IMAX Corporation Reports Third Quarter 2012 Financial Results
LOS ANGELES, Oct. 25, 2012, 2012 (Menafn - Canada NewsWire via COMTEX) --HIGHLIGHTS
--Operating leverage of business drives strong financial results
--Q3 2012 Revenues increased 20% to 80.7 million
--Adjusted EPS increased 86% to 0.26 and Adjusted EBITDA grew
59% to 34.0 million in the third quarter
--Free Cash Flow generation of 30.3 million in the quarter
--Maintaining full year 2012 install guidance of approximately
110 new theatre installations and issuing full year 2013
guidance of 110 to 125 new theatre installations
IMAX Corporation IMAX today reported strong financial results for the third quarter of 2012 driven by operating leverage and continued theatre network growth globally, with 41 signings and 33 theatre installations in the quarter. Third quarter 2012 revenues were 80.7 million, adjusted EBITDA as calculated in accordance with the Company's Credit Facility was 34.0 million, adjusted net income was 17.9 million, or 0.26 per diluted share, and reported net income was 15.0 million, or 0.22 per diluted share. For reconciliations of adjusted net income to reported net income and for the definition of adjusted EBITDA and free cash flow, please see the tables at the end of this press release.
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"Our strong quarterly financial results once again demonstrate how much the IMAX business model has evolved," said IMAX Chief Executive Officer Richard L. Gelfond. "We believe IMAX has become a story of growth and operating leverage, and our pipeline for future theatre deals remains robust. Our view is that we have reached a point of critical mass where our portfolio approach to our film slate combined with our global network expansion is driving scalability in the business."
"We are also seeing an increase in demand from filmmakers who want to take advantage of our differentiation opportunities, whether it be using our IMAX cameras, or specially formatting their movies for IMAX, or using an early release window in IMAX to further promote their film," Gelfond continued. "This ability to work closely with studios and directors, taken together with our strong brand and our end-to-end approach to our business, continues to set us apart and positions us well to create a unique experience that consumers cannot get anywhere else."
Third Quarter Segment Results
--IMAX posted third quarter 2012 revenues of 80.7 million,
compared to 67.5 million in the same period last year
--IMAX systems revenue was 25.4 million in the quarter, compared
to 20.6 million in the third quarter of 2011, primarily
reflecting the installation of 14 full, new theatre systems
under sales and sales-type lease arrangements in the most
recent third quarter, compared to 11 full, new theatre systems
in the third quarter of 2011. The Company also installed 3
digital system upgrades under sales or sales-type lease
arrangements in the third quarter of 2012, compared to 4
upgrades in the third quarter of 2011
--Revenue from joint revenue sharing arrangements increased 31.9%
to 13.2 million, compared to 10.0 million in the prior-year
period. During the quarter, the Company installed 14 new
theatres under joint revenue sharing arrangements, compared to
14 in the year-ago period. The Company ended the third quarter
of 2012 with 287 theatres operating under joint revenue sharing
arrangements, as compared to 218 theatres at the end of the
third quarter of 2011
--Production and IMAX DMRR (Digital Re-Mastering) revenues
increased 35.6% to 25.2 million in the third quarter of 2012
from 18.6 million in the third quarter of 2011. Gross box
office from DMR titles was 173.2 million in the third quarter
of 2012, compared to 149.5 million in the third quarter of
2011. The average DMR box office per screen in the third
quarter of 2012 was 311,700, compared to 355,500 in the third
quarter of 2011
Network Growth and Guidance Update
In the third quarter of 2012, the Company signed contracts for 41 theatres, of which 32 were new systems, and installed 33 theatres, of which 28 were new systems and 5 were digital upgrades.
The Company continues to expect that approximately 110 new theatre systems (excluding digital upgrades) will be installed during the full year of 2012, which implies that approximately 46 new theatre systems (excluding digital upgrades) will be installed in the fourth quarter of 2012. The Company updated its annual installation guidance to a more comprehensive definition which includes scheduled installations from backlog as well as the Company's estimate of installations from arrangements that will sign and install within a given year. Under this definition, the Company is issuing installation guidance for 2013 of an estimated 110 to 125 new theatre systems (excluding digital upgrades). The Company cautions that theatre system installations can slip from period to period in the course of the Company's business, usually for reasons beyond its control.
