EX-99 2 imax-ex99_1.htm EX-99.1 EX-99

 

Exhibit 99.1

img199560746_0.jpg 

 

 

IMAX CORPORATION REPORTS Q4 AND FULL-YEAR 2022 RESULTS

 

•
IMAX expects return to pre-pandemic gross box office level of $1.1 billion in 2023 as year begins with strong reopening of China and record-breaking performance of “Avatar: The Way of Water” of approximately $250 million in global box office

 

•
IMAX drives record-breaking Chinese New Year box office of $61.3 million in 2023, led by “The Wandering Earth 2” — now the highest grossing Chinese film of all time in IMAX

 

•
IMAX global entertainment technology platform drives full-year 2022 growth of more than 15% across Revenue, Gross Margin and Adjusted EBITDA(1)

 

•
IMAX gross global box office increased 33% year over year to $850 million leading to record share of both global (3.3%) and domestic (4.8%) gross box office in 2022

 

•
IMAX completes 92 technology system installations for full year 2022 — including 52 in Q4 exceeding mid-range of full year guidance of 80 to 100

 

•
IMAX repurchased 5.4 million shares for full-year 2022 or 9.2% of total shares outstanding

 

NEW YORK, NY — February 22, 2023 — IMAX Corporation (NYSE: IMAX) today reported solid financial results for the fourth quarter of 2022 demonstrating the value of its unique global entertainment technology platform and content portfolio.

 

“IMAX fully expects to resume pre-pandemic levels of performance in 2023, as we surge into the year with strong dual tailwinds — the record-breaking performance of ‘Avatar: The Way of Water’ and the rapid reopening of China,” said Richard L. Gelfond, Chief Executive Officer of IMAX. “Already in the new year, we’ve delivered our highest grossing first-run release ever with the ‘Avatar’ sequel, our best Chinese New Year box office ever, and multi-system agreements — demonstrating our prospects for strong box office and global network growth in 2023.”

 

“The first ‘Avatar’ took IMAX to a new level, and we are seeing early signs that its sequel will help drive growth across our business. ‘Avatar: The Way of Water’ is our highest grossing release ever in nearly 50 international markets, many of which are underrepresented with IMAX systems and among those we’ve identified for strategic expansion. Coupled with a strong, consistent Hollywood slate and our expanding local language content portfolio in priority markets, we see a clear opportunity to further expand and diversify our global footprint this year.”

 

“The rapid reopening of China has been stunning and a powerful reminder of what we can deliver in the market given the strength of our brand, experience, and content portfolio of Hollywood and local blockbusters. With Hollywood tentpoles like ‘Avatar: The Way of Water’ and ‘Ant-Man and the Wasp: Quantumania’ gaining day-and-date Chinese releases, and Chinese-made blockbusters like ‘The Wandering Earth 2’ and ‘Full River Red’ drawing big audiences, China is fast reasserting itself as one of the world’s biggest moviegoing markets.”

 

 

 

 

 

 

1

 

 

Fourth Quarter and December Full-Year Financial Highlights

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

In millions of U.S. Dollars, except per share data

 

2022

 

 

2021

 

 

YoY %
Change

 

2022

 

 

2021

 

 

YoY %
Change

Total Revenue

 

$

98.0

 

 

$

108.6

 

 

(10%)

 

$

300.8

 

 

$

254.9

 

 

18%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin

 

$

48.8

 

 

$

64.0

 

 

(24%)

 

$

156.4

 

 

$

134.4

 

 

16%

Gross Margin (%)

 

 

50

%

 

 

59

%

 

 

 

 

52

%

 

 

53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)(2)(3)

 

$

2.6

 

 

$

10.1

 

 

(74%)

 

$

(22.8

)

 

$

(22.3

)

 

N/A

Net Income (Loss) per share(2)(3)

 

$

0.05

 

 

$

0.17

 

 

(71%)

 

$

(0.40

)

 

$

(0.38

)

 

N/A

Adjusted Net Income (Loss)(1)(2)(3)

 

$

10.6

 

 

$

18.4

 

 

(43%)

 

$

3.2

 

 

$

(8.4

)

 

N/A

Adjusted Net Income (Loss) per share(1)(2)(3)

 

$

0.19

 

 

$

0.31

 

 

(39%)

 

$

0.06

 

 

$

(0.14

)

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA per Credit Facility(1)(4)

$

27.8

 

 

$

44.0

 

 

(37%)

 

$

84.5

 

 

$

68.6

 

 

23%

Adjusted EBITDA Margin (%)(1)(2)

 

 

30.6

%

 

 

45.0

%

 

(32%)

 

 

30.2

%

 

 

31.0

%

 

(3%)

Weighted average shares outstanding (in millions):

Basic

 

 

54.8

 

 

 

58.9

 

 

(7%)

 

 

56.7

 

 

 

59.1

 

 

(4%)

Diluted

 

 

55.7

 

 

 

59.8

 

 

(7%)

 

 

57.4

 

 

 

59.1

 

 

(3%)

_______________

(1)
Non-GAAP Financial Measure. See the discussion at the end of this earnings release for a description of the non-GAAP financial measures used herein, as well as reconciliations to the most comparable GAAP amounts.
(2)
Attributable to common shareholders.
(3)
Includes a tax valuation allowance resulting in a negative impact of $2.1 million or $0.04 per share for the three months ended December 31, 2022 (2021 — $0.5 million or $0.01 per share) and $16.5 million or $0.29 per share for the year ended December 31, 2022 (2021 — $14.7 million or $0.25 per share).
(4)
Adjusted EBITDA per Credit facility attributable to common shareholders.

