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IMAX Corporation Reports Fourth Quarter and Full Year 2012 Financial Results

February 21, 2013

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

HIGHLIGHTS

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

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

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

Full year 2012 revenues were $284.3 million, adjusted EBITDA as calculated in accordance with the Company’s Credit Facility was $106.8 million, adjusted net income was $54.3 million, or $0.80 per diluted share, and reported net income was $41.3 million, or $0.61 per diluted share. For reconciliations of adjusted net income to reported net income and for the definition of adjusted EBITDA and free cash flow, please see the tables at the end of this press release.

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

Network Growth Update

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

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

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

Fourth Quarter Segment Results

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

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

About IMAX Corporation
IMAX, an innovator in entertainment technology, combines proprietary software, architecture and equipment to create experiences that take you beyond the edge of your seat to a world you’ve never imagined. Top filmmakers and studios are utilizing IMAX theatres to connect with audiences in extraordinary ways, and, as such, IMAX’s network is among the most important and successful theatrical distribution platforms for major event films around the globe.

IMAX is headquartered in New York, Toronto and Los Angeles, with offices in London, Tokyo, Shanghai and Beijing. As of Dec. 31, 2012, there were 731 IMAX theatres (598 commercial multiplexes, 19 commercial destinations and 114 institutions) in 53 countries.

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

This press release contains forward looking statements that are based on IMAX management’s assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include, but are not limited to, general economic, market or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by the Company; the performance of IMAX DMR films; competitive actions by other companies; conditions in the in-home and out-of-home entertainment industries; the signing of theater system agreements; changes in laws or regulations; conditions, changes and developments in the commercial exhibition industry; the failure to convert theater system backlog into revenue; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada; risks related to the Company’s growth and operations in China; the failure to respond to change and advancements in digital technology; risks related to the acquisition of AMC Entertainment Holdings, Inc. by Dalian Wanda Group Co., Ltd.; risks related to new business initiatives; the potential impact of increased competition in the markets within which the Company operates; risks related to the Company’s inability to protect the Company’s intellectual property; risks related to Eastman Kodak bankruptcy and the possibility of constrained film supply; risks related to the Company’s implementation of a new enterprise resource planning system; risks related to the Company’s prior restatements and the related litigation; and other factors, many of which are beyond the control of the Company. These factors and other risks and uncertainties are discussed in IMAX’s most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q.

For additional information please contact:

    Investors:                 Media:
    IMAX Corporation, New York IMAX Corporation, New York
    Teri Loxam/Blaire Lomasky  Ann Sommerlath
    212-821-0100               212-821-0155
    tloxam@imax.com            asommerlath@imax.com
    blomasky@imax.com
    -----------------

    Business Media:            Entertainment Media:
    Sloane & Company, New York Principal Communications Group, Los Angeles
    Whit Clay                  Melissa Zuckerman/Paul Pflug
    212-446-1864               323-658-1555
    wclay@sloanepr.com         melissa@pcommgroup.com
                               paul@pcommgroup.com
    ---                        -------------------


                                                                    Additional Information

    Theatre Network Details:

                                                                                                Three Months             Twelve Months
                                                                                             Ended December 31,       Ended December 31,
                                                                                             ------------------       ------------------
    Theatre System Signings:                                                                               2012          2011              2012           2011
                                                                                                           ----          ----              ----           ----

             Full new sales and sales-type lease arrangements                                              11            13                43             58
             New joint revenue sharing arrangements                                                        17            11                78            132
                                                                                                          ---
    Total new theatres                                                                                     28            24               121            190
                                                                                                          ---           ---               ---            ---

             Upgrades and other                                                                            10   (1)       2                21   (1) (2)   19
    Total Theatre Signings                                                                                 38            26               142            209
                                                                                                          ===           ===               ===            ===

