NEW YORK, Feb. 26, 2019 /PRNewswire/ --
HIGHLIGHTS
- Delivered full-year 2018 GAAP net income per share of $0.36, compared to GAAP net income per
share of $0.04, in 2017.
- 2018 adjusted net income per share was $0.91, compared to $0.62
in 2017, an increase of 46.8%.
- Strong box office and continued cost discipline drove a 381-basis point increase in 2018 operating income margin, compared
to 2017.
- IMAX surpassed $1 billion in global box office for the first time in its history and
delivered its highest-grossing year in China.
- Year-to-date in 2019, IMAX box office in China reached $78
million, up 61%, compared to last year.
IMAX Corporation (NYSE: IMAX) today reported fourth quarter 2018 revenues of $109.0 million, gross profit of $54.6 million and net income attributable to
common shareholders of $1.7 million, or $0.03 per diluted share.
Adjusted net income attributable to common shareholders for the fourth quarter was $16.4 million,
or $0.26 per diluted share. Adjusted EBITDA was $36.4 million. For
reconciliations of reported results to non-GAAP financial results, and for the definition and reconciliation of Adjusted EBITDA,
please see the end of this press release.
The Company also reported full year 2018 revenues of $374.4 million, gross profit of
$207.9 million and net income attributable to common shareholders of $22.8
million, or $0.36 per diluted share. Adjusted net income attributable to common shareholders
for the year ended December 31, 2018 was $57.8 million, or
$0.91 per diluted share. Adjusted EBITDA was $133.2 million.
"We believe our achievements last year set the stage for IMAX to have a blockbuster year in 2019. We further differentiated
The IMAX Experience®, increased awareness of the IMAX brand and tackled key challenges in China,
where we delivered our strongest box office year ever and doubled the industry growth rate," said IMAX CEO Richard L. Gelfond. "While these achievements have already begun paying dividends—as evidenced by the 47%
year-over-year increase in adjusted earnings per share—we anticipate these initiatives to continue to improve the performance of
our business in 2019 and beyond. And we have hit the ground running in 2019. Year-to-to date, we have already achieved
$78 million of box office in China, a 61% increase compared to
2018. Overall, we are encouraged by our recent results as we head into the blockbuster filled calendar, which includes highly
anticipated films such as Captain Marvel, Avengers: Endgame, The Lion King and Star Wars Episode
IX."
Fourth Quarter 2018 Results
Network Update
During the quarter, the Company installed 88 theater systems, 67 of which were for new theater locations. The total
IMAX® theater network consisted of 1,505 systems as of December 31, 2018, of which 1,409 were in
commercial multiplexes. There were 564 theaters in backlog as of December 31, 2018, compared to the
499 in backlog as of December 31, 2017.
IMAX also signed contracts for 12 new theaters and 2 upgrades in the fourth quarter. During 2018, the Company signed
agreements for 203 IMAX with Laser systems, 59 of which were new systems, 114 of which were upgrades to existing IMAX theaters
and 30 of which were amendments to existing backlog arrangements. For a breakdown of theater system signings, installations,
network and backlog by type for the fourth quarter, please see the end of this press release.
"The story is quite simple. Beginning in 2017 we made a series of strategic decisions to turn around our business," said
Gelfond. "From top to bottom, the evidence is clear in 2018 that these initiatives are working as our growth, margin and return
metrics are on solidly positive trend lines. We have confidence each of these trends will continue in 2019 and our margin and
return improvement should accelerate as we continue to execute against the initiatives we laid out."
Box Office Update
Gross box office from IMAX DMR® films was $236.7 million in the fourth quarter of 2018
compared to $278.1 million in the fourth quarter of 2017, primarily due to a stronger film slate in
the fourth quarter of 2017 which included Star Wars: The Last Jedi. Gross box office was generated primarily by the
exhibition of 29 films (22 new and 7 carryover), as compared to 26 films (22 new and 4 carryover) exhibited in the
fourth quarter of 2017.
Fourth-Quarter Consolidated Results
The gross margin across all segments in the fourth quarter of 2018 was $54.6 million, or
50.1% of total revenues, compared to $60.1 million, or 47.9% of total revenues, in the fourth
quarter of 2017. Operating expenses (which includes SG&A, excluding stock-based compensation, plus R&D) were $28.0 million in the quarter, compared to $27.2 million in 2017.
Fourth-Quarter Segment Results
Network Business
- Network business revenues were $41.7 million in the quarter, compared with $53.8 million in the prior-year period. Gross margin for the network business was 59.2% in the most recent
quarter, compared to 64.3% in the prior-year period.
- IMAX DMR revenues were $25.2 million in the fourth quarter of 2018, compared to $31.7 million in the fourth quarter of 2017. Gross margin for the IMAX DMR segment was 60.5%, compared to
60.6% in the prior-year comparative period.
- Revenues from joint revenue-sharing arrangements were $16.5 million in the quarter, compared
with $20.7 million in the prior-year period. Gross margin for joint revenue-sharing arrangements
was 57.2%, compared to 67.8% in the prior-year comparative period.
Theater Business
- Theater business segment revenues were $61.9 million in the quarter, compared with
$55.5 million in the prior-year period, primarily reflecting the variable consideration being
recognized due to the adoption of ASC Topic 606, as well as 2 additional installations of sales-type theaters.
- Gross margin on sales and sales-type leases was 51.0% compared with 61.4% in the year-ago period. The decline was driven by
the mix of theater installations (new vs. upgrades) compared to the prior year, which can vary each year.
In addition to the Company's core revenue segments, new business revenues were $0.8 million in
the quarter, compared to $13.0 million in the same period last year. New business revenues in 2017
were driven primarily by the launch of Marvel's Inhumans. The company recognized a gross loss of $0.5 million in the quarter, compared to a gross loss of $2.7 million in the
fourth quarter of 2017.