The total IMAX theatre network consisted of 689 systems at the end of the quarter, of which 556 were in commercial multiplexes. There were 285 theatre systems in backlog as of Sept. 30, 2012, compared to 280 theatre systems in backlog as of June 30, 2012 and 295 systems in backlog as of Sept. 30, 2011. For a breakdown of theatre system signings, installations and backlog by type, please see the end of this press release.
"We believe that IMAX's fundamentals have never been stronger," Gelfond concluded. "The healthy level of business activity is evidenced by our signings and installations this quarter, and we continue to be encouraged by the pace and quality of discussions regarding future theatre deals. IMAX has created a truly differentiated brand and entertainment offering that is being embraced by exhibitors, studios, filmmakers, and - most importantly - by moviegoers around the world."
Conference CallThe Company will host a conference call today at 8:30 AM ET to discuss its third quarter 2012 financial results. To access the call via telephone, interested parties should dial (866) 321-6651 approximately 5 to 10 minutes before it begins. International callers should dial (416) 642-5212. The participant passcode for the call is 9337410. 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, or (647) 436-0148 for international callers. The participant passcode for the telephone replay is 9337410.
About IMAX CorporationIMAX, 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 Sept. 30, 2012, there were 689 IMAX theatres (556 commercial multiplex, 20 commercial destination and 113 institutional) in 52 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; including the length and severity of the current economic downturn, 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; 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 the Company's implementation of a new enterprise resource planning ("ERP") system; risks related to new business initiatives; 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; 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 foreign currency transactions; 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 and other risks and uncertainties are discussed in IMAX's most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q.
For additional information please contact:
_______________________________________________________________________________________________________________________________________________________________________________________________
Investors:Media:
IMAX Corporation, New YorkIMAX Corporation, New York
Teri Loxam/Blaire LomaskyAnn Sommerlath
212-821-0100212-821-0155
tloxam@imax.comasommerlath@imax.com
blomasky@imax.comEntertainment Media:
Business Media:Principal Communications Group, Los Angeles
Sloane & Company, New YorkMelissa Zuckerman/Paul Pflug
Whit Clay323-658-1555
212-446-1864melissa@pcommgroup.com
wclay@sloanepr.compaul@pcommgroup.com
______________________________________________________________________________________________________________________________________________________________________________________________
Additional Information
2012 DMR Films Announced to Date: To date, IMAX has announced 31 DMR titles that will be released in the IMAX theatre network in 2012. Films to run throughout the remainder of 2012 include:
--Paranormal Activity 4: The IMAX Experience (Paramount Pictures,
October 2012);
--Tai Chi Hero: An IMAX 3D Experience (Huayi Brothers, October
2012, Asia only);
--Cloud Atlas: The IMAX Experience (WB, October 2012);
--Skyfall: The IMAX Experience (Sony, November 2012);
--The Twilight Saga: Breaking Dawn - Part 2: The IMAX Experience
(Lionsgate, November 2012, UK and select international markets
only)
--Back to 1942: The IMAX Experience (Huayi Brothers, November
2012, Asia only);
--CZ12: The IMAX Experience (JCE Entertainment Ltd., Huayi
Brothers & Emperor Motion Pictures, December 2012, Asia only);
and
--The Hobbit: An Unexpected Journey: An IMAX 3D Experience (WB,
December 2012).
2013 DMR Films Announced to Date: To date, IMAX has announced 10 titles to be released in 2013. 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.
