IMAX Corporation Reports Fourth Quarter and Full Year 2012 Financial Results

21 Feb, 2013, 06:30 ET from IMAX Corporation

NEW YORK, Feb. 21, 2013 /PRNewswire/ -- 

HIGHLIGHTS

  • Adjusted EPS increases 95% to $0.80 for full year; Q4 2012 adjusted EPS of $0.23
  • Full year revenues increase 20% to $284.3 million with fourth quarter revenues of $77.8 million
  • Network scale and global film portfolio drive approximately 50% box office growth in full year 2012

IMAX Corporation (NYSE: IMAX; TSX: IMX) today reported its financial results for the fourth quarter of 2012, driven by continued theatre network growth and strong box office performance, derived from a diverse global film portfolio.  Fourth quarter 2012 revenues were $77.8 million, adjusted EBITDA as calculated in accordance with the Company's Credit Facility was $27.4 million, adjusted net income was $15.7 million, or $0.23 per diluted share, and reported net income was $12.9 million, or $0.19 per diluted share.

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

Full year 2012 revenues were $284.3 million, adjusted EBITDA as calculated in accordance with the Company's Credit Facility was $106.8 million, adjusted net income was $54.3 million, or $0.80 per diluted share, and reported net income was $41.3 million, or $0.61 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.

"Our fourth quarter results once again demonstrated the operating leverage inherent in the IMAX business model and was a strong finish to a successful year for the Company," said IMAX Chief Executive Officer Richard L. Gelfond. "We executed on all key fronts, with the combination of network expansion and an increasingly global portfolio approach to our film slate translating into solid financial results."

Network Growth Update

In the fourth quarter of 2012, the Company signed contracts for 38 theatre systems, of which 28 were systems in new theatre locations, and installed 46 theatre systems, of which 43 were systems in new theatre locations.  For the full year of 2012, the Company signed contracts for 142 theatre systems, of which 121 were systems in new theatre locations, and installed 125 theatre systems, of which 107 were systems in new theatre locations.

The total IMAX® theatre network consisted of 731 systems as of Dec. 31, 2012, of which 598 were in commercial multiplexes.  There were 276 theatre systems in backlog as of Dec. 31, 2012, compared to 263 theatre systems in backlog as of Dec. 31, 2011.  For a breakdown of theatre system signings, installations and backlog by type, please see the end of this press release.

"We believe the financial and strategic accomplishments of 2012 re-confirmed IMAX's position as a unique global player in the film industry and laid a solid foundation for long-term growth," Mr. Gelfond concluded.  "Our 2013 objectives are straight forward - continue to expand our footprint worldwide, maximize the scalability of our business and further leverage our differentiated end-to-end technology platform to enable more leading filmmakers and studios to create an entertainment experience that cannot be found anywhere else."

Fourth Quarter Segment Results

  • IMAX systems revenue was $24.3 million in the quarter, compared to $29.8 million in the fourth quarter of 2011, primarily reflecting the installation of 14 full, new theatre systems under sales and sales-type lease arrangements in the most recent fourth quarter, compared to 17 full, new theatre systems in the prior year period.  The Company also installed three digital system upgrades under sales or sales-type lease arrangements in the fourth quarter of 2012, compared to one upgrade in the fourth quarter of 2011.
  • Revenue from joint revenue sharing arrangements increased 103.4% to $17.0 million, from $8.4 million in the prior-year period.  During the quarter, the Company installed 29 new theatres under joint revenue sharing arrangements, compared to 39 in the year-ago period.  The Company ended 2012 with 316 theatres operating under joint revenue sharing arrangements, as compared to 257 theatres at the end of 2011.
  • Production and IMAX DMR® (Digital Re-Mastering) revenues increased 56.3% to $19.2 million in the fourth quarter of 2012 from $12.3 million in the fourth quarter of 2011. Gross box office from DMR titles was a record $152.0 million in the fourth quarter of 2012, compared to $97.6 million in the prior year period.  The average global DMR box office per screen in the fourth quarter of 2012 was $264,400, compared to $221,600 in the prior year period.

Conference Call  The Company will host a conference call today at 8:30 AM ET to discuss its fourth quarter and full year 2012 financial results.  To access the call via telephone, interested parties should dial (800) 820-0231 approximately 5 to 10 minutes before it begins.  International callers should dial (416) 640-5926.  The participant passcode for the call is 4550645.  This call is also being webcast by Thomson Financial and can be accessed on the 'Investor Relations' section of www.imax.com.   A replay of the call will be available via webcast on the 'Investor Relations' section of www.imax.com or via telephone by dialing (888) 203-1112 (US and Canada) or (647) 436-0148 (international). The Conference ID for the telephone replay is 4550645.