Supplemental Materials
For more information about the Company's results, please refer to the IMAX Investor Relations website located at
investors.imax.com.
Investor Relations Website and Social Media
On a weekly basis, the Company posts quarter-to-date box office results on the IMAX Investor Relations website located
at www.imax.com/content/investor-relations. The Company expects to provide such updates on Friday of each
week, although the Company may change this timing without notice. Results will be displayed with a one-week lag. In addition, the
Company maintains a Twitter account: @IMAX_Investors. The Company intends to use Twitter to disclose the box office information,
as well as other information that may be of interest to the Company's investor community.
The information posted on the Company's website and/or via its Twitter account may be deemed material to investors.
Accordingly, investors, media and others interested in the Company should monitor the Company's website and its Twitter account
in addition to the Company's press releases, SEC filings and public conference calls and webcasts.
Conference Call
The Company will host a conference call today at 4:30PM ET to discuss its fourth
quarter and full year 2018 financial results. This call is being webcast by Nasdaq and can be accessed at
investors.imax.com. To access the call via telephone, interested parties in the US and Canada should dial (800) 667-5617 approximately 5 to 10 minutes before the call begins. Other international
callers should dial (647) 490-5367. The conference ID for the call is 7993555. A replay of the call will be available via webcast
at investors.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 7993555.
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 theaters 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 additional offices in London, Dublin, Tokyo, and Shanghai. As of
December 31, 2018, there were 1,505 IMAX theater systems (1,409 commercial multiplexes, 14
commercial destinations, 82 institutional) operating in 80 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, references to future capital expenditures (including the amount and nature thereof), business and technology
strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and
technology, plans and references to the future success of IMAX Corporation together with its consolidated subsidiaries (the
"Company") and expectations regarding the Company's future operating, financial and technological results. These forward-looking
statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of
historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in
the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the
Company is subject to a number of risks and uncertainties, including, but not limited to, 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 performance of IMAX DMR films; the signing of theater system agreements; conditions, changes and
developments in the commercial exhibition industry; risks related to currency fluctuations; 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 relating to recent consolidation among commercial exhibitors and studios;
risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities
(or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks
related to the Company's inability to protect the Company's intellectual property; general economic, market or business
conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; the failure to fully
realize the projected cost savings and benefits from any of the Company's restructuring initiatives; 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. The Company undertakes no obligation to
update publicly or otherwise revise any forward looking statements, whether as a result of new information, future events or
otherwise.
For additional information please contact:
Additional Information
|
Signings and Installations
|
|
|
|
|
|
December 31, 2018
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
Theater Signings:
|
2018
|
|
2017
|
|
|
Full new sales and sales-type lease arrangements
|
57
|
|
85
|
|
|
New traditional joint revenue sharing lease arrangements
|
55
|
|
35
|
|
|
New hybrid joint revenue sharing lease arrangements
|
10
|
|
50
|
|
|
Total new theaters
|
122
|
|
170
|
|
|
Upgrades of IMAX theater systems
|
112
|
(1)
|
7
|
|
|
Total Theater Signings
|
234
|
|
177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
Theater Installations:
|
2018
|
|
2017
|
|
|
Full new sales and sales-type lease arrangements
|
63
|
|
60
|
|
|
New traditional joint revenue sharing lease arrangements
|
72
|
|
86
|
|
|
New hybrid joint revenue sharing lease arrangements
|
14
|
|
19
|
|
|
Total new theaters
|
149
|
|
165
|
|
|
Upgrades of IMAX theater systems
|
23
|
|
5
|
|
|
Total Theater Installations
|
172
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
Theater Backlog:
|
2018
|
|
2017
|
|
|
Sales and sales-type lease arrangements
|
177
|
(2)
|
162
|
|
|
Joint revenue sharing arrangements
|
|
|
|
|
|
Hybrid lease arrangements
|
118
|
|
121
|
|
|
Traditional arrangements
|
269
|
(3)
|
216
|
|
|
Total Theater Backlog
|
564
|
(4)
|
499
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
Theater Network:
|
2018
|
|
2017
|
|
|
Commercial Multiplex Theaters:
|
|
|
|
|
|
Sales and sales-type lease arrangements
|
611
|
|
525
|
|
|
Traditional joint revenue sharing arrangements
|
674
|
|
613
|
|
|
Hybrid joint revenue sharing lease arrangements
|
124
|
|
134
|
|
|
Total Commercial Multiplex Theaters
|
1,409
|
|
1,272
|
|
|
|
|
|
|
|
|
Commercial Destination
|
14
|
|
12
|
|
|
Institutional
|
82
|
|
86
|
|
|
Total Theater Network
|
1,505
|
|
1,370
|
|
____________________
|
(1)
|
Includes 105 theater systems related to existing AMC, Regal and Pathé
theaters to be upgraded to IMAX with Laser projection systems on new lease terms
ranging from 10 to 12 years.
|
|
(2)
|
Includes 20 hybrid sales theater systems which were previously classified
under joint revenue sharing arrangements – hybrid sales arrangements.
|
|
(3)
|
Includes 46 theater systems where the customer has the option to convert
from a joint revenue sharing arrangement to a sales arrangement.
|
|
(4)
|
Includes 83 new laser projection system configurations (73 of the 83 new
systems are IMAX with Laser projection system configurations) and 100 upgrades of
existing locations to laser projection system configurations (98 of the 100
upgrades are for the IMAX with Laser projection system configurations).
|
|
(5)
|
Includes 27 new laser projection system configurations (three of the 27 new
systems are IMAX with Laser projection system configurations) and five upgrades of
existing locations to laser projection system configurations (three of the
five upgrades are for the IMAX with Laser projection system configurations).