 

 

2

 

Fourth Quarter and December Year-to-Date Segment Results(1)

 

 

IMAX Technology Network

 

 

IMAX Technology Sales and Maintenance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

Gross Margin

 

 

Gross
Margin %

 

 

Revenue

 

 

Gross Margin

 

 

Gross
Margin %

 

4Q22

 

$

45.9

 

 

$

27.0

 

 

 

59

%

 

$

48.0

 

 

 

$

23.2

 

 

 

48

%

4Q21

 

51.3

 

 

 

36.8

 

 

 

72

%

 

53.4

 

 

 

 

26.2

 

 

 

49

%

% change

 

 

(11

%)

 

 

(27

%)

 

 

 

 

 

(10

%)

 

 

 

(11

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD 4Q22

 

$

156.6

 

 

$

95.4

 

 

 

61

%

 

$

130.6

 

 

 

$

63.6

 

 

 

49

%

YTD 4Q21

 

116.8

 

 

 

66.5

 

 

 

57

%

 

 

126.8

 

 

 

 

64.3

 

 

 

51

%

% change

 

 

34

%

 

 

43

%

 

 

 

 

 

3

%

 

 

 

(1

%)

 

 

 

_______________

(1)
Please refer to the Company’s Form 10-K for the year ended December 31, 2022 for additional segment information.

 

IMAX Technology Network

•
IMAX Technology Network revenues decreased 11% to $45.9 million in the fourth quarter of 2022. Box office from IMAX locations in Q4 of $252 million was down 9.3% from Q4 of 2021 driven by China. Avatar delivered $140 million in box office in the last two weeks of December with 11% market share on less than 1% of screens and comprising more than half of Q4’s total IMAX box office.
•
Gross margin for the IMAX Technology Network was $27.0 million in the fourth quarter of 2022, compared to $36.8 million in the prior year period driven by lower revenues and higher marketing investments.

IMAX Technology Sales and Maintenance

•
IMAX Technology Sales and Maintenance revenues and gross margin decreased 10% to $48.0 million and 11% to $23.2 million, respectively, in the fourth quarter of 2022 which reflects a one-time release of $6.3 million in deferred maintenance revenue that benefitted Q4 of 2021.
•
During the fourth quarter the Company installed 52 systems compared to 30 systems in the fourth quarter of 2021, of those, 24 systems were under sales and sales-type lease and hybrid JRSA arrangements compared to 26 systems in the prior year.

 

Operating Cash Flow and Liquidity

Net cash provided by operating activities was $17.3 million for full-year 2022, compared to $6.1 million for full-year 2021.

As of December 31, 2022, the Company’s available liquidity was $415.5 million including its balance of cash and cash equivalents of $97.4 million, $275.0 million in available borrowing capacity under the Credit Facility and $43.1 million in available borrowing capacity under IMAX China’s revolving facilities. Total debt, excluding deferred financing costs was $270.7 million as of December 31, 2022.

 

 

3

 

Share Count and Capital Return

The weighted average basic and diluted shares outstanding in the fourth quarter of 2022 were 54.8 million and 55.7 million, respectively, compared to 58.9 million and 59.8 million in the fourth quarter of 2021.

During the fourth quarter of 2022, the Company repurchased 1.9 million shares at an average price of $14.01 for a total of $26.6 million. For the full year, the Company repurchased 5.4 million shares at an average price of $15.19 for a total of $82.0 million and 9.2% of the beginning of year share count.

In 2021, the Company issued $230.0 million of 0.500% Convertible Senior Notes due 2026 ("Convertible Notes"). In connection with the pricing of the Convertible Notes, the Company entered into privately negotiated capped call transactions with an initial cap price of $37.2750 per share of the Company’s common shares.

Additionally, for the full year, IMAX China repurchased 3.0 million shares at an average price of $1.02 for a total cost of $3.0 million.

As of December 31, 2022, a total of $193.4 million remains available under the Company’s outstanding share repurchase authorization.

 

Supplemental Materials

For more information about the Company’s results, please refer to the IMAX Investor Relations website located at investors.imax.com.

 

Investor Relations Website and Social Media

On a weekly basis, the Company posts quarter-to-date box office results on the IMAX Investor Relations website located at investors.imax.com. 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.

 

The Company may post additional information on the Company’s corporate and Investor Relations website which may be material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company’s website in addition to the Company’s press releases, SEC filings and public conference calls and webcasts, for additional information about the Company.

 

Conference Call

The Company will host a conference call today at 4:30 PM ET to discuss its fourth quarter 2022 financial results. This call is being webcast and can be accessed at investors.imax.com. To access the call via telephone, interested parties please pre-register here: https://register.vevent.com/register/BI2197088c38524f54b874f4773ab6fb7a. and you will be provided with a dial-in number and unique pin. To avoid delays, we encourage participants to dial into the conference call ten minutes ahead of the scheduled start time. A replay of the call will be available via webcast at investors.imax.com.

 

 

4

 

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 systems to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe.

 

IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of December 31, 2022, there were 1,716 IMAX systems (1,633 commercial multiplexes, 12 commercial destinations, 71 institutional) operating in 87 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchange under the stock code “1970.”

 

IMAX®, IMAX® 3D, Experience It In IMAX®, The IMAX Experience®, DMR®, Filmed For IMAXTM, IMAX LiveTM, IMAX Enhanced®, and SSIMWAVE® are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. More information about the Company can be found at www.imax.com. You may also connect with IMAX on Instagram (https://www.instagram.com/imax), Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).

 

For additional information please contact:

 

Investors:

IMAX Corporation, New York

Jennifer Horsley

212-821-0154

jhorsley@IMAX.com

Media:

IMAX Corporation, New York

Mark Jafar

212-821-0102

mjafar@imax.com

 

 

 

5

 

Forward-Looking Statements

 

This earnings 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. These forward-looking statements include, but are not limited to, references to business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, future capital expenditures (including the amount and nature thereof), industry prospects and consumer behavior, 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 related to the adverse impact of the COVID-19 pandemic; 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, as well as geopolitical conflicts, such as the conflict between Russia and Ukraine; risks related to the Company’s growth and operations in China; the performance of IMAX DMR® films and other films released to the IMAX network; the signing of IMAX System agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which the Company operates, including competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to consolidation among commercial exhibitors and studios; risks related to brand extensions and new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company’s inability to protect the Company’s intellectual property; risks related to climate change; risks related to weather conditions and natural disasters that may disrupt or harm the Company’s business; risks related to the Company’s indebtedness and compliance with its debt agreements; general economic, market or business conditions; risks related to political, economic and social instability, including with respect to the Russia-Ukraine conflict; the failure to convert IMAX System backlog into revenue; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in our periodic filings with the SEC; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX’s most recent Annual Report on Form 10-K. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

