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 IMAX Corporation Reports Fourth-Quarter And Full-Year 2016 Results
   Thursday, February 23, 2017 4:05:00 PM ET

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HIGHLIGHTS

-- Installed 166 new IMAX? theatres during 2016, up 22% vs. prior year, bringing the IMAX theatre network count to 1,215 screens across 75 countries

-- Signed agreements for record 319 IMAX theatre systems during 2016, up from 138 signings in 2015

-- Ended year with 498 theatres in backlog, up 34% vs. prior year

-- Company provides 2017 installation guidance range of approximately 150-155 new systems

-- Opened flagship IMAX Virtual Reality Centre in Los Angeles in January of 2017, with an additional five pilot centres signed and scheduled to be open in coming months

IMAX Corporation (IMAX ) today reported fourth-quarter 2016 revenue of $106.9 million and net income attributable to common shareholders of $8.9 million, or $0.13 per diluted share. Full year 2016 revenue was $377.3 million and net income attributable to common shareholders was $28.8 million, or $0.42 per diluted share. Adjusted net income attributable to common shareholders for the fourth quarter and full year was $0.22 per diluted share and $0.73 per diluted share, respectively. For reconciliations of reported results to non-GAAP financial results, and for the definition and reconciliation of Adjusted EBITDA as calculated in accordance with the Company’s credit facility, please see the end of this press release.

"2016 was an impressive year for IMAX on several strategic fronts: our footprint grew 15%, we signed a record 319 new theatre agreements, and we further established IMAX as a leader in the entertainment industry through two key growth initiatives - original content and virtual reality," said IMAX CEO Richard L. Gelfond. "We’re extremely optimistic on the theatrical side of the business, where demand for IMAX has hit record levels. With a global footprint of 1,215 theatres in 75 countries and a promising blockbuster-driven 2017 film slate that features more IMAX differentiation than any year in our history, we believe we’re extremely well positioned for future growth."

Fourth-Quarter 2016 Results

Network Update During the quarter, the Company installed 73 theatres, of which 70 were for new theatre locations and 3 were upgrades. The Company also signed contracts for 26 theatres in the fourth quarter of 2016. The total IMAX theatre network consisted of 1,215 systems as of Dec. 31, 2016, of which 1,107 were in commercial multiplexes. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

Box Office Update Gross box office from IMAX DMR titles was $246.5 million in the fourth quarter of 2016, compared with $288.4 million in the prior-year period. The average global DMR box office per-screen average in the fourth quarter of 2016 was $233,300, compared with $318,600 in same period last year.

Fourth-Quarter Segment Results

-- Revenue from sales and sales-type leases was $31.0 million in the fourth quarter of 2016, compared with $33.0 million in the fourth quarter of 2015. The Company installed 23 full theatre systems under sales and sales-type lease arrangements in the most recent quarter, compared with the 24 full sales-type theatres the Company installed in the fourth quarter of 2015. The Company also recognized one laser upgrade under a sales-type lease arrangement in the most recent quarter, compared to two in the same period last year. Gross margin for sales and sales-type leases was 58.9% vs. 60.7% in the year ago period, primarily a result of lower margins from the installation of laser-based digital systems. The Company’s margins on full, new sales and sales-type leases was 62.6% in the most recent quarter.

-- Revenue from joint revenue-sharing arrangements was $24.5 million in the quarter, compared with $31.9 million in the prior-year period. During the quarter, the Company installed 46 new theatres under joint revenue-sharing arrangements, compared with 32 new theatres in the fourth quarter of 2015. The Company had 640 theatres operating under joint revenue-sharing arrangements as of Dec. 31, 2016, as compared to 529 theatres one year prior. Gross margin for joint revenue-sharing arrangements was 61.8%, compared to 67.7% in the prior-year period. Revenue and gross margin results primarily reflected lower box office revenue and FX headwinds.

-- Production and DMR revenues were $27.6 million in the fourth quarter of 2016, compared with $31.9 million in the fourth quarter of 2015. Gross margin for the Production and DMR segment was 60.8%, compared to 68.9% in the prior-year period, primarily a result of lower box office revenue, higher marketing costs and FX headwinds.

-- Gross margin across all segments in the fourth quarter of 2016 was 51.7%, compared to 60.2% in the fourth quarter of 2015, mainly due to lower box office, upfront costs associated with heightened installation activity and FX headwinds.

-- Operating expenses (which includes SG&A and R&D, and excludes stock-based compensation) were $28.7 million in the quarter, compared to $29.2 million in the fourth quarter of 2015 and consistent with guidance disclosed on the Q3 2016 call.