|
|
IMAX CORPORATION
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
In accordance with United States Generally Accepted Accounting
Principles
|
|
(In thousands of U.S. dollars, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Years Ended
|
|
|
Ended December 31,
|
|
Ended December 31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment and product sales
|
$
|
46,409
|
|
$
|
39,701
|
|
$
|
106,591
|
|
$
|
103,294
|
|
Services
|
|
42,769
|
|
|
62,330
|
|
|
181,740
|
|
|
195,594
|
|
Rentals
|
|
16,667
|
|
|
21,138
|
|
|
74,472
|
|
|
72,281
|
|
Finance income
|
|
3,119
|
|
|
2,384
|
|
|
11,598
|
|
|
9,598
|
|
|
|
108,964
|
|
|
125,553
|
|
|
374,401
|
|
|
380,767
|
|
Costs and expenses applicable to revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment and product sales
|
|
25,233
|
|
|
15,820
|
|
|
54,853
|
|
|
48,172
|
|
Services
|
|
21,428
|
|
|
40,951
|
|
|
84,236
|
|
|
120,629
|
|
Rentals
|
|
7,661
|
|
|
8,634
|
|
|
27,383
|
|
|
26,720
|
|
|
|
54,322
|
|
|
65,405
|
|
|
166,472
|
|
|
195,521
|
|
Gross margin
|
|
54,642
|
|
|
60,148
|
|
|
207,929
|
|
|
185,246
|
|
Selling, general and administrative expenses
|
|
30,380
|
|
|
25,199
|
|
|
117,477
|
|
|
109,882
|
|
Research and development
|
|
2,186
|
|
|
6,217
|
|
|
13,728
|
|
|
20,855
|
|
Amortization of intangibles
|
|
1,249
|
|
|
837
|
|
|
4,145
|
|
|
3,019
|
|
Receivable provisions, net of recoveries
|
|
1,463
|
|
|
559
|
|
|
3,130
|
|
|
2,647
|
|
Asset impairments
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,225
|
|
Legal arbitration award
|
|
4,237
|
|
|
-
|
|
|
11,737
|
|
|
-
|
|
Executive transition costs
|
|
2,994
|
|
|
-
|
|
|
2,994
|
|
|
-
|
|
Exit costs, restructuring charges and associated impairments
|
|
8,384
|
|
|
2,479
|
|
|
9,542
|
|
|
16,174
|
|
Income from operations
|
|
3,749
|
|
|
24,857
|
|
|
45,176
|
|
|
31,444
|
|
Retirement benefits non-service expense
|
|
(125)
|
|
|
(130)
|
|
|
(499)
|
|
|
(518)
|
|
Interest income
|
|
723
|
|
|
266
|
|
|
1,844
|
|
|
1,027
|
|
Interest expense
|
|
(613)
|
|
|
(524)
|
|
|
(2,916)
|
|
|
(1,942)
|
|
Income from operations before income taxes
|
|
3,734
|
|
|
24,469
|
|
|
43,605
|
|
|
30,011
|
|
Provision for income taxes
|
|
22
|
|
|
(15,905)
|
|
|
(9,518)
|
|
|
(16,790)
|
|
Gain (loss) from equity-accounted investments, net of tax
|
|
15
|
|
|
134
|
|
|
(492)
|
|
|
(703)
|
|
Net income
|
|
3,771
|
|
|
8,698
|
|
|
33,595
|
|
|
12,518
|
|
Less: net income attributable to non-controlling interests
|
|
(2,077)
|
|
|
(3,867)
|
|
|
(10,751)
|
|
|
(10,174)
|
|
Net income attributable to common shareholders
|
$
|
1,694
|
|
$
|
4,831
|
|
$
|
22,844
|
|
$
|
2,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to common shareholders - basic and
diluted:
|
|
|
|
|
|
|
|
|
|
|
Net income per share - basic
|
$
|
0.03
|
|
$
|
0.08
|
|
$
|
0.36
|
|
$
|
0.04
|
|
Net income per share - diluted
|
$
|
0.03
|
|
$
|
0.08
|
|
$
|
0.36
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding (000's):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
61,924
|
|
|
64,658
|
|
|
63,075
|
|
|
65,380
|
|
Fully Diluted
|
|
62,127
|
|
|
64,790
|
|
|
63,207
|
|
|
65,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Disclosure:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization(1)
|
$
|
15,453
|
|
$
|
27,040
|
|
$
|
57,437
|
|
$
|
66,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes $0.1 million and $1.1 million of amortization of deferred
financing costs charged to interest expense for the three months and year
ended December 31, 2018 (2017 - $0.2 million and $0.6 million,
respectively).
|
|
IMAX CORPORATION
|
|
CONSOLIDATED BALANCE SHEETS
|
|
In accordance with United States Generally Accepted Accounting
Principles
|
|
(In thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31,
|
|
2018
|
|
2017
|
|
Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
141,590
|
|
$
|
158,725
|
|
Accounts receivable, net of allowance for doubtful accounts of $3,174
(December 31, 2017 — $1,613)
|
|
93,309
|
|
|
130,546
|
|
Financing receivables, net of allowance for uncollectible
amounts
|
|
127,432
|
|
|
129,494
|
|
Inventories
|
|
44,560
|
|
|
30,788
|
|
Prepaid expenses
|
|
10,294
|
|
|
7,549
|
|
Film assets
|
|
16,367
|
|
|
5,026
|
|
Property, plant and equipment
|
|
280,658
|
|
|
276,781
|
|
Other assets
|
|
55,004
|
|
|
26,757
|
|
Deferred income taxes
|
|
31,264
|
|
|
30,708
|
|
Other intangible assets
|
|
34,095
|
|
|
31,211
|
|
Goodwill
|
|
39,027
|
|
|
39,027
|
|
Total assets
|
$
|
873,600
|
|
$
|
866,612
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Bank indebtedness
|
$
|
37,753
|
|
$
|
25,357
|
|
Accounts payable
|
|
32,057
|
|
|
24,235
|
|
Accrued and other liabilities
|
|
97,724
|
|
|
100,140
|
|
Deferred revenue
|
|
106,709
|
|
|
113,270
|
|
Total liabilities
|
|
274,243
|
|
|
263,002
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
6,439
|
|
|
1,353
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
Capital stock common shares — no par value. Authorized — unlimited
number.
