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Last updated on April 20, 2014 at 17:20 EDT

IMAX Corporation Reports First Quarter 2013 Financial Results

April 25, 2013

HIGHLIGHTS

NEW YORK, April 25, 2013 /PRNewswire/ — IMAX Corporation (NYSE:IMAX; TSX:IMX) today reported first quarter 2013 revenues of $49.9 million, adjusted EBITDA as calculated in accordance with the Company’s credit facility of $13.9 million, adjusted net income of $5.6 million, or $0.08 per diluted share, and reported net income of $2.9 million, or $0.04 per diluted share.

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

“In the first quarter, we continued to execute against our three main Company priorities for the year – Penetration, Differentiation, and Scale,” said IMAX Chief Executive Officer Richard L. Gelfond. “We expect these to be key drivers of our long-term growth, while supporting our results in the near-term, and we are excited about the promising upcoming lineup of films in IMAX, particularly in the second quarter.”

Network Growth Update

The total IMAX® theatre network consisted of 738 systems as of March 31, 2013, of which 606 were in commercial multiplexes. There were 283 theatre systems in backlog as of March 31, 2013, compared to 261 theatre systems in backlog as of March 31, 2012. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

In the first quarter of 2013, the Company signed contracts for 25 theatre systems, of which 17 were in new theatre locations and 8 were additional signings for laser systems and conversion of some of the Company’s film theatres to digital systems in existing theatre locations. In the quarter the Company installed 17 theatre systems, of which 10 were in new theatre locations.

“We are very pleased that we continue to penetrate different countries around the world, strengthening our presence in some and building strong theatres in new markets to catalyze future growth in others,” Gelfond continued. “Our one-of-a-kind, end-to-end entertainment solution is driving demand from exhibitor and studio partners from around the world, who have seen the value of being in the IMAX business. We remain optimistic as our growth opportunity in underpenetrated international regions, combined with our ability to program each of those markets individually, continues to position IMAX as a unique player in the global entertainment industry.”

First-Quarter Segment Results

  • Revenue from sales and sales-type leases was $9.8 million in the first quarter of 2013, compared to $12.9 million in the first quarter of 2012, primarily reflecting the installation of six full, new theatre systems under sales and sales-type lease arrangements in the most recent first quarter, compared to eight full, new theatre systems in the first quarter of 2012. The Company also installed five digital system upgrades under sales or sales-type lease arrangements in the first quarter of 2013, compared to 10 upgrades in the first quarter of 2012, and two digital systems under short-term operating lease arrangements.
  • Revenue from joint revenue-sharing arrangements was $9.4 million, compared to $11.7 million in the prior-year period. During the quarter, the Company installed four new theatres under joint revenue-sharing arrangements, compared to eight in the year-ago period. The Company had 319 theatres operating under joint revenue-sharing arrangements as of March 31, 2013, as compared to 265 theatres one year prior.
  • Production and IMAX DMR® (Digital Re-Mastering) revenues were $14.4 million in the first quarter of 2013, compared to $13.8 million in the first quarter of 2012. Gross box office from DMR titles was $128.7 million in the first quarter of 2013, compared to $121.7 million in the prior-year period. The average global DMR box office per screen in the first quarter of 2013 was $212,900, compared to $247,600 in the prior-year period.

“Looking ahead, the heart of the summer box office season kicks into gear this week including the release of the IMAX® 3D version of Iron Man 3, followed by Star Trek: Into Darkness, Man of Steel and an international only release of Fast & Furious 6, providing a strong foundation for our full portfolio of films this year,” Gelfond concluded. “We have secured many key tentpole films for the remainder of 2013, as well as 2014 and beyond, including Christopher Nolan’s Interstellar and Michael Bay’s Transformers 4, both of which will be captured with IMAX cameras, demonstrating the ongoing desire of studios and filmmakers to leverage the IMAX platform to bring audiences the most immersive entertainment experiences that they cannot get anywhere else.”

Conference Call
The Company will host a conference call today at 8:30 AM ET to discuss its first quarter 2013 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 7114021. 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 7114021.