--Hansel & Gretel: Witch Hunters: An IMAX 3D Experience
(Paramount, January 2013);
--Jack the Giant Killer: An IMAX 3D Experience (WB, March 2013);
--Oblivion: The IMAX Experience (Universal, April 2013);
--Star Trek: Into Darkness: An IMAX 3D Experience (Paramount, May
2013);
--Man of Steel: The IMAX Experience (WB, June 2013);
--Gravity: An IMAX 3D Experience (WB, September 2013);
--Stalingrad: An IMAX 3D Experience (AR Films, October 2013,
Russia and the CIS only);
--The Hunger Games: Catching Fire: The IMAX Experience
(Lionsgate, November 2013);
--The Hobbit: The Desolation of Smaug: An IMAX 3D Experience (WB,
December 2013); and
--Dhoom 3: The IMAX Experience (Yash Raj Films, 2013, India
only).
Theatre Network Details:
_____________________________________________________________________
Three MonthsNine Months
______________________________________________________________
Ended September 30,Ended September 30,
______________________________________________________________
Theatre System Signings:2012201120122011
__________________________________________________________
__________________________________________________________
Full new sales and
sales-type lease4103246
arrangements
__________________________________________________________
New joint revenue281861120
sharing arrangements
__________________________________________________________
Total new theatres322893166
__________________________________________________________
__________________________________________________________
Upgrades of IMAX theatre9((1))21117
systems
__________________________________________________________
Total Theatre Signings4130104 183
__________________________________________________________
__________________________________________________________
Three MonthsNine Months
______________________________________________________________
Ended September 30,Ended September 30,
______________________________________________________________
Theatre System2012201120122011
Installations:
__________________________________________________________
__________________________________________________________
Full new sales and
sales-type lease14113333
arrangements
__________________________________________________________
New joint revenue14143147
sharing arrangements
__________________________________________________________
Total new theatres28256480
__________________________________________________________
__________________________________________________________
Upgrades and other541533
__________________________________________________________
Total Theatre332979113
Installations
__________________________________________________________
__________________________________________________________
As of
____________________________________________________________
September 30,
____________________________________________________________
Theatre Backlog:20122011
__________________________________________________________
__________________________________________________________
New sales and sales-type133 137
lease arrangements
__________________________________________________________
New joint revenue149 148
sharing arrangements
__________________________________________________________
Total new theatres282 285
__________________________________________________________
__________________________________________________________
Upgrades under sales and
sales-type lease310
arrangements
__________________________________________________________
Total Theatres in285 295
Backlog
__________________________________________________________
_____________________________________________________________________
__________
_____________________________________________________________________
Includes three IMAX theatres acquired from another existing
(1)customer that had been operating under a joint revenue sharing
arrangement. These theaters were purchased from the Company under
a sales arrangement.
____________________________________________________________________
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 MonthsNine Months
Ended September 30,Ended September 30,
2012201120122011
Revenues( )
Equipment and product sales 24,327 18,378 55,756 58,359
( )
Services( )40,31635,104102,31280,371
Rentals( )14,01311,35042,91225,416
Finance income( )2,0551,5815,5374,409
Other( )-1,075-1,325
80,71167,488206,517169,880
Costs and expenses
applicable to revenues( )
Equipment and product sales10,6528,08327,72728,595
( )
Services ( )21,10719,11355,37848,015
Rentals( )4,2023,46812,9689,478
Other( )-386-406
35,96131,05096,07386,494
Gross margin( )44,75036,438110,44483,386
Selling, general and19,32619,44058,71355,778
administrative expenses ( )
(including share-based
compensation expense of
2.8 million and 10.3
million for the three and
nine months ended
September 30, 2011,
respectively
(2011 ?? expense of
0.5 million and 9.0
million, respectively))
Provision for arbitration---2,055
award( )
Research and development( )2,5282,0417,6236,026
Amortization of intangibles166113532341
( )
Receivable provisions, net241408829767
of recoveries( )
Asset impairments( )-8-8
Impairment of
available-for-sale--150-
investment( )
Income from operations( )22,48914,42842,59718,411
Interest income( )22137344
Interest expense( )(373)(431)(1,375)(1,425)
Income from continuing
operations before income22,13814,01041,29517,030
taxes( )
Provision for income taxes(6,814)(5,179)(11,599)(6,504)
( )
Loss from equity-accounted(334)(439)(1,038)(1,312)
investments( )
Net income( ) 14,990 8,392 28,658 9,214
Net income per share -
basic & diluted:( )
Net income per share - 0.23 0.13 0.44 0.14
basic( )
Net income per share - 0.22 0.12 0.42 0.14
diluted( )
Weighted average number of
shares outstanding (000's):
( )
Basic( )65,93064,65465,71864,406
Fully Diluted( )68,30167,75668,18768,110
Additional Disclosure:( )
Depreciation and 8,038 5,838 24,704 18,020
amortization((1))
____________________________________________________________________
__________
____________________________________________________________________
Includes less than 0.1 million and 0.1 million of amortization
of deferred financing costs charged to interest expense for the
(1)three and nine months ended September 30, 2012, respectively
(September 30, 2011 ?? less than 0.1 million and 0.3
million , respectively).