|
|
|
|
|
|
|
61,478,168 — issued and 61,433,589 — outstanding (December 31, 2017 —
64,902,201 — issued
and 64,695,550 — outstanding)
|
|
422,455
|
|
|
445,797
|
|
Less: Treasury stock, 44,579 shares at cost (December 31, 2017 —
206,651)
|
|
(916)
|
|
|
(5,133)
|
|
Other equity
|
|
179,595
|
|
|
175,300
|
|
Accumulated deficit
|
|
(85,385)
|
|
|
(87,592)
|
|
Accumulated other comprehensive loss
|
|
(3,588)
|
|
|
(626)
|
|
Total shareholders' equity attributable to common
shareholders
|
|
512,161
|
|
|
527,746
|
|
Non-controlling interests
|
|
80,757
|
|
|
74,511
|
|
Total shareholders' equity
|
|
592,918
|
|
|
602,257
|
|
Total liabilities and shareholders' equity
|
$
|
873,600
|
|
$
|
866,612
|
|
IMAX CORPORATION
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
In accordance with United States Generally Accepted Accounting
Principles
|
|
|
(In thousands of U.S. dollars)
|
|
|
|
|
Years Ended December 31,
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Cash provided by (used in):
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
33,595
|
|
$
|
12,518
|
|
|
Adjustments to reconcile net income to cash from operations:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
57,437
|
|
|
66,807
|
|
|
Write-downs, net of recoveries
|
|
|
11,770
|
|
|
29,568
|
|
|
Change in deferred income taxes
|
|
|
(6,923)
|
|
|
(4,017)
|
|
|
Stock and other non-cash compensation
|
|
|
23,723
|
|
|
24,075
|
|
|
Unrealized foreign currency exchange loss (gain)
|
|
|
631
|
|
|
(502)
|
|
|
Loss from equity-accounted investments
|
|
|
95
|
|
|
306
|
|
|
Gain on non-cash contribution to equity-accounted investees
|
|
|
397
|
|
|
397
|
|
|
Investment in film assets
|
|
|
(23,200)
|
|
|
(34,645)
|
|
|
Changes in other non-cash operating assets and liabilities
|
|
|
12,447
|
|
|
(9,141)
|
|
|
Net cash provided by operating activities
|
|
|
109,972
|
|
|
85,366
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
|
(13,368)
|
|
|
(24,143)
|
|
|
Investment in joint revenue sharing equipment
|
|
|
(34,810)
|
|
|
(42,634)
|
|
|
Investment in new business ventures
|
|
|
-
|
|
|
(1,606)
|
|
|
Acquisition of other intangible assets
|
|
|
(8,696)
|
|
|
(5,214)
|
|
|
Net cash used in investing activities
|
|
|
(56,874)
|
|
|
(73,597)
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Increase in bank indebtedness
|
|
|
65,000
|
|
|
-
|
|
|
Repayment of bank indebtedness
|
|
|
(50,667)
|
|
|
(2,000)
|
|
|
Repurchase of common shares
|
|
|
(71,479)
|
|
|
(46,140)
|
|
|
Repurchase of common shares, IMAX China
|
|
|
(6,084)
|
|
|
-
|
|
|
Settlement of restricted share units and options
|
|
|
(916)
|
|
|
(20,331)
|
|
|
Common shares issued - stock options exercised
|
|
|
1,017
|
|
|
16,668
|
|
|
Treasury stock repurchased for future settlement of restricted share
units
|
|
|
(5,249)
|
|
|
(5,133)
|
|
|
Taxes withheld and paid on employee stock awards vested
|
|
|
(1,437)
|
|
|
(600)
|
|
|
Issuance of subsidiary shares to non-controlling interests
|
|
|
7,796
|
|
|
-
|
|
|
Dividends paid to non-controlling interests
|
|
|
(6,934)
|
|
|
-
|
|
|
Credit facility amendment fees paid
|
|
|
(1,909)
|
|
|
-
|
|
|
Net cash used in financing activities
|
|
|
(70,862)
|
|
|
(57,536)
|
|
|
|
|
|
|
|
|
|
|
|
Effects of exchange rate changes on cash
|
|
|
629
|
|
|
(267)
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents during year
|
|
|
(17,135)
|
|
|
(46,034)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
158,725
|
|
|
204,759
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
141,590
|
|
$
|
158,725
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX CORPORATION
|
|
SELECTED FINANCIAL DATA
|
|
In accordance with United States Generally Accepted Accounting
Principles
|
|
(in thousands of U.S. dollars)
|
|
|
The Company has four primary reporting groups
identified by nature of product sold or service provided: (1) Network Business, reporting
variable revenue generated by box-office results and which includes the
reportable segments of IMAX DMR and contingent rent from the JRSAs and
IMAX systems-segments; (2) Theater Business, representing revenue generated
by the sale and installation of theater systems and maintenance services,
primarily related to the IMAX Systems and Theatre System Maintenance
reportable segments, and also includes fixed hybrid revenue and upfront
installation costs from the JRSA segment; (3) New Business, which includes
content licensing and distribution fees associated with our content
investments, virtual reality initiatives, IMAX Home Entertainment, and
other business initiatives that are in the development and/or start-up phase, and
(4) Other; which includes the film post-production and distribution
segments and certain IMAX theaters that the Company owns and operates, camera