Full-Year 2016 Results Full-year 2016 revenue was $377.3 million as compared to 2015 revenue of $373.8 million. Reported net income attributable to common shareholders was $28.8 million, or $0.42 per diluted share, as compared to $55.8 million or $0.78 per diluted share in 2015. Adjusted net income attributable to common shareholders was $50.0 million as compared to $73.0 million in 2015, or $0.73 per diluted share as compared to $1.02 per diluted share in 2015 Adjusted EBITDA, as calculated in accordance with the Company’s credit facility, was $121.9 million in 2016 as compared to $140.8 million in 2015. The Company also reported a global 2016 per-screen average of $963,800, as compared to $1,155,800 in the prior year.

The full-year installations total grew to 182 theatre systems, of which 16 were upgrades, compared with 154 and 18, respectively, in the prior-year period. IMAX signed contracts for 319 theatres in 2016, across 28 countries, resulting in 498 theatre systems in backlog as of Dec. 31, 2016, compared to 372 theatre systems in backlog as of Dec. 31, 2015. The Company’s top three markets for signings were China, the United States and France. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

"In terms of new business opportunities, we formed a ground-breaking partnership with Marvel and ABC to exclusively launch the first two episodes of the television series Marvel’s Inhumans across the global IMAX network ahead of its premiere on ABC and in international markets later this year. We are excited to have an equity interest in the venture and we believe this approach could help facilitate quicker international syndication," Gelfond said.

"We’ve also taken a giant step forward in establishing location-based VR with the launch of our $50 million VR content fund and several new innovative technology and content partnerships," he continued. "Last month, we opened our flagship pilot IMAX VR Centre in Los Angeles, which has already had more than 7,000 unique, satisfied visitors. We also signed agreements to open five new VR pilot centres in China, the U.K. and the U.S. by year-end. While this venture is still in its pilot phase, we are extremely encouraged by the initial results and look forward to getting the additional locations up and running over the coming months."

Share Buybacks In 2016, the Company repurchased 3,849,222 common shares under the Company’s repurchase program at an average price of $30.25 per share. The retired shares were purchased for $116.5 million. The Company has $46.3 million available under its approved repurchase program.

Supplemental Materials For more information about our results, please refer to the IMAX Investor Relations website located at www.imax.com/content/investor-relations.

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 Investor Relations 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 4:30 PM ET to discuss its fourth-quarter and full-year 2016 financial results. To access the call via telephone, interested parties in the US and Canada should dial (800) 274-0251 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 794-1827. The conference ID for the call is 6312959. A replay of the call will be available via webcast on the IMAX Investor Relations website located at www.imax.com/content/investor-relations or via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 6312959.

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, 2016, there were 1,215 IMAX theatres (1,107 commercial multiplexes, 16 commercial destinations and 92 institutions) in 75 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 signing of theater system agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the performance of IMAX DMR films; the potential impact of increased competition in the markets within which the Company operates; competitive actions by other companies; the failure to respond to change and advancements in digital technology; the Company’s largest customer accounting for a significant portion of the Company’s revenue and backlog; risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security; risks related to the Company’s inability to protect its intellectual property; risks related to the Company’s implementation of a new enterprise resource planning system; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; and other factors, many of which are beyond the control of the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

For additional information please contact:

Investors:                 Media:
IMAX Corporation, New York IMAX Corporation, New York
Jessica Kourakos           Ann Sommerlath
212-821-0100               212-821-0155
jkourakos@imax.com         asommerlath@imax.com
Michael Mougias            Entertainment Media:
212-821-0187               Principal Communications Group, Los Angeles
mmougias@imax.com          Melissa Zuckerman/Paul Pflug
Business Media:            323-658-1555
Sloane & Company, New York melissa@pcommgroup.com
Whit Clay                  paul@pcommgroup.com
212-446-1864
wclay@sloanepr.com
Additional Information
Signings and Installations
December 31, 2016
                                                               Year Ended December 31,
              Theater Signings:                                2016            2015
              Full new sales and sales-type lease arrangements 61              55      (1)
              New joint revenue sharing arrangements           253             78
              Total new theaters                               314             133
              Upgrade of IMAX theater systems                  5               5
              Total Theater Signings                           319             138
                                                               Year Ended December 31,
              Theater Installations:                           2016            2015
              Full new sales and sales-type lease arrangements 56      (2)     56      (2)
              New joint revenue sharing arrangements           109             80
              Operating lease arrangements                     1               -
              Total new theaters                               166             136
              Upgrade of IMAX theater systems                  16      (3)(4)  18      (3)(4)
              Total Theater Installations                      182             154
                                                               As of December 31,
              Theater Backlogs:                                2016            2015
              New sales and sales-type lease arrangements      143             160
              New joint revenue sharing arrangements
              Hybrid arrangements                              92              117
              Traditional arrangements                         263             95
              Total new theaters                               498     (5)(6)  372     (5)(7)
                                                               As of December 31,
              Theater Network:                                 2016            2015
              Commercial Multiplex Theaters:
              Sales and sales-type lease arrangements          467             414
              Joint revenue sharing arrangements               640             529
              Total Commercial Multiplex Theaters              1,107           943
              Commercial Destination Theaters                  16              19
              Institutional Theaters                           92              99
              Total Theater Network                            1,215           1,061