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 Dec. 31, 2012, there were 731 IMAX theatres (598 commercial multiplexes, 19 commercial destinations and 114 institutions) in 53 countries.

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

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

IMAX Corporation, New York

Teri Loxam/Blaire Lomasky

212-821-0100

tloxam@imax.com

blomasky@imax.com

Media:

IMAX Corporation, New York

Ann Sommerlath

212-821-0155

asommerlath@imax.com

Business Media:

Sloane & Company, New York

Whit Clay

212-446-1864

wclay@sloanepr.com

Entertainment Media:

Principal Communications Group, Los Angeles

Melissa Zuckerman/Paul Pflug

323-658-1555

melissa@pcommgroup.com

paul@pcommgroup.com

 

Additional Information

Theatre Network Details:

Three Months

Twelve Months

Ended December 31,

Ended December 31,

Theatre System Signings:

2012

2011

2012

2011

Full new sales and sales-type lease arrangements

11

13

43

58

New joint revenue sharing arrangements

17

11

78

132

Total new theatres

28

24

121

190

Upgrades and other

10

(1)

2

21

(1) (2)

19

Total Theatre Signings

38

26

142

209

Three Months

Twelve Months

Ended December 31,

Ended December 31,

Theatre System Installations:

2012

2011

2012

2011

Full new sales and sales-type lease arrangements

14

17

47

51

New joint revenue sharing arrangements

29

39

60

86

Total new theatres

43

56

107

137

Upgrades and other

3

1

18

33

Total Theatre Installations

46

57

125

170

As of

Ended December 31,

Theatre Backlog:

2012

2011

New sales and sales-type lease arrangements

128

134

New joint revenue sharing arrangements

137

119

Total new theatres

265

253

Upgrades under sales and sales-type lease arrangements

11

(1)

10

Total Theatres in Backlog

276

263

_______________

(1)

Includes one laser-based system for a commercial theater and four laser-based systems for institutional theaters.

(2)

Includes three IMAX theatres acquired from another existing customer that had been operating under a joint revenue sharing arrangement. These theaters were purchased from the Company under a sales arrangement.

 

Additional Information (continued)

2013 DMR Films Announced to Date:   To date, IMAX has announced 23 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. 

  • The Grandmaster: The IMAX Experience (Jet Tone Films and Sil-Metropole Organization, January 2013);
  • Hansel & Gretel: Witch Hunters: An IMAX 3D Experience (Paramount Pictures, January 2013);
  • Journey to the West: Conquering the Demons: An IMAX 3D Experience (Bingo Movie Development Ltd, February 2013);
  • Top Gun: An IMAX 3D Experience (Paramount Pictures, February 2013);
  • A Good Day to Die Hard: The IMAX Experience (Twentieth Century Fox, February 2013);
  • Jack the Giant Slayer: An IMAX 3D Experience (Warner Bros., March 2013);
  • Oz: The Great and Powerful: An IMAX 3D Experience (Walt Disney Pictures, March 2013);
  • G.I. Joe: Retaliation: An IMAX 3D Experience (Paramount Pictures, March 2013);
  • Dragon Ball Z: Battle of the Gods: An IMAX 3D Experience (Toei Animation Company, March 2013);
  • Oblivion: The IMAX Experience (Universal Pictures, April 2013);
  • Jurassic Park: An IMAX 3D Experience (Universal Pictures, April 2013);
  • Iron Man 3: An IMAX 3D Experience (Walt Disney Pictures, May 2013);
  • Star Trek: Into Darkness: An IMAX 3D Experience (Paramount Pictures, May 2013);
  • Man of Steel: The IMAX Experience (Warner Bros., June 2013);
  • Pacific Rim: An IMAX 3D Experience (Warner Bros., July 2013);
  • 300: Rise of an Empire: An IMAX 3D Experience (Warner Bros., August 2013);
  • Riddick Sequel: The IMAX Experience (Universal Pictures, September 2013);
  • Gravity: An IMAX 3D Experience (Warner Bros., October 2013);
  • Stalingrad: An IMAX 3D Experience (AR Films, October 2013, Russia and the CIS only );
  • Seventh Son: An IMAX 3D Experience (Warner Bros., October 2013);
  • The Hunger Games: Catching Fire: The IMAX Experience (Lionsgate, November 2013);
  • The Hobbit: The Desolation of Smaug: An IMAX 3D Experience (Warner Bros., December 2013); and
  • Dhoom 3: The IMAX Experience (Yash Raj Films, 2013, India only).