rentals and other miscellaneous items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Years Ended
|
|
|
|
|
Ended December 31,
|
|
Ended December 31,
|
|
|
|
|
|
2018
|
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX DMR
|
|
$
|
25,207
|
|
$
|
31,717
|
|
$
|
110,793
|
|
$
|
108,853
|
|
Joint revenue sharing arrangements - contingent rent
|
|
|
16,452
|
|
|
20,741
|
|
|
73,371
|
|
|
70,444
|
|
IMAX systems - contingent rent
|
|
|
-
|
|
|
1,317
|
|
|
-
|
|
|
3,890
|
|
|
|
|
|
41,659
|
|
|
53,775
|
|
|
184,164
|
|
|
183,187
|
|
Theater Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX systems
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and sales-type leases
|
|
|
37,887
|
|
|
31,675
|
|
|
88,432
|
|
|
79,853
|
|
|
Ongoing fees and finance income
|
|
|
3,242
|
|
|
2,650
|
|
|
12,224
|
|
|
10,494
|
|
Joint revenue sharing arrangements – fixed fees
|
|
|
5,885
|
|
|
5,582
|
|
|
9,706
|
|
|
10,118
|
|
Theater system maintenance
|
|
|
12,222
|
|
|
11,924
|
|
|
49,684
|
|
|
45,383
|
|
Other theater
|
|
|
2,651
|
|
|
3,696
|
|
|
8,358
|
|
|
9,145
|
|
|
|
|
61,887
|
|
|
55,527
|
|
|
168,404
|
|
|
154,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Business
|
|
|
770
|
|
|
13,014
|
|
|
5,769
|
|
|
24,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Film distribution and post-production
|
|
|
3,806
|
|
|
1,803
|
|
|
12,962
|
|
|
13,172
|
|
Other
|
|
|
842
|
|
|
1,433
|
|
|
3,102
|
|
|
4,893
|
|
|
|
|
|
4,648
|
|
|
3,236
|
|
|
16,064
|
|
|
18,065
|
|
Total revenues
|
|
$
|
108,964
|
|
$
|
125,552
|
|
$
|
374,401
|
|
$
|
380,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX DMR (1)
|
|
$
|
15,250
|
|
$
|
19,211
|
|
$
|
72,773
|
|
$
|
71,789
|
|
Joint revenue sharing arrangements – contingent
rent(1)
|
|
9,415
|
|
|
14,066
|
|
|
48,856
|
|
|
47,337
|
|
IMAX systems - contingent rent
|
|
|
-
|
|
|
1,317
|
|
|
-
|
|
|
3,890
|
|
|
|
|
|
24,665
|
|
|
34,594
|
|
|
121,629
|
|
|
123,016
|
|
Theater Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMAX systems (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and sales-type leases
|
|
$
|
19,338
|
|
$
|
19,449
|
|
$
|
47,986
|
|
$
|
47,639
|
|
|
Ongoing fees and finance income
|
|
|
3,194
|
|
|
2,513
|
|
|
12,033
|
|
|
10,095
|
|
Joint revenue sharing arrangements – fixed fees(1)
|
|
|
1,206
|
|
|
1,462
|
|
|
1,982
|
|
|
2,349
|
|
Theater system maintenance
|
|
|
4,702
|
|
|
4,969
|
|
|
21,991
|
|
|
18,275
|
|
Other theater
|
|
|
707
|
|
|
883
|
|
|
1,806
|
|
|
1,965
|
|
|
|
|
|
29,147
|
|
|
29,276
|
|
|
85,798
|
|
|
80,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Business
|
|
|
(489)
|
|
|
(2,744)
|
|
|
(350)
|
|
|
(16,176)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Film distribution and post-production (1)
|
|
|
1,443
|
|
|
(744)
|
|
|
1,763
|
|
|
(1,006)
|
|
|
Other
|
|
|
(124)
|
|
|
(234)
|
|
|
(911)
|
|
|
(911)
|
|
|
|
|
|
1,319
|
|
|
(978)
|
|
|
852
|
|
|
(1,917)
|
|
Total segment margin
|
|
$
|
54,642
|
|
$
|
60,148
|
|
$
|
207,929
|
|
$
|
185,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
IMAX DMR segment margins include marketing costs of $2.8 million and $16.5
million for the three months and year ended, respectively (2017
- $5.6 million and $15.4 million, respectively). Joint revenue sharing
arrangements segment margins include advertising, marketing and
commission costs of $1.4 million and $3.6 million for the three months and
year ended, respectively (2017 - $2.0 million and $4.5 million,
respectively). IMAX system segment margins include marketing and commission
costs of $0.9 million and $2.9 million for the three months and
year ended, respectively (2017 - $1.3 million and $3.5 million). Film
distribution and post production segment margins include marketing
expense of $0.2 million and $2.2 million for the three months and year
ended (2017 - an expense of $nil and recovery 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, EBITDA and adjusted EBITDA per Credit Facility 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) and
non-recurring charges 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, its
stock-based compensation (net of any related tax impact) and non-recurring charges
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 Company is required to maintain a minimum
level of "EBITDA", as such term is defined in the Company's credit agreement (and which is
referred to herein as "Adjusted EBITDA per Credit Facility" or "Adjusted
EBITDA per Credit Facility excluding Marvel's Inhumans", as the credit
agreement includes additional adjustments beyond interest, taxes,
depreciation and amortization). EBITDA and Adjusted EBITDA per Credit Facility
(each as defined below) should not be construed as substitutes for net
income or as better measures of liquidity as determined in accordance with U.S.