______________________

(1) Includes four signings which replaced theaters under an existing arrangement in backlog.
(2) Includes one used theater system (2015 - one used theater system).
(3) Includes 14 installations of an upgrade to a laser-based digital system, 12 under sales and sales-type lease arrangement and two under joint revenue sharing arrangements (2015 - 16 laser-based digital systems, ten under sales and sales-type lease arrangements, one under a short-term operating lease arrangement and five under joint revenue sharing arrangements).
(4) Includes two installations of an upgrade to a xenon-based digital system under sales arrangements (2015 - two xenon-based digital systems, one under a sales and sales-type lease arrangement and one under a short-term operating lease arrangement).
(5) Includes 20 laser-based digital theater system configurations (2015 - 24), including upgrades. The Company continues to develop and roll out its laser-based digital projection system.
(6) Includes three upgrades to a laser-based digital theater system, in existing IMAX theater locations.
(7) Includes 15 upgrades to a digital theater system, in existing IMAX theater locations (two xenon configurations and 13 laser configurations).

2017 DMR Films:

To date, the Company has announced the following 26 DMR titles to be released in 2017 to the IMAX theater network. The Company remains in active negotiations with all of the major Hollywood studios, as well as international studios, for additional films to fill out its short and long-term film slate, and anticipates that the number of IMAX DMR films to be released to the IMAX network in 2017 will be similar to the IMAX DMR films released to the IMAX network in 2016.

-- Your Name: The IMAX Experience (Toho Co., Ltd., January 2017);

-- xXx: Return of Xander Cage: The IMAX Experience (Paramount Pictures, January 2017);

-- Resident Evil: The Final Chapter: The IMAX Experience (Sony Pictures, February 2017);

-- Attraction: The IMAX Experience (Art Pictures Studio, January 2017, Russia only);

-- Journey to The West: The Demons Strike Back: The IMAX Experience (Alibaba Pictures Group, January 2017);

-- The Lego Batman Movie: The IMAX Experience (Warner Bros. Pictures, February 2017);

-- Sing: The IMAX Experience (Universal Pictures, February 2017, China and Japan only);

-- Logan: The IMAX Experience (20th Century Fox, March 2017);

-- Kong: Skull Island: The IMAX Experience (Warner Bros. Pictures, March 2017);

-- Beauty and The Beast: The IMAX Experience (Walt Disney Studios, March 2017);

-- Ghost in the Shell: The IMAX Experience (Paramount Pictures, March 2017);

-- The Fate of the Furious: The IMAX Experience (Universal Pictures, April 2017);

-- Guardians of the Galaxy Vol. 2: The IMAX Experience (Walt Disney Studios, May 2017);

-- Pirates of the Caribbean: Dead Men Tell No Tales: The IMAX Experience (Walt Disney Studios, May 2017);

-- Wonder Woman: The IMAX Experience (Warner Bros. Pictures, June 2017);

-- The Mummy: The IMAX Experience (Universal Pictures, June 2017);

-- Transformers: The Last Knight: The IMAX Experience (Paramount Pictures, June 2017);

-- Spider-Man: Homecoming: The IMAX Experience (Sony Pictures-distributed and Marvel Studios and Sony Pictures- produced, July 2017);

-- Dunkirk: The IMAX Experience (Warner Bros. Pictures, July 2017);

-- The Solutrean: The IMAX Experience (Sony Pictures, September 2017);

-- The Lego Ninjago Movie: The IMAX Experience (Warner Bros. Pictures, September 2017);

-- Blade Runner 2049: The IMAX Experience (Warner Bros. Pictures, October 2017);

-- Geostorm: The IMAX Experience (Warner Bros. Pictures, October 2017);

-- Thor: Ragnar?k: The IMAX Experience (Walt Disney Studios, November 2017);

-- Justice League: The IMAX Experience (Warner Bros. Pictures, November 2017); and

-- Star Wars: The Last Jedi: The IMAX Experience (Walt Disney Studios, December 2017).