6

 

Primary Reporting Groups

The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements ("JRSA"); (iii) IMAX Systems; (iv) IMAX Maintenance; (v) Other Theater Business; (vi) Film Distribution; and (vii) Film Post-Production. The Company's activities that do not meet the criteria to be considered a reportable segment are disclosed within All Other. The Company organizes its reportable segments into the following three categories, identified by the nature of the product sold or service provided:

 

(i)
IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from JRSA segment;

 

(ii)
IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment; and

 

(iii)
Film Distribution and Post-Production, which includes activities related to the distribution of large-format documentary films, primarily to institutional theaters, and the distribution of exclusive experiences ranging from live performances to interactive events with leading artists and creators (through the Film Distribution segment) and the provision of film post-production and quality control services.

 

The Company presents its segment information at a disaggregated level to provide more relevant information to the users of its financial statements.

 

Transactions between the IMAX DMR segment and the Film Post-Production segment are valued at exchange value. Inter-segment profits are eliminated upon consolidation, as well as for the disclosures below.

 

In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced®, an initiative to bring The IMAX Experience® into the home, out of the New Business Initiatives segment and into All Other for segment reporting purposes. IMAX Enhanced was the only component of the New Business Initiatives segment. Prior period comparatives have been reclassified to conform with the current period presentation.

 

In the first quarter of 2023, the Company has updated its internal reporting, including the information provided to the CODM to assess segment performance and allocate resources, and, as a result, will update its reportable segments in its quarterly report on Form 10-Q for the period ending March 31, 2023. Following these changes, the Company will have two reportable segments: (i) Technology Products and Services, which will principally include the sale, lease, and maintenance of IMAX Systems, previously included within the JRSA, IMAX Systems, IMAX Maintenance, Other Theater Business segments, and (ii) Content Solutions, which will principally include content enhancement and distribution services, previously included within the IMAX DMR, Film Distribution and Film Post-Production segments. The Company’s activities that do not meet the criteria to be considered a reportable segment will be reported within All Other.

 

 

7

 

IMAX Network and Backlog

 

 

 

Three Months
Ended December 31,

 

 

Year
Ended December 31,

 

System Signings:

 

2022

 

 

2021

 

 

2022

 

 

2021

 

New IMAX Systems

 

 

 

 

 

 

 

 

 

 

 

 

Sales and sales-type lease arrangements

 

 

9

 

 

 

7

 

 

 

18

 

 

 

20

 

Hybrid JRSA

 

 

—

 

 

 

—

 

 

 

3

 

 

 

—

 

Traditional JRSA

 

 

—

 

 

 

1

 

 

 

9

 

 

 

9

 

      Total new IMAX Systems

 

 

9

 

 

 

8

 

 

 

30

 

 

 

29

 

Upgrades of IMAX systems

 

 

3

 

 

 

3

 

 

 

17

 

 

 

7

 

   Total IMAX System signings

 

 

12

 

 

 

11

 

 

 

47

 

 

 

36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months
Ended December 31,

 

 

Year
Ended December 31,

 

System Installations:

 

2022

 

 

2021

 

 

2022

 

 

2021

 

New IMAX Systems(1)

 

 

 

 

 

 

 

 

 

 

 

 

Sales and sales-type lease arrangements

 

 

14

 

 

 

18

 

 

 

28

 

 

 

35

 

Hybrid JRSA

 

 

1

 

 

 

3

 

 

 

6

 

 

 

9

 

Traditional JRSA

 

 

6

 

 

 

3

 

 

 

22

 

 

 

18

 

      Total new IMAX Systems

 

 

21

 

 

 

24

 

 

 

56

 

 

 

62

 

Upgrades of IMAX systems

 

 

31

 

 

 

6

 

 

 

36

 

 

 

13

 

   Total IMAX System installations

 

 

52

 

 

 

30

 

 

 

92

 

 

 

75

 

 

 

 

Year
Ended December 31,

 

 

System Backlog:

 

2022

 

 

 

2021

 

 

Sales and sales-type lease arrangements

 

 

162

 

 

 

 

173

 

 

Hybrid JRSA

 

 

120

 

 

 

 

132

 

 

Traditional JRSA

 

 

168

 

(2)

 

 

184

 

(2)

Total System backlog

 

 

450

 

(3)

 

 

489

 

(4)

 

 

 

 

 

 

 

 

 

 

 

Year
Ended December 31,

 

 

System Network:

 

2022

 

 

 

2021

 

 

Commercial Multiplex Systems

 

 

 

 

 

 

 

 

Sales and sales-type lease arrangements

 

 

702

 

 

 

 

690

 

 

Hybrid JRSA

 

 

151

 

 

 

 

146

 

 

Traditional JRSA

 

 

780

 

 

 

 

763

 

 

Total Commercial Multiplex Systems

 

 

1,633

 

 

 

 

1,599

 

 

Commercial Destination Systems

 

 

12

 

 

 

 

12

 

 

Institutional Systems

 

 

71

 

 

 

 

72

 

 

Total System network(5)

 

 

1,716

 

 

 

 

1,683

 

 

_______________

(1)
For the three months ended December 31, 2022, includes four IMAX Systems that were relocated from their original locations (2021 — nine). For the year ended December 31, 2022, includes twelve IMAX Systems that were relocated from their original location (2021 ― nine). When a system under a sales or sales-type lease arrangement is relocated, the amount of revenue earned by the Company may vary from transaction-to-transaction and is usually less than the amount earned for a new sale. In certain situations when a system is relocated, the original location is upgraded to an IMAX Laser System.
(2)
Includes 38 IMAX Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2021 — 44 ).