___________________________________________________________________
IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In accordance with United States Generally Accepted Accounting
Principles
(in thousands of U.S. dollars)
As atAs at
September 30,December 31,
20122011
(unaudited)
Assets
Cash and cash equivalents 29,450 18,138
Accounts receivable, net of allowance for
doubtful accounts of 1,636 (December 31,36,14746,659
2011 ?? 1,840)
Financing receivables91,53386,714
Inventories20,84119,747
Prepaid expenses4,0813,126
Film assets3,4882,388
Property, plant and equipment109,115101,253
Other assets25,48014,238
Deferred income taxes40,16450,033
Goodwill39,02739,027
Other intangible assets27,70924,913
Total assets 427,035 406,236
Liabilities
Bank indebtedness 30,000 55,083
Accounts payable15,38928,985
Accrued and other liabilities63,40554,803
Deferred revenue79,66074,458
Total liabilities188,454213,329
Commitments, contingencies and guarantees
Shareholders' equity
Capital stock, common shares ?? no par
value. Authorized ?? unlimited number.
Issued and outstanding ?? 65,997,319310,105303,395
(December 31, 2011 ?? 65,052,740)
Other equity26,58717,510
Deficit(97,008)(125,666)
Accumulated other comprehensive loss(1,103)(2,332)
Total shareholders' equity238,581192,907
Total liabilities and shareholders' equity 427,035 406,236
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,
20122011
Cash provided by (used in):
Operating Activities
Net income 28,658 9,214
Adjustments to reconcile net income to cash
from operations:
Depreciation and amortization24,70418,020
Write-downs, net of recoveries1,516841
Change in deferred income taxes9,5455,694
Stock and other non-cash compensation10,7819,595
Provision for arbitration award-2,055
Unrealized foreign currency exchange (gain)(152)4,270
loss
Loss from equity-accounted investments1,0381,312
Gain on non-cash contribution to-(404)
equity-accounted investees
Investment in film assets(13,508)(8,814)
Changes in other non-cash operating assets and(8,672)(48,192)
liabilities
Net cash provided by (used in) operating53,910(6,409)
activities
Investing Activities
Purchase of property, plant and equipment(2,599)(4,409)
Investment in joint revenue sharing equipment(15,174)(22,432)
Investment in new business ventures(381)(1,571)
Acquisition of other intangible assets(5,046)(4,008)
Net cash used in investing activities(23,200)(32,420)
Financing Activities
Increase in bank indebtedness9,91759,583
Repayment of bank indebtedness(35,000)(37,500)
Credit facility amendment fees paid-(297)
Common shares issued - stock options exercised5,8315,635
Net cash (used in) provided by financing(19,252)27,421
activities
Effects of exchange rate changes on cash(146)(139)
Increase (decrease) in cash and cash11,312(11,547)
equivalents during the period
Cash and cash equivalents, beginning of period18,13830,390
Cash and cash equivalents, end of period 29,450 18,843
______________________________________________________________
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 of 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 of 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 MonthsNine Months
Ended September 30,Ended September 30,
2012201120122011
Revenue
IMAX systems( )
Sales and sales-type leases 21,937 17,593 49,751 54,758
Ongoing rent, fees, and3,4213,0569,3128,620
finance income
25,35820,64959,06363,378
Theater system maintenance( )7,0426,34820,87818,270
Joint revenue sharing13,1869,99540,47722,382
arrangements( )
Films( )
Production and IMAX DMR( )25,22318,60058,80538,280
Distribution( )3,2594,96511,12212,857
Post-production( )1,6463,0235,7785,686
30,12826,58875,70556,823
Other( )4,9973,90810,3949,027
Total( ) 80,711 67,488 206,517 169,880
Gross margins( )
IMAX systems((1))
Sales and sales-type leases 12,575 10,329 25,259 28,163
