8-K
IMAX CORP (IMAX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
October 31, 2022
Date of report (Date of earliest event reported)
IMAX Corporation
(Exact Name of Registrant as Specified in Its Charter)
| Canada | 001-35066 | 98-0140269 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>Identification Number) |
| 2525 Speakman Drive | 902 Broadway, Floor 20 | |
| --- | --- | |
| Mississauga, Ontario, Canada L5K 1B1 | New York, New York, USA 10010 | |
| (905) 403-6500 | (212) 821-0100 |
(Address of principal executive offices, zip code, telephone numbers)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br>Symbol(s) | Name of each exchange<br><br>on which registered |
|---|---|---|
| Common Shares, no par value | IMAX | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter):
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On October 31, 2022, IMAX Corporation (the “Company”) issued a press release announcing the Company’s financial and operating results for the quarter ended September 30, 2022, a copy of which is attached as Exhibit 99.1.
The information in this current report on Form 8-K, including the Exhibit attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d)
Exhibits
| Exhibit<br><br>No. | Description |
|---|---|
| 99.1 | Press Release dated October 31, 2022. |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| IMAX Corporation | ||
|---|---|---|
| (Registrant) | ||
| Date: October 31, 2022 | By: | /s/ Richard L. Gelfond |
| Name: | Richard L. Gelfond | |
| Title: | Chief Executive Officer & Director |
EX-99.1
Exhibit 99.1
IMAX CORPORATION REPORTS THIRD QUARTER 2022 RESULTS
• IMAX global entertainment technology platform drives double-digit growth across Revenue, Gross Margin and Adjusted EBITDA as well as positive Net Income within IMAX China
• Total IMAX Gross Box Office increased 25% year over year to $177.1 million, with 30% of box office coming from Local Language blockbusters
• Strong upcoming blockbuster film slate represents significant expected tailwind, as 2022 concludes with “Black Panther: Wakanda Forever” and “Avatar: The Way of Water,” the first of four planned sequels to the highest grossing movie of all time with more than $270 million in IMAX box office receipts
• IMAX completes acquisition of streaming technology company SSIMWAVE, enhancing its capabilities to deliver the best images on any screen, out of home and in home
• IMAX increased its Share-Repurchase Authorization by $200 million and repurchased 418 thousand shares in third quarter; cumulative 10.4 million under the program as of September 30th, or 16% of total shares outstanding
NEW YORK, NY — October 31, 2022 — IMAX Corporation (NYSE: IMAX) today reported solid financial results for the third quarter of 2022 demonstrating the value of its unique global entertainment technology platform and content portfolio.
“IMAX demonstrated the strength of its differentiated model in the third quarter — leaning into its diversified global content portfolio to grow revenue, box office, and EBITDA despite a temporary slowdown in the Hollywood pipeline,” said Richard L. Gelfond, CEO of IMAX Corporation. “As we look toward the end of 2022 and beyond, we see significant potential tailwinds on the horizon, most notably the release of “Black Panther: Wakanda Forever” and “Avatar: The Way of Water”, the long-awaited sequel to the highest grossing IMAX film of all time.”
“We also took a significant step in the quarter to advance our long-term growth strategy with the acquisition of streaming technology company SSIMWAVE. In the short-term, SSIMWAVE is expected to generate incremental revenue for IMAX and be accretive in 2023, and in the long-term open a new world of possibility for our image enhancement capabilities — across not only streaming and theatrical, but gaming, VR and AR.”
Financial Summary
• Revenue increased 21% to $68.8 million from $56.6 million in the year-ago period
• IMAX China Net Income of $4.2 million or $3.0 million attributable to common shareholders.
• Net loss(2) was ($9.0) million, or ($0.16) per share, compared to ($8.4) million, or ($0.14) per share in Q3 2021. Q3 2022 included a $4.3 million, or $0.08 per share, valuation allowance against its deferred tax assets as well as $1.0 million, or $0.02 per share, in acquisition-related expenses.
• Adjusted Net loss(1,2) was ($3.0) million, or ($0.05) per share, improved from an Adjusted Net Loss(1,2) of ($5.0) million, or ($0.08) per share in Q3 2021
• Adjusted EBITDA(1,3) of $16.5 million was up from $13.1 million in Q3 2021 and marked the 8th straight quarter of positive Adjusted EBITDA. On a trailing 12-month basis, Adjusted EBITDA(1,3) was $100.7 million as of September 30th.
Third Quarter Financial Highlights
| Three Months Ended | Nine Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||||||||
| In millions of U.S. Dollars, except per share data | 2022 | 2021 | YoY % <br>Change | 2022 | 2021 | YoY % Change | ||||||||||||
| Total Revenue | $ | 68.8 | $ | 56.6 | 21 | % | $ | 202.8 | $ | 146.3 | 39 | % | ||||||
| Gross Margin | $ | 31.7 | $ | 27.5 | 15 | % | $ | 107.5 | $ | 70.4 | 53 | % | ||||||
| Gross Margin (%) | 46 | % | 49 | % | 53 | % | 48 | % | ||||||||||
| Net Loss(2) | $ | (9.0 | ) | $ | (8.4 | ) | N/A | $ | (25.4 | ) | $ | (32.4 | ) | N/A | ||||
| Diluted Net Loss per share(2) | $ | (0.16 | ) | $ | (0.14 | ) | N/A | $ | (0.44 | ) | $ | (0.55 | ) | N/A | ||||
| Adjusted Net Loss(1)(2) | $ | (3.0 | ) | $ | (5.0 | ) | N/A | $ | (7.3 | ) | $ | (26.8 | ) | N/A | ||||
| Adjusted Net Loss per share(1)(2) | $ | (0.05 | ) | $ | (0.08 | ) | N/A | $ | (0.13 | ) | $ | (0.44 | ) | N/A | ||||
| Adjusted EBITDA per Credit Facility(1)(3) | $ | 16.5 | $ | 13.1 | 26 | % | $ | 56.7 | $ | 24.6 | 130 | % | ||||||
| Adjusted EBITDA Margin (%)(1)(2) | 25.5 | % | 26.3 | % | (3 | %) | 30.0 | % | 19.9 | % | 50 | % | ||||||
| Weighted average shares outstanding (in millions): | ||||||||||||||||||
| Basic and Diluted | 56.0 | 59.2 | (5 | %) | 57.3 | 59.2 | (3 | %) |
_______________
(1) Non-GAAP Financial Measure. See the discussion at the end of this earnings release for a description of the non-GAAP financial measures used herein, as well as reconciliations to the most comparable GAAP amounts.