8

 

(3)
Includes 200 new IMAX with Laser projection system configurations and 89 upgrades of existing locations to IMAX Laser Systems configurations.
(4)
Includes 158 new IMAX with Laser projection system configurations and 92 upgrades of existing locations to IMAX Laser Systems configurations.
(5)
Period-to-period changes are reported net of the effect of permanently closed locations.

 

9

 

 

IMAX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

Year Ended

 

 

 

 

(Unaudited)

 

 

December 31,

 

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Technology sales

 

$

33,888

 

 

$

31,645

 

 

$

69,158

 

 

$

66,153

 

Image enhancement and maintenance services

 

 

44,094

 

 

 

54,234

 

 

 

161,379

 

 

 

131,148

 

Technology rentals

 

 

18,060

 

 

 

20,082

 

 

 

61,786

 

 

 

46,790

 

Finance income

 

 

2,004

 

 

 

2,611

 

 

 

8,482

 

 

 

10,792

 

 

 

 

 

98,046

 

 

 

108,572

 

 

 

300,805

 

 

 

254,883

 

Costs and expenses applicable to revenues

 

 

 

 

 

 

 

 

 

 

 

 

Technology sales

 

 

17,346

 

 

 

19,260

 

 

 

37,610

 

 

 

37,039

 

Image enhancement and maintenance services

 

 

25,575

 

 

 

19,480

 

 

 

81,834

 

 

 

58,062

 

Technology rentals

 

 

6,278

 

 

 

5,797

 

 

 

25,006

 

 

 

25,376

 

 

 

 

 

49,199

 

 

 

44,537

 

 

 

144,450

 

 

 

120,477

 

Gross margin

 

 

48,847

 

 

 

64,035

 

 

 

156,355

 

 

 

134,406

 

Selling, general and administrative expenses

 

 

37,862

 

 

 

34,929

 

 

 

138,043

 

 

 

117,322

 

Research and development

 

 

1,633

 

 

 

1,248

 

 

 

5,300

 

 

 

6,944

 

Amortization of intangible assets

 

 

1,417

 

 

 

1,291

 

 

 

4,829

 

 

 

4,877

 

Credit loss expense (reversal), net

 

 

398

 

 

 

933

 

 

 

8,547

 

 

 

(3,951

)

Asset impairments

 

 

—

 

 

 

—

 

 

 

4,470

 

 

 

—

 

Legal judgment and arbitration awards

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,770

)

Income (loss) from operations

 

 

7,537

 

 

 

25,634

 

 

 

(4,834

)

 

 

10,984

 

Realized and unrealized investment (losses) gains

 

 

(29

)

 

 

29

 

 

 

70

 

 

 

5,340

 

Retirement benefits non-service expense

 

 

(139

)

 

 

(116

)

 

 

(556

)

 

 

(463

)

Interest income

 

 

252

 

 

 

538

 

 

 

1,428

 

 

 

2,218

 

Interest expense

 

 

(1,523

)

 

 

(1,558

)

 

 

(5,877

)

 

 

(7,092

)

Income (loss) before taxes

 

 

6,098

 

 

 

24,527

 

 

 

(9,769

)

 

 

10,987

 

Income tax expense

 

 

(2,017

)

 

 

(11,148

)

 

 

(10,108

)

 

 

(20,564

)

Net income (loss)

 

 

4,081

 

 

 

13,379

 

 

 

(19,877

)

 

 

(9,577

)

Net income attributable to non-controlling interests

 

 

(1,468

)

 

 

(3,279

)

 

 

(2,923

)

 

 

(12,752

)

Net income (loss) attributable to common shareholders

 

$

2,613

 

 

$

10,100

 

 

$

(22,800

)

 

$

(22,329

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common shareholders - basic and diluted:

 

Net income (loss) per share — basic and diluted

 

$

0.05

 

 

$

0.17

 

 

$

(0.40

)

 

$

(0.38

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding (in thousands):

 

 

Basic

 

 

54,816

 

 

 

58,886

 

 

 

56,674

 

 

 

59,126

 

 

Diluted

 

 

55,659

 

 

 

59,805

 

 

 

56,674

 

 

 

59,126

 

Additional Disclosure:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

13,998

 

 

$

15,512

 

 

$

56,661

 

 

$

56,082

 

Amortization of deferred financing costs

 

$

712

 

 

$

764

 

 

$

3,177

 

 

$

2,513

 

 

 

10

 

IMAX CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands of dollars, except share amounts)

 

 

 

As of December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

97,401

 

 

$

189,711

 

Accounts receivable, net of allowance for credit losses

 

 

136,142

 

 

 

110,050

 

Financing receivables, net of allowance for credit losses

 

 

129,384

 

 

 

141,049

 

Variable consideration receivable, net of allowance for credit losses

 

 

44,024

 

 

 

44,218

 

Inventories

 

 

31,534

 

 

 

26,924

 

Prepaid expenses

 

 

12,343

 

 

 

11,802

 

Film assets, net of accumulated amortization

 

 

5,277

 

 

 

4,241

 

Property, plant and equipment, net of accumulated depreciation

 

 

252,896

 

 

 

260,353

 

Investment in equity securities

 

 

1,035

 

 

 

1,087

 

Other assets

 

 

15,665

 

 

 

17,799

 

Deferred income tax assets, net of valuation allowance

 

 

9,900

 

 

 

13,906

 

Goodwill

 

 

52,815

 

 

 

39,027

 

Other intangible assets, net of accumulated amortization

 

 

32,738

 

 

 

23,080

 

Total assets

 

$

821,154

 

 

$

883,247

 

Liabilities

 

 

 

 

 

 

Accounts payable

 

$

25,237

 

 

$

15,943

 

Accrued and other liabilities

 

 

117,286

 

 

 

111,896

 

Deferred revenue

 

 

70,940

 

 

 

81,281

 

Revolving credit facility borrowings, net of unamortized debt issuance costs

 

 

36,111

 

 

 

2,472

 

Convertible notes and other borrowings, net of unamortized discounts and debt issuance costs

 

226,912

 

 

 

223,641

 