 

IMAX CORPORATION

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

Year Ended

Ended December 31,

Ended December 31,

2012 

2011* 

2012

2011* 

Revenues

Equipment and product sales

$

22,405

$

26,657

$

78,161

$

85,016

Services

 34,294 

26,349

136,606

106,720

Rentals

 18,356 

9,394

61,268

34,810

Finance income

 1,986 

1,753

7,523

6,162

Other

 732 

2,523

732

3,848

 77,773 

66,676

284,290

236,556

Costs and expenses applicable to revenues

Equipment and product sales

 9,811 

10,147

37,538

38,742

Services

 17,239 

21,262

72,617

69,277

Rentals

 8,434 

4,823

21,402

14,301

Other

 - 

612

-

1,018

 35,484 

36,844

131,557

123,338

Gross margin

 42,289 

29,832

152,733

113,218

Selling, general and administrative expenses

 22,529 

17,093

81,560

73,157

(including share-based compensation expense of $2.9 million and $13.1 million for the three

months and year ended December 31, 2012, respectively (2011 - expense of $2.7 million and

$11.7 million, respectively))

Provision for arbitration award

 - 

-

-

2,055

Research and development

 3,788 

1,803

11,411

7,829

Amortization of intangibles

 174 

125

706

465

Receivable provisions, net of recoveries

 (305)

804

524

1,570

Asset impairments

 - 

20

-

28

Impairment of available-for-sale investment

 - 

-

150

-

Income from operations

 16,103 

9,987

58,382

28,114

Interest income

 12 

13

85

57

Interest recovery (expense)

 686 

(402)

(689)

(1,827)

Income from continuing operations before income taxes

 16,801 

9,598

57,778

26,344

(Provision for) recovery of income taxes

 (3,594)

(2,861)

(15,079)

(9,293)

Loss from equity-accounted investments

 (324)

(479)

(1,362)

(1,791)

Net Income

$

12,883

$

6,258

$

41,337

$

15,260

Net income per share - basic & diluted:

Net income per share - basic

$

0.19

$

0.10

$

0.63

$

0.24

Net income per share - diluted

$

0.19

$

0.09

$

0.61

$

0.22

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

Basic

 66,264 

64,799

65,854

64,504

Fully Diluted

 68,281 

67,460

67,933

67,859

Additional Disclosure:

Depreciation and amortization(1)

$

8,084

7,143

$

32,788

25,163

_______________

(1)

Includes less than $0.1 million and $0.2 million of amortization of deferred financing costs charged to interest expense for the three months and year ended December 31, 2012 (2011 - less than $0.1 million and $0.4 million respectively).

*

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

 

IMAX CORPORATION

CONSOLIDATED BALANCE SHEETS

In accordance with United States Generally Accepted Accounting Principles

(In thousands of U.S. dollars)

As at December 31,

2012

2011*

Assets

Cash and cash equivalents

$

21,336

$

18,138

Accounts receivable, net of allowance for doubtful accounts of $1,564 (December 31, 2011 — $1,840)

42,007

46,659

Financing receivables 

94,193

86,714

Inventories 

15,794

19,747

Prepaid expenses

3,833

3,126

Film assets 

3,737

2,388

Property, plant and equipment 

113,610

101,253

Other assets 

23,963

14,238

Deferred income taxes

36,461

51,046

Goodwill

39,027

39,027

Other intangible assets 

27,911

24,913

Total assets

$

421,872

$

407,249

Liabilities

Bank indebtedness 

$

11,000

$

55,083

Accounts payable

15,144

28,985

Accrued and other liabilities 

68,695

58,855

Deferred revenue

73,954

74,458

Total liabilities

168,793

217,381

Commitments and contingencies

Shareholders' equity

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

    Issued and outstanding — 66,482,425 (December 31, 2011 — 65,052,740)

313,744

303,395

Other equity

28,892

17,510

Deficit

(87,166)

(128,503)

Accumulated other comprehensive loss

(2,391)

(2,534)

Total shareholders' equity

253,079

189,868

Total liabilities and shareholders' equity

$

421,872

$

407,249

 

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,

2012

2011*

Cash provided by (used in):

Operating Activities

Net income

$

41,337

$

15,260

Adjustments to reconcile net income to cash from operations:

Depreciation and amortization

32,788

25,163

Write-downs, net of recoveries

1,607

1,954

Change in deferred income taxes

14,724

7,994

Stock and other non-cash compensation

14,220

12,814

Provision for arbitration award

-

2,055

Foreign currency exchange (gain) loss

(329)

1,255

Loss from equity-accounted investments

1,362

1,791

Gain on non-cash contribution to equity-accounted investees

-

(404)

Investment in film assets

(16,817)

(12,256)

Changes in other non-cash operating assets and liabilities

(15,262)

(49,379)

Net cash provided by operating activities

73,630

6,247

Investing Activities

Purchase of property, plant and equipment

(6,055)

(5,528)

Investment in joint revenue sharing equipment

(23,257)

(33,290)

Investment in new business ventures

(381)

(2,483)

Acquisition of other intangible assets

(5,826)

(22,206)

Net cash used in investing activities

(35,519)

(63,507)

Financing Activities

Increase in bank indebtedness

9,917

75,083

Repayment of bank indebtedness

(54,000)

(37,500)

Common shares issued - stock options exercised

8,920

7,864

Proceeds from disgorgement of stock sale profits

314

-

Credit Facility amendment fees paid

-

(306)

Net cash (used in) provided by financing activities

(34,849)

45,141

Effects of exchange rate changes on cash

(64)

(133)

Increase (decrease) in cash and cash equivalents during year

3,198

(12,252)

Cash and cash equivalents, beginning of year

18,138

30,390

Cash and cash equivalents, end of year

$

21,336

$

18,138

 

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; theater operations; and other. The IMAX systems segment designs, manufactures, sells or leases IMAX theater projection system equipment. The theater system maintenance segment maintains IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment provides IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concessions revenue. The film production and IMAX DMR segment produces films and performs film re-mastering services. The film distribution segment distributes 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 theater operations from certain IMAX theaters, camera rentals and other miscellaneous items.

Three Months

Year Ended

Ended December 31,

Ended December 31,

2012 

2011

2012

2011

Revenue

IMAX systems

Sales and sales-type leases

$

20,237

$

26,552

$

69,988

$

81,310

Ongoing rent, fees, and finance income

 4,105 

3,270

13,417

11,890

 24,342 

29,822

83,405

93,200

Theater system maintenance

 7,751 

6,570

28,629

24,840

Joint revenue sharing arrangements

 17,049 

8,382

57,526

30,764

Film

Production and IMAX DMR

 19,245 

12,312

78,050

50,592

Distribution

 3,100 

3,217

14,222

16,074

Post-production

 2,126 

2,549

7,904

8,235

 24,471 

18,078

100,176

74,901

Other

 4,160 

3,824

14,554

12,851

Total

$

77,773

$

66,676

$

284,290

$

236,556

Gross margins

IMAX systems(1)

Sales and sales-type leases

$

11,715

$

17,088

$

36,974

$

45,251

Ongoing rent, fees, and finance income

 4,055 

3,372

13,271

11,678

 15,770 

20,460

50,245

56,929

Theater system maintenance

 2,848 

2,525

10,970

9,437

Joint revenue sharing arrangements(1)

 8,968 

3,813

37,308

17,605

Film

Production and IMAX DMR(1)

 13,641 

2,339

49,355

23,574

Distribution(1)

 223 

494

2,356

3,025

Post-production

 581 

181

1,954

2,985

 14,445 

3,014

53,665

29,584

Other

 258 

20

545

(337)

Total

$

42,289

$

29,832

$

152,733

$

113,218

_______________

(1)

IMAX systems include commission costs of $0.6 million and $2.7 million for the three and twelve months ended December 31, 2012, respectively (2011 — $0.9 million and $2.4 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.3 million and $3.4 million for the three and twelve months ended December 31, 2012, respectively (2011 — $1.9 million and $5.4 million, respectively). Production and DMR segment margins include marketing costs of $1.1 million and $3.3 million for the three and twelve months ended December 31, 2012, respectively (2011 — $1.9 million and $3.8 million, respectively). Distribution segment margins include marketing costs of $0.3 million and $1.5 million for the three and twelve months ended December 31, 2012, respectively (2011 — $0.2 million and $1.9 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 and adjusted net income per diluted share as supplemental measures of performance of the Company, which are not recognized under United States generally accepted accounting principals ("GAAP"). The Company presents adjusted EBITDA, adjusted net income and adjusted net income per diluted share because it believes that they are important supplemental measures of its comparable controllable operating performance and it wants to ensure that its investors fully understand the impact of its variable share-based compensation, provision for arbitration award and deferred 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 and adjusted net income per diluted share should be considered in addition to, and not as a substitute for, net income and other measures of financial performance reported in accordance with GAAP.