GAAP. The Company believes that EBITDA
and Adjusted EBITDA per Credit Facility excluding Marvel's Inhumans are relevant and useful
information widely used by analysts, investors and other interested parties
in the Company's industry.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Year Ended
|
|
Year Ended
|
|
|
December 31, 2018
|
|
December 31, 2018
|
(1)
|
December 31, 2017
|
|
|
(In thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
3,771
|
|
$
|
33,595
|
|
$
|
12,518
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
(22)
|
|
|
9,518
|
|
|
16,790
|
|
|
Interest expense, net of interest income
|
|
(110)
|
|
|
1,072
|
|
|
915
|
|
|
Depreciation and amortization, including film asset
amortization(1)
|
|
15,453
|
|
|
57,437
|
|
|
66,245
|
|
|
EBITDA
|
|
19,092
|
|
|
101,622
|
|
|
96,468
|
|
|
Stock and other non-cash compensation
|
|
5,483
|
|
|
23,723
|
|
|
23,718
|
|
|
Write-downs, net of recoveries including asset impairments and
receivable
provisions(1)
|
|
2,797
|
|
|
5,338
|
|
|
24,015
|
|
|
Exit costs, restructuring charges and associated impairments
|
|
8,384
|
|
|
9,542
|
|
|
16,174
|
|
|
Legal arbitration award
|
|
4,237
|
|
|
11,737
|
|
|
-
|
|
|
Executive transition costs
|
|
2,994
|
|
|
2,994
|
|
|
-
|
|
|
(Gain) loss from equity accounted investments
|
|
(15)
|
|
|
492
|
|
|
703
|
|
|
Adjusted EBITDA before non-controlling interests
|
|
42,972
|
|
|
155,448
|
|
|
161,078
|
|
|
Adjusted EBITDA attributable to non-controlling
interests(2)
|
|
(6,593)
|
|
|
(22,220)
|
|
|
(22,927)
|
|
|
Adjusted EBITDA per Credit Facility
|
$
|
36,379
|
|
$
|
133,228
|
|
$
|
138,151
|
*
|
|
Adjusted EBITDA per Credit Facility, excluding impact
|
|
|
|
|
|
|
|
|
|
|
from "Marvel's Inhumans"
|
$
|
36,379
|
|
$
|
133,228
|
|
$
|
126,158
|
*
|
|
Adjusted revenues attributable to common shareholders
|
$
|
97,573
|
|
$
|
336,723
|
|
$
|
340,460
|
|
|
Adjusted EBITDA margin, excluding impact from "Marvel's
Inhumans"
|
|
37.3
|
%
|
|
39.6
|
%
|
|
37.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted EBITDA per Credit Facility of $138.2 million includes the impact
of the Company's investment in "Marvel's
Inhumans", which resulted in a $13.0 million loss. However, as
permitted by the Credit Facility, this loss was offset by addbacks of
$13.3 million and $11.7 million for amortization and impairment charges,
respectively, relating to the investment, the net effect of
which was to increase Adjusted EBITDA per Credit Facility by $12.0 million.
This investment represents the Company's first foray
into a commercial television property, and therefore the Adjusted EBITDA
per Credit Facility metric presented above may not be
reflective of the Company's typical operational activity. Further, the
Company does not yet know whether it will make similar
investments in the future. As a result, the Company is also presenting
Adjusted EBITDA per Credit Facility excluding the impact of
"Marvel's Inhumans" to better facilitate comparisons to prior and
future periods.
|
|
|
__________________
|
|
|
|
|
|
(1) Senior Secured Net Leverage Ratio
calculated using twelve months ended Adjusted EBITDA per Credit Facility.
|
|
|
(2) The Adjusted EBITDA per Credit
Facility calculation includes the reduction in Adjusted EBITDA per Credit Facility from the
Company's non-controlling
interests.
|
|
|
(3)
|
|
|
Quarter Ended
|
|
Year Ended
|
|
Year Ended
|
|
|
|
December 31, 2018
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Total revenues
|
|
|
|
$
|
108,964
|
|
|
|
$
|
374,401
|
|
|
|
$
|
380,767
|
|
Greater China revenues
|
|
$
|
35,553
|
|
|
|
$
|
117,520
|
|
|
|
$
|
126,474
|
|
|
|
Non-controlling interest ownership percentage(4)
|
|
|
32.04%
|
|
|
|
|
32.06%
|
|
|
|
|
31.87%
|
|
|
|
Deduction for non-controlling interest share
of revenues
|
|
|
|
|
(11,391)
|
|
|
|
|
(37,678)
|
|
|
|
|
(40,307)
|
|
Adjusted revenues attributable to common
shareholders
|
|
|
|
$
|
97,573
|
|
|
|
$
|
336,723
|
|
|
|
$
|
340,460
|
|
(4)
|
Weighted average ownership percentage for change in non-controlling
interest share
|
|
Return on Invested Capital:
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Income from operations
|
$
|
45,176
|
|
$
|
31,444
|
|
|
Provision for income taxes
|
|
(9,518)
|
|
|
(16,790)
|
|
|
EBIAT Return
|
$
|
35,658
|
|
$
|
14,654
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
$
|
592,918
|
|
$
|
602,257
|
|
|
Total bank indebtedness
|
|
37,753
|
|
|
25,357
|
|
|
Less: Goodwill
|
|
39,027
|
|
|
39,027
|
|
|
Less: Other intangible assets
|
|
34,095
|
|
|
31,211
|
|
|
Total Invested Capital
|
$
|
557,549
|
|
$
|
557,376
|
|
|
|
|
|
|
|
|
|
Return on Invested Capital (Non-GAAP measure)
|
|
6.4%
|
|
|
2.6%
|
*
|
|
|
|
|
|
|
|
|
* Return on Invested Capital (ROIC) is not defined under U.S. generally
accepted accounting principles. Therefore, ROIC should not
be considered a substitute for other measures prepared in accordance with
U.S. GAAP and may not be comparable to similarly titled
measures used by other companies. The Company defines ROIC as earnings
before interest after taxes (before non-controlling
interests) divided by total invested capital (total equity plus total debt
less goodwill and other intangible assets). The Company
believes ROIC is meaningful to investors as it focuses on shareholder value
creation.