Deferred income tax liabilities

 

 

14,900

 

 

 

17,642

 

Total liabilities

 

 

491,386

 

 

 

452,875

 

Commitments, contingencies and guarantees

 

 

 

 

 

 

Non-controlling interests

 

 

722

 

 

 

758

 

Shareholders' equity

 

 

 

 

 

 

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

 

 

 

 

 

 

54,148,614 issued and outstanding (December 31, 2021 — 58,653,642 issued and outstanding)

 

 

376,715

 

 

 

409,979

 

Other equity

 

 

185,678

 

 

 

174,620

 

Statutory surplus reserve

 

 

3,932

 

 

 

3,932

 

Accumulated deficit

 

 

(293,124

)

 

 

(234,975

)

Accumulated other comprehensive (loss) income

 

 

(9,846

)

 

 

2,527

 

Total shareholders' equity attributable to common shareholders

 

 

263,355

 

 

 

356,083

 

Non-controlling interests

 

 

65,691

 

 

 

73,531

 

Total shareholders' equity

 

 

329,046

 

 

 

429,614

 

Total liabilities and shareholders' equity

 

$

821,154

 

 

$

883,247

 

 

 

11

 

IMAX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of dollars)

 

 

 

 

Years Ended December 31,

 

 

 

2022

 

 

2021

 

Operating Activities

 

 

 

 

 

 

 

 

Net loss

 

$

 

(19,877

)

 

$

 

(9,577

)

Adjustments to reconcile net loss to cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

56,661

 

 

 

 

56,082

 

Amortization of deferred financing costs

 

 

 

3,177

 

 

 

 

2,513

 

Credit loss expense (reversal), net

 

 

 

8,547

 

 

 

 

(3,951

)

Write-downs, including asset impairments

 

 

 

7,176

 

 

 

 

1,764

 

Deferred income tax (benefit) expense

 

 

 

(2,073

)

 

 

 

2,996

 

Share-based and other non-cash compensation

 

 

 

27,573

 

 

 

 

26,079

 

Unrealized foreign currency exchange loss

 

 

 

1,108

 

 

 

 

256

 

Realized and unrealized investment gains

 

 

 

(70

)

 

 

 

(5,340

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

 

(29,003

)

 

 

 

(52,453

)

Inventories

 

 

 

(5,529

)

 

 

 

11,451

 

Film assets

 

 

 

(19,598

)

 

 

 

(14,810

)

Deferred revenue

 

 

 

(11,572

)

 

 

 

(6,591

)

Changes in other operating assets and liabilities

 

 

 

801

 

 

 

 

(2,354

)

Net cash provided by operating activities

 

 

 

17,321

 

 

 

 

6,065

 

Investing Activities

 

 

 

 

 

 

 

 

Acquisition of SSIMWAVE Inc., net of cash and cash equivalents acquired

 

 

 

(15,939

)

 

 

 

—

 

Purchase of property, plant and equipment

 

 

 

(8,424

)

 

 

 

(3,590

)

Investment in equipment for joint revenue sharing arrangements

 

 

 

(19,803

)

 

 

 

(10,094

)

Interest in film classified as a financial instrument

 

 

 

(4,731

)

 

 

 

—

 

Acquisition of other intangible assets

 

 

 

(4,394

)

 

 

 

(4,092

)

Proceeds from sale of equity securities

 

 

 

—

 

 

 

 

17,769

 

Net cash used in investing activities

 

 

 

(53,291

)

 

 

 

(7

)

Financing Activities

 

 

 

 

 

 

 

 

Proceeds from issuance of convertible notes, net

 

 

 

—

 

 

 

 

223,675

 

Debt issuance costs related to convertible notes

 

 

 

—

 

 

 

 

(1,161

)

Purchase of capped calls related to convertible notes

 

 

 

—

 

 

 

 

(19,067

)

Revolving credit facility borrowings

 

 

 

37,871

 

 

 

 

3,600

 

Repayment of revolving credit facility borrowings

 

 

 

(3,600

)

 

 

 

(307,609

)

Credit facility amendment fees paid

 

 

 

(2,279

)

 

 

 

(527

)

Repurchase of common shares, IMAX Corporation

 

 

 

(80,124

)

 

 

 

(13,905

)

Repurchase of common shares, IMAX China

 

 

 

(3,043

)

 

 

 

(10,060

)

Taxes withheld and paid on employee stock awards vested

 

 

 

(3,687

)

 

 

 

(3,660

)

Common shares issued - stock options exercised

 

 

 

—

 

 

 

 

883

 

Principal payment under finance lease obligations

 

 

 

(948

)

 

 

 

—

 

Dividends paid to non-controlling interests

 

 

 

(2,704

)

 

 

 

(4,889

)

Net cash used in financing activities

 

 

 

(58,514

)

 

 

 

(132,720

)

Effects of exchange rate changes on cash

 

 

 

2,174

 

 

 

 

(1,006

)

Decrease in cash and cash equivalents during year

 

 

 

(92,310

)

 

 

 

(127,668

)

Cash and cash equivalents, beginning of year

 

 

 

189,711

 

 

 

 

317,379

 

Cash and cash equivalents, end of year

 

$

 

97,401

 

 

$

 

189,711

 

 

 

 

 

 

 

 

12

 

Segment Revenue and Gross Margin (Margin Loss)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

IMAX Technology Network

 

 

 

 

 

 

 

 

 

 

 

 

IMAX DMR

 

$

27,803

 

 

$

31,221

 

 

$

94,867

 

 

$

70,659

 

JRSA, contingent rent

 

 

18,060

 

 

 

20,076

 

 

 

61,768

 

 

 

46,184

 

 

 

 

45,863

 

 

 

51,297

 

 

 

156,635

 

 

 

116,843

 

IMAX Technology Sales and Maintenance

 

 

 

 

 

 

 

 

 

 

 

 

IMAX Systems

 

 

30,127

 

 

 

30,543

 

 

 

62,933

 

 

 

65,660

 

JRSA, fixed fees

 

 

2,318

 

 

