-Stop Production LLC, October
2016);
-- Doctor Strange: An IMAX 3D Experience (Walt Disney Studios, November
2016);
-- Fantastic Beasts and Where to Find Them: The IMAX Experience (Warner
Bros. Pictures, November 2016); and
-- Rogue One: An IMAX 3D Experience (Walt Disney Studios, December 2016).
In addition, in conjunction with Walt Disney Studios, the Company will be releasing an IMAX original production, A Beautiful Planet, on April 29, 2016.

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 44 slated for release in 2015.












IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

In accordance with United States Generally Accepted Accounting Principles

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

(Unaudited)


Three Months Nine Months

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

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

Revenues

Equipment and product sales $33,083 $11,765 $72,824 $37,621

Services 33,024 33,199 115,698 101,813

Rentals 16,665 13,646 59,006 42,278

Finance income 2,329 2,132 6,803 6,372

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

85,101 60,742 254,472 188,084
------ ------ ------- -------

Costs and expenses applicable to revenues

Equipment and product sales 21,949 6,041 43,010 19,126

Services 15,899 14,788 50,201 46,318

Rentals 4,864 4,471 13,856 12,996

42,712 25,300 107,067 78,440
------ ------ ------- ------

Gross margin 42,389 35,442 147,405 109,644

Selling, general and administrative expenses 24,973 23,513 82,348 68,323

(including share-based compensation expense of $4.3 million and $14.9 million for the three and
nine months ended September 30 2015, respectively (2014 - expense of $3.4 million and $11.3
million, respectively))

Research and development 2,722 4,560 9,611 11,468

Amortization of intangibles 429 441 1,302 1,259

Receivable provisions, net of recoveries 361 26 709 642

Asset impairments 245 - 245 -

Impairment of investments - - 350 650
--- --- --- ---

Income from operations 13,659 6,902 52,840 27,302

Interest income 222 149 727 189

Interest expense (463) (269) (1,170) (803)
---- ---- ------ ----

Income from operations before income taxes 13,418 6,782 52,397 26,688

Provision for income taxes (2,477) (1,188) (12,408) (6,667)

Loss from equity-accounted investments, net of tax (427) (297) (1,610) (721)
---- ---- ------ ----

Income from continuing operations 10,514 5,297 38,379 19,300

Net income from discontinued operations, net of tax - - - 355
--- --- --- ---

Net income $10,514 $5,297 $38,379 $19,655

Less: Net income attributable to non-controlling interests (1,904) (439) (5,028) (911)
------ ---- ------ ----

Net income attributable to Common Shareholders $8,610 $4,858 $33,351 $18,744
====== ====== ======= =======


Net income per share - basic:

Net income per share from continuing operations $0.12 $0.07 $0.47 $0.26

Net income per share from discontinued operations - - - 0.01


$0.12 $0.07 $0.47 $0.27
===== ===== ===== =====


Net income per share - diluted:

Net income per share from continuing operations $0.12 $0.07 $0.46 $0.26

Net income per share from discontinued operations - - - 0.01


$0.12 $0.07 $0.46 $0.27
===== ===== ===== =====

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

Basic 69,699 68,480 69,582 68,206

Fully Diluted 70,860 69,602 71,102 69,597


Additional Disclosure:

Depreciation and amortization(1) $10,467 $7,992 $31,191 $23,937



(1) Includes $0.3 million
and $0.7 million of
amortization of
deferred financing
costs charged to
interest expense for
the three and nine
months ended
September 30, 2015,
respectively (2014 -
$0.1 million and $0.4
million,
respectively).







IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

In accordance with United States Generally
Accepted Accounting Principles

(in thousands of U.S. dollars)


As at As at

September 30, December 31,

2015 2014
---- ----

(unaudited)

Assets

Cash and cash equivalents $117,361 $106,503

Accounts receivable, net
of allowance for
doubtful accounts of
$1,558 (December 31,
2014 -$947) 87,534 76,051

Financing receivables 113,984 105,700

Inventories 35,562 17,063

Prepaid expenses 7,106 4,946

Film assets 15,460 15,163

Property, plant and
equipment 212,967 183,424

Other assets 34,645 23,047

Deferred income taxes 21,458 23,058

Other intangible assets 28,719 27,551

Goodwill 39,027 39,027
------ ------

Total assets $713,823 $621,533
======== ========


Liabilities

Bank indebtedness $22,278 $4,710

Accounts payable 18,118 26,145

Accrued and other
liabilities 72,519 75,425

Deferred revenue 106,301 88,566

Total liabilities 219,216 194,846
------- -------


Commitments and
contingencies


Non-controlling interests 87,851 43,912
------ ------


Shareholders' equity

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

69,193,840 -issued and
69,136,609 -outstanding
(December 31, 2014 -
68,988,050 -issued and
outstanding) 373,936 344,862