                                                                                              Three Months          Twelve Months
                                                                                           Ended December 31,       Ended December 31,
                                                                                           ------------------       ------------------
    Theatre System Installations:                                                                        2012          2011              2012           2011
                                                                                                         ----          ----              ----           ----

             Full new sales and sales-type lease arrangements                                              14            17                47             51
             New joint revenue sharing arrangements                                                        29            39                60             86
                                                                                                          ---
    Total new theatres                                                                                     43            56               107            137
                                                                                                          ---           ---               ---            ---

             Upgrades and other                                                                             3             1                18             33
    Total Theatre Installations                                                                            46            57               125            170
                                                                                                          ===           ===               ===            ===

                                                                                                  As of
                                                                                           Ended December 31,
                                                                                           ------------------
    Theatre Backlog:                                                                                     2012          2011
                                                                                                         ----          ----

             New sales and sales-type lease arrangements                                                  128           134
             New joint revenue sharing arrangements                                                       137           119
    Total new theatres                                                                                    265           253
                                                                                                          ---           ---

             Upgrades under sales and sales-type lease arrangements                                        11   (1)      10
    Total Theatres in Backlog                                                                             276           263
                                                                                                          ===           ===
    _______________

    (1)             Includes one laser-based system
                    for a commercial theater and
                    four laser-based systems for
                    institutional theaters.
    (2)             Includes three IMAX theatres
                    acquired from another existing
                    customer that had been operating
                    under a joint revenue sharing
                    arrangement. These theaters were
                    purchased from the Company under
                    a sales arrangement.

Additional Information (continued)

2013 DMR Films Announced to Date:
To date, IMAX has announced 23 titles to be released in 2013. The Company remains in discussions with virtually every major studio regarding future titles and expects the total number of titles in 2013 to be similar to that in 2012.

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

                                                                                                                                                                Three Months                     Year Ended
                                                                                                                                                             Ended December 31,              Ended December 31,
                                                                                                                                                             ------------------              ------------------
                                                                                                                                                                           2012             2011*                    2012 2011*
                                                                                                                                                                           ----              ----                    ---- ----

    Revenues
    Equipment and product sales                                                                                                                                                    $22,405                      $26,657         $78,161  $85,016
    Services                                                                                                                                                                        34,294                       26,349         136,606  106,720
    Rentals                                                                                                                                                                         18,356                        9,394          61,268   34,810
    Finance income                                                                                                                                                                   1,986                        1,753           7,523    6,162
    Other                                                                                                                                                                              732                        2,523             732    3,848
                                                                                                                                                                                       ---                        -----             ---    -----
                                                                                                                                                                                    77,773                       66,676         284,290  236,556
                                                                                                                                                                                    ------                       ------         -------  -------
    Costs and expenses applicable to revenues
    Equipment and product sales                                                                                                                                                      9,811                       10,147          37,538   38,742
    Services                                                                                                                                                                        17,239                       21,262          72,617   69,277
    Rentals                                                                                                                                                                          8,434                        4,823          21,402   14,301
    Other                                                                                                                                                                                -                          612               -    1,018
                                                                                                                                                                                       ---                          ---             ---    -----
                                                                                                                                                                                    35,484                       36,844         131,557  123,338
                                                                                                                                                                                    ------                       ------         -------  -------
    Gross margin                                                                                                                                                                    42,289                       29,832         152,733  113,218
    Selling, general and administrative expenses                                                                                                                                    22,529                       17,093          81,560   73,157
             (including share-based compensation expense of $2.9 million and $13.1 million for the three
             months and year ended December 31, 2012, respectively (2011 - expense of $2.7 million and
                                                                                                                            $11.7 million, respectively))
    Provision for arbitration award                                                                                                                                                      -                            -               -    2,055
    Research and development                                                                                                                                                         3,788                        1,803          11,411    7,829
    Amortization of intangibles                                                                                                                                                        174                          125             706      465
    Receivable provisions, net of recoveries                                                                                                                                          (305)                         804             524    1,570
    Asset impairments                                                                                                                                                                    -                           20               -       28
    Impairment of available-for-sale investment                                                                                                                                          -                            -             150        -
                                                                                                                                                                                       ---                          ---             ---      ---
    Income from operations                                                                                                                                                          16,103                        9,987          58,382   28,114
    Interest income                                                                                                                                                                     12                           13              85       57
    Interest recovery (expense)                                                                                                                                                        686                         (402)           (689)  (1,827)
    Income from continuing operations before income taxes                                                                                                                           16,801                        9,598          57,778   26,344
    (Provision for) recovery of income taxes                                                                                                                                        (3,594)                      (2,861)        (15,079)  (9,293)
    Loss from equity-accounted investments                                                                                                                                            (324)                        (479)         (1,362)  (1,791)
                                                                                                                                                                                      ----                         ----          ------   ------
    Net Income                                                                                                                                                                     $12,883                       $6,258         $41,337  $15,260
                                                                                                                                                                                   =======                       ======         =======  =======

