Global entertainment technology platform delivers strong Q2 year-over-year growth across all key metrics, including Revenue (+32%), Gross Margin (+31%) and Adjusted EBITDA (+29%)⁽¹⁾
Systems signings climb to 84 to-date — significantly more than the Company delivered in all of 2022 (47) — as system installations grow to 29 through June
Strong IMAX share of global box office across summer blockbuster season highlighted by record-breaking 20% indexing with $35 million IMAX debut of "Oppenheimer"
Cash flow improvement continues, with cash from operations of — $25.9 million in first half of 2023 versus —$(5.3) million use of cash in the first half of 2022

NEW YORK, July 26, 2023 /PRNewswire/ -- IMAX Corporation (NYSE:IMAX) today reported strong top and bottom-line financial results for the second quarter of 2023, demonstrating the value of its unique global entertainment technology platform and content portfolio.

"IMAX continues to be a winner in a dynamic global marketplace for entertainment, as demonstrated by our strong results in the second quarter," said Richard L. Gelfond, Chief Executive Officer of IMAX. "We again proved that IMAX can drive results in virtually any business environment thanks to our global scale, asset-lite model, and diversified revenue mix across technology licensing and Hollywood and local language global box office."

"It is increasingly clear that the future of the movie business is IMAX, as moviegoers show growing preference for the premium IMAX Experience^®, our market share remains robust, and our network and content portfolio expand in the most promising international growth markets for global cinema."

"This past weekend demonstrates the paradigm shift at hand in moviegoing, as IMAX drove strong double-digit market share with a trio of Hollywood and local releases — led by the stunning performance of 'Oppenheimer' — lifting the Company to one of its best weekends of all time at the global box office."

"We remain confident we will continue to drive growth in 2023 across global box office, system signings, installations, and adjusted EBITDA. And the accelerated pace of system signings and installations we're seeing globally this year are a very positive long-term growth indicator for our business."

(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.

Second Quarter Financial Highlights

	Three Months Ended					Six Months Ended
	June 30,					June 30,
In millions of U.S. Dollars, except per share data	2023		2022		YoY % Change	2023		2022		YoY % Change
Total Revenue	$	98.0	$	74.0	32 %	$	184.9	$	134.0	38 %

Gross Margin	$	57.9	$	44.0	31 %	$	107.9	$	75.8	42 %
Gross Margin (%)	59 %		60 %			58 %		57 %

Net Income (Loss)⁽²⁾	$	8.4	$	(2.9)	N/A	$	10.8	$	(16.5)	N/A
Diluted Net Income (Loss) per share⁽²⁾	$	0.15	$	(0.05)	N/A	$	0.20	$	(0.28)	N/A
Adjusted Net Income (Loss)⁽¹⁾⁽²⁾	$	14.4	$	3.9	266 %	$	23.4	$	(4.3)	N/A
Adjusted Net Income (Loss) per share⁽¹⁾⁽²⁾	$	0.26	$	0.07	271 %	$	0.42	$	(0.07)	N/A

Adjusted EBITDA per Credit Facility⁽¹⁾⁽³⁾	$	32.8	$	25.4	29 %	$	60.1	$	40.2	49 %
Adjusted EBITDA Margin (%)⁽¹⁾⁽²⁾	35.4 %		35.9 %		(1.3 %)	34.9 %		32.3 %		8.2 %

Weighted average shares outstanding (in millions):
Basic		54.6		57.3	(5 %)		54.3		57.9	(6 %)
Diluted		55.3		57.9	(4 %)		55.1		57.9	(5 %)

_______________
(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.

Second Quarter and June YTD Segment Results⁽¹⁾

	Content Solutions					Technology Products and Services

In millions of U.S. Dollars	Revenue		Gross Margin		Gross Margin %	Revenue		Gross Margin			Gross Margin %
2Q23	$	31.3	$	20.0	64 %	$	64.0		$	36.4	57 %
2Q22		29.5		17.4	59 %		42.9			25.7	60 %
% change	6 %		15 %			49 %			42 %

YTD 2Q23	$	63.4	$	38.0	60 %	$	115.6		$	66.3	57 %
YTD 2Q22		50.5		30.0	59 %	$	80.7			44.1	55 %
% change	26 %		27 %			43 %			50 %

_______________
(1)	Please refer to the Company's Form 10-Q for the period ended June 30, 2023, for additional segment information.