Adjusted EBITDA is calculated on a basis consistent with the Company's Credit Facility, which refers to Adjusted EBITDA as EBITDA. As of December 31, 2012, the Credit Facility provided that the Company was 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 was also required to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.1:1.0. As of December 31, 2012, under the terms of the Credit Facility, the Company was 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 0.10:1 as at December 31, 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 $11.0 million. EBITDA is calculated as follows:

Quarter Ended December 31,

Year Ended December 31,

2012

2011*

2012

2011*

Net income

$

12,883

$

6,258

$

41,337

$

15,260

Add (subtract):

Loss for equity-accounted investments

324

479

1,362

1,791

Provision for income taxes

3,595

2,860

15,079

9,293

Interest (recovery) expense net of interest income

(698)

389

604

1,770

Depreciation and amortization including film asset amortization

8,041

7,100

32,618

24,774

Write-downs net of recoveries including asset impairments and

   receivable provisions

91

1,113

1,607

1,954

Stock and other non-cash compensation

3,121

2,936

14,220

12,814

Adjusted EBITDA

$

27,357

$

21,135

$

106,827

$

67,657

 

IMAX CORPORATION

OTHER INFORMATION

(in thousands of U.S. dollars)

Adjusted Net Income and Adjusted Diluted Per Share Calculations – Quarter Ended December 31, 2012 vs. 2011:

The Company reported net income of $12.9 million or $0.20 per basic share and $0.19 per diluted share for the fourth quarter of 2012 as compared to $6.3 million or $0.10 per basic share and $0.09 per diluted share for the fourth quarter of 2011. Net income for the quarter includes a $2.9 million charge or $0.04 per diluted share (2011 – $2.7 million or $0.04 per diluted share) for stock-based compensation. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $15.7 million or $0.23 per diluted share in the fourth quarter of 2012 as compared to adjusted net income of $8.9 million or $0.13 per diluted share for the fourth 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 Ended

Three Months Ended

December 31, 2012

December 31, 2011*

Net Income

Diluted EPS

Net Income

Diluted EPS

Reported

$

12,883

$

0.19

$

6,258

$

0.09

Adjustments:

Stock-based compensation

2,861

0.04

2,708

0.04

Tax impact on item listed above

(77)

-

(113)

-

Adjusted

$

15,667

$

0.23

$

8,853

$

0.13

Weighted average diluted shares outstanding

68,281

67,460

Adjusted Net Income and Adjusted Diluted Per Share Calculations – Year Ended December 31, 2012 vs. 2011:

The Company reported net income of $41.3 million or $0.63 per basic share and $0.61 per diluted share for the year ended December 31, 2012 as compared to net income of $15.3 million or $0.24 per basic share and $0.22 per diluted share for the year ended December 31, 2011. Net income for the year ended December 31, 2012 includes a $13.1 million charge or 0.19 per diluted share (2011 — $11.7 million or 0.17 per diluted share) for stock-based compensation. Net income for December 31, 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 stock-based compensation, the charge for arbitration award and the related tax impact, was $54.3 million or $0.80 per diluted share for the year ended December 31, 2012 as compared to adjusted net income of $28.0 million or $0.41 per diluted share for the year ended December 31, 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:

Year Ended

Year Ended

December 31, 2012

December 31, 2011*

Net Income

Diluted EPS

Net Income

Diluted EPS

Net income

$

41,337

$

0.61

$

15,260

$

0.22

Adjustments:

Stock-based compensation

13,113

0.19

11,681

0.17

Provision for arbitration award

-

-

2,055

0.03

Tax impact on items listed above

(160)

-

(973)

(0.01)

Adjusted net income

$

54,290

$

0.80

$

28,023

$

0.41

Weighted average diluted shares outstanding

67,933

67,859

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

Quarter Ended

Year Ended

(In thousands of U.S. Dollars)

December 31, 2012

December 31, 2012

Net cash provided by operating activities  

$

19,720

$

73,630

Net cash (used in) investing activities 

(12,319)

(35,519)

Free cash flow

$

7,401

$

38,111

 

 

SOURCE IMAX Corporation



RELATED LINKS

http://www.imax.com