    Net income per share - basic & diluted:
             Net income per share - basic                                                                                                                                            $0.19                        $0.10           $0.63    $0.24
                                                                                                                                                                          ===
             Net income per share - diluted                                                                                                                                          $0.19                        $0.09           $0.61    $0.22
                                                                                                                                                                          ===

    Weighted average number of shares outstanding (000's):
             Basic                                                                                                                                                                  66,264                       64,799          65,854   64,504
             Fully Diluted                                                                                                                                                          68,281                       67,460          67,933   67,859

    Additional Disclosure:
    Depreciation and amortization(1)                                                                                                                                                $8,084                        7,143         $32,788   25,163
    _______________

    (1)            Includes less than $0.1 million and
                   $0.2 million of amortization of
                   deferred financing costs charged
                   to interest expense for the three
                   months and year ended December 31,
                   2012 (2011 -less than $0.1
                   million and $0.4 million
                   respectively).
    *              Reflects a revision resulting from
                   an adjustment to reflect an
                   unfunded postretirement obligation
                   of the Company.

                                                                                                                                    IMAX CORPORATION
                                                                                                                              CONSOLIDATED BALANCE SHEETS
                                                                                                       In accordance with United States Generally Accepted Accounting Principles
                                                                                                                             (In thousands of U.S. dollars)

                                                                                                                                                                                 As at December 31,
                                                                                                                                                                                 ------------------
                                                                                                                                                                                               2012           2011*
                                                                                                                                                                                               ----            ----

    Assets
    Cash and cash equivalents                                                                                                                                                                        $21,336         $18,138
    Accounts receivable, net of allowance for doubtful accounts of $1,564 (December 31, 2011 - $1,840)                                                                                                42,007          46,659
    Financing receivables                                                                                                                                                                             94,193          86,714
    Inventories                                                                                                                                                                                       15,794          19,747
    Prepaid expenses                                                                                                                                                                                   3,833           3,126
    Film assets                                                                                                                                                                                        3,737           2,388
    Property, plant and equipment                                                                                                                                                                    113,610         101,253
    Other assets                                                                                                                                                                                      23,963          14,238
    Deferred income taxes                                                                                                                                                                             36,461          51,046
    Goodwill                                                                                                                                                                                          39,027          39,027
    Other intangible assets                                                                                                                                                                           27,911          24,913
                                                                                                                                                                                                      ------          ------
    Total assets                                                                                                                                                                                    $421,872        $407,249
                                                                                                                                                                                                    ========        ========

    Liabilities
    Bank indebtedness                                                                                                                                                                                $11,000         $55,083
    Accounts payable                                                                                                                                                                                  15,144          28,985
    Accrued and other liabilities                                                                                                                                                                     68,695          58,855
    Deferred revenue                                                                                                                                                                                  73,954          74,458
    Total liabilities                                                                                                                                                                                168,793         217,381
                                                                                                                                                                                                     -------         -------