Content Solutions Segment

Content Solutions revenues of $31.3 million increased 6% year-over-year. Gross box office from IMAX locations in Q2 2023 of $268.3 million; was up 8% from Q2 2022. Key contributors to second quarter box office performance included:

Hollywood titles led by Super Mario Bros. with $50 million in IMAX GBO with strong contributions coming from Guardians of the Galaxy Vol. 3, Fast X and Spider-Man: Across the Spider-Verse ($30M+ IMAX GBO per title).
Local language titles Born to Fly, The First Slam Dunk, Detective Conan: Black Iron Submarine, and Lost in the Stars contributed on average $6.4 million in IMAX GBO locally.

Gross margin for Content Solutions was $20.0 million, at a 64% margin, an increase of 15% compared to the second quarter of the prior year period, driven by strong profit flow-through of box office and lower marketing expense reflecting the mix of films year-over-year.

Technology Products and Services Segment

Technology Products and Services revenues and gross margin increased 49% to $64.0 million and 42% to $36.4 million, respectively, which reflects growth in box office tied rental revenues as well as a higher number of sale/hybrid installations, as well as amendments and renewals.
During the second quarter the Company installed 20 systems compared to 9 systems in the second quarter of 2022. Of those, 13 systems were under sales and hybrid JRSA arrangements compared to 5 systems in the prior year.

Operating Cash Flow and Liquidity

Net cash provided by operating activities was $25.9 million for the first half of 2023 compared to net cash used of ($5.3) million in the prior year period.

As of June 30, 2023, the Company's available liquidity was $420.0 million, including cash and cash equivalents of $95.3 million, $280.0 million in available borrowing capacity under the Credit Facility and $44.7 million in available borrowing capacity under IMAX China's revolving facilities. Total debt, excluding deferred financing costs was $262.4 million as of June 30, 2023.

Share Count and Capital Return

The weighted average basic and diluted shares outstanding in the second quarter of 2023 were 54.6 million and 55.3 million, respectively, compared to 57.3 million in the second quarter of 2022, a decrease of 5% and 3%, respectively.

The Company repurchased 130,501 common shares at an average price of $15.20 per share, for a total of $2.0 million, excluding commission, year-to-date.

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.

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 $191.5 million remains available.

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 Tuesday of each week, although the Company may change this timing without notice. Results will be displayed with a few days 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 second quarter 2023 financial results. This call is being webcast and can be accessed at investors.imax.com. To access the call via telephone, interested parties please pre-register here: https://register.vevent.com/register/BIebeab49b8c1d418589a6683e1accbccf 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 systems 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. 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 June 30, 2023, there were 1,718 IMAX systems (1,638 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^® 3D, Experience It In IMAX^®, The IMAX Experience^®, DMR^®, Filmed For IMAX^TM, IMAX Live^TM, IMAX Enhanced®, and SSIMWAVE^® 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:

IMAX Corporation, New York

Jennifer Horsley

212-821-0154

jhorsley@imax.com

Media:

IMAX Corporation,

New York Mark Jafar 212-821-0102

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, 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, statements regarding the closing and expected benefits of the acquisition of IMAX China and the emergence of Cineworld from bankruptcy, as well as 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 and other films released to the IMAX network; the signing of IMAX 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 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 the Company's 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 the Company'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's Chief Executive Officer ("CEO") is its Chief Operating Decision Maker ("CODM"), as such term is defined under U.S. GAAP. The CODM assesses segment performance based on segment revenues and segment gross margins. Selling, general and administrative expenses, research and development costs, the amortization of intangible assets, provision for (reversal of) current expected credit losses, certain write-downs, interest income, interest expense, and income tax (expense) benefit are not allocated to the Company's segments.

In the first quarter of 2023, the Company revised its internal segment reporting, including the information provided to the CODM to assess segment performance and allocate resources. Accordingly, the Company has two reportable segments: (i) Content Solutions, which principally includes content enhancement and distribution services, previously included within the IMAX DMR, Film Distribution and Film Post-Production segments, and (ii) Technology Products and Services, which principally includes the sale, lease, and maintenance of IMAX Systems, previously included within the JRSA, IMAX Systems, IMAX Maintenance, and Other Theater Business segments. The Company's activities that do not meet the criteria to be considered a reportable segment are reported within All Other. Prior period comparatives have been revised to conform with the current period presentation.