In addition, in conjunction with Marvel and Disney|ABC Television Group, the Company will be co-producing and exclusively premiering the new ABC series "Marvel’s Inhumans" in IMAX theaters. The first two episodes of the series are expected to run worldwide exclusively in IMAX theaters for two weeks in September 2017, and several weeks later, the series will premiere on the ABC network. The Company will have an equity participation both in the pilot and in the television series, representing the first time the Company will have an economic interest in a television property.

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,
                                                                                                          2016                                     2015                                 2016                                 2015
Revenues
Equipment and product sales                                                                               $                   41,318               $                 46,113             $                 122,382            $                 118,937
Services                                                                                                                      44,009                                 46,266                               166,862                              161,964
Rentals                                                                                                                       18,777                                 24,645                               77,315                               83,651
Finance income                                                                                                                2,509                                  2,309                                9,500                                9,112
Other                                                                                                                         300                                    -                                    1,275                                141
                                                                                                                              106,913                                119,333                              377,334                              373,805
Costs and expenses applicable to revenues
Equipment and product sales                                                                                                   20,605                                 20,625                               69,680                               63,635
Services                                                                                                                      25,263                                 20,654                               83,780                               70,855
Rentals                                                                                                                       5,719                                  6,171                                21,086                               20,027
Other                                                                                                                         -                                      -                                    110                                  -
                                                                                                                              51,587                                 47,450                               174,656                              154,517
Gross margin                                                                                                                  55,326                                 71,883                               202,678                              219,288
Selling, general and administrative expenses                                                                                  32,039                                 32,997                               124,745                              115,345
                              (including share-based compensation expense of $8.0 million and $30.5
                              million for the three months and year ended December 31, 2016, respectively
                              (2015 - expense of $7.0 million and $21.9 million, respectively))
Research and development                                                                                                      4,712                                  3,119                                16,315                               12,730
Amortization of intangibles                                                                                                   542                                    558                                  2,079                                1,860
Receivable provisions, net of recoveries                                                                                      323                                    43                                   954                                  752
Asset (recoveries) impairments                                                                                                (1,000)                                235                                  417                                  830
Income from operations                                                                                                        18,710                                 34,931                               58,168                               87,771
Interest income                                                                                                               273                                    241                                  1,490                                968
Interest expense                                                                                                              (480)                                  (491)                                (1,805)                              (1,661)
Income from operations before income taxes                                                                                    18,503                                 34,681                               57,853                               87,078
Provision for income taxes                                                                                                    (6,577)                                (7,644)                              (16,212)                             (20,052)
Gain (loss) from equity-accounted investments, net of tax                                                                     150                                    (792)                                (2,321)                              (2,402)
Net income                                                                                                                    12,076                                 26,245                               39,320                               64,624
Less: net income attributable to non-controlling interests                                                                    (3,131)                                (3,752)                              (10,532)                             (8,780)
Net income attributable to common shareholders                                                            $                   8,945                $                 22,493             $                 28,788             $                 55,844
Net income per share attributable to common shareholders - basic and diluted:
                                                                                                          $                   0.14                 $                 0.33               $                 0.43               $                 0.79
                                                                                                          $                   0.13                 $                 0.32               $                 0.42               $                 0.78
Weighted average number of shares outstanding (000’s):
                              Basic                                                                                           66,152                                 69,364                               67,575                               69,526
                              Fully Diluted                                                                                   66,950                                 70,764                               68,263                               71,058
Additional Disclosure:
Depreciation and amortization(1)                                                                          $                   12,306               $                 11,612             $                 46,485             $                 42,803
(1) Includes $0.1 million and $0.5 million of amortization of deferred financing costs charged to interest expense for the three months and year ended December 31, 2016 (2015 - $0.4 million and $1.0 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,
                                                                                                               2016                       2015
Assets
Cash and cash equivalents                                                                                      $            204,759       $            317,449
Accounts receivable, net of allowance for doubtful accounts of $1,250 (December 31, 2015 -- $1,146)                         96,349                     97,981
Financing receivables                                                                                                       122,125                    117,231
Inventories                                                                                                                 42,121                     38,753