|
|
|
IMAX CORPORATION
|
|
OTHER INFORMATION
|
|
(in thousands of U.S. dollars)
|
|
|
Adjusted Net Income and Adjusted Diluted Per Share Calculations –
Quarter Ended December 31, 2018 vs. 2017:
|
|
The Company reported net income of $3.8
million or $0.06 per basic and diluted share for the quarter ended December 31, 2018 as
compared to net income of $8.7 million or $0.13 per basic and diluted share
for the quarter ended December 31, 2017.
|
|
|
Net income for the quarter ended December
31, 2018 includes a $5.0 million charge or $0.08 per diluted share (2017 — $4.9 million
or $0.08 per diluted share) for stock-based compensation, a $8.4 million
charge, or $0.13 per diluted share for exit costs, restructuring
charges and associated impairments (2017 - $2.5 million or $0.04 per
diluted share), a $4.2 million, or $0.07 per diluted share, for a
legal arbitration award related to one of the Company's litigation matters
from 2006 (2017- $nil) and a $3.0 million, or $0.05 per diluted
share for executive transition costs (2017 — $nil). In 2017, the Company
also recognized a $9.3 million, or $0.14 per diluted share, non-
recurring tax charge as the Company re-measured its deferred tax assets and
liabilities as at the date of enactment of the amended Tax
Cut and Jobs Act.
|
|
|
Adjusted net income, which consists of net
income excluding the impact of stock-based compensation, exit costs, restructuring
charges and associated impairments, the legal arbitration award, executive
transition costs, the related tax impact of these adjustments,
and tax charge from the provisional re-measurement of U.S. deferred tax
assets and liabilities given changes enacted by the Tax Act,
was $19.8 million, or $0.32 per diluted share, for the quarter ended
December 31, 2018 as compared to adjusted net income of $25.7
million or $0.40 per diluted share for the quarter ended December 31,
2017.
|
|
|
The Company reported net income attributable
to common shareholders of $1.7 million, or $0.03 per basic and diluted share for the
year ended December 31, 2018 (2017 — $4.8 million, or $0.08 per basic
and diluted share).
|
|
|
Adjusted net income attributable to common
shareholders, which consists of net income attributable to common shareholders
excluding the impact of stock-based compensation, exit costs, restructuring
charges and associated impairments, the legal arbitration
award, executive transition costs, the related tax impact of these
adjustments, and tax charge from the provisional re-measurement of
U.S. deferred tax assets and liabilities given changes enacted by the Tax
Act, was $16.4 million, or $0.26 per diluted share, for the
quarter ended December 31, 2018 as compared to adjusted net income
attributable to common shareholders of $21.8 million or $0.34
per diluted share for the quarter ended December 31, 2017.
|
|
|
A reconciliation of net income and net income
attributable to common shareholders, the most directly comparable U.S. GAAP
measure, to adjusted net income, adjusted net income per diluted share,
adjusted net income attributable to common shareholders and
adjusted net income attributable to common shareholders per diluted share
is presented in the table below:
|
|
|
|
|
|
|
Quarter Ended December 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
Net Income
|
|
Diluted EPS
|
|
|
Net Income
|
|
Diluted EPS
|
|
|
Reported net income
|
$
|
3,771
|
|
$
|
0.06
|
|
|
$
|
8,698
|
|
$
|
0.13
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
5,046
|
|
|
0.08
|
|
|
|
4,857
|
|
|
0.08
|
|
|
Exit costs, restructuring charges and associated impairments
|
|
8,384
|
|
|
0.13
|
|
|
|
2,479
|
|
|
0.04
|
|
|
Legal arbitration award
|
|
4,237
|
|
|
0.07
|
|
|
|
-
|
|
|
-
|
|
|
Executive transition costs
|
|
2,994
|
|
|
0.05
|
|
|
|
-
|
|
|
-
|
|
|
Tax impact on items listed above
|
|
(4,586)
|
|
|
(0.07)
|
|
|
|
360
|
|
|
0.01
|
|
|
Impact of enactment of U.S. Tax Act
|
|
-
|
|
|
-
|
|
|
|
9,323
|
|
|
0.14
|
|
|
Adjusted net income
|
|
19,846
|
|
|
0.32
|
|
|
|
25,717
|
|
|
0.40
|
|
|
Net income attributable to non-controlling interests
(1)
|
|
(2,077)
|
|
|
(0.04)
|
|
|
|
(3,867)
|
|
|
(0.06)
|
|
|
Stock-based compensation (net of tax of less than $0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
million and less than $0.1 million,
respectively) (1)
|
|
(115)
|
|
|
-
|
|
|
|
(76)
|
|
|
-
|
|
|
Exit costs, restructuring charges and associated impairments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(net of tax of $0.4 million and $nil, respectively)
(1)
|
|
(1,262)
|
|
|
(0.02)
|
|
|
|
(2)
|
|
|
-
|
|
|
Adjusted net income attributable to common shareholders
|
$
|
16,392
|
|
$
|
0.26
|
|
|
$
|
21,774
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
|
|
|
62,127
|
|
|
|
|
|
|
64,790
|
|
|
|
__________
|
(1) Reflects amounts attributable to non-controlling interests.
|
|
Adjusted Net Income and Adjusted Diluted Per Share Calculations – Year
Ended December 31, 2018 vs. 2017:
|
|
|
The Company reported net income of $33.6
million or $0.53 per basic and diluted share for the year ended December 31, 2018 as
compared to net income of $12.5 million and $0.19 per basic and
diluted share, for the year ended December 31, 2017.