The Company has the following reportable segments:

(i)	Content Solutions, which principally includes the digital remastering of films and other content into IMAX formats for distribution to the IMAX network. To a lesser extent, the Content Solutions segment also earns revenue from the distribution of large-format documentary films and exclusive experiences ranging from live performances to interactive events with leading artists and creators, as well as film post-production services.

(ii)	Technology Products and Services, which includes results from the sale or lease of IMAX Systems, as well as from the maintenance of IMAX Systems. To a lesser extent, the Technology Product and Services segment also earns revenue from certain ancillary theater business activities, including after-market sales of IMAX System parts and 3D glasses.

Transactions between segments are valued at exchange value. Inter-segment profits are eliminated upon consolidation, as well as for the disclosures below.

IMAX Network and Backlog

	Three Months Ended June 30,				Six Months Ended June 30,
System Signings:	2023		2022		2023		2022
New IMAX Systems
Sales and sales-type lease arrangements		23		2		37		6
Hybrid JRSA		—		1		—		2
Traditional JRSA		12		—		25		2
Total new IMAX Systems		35		3		62		10
Upgrades of IMAX systems		11		10		12		10
Total IMAX System signings		46		13		74		20

	Three Months Ended June 30,				Six Months Ended June 30,
System Installations:	2023		2022		2023		2022
New IMAX Systems
Sales and sales-type lease arrangements		9		3		16		7
Hybrid JRSA		2		1		2		3
Traditional JRSA		3		3		3		9
Total new IMAX Systems		14		7		21		19
Upgrades of IMAX Systems		6		2		8		4
Total IMAX System installations		20		9		29		23

June 30,

IMAX System Backlog:

2023

2022

Sales and sales-type lease arrangements

193

170

Hybrid JRSA

109

128

Traditional JRSA

194

Total IMAX System backlog

496

492

June 30,

IMAX Network:

2023

2022

Commercial Multiplex Theaters

Sales and sales-type lease arrangements

731

687

Hybrid JRSA

138

149

Traditional JRSA

769

774

Total Commercial Multiplex Theaters

1,638

1,610

Commercial Destination Theaters

Institutional Theaters

Total IMAX network

1,718

1,694

IMAX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of U.S. dollars, except per share amounts) (Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Revenues
Technology sales	$	29,360	$	8,229	$	47,182	$	17,205
Image enhancement and maintenance services		46,867		44,958		93,994		81,052
Technology rentals		19,546		18,525		39,604		31,186
Finance income		2,206		2,256		4,145		4,561
		97,979		73,968		184,925		134,004
Costs and expenses applicable to revenues
Technology sales		13,771		4,218		21,003		10,203
Image enhancement and maintenance services		19,739		19,953		42,824		35,696
Technology rentals		6,582		5,761		13,160		12,298
		40,092		29,932		76,987		58,197
Gross margin		57,887		44,036		107,938		75,807
Selling, general and administrative expenses		38,906		37,095		73,054		67,276
Research and development		2,762		1,356		4,617		2,552
Amortization of intangible assets		1,147		1,104		2,221		2,301
Credit loss expense, net		846		112		1,066		7,341
Asset impairments		—		4,470		—		4,470
Executive transition costs		—		—		1,353		—
Income (loss) from operations		14,226		(101)		25,627		(8,133)
Unrealized investment gains		28		30		72		64
Retirement benefits non-service expense		(78)		(138)		(155)		(277)
Interest income		693		417		1,100		919
Interest expense		(1,795)		(1,326)		(3,562)		(3,031)
Income (loss) before taxes		13,074		(1,118)		23,082		(10,458)
Income tax expense		(3,461)		(3,133)		(8,346)		(5,743)
Net income (loss)		9,613		(4,251)		14,736		(16,201)
Less: net (income) loss attributable to non-controlling interests		(1,262)		1,400		(3,931)		(259)
Net income (loss) attributable to common shareholders	$	8,351	$	(2,851)	$	10,805	$	(16,460)

Net income (loss) per share attributable to common shareholders:
Basic and diluted	$	0.15	$	(0.05)	$	0.20	$	(0.28)

Weighted average shares outstanding (in thousands):
Basic		54,591		57,320		54,328		57,943
Diluted		55,320		57,320		55,145		57,943