    Commitments and contingencies

    Shareholders' equity
    Capital stock common shares - no par value. Authorized - unlimited number.
        Issued and outstanding - 66,482,425 (December 31, 2011 - 65,052,740)                                                                                                                         313,744         303,395
    Other equity                                                                                                                                                                                      28,892          17,510
    Deficit                                                                                                                                                                                          (87,166)       (128,503)
    Accumulated other comprehensive loss                                                                                                                                                              (2,391)         (2,534)
                                                                                                                                                                                                      ------          ------
    Total shareholders' equity                                                                                                                                                                       253,079         189,868
                                                                                                                                                                                                     -------         -------
    Total liabilities and shareholders' equity                                                                                                                                                      $421,872        $407,249
                                                                                                                                                                                                    ========        ========

                                                   IMAX CORPORATION
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                       In accordance with United States Generally Accepted Accounting Principles
                                            (In thousands of U.S. dollars)
                                                                       Years Ended December 31,
                                                                         2012              2011*
                                                                         ----               ----

    Cash provided by (used in):
    Operating Activities
    Net income                                                                   $41,337               $15,260
    Adjustments to reconcile
     net income to cash from
     operations:
                               Depreciation and amortization                      32,788                25,163
                               Write-downs, net of recoveries                      1,607                 1,954
                               Change in deferred income taxes                    14,724                 7,994
                                Stock and other non-cash
                                compensation                                      14,220                12,814
                               Provision for arbitration award                         -                 2,055
                                Foreign currency exchange (gain)
                                loss                                                (329)                1,255
                                Loss from equity-accounted
                                investments                                        1,362                 1,791
                                Gain on non-cash contribution to
                                equity-accounted investees                             -                  (404)
    Investment in film assets                                                    (16,817)              (12,256)
    Changes in other non-cash
     operating assets and
     liabilities                                                                 (15,262)              (49,379)
                                Net cash provided by operating
                                activities                                        73,630                 6,247

    Investing Activities
    Purchase of property, plant
     and equipment                                                                (6,055)               (5,528)
    Investment in joint revenue
     sharing equipment                                                           (23,257)              (33,290)
    Investment in new business
     ventures                                                                       (381)               (2,483)
    Acquisition of other
     intangible assets                                                            (5,826)              (22,206)
                                Net cash used in investing
                                activities                                       (35,519)              (63,507)

    Financing Activities
    Increase in bank
     indebtedness                                                                  9,917                75,083
    Repayment of bank
     indebtedness                                                                (54,000)              (37,500)
    Common shares issued -
     stock options exercised                                                       8,920                 7,864
    Proceeds from disgorgement
     of stock sale profits                                                           314                     -
    Credit Facility amendment
     fees paid                                                              -                    (306)
                                                                          ---                    ----
                                Net cash (used in) provided by
                                financing activities                             (34,849)               45,141

    Effects of exchange rate
     changes on cash                                                                 (64)                 (133)
                                                                                     ---                  ----

    Increase (decrease) in cash
     and cash equivalents
     during year                                                                   3,198               (12,252)

    Cash and cash equivalents,
     beginning of year                                                            18,138                30,390

    Cash and cash equivalents,
     end of year                                                                 $21,336               $18,138
                                                                                 =======               =======

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

    The Company has seven reportable segments identified by category of product sold or service provided: IMAX systems; theater system maintenance; joint revenue sharing arrangements; film production and IMAX DMR; film distribution; film post-
     production; theater operations; and other. The IMAX systems segment designs, manufactures, sells or leases IMAX theater projection system equipment. The theater system maintenance segment maintains IMAX theater projection system equipment
     in the IMAX theater network. The joint revenue sharing arrangements segment provides IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concessions revenue. The film production and IMAX
     DMR segment produces films and performs film re-mastering services. The film distribution segment distributes films for which the Company has distribution rights. The film post-production segment provides film post-production and film
     print services. The other segment includes theater operations from certain IMAX theaters, camera rentals and other miscellaneous items.