(2) Attributable to common shareholders.
(3) Adjusted EBITDA per Credit facility attributable to common shareholders.
Third Quarter and September Year-to-Date Segment Results(1)
| IMAX Technology Network | IMAX Technology Sales and Maintenance | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| In millions of U.S. Dollars | Revenue | Gross Margin | Gross Margin % | Revenue | Gross Margin | Gross Margin % | |||||||||||||
| 3Q22 | $ | 32.5 | $ | 17.7 | 54 | % | $ | 33.0 | $ | 15.4 | 47 | % | |||||||
| 3Q21 | 25.6 | 10.9 | 43 | % | 27.7 | 14.9 | 54 | % | |||||||||||
| % change | 27 | % | 62 | % | 19 | % | 3 | % | |||||||||||
| YTD 3Q22 | $ | 110.8 | $ | 68.4 | 62 | % | $ | 82.6 | $ | 40.5 | 49 | % | |||||||
| YTD 3Q21 | 65.5 | 29.7 | 45 | % | 73.4 | 38.1 | 52 | % | |||||||||||
| % change | 69 | % | 130 | % | 13 | % | 6 | % |
_______________
(1) Please refer to the Company’s Form 10-Q for the period ended September 30, 2022 for additional segment information.
IMAX Technology Network
• IMAX Technology Network revenues increased 27% to $32.5 million in the third quarter of 2022, compared to $25.6 million in the prior-year period. The strength of local language titles as well as key titles such as “Thor: Love and Thunder” and “Nope” drove the increase in gross box office and revenue.
• Gross margin for the IMAX Technology Network increased to $17.7 million in the third quarter of 2022, compared to $10.9 million in the prior year period as improved box office performance drove higher revenue.
IMAX Technology Sales and Maintenance
• IMAX Technology Sales and Maintenance revenues increased 19% to $33.0 million in the third quarter of 2022, compared with $27.7 million in the prior year period. During the third quarter the Company installed 10 systems under sales and sales-type lease arrangements and hybrid JRSA compared to 9 systems in the third quarter of 2021.
• Total gross margin for IMAX Technology Sales and Maintenance increased 3% to $15.4 million in the third quarter of 2022 compared to $14.9 million in the prior year period.
Cash Balances and Outstanding Debt
Total cash and cash equivalents as of September 30, 2022 were $87.2 million. Total debt, excluding deferred financing fees, was $237.6 million as of September 30, 2022.
As of September 30, 2022, the Company’s available liquidity was $437.4 million including its balance of cash and cash equivalents of $87.2 million, $300.0 million in available borrowing capacity under the Credit Facility and $50.2 million in available borrowing capacity under IMAX China’s revolving facilities.
Share Count and Capital Return
The weighted average basic and diluted shares outstanding at the end of the third quarter of 2022 was 56.0 million compared to 59.2 million in the third quarter of 2021. During the third quarter of 2022, the Company repurchased 0.4 million shares at an average price of $14.62 for a total of $6.1 million, and IMAX China repurchased 1.5 million shares at an average price of $0.79 for a total of $1.2 million. As of September 30, 2022, a total of $220.1 million remains available under the Company’s outstanding share repurchase authorization.
Supplemental Materials
For more information about the Company’s results, please refer to the IMAX Investor Relations website located at investors.imax.com.
Investor Relations Website and Social Media
On a weekly basis, the Company posts quarter-to-date box office results on the IMAX Investor Relations website located at investors.imax.com. The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one-week lag.
The Company may post additional information on the Company’s corporate and Investor Relations website which may be material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company’s website in addition to the Company’s press releases, SEC filings and public conference calls and webcasts, for additional information about the Company.
Conference Call
The Company will host a conference call today at 4:30 PM ET to discuss its third quarter 2022 financial results. This call is being webcast and can be accessed at investors.imax.com. To access the call via telephone, there is a new process: interested parties please pre-register here: https://register.vevent.com/register/BI38d122a3ee2046378a62d5b70836c40a. and you will be provided with a dial-in number and unique pin. To avoid delays, we encourage participants to dial into the conference call ten minutes ahead of the scheduled start time. A replay of the call will be available via webcast at investors.imax.com.
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 theaters to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe.
IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of September 30, 2022, there were 1,703 IMAX theater systems (1,622 commercial multiplexes, 12 commercial destinations, 69 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®, Films to the Fullest®, SSIMWAVE®, SSIMPLUS®, Viewer Score® are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. More information about the Company can be found at www.imax.com. You may also connect with IMAX on Instagram (https://www.instagram.com/imax), Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).