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 Mar. 31, 2013, there were 738 IMAX theatres (606 commercial multiplexes, 19 commercial destinations and 113 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, other risks and uncertainties and financial details are discussed in IMAX’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

For additional information please contact:

    Investors:                 Media:

    IMAX Corporation, New York IMAX Corporation, New York

    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

                                                                                                                                                             Ended March 31,
                                                                                                                                                             ---------------

    Theatre Signings:                                                                                                                               2013            2012
                                                                                                                                                    ----            ----

                                         Full new sales and sales-type lease arrangements                                                                 14          (1)     18

                                         New joint revenue sharing arrangements                                                                            3                   5
                                         -----------

      Total new theatres                                                                                                                              17              23
                                                                                                                                                     ---             ---

                                         Upgrades of IMAX theatre systems                                                                                  8      (2)(3)       -

    Total Theatre Signings                                                                                                                            25              23
                                                                                                                                                     ===             ===

                                                                                                                                                            Three Months

                                                                                                                                                           Ended March 31,
                                                                                                                                                           ---------------

    Theatre Installations:                                                                                                                          2013            2012
                                                                                                                                                    ----            ----

                                         Full new sales and sales-type lease arrangements                                                                  6                   8

                                         New joint revenue sharing arrangements                                                                            4                   8
                                         -----------

      Total new theatres                                                                                                                              10              16
                                                                                                                                                     ---             ---

                                         Upgrades of IMAX theatre systems                                                                                  7          (2)     10

    Total Theatre Installations                                                                                                                       17              26
                                                                                                                                                     ===             ===

                                                                                                                                                           As of March 31,
                                                                                                                                                           ---------------

    Theatre Backlog:                                                                                                                                2013            2012
                                                                                                                                                    ----            ----

                                         New sales and sales-type lease arrangements                                                                     135                 144

                                         New joint revenue sharing arrangements                                                                          136                 116

      Total new theatres                                                                                                                             271             260
                                                                                                                                                     ---             ---

                                         Upgrades of IMAX theatre systems                                                                                 12      (2)(3)       1

    Total Theatres in Backlog                                                                                                                            283          (4)    261 (4)
                                                                                                                                                         ===                 ===

                                                                                                                                                           As of March 31,
                                                                                                                                                           ---------------

    Theatre Network:                                                                                                                                2013            2012
                                                                                                                                                    ----            ----

    Commercial Multiplex Theatres:

                                         Sales and sales-type lease arrangements                                                                         287                 245

                                         Joint revenue sharing arrangements                                                                              319                 265

    Total Commercial Multiplex Theatres                                                                                                              606             510
                                                                                                                                                     ---             ---

    Commercial Destination Theatres                                                                                                                   19              20

    Institutional Theatres                                                                                                                           113             113

    Total IMAX Theatre Network                                                                                                                       738             643
                                                                                                                                                     ===             ===

    ______________________

    (1) Includes one signing which replaced a theatre under an existing arrangement in backlog.

    (2) Includes upgrades to xenon-based digital systems under short-term operating lease arrangements (2 signings, 2 installations, 5 in backlog).

    (3) Includes installation of laser-based digital systems in existing theatre locations (2 signings, 7 in backlog).

    (4) Reflects the minimum number of theatres arising from signed contracts in backlog.

Additional Information (continued)

2013 DMR Films Announced to Date:
To date, IMAX has announced 28 titles to be released in 2013. The Company released 35 titles in 2012. 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, China only);
  • 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, China only);
  • 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, Japan only);
  • Jurassic Park: An IMAX 3D Experience (Universal Pictures, April 2013);
  • Oblivion: The IMAX 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);
  • Fast & Furious 6: The IMAX Experience (Universal, May 2013, international only);
  • After Earth: The IMAX Experience (Sony, May 2013);
  • Man of Steel: The IMAX Experience (Warner Bros., June 2013);
  • Despicable Me 2: An IMAX 3D Experience (Universal Pictures, July 2013, international only);
  • 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);
  • Metallica Through the Never: An IMAX 3D Experience (Picturehouse, 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);
  • Ender’s Game: The IMAX Experience (Lionsgate, November 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

                            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

               In accordance with United States Generally Accepted Accounting Principles

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

                                              (Unaudited)

                                                                      Three Months

                                                                     Ended March 31,
                                                                     ---------------

                                                                    2013              2012*
                                                                    ----               ----

    Revenues

    Equipment and
     product sales                                                          $10,679                    $14,379

    Services                                          26,859                          27,067

    Rentals                                            9,972                          12,470

    Finance income                                     1,984                           1,680

    Other                                                375                               -
                                                         ---                             ---

                                                                  49,869                        55,596
                                                                  ------                        ------

    Costs and expenses applicable
     to revenues

    Equipment and product sales                        5,059                           9,095