Ongoing rent, fees, and3,3812,9659,2168,306
finance income
15,95613,29434,47536,469
Theater system maintenance( )2,8281,9448,1226,912
Joint revenue sharing9,2866,73328,34013,792
arrangements((1))
Films( )
Production and IMAX DMR((1))15,42612,01535,71421,235
Distribution((1))5871,4182,1332,531
Post-production( )1038081,3732,804
16,11614,24139,22026,570
Other( )564226287(357)
Total( ) 44,750 36,438 110,444 83,386
_____________________________________________________________________
__________
_____________________________________________________________________
IMAX systems include commission costs of 0.9 million and 2.1
million for the three and nine months ended September 30, 2012,
respectively (2011 ?? 0.6 million and 1.4 million,
respectively). Joint revenue sharing arrangements segment margins
include advertising, marketing and commission costs of 1.1
million and 2.1 million for the three and nine months ended
September 30, 2012, respectively (2011 ?? 1.3 million and
(1)3.6 million, respectively). Production and DMR segment margins
include marketing costs of 0.5 million and 2.2 million for the
three and nine months ended September 30, 2012, respectively
(2011 ?? 0.7 million and 1.9 million, respectively).
Distribution segment margins include a marketing cost recovery of
less than 0.1 million and an expense of 1.2 million for the
three and nine months ended September 30, 2012, respectively
(2011 ?? expense of 0.1 million and 1.7 million,
respectively).
____________________________________________________________________
______________________________
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, adjusted net income per diluted share and free cash flow 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, adjusted net income per diluted share, and free cash flow 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 and a provision for an arbitration award (net of any related taxes) on its net income. Management uses these measures to review operating performance on a comparable basis from period to period. However, these non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Adjusted EBITDA, adjusted net income, adjusted net income per diluted share and free cash flow 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:
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 ratio of funded debt (as defined in the Credit Agreement) to EBITDA (as defined in the Credit Agreement) of not more than 2:1. The Company will also be required to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.1:1.0. At all times under the terms of the Credit Facility, the Company is required to maintain minimum Excess Availability of not less than 5.0 million and minimum Cash and Excess Availability of not less than 15.0 million. The ratio of funded debt to EBITDA was 0.30:1 as at September 30, 2012, where Funded Debt (as defined in the Credit Agreement) is the sum of all obligations evidenced by notes, bonds, debentures or similar instruments and was 30.0 million. EBITDA is calculated as follows:
For theFor the( )
3 months ended12 months ended( )
September 30, 2012September 30, 2012((1))
(In thousands of U.S.
Dollars)( )
Net income( ) 14,990 34,987 ( )
Add: ( )
Loss from equity accounted3341,517 ( )
investments( )
Provision for income taxes6,81414,483 ( )
( )
Interest expense, net of3511,691 ( )
interest income( )
Depreciation and
amortization, including7,99531,676 ( )
film asset amortization( )
Write-downs net of
recoveries including asset5972,629 ( )
impairments and receivable
provisions( )
Stock and other non-cash2,93013,621 ( )
compensation( )
Adjusted EBITDA 34,011 100,604 ( )
_____________________________________________________________________
__________
_____________________________________________________________________
(1)Ratio of funded debt calculated using twelve months ended EBITDA.