For additional information please contact:
| Investors:<br><br>IMAX Corporation, New York<br><br>Jennifer Horsley<br><br>212-821-0154<br><br>jhorsley@IMAX.com | Media:<br><br>IMAX Corporation, New York<br><br>Mark Jafar<br><br>212-821-0102<br><br>mjafar@imax.com |
|---|
Forward-Looking Statements
This earnings release contains forward looking statements that are based on IMAX management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. These forward-looking statements include, but are not limited to, references to business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, future capital expenditures (including the amount and nature thereof), industry prospects and consumer behavior, plans and references to the future success of IMAX Corporation together with its consolidated subsidiaries (the "Company") and expectations regarding the Company's future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, risks related to the adverse impact of the COVID-19 pandemic; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada, as well as geopolitical conflicts, such as the conflict between Russia and Ukraine; risks related to the Company’s growth and operations in China; the performance of IMAX DMR® films; the signing of IMAX Theater System agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which the Company operates, including competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to consolidation among commercial exhibitors and studios; risks related to brand extensions and new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company’s inability to protect the Company’s intellectual property; risks related to climate change; risks related to weather conditions and natural disasters that may disrupt or harm the Company’s business; risks related to the Company’s indebtedness and compliance with its debt agreements; general economic, market or business conditions; risks related to political, economic and social instability, including with respect to the Russia-Ukraine conflict; the failure to convert IMAX Theater System backlog into revenue; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in our periodic filings with the SEC; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX’s most recent Annual Report on Form 10-K. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Primary Reporting Groups
The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements ("JRSA"); (iii) IMAX Systems; (iv) IMAX Maintenance; (v) Other Theater Business; (vi) Film Distribution; and (vii) Film Post-Production. The Company's activities that do not meet the criteria to be considered a reportable segment are disclosed within All Other. The Company organizes its reportable segments into the following three categories, identified by the nature of the product sold or service provided:
(i) IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from JRSA segment;
(ii) IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment; and
(iii) Film Distribution and Post-Production, which includes activities related to the distribution of large-format documentary films, primarily to institutional theaters, and the distribution of exclusive experiences ranging from live performances to interactive events with leading artists and creators (through the Film Distribution segment) and the provision of film post-production and quality control services.
In the first quarter of 2022, the Company’s internal reporting was updated to reclassify the results of IMAX Enhanced®, an initiative to bring The IMAX Experience® into the home, out of the New Business Initiatives segment and into All Other for segment reporting purposes. IMAX Enhanced was the only component of the New Business Initiatives segment. Prior period comparatives have been reclassified to conform with the current period presentation. Following its acquisition in Q3 2022, SSIMWAVE is being included within All Other for segment reporting purposes. Please refer to the Company’s Form 10-Q for the period ended September 30, 2022 for additional segment information.
IMAX Network and Backlog
| Three Months Ended<br>September 30, | Nine Months Ended<br> September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| Theater System Signings: | 2022 | 2021 | 2022 | 2021 | ||||
| New IMAX Theater Systems | ||||||||
| Sales and sales-type lease arrangements | 3 | 4 | 9 | 13 | ||||
| Hybrid JRSA | 1 | — | 3 | — | ||||
| Traditional JRSA | 7 | 5 | 9 | 8 | ||||
| Total new IMAX theaters Systems | 11 | 9 | 21 | 21 | ||||
| Upgrades of IMAX theater systems | 4 | 2 | 14 | 4 | ||||
| Total IMAX Theater System signings | 15 | 11 | 35 | 25 | ||||
| Three Months Ended<br>September 30, | Nine Months Ended<br> September 30, | |||||||
| Theater System Installations: | 2022 | 2021 | 2022 | 2021 | ||||
| New IMAX Theater Systems(1) | ||||||||
| Sales and sales-type lease arrangements | 7 | 6 | 14 | 17 | ||||
| Hybrid JRSA | 2 | 2 | 5 | 6 | ||||
| Traditional JRSA | 7 | 6 | 16 | 15 | ||||
| Total new IMAX Theater Systems | 16 | 14 | 35 | 38 | ||||
| Upgrades of IMAX theater systems | 1 | 3 | 5 | 7 | ||||
| Total IMAX Theater System installations | 17 | 17 | 40 | 45 | ||||
| September 30, | ||||||||
| --- | --- | --- | --- | --- | --- | --- | ||
| Theater System Backlog: | 2022 | 2021 | ||||||
| Sales and sales-type lease arrangements | 170 | 182 | ||||||
| Hybrid JRSA | 127 | 139 | ||||||
| Traditional JRSA | 192 | (2) | 185 | (2) | ||||
| Total Theater System backlog | 489 | (3) | 506 | (4) | ||||
| September 30, | ||||||||
| Theater Network: | 2022 | 2021 | ||||||
| Commercial Multiplex Theaters | ||||||||
| Sales and sales-type lease arrangements | 696 | 676 | ||||||
| Hybrid JRSA | 150 | 144 | ||||||
| Traditional JRSA | 776 | 760 | ||||||
| Total Commercial Multiplex Theaters | 1,622 | 1,580 | ||||||
| Commercial Destination Theaters | 12 | 12 | ||||||
| Institutional Theaters | 69 | 72 | ||||||
| Total Theater network(5) | 1,703 | 1,664 |
_______________
(1) For the three months ended September 30, 2022, includes two IMAX Theater Systems that were relocated from their original locations (2021 — nil). For the nine months ended September 30, 2022, includes eight IMAX Theater Systems that were relocated from their original location. (2021 ― nil). When a theater system under a sales or sales-type lease arrangement is relocated, the amount of revenue earned by the Company may vary from transaction-to-transaction and is usually less than the amount earned for a new sale. In certain situations when a theater system is relocated, the original location is upgraded to an IMAX Laser Theater System.
(2) Includes 41 IMAX Theater Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2021 — 44).
(3) Includes 201 new IMAX Laser Theatre systems configurations and 116 upgrades of existing locations to IMAX Laser Theater Systems configurations.
(4) Includes 157 new IMAX Laser Theatre systems configurations and 95 upgrades of existing locations to IMAX Laser Theater Systems configurations.
(5) Period-to-period changes are reported net of the effect of permanently closed theaters.
IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. Dollars, except per share amounts)
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenues | |||||||||||||||
| Technology sales | $ | 18,065 | $ | 13,160 | $ | 35,270 | $ | 34,508 | |||||||
| Image enhancement and maintenance services | 36,233 | 30,588 | 117,285 | 76,914 | |||||||||||
| Technology rentals | 12,540 | 10,219 | 43,726 | 26,708 | |||||||||||
| Finance income | 1,917 | 2,635 | 6,478 | 8,181 | |||||||||||
| 68,755 | 56,602 | 202,759 | 146,311 | ||||||||||||
| Costs and expenses applicable to revenues | |||||||||||||||
| Technology sales | 10,061 | 6,230 | 20,264 | 17,779 | |||||||||||
| Image enhancement and maintenance services | 20,563 | 16,461 | 56,259 | 38,582 | |||||||||||
| Technology rentals | 6,430 | 6,424 | 18,728 | 19,579 | |||||||||||
| 37,054 | 29,115 | 95,251 | 75,940 | ||||||||||||
| Gross margin | 31,701 | 27,487 | 107,508 | 70,371 | |||||||||||
| Selling, general and administrative expenses | 32,905 | 28,377 | 100,181 | 82,393 | |||||||||||
| Research and development | 1,115 | 2,025 | 3,667 | 5,696 | |||||||||||
| Amortization of intangible assets | 1,111 | 1,255 | 3,412 | 3,586 | |||||||||||
| Credit loss expense (reversal), net | 808 | (3,317 | ) | 8,149 | (4,884 | ) | |||||||||
| Asset impairments | — | — | 4,470 | — | |||||||||||
| Legal judgment and arbitration awards | — | — | — | (1,770 | ) | ||||||||||
| Loss from operations | (4,238 | ) | (853 | ) | (12,371 | ) | (14,650 | ) | |||||||
| Realized and unrealized investment gains | 35 | 30 | 99 | 5,311 | |||||||||||
| Retirement benefits non-service expense | (140 | ) | (117 | ) | (417 | ) | (347 | ) | |||||||
| Interest income | 257 | 538 | 1,176 | 1,680 | |||||||||||
| Interest expense | (1,323 | ) | (1,540 | ) | (4,354 | ) | (5,534 | ) | |||||||
| Loss before taxes | (5,409 | ) | (1,942 | ) | (15,867 | ) | (13,540 | ) | |||||||
| Income tax expense | (2,348 | ) | (4,402 | ) | (8,091 | ) | (9,416 | ) | |||||||
| Net loss | (7,757 | ) | (6,344 | ) | (23,958 | ) | (22,956 | ) | |||||||
| Less: net income attributable to non-controlling interests | (1,196 | ) | (2,034 | ) | (1,455 | ) | (9,473 | ) | |||||||
| Net loss attributable to common shareholders | $ | (8,953 | ) | $ | (8,378 | ) | $ | (25,413 | ) | $ | (32,429 | ) | |||
| Net loss per share attributable to common shareholders - basic and diluted: | |||||||||||||||
| Net loss per share - basic and diluted: | $ | (0.16 | ) | $ | (0.14 | ) | $ | (0.44 | ) | $ | (0.55 | ) | |||
| Weighted average number of shares outstanding (000's): | |||||||||||||||
| Basic | 56,039 | 59,244 | 57,301 | 59,207 | |||||||||||
| Diluted | 56,039 | 59,244 | 57,301 | 59,207 | |||||||||||
| Additional Disclosure: | |||||||||||||||
| Depreciation and amortization | $ | 15,640 | $ | 14,899 | $ | 42,663 | $ | 40,570 | |||||||
| Amortization of deferred financing costs | $ | 712 | $ | 741 | $ | 2,465 | $ | 1,749 |
IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. Dollars, except share amounts)
(Unaudited)
| September 30, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 87,151 | $ | 189,711 | ||
| Accounts receivable, net of allowance for credit losses | 125,686 | 110,050 | ||||
| Financing receivables, net of allowance for credit losses | 122,618 | 141,049 | ||||
| Variable consideration receivables, net of allowance for credit losses | 43,643 | 44,218 | ||||
| Inventories | 36,378 | 26,924 | ||||
| Prepaid expenses | 13,145 | 11,802 | ||||
| Film assets, net of accumulated amortization | 4,535 | 4,241 | ||||
| Property, plant and equipment, net of accumulated depreciation | 251,518 | 260,353 | ||||
| Investment in equity securities | 1,095 | 1,087 | ||||
| Other assets | 16,294 | 17,799 | ||||
| Deferred income tax assets, net of valuation allowance | 14,369 | 13,906 | ||||
| Goodwill | 61,718 | 39,027 | ||||
| Other intangible assets, net of accumulated amortization | 22,077 | 23,080 | ||||
| Total assets | $ | 800,227 | $ | 883,247 | ||
| Liabilities | ||||||
| Accounts payable | $ | 22,607 | $ | 15,943 | ||
| Accrued and other liabilities | 119,138 | 111,896 | ||||
| Deferred revenue | 76,461 | 81,281 | ||||
| Revolving credit facility borrowings, net of unamortized debt issuance costs | 2,660 | 2,472 | ||||
| Convertible Notes and other borrowings, net | 226,527 | 223,641 | ||||
| Deferred income tax liabilities | 14,900 | 17,642 | ||||
| Total liabilities | 462,293 | 452,875 | ||||
| Commitments and contingencies | ||||||
| Non-controlling interests | 736 | 758 | ||||
| Shareholders' equity | ||||||
| Capital stock common shares — no par value. Authorized — unlimited number. | ||||||
| 55,973,443 issued and outstanding (December 31, 2021 — 58,653,642 issued and outstanding) | 388,953 | 409,979 | ||||
| Other equity | 179,571 | 174,620 | ||||
| Statutory surplus reserve | 3,932 | 3,932 | ||||
| Accumulated deficit | (282,944 | ) | (234,975 | ) | ||
| Accumulated other comprehensive (loss) income | (16,173 | ) | 2,527 | |||
| Total shareholders' equity attributable to common shareholders | 273,339 | 356,083 | ||||
| Non-controlling interests | 63,859 | 73,531 | ||||
| Total shareholders' equity | 337,198 | 429,614 | ||||
| Total liabilities and shareholders' equity | $ | 800,227 | $ | 883,247 |
IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. Dollars)
(Unaudited)
| Nine Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, | ||||||
| 2022 | 2021 | |||||
| Operating Activities | ||||||
| Net loss | $ | (23,958 | ) | $ | (22,956 | ) |
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||||
| Depreciation and amortization | 42,663 | 40,570 | ||||
| Amortization of deferred financing costs | 2,465 | 1,749 | ||||
| Credit loss expense (reversal), net | 8,149 | (4,884 | ) | |||
| Write-downs | 5,707 | 878 | ||||
| Deferred income tax benefit | (3,374 | ) | (1,687 | ) | ||
| Share-based and other non-cash compensation | 19,510 | 18,558 | ||||
| Unrealized foreign currency exchange loss | 1,310 | 555 | ||||
| Realized and unrealized investment gains | (99 | ) | (5,311 | ) | ||
| Changes in assets and liabilities: | ||||||
| Accounts receivable | (18,050 | ) | (24,336 | ) | ||
| Inventories | (10,131 | ) | 653 | |||
| Film assets | (14,174 | ) | (10,035 | ) | ||
| Deferred revenue | (5,989 | ) | (1,434 | ) | ||
| Changes in other operating assets and liabilities | (3,548 | ) | (11,902 | ) | ||
| Net cash provided by (used in) operating activities | 481 | (19,582 | ) | |||
| Investing Activities | ||||||
| Acquisition of SSIMWAVE, net of cash and cash equivalents acquired | (12,639 | ) | — | |||
| Purchase of property, plant and equipment | (5,248 | ) | (2,353 | ) | ||
| Investment in equipment for joint revenue sharing arrangements | (14,543 | ) | (5,361 | ) | ||
| Interest in film classified as a financial instrument | (4,731 | ) | — | |||
| Acquisition of other intangible assets | (3,246 | ) | (3,399 | ) | ||
| Proceeds from sale of equity securities | — | 17,769 | ||||
| Net cash (used in) provided by investing activities | (40,407 | ) | 6,656 | |||
| Financing Activities | ||||||
| Proceeds from issuance of convertible notes, net | — | 223,675 | ||||
| Debt issuance costs related to convertible notes | — | (1,163 | ) | |||
| Purchase of capped calls related to convertible notes | — | (19,067 | ) | |||
| Revolving credit facility borrowings | 4,890 | 3,600 | ||||
| Repayments of revolving credit facility borrowings | (3,600 | ) | (300,243 | ) | ||
| Credit facility amendment fees paid | (2,277 | ) | (474 | ) | ||
| Repurchase of common shares, IMAX Corporation | (53,581 | ) | (4,610 | ) | ||
| Repurchase of common shares, IMAX China | (3,043 | ) | (5,016 | ) | ||
| Taxes withheld and paid on employee stock awards vested | (3,393 | ) | (3,045 | ) | ||
| Common shares issued - stock options exercised | — | 883 | ||||
| Principal payment under finance lease obligations | (890 | ) | — | |||
| Dividends paid to non-controlling interests | (2,701 | ) | (5,027 | ) | ||
| Net cash used in financing activities | (64,595 | ) | (110,487 | ) | ||
| Effects of exchange rate changes on cash and cash equivalents | 1,961 | (958 | ) | |||
| Decrease in cash and cash equivalents during period | (102,560 | ) | (124,371 | ) | ||
| Cash and cash equivalents, beginning of period | 189,711 | 317,379 | ||||
| Cash and cash equivalents, end of period | $ | 87,151 | $ | 193,008 |
Segment Revenue and Gross Margin (Margin Loss)
| Three Months Ended | Nine Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | ||||||||||
| In thousands of U.S. Dollars | 2022 | 2021 | 2022 | 2021 | |||||||
| Revenue | |||||||||||
| IMAX Technology Network | |||||||||||
| IMAX DMR | $ | 19,919 | $ | 15,701 | $ | 67,064 | $ | 39,438 | |||
| JRSA, contingent rent | 12,540 | 9,887 | 43,708 | 26,108 | |||||||
| 32,459 | 25,588 | 110,772 | 65,546 | ||||||||
| IMAX Technology Sales and Maintenance | |||||||||||
| IMAX Systems | 15,957 | 13,236 | 32,806 | 35,117 | |||||||
| JRSA, fixed fees | 998 | 1,036 | 2,486 | 3,776 | |||||||
| IMAX Maintenance | 13,939 | 13,055 | 43,564 | 33,196 | |||||||
| Other Theater Business(1) | 2,107 | 363 | 3,697 | 1,283 | |||||||
| 33,001 | 27,690 | 82,553 | 73,372 | ||||||||
| Film Distribution and Post-Production | 2,049 | 1,598 | 5,418 | 4,001 | |||||||
| Sub-total for reportable segments | 67,509 | 54,876 | 198,743 | 142,919 | |||||||
| All Other(2) | 1,246 | 1,726 | 4,016 | 3,392 | |||||||
| Total | $ | 68,755 | $ | 56,602 | $ | 202,759 | $ | 146,311 | |||
| Gross Margin (Margin Loss) | |||||||||||
| IMAX Technology Network | |||||||||||
| IMAX DMR | $ | 11,408 | $ | 7,293 | $ | 42,965 | $ | 22,405 | |||
| JRSA, contingent rent | 6,302 | 3,626 | 25,389 | 7,299 | |||||||
| 17,710 | 10,919 | 68,354 | 29,704 | ||||||||
| IMAX Technology Sales and Maintenance | |||||||||||
| IMAX Systems | 9,029 | 8,086 | 18,432 | 21,646 | |||||||
| JRSA, fixed fees | (154 | ) | 280 | 79 | 783 | ||||||
| IMAX Maintenance | 6,406 | 6,462 | 21,643 | 15,360 | |||||||
| Other Theater Business | 168 | 64 | 314 | 269 | |||||||
| 15,449 | 14,892 | 40,468 | 38,058 | ||||||||
| Film Distribution and Post-Production | (2,082 | ) | 416 | (3,470 | ) | 997 | |||||
| Sub-total for reportable segments | 31,077 | 26,227 | 105,352 | 68,759 | |||||||
| All Other(2) | 624 | 1,260 | 2,156 | 1,612 | |||||||
| Total | $ | 31,701 | $ | 27,487 | $ | 107,508 | $ | 70,371 |
_______________
(1) The revenue from this segment principally includes after-market sales of IMAX Theater system parts and 3D glasses.