Less: Treasury stock held
in trust, 57,231 shares
at cost (2,141) -

Other equity 43,769 47,319

Accumulated deficit (2,544) (6,259)

Accumulated other
comprehensive loss (6,264) (3,147)
------ ------

Total shareholders'
equity 406,756 382,775
------- -------

Total liabilities and
shareholders' equity $713,823 $621,533
======== ========









IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In accordance with United States Generally Accepted Accounting Principles

(In thousands of U.S. dollars)

(Unaudited)

Nine Months

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

2015 2014
---- ----

Cash provided by (used in):

Operating Activities

Net income $38,379 $19,655

Net income from discontinued
operations - (355)

Adjustments to reconcile net income to
cash from operations:

Depreciation and amortization 31,191 23,937

Write-downs, net of recoveries 2,928 1,753

Change in deferred income taxes 5,097 3,157

Stock and other non-cash
compensation 15,204 11,609

Unrealized foreign currency
exchange loss 716 847

Loss from equity-accounted
investments 2,756 1,073

Gain on non-cash contribution to
equity-accounted investees (1,146) (352)

Investment in film assets (12,069) (8,398)

Changes in other non-cash operating
assets and liabilities (41,256) 18,372

Net cash provided by operating
activities from discontinued
operations - 572
--- ---

Net cash provided by operating
activities 41,800 71,870



Investing Activities

Purchase of property, plant and
equipment (38,443) (24,686)

Investment in joint revenue sharing
equipment (20,969) (15,908)

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

Acquisition of other intangible assets (3,622) (1,979)
------ ------

Net cash used in investing
activities (65,034) (45,073)



Financing Activities

Issuance of subsidiary shares to a non-
controlling interest 40,000 40,491

Share issuance costs from the issuance
of subsidiary shares to a non-
controlling interest (2,000) (3,556)

Exercise of stock options 23,838 3,672

Increase in bank indebtedness 17,568 -

Credit facility amendment fees paid (1,310) -

Repurchase of common shares (34,279) (2,369)

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

Net cash provided by financing
activities 33,817 37,448



Effects of exchange rate changes on
cash 275 (86)
--- ---


Increase in cash and cash equivalents
during the period 10,858 64,159


Cash and cash equivalents, beginning of
period 106,503 29,546
------- ------

Cash and cash equivalents,
end of period $117,361 $93,705
======== =======











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 September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------

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

Revenue

IMAX Theater Systems

IMAX Systems

Sales and sales-type leases $26,635 $6,644 $53,924 $25,629

Ongoing rent, fees, and finance income 3,518 3,501 10,708 10,272

Other 3,221 3,165 11,320 8,407
----- ----- ------ -----

33,374 13,310 75,952 44,308
------ ------ ------ ------

Theater System Maintenance 9,337 8,516 27,345 25,384


Joint Revenue Sharing Arrangements 19,797 15,238 67,259 45,457



Film

Production and IMAX DMR 20,865 18,350 75,144 57,585

Film distribution and post-production 1,728 5,328 8,772 15,350


22,593 23,678 83,916 72,935
------ ------ ------ ------

Total $85,101 $60,742 $254,472 $188,084
======= ======= ======== ========


Gross margin

IMAX Theater Systems

IMAX systems(1)

Sales and sales-type leases $9,775 $4,246 $24,720 $14,161

Ongoing rent, fees, and finance income 3,334 3,352 10,111 9,799

Other (267) (218) (421) (202)
---- ---- ---- ----

12,842 7,380 34,410 23,758
------ ----- ------ ------

Theater System Maintenance 3,521 3,208 9,891 8,990


Joint Revenue Sharing Arrangements(1) 12,130 9,382 46,816 30,043



Film

Production and IMAX DMR(1) 13,929 13,469 55,642 43,177

Film distribution and post-
production(1) (33) 2,003 646 3,676


13,896 15,472 56,288 46,853
------ ------ ------ ------

Total $42,389 $35,442 $147,405 $109,644
======= ======= ======== ========



(1) IMAX systems include marketing and
commission costs of $0.9 million and
$1.8 million for the three and nine
months ended September 30, 2015,
respectively (2014 -$0.3 million and
$1.2 million, respectively). Joint
revenue sharing arrangements segment
margins include advertising, marketing
and commission costs of $1.3 million
and $2.7 million for the three and nine
months ended September 30, 2015,
respectively (2014 -$0.9 million and
$2.1 million, respectively). Production
and DMR segment margins include
marketing costs of $3.4 million and
$8.3 million for the three and nine
months ended September 30, 2015,
respectively (2014 -$2.1 million and
$5.3 million, respectively).
Distribution segment margins include
marketing cost recovery of less than
$0.1 million and cost recovery of $0.1
million for the three and nine months
ended September 30, 2015, respectively
(2014 -expense of $0.3 million and
expense of $0.7 million, 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 $90.0 million until December 30, 2015, which requirement increases to $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 until December 30, 2015, which requirement decreases to (i) 2.25:1.0 on December 31, 2015; (ii) 2.0:1.0 on December 31, 2016; and (iii) 1.75:1.0
on December 31, 2017. The ratio of total debt to EBITDA was 0.16:1 as at September 30, 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 $22.3 million. EBITDA is calculated as follows:


For the For the

3 months ended 12 months ended

September 30, 2015 September 30, 2015(1)
------------------ --------------------

(In thousands of U.S Dollars)

Net income $10,514 $60,893

Add (subtract):

Loss from equity accounted investments 427 1,960

Provision for income taxes 2,477 20,207

Interest expense, net of interest income 241 348

Depreciation and amortization, including film asset amortization 10,200 40,215

Write-downs net of recoveries including asset impairments and receivable provisions 1,471 6,469

Stock and other non-cash compensation 4,343 19,062

EBITDA attributable to non-controlling interests(2) (3,399) (11,031)

$26,274 $138,123
======= ========



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

(2) The EBITDA calculation
specified for purposes
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 September 30, 2015 vs. 2014:


The Company reported net income of $10.5 million or $0.15 per basic share and $0.14 per diluted share for the third quarter of 2015, as compared to $5.3 million or $0.08 per basic and diluted share for the third quarter of 2014. Adjusted net
income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $13.9 million or $0.19 per diluted share for the third quarter of 2015 as compared to adjusted net income of $8.3 million or
$0.12 per diluted share for the third quarter of 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 $12.0 million or $0.17 per diluted share for the third quarter of 2015 as compared to adjusted net income attributable to common shareholders of $7.8 million or $0.11 per diluted share for the third quarter of 2014. A
reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measures, 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:


Three Months Three Months

Ended September 30, 2015 Ended September 30, 2014
------------------------ ------------------------

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

Reported net income $10,514 $0.14 (1) $5,297 $0.08 (1)

Adjustments:

Stock-based compensation 4,252 0.06 3,425 0.05

Tax impact on items listed above (901) (0.01) (464) (0.01)


Adjusted net income 13,865 0.19 (1) 8,258 0.12 (1)

Net income attributable to non-controlling interests (1,904) (0.02) (439) (0.01)


Adjusted net income attributable to common shareholders $11,961 $0.17 (1) $7,819 $0.11 (1)
======= ===== ====== =====


Weighted average diluted shares outstanding 70,860 69,602
====== ======



(1) Includes impact of $0.3
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 - Nine Months Ended September 30, 2015 vs. 2014:


The Company reported net income of $38.4 million or $0.54 per basic share and $0.53 per diluted share for the nine months ended September 30, 2015, as compared to $19.7 million or $0.28 per basic and diluted share for the nine months
ended September 30, 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $50.7 million or $0.70 per diluted share for the nine months ended September
30, 2015 as compared to adjusted net income of $29.2 million or $0.41 per diluted share for the nine months ended September 30, 2014. Adjusted net income attributable to common shareholders, which consists of net income attributable
to common shareholders excluding stock-based compensation expense and the related tax impact, was $45.7 million, or $0.63 per diluted share, in the nine months ended September 30, 2015, as compared to adjusted net income attributable
to common shareholders of $28.3 million, or $0.40 per diluted share, for the nine months ended September 30, 2014. A reconciliation of net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, to
adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below:


Nine Months Nine Months

Ended September 30, 2015 Ended September 30, 2014
------------------------ ------------------------

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

Reported net income attributable to Common Shareholders $38,379 $0.53 (1) $19,655 $0.28 (1)

Add:

Stock-based compensation 14,931 0.21 11,328 0.16

Tax expense on items listed above (2,603) (0.04) (1,807) (0.03)


Adjusted net income 50,707 0.70 (1) 29,176 0.41 (1)

Net income attributable to non-controlling interests (5,028) (0.07) (911) (0.01)


Adjusted net income attributable to Common Shareholders $45,679 $0.63 (1) $28,265 $0.40 (1)
======= ===== ======= =====


Weighted average diluted shares outstanding 71,102 69,597
====== ======



(1) Includes impact of $0.7
million (2014 -$0.3
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

Nine Months
Ended

September 30,
2015
-------------

(In thousands of U.S. Dollars)

Net cash provided by operating activities $41,800

Net cash used in investing activities (65,034)
-------

Free cash flow $(23,234)
========


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SOURCE IMAX Corporation

Photo:http://photos.prnewswire.com/prnh/20111107/MM01969LOGO
http://photoarchive.ap.org/
Photo:http://photos.prnewswire.com/prnh/20111107/MM01969LOGO
http://photoarchive.ap.org/
IMAX Corporation

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


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Profile: intent