Prepaid expenses                                                                                                            6,626                      6,498
Film assets                                                                                                                 16,522                     14,571
Property, plant and equipment                                                                                               245,415                    218,267
Other assets                                                                                                                33,195                     26,136
Deferred income taxes                                                                                                       20,779                     25,766
Other intangible assets                                                                                                     30,416                     28,950
Goodwill                                                                                                                    39,027                     39,027
Total assets                                                                                                   $            857,334       $            930,629
Liabilities
Bank indebtedness                                                                                              $            27,316        $            29,276
Accounts payable                                                                                                            19,990                     23,455
Accrued and other liabilities                                                                                               93,208                     95,748
Deferred revenue                                                                                                            90,266                     104,993
Total liabilities                                                                                                           230,780                    253,472
Commitments and contingencies
Non-controlling interests                                                                                                   4,980                      3,307
Shareholders’ equity
Capital stock common shares -- no par value. Authorized -- unlimited number.
66,224,467 -- issued and 66,159,902 -- outstanding (December 31, 2015 -- 69,673,244 -- issued and outstanding)              439,213                    448,310
Less: Treasury stock, 64,565 shares at cost (December 31, 2015 - nil)                                                       (1,939)                    -
Other equity                                                                                                                177,304                    163,094
Accumulated (deficit) earnings                                                                                              (47,366)                   19,930
Accumulated other comprehensive loss                                                                                        (5,200)                    (7,443)
Total shareholders’ equity attributable to common shareholders                                                              562,012                    623,891
Non-controlling interests                                                                                                   59,562                     49,959
Total shareholders’ equity                                                                                                  621,574                    673,850
Total liabilities and shareholders’ equity                                                                     $            857,334       $            930,629
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,
                                                                                                     2016                2015
Cash provided by (used in):
Operating Activities
Net income                                                                                           $        39,320     $        64,624
Adjustments to reconcile net income to cash from operations:
                                        Depreciation and amortization                                         46,485              42,803
                                        Write-downs, net of recoveries                                        5,940               3,725
                                        Change in deferred income taxes                                       4,940               (1,336)
                                        Stock and other non-cash compensation                                 31,586              22,379
                                        Unrealized foreign currency exchange loss                             462                 785
                                        Loss from equity-accounted investments                                2,685               3,838
                                        Gain on non-cash contribution to equity-accounted investees           (364)               (1,436)
Investment in film assets                                                                                     (22,308)            (15,119)
Changes in other non-cash operating assets and liabilities                                                    (30,874)            (36,058)
                                        Net cash provided by operating activities                             77,872              84,205
Investing Activities
Purchase of property, plant and equipment                                                                     (15,278)            (43,257)
Investment in joint revenue sharing equipment                                                                 (42,910)            (28,474)
Investment in new business ventures                                                                           (1,911)             (2,000)
Acquisition of other intangible assets                                                                        (4,787)             (5,065)
                                        Net cash used in investing activities                                 (64,886)            (78,796)
Financing Activities
Increase in bank indebtedness                                                                                 -                   25,290
Repayment of bank indebtedness                                                                                (2,000)             (333)
Repurchase of common shares                                                                                   (116,518)           (34,276)
Settlement of restricted share units and options                                                              (17,889)            (10,000)
Exercise of stock options                                                                                     13,113              35,609
Taxes paid on secondary sales and repatriation dividend                                                       (2,443)             -
Treasury stock repurchased for future settlement of restricted share units                                    (1,996)             -
Taxes withheld and paid on employee stock awards vested                                                       (528)               (520)
Issuance of subsidiary shares to non-controlling interests - private offering                                 2,479               40,000
Share issuance costs from the issuance of subsidiary shares to non-controlling                                -                   (2,000)
interests - private offering
Issuance of subsidiary shares to non-controlling interests - public offering                                  -                   178,226
Share issuance expenses - public offering                                                                     -                   (16,257)
Dividends paid to non-controlling interests                                                                   -                   (9,511)
Credit facility amendment fees paid                                                                           -                   (1,533)
                                        Net cash (used in) provided by financing activities                   (125,782)           204,695
Effects of exchange rate changes on cash                                                                      106                 842
(Decrease) increase in cash and cash equivalents during year                                                  (112,690)           210,946
Cash and cash equivalents, beginning of year                                                                  317,449             106,503
Cash and cash equivalents, end of year                                                               $        204,759    $        317,449

IMAX CORPORATION SELECTED FINANCIAL DATA In accordance with United States Generally Accepted Accounting Principles (in thousands of U.S. dollars)

The Company has seven reportable segments identified by category of product sold or service provided: IMAX systems; theater system maintenance; joint revenue sharing arrangements; film production and IMAX DMR; film distribution; film post-production; and other. The IMAX systems segment includes the design, manufacture, sale or lease of IMAX theater projection system equipment. The theater system maintenance segment includes the maintenance of IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment includes the provision of IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concession revenues. The film production and IMAX DMR segment includes the production of films and the performance of film re-mastering services. The film distribution segment includes the distribution of films for which the Company has distribution rights. The film post-production segment provides film post-production and film print services. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items.