|
|
|
Net income for the year ended December
31, 2018 includes a $22.2 million charge or $0.35 per diluted share (2017 —
$22.7 million
or $0.35 per diluted share) for stock-based compensation, a $9.5
million charge or $0.15 per diluted share for exit costs, restructuring
charges and associated impairments (2017 - $16.2 million or $0.25 per
diluted share), a $11.7 million, or $0.19 per diluted share, for a
legal arbitration award related to one of the Company's litigation matters
from 2006 (2017 — $nil) and a $3.0 million, or $0.05 per diluted
share for executive transition costs (2017 — $nil). In 2017, the Company
also recognized a $9.3 million, or $0.14 per diluted
share, non-recurring tax charge as the Company re-measured its deferred tax
assets and liabilities as of the date of enactment of the
recently passed Tax Act.
|
|
|
Adjusted net income, which consists of net
income excluding the impact of stock-based compensation, exit costs, restructuring
charges and associated impairments, the legal arbitration award, executive
transition costs, the related tax impact of these adjustments,
and tax charge from the provisional re-measurement of U.S. deferred tax
assets and liabilities given changes enacted by the Tax Act,
was $70.2 million, or $1.11 per diluted share, for the year ended December
31, 2018 as compared to adjusted net income of $51.5 million
or $0.79 per diluted share for the year ended December 31, 2017.
|
|
|
The Company reported net income attributable
to common shareholders of $22.8 million, or $0.36 per basic and diluted share for the
year ended December 31, 2018 (2017 — $2.3 million, or $0.04 per basic
share and diluted share).
|
|
|
Adjusted net income attributable to common
shareholders, which consists of net income attributable to common shareholders
excluding the impact of stock-based compensation, exit costs, restructuring
charges and associated impairments, the legal arbitration
award, executive transition costs, the related tax impact of these
adjustments, and tax charge from the provisional re-measurement of
U.S. deferred tax assets and liabilities given changes enacted by the Tax
Act, was $57.8 million or $0.91 per diluted share for the year
ended December 31, 2018 as compared to adjusted net income attributable to
common shareholders of $40.5 million or $0.62 per diluted
share for the year ended December 31, 2017.
|
|
|
A reconciliation of net income and net income
attributable to common shareholders, the most directly comparable U.S. GAAP
measure, to adjusted net income, adjusted net income per diluted share,
adjusted net income attributable to common shareholders and
adjusted net income attributable to common shareholders per diluted share
is presented in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
Net Income
|
|
Diluted EPS
|
|
|
Net Income
|
|
Diluted EPS
|
|
|
Reported net income
|
$
|
33,595
|
|
$
|
0.53
|
|
|
$
|
12,518
|
|
$
|
0.19
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
22,211
|
|
|
0.35
|
|
|
|
22,653
|
|
|
0.35
|
|
|
Exit costs, restructuring charges and associated impairments
|
|
9,542
|
|
|
0.15
|
|
|
|
16,174
|
|
|
0.25
|
|
|
Legal arbitration award
|
|
11,737
|
|
|
0.19
|
|
|
|
-
|
|
|
-
|
|
|
Executive transition costs
|
|
2,994
|
|
|
0.05
|
|
|
|
-
|
|
|
-
|
|
|
Tax impact on items listed above
|
|
(9,873)
|
|
|
(0.16)
|
|
|
|
(9,218)
|
|
|
(0.14)
|
|
|
Impact of enactment of U.S. Tax Act
|
|
-
|
|
|
-
|
|
|
|
9,323
|
|
|
0.14
|
|
|
Adjusted net income
|
|
70,206
|
|
|
1.11
|
|
|
|
51,450
|
|
|
0.79
|
|
|
Net income attributable to non-controlling interests
(1)
|
|
(10,751)
|
|
|
(0.17)
|
|
|
|
(10,174)
|
|
|
(0.16)
|
|
|
Stock-based compensation (net of tax of $0.1 million,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and $0.2 million, respectively) (1)
|
|
(394)
|
|
|
(0.01)
|
|
|
|
(620)
|
|
|
(0.01)
|
|
|
Exit costs, restructuring charges and associated impairments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(net of tax of $0.4 million and $0.1 million, respectively)
(1)
|
|
(1,262)
|
|
|
(0.02)
|
|
|
|
(181)
|
|
|
-
|
|
|
Adjusted net income attributable to common shareholders
|
$
|
57,799
|
|
$
|
0.91
|
|
|
$
|
40,475
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
|
|
|
63,207
|
|
|
|
|
|
|
65,540
|
|
__________
|
(1) Reflects amounts attributable to non-controlling interests.
|
|
Free Cash Flow:
|
|
Free cash flow is defined as cash provided by
operating activities minus cash used in investing activities (from the consolidated
statements of cash flows). Cash provided by operating activities consist of
net income, plus depreciation and amortization, plus the
change in deferred income taxes, plus other non-cash items, plus changes in
working capital, less investment in film assets, plus other
changes in operating assets and liabilities. Cash used in investing
activities includes capital expenditures, acquisitions and other cash
used in investing activities. Management views free cash flow, a non-GAAP
measure, as a measure of the Company's after-tax cash
flow available to reduce debt, add to cash balances, and fund other
financing activities. A reconciliation of cash provided by operating
activities to free cash flow is presented in the table below:
|
|
|
|
|
|
|
|
|
For the
|
|
For the
|
|
|
3 months ended
|
|
12 months ended
|
|
December 31, 2018
|
|
December 31, 2018
|
|
(In thousands of U.S. Dollars)
|
|
|
|
|
|
|
Net cash provided by operating activities
|
$
|
41,902
|
|
$
|
109,972
|
|
Net cash used in investing activities
|
|
(23,599)
|
|
|
(56,874)
|
|
Free cash flow
|
$
|
18,303
|
|
$
|
53,098
|
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SOURCE IMAX Corporation