____________________________________________________________________
______________________________
IMAX CORPORATION
OTHER INFORMATION
(in thousands of U.S. dollars)
______________________________
Adjusted Net Income and Adjusted Diluted Per Share Calculations - Quarter Ended September 30, 2012 vs. 2011:
The Company reported net income of 15.0 million or 0.23 per basic share and 0.22 per diluted share for the third quarter of 2012, as compared to net income of 8.4 million or 0.13 per basic share and 0.12 per diluted share for the third quarter of 2011. Net income for the third quarter of 2012 includes a 2.8 million charge, or 0.04 per diluted share, for stock-based compensation (2011 - 0.5 million or 0.01 per diluted share) and the related tax benefit of 0.1 million (2011 - 0.5 million or 0.01 per diluted share). Adjusted net income, which consists of net income excluding stock-based compensation expense and the related tax benefit, was 17.9 million, or 0.26 per diluted share, in the third quarter of 2012, as compared to adjusted net income of 9.5 million, or 0.14 per diluted share, for the third quarter of 2011. 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 EndedThree Months Ended
________________________________________________________________
September 30, 2012September 30, 2011
________________________________________________________________
Net IncomeDiluted EPSNet IncomeDiluted EPS
____________________________________________________________
Reported14,9900.228,3920.12
_________________________________________________________
Adjustments:
_________________________________________________________
Stock-based 2,756 0.04 519 0.01
compensation
________________________________________________________
Tax benefit of 114 - 549 0.01
items listed above
________________________________________________________
Adjusted17,8600.269,4600.14
_________________________________________________________
________________________________________________________
Weighted average
diluted shares 68,301 67,756
outstanding
_________________________________________________________
Adjusted Net Income and Adjusted Diluted Per Share Calculations - Nine Months Ended September 30, 2012 vs. 2011:
The Company reported net income of 28.7 million or 0.44 per basic share and 0.42 per diluted share for the nine months ended September 30, 2012, as compared to net income of 9.2 million or 0.14 per basic and diluted share for the nine months ended September 30, 2011. Net income for the nine months ended September 30, 2012 includes a 10.3 million charge, or 0.15 per diluted share (2011 - 9.0 million or 0.13 per diluted share), for stock-based compensation. Net income for the nine months ended September 30, 2011 also includes a one-time 2.1 million pre-tax charge (0.03 per diluted share), due to an arbitration award arising from an arbitration proceeding brought against the Company in connection with a discontinued subsidiary. Adjusted net income, which consists of net income excluding the impact of the stock-based compensation expense, the charge for the arbitration award and the related tax impact, was 38.8 million, or 0.57 per diluted share, in the nine months ended September 30, 2012, as compared to adjusted net income of 19.4 million, or 0.28 per diluted share, for the nine months ended September 30, 2011. 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:
_____________________________________________________________________
Nine MonthsNine Months
_________________________________________________________________
Ended September 30, 2012Ended September 30, 2011
_________________________________________________________________
Net IncomeDiluted EPS Net IncomeDiluted EPS
_____________________________________________________________
Reported28,6580.429,2140.14
__________________________________________________________
Add:
__________________________________________________________
Stock-based 10,252 0.15 8,973 0.13
compensation
_________________________________________________________
Provision for - - 2,055 0.03
arbitration award
_________________________________________________________
Tax impact on
items listed (86) - (882) (0.02)
above
_________________________________________________________
Adjusted38,8240.5719,3600.28
__________________________________________________________
_________________________________________________________
Weighted average
diluted shares 68,187 68,110
outstanding
__________________________________________________________
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 theFor the( )
Three Months EndedNine Months Ended( )
September 30, 2012September 30, 2012
(In thousands of U.S. Dollars)
( )
Net cash provided by operating 34,067 53,910
activities ( )
Net cash (used in) investing(3,797)(23,200)
activities
Free cash flow 30,270 30,710
SOURCE: IMAX Corporation
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SOURCE: IMAX Corporation
http://www.imax.comhttp://photos.prnewswire.com/prnh/20111107/MM01969LOGO PRN Photo
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