                                                                                                     Three Months                                                                                   Years Ended
                                                                                                     Ended December 31,                                                                             Ended December 31,
                                                                                                     2016                                                                             2015          2016                                                                             2015
Revenue
IMAX Theater Systems
       IMAX Systems
                            Sales and sales-type leases                                              $                                                                       31,002   $    33,011   $                                                                       89,524   $    86,935
                            Ongoing rent, fees, and finance income                                                                                                           4,017         4,485                                                                            16,003        15,193
                            Other                                                                                                                                            5,040         6,259                                                                            19,434        17,579
                                                                                                                                                                             40,059        43,755                                                                           124,961       119,707
       Theater System Maintenance                                                                                                                                            10,399        9,599                                                                            40,430        36,944
       Joint Revenue Sharing Arrangements                                                                                                                                    24,473        31,861                                                                           91,413        99,120
Film
       Production and IMAX DMR                                                                                                                                               27,636        31,945                                                                           106,403       107,089
       Film distribution and post-production                                                                                                                                 4,346         2,173                                                                            14,127        10,945
                                                                                                                                                                             31,982        34,118                                                                           120,530       118,034
Total                                                                                                $                                                                       106,913  $    119,333  $                                                                       377,334  $    373,805
Gross margins
IMAX Theater Systems
       IMAX Systems(1)
                            Sales and sales-type leases                                              $                                                                       17,991   $    20,070   $                                                                       44,786   $    44,790
                            Ongoing rent, fees, and finance income                                                                                                           3,847         4,267                                                                            15,304        14,378
                            Other                                                                                                                                            327           700                                                                              76            279
                                                                                                                                                                             22,165        25,037                                                                           60,166        59,447
       Theater System Maintenance                                                                                                                                            3,452         2,811                                                                            13,659        12,702
       Joint Revenue Sharing Arrangements(1)                                                                                                                                 15,121        21,556                                                                           59,837        68,372
Film
       Production and IMAX DMR(1)                                                                                                                                            16,798        22,003                                                                           69,196        77,645
       Film distribution and post-production(1)                                                                                                                              (2,210)       476                                                                              (180)         1,122
                                                                                                                                                                             14,588        22,479                                                                           69,016        78,767
Total                                                                                                $                                                                       55,326   $    71,883   $                                                                       202,678  $    219,288
__________________
(1)                         IMAX systems include marketing and commission costs of $1.1 million and $3.0 million for the three and twelve months ended December 31, 2016, respectively (2015 - $1.2 million and $3.0 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.2 million and $4.1 million for the three and twelve months ended December 31, 2016, respectively (2015 - $1.6 million and $4.3 million, respectively). Production and DMR segment margins include marketing costs of $5.8 million and $17.5 million for the three and twelve months ended December 31, 2016, respectively (2015 - $5.0 million and $13.3 million, respectively). Distribution segment margins include marketing costs of $0.1 million and $2.2 million for the three and twelve months ended December 31, 2016, respectively (2015 - less than $0.1 million recovery and $0.1 million recovery, respectively).

IMAX CORPORATION OTHER INFORMATION (in thousands of U.S. dollars)

Non-GAAP Financial Measures: In this release, the Company presents adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share as supplemental measures of performance of the Company, which are not recognized under U.S. GAAP. The Company presents adjusted net income and adjusted net income per diluted share because it believes that they are important supplemental measures of its comparable controllable operating performance and it wants to ensure that its investors fully understand the impact of its stock-based compensation (net of any related tax impact) on net income. In addition, the Company presents adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share because it believes that they are important supplemental measures of its comparable financial results, and not including these measures could potentially distort the analysis of trends in business performance. Management uses these measures to review operating performance on a comparable basis from period to period. However, these non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share should be considered in addition to, and not as a substitute for, net income and net income attributable to common shareholders and other measures of financial performance reported in accordance with U.S. GAAP.