Additional Disclosure:
Depreciation and amortization	$	13,878	$	14,282	$	27,198	$	27,023
Amortization of deferred financing costs	$	625	$	730	$	1,250	$	1,753

IMAX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share amounts) (Unaudited)

	June 30,		December 31,
	2023		2022
Assets
Cash and cash equivalents	$	95,266	$	97,401
Accounts receivable, net of allowance for credit losses		125,764		136,142
Financing receivables, net of allowance for credit losses		125,450		129,384
Variable consideration receivables, net of allowance for credit losses		57,340		44,024
Inventories		37,291		31,534
Prepaid expenses		12,349		12,343
Film assets, net of accumulated amortization		8,162		5,277
Property, plant and equipment, net of accumulated depreciation		238,973		252,896
Investment in equity securities		1,046		1,035
Other assets		15,914		15,665
Deferred income tax assets, net of valuation allowance		11,450		9,900
Goodwill		52,815		52,815
Other intangible assets, net of accumulated amortization		33,886		32,738
Total assets	$	815,706	$	821,154
Liabilities
Accounts payable	$	24,092	$	25,237
Accrued and other liabilities		116,658		117,286
Deferred revenue		67,715		70,940
Revolving credit facility borrowings, net of unamortized debt issuance costs		28,002		36,111
Convertible notes and other borrowings, net of unamortized discounts and debt issuance costs		228,039		226,912
Deferred income tax liabilities		13,587		14,900
Total liabilities		478,093		491,386
Commitments, contingencies and guarantees
Non-controlling interests		732		722
Shareholders' equity
Capital stock common shares — no par value. Authorized — unlimited number.
54,620,083 issued and outstanding (December 31, 2022 — 54,148,614 issued and outstanding)		390,238		376,715
Other equity		175,374		185,678
Statutory surplus reserve		3,932		3,932
Accumulated deficit		(284,208)		(293,124)
Accumulated other comprehensive loss		(14,622)		(9,846)
Total shareholders' equity attributable to common shareholders		270,714		263,355
Non-controlling interests		66,167		65,691
Total shareholders' equity		336,881		329,046
Total liabilities and shareholders' equity	$	815,706	$	821,154

IMAX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) (Unaudited)

	Six Months Ended
	June 30,
	2023		2022
Operating Activities
Net income (loss)	$	14,736	$	(16,201)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization		27,198		27,023
Amortization of deferred financing costs		1,250		1,753
Credit loss expense, net		1,066		7,341
Write-downs		474		5,432
Deferred income tax benefit		(3,279)		(300)
Share-based and other non-cash compensation		12,533		13,966
Unrealized foreign currency exchange loss		175		841
Unrealized investment gains		(72)		(64)
Changes in assets and liabilities:
Accounts receivable		9,531		(14,745)
Inventories		(6,118)		(6,949)
Film assets		(9,241)		(10,420)
Deferred revenue		(3,255)		(5,291)
Changes in other operating assets and liabilities		(19,143)		(7,679)
Net cash provided by (used in) operating activities		25,855		(5,293)
Investing Activities
Purchase of property, plant and equipment		(1,009)		(2,934)
Investment in equipment for joint revenue sharing arrangements		(4,033)		(8,651)
Interest in film classified as a financial instrument		—		(4,731)
Acquisition of other intangible assets		(3,478)		(1,680)
Net cash used in investing activities		(8,520)		(17,996)
Financing Activities
Revolving credit facility borrowings		30,717		—
Repayments of revolving credit facility borrowings		(38,886)		—
Credit facility amendment fees paid		—		(2,028)
Other borrowings		315		—
Repurchase of common shares		(4,011)		(49,355)
Repurchase of common shares, IMAX China		—		(1,844)
Taxes withheld and paid on employee stock awards vested		(6,458)		(3,393)
Principal payment under finance lease obligations		—		(890)
Dividends paid to non-controlling interests		(1,438)		—
Net cash used in financing activities		(19,761)		(57,510)
Effects of exchange rate changes on cash		291		1,200
Decrease in cash and cash equivalents during period		(2,135)		(79,599)
Cash and cash equivalents, beginning of period		97,401		189,711
Cash and cash equivalents, end of period	$	95,266	$	110,112