                                                                                                                                            Three Months                               Year Ended
                                                                                                                                         Ended December 31,                        Ended December 31,
                                                                                                                                         ------------------                        ------------------
                                                                                                                                          2012                2011                  2012                 2011
                                                                                                                                          ----                ----                  ----                 ----
    Revenue
    IMAX systems
                                           Sales and sales-type leases                                                                            $20,237                        $26,552                         $69,988                         $81,310
                                           Ongoing rent, fees, and finance income                                                                   4,105                          3,270                          13,417                          11,890

                                                                                                                                        24,342                          29,822                         83,405                          93,200
                                                                                                                                        ------                          ------                         ------                          ------
    Theater system maintenance                                                                                               7,751                           6,570                         28,629                          24,840
                                                                                                                             -----                           -----                         ------                          ------
    Joint revenue sharing arrangements                                                                                      17,049                           8,382                         57,526                          30,764
                                                                                                                            ------                           -----                         ------                          ------
    Film
                                           Production and IMAX DMR                                                                                 19,245                         12,312                          78,050                          50,592
                                           Distribution                                                                                             3,100                          3,217                          14,222                          16,074
                                           Post-production                                                                                          2,126                          2,549                           7,904                           8,235

                                                                                                                                        24,471                          18,078                        100,176                          74,901
                                                                                                                                        ------                          ------                        -------                          ------
    Other                                                                                                                    4,160                           3,824                         14,554                          12,851
                                                                                                                             -----                           -----                         ------                          ------
    Total                                                                                                                                         $77,773                        $66,676                        $284,290                        $236,556
                                                                                                                                                  =======                        =======                        ========                        ========

    Gross margins
    IMAX systems(1)
                                           Sales and sales-type leases                                                                            $11,715                        $17,088                         $36,974                         $45,251
                                           Ongoing rent, fees, and finance income                                                                   4,055                          3,372                          13,271                          11,678

                                                                                                                                        15,770                          20,460                         50,245                          56,929
                                                                                                                                        ------                          ------                         ------                          ------
    Theater system maintenance                                                                                               2,848                           2,525                         10,970                           9,437
                                                                                                                             -----                           -----                         ------                           -----
    Joint revenue sharing arrangements(1)                                                                                    8,968                           3,813                         37,308                          17,605
                                                                                                                             -----                           -----                         ------                          ------
    Film
                                           Production and IMAX DMR(1)                                                                              13,641                          2,339                          49,355                          23,574
                                           Distribution(1)                                                                                            223                            494                           2,356                           3,025
                                           Post-production                                                                                            581                            181                           1,954                           2,985

                                                                                                                                        14,445                           3,014                         53,665                          29,584
                                                                                                                                        ------                           -----                         ------                          ------
    Other                                                                                                                      258                              20                            545                            (337)
                                                                                                                               ---                             ---                            ---                            ----
    Total                                                                                                                                         $42,289                        $29,832                        $152,733                        $113,218
                                                                                                                                                  =======                        =======                        ========                        ========
    _______________

    (1)             IMAX systems include commission
                    costs of $0.6 million and $2.7
                    million for the three and twelve
                    months ended December 31, 2012,
                    respectively (2011 -$0.9
                    million and $2.4 million,
                    respectively). Joint revenue
                    sharing arrangements segment
                    margins include advertising,
                    marketing and commission costs
                    of $1.3 million and $3.4 million
                    for the three and twelve months
                    ended December 31, 2012,
                    respectively (2011 -$1.9
                    million and $5.4 million,
                    respectively). Production and
                    DMR segment margins include
                    marketing costs of $1.1 million
                    and $3.3 million for the three
                    and twelve months ended December
                    31, 2012, respectively (2011 -
                    $1.9 million and $3.8 million,
                    respectively). Distribution
                    segment margins include
                    marketing costs of $0.3 million
                    and $1.5 million for the three
                    and twelve months ended December
                    31, 2012, respectively (2011 -
                    $0.2 million and $1.9 million,
                    respectively).