    Services                                          15,318                          15,620

    Rentals                                            3,453                           4,020

    Other                                                  -                               -
                                                         ---                             ---

                                                                  23,830                        28,735
                                                                  ------                        ------

    Gross margin                                      26,039                          26,861

    Selling, general and
     administrative expenses                          17,476                          19,168

    (including share-based compensation expense of $2.8 million for the
    three months ended March 31, 2013 (2012 - $3.8 million))

    Research and development                           3,634                           2,630

    Amortization of intangibles                          364                             176

    Receivable provision, net of
     recoveries                                            -                             451

    Income from operations                             4,565                           4,436

    Interest income                                       13                              24

    Interest expense                                                           (345)                      (526)
                                                                               ----                       ----

    Income from continuing
     operations before income
     taxes                                             4,233                           3,934

    Provision for income taxes                                               (1,152)                      (966)

    Loss from equity-accounted
     investments                                        (220)                           (459)
                                                        ----                            ----

    Net income                                                               $2,861                     $2,509
                                                                             ======                     ======

    Net income per share -basic
     & diluted:

                                    Net income per share -
                                    basic & diluted                           $0.04                      $0.04
                                                                     ===

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

                                   Basic                                     66,646                     65,402

                                   Fully Diluted                             68,690                     68,158

    Additional Disclosure:

    Depreciation and
     amortization                                                            $8,591                     $7,466

    ______________________
    ----------------------

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


                                               IMAX CORPORATION

                                    CONDENSED CONSOLIDATED BALANCE SHEETS

                  In accordance with United States Generally Accepted Accounting Principles

                                        (in thousands of U.S. dollars)

                                                               As at                    As at

                                                            March 31,               December 31,

                                                                   2013                     2012
                                                                   ----                     ----

                                                            (unaudited)

    Assets

    Cash and cash
     equivalents                                                           $15,158                $21,336

    Accounts receivable, net of
     allowance for doubtful accounts
     of $1,564 (December 31, 2012 -
     $1,564)                                                                48,360                 42,007

    Financing receivables                                                   96,204                 94,193

    Inventories                                                             14,452                 15,794

    Prepaid expenses                                                         4,781                  3,833

    Film assets                                                              4,427                  3,737

    Property, plant and equipment                                          120,764                113,610

    Other assets                                                            25,410                 23,963

    Deferred income taxes                                                   35,654                 36,461

    Goodwill                                                                39,027                 39,027

    Other intangible assets                                                 28,101                 27,911
                                                                            ------                 ------

    Total assets                                                          $432,338               $421,872
                                                                          ========               ========

    Liabilities

    Bank indebtedness                                                      $18,000                $11,000

    Accounts payable                                                        16,155                 15,144

    Accrued and other liabilities                                           61,335                 68,695

    Deferred revenue                                                        76,364                 73,954

    Total liabilities                                                      171,854                168,793
                                                                           -------                -------

    Shareholders' equity

    Capital stock, common shares -no par value. Authorized
     -unlimited number.

    Issued and outstanding -
     66,866,076 (December 31, 2012 -
     66,482,425)                                                           317,144                313,744

    Other equity                                                            30,239                 28,892

    Deficit                                                                (84,305)               (87,166)

    Accumulated other comprehensive
     loss                                                                   (2,594)                (2,391)
                                                                            ------                 ------

    Total shareholders' equity                                             260,484                253,079
                                                                           -------                -------

    Total liabilities and
     shareholders' equity                                                 $432,338               $421,872
                                                                          ========               ========

                                                                                                                    IMAX CORPORATION

                                                                                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                        In accordance with United States Generally Accepted Accounting Principles

                                                                                                             (In thousands of U.S. dollars)

                                                                                                                       (Unaudited)

                                                                                                                                                                      Three Months

                                                                                                                                                                     Ended March 31,
                                                                                                                                                                     ---------------

                                                                                                                                                                    2013             2012*
                                                                                                                                                                    ----              ----

    Cash provided by (used in):

    Operating Activities

    Net income                                                                                                                                                               $2,861           $2,509

    Adjustments to reconcile net income to cash from operations:

                                                                  Depreciation and amortization                                                                               8,591            7,466

                                                                  Write-downs, net of recoveries                                                                                  -              481

                                                                  Change in deferred income taxes                                                                               904              624

                                                                  Stock and other non-cash compensation                                                                       3,000            4,088

                                                                  Gain on curtailment of postretirement benefits                                                             (2,185)               -