The Credit Facility provides that the Company will be required at all times to satisfy a Minimum Liquidity Test (as defined in the Credit Agreement) of at least $50.0 million. The Company is required to maintain a minimum level of "EBITDA" of $100.0 million, as such term is defined in the Company’s credit agreement (herein referred to as "Adjusted EBITDA" as the credit agreement includes additional adjustments beyond interest, taxes, depreciation and amortization). EBITDA and Adjusted EBITDA should not be construed as substitutes for net income or as better measures of liquidity than cash flow from operating activities determined in accordance with U.S. GAAP. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the credit agreement) of 2.0:1.0, which requirement decreases to 1.75:1.0 on December 31, 2017. The Company was in compliance with all of these requirements at December 31, 2016. The Maximum Total Leverage Ratio was 0.23:1 as at December 31, 2016, where Total Debt (as defined in the credit agreement) is the sum of all obligations evidenced by notes, bonds, debentures or similar instruments and was $27.7 million. Adjusted EBITDA is calculated as follows:

                                                                                 Quarter Ended                             Year Ended                                  Year Ended
                                                                                 December 31, 2016                         December 31, 2016                       (1) December 31, 2015
(In thousands of U.S. Dollars)
Net income                                                                       $                   12,076                $                   39,320                  $                   64,624
Add (subtract):
                Provision for income taxes                                                           6,577                                     16,212                                      20,052
                Interest expense, net of interest income                                             207                                       315                                         693
                Depreciation and amortization, including film asset amortization                     12,176                                    45,953                                      41,787
                EBITDA                                                           $                   31,036                $                   101,800                 $                   127,156
                Write-downs, net of recoveries including asset impairments and                       3,037                                     5,940                                       3,725
                receivable provisions
                (Gain) loss from equity accounted investments                                        (150)                                     2,321                                       2,402
                Stock and other non-cash compensation                                                8,690                                     31,586                                      22,379
                Adjusted EBITDA before non-controlling interests                                     42,613                                    141,647                                     155,662
                Adjusted EBITDA attributable to non-controlling interests(2)                         (5,752)                                   (19,743)                                    (14,885)
                Adjusted EBITDA attributable to common shareholders              $                   36,861                $                   121,904                 $                   140,777
                Adjusted revenues attributable to common shareholders(3)         $                   96,192                $                   339,868                 $                   347,862
                Adjusted EBITDA margin                                                               38.3                %                     35.9                %                       40.5                %
__________________
(1)             Ratio of funded debt calculated using twelve months ended Adjusted EBITDA.
(2)             The Adjusted EBITDA calculation specified for purpose of the minimum Adjusted EBITDA covenant excludes the reduction in EBITDA from the Company’s non-controlling interests.
(3)                                                           Quarter Ended            Year Ended                Year Ended
                                                              December 31, 2016        December 31, 2016         December 31, 2015
    Total revenues                                                         $ 106,913                 $ 377,334                 $ 373,805
    Greater China revenues                                    $     33,735             $     118,532             $     110,591
    Non-controlling interest ownership percentage(4)                31.78%                   31.61%                    23.46%
    Deduction for non-controlling interest share  of revenues                (10,721)                  (37,466)                  (25,943)
    Adjusted revenues attributable to common shareholders                  $ 96,192                  $ 339,868                 $ 347,862
(4) Weighted average ownership percentage for change in non-controlling interest share

IMAX CORPORATION OTHER INFORMATION (in thousands of U.S. dollars)

Adjusted Net Income and Adjusted Diluted Per Share Calculations - Quarter Ended December 31, 2016 vs. 2015: The Company reported net income of $12.1 million or $0.18 per basic and diluted share for the quarter ended December 31, 2016 as compared to net income of $26.2 million or $0.38 per basic share and $0.37 per diluted share for the quarter ended December 31, 2015. Net income for the quarter ended December 31, 2016 includes a $8.0 million charge or $0.13 per diluted share (2015 -- $6.9 million or $0.10 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 $17.7 million or $0.27 per diluted share for the quarter ended December 31, 2016 as compared to adjusted net income of $31.7 million or $0.45 per diluted share for the quarter ended December 31, 2015. The Company reported net income attributable to common shareholders of $8.9 million, or $0.14 per basic and $0.13 per diluted share for the year ended December 31, 2016 (2015 -- $22.5 million, or $0.33 per basic share and $0.32 per 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 and the related tax impact, was $14.5 million or $0.22 per diluted share for the quarter ended December 31, 2016 as compared to adjusted net income attributable to common shareholders of $27.3 million or $0.39 per diluted share for the quarter ended December 31, 2015. 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,
                                                                                                              2016                                   2015
                                                                                                              Net Income         Diluted EPS         Net Income         Diluted EPS
Reported net income                                                                                           $        12,076    $        0.18       $        26,245    $        0.37     (1)
Adjustments:
                            Stock-based compensation                                                                   8,038              0.13                6,949              0.10
                            Tax impact on items listed above                                                           (2,389)            (0.04)              (1,453)            (0.02)
Adjusted net income                                                                                                    17,725             0.27                31,741             0.45     (1)
                            Net income attributable to non-controlling interests                                       (3,131)            (0.05)              (3,752)            (0.05)
                            Stock-based compensation (net of tax of less than $0.1
                            million and $0.2 million, respectively) attributable to non-controlling interests          (112)              -                   (703)              (0.01)
Adjusted net income attributable to common shareholders                                                       $        14,482    $        0.22       $        27,286    $        0.39     (1)
Weighted average diluted shares outstanding                                                                                               66,950                                 70,764
_____________
(1)                         Includes impact of less than $0.1 million of accretion charges associated with redeemable Class C shares of IMAX China.

