IMAX Corporation (NYSE: IMAX) today reported financial results for the first quarter of 2024, demonstrating the value of its unique global entertainment platform and broad content portfolio.

• Global entertainment platform delivers Revenue of $79 million and strong profitability, including Net Income of $3.3 million up 33% YoY and Total Adjusted EBITDA Margin of 40.5% up more than 300 basis points YoY.
• IMAX system installations climb +67% YoY to 15 in Q1; sales activity gaining momentum with 17 signings for new and upgraded IMAX systems worldwide year-to-date.
• IMAX Global Box Office (GBO) of $261 million marks Company’s third highest grossing Q1 ever, driven by “Dune: Part Two”, “Godzilla x Kong: New Empire”; IMAX-exclusive “Queen Rock Montreal”; and local language releases, which contributed 21% of quarterly GBO.
• IMAX delivers 5.9% of Domestic Box Office in Q1 — Company’s highest quarterly market share ever in North America — and strong 3.4% of Global Box Office.

“IMAX powers awe-inspiring experiences for audiences around the world; our technology, deep relationships with creators, and global scale combine to make us a wholly differentiated platform, and as a result, one of the most consistent winners in global media and entertainment,” said Rich Gelfond, CEO of IMAX.

“Our industry leading momentum is fueled in part by our strategic expansion of the IMAX value proposition; increasingly, our technology is driving content creation as much as it is content delivery. ‘Oppenheimer,’ ‘Dune — Part Two,” and ‘Godzilla x Kong’ demonstrate that more and more of today’s commercially and critically successful blockbusters are shot with IMAX cameras for the IMAX platform — which drives our global box office and makes our systems even more of a ‘must have’ for global exhibitors.”

“We currently have more films in production shooting with IMAX cameras than at any time in our history, and an unprecedented run of Filmed for IMAX titles scheduled for 2025 — including every one of our releases slated for the critical summer blockbuster season. We are also opening the aperture of The IMAX Experience by working with a wider variety of creators than ever across local language, documentaries, and music, gaming, sports, and live events.”

“IMAX is very well-positioned to accelerate growth and margin expansion with a promising slate for the duration of the year, 2025, and 2026, and strong sales activity across key global markets we’re targeting for expansion.”

Content Solutions Segment
Content Solutions revenue of $34 million increased 6% year-over-year driven by incremental revenue from alternative content including the Queen Rock Montreal concert film coupled with the strong March box office from “Dune: Part 2” and “Godzilla x Kong: New Empire”. Gross box office from IMAX locations of $261 million compares to box office of $273 million in Q1 2023.

Gross margin for Content Solutions of $22 million increased 23% year-over-year. Gross margin percent of 65% increased 900 basis points year-over-year driven by lower marketing expenses and the performance of alternative content.

Technology Products and Services Segment
Technology Products and Services revenues and gross margin decreased 16% to $43 million and 21% to $24 million, respectively, reflecting lower system renewals and mix of fewer sale/hybrid installations.

During the first quarter the Company installed 15 systems compared to 9 systems in the first quarter of 2023. Of those, 5 systems were under sales arrangements compared to 8 systems in the prior year.

The Commercial network grew 4% year-over-year with the number of IMAX locations increasing to 1,697. IMAX system backlog stands at 442 systems at the end of March including 377 new systems representing potential future network growth of approximately 21%.

Operating Cash Flow and Liquidity
Net cash used in operating activities for the first quarter of 2024 was $11.0 million compared to net cash provided by operating activities of $21.2 million in the first quarter of 2023. The change year over year reflects the timing of box office and related collections. The first quarter of 2023 operating cash flows benefited from strong box office at the end of 2022 and in early 2023 driven by the film slate, which included Avatar: The Way of Water. In comparison, the first quarter of 2024 operating cash flows were negatively impacted from lower levels of box office in the fourth quarter 2023, and early 2024 due to the weaker film slate stemming from the Hollywood Actors and Writers strikes.

As of March 31, 2024, the Company’s available liquidity was $367.0 million. The Company’s liquidity includes cash and cash equivalents of $81.0 million, $231.0 million in available borrowing capacity under the Credit Facility, and $55.0 million in available borrowing capacity under IMAX China’s revolving facilities. Total debt, excluding deferred financing costs, was $302.0 million as of March 31, 2024.

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

Share Count and Capital Return
The weighted average basic and diluted shares outstanding used in the calculation of adjusted EPS for the first quarter of 2024 were 52.5 million and 53.4 million, respectively, compared to 54.1 million and 55.0 million, respectively for the first quarter of 2023, a decrease year-over-year of 2.9% for both basic and diluted shares outstanding.

During the first quarter of 2024, the Company repurchased 1.2 million common shares at an average price of $13.99 per share, for a total of $16.2 million, excluding commission.

On June 14, 2023, the Company announced a 3-year extension to its share-repurchase program through June 30, 2026. The current share-repurchase program authorizes the Company to repurchase up to $400.0 million of its common shares, of which approximately $150.8 million remains available.

Investor Relations Website and Social Media
On a monthly basis, the Company posts quarter-to-date box office results on the IMAX Investor Relations website located at investors.imax.com. The Company expects to provide such updates within five business days of month-end, although the Company may change this timing without notice.

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

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

IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of March 31, 2024, there were 1,772 IMAX systems (1,697 commercial multiplexes, 12 commercial destinations, 63 institutional) operating in 89 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchange under the stock code “1970”.

IMAX, IMAX 3D, Experience It In IMAX, The IMAX Experience, DMR, Filmed For IMAX, IMAX LIVE™, and IMAX Enhanced are trademarks and trade names of IMAX Corporation or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. For more information, visit www.imax.com. You may also connect with IMAX on Instagram (www.instagram.com/imax), Facebook (www.facebook.com/imax), LinkedIn (www.linkedin.com/company/imax), X (www.twitter.com/imax), and YouTube (www.youtube.com/imaxmovies).