 

1,630

 

 

 

4,804

 

 

 

5,406

 

IMAX Maintenance

 

 

13,044

 

 

 

20,143

 

 

 

56,608

 

 

 

53,339

 

Other Theater Business(1)

 

 

2,558

 

 

 

1,080

 

 

 

6,255

 

 

 

2,363

 

 

 

 

48,047

 

 

 

53,396

 

 

 

130,600

 

 

 

126,768

 

Film Distribution and Post-Production

 

 

1,517

 

 

 

1,723

 

 

 

6,935

 

 

 

5,724

 

Sub-total for reportable segments

 

 

95,427

 

 

 

106,416

 

 

 

294,170

 

 

 

249,335

 

All Other(2)

 

 

2,619

 

 

 

2,156

 

 

 

6,635

 

 

 

5,548

 

Total

 

$

98,046

 

 

$

108,572

 

 

$

300,805

 

 

$

254,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin (Margin Loss)

 

 

 

 

 

 

 

 

 

 

 

 

IMAX Technology Network

 

 

 

 

 

 

 

 

 

 

 

 

IMAX DMR

 

$

14,999

 

 

$

22,377

 

 

$

57,964

 

 

$

44,782

 

JRSA, contingent rent

 

 

12,005

 

 

 

14,462

 

 

 

37,394

 

 

 

21,761

 

 

 

 

27,004

 

 

 

36,839

 

 

 

95,358

 

 

 

66,543

 

IMAX Technology Sales and Maintenance

 

 

 

 

 

 

 

 

 

 

 

 

IMAX Systems

 

 

16,697

 

 

 

13,336

 

 

 

35,129

 

 

 

34,982

 

JRSA, fixed fees

 

 

510

 

 

 

560

 

 

 

589

 

 

 

1,343

 

IMAX Maintenance

 

 

5,466

 

 

 

12,212

 

 

 

27,109

 

 

 

27,572

 

Other Theater Business

 

 

493

 

 

 

129

 

 

 

807

 

 

 

398

 

 

 

 

23,166

 

 

 

26,237

 

 

 

63,634

 

 

 

64,295

 

Film Distribution and Post-Production

 

 

(2,658

)

 

 

(149

)

 

 

(6,128

)

 

 

848

 

Sub-total for reportable segments

 

 

47,512

 

 

 

62,927

 

 

 

152,864

 

 

 

131,686

 

All Other(2)

 

 

1,335

 

 

 

1,109

 

 

 

3,491

 

 

 

2,721

 

Total

 

$

48,847

 

 

$

64,036

 

 

$

156,355

 

 

$

134,407

 

______________

(1)
The revenue from this segment principally includes after-market sales of IMAX system parts and 3D glasses.
(2)
All Other includes the results from IMAX Enhanced, SSIMWAVE, and other ancillary activities. In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced out of the New Business Initiatives segment into All Other for segment reporting purposes. Prior period comparatives have been revised to conform with the current period presentation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

IMAX CORPORATION

NON-GAAP FINANCIAL MEASURES

(in thousands of U.S. dollars)

In this release, the Company presents adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin as supplemental measures of the Company’s performance, which are not recognized under U.S. GAAP. Adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) COVID-19 government relief benefits, net, (iii) legal judgment and arbitration awards; (iv) realized and unrealized investment gains or losses, (v) acquisition-related expenses, as well as the related tax impact of these adjustments, and (vi) income taxes resulting from management’s decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries.

The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company’s financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net income (loss) attributable to common shareholders. Although share-based compensation is an important aspect of the Company’s employee and executive compensation packages, it is a non-cash expense and is excluded from certain internal business performance measures.

A reconciliation from net income (loss) attributable to common shareholders and the associated per share amounts to adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per diluted share is presented in the table below. Net income (loss) attributable to common shareholders and the associated per share amounts are the most directly comparable GAAP measures because they reflect the earnings relevant to the Company’s shareholders, rather than the earnings attributable to non-controlling interests.

In addition to the non-GAAP financial measures discussed above, management also uses “EBITDA,” as such term is defined in the Company’s Credit Agreement, and which is referred to herein as “Adjusted EBITDA per Credit Facility.” As allowed by the Credit Agreement, Adjusted EBITDA per Credit Facility includes adjustments in addition to the exclusion of interest, taxes, depreciation and amortization. Adjusted EBITDA per Credit Facility measure is presented to allow a more comprehensive analysis of the Company’s operating performance and to provide additional information with respect to the Company’s compliance against its Credit Agreement requirements when applicable. In addition, the Company believes that Adjusted EBITDA per Credit Facility presents relevant and useful information widely used by analysts, investors and other interested parties in the Company’s industry to evaluate, assess and benchmark the Company’s results.

EBITDA is defined as net income or loss excluding (i) income tax expense or benefit; (ii) interest expense, net of interest income; (iii) depreciation and amortization, including film asset amortization; and (iv) amortization of deferred financing costs. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) realized and unrealized investment gains or losses; (iii) acquisition-related expenses; (iv) write-downs, net of recoveries, including asset impairments and credit loss expense; and (v) legal judgment and arbitration awards.

A reconciliation of net income (loss) attributable to common shareholders, which is the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA per Credit Facility is presented in the table below. Net income (loss) attributable to common shareholders is the most directly comparable GAAP measure because it reflects the earnings relevant to the Company’s shareholders, rather than the earnings attributable to non-controlling interests.

In this release, the Company also presents free cash flow, which is not recognized under U.S. GAAP, as a supplemental measure of the Company’s liquidity. Prior to the third quarter of 2022, the Company defined free cash flow as net cash provided by or used in operating activities minus cash used in investing activities (from the Consolidated Statements of Cash Flows). In the third quarter of 2022, the Company updated its definition of free cash flow to deduct only normal recurring capital expenditures, including the Company’s investment in joint revenue sharing arrangements, the purchase of property, plant and equipment and the acquisition of other intangible assets (from the Consolidated Statements of Cash Flows), from net cash provided by or used in operating activities. Management believes that free cash flow is a supplemental measure of the cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented below.