                                                                  Unrealized foreign currency exchange loss (gain)                                                              189           (1,388)

                                                                  Loss on equity-accounted investments                                                                          220              459

    Investment in film assets                                                                                                                                                (3,866)          (3,958)

    Changes in other non-cash operating assets and liabilities                                                                                                              (10,703)             145

                                                                  Net cash (used in) provided by operating activities                                                          (989)          10,426

    Investing Activities

    Purchase of property, plant and equipment                                                                                                                                (3,315)            (374)

    Investment in joint revenue sharing equipment                                                                                                                            (8,717)          (7,088)

    Investment in new business ventures                                                                                                                           -                    (381)

    Acquisition of other intangible assets                                                                                                                                     (778)          (2,568)
                                                                                                                                                                               ----           ------

                                                                  Net cash used in investing activities                                                                     (12,810)         (10,411)

    Financing Activities

    Increase in bank indebtedness                                                                                                                                            12,000            4,917

    Repayment of bank indebtedness                                                                                                                                           (5,000)          (5,000)

    Common shares issued - stock options exercised                                                                                                                            2,485            3,488

    Credit facility amendment fees paid                                                                                                                                      (1,881)               -
                                                                                                                                                                             ------              ---

                                                                  Net cash provided by financing activities                                                                   7,604            3,405

    Effects of exchange rate changes on cash                                                                                                                                     17               30
                                                                                                                                                                                ---              ---

    (Decrease) increase in cash and cash equivalents during the period                                                                                                       (6,178)           3,450

    Cash and cash equivalents, beginning of period                                                                                                                           21,336           18,138
                                                                                                                                                                             ------           ------

    Cash and cash equivalents, end of period                                                                                                                                $15,158          $21,588
                                                                                                                                                                            =======          =======

                                                          IMAX CORPORATION

                                                       SELECTED FINANCIAL DATA

                              In accordance with United States Generally Accepted Accounting Principles

                                                   (in thousands of U.S. dollars)

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

                                                                       Three Months

                                                                      Ended March 31,
                                                            ---------------

                                                                                                           2013                           2012
                                                                                                           ----                           ----

    Revenue

    Theater Systems

                     IMAX Systems

                      Sales and sales-type
                      leases                                                                             $9,796                        $12,865

                      Ongoing rent, fees, and
                      finance income                                                                      2,942                          2,793

                     Other                                                                                1,983                          2,340
                                                                                                          -----                          -----

                                                                                                         14,721                         17,998
                                                                                                         ------                         ------

                      Theater
                      system
                      maintenance                                                                         7,789                          6,847

                      Joint revenue
                      sharing
                      arrangements                                                                        9,376                         11,698

    Film

                      Production
                      and IMAX DMR                                                                       14,355                         13,838

                      Film
                      distribution
                      and post-
                      production                                                                          3,628                          5,215

                                                                                                         17,983                         19,053
                                                                                                         ------                         ------

    Total                                                                                               $49,869                        $55,596
                                                                                                        =======                        =======

    Gross margins

    Theater Systems

                      IMAX
                      systems(1)

                      Sales and sales-type
                      leases                                                                             $5,284                         $4,650

                      Ongoing rent, fees, and
                      finance income                                                                      2,907                          2,762

                     Other                                                                                 (349)                          (457)
                                                                                                           ----                           ----

                                                                                                          7,842                          6,955
                                                                                                          -----                          -----

                      Theater
                      system
                      maintenance                                                                         3,054                          2,726

                      Joint revenue
                      sharing
                      arrangements(1)                                                                     6,159                          7,937

    Film

                      Production
                      and IMAX
                      DMR(1)                                                                              9,213                          7,930

                      Film
                      distribution
                      and post-
                      production                                                                           (229)                         1,313

                                                                                                          8,984                          9,243
                                                                                                          -----                          -----

    Total                                                                                               $26,039                        $26,861
                                                                                                        =======                        =======

    _________

     (1) IMAX systems include commission costs of $0.3 million for the three months ended March 31, 2013 (2012 -$0.7
      million). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of
      $0.2 million for the three months ended March 31, 2013 (2012 -$0.4 million). Production and DMR segment margins
      include marketing costs of $0.9 million for the three months ended March 31, 2013 (2012 -$0.6 million).
      Distribution segment margins include marketing costs of $0.1 million for the three months ended March 31, 2013
      (2012 -$0.8 million).