(2) All Other includes the results from IMAX Enhanced, SSIMWAVE, and other ancillary activities. In the first quarter of 2022, the Company's internal reporting was updated to reclassify the results of IMAX Enhanced out of the New Business Initiatives segment into All Other for segment reporting purposes. Prior period comparatives have been revised to conform with the current period presentation. The results of SSIMWAVE, which was acquired on September 22, 2022, were not material to the period.
IMAX CORPORATION
NON-GAAP FINANCIAL MEASURES
(in thousands of U.S. dollars)
In this release, the Company presents adjusted net loss attributable to common shareholders and adjusted net loss attributable to common shareholders per basic and diluted share, EBITDA, Adjusted EBITDA per Credit Facility, and Adjusted EBITDA margin as supplemental measures of the Company’s performance, which are not recognized under U.S. GAAP. Adjusted net loss attributable to common shareholders and adjusted net loss attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) COVID-19 government relief benefits (iii) legal judgment and arbitration awards; (iv) realized and unrealized investment gains or losses; (v) acquisition-related expenses, as well as the related tax impact of these adjustments, and (vi) income taxes resulting from management’s decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries.
The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company’s financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net loss attributable to common shareholders. Although share-based compensation is an important aspect of the Company’s employee and executive compensation packages, it is a non-cash expense and is excluded from certain internal business performance measures.
A reconciliation of net loss attributable to common shareholders and the associated per share amounts to adjusted net loss attributable to common shareholders and adjusted net loss attributable to common shareholders per diluted share is presented in the table below. Net loss attributable to common shareholders and the associated per share amounts are the most directly comparable GAAP measures because they reflect the earnings relevant to the Company’s shareholders, rather than the earnings attributable to non-controlling interests.
In addition to the non-GAAP financial measures discussed above, management also uses “EBITDA,” as such term is defined in the Company’s Credit Agreement, and which is referred to herein as “Adjusted EBITDA per Credit Facility.” As allowed by the Credit Agreement, Adjusted EBITDA per Credit Facility includes adjustments in addition to the exclusion of interest, taxes, depreciation and amortization. Adjusted EBITDA per Credit Facility measure is presented to allow a more comprehensive analysis of the Company’s operating performance and to provide additional information with respect to the Company’s compliance against its Credit Agreement requirements when applicable. In addition, the Company believes that Adjusted EBITDA per Credit Facility presents relevant and useful information widely used by analysts, investors and other interested parties in the Company’s industry to evaluate, assess and benchmark the Company’s results.
EBITDA is defined as net income or loss excluding (i) income tax expense or benefit; (ii) interest expense, net of interest income; (iii) depreciation and amortization, including film asset amortization; and (iv) amortization of deferred financing costs. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) realized and unrealized investment gains or losses; (iii) acquisition-related expenses; (iv) write-downs, net of recoveries, including asset impairments and credit loss expense; and (v) legal judgment and arbitration awards.
A reconciliation of net loss attributable to common shareholders, which is the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA per Credit Facility is presented in the table below. Net loss attributable to common shareholders is the most directly comparable GAAP measure because it reflects the earnings relevant to the Company’s shareholders, rather than the earnings attributable to non-controlling interests.
In this release, the Company also presents free cash flow, which is not recognized under U.S. GAAP, as a supplemental measure of the Company’s liquidity. Prior to the third quarter of 2022, the Company defined free cash flow as net cash provided by or used in operating activities minus cash used in investing activities (from the Condensed Consolidated Statements of Cash Flows). In the third quarter of 2022, the Company updated its definition of free cash flow to deduct only normal recurring capital expenditures, including the Company’s investment in joint revenue sharing arrangements, the purchase of property, plant and equipment and the acquisition of other intangible assets (from the Condensed Consolidated Statements of Cash Flows), from net cash provided by or used in operating activities. Management believes that free cash flow is a supplemental measure of the cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented below.
These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts.