*Segment Revenue and Gross Margin*

	Three Months Ended				Six Months Ended
	June 30,					June 30,
(In thousands of U.S. Dollars)	2023		2022			2023		2022
Revenue
Content Solutions	$	31,290	$	29,544		$	63,391	$	50,532
Technology Products and Services		63,976		42,857			115,643		80,720
Sub-total for reportable segments		95,266		72,401			179,034		131,252
All Other⁽¹⁾		2,713		1,567			5,891		2,752
Total	$	97,979	$	73,968		$	184,925	$	134,004

Gross Margin
Content Solutions	$	19,996	$	17,354		$	37,991	$	29,979
Technology Products and Services		36,411		25,709			66,302		44,125
Sub-total for reportable segments		56,407		43,063			104,293		74,104
All Other⁽¹⁾		1,480		973			3,645		1,703
Total	$	57,887	$	44,036		$	107,938	$	75,807

______________
(1)	All Other includes the results from IMAX Enhanced, SSIMWAVE, and other ancillary activities.

IMAX CORPORATION

NON-GAAP FINANCIAL MEASURES

(in thousands of U.S. dollars)

In this release, the Company presents adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin as supplemental measures of the Company's performance, which are not recognized under U.S. GAAP. Adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) COVID-19 government relief benefits, net, (iii) realized and unrealized investment gains or losses; (iv) acquisition-related expenses, and (v) executive transaction costs, as well as the related tax impact of these adjustments.

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 income (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 from net income (loss) attributable to common shareholders and the associated per share amounts to adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share are presented in the table below. Net income (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 well as "Adjusted EBITDA per Credit Facility," as defined in the Company's Credit Agreement. As allowed by the Credit Agreement, Adjusted EBITDA per Credit Facility includes adjustments in addition to the exclusion of interest, taxes, depreciation and amortization. Accordingly, this non-GAAP financial 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) executive transition costs; and (v) write-downs, net of recoveries, including asset impairments and credit loss expense.

A reconciliation of net income (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 income (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. The Company's definition of free cash flow deducts only normal recurring capital expenditures, including its investment in joint revenue sharing arrangements, the purchase of property, plant and equipment and the acquisition of other intangible assets (from the 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 June 30, 2023						For the Three Months Ended June 30, 2022
	Attributable to						Attributable to
	Non-controlling		Less:				Non-controlling		Less:
	Interests and		Attributable to		Attributable to		Interests and		Attributable to		Attributable to
(In thousands of U.S. Dollars)	Common Shareholders		Non-controlling Interests		Common Shareholders		Common Shareholders		Non-controlling Interests		Common Shareholders
Reported net income (loss)	$	9,613	$	1,262	$	8,351	$	(4,251)	$	(1,400)	$	(2,851)
Add (subtract):
Income tax expense		3,461		38		3,423		3,133		5		3,128
Interest expense, net of interest income		477		(115)		592		179		(91)		270
Depreciation and amortization, including film asset amortization		13,878		1,546		12,332		14,282		1,196		13,086
Amortization of deferred financing costs⁽¹⁾		625		—		625		730		—		730
EBITDA	$	28,054	$	2,731	$	25,323	$	14,073	$	(290)	$	14,363
Share-based and other non-cash compensation		6,900		281		6,619		7,777		379		7,398
Unrealized investment gains		(28)		—		(28)		(30)		—		(30)
Write-downs, including asset impairments and credit loss expense		1,016		153		863		5,163		1,477		3,686
Adjusted EBITDA per Credit Facility	$	35,942	$	3,165	$	32,777	$	26,983	$	1,566	$	25,417
Revenues attributable to common shareholders⁽²⁾	$	97,979	$	5,422	$	92,557	$	73,968	$	3,213	$	70,755
Adjusted EBITDA margin attributable to common shareholders	36.7 %		58.4 %		35.4 %		36.5 %		48.7 %		35.9 %

