IMAX China Reports Half-Year 2021 Financial Results

GREATER CHINA HIGHLIGHTS

(Note: Percentage and other changes refer to first-half 2020 unless otherwise noted)

• A profitability turnaround to US$21.3 million adjusted net profit, compared to US$15.5 million net loss in prior year period.
• IMAX China delivered a strong revenue rebound to US$53.4 million for the first half of 2021, up from US$6.7 million a year ago, including technology sales and maintenance revenue of US$31.7 million, 25% higher than that of first-half 2019. 
• The IMAX China network reached 759 systems as of June 30, 2021. Including 237 in the backlog, Greater China contracted network reached close to a 1,000-theater milestone.
• Approval of an interim dividend of approximately US$9.7 million (US$0.028 per share), up from US$7 million historically on an increased payout ratio of 50%.

SHANGHAI, July 28, 2021 /PRNewswire/ -- IMAX China Holding, Inc. ("IMAX China" or the "Company", HKSE: 1970) today reported half-year 2021 Greater China revenue of US$53.4 million, up from US$6.7 million a year ago, driven by strong year-over-year recovery in box office and increased installation activities. Adjusted net profit reached US$21.3 million, compared to US$15.5 million net loss in first-half 2020. For adjustments to profit (loss) for the period and a full detail of financial results, please refer to the interim results announcement posted with the Hong Kong Stock Exchange or on the Investor Relations section of the IMAX China web site (http://www.imax.cn/investor). 

"Our strong first-half revenue and earnings rebound to levels approaching that of 2019 underscores the rising value of IMAX to Chinese consumers, filmmakers and exhibitors," said Richard L. Gelfond, Chairman of IMAX China. "A year into reopening, we are pleased to see the accelerating shift to theatrical blockbusters and increasing involvement of IMAX DNA in content production has further strengthened IMAX China's positioning in the post-pandemic entertainment ecosystem. Our record local language box office demonstrates our opportunity to gain further market share as local content gravitates towards high production value genres. We look forward to building on the momentum as we capitalize on a strong pipeline of blockbusters, both Hollywood and local language, for the rest of the year and into 2022," said Mr. Gelfond.

"We started off 2021 on a strong note with record-breaking New Year's Day and Chinese New Year opening weekend box office, continued network growth and expansion in new theater signings," said Edwin Tan, CEO of IMAX China. "IMAX China has become the go-to entertainment choice as consumers increasingly seek for premium experience and exhibitors look to differentiate their offerings. Our growing indexing across both Hollywood and local language blockbusters gives us greater confidence in our continued market share gain as major Hollywood tentpoles return to theaters starting second-half of the year."

IMAX China Dividend

IMAX China today announced that its Board of Directors approved the payment of an interim cash dividend of US$0.028 per share, or approximately US$9.7 million in total, based on the total number of shares in issue as of June 30, 2021. The dividend payment is based on an increased payout ratio of 50% of net income from 2021 onwards, up from 33% during the pre-COVID years of 2017 to 2019.  

Network Update

The Company delivered further network expansion with a total of 759 systems in the IMAX® theatre network in Greater China as of June 30, 2021, of which 384 operate under full revenue sharing arrangements, 108 under hybrid revenue sharing arrangements and 267 operate under sales arrangements. The Company installed 23 new and upgraded theater systems during first-half 2021, compared to 3 installations in first-half 2020.

The Company signed agreements for 12 theater systems during first-half 2021, bringing total backlog to 237 systems as of June 30, 2021. Signings were headlined by a four Laser theater deal with Broadway across iconic commercial locations in Shanghai.

Greater China Key Metrics

Sale of Investment

In February 2021, the Company sold its 7,949,000 shares of Maoyan for a net gain of US$2.7 million. The gain was transferred from other comprehensive income to retained earnings upon disposal and as a result, the gain was not included in the Company's adjusted net profit for the first half of 2021.

Conference Call

The Company will host a conference call today at 8:00 AM Hong Kong Time to discuss its half-year 2021 financial results. To access the call via telephone, interested parties in the US and Canada should dial (866) 548-4713 approximately 5 to 10 minutes before the call begins. Hong Kong callers should dial 800-961-105/ 852-3008-1527 and other international callers should dial (647) 484-0477. The conference ID for the call is 4804674. A replay of the call will be available via webcast at www.imax.cn/investor/l-en or via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international), or 800-901-108 (Hong Kong). The Conference ID for the telephone replay is 4804674.

About IMAX China

IMAX China is a subsidiary of IMAX Corporation, and was incorporated as a limited liability company under the laws of Cayman Islands. IMAX China was established by IMAX Corporation specifically to oversee the expansion of IMAX's business throughout Greater China. Shares of IMAX China trade on the Hong Kong Stock Exchange under the stock code "1970."

About IMAX Corporation

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

IMAX