These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts.

 

14

 

Adjusted EBITDA per Credit Facility

 

 

For the Three Months Ended December 31, 2022 (1)

 

 

For the Three Months Ended December 31, 2021 (1)

 

 

 

Attributable to
Non-controlling

 

 

Less:

 

 

 

 

 

Attributable to
Non-controlling

 

 

Less:

 

 

 

 

 

 

Interests and

 

 

Attributable to

 

 

Attributable to

 

 

Interests and

 

 

Attributable to

 

 

Attributable to

 

 

 

Common

 

 

Non-controlling

 

 

Common

 

 

Common

 

 

Non-controlling

 

 

Common

 

 

 

Shareholders

 

 

Interests

 

 

Shareholders

 

 

Shareholders

 

 

Interests

 

 

Shareholders

 

(In thousands of U.S. Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net income

 

$

 

4,081

 

 

$

 

1,468

 

 

$

 

2,613

 

 

$

 

13,379

 

 

$

 

3,279

 

 

$

 

10,100

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

2,016

 

 

 

 

786

 

 

 

 

1,230

 

 

 

 

11,148

 

 

 

 

1,557

 

 

 

 

9,591

 

Interest expense, net of interest income

 

 

 

559

 

 

 

 

(15

)

 

 

 

574

 

 

 

 

257

 

 

 

 

(91

)

 

 

 

348

 

Depreciation and amortization, including film asset amortization

 

 

 

13,998

 

 

 

 

1,109

 

 

 

 

12,889

 

 

 

 

15,512

 

 

 

 

1,345

 

 

 

 

14,167

 

Amortization of deferred financing costs(2)

 

 

 

712

 

 

 

 

—

 

 

 

 

712

 

 

 

 

764

 

 

 

 

—

 

 

 

 

764

 

EBITDA

 

$

 

21,366

 

 

$

 

3,348

 

 

$

 

18,018

 

 

$

 

41,060

 

 

$

 

6,090

 

 

$

 

34,970

 

Stock and other non-cash compensation

 

 

 

8,063

 

 

 

 

205

 

 

 

 

7,858

 

 

 

 

7,521

 

 

 

 

290

 

 

 

 

7,231

 

Realized and unrealized investment losses (gains)

 

 

 

29

 

 

 

 

—

 

 

 

 

29

 

 

 

 

(29

)

 

 

 

—

 

 

 

 

(29

)

Acquisition-related expenses

 

 

 

166

 

 

 

 

—

 

 

 

 

166

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Write-downs, including asset impairments and credit loss expense

 

 

 

1,867

 

 

 

 

162

 

 

 

 

1,705

 

 

 

 

1,819

 

 

 

 

(23

)

 

 

 

1,842

 

Adjusted EBITDA per Credit Facility

 

$

 

31,491

 

 

$

 

3,715

 

 

$

 

27,776

 

 

$

 

50,371

 

 

$

 

6,357

 

 

$

 

44,014

 

Revenues attributable to common shareholders(3)

 

 

 

98,046

 

 

 

 

7,273

 

 

 

 

90,773

 

 

 

 

108,572

 

 

 

 

10,738

 

 

 

 

97,834

 

Adjusted EBITDA margin attributable to common shareholders

 

 

 

32.1

%

 

 

 

51.1

%

 

 

 

30.6

%

 

 

 

46.4

%

 

 

 

59.2

%

 

 

 

45.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Twelve Months Ended December 31, 2022 (1)

 

 

For the Twelve Months Ended December 31, 2021 (1)

 

 

 

Attributable to
Non-controlling

 

 

Less:

 

 

 

 

 

Attributable to
Non-controlling

 

 

Less:

 

 

 

 

 

 

Interests and

 

 

Attributable to

 

 

Attributable to

 

 

Interests and

 

 

Attributable to

 

 

Attributable to

 

 

 

Common

 

 

Non-controlling

 

 

Common

 

 

Common

 

 

Non-controlling

 

 

Common

 

 

 

Shareholders

 

 

Interests

 

 

Shareholders

 

 

Shareholders

 

 

Interests

 

 

Shareholders

 

(In thousands of U.S. Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net loss

 

$

 

(19,877

)

 

$

 

2,923

 

 

$

 

(22,800

)

 

$

 

(9,577

)

 

$

 

12,752

 

 

$

 

(22,329

)

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

10,108

 

 

 

 

1,256

 

 

 

 

8,852

 

 

 

 

20,564

 

 

 

 

4,049

 

 

 

 

16,515

 

Interest expense, net of interest income

 

 

 

1,272

 

 

 

 

(251

)

 

 

 

1,523

 

 

 

 

2,362

 

 

 

 

(356

)

 

 

 

2,718

 

Depreciation and amortization, including film asset
   amortization

 

 

 

56,661

 

 

 

 

4,820

 

 

 

 

51,841

 

 

 

 

56,082

 

 

 

 

5,255

 

 

 

 

50,827

 

Amortization of deferred financing costs(2)

 

 

 

3,177

 

 

 

 

—

 

 

 

 

3,177

 

 

 

 

2,513

 

 

 

 

—

 

 

 

 

2,513

 

EBITDA

 

$

 

51,341

 

 

$

 

8,748

 

 

$

 

42,593

 

 

$

 

71,944

 

 

$

 

21,700

 

 

$

 

50,244

 

Stock and other non-cash compensation

 

 

 

27,573

 

 

 

 

760

 

 

 

 

26,813

 

 

 

 

26,079

 

 

 

 

1,114

 

 

 

 

24,965

 

Realized and unrealized investment gains

 

 

 

(70

)

 

 

 

—

 

 

 

 

(70

)

 

 

 

(5,340

)

 

 

 

(1,571

)

 

 

 

(3,769

)

Acquisition-related expenses

 

 

 

1,122

 

 

 

 

—

 

 

 

 

1,122

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Write-downs (Recoveries), including asset impairments and credit loss expense

 

 

 

15,723

 

 

 

 

1,723

 