Adjusted EBITDA per Credit Facility
| For the Three Months Ended September 30, 2022 (1) | For the Three Months Ended September 30, 2021 (1) | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Attributable to<br>Non-controlling | Less: | Attributable to<br>Non-controlling | Less: | |||||||||||||||
| Interests and | Attributable to | Attributable to | Interests and | Attributable to | Attributable to | |||||||||||||
| Common | Non-controlling | Common | Common | Non-controlling | Common | |||||||||||||
| Shareholders | Interests | Shareholders | Shareholders | Interests | Shareholders | |||||||||||||
| (In thousands of U.S. Dollars) | ||||||||||||||||||
| Reported net loss | $ | (7,757 | ) | $ | 1,196 | $ | (8,953 | ) | $ | (6,344 | ) | $ | 2,034 | $ | (8,378 | ) | ||
| Add (subtract): | ||||||||||||||||||
| Income tax expense | 2,348 | (22 | ) | 2,370 | 4,402 | 634 | 3,768 | |||||||||||
| Interest expense, net of interest income | 354 | (39 | ) | 393 | 261 | (90 | ) | 351 | ||||||||||
| Depreciation and amortization, including film asset amortization | 15,640 | 1,214 | 14,426 | 14,899 | 1,723 | 13,176 | ||||||||||||
| Amortization of deferred financing costs(2) | 712 | — | 712 | 741 | — | 741 | ||||||||||||
| EBITDA | $ | 11,297 | $ | 2,349 | $ | 8,948 | $ | 13,959 | $ | 4,301 | $ | 9,658 | ||||||
| Share-based and other non-cash compensation | 5,544 | (27 | ) | 5,571 | 6,226 | 233 | 5,993 | |||||||||||
| Unrealized investment gains | (35 | ) | — | (35 | ) | (30 | ) | — | (30 | ) | ||||||||
| Acquisition-related expenses | 955 | — | 955 | — | — | — | ||||||||||||
| Write-downs (recoveries), including asset impairments and credit loss expense | 1,083 | 66 | 1,017 | (2,901 | ) | (381 | ) | (2,520 | ) | |||||||||
| Adjusted EBITDA per Credit Facility | $ | 18,844 | $ | 2,388 | $ | 16,456 | $ | 17,254 | $ | 4,153 | $ | 13,101 | ||||||
| Revenues attributable to common shareholders(3) | 68,755 | 4,257 | 64,498 | 56,602 | 6,699 | 49,903 | ||||||||||||
| Adjusted EBITDA margin attributable to common shareholders | 27.4 | % | 56.1 | % | 25.5 | % | 30.5 | % | 62.0 | % | 26.3 | % | ||||||
| For the Nine Months Ended September 30, 2022 (1) | For the Nine Months Ended September 30, 2021 (1) | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Attributable to<br>Non-controlling | Less: | Attributable to<br>Non-controlling | Less: | |||||||||||||||
| Interests and | Attributable to | Attributable to | Interests and | Attributable to | Attributable to | |||||||||||||
| Common | Non-controlling | Common | Common | Non-controlling | Common | |||||||||||||
| Shareholders | Interests | Shareholders | Shareholders | Interests | Shareholders | |||||||||||||
| (In thousands of U.S. Dollars) | ||||||||||||||||||
| Reported net loss | $ | (23,958 | ) | $ | 1,455 | $ | (25,413 | ) | $ | (22,956 | ) | $ | 9,473 | $ | (32,429 | ) | ||
| Add (subtract): | ||||||||||||||||||
| Income tax expense | 8,091 | 470 | 7,621 | 9,416 | 2,492 | 6,924 | ||||||||||||
| Interest expense, net of interest income | 713 | (236 | ) | 949 | 2,105 | (265 | ) | 2,370 | ||||||||||
| Depreciation and amortization, including film asset amortization | 42,663 | 3,711 | 38,952 | 40,570 | 3,910 | 36,660 | ||||||||||||
| Amortization of deferred financing costs(2) | 2,465 | — | 2,465 | 1,749 | — | 1,749 | ||||||||||||
| EBITDA | $ | 29,974 | $ | 5,400 | $ | 24,574 | $ | 30,884 | $ | 15,610 | $ | 15,274 | ||||||
| Share-based and other non-cash compensation | 19,510 | 555 | 18,955 | 18,558 | 824 | 17,734 | ||||||||||||
| Unrealized investment gains | (99 | ) | — | (99 | ) | (5,311 | ) | (1,571 | ) | (3,740 | ) | |||||||
| Acquisition-related expenses | 955 | — | 955 | — | — | — | ||||||||||||
| Write-downs (recoveries), including asset impairments and credit loss expense | 13,856 | 1,561 | 12,295 | (4,006 | ) | (1,136 | ) | (2,870 | ) | |||||||||
| Legal judgment and arbitration awards | — | — | — | (1,770 | ) | — | (1,770 | ) | ||||||||||
| Adjusted EBITDA per Credit Facility | $ | 64,196 | $ | 7,516 | $ | 56,680 | $ | 38,355 | $ | 13,727 | $ | 24,628 | ||||||
| Revenues attributable to common shareholders(3) | 202,759 | 13,609 | 189,149 | 146,311 | 22,819 | 123,492 | ||||||||||||
| Adjusted EBITDA margin attributable to common shareholders | 31.7 | % | 55.2 | % | 30.0 | % | 26.2 | % | 60.2 | % | 19.9 | % | ||||||
| For the Twelve Months Ended September 30, 2022 (1) | For the Twelve Months Ended September 30, 2021 (1) | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Attributable to<br>Non-controlling | Less: | Attributable to<br>Non-controlling | Less: | |||||||||||||||
| Interests and | Attributable to | Attributable to | Interests and | Attributable to | Attributable to | |||||||||||||
| Common | Non-controlling | Common | Common | Non-controlling | Common | |||||||||||||
| Shareholders | Interests | Shareholders | Shareholders | Interests | Shareholders | |||||||||||||
| (In thousands of U.S. Dollars) | ||||||||||||||||||
| Reported net loss | $ | (10,579 | ) | $ | 4,734 | $ | (15,313 | ) | $ | (42,500 | ) | $ | 11,174 | $ | (53,674 | ) | ||
| Add (subtract): | ||||||||||||||||||
| Income tax expense | 19,239 | 2,027 | 17,212 | 11,314 | 3,209 | 8,105 | ||||||||||||
| Interest expense, net of interest income | 970 | (327 | ) | 1,297 | 3,642 | (355 | ) | 3,997 | ||||||||||
| Depreciation and amortization, including film asset amortization | 58,175 | 5,056 | 53,119 | 52,575 | 5,009 | 47,566 | ||||||||||||
| Amortization of deferred financing costs(2) | 3,229 | — | 3,229 | 2,056 | — | 2,056 | ||||||||||||
| EBITDA | $ | 71,034 | $ | 11,490 | $ | 59,544 | $ | 27,087 | $ | 19,037 | $ | 8,050 | ||||||
| Share-based and other non-cash compensation | 27,031 | 845 | 26,186 | 24,251 | 1,050 | 23,201 | ||||||||||||
| Unrealized investment gains | (128 | ) | — | (128 | ) | (4,169 | ) | (1,218 | ) | (2,951 | ) | |||||||
| Acquisition-related expenses | 955 | — | 955 | — | — | — | ||||||||||||
| Write-downs (recoveries), including asset impairments and credit loss expense | 15,675 | 1,538 | 14,137 | 3,410 | (603 | ) | 4,013 | |||||||||||
| Legal judgment and arbitration awards | — | — | — | 2,335 | — | 2,335 | ||||||||||||
| Adjusted EBITDA per Credit Facility | $ | 114,567 | $ | 13,873 | $ | 100,694 | $ | 52,914 | $ | 18,266 | $ | 34,648 | ||||||
| Revenues attributable to common shareholders(3) | 311,331 | 24,347 | 286,984 | 202,301 | 30,744 | 171,557 | ||||||||||||
| Adjusted EBITDA margin attributable to common shareholders | 36.8 | % | 57.0 | % | 35.1 | % | 26.2 | % | 59.4 | % | 20.2 | % |
_______________
(1) The Senior Secured Net Leverage Ratio is calculated using Adjusted EBITDA per Credit Facility determined on a trailing twelve-month basis.