	For the Twelve Months Ended June 30, 2023						For the Twelve Months Ended June 30, 2022
	Attributable to						Attributable to
	Non-controlling		Less:				Non-controlling		Less:
	Interests and		Attributable to		Attributable to		Interests and		Attributable to		Attributable to
(In thousands of U.S. Dollars)	Common Shareholders		Non-controlling Interests		Common Shareholders		Common Shareholders		Non-controlling Interests		Common Shareholders
Reported net income (loss)	$	11,060	$	6,595	$	4,465	$	(9,166)	$	5,572	$	(14,738)
Add (subtract):
Income tax expense		12,710		1,595		11,115		21,293		2,683		18,610
Interest expense, net of interest income		2,125		(180)		2,305		877		(378)		1,255
Depreciation and amortization, including film asset amortization		56,836		5,170		51,666		57,434		5,565		51,869
Amortization of deferred financing costs⁽¹⁾		2,674		—		2,674		3,258		—		3,258
EBITDA	$	85,405	$	13,180	$	72,225	$	73,696	$	13,442	$	60,254
Share-based and other non-cash compensation		26,140		653		25,487		27,713		1,105		26,608
Unrealized investment gains		(78)		—		(78)		(123)		—		(123)
Acquisition-related expenses		1,278		—		1,278		—		—		—
Write-downs, including asset impairments and credit loss expense		4,490		463		4,027		11,691		1,091		10,600
Executive transition costs		1,353		—		1,353		—		—		—
Adjusted EBITDA per Credit Facility	$	118,588	$	14,296	$	104,292	$	112,977	$	15,638	$	97,339
Revenues attributable to common shareholders⁽²⁾	$	351,726	$	24,489	$	327,237	$	299,178	$	26,789	$	272,389
Adjusted EBITDA margin attributable to common shareholders	33.7 %		58.4 %		31.9 %		37.8 %		58.4 %		35.7 %


(1)	The amortization of deferred financing costs is recorded within Interest Expense in the Condensed Consolidated Statement of Operations.
(2)	Revenues attributable to common shareholders calculated as follows:

	Three months ended					Three months ended					Twelve months ended					Twelve months ended
(In thousands of U.S. Dollars)	June 30, 2023					June 30, 2022					June 30, 2023					June 30, 2022
Total revenues				$	97,979				$	73,968				$	351,726				$	299,178
Greater China revenues	$		19,112			$		11,237			$	86,295				$		92,083
Non-controlling interest ownership percentage⁽³⁾		28.37 %					28.59 %					28.38	%				29.09 %
Deduction for non-controlling interest share of revenues					(5,422)					(3,213)					(24,489)					(26,789)
Revenues attributable to common shareholders				$	92,557				$	70,755				$	327,237				$	272,389

(3)	Weighted average ownership percentage for change in non-controlling interest share.

*Adjusted Net Income (Loss) Attributable to Common Shareholders and Adjusted Net Income (Loss) Per Share*

	Three Months Ended June 30,
	2023				2022
(In thousands of U.S. Dollars, except per share amounts)	Net Income		Per Share		Net (Loss) Income		Per Share
Net income (loss) attributable to common shareholders	$	8,351	$	0.15	$	(2,851)	$	(0.05)
Adjustments⁽¹⁾:
Share-based compensation		6,511		0.12		7,261		0.13
COVID-19 government relief benefits, net		—		—		32		—
Unrealized investment gains		(27)		—		(30)		—
Tax impact on items listed above		(480)		(0.01)		(490)		(0.01)
Adjusted net income⁽¹⁾	$	14,355	$	0.26	$	3,922	$	0.07

Weighted average shares outstanding — basic				54,591				57,320
Weighted average shares outstanding — diluted				55,320				57,856

	Six Months Ended June 30,
	2023				2022
(In thousands of U.S. dollars, except per share amounts)	Net Income		Per Share		Net Loss		Per Share
Net income (loss) attributable to common shareholders	$	10,805	$	0.20	$	(16,460)	$	(0.28)
Adjustments⁽¹⁾:
Stock-based compensation		12,047		0.22		13,220		0.23
COVID-19 government relief benefits, net		—		—		(161)		—
Unrealized investment gains		(72)		—		(64)		—
Acquisition-related expenses		156		—		—		—
Executive transition costs		1,353		0.02		—		—
Tax impact on items listed above		(909)		(0.02)		(857)		(0.01)
Adjusted net income (loss)⁽¹⁾	$	23,380	$	0.42	$	(4,322)	$	(0.07)

Weighted average shares outstanding — basic				54,328				57,943
Weighted average shares outstanding — diluted				55,145				57,943

_______________
(1)	Reflects amounts attributable to common shareholders.

*Free Cash Flow*

	Six Months Ended
(In thousands of U.S. Dollars)	June 30, 2023
Net cash provided by operating activities	$	25,855
Net cash used in capital expenditures		(8,520)
Free cash flow	$	17,335

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SOURCE IMAX Corporation

IMAX CORPORATION REPORTS Q2 2023 RESULTS