Adjusted Net Income and Adjusted Diluted Per Share Calculations - Year Ended December 31, 2016 vs. 2015: The Company reported net income of $39.3 million or $0.58 per basic and diluted share for the year ended December 31, 2016 as compared to net income of $64.6 million or $0.92 per basic share and $0.90 per diluted share for the year ended December 31, 2015. Net income for the year ended December 31, 2016 includes a $30.5 million charge or $0.45 per diluted share (2015 -- $21.9 million or $0.31 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 $61.1 million or $0.90 per diluted share for the year ended December 31, 2016 as compared to adjusted net income of $82.4 million or $1.15 per diluted share for the year ended December 31, 2015. The Company reported net income attributable to common shareholders of $28.8 million, or $0.43 per basic and $0.42 per diluted share for the year ended December 31, 2016 (2015 -- $55.8 million, or $0.79 per basic share and $0.78 per 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 and the related tax impact, was $50.0 million or $0.73 per diluted share for the year ended December 31, 2016 as compared to adjusted net income attributable to common shareholders of $73.0 million or $1.02 per diluted share for the year ended December 31, 2015. 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,
                                                                                 2016                                2015
                                                                                 Net Income        Diluted EPS       Net Income       Diluted EPS
Reported net income                                                              $       39,320    $       0.58      $       64,624   $       0.90    (1)
Adjustments:
                            Stock-based compensation                                     30,523            0.45              21,880           0.31
                            Tax impact on items listed above                             (8,783)           (0.13)            (4,056)          (0.06)
Adjusted net income                                                                      61,060            0.90              82,448           1.15    (1)
                            Net income attributable to non-controlling interests         (10,532)          (0.16)            (8,780)          (0.12)
                            Stock-based compensation (net of tax of $0.2 million
                            and $0.2 million, respectively) attributable to
                            non-controlling interests                                    (533)             (0.01)            (703)            (0.01)
Adjusted net income attributable to common shareholders                          $       49,995    $       0.73      $       72,965   $       1.02    (1)
Weighted average diluted shares outstanding                                                                68,263                             71,058
_____________
(1)                         Includes impact of $0.8 million of accretion charges associated with redeemable Class C shares of IMAX China.

Free Cash Flow: Free cash flow is defined as cash provided by operating activities minus cash used in investing activities (from the consolidated statements of cash flows). Cash provided by operating activities consist of net income, plus depreciation and amortization, plus the change in deferred income taxes, plus other non-cash items, plus changes in working capital, less investment in film assets, plus other changes in operating assets and liabilities. Cash used in investing activities includes capital expenditures, acquisitions and other cash used in investing activities. Management views free cash flow, a non-GAAP measure, as a measure of the Company’s after-tax cash flow available to reduce debt, add to cash balances, and fund other financing activities. A reconciliation of cash provided by operating activities to free cash flow is presented in the table below:

                                          For the            For the
                                          3 months ended     12 months ended
                                          December 31, 2016  December 31, 2016
(In thousands of U.S. Dollars)
Net cash provided by operating activities $        32,568    $        77,872
Net cash used in investing activities              (26,398)           (64,886)
                     Free cash flow       $        6,170     $        12,986

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/imax-corporation-reports-fourth-quarter-and-full-year-2016-results-300412853.html

SOURCE IMAX Corporation

https://rt.prnewswire.com/rt.gif?NewsItemId=NY20487&Transmission_Id=201702231605PR_NEWS_USPR_____NY20487&DateId=20170223



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