IMAX Corporation (NYSE: IMAX) today reported strong top and bottom-line financial results for the third quarter of 2023, demonstrating the value of its unique global entertainment technology platform and diversified content portfolio.

“IMAX financial results for the third quarter are spectacular by any measure — versus budget, versus our historical performance and in the context of a highly dynamic business environment for media and entertainment,” said Richard L. Gelfond, Chief Executive Officer of IMAX. “We are programming by far the strongest and most diverse content portfolio in our history — Hollywood blockbusters, local language films, marquee theatrical releases by streamers, concert films, docs, Live events – and we couldn’t be more pleased with the results across our global network.”

“Our outsized performance with Hollywood blockbusters coupled with the expansion of our successful local language strategy is fueling strong network growth around the world, with robust sales activity in China and North America as well as key growth markets across Europe and Southeast Asia.”

“It is clear that IMAX is the preferred way to experience blockbuster entertainment globally, and our global footprint, differentiated technology, and asset-lite model have made us a consistent winner. As we enter the fourth quarter, we remain on track to deliver significant growth in system signings, installations, and Adjusted EBITDA for the full year and one of the best years in our history at the global box office.”

Content Solutions Segment

• Content Solutions revenues of $44.2 million increased 101% year-over-year. Gross box office from IMAX locations in Q3 2023 of $347.1 million was up 96% from Q3 2022. Key contributors to third quarter box office performance included:
• Hollywood titles led by Oppenheimer with $180 million in IMAX GBO with significant contributions coming from Mission Impossible: Dead Reckoning Part 1 and Indiana Jones and the Dial of Destiny.
• Local language titles led by the record setting Chinese title Creation of the Gods: Kingdom of Storms ($32.3 million in IMAX GBO), with strong contributions coming from No More Bets, Lost in the Stars, and Jawan.
• Gross margin for Content Solutions was $26.4 million (at a 60% margin) and increased 189% compared to the third quarter of the prior year period. This outsized growth was driven by the operating leverage in our business that resulted in very pronounced profit flow-through from box office.

Technology Products and Services Segment

• Technology Products and Services revenues and gross margin increased 23% year-over-year to $56.2 million and 55% year-over-year to $33.8 million, respectively, which reflects growth in box office tied to rental revenues as well as a higher number of sale/hybrid installations.
• During the third quarter the Company installed 30 systems compared to 17 systems in the third quarter of 2022. Of those, 16 systems were under sales and hybrid JRSA arrangements, compared to 9 systems in the prior year.

Operating Cash Flow and Liquidity
Net cash provided by operating activities for the nine months through September was $54.6 million compared to net cash provided by operating activities of $0.5 million in the prior year period.

As of September 30, 2023, the Company’s available liquidity was $308.9 million or $438.9 million excluding the letter of credit associated with the IMAX China privatization transaction. Our liquidity includes cash and cash equivalents of $109.6 million, $150.0 million in available borrowing capacity under the Credit Facility, $130.0 million for the standby letter of credit and $49.2 million in available borrowing capacity under IMAX China’s revolving facilities. Total debt, excluding deferred financing costs, was $258.2 million as of September 30, 2023.

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 in the third quarter of 2023 were 54.6 million and 55.5 million, respectively, compared to 56.0 million for both in the third quarter of 2022, a decrease of 3% and 1%, respectively.

The Company repurchased 362,784 common shares at an average price of $16.90 per share, for a total of $6.1 million, excluding commission, year-to-date through October 24, 2023.

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 million of its common shares, of which approximately $187.3 million remains available.

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. Streaming technology company SSIMWAVE, an IMAX subsidiary, is a leader in AI-driven video quality solutions for media and entertainment companies.

IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of March 31, 2023, there were 1,711 IMAX systems (1,631 commercial multiplexes, 12 commercial destinations, 68 institutional) operating in 87 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchange under the stock code “1970.”

IMAX, IMAX Dome, IMAX 3D, IMAX 3D Dome, Experience It In IMAX, The IMAX Experience, An IMAX Experience, An IMAX 3D Experience, IMAX DMR, DMR, Filmed For IMAX, IMAX LIVE, IMAX Enhanced, IMAX nXos, SSIMWAVE and Films to the Fullest, are trademarks and trade names of the Company 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), Twitter (www.twitter.com/imax), YouTube (www.youtube.com/imaxmovies) and LinkedIn (www.linkedin.com/company/imax).