 

 

 

14,000

 

 

 

 

(2,187

)

 

 

 

(1,159

)

 

 

 

(1,028

)

Legal judgment and arbitration awards

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

(1,770

)

 

 

 

—

 

 

 

 

(1,770

)

Adjusted EBITDA per Credit Facility

 

$

 

95,689

 

 

$

 

11,231

 

 

$

 

84,458

 

 

$

 

88,726

 

 

$

 

20,084

 

 

$

 

68,642

 

Revenues attributable to common shareholders(3)

 

 

 

300,805

 

 

 

 

20,883

 

 

 

 

279,922

 

 

 

 

254,883

 

 

 

 

33,556

 

 

 

 

221,327

 

Adjusted EBITDA margin attributable to common shareholders

 

 

 

31.8

%

 

 

 

53.8

%

 

 

 

30.2

%

 

 

 

34.8

%

 

 

 

59.9

%

 

 

 

31.0

%

______________

(1) The Senior Secured Net Leverage Ratio is calculated using Adjusted EBITDA per Credit Facility determined on a trailing twelve-month basis.

(2) The amortization of deferred financing costs is recorded within Interest Expense in the Condensed Consolidated Statement of Operations.

 

15

 

(3)

 

(In thousands of U.S. Dollars)

 

Three months ended
December 31, 2022

 

 

Three months ended
December 31, 2021

 

 

Year ended
December 31, 2022

 

 

Year ended
December 31, 2021

 

Total revenues

 

 

 

 

 

$

 

98,046

 

 

 

 

 

 

$

 

108,572

 

 

 

 

 

 

$

 

300,805

 

 

 

 

 

$

 

254,883

 

Greater China revenues

 

$

 

25,728

 

 

 

 

 

 

$

 

37,167

 

 

 

 

 

 

$

 

73,330

 

 

 

 

 

 

$

 

112,801

 

 

 

 

Non-controlling interest ownership percentage(4)

 

 

 

28.27

%

 

 

 

 

 

 

 

28.89

%

 

 

 

 

 

 

 

28.48

%

 

 

 

 

 

 

 

29.75

%

 

 

 

Deduction for non-controlling interest share of revenues

 

 

 

 

 

 

 

(7,273

)

 

 

 

 

 

 

 

(10,738

)

 

 

 

 

 

 

 

(20,883

)

 

 

 

 

 

 

(33,556

)

Revenues attributable to common shareholders

 

 

 

 

 

$

 

90,773

 

 

 

 

 

 

$

 

97,834

 

 

 

 

 

 

$

 

279,922

 

 

 

 

 

$

 

221,327

 

(4) Weighted average ownership percentage for change in non-controlling interest share

 

Adjusted Net Income (Loss) Attributable to Common Shareholders and Adjusted Diluted Per Share Calculations

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

December 31, 2022

 

 

December 31, 2021

 

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

 

Net Income

 

 

Diluted EPS

 

 

Net Income

 

 

Diluted EPS

 

Net income attributable to common shareholders

 

$

2,613

 

 

$

0.05

 

 

$

10,100

 

 

$

0.17

 

Adjustments(1):

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

7,730

 

 

 

0.14

 

 

 

7,140

 

 

 

0.12

 

COVID-19 government relief benefits, net

 

 

—

 

 

 

—

 

 

 

1,674

 

 

 

0.03

 

Realized and unrealized investment losses (gains)

 

 

29

 

 

 

—

 

 

 

(29

)

 

 

—

 

Acquisition-related expenses

 

 

166

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax impact on items listed above

 

 

17

 

 

 

—

 

 

 

(492

)

 

 

(0.01

)

Adjusted net income(1)

 

$

10,555

 

 

$

0.19

 

 

$

18,393

 

 

$

0.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average basic shares outstanding

 

 

 

 

 

54,816

 

 

 

 

 

 

58,886

 

Weighted average diluted shares outstanding

 

 

 

 

 

55,659

 

 

 

 

 

 

59,805

 

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2022

 

 

December 31, 2021

 

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

 

Net (Loss) Income

 

 

Diluted EPS

 

 

Net Loss

 

 

Diluted EPS

 

Net loss attributable to common shareholders

 

$

(22,800

)

 

$

(0.40

)

 

$

(22,329

)

 

$

(0.38

)

Adjustments(1):

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

26,382

 

 

 

0.46

 

 

 

24,815

 

 

 

0.42

 

COVID-19 government relief benefits, net

 

 

(373

)

 

 

(0.01

)

 

 

(3,839

)

 

 

(0.06

)

Legal judgment and arbitration awards

 

 

—

 

 

 

—

 

 

 

(1,770

)

 

 

(0.03

)

Realized and unrealized investment gains

 

 

(70

)

 

 

—

 

 

 

(3,769

)

 

 

(0.06

)

Acquisition-related expenses

 

 

1,122

 

 

 

0.02

 

 

 

—

 

 

 

—

 

Tax impact on items listed above

 

 

(1,054

)

 

 

(0.02

)

 

 

(1,909

)

 

 

(0.03

)

Income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries

 

 

—

 

 

 

—

 

 

 

381

 

 

 

0.01

 

Adjusted net income (loss)(1)

 

$

3,207

 

 

$

0.06

 

 

$

(8,420

)

 

$

(0.14

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

 

 

 

 

56,674

 

 

 

 

 

 

59,126

 

Weighted average shares outstanding - diluted

 

 

 

 

 

57,371

 

 

 

 

 

 

59,126

 

_______________

(1)
Reflects amounts attributable to common shareholders.

 

 

16

 

Free Cash Flow

 

 

Three Months Ended

 

 

Year Ended

 

(In thousands of U.S. Dollars)

 

December 31, 2022

 

 

December 31, 2022

 

Net cash provided by operating activities

 

$

 

16,840

 

 

$

 

17,321

 

Net cash used in capital expenditures

 

 

 

(9,584

)

 

 

 

(32,621

)

Free cash flow

 

$

 

7,256

 

 

$

 

(15,300

)

 

 

 

17