                                                                                                               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 principles ("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 stock-based compensation expense and the related tax impact. 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. The Credit Facility provides that the Company will be required to maintain a Fixed Charge Coverage Ratio
     (as defined in the Credit Agreement) of not less than 1.1:1.0. The Company will also be required to maintain minimum EBITDA (as defined in the Credit Agreement) of $70.0 million between closing and December 30, 2013, which requirement
     increases to $80.0 million on December 31, 2013, $90.0 million on December 31, 2014, and $100.0 million on December 31, 2015. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the Credit Agreement) of 2.5:1.0
     between closing and December 30, 2013, which requirement decreases to (i) 2.25:1.0 on December 31, 2013; (ii) 2.00:1:0 on December 31, 2014; and (iii) 1.75:1.0 on December 31, 2015. The ratio of total debt to EBITDA was 0.17:1 as at
     March 31, 2013, where Total Debt (as defined in the Credit Agreement) is the sum of all obligations evidenced by notes, bonds, debentures or similar instruments and was $18.0 million. EBITDA is calculated as follows:

                                                                                                                                                                     Three months ended                  Twelve months ended

                                                                                                                                                                       March 31, 2013                       March 31, 2013
                                                                                                                                                                       --------------                       --------------

    (In thousands of U.S Dollars)

    Net income                                                                                                                                                                                   $2,861                                           $41,689

    Add:

                                   Loss from equity accounted investments                                                                                                                           220                                             1,123

                                   Provision for income taxes                                                                                                                                     1,152                                            15,265

                                   Interest expense, net of interest income (1)                                                                                                                     331                                               433

                                   Depreciation and amortization, including film asset amortization                                                                                               8,493                                            33,686

                                   Write-downs net of recoveries including asset impairments and receivable provisions                                                                                -                                             1,126

                                   Gain on curtailment of postretirement benefits                                                                                                                (2,185)                                           (2,185)

                                   Stock and other non-cash compensation                                                                                                                          3,000                                            13,132

                                                                                                                                                                                                $13,872                                          $104,269
                                                                                                                                                                                                =======                                          ========

    ____________

    (1) Includes $0.1 million of amortization of deferred financing costs charged to interest expense for the three months ended March 31, 2013 (2012 - less than $0.1 million).

                                                                                                                   IMAX CORPORATION

                                                                                                                  OTHER INFORMATION

                                                                                                            (in thousands of U.S. dollars)

    Adjusted Net Income and Adjusted Diluted Earnings Per Share Calculations - Quarter Ended March 31, 2013 vs. 2012:

        The Company reported net income of $2.9 million, or $0.04 per basic and diluted share, for the first quarter of 2013, as compared to net income of $2.5 million or $0.04 per basic and diluted share for the first quarter of 2012. Net income for the
         first quarter of 2013 includes a $2.8 million charge, or $0.04 per diluted share, for stock-based compensation (2012 - $3.8 million or $0.05 per diluted share). Adjusted net income, which consists of net income excluding stock-based
         compensation expense and the related tax benefit, was $5.6 million, or $0.08 per diluted share, in the first quarter of 2013, as compared to adjusted net income of $6.1 million, or $0.09 per diluted share, for the first quarter of 2012. 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

                                                                                                                                                  March 31, 2013                                March 31, 2012*
                                                                                                                                                  --------------                                --------------

                                                                                                                                        Net Income             Diluted EPS               Net Income            Diluted EPS
                                                                                                                                        ----------             -----------               ----------            -----------

    Reported                                                                                                                                           $2,861                                 $0.04                           $2,509                           $0.04

    Adjustments:

                                                 Stock-based compensation                                                                               2,808                                  0.04                            3,802                            0.05

                                                 Tax benefit on item listed above                                                                        (105)                                    -                             (200)                              -

    Adjusted                                                                                                                                           $5,564                                 $0.08                           $6,111                           $0.09
                                                                                                                                                       ======                                 =====                           ======                           =====

    Weighted average diluted shares outstanding                                                                                                                     68,690                                                              68,158
                                                                                                                                                                    ======                                                              ======

    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:

                                 Three Months
                                     Ended

    (In thousands of U.S.          March 31,
     Dollars)                         2013
                                  ----------

    Net cash (used in) operating
     activities                                  $(989)

    Net cash (used in) investing
     activities                                (12,810)

    Free cash flow                            $(13,799)
                                              ========

SOURCE IMAX Corporation


Source: PR Newswire