(2) The amortization of deferred financing costs is recorded within Interest Expense in the Condensed Consolidated Statement of Operations.
(3)
| (In thousands of U.S. Dollars) | Three Months Ended <br>September 30, 2022 | Three Months Ended <br>September 30, 2021 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total revenues | $ | 68,755 | $ | 56,602 | ||||||||
| Greater China revenues | $ | 14,889 | $ | 22,203 | ||||||||
| Non-controlling interest ownership percentage(4) | 28.59 | % | 30.17 | % | ||||||||
| Deduction for non-controlling interest share of revenues | (4,257 | ) | (6,699 | ) | ||||||||
| Revenues attributable to common shareholders | $ | 64,498 | $ | 49,903 | ||||||||
| (In thousands of U.S. Dollars) | Nine Months Ended <br>September 30, 2022 | Nine Months Ended <br>September 30, 2021 | ||||||||||
| Total revenues | $ | 202,759 | $ | 146,311 | ||||||||
| Greater China revenues | $ | 47,602 | $ | 75,634 | ||||||||
| Non-controlling interest ownership percentage(4) | 28.59 | % | 30.17 | % | ||||||||
| Deduction for non-controlling interest share of revenues | (13,609 | ) | (22,819 | ) | ||||||||
| Revenues attributable to common shareholders | $ | 189,149 | $ | 123,492 | ||||||||
| (In thousands of U.S. Dollars) | Twelve Months Ended <br>September 30, 2022 | Twelve Months Ended <br>September 30, 2021 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Total revenues | $ | 311,331 | $ | 202,301 | ||||||||
| Greater China revenues | $ | 84,769 | $ | 101,957 | ||||||||
| Non-controlling interest ownership percentage(4) | 28.72 | % | 30.15 | % | ||||||||
| Deduction for non-controlling interest share of revenues | (24,347 | ) | (30,744 | ) | ||||||||
| Revenues attributable to common shareholders | $ | 286,984 | $ | 171,557 |
(4) Weighted average ownership percentage for change in non-controlling interest share
Adjusted Net Loss Attributable to Common Shareholders and Adjusted Diluted Per Share Calculations
| Three Months Ended | Three Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | |||||||||||
| (In thousands of U.S. dollars, except per share amounts) | Net Loss | Per Share | Net Loss | Per Share | ||||||||
| Net loss attributable to common shareholders | $ | (8,953 | ) | $ | (0.16 | ) | $ | (8,378 | ) | $ | (0.14 | ) |
| Adjustments(1): | ||||||||||||
| Stock-based compensation | 5,431 | 0.10 | 5,876 | 0.10 | ||||||||
| COVID-19 government relief benefits, net | (212 | ) | — | (2,048 | ) | (0.03 | ) | |||||
| Realized and unrealized investment gains | (34 | ) | — | (30 | ) | — | ||||||
| Acquisition-related expenses | 955 | 0.02 | — | — | ||||||||
| Tax Impact on items listed above | (214 | ) | — | (452 | ) | (0.01 | ) | |||||
| Adjusted net loss(1) | $ | (3,027 | ) | $ | (0.05 | ) | $ | (5,032 | ) | $ | (0.08 | ) |
| Weighted average shares outstanding - basic and diluted | 56,039 | 59,244 | ||||||||||
| Nine Months Ended | Nine Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| September 30, 2022 | September 30, 2021 | |||||||||||
| (In thousands of U.S. dollars, except per share amounts) | Net Loss | Per Share | Net Loss | Per Share | ||||||||
| Net loss attributable to common shareholders | $ | (25,413 | ) | $ | (0.44 | ) | $ | (32,429 | ) | $ | (0.55 | ) |
| Adjustments(1): | ||||||||||||
| Stock-based compensation | 18,651 | 0.33 | 17,675 | 0.30 | ||||||||
| COVID-19 government relief benefits, net | (373 | ) | (0.01 | ) | (5,513 | ) | (0.09 | ) | ||||
| Legal judgment and arbitration awards | — | — | (1,770 | ) | (0.03 | ) | ||||||
| Realized and unrealized investment gains | (98 | ) | — | (3,740 | ) | (0.06 | ) | |||||
| Acquisition-related expenses | 955 | 0.02 | — | — | ||||||||
| Tax impact on items listed above | (1,071 | ) | (0.02 | ) | (1,417 | ) | (0.02 | ) | ||||
| Income tax effects related to the removal of the indefinitely reinvested assertion on the historical earnings of certain subsidiaries | — | — | 381 | 0.01 | ||||||||
| Adjusted net loss(1) | $ | (7,349 | ) | $ | (0.13 | ) | $ | (26,813 | ) | $ | (0.44 | ) |
| Weighted average shares outstanding - basic and diluted | 57,301 | 59,207 |
_______________
(1) Reflects amounts attributable to common shareholders.
Free Cash Flow
| Three Months Ended | Nine Months Ended | |||||
|---|---|---|---|---|---|---|
| (In thousands of U.S. Dollars) | September 30, 2022 | September 30, 2022 | ||||
| Net cash provided by operating activities | $ | 5,774 | $ | 481 | ||
| Net cash used in capital expenditures | (9,772 | ) | (23,037 | ) | ||
| Free cash flow | $ | (3,998 | ) | $ | (22,556 | ) |