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

    Non-GAAP Financial Measures:

    In this release, the Company presents adjusted EBITDA, adjusted net income and adjusted net income per diluted share as supplemental measures of performance of the Company, which are not recognized under United States generally accepted accounting principals ("GAAP"). The Company
     presents adjusted EBITDA, adjusted net income and adjusted net income per diluted share because it believes that they are important supplemental measures of its comparable controllable operating performance and it wants to ensure that its investors fully understand the impact of
     its variable share-based compensation, provision for arbitration award and deferred taxes on its net income. Management uses these measures to review operating performance on a comparable basis from period to period. However, these non-GAAP measures may not be comparable to
     similarly titled amounts reported by other companies. Adjusted EBITDA, adjusted net income and adjusted net income per diluted share should be considered in addition to, and not as a substitute for, net income and other measures of financial performance reported in accordance
     with GAAP.

    Adjusted EBITDA is calculated on a basis consistent with the Company's Credit Facility, which refers to Adjusted EBITDA as EBITDA. As of December 31, 2012, the Credit Facility provided that the Company was required to maintain a ratio of funded debt (as defined in the Credit
     Agreement) to EBITDA (as defined in the Credit Agreement) of not more than 2:1. The Company was also required to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.1:1.0. As of December 31, 2012, under the terms of the Credit Facility,
     the Company was required to maintain minimum Excess Availability of not less than $5.0 million and minimum Cash and Excess Availability of not less than $15.0 million. The ratio of funded debt to EBITDA was 0.10:1 as at December 31, 2012, where Funded Debt (as defined in the
     Credit Agreement) is the sum of all obligations evidenced by notes, bonds, debentures or similar instruments and was $11.0 million. EBITDA is calculated as follows:

                                                                                                                                                            Quarter Ended December 31,                 Year Ended December 31,
                                                                                                                                                            --------------------------                 -----------------------
                                                                                                                                                                  2012             2011*                   2012              2011*
                                                                                                                                                                  ----              ----                   ----              ----

    Net income                                                                                                                                                           $12,883                         $6,258                         $41,337                        $15,260
    Add (subtract):
                     Loss for equity-accounted investments                                                                                                                   324                            479                           1,362                          1,791
                     Provision for income taxes                                                                                                                            3,595                          2,860                          15,079                          9,293
                     Interest (recovery) expense net of interest income                                                                                                     (698)                           389                             604                          1,770
                     Depreciation and amortization including film asset amortization                                                                                       8,041                          7,100                          32,618                         24,774
                     Write-downs net of recoveries including asset impairments and                                                                                            91                          1,113                           1,607                          1,954
                        receivable provisions
                     Stock and other non-cash compensation                                                                                                                 3,121                          2,936                          14,220                         12,814
                     Adjusted EBITDA                                                                                                                                     $27,357                        $21,135                        $106,827                        $67,657
                                                                                                                                                                   ===

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

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

    The Company reported net income of $12.9 million or $0.20 per basic share and $0.19 per diluted share for the fourth quarter of 2012 as compared to $6.3 million or $0.10 per basic share and $0.09 per diluted share for the fourth quarter of 2011. Net income for the
     quarter includes a $2.9 million charge or $0.04 per diluted share (2011 - $2.7 million or $0.04 per diluted share) for stock-based compensation. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax
     impact, was $15.7 million or $0.23 per diluted share in the fourth quarter of 2012 as compared to adjusted net income of $8.9 million or $0.13 per diluted share for the fourth quarter of 2011. A reconciliation of net income, the most directly comparable U.S. GAAP
     measure, to adjusted net income and adjusted net income per diluted share is presented in the table below:

                                                                                                                                              Three Months Ended                            Three Months Ended
                                                                                                                                              December 31, 2012                             December 31, 2011*
                                                                                                                                              -----------------                              -----------------
                                                                                                                                       Net Income            Diluted EPS                  Net Income                         Diluted EPS
                                                                                                                                       ----------            -----------                  ----------                         -----------
    Reported                                                                                                                                        $12,883                              $0.19                                        $6,258                                      $0.09
    Adjustments:
                                                 Stock-based compensation                                                                             2,861                               0.04                                         2,708                                       0.04
                                                 Tax impact on item listed above                                                                        (77)                                 -                                          (113)                                         -

    Adjusted                                                                                                                                        $15,667                              $0.23                                        $8,853                                      $0.13
                                                                                                                                                    =======                              =====                                        ======                                      =====

    Weighted average diluted shares outstanding                                                                                                                   68,281                                                                        67,460
                                                                                                                                                                  ======                                                                        ======

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

    The Company reported net income of $41.3 million or $0.63 per basic share and $0.61 per diluted share for the year ended December 31, 2012 as compared to net income of $15.3 million or $0.24 per basic share and $0.22 per diluted share for the year ended December 31,
     2011. Net income for the year ended December 31, 2012 includes a $13.1 million charge or 0.19 per diluted share (2011 - $11.7 million or 0.17 per diluted share) for stock-based compensation. Net income for December 31, 2011 also includes a one-time $2.1 million
     pre-tax charge ($0.03 per diluted share) due to an arbitration award arising from an arbitration proceeding brought against the Company in connection with a discontinued subsidiary. Adjusted net income, which consists of net income excluding the impact of stock-
     based compensation, the charge for arbitration award and the related tax impact, was $54.3 million or $0.80 per diluted share for the year ended December 31, 2012 as compared to adjusted net income of $28.0 million or $0.41 per diluted share for the year ended
     December 31, 2011. A reconciliation of net income, the most directly comparable U.S. GAAP measure, to adjusted net income and adjusted net income per diluted share is presented in the table below:

                                                                                                                                                  Year Ended                                    Year Ended
                                                                                                                                              December 31, 2012                             December 31, 2011*
                                                                                                                                              -----------------                              -----------------
                                                                                                                                       Net Income            Diluted EPS                  Net Income                         Diluted EPS
                                                                                                                                       ----------            -----------                  ----------                         -----------
    Net income                                                                                                                                      $41,337                              $0.61                                       $15,260                                      $0.22
    Adjustments:
                                                 Stock-based compensation                                                                            13,113                               0.19                                        11,681                                       0.17
                                                 Provision for arbitration award                                                                          -                                  -                                         2,055                                       0.03
                                                 Tax impact on items listed above                                                                      (160)                                 -                                          (973)                                     (0.01)

    Adjusted net income                                                                                                                             $54,290                              $0.80                                       $28,023                                      $0.41
                                                                                                                                                    =======                              =====                                       =======                                      =====

    Weighted average diluted shares outstanding                                                                                                                   67,933                                                                        67,859
                                                                                                                                                                  ======                                                                        ======

    Free Cash Flow:

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

                                                                                                                                                                                                                               For the                      For the
                                                                                                                                                                                                                            Quarter Ended                  Year Ended
    (In thousands of U.S. Dollars)                                                                                                                                                                                        December 31, 2012            December 31, 2012
                                                                                                                                                                                                                          -----------------            -----------------

    Net cash provided by operating activities                                                                                                                                                    $19,720                                       $73,630
    Net cash (used in) investing activities                                                                                                                                                     (12,319)                                      (35,519)
    Free cash flow                                                                                                                                                                                $7,401                                       $38,111
                                                                                                                                                                                                  ======                                       =======

SOURCE IMAX Corporation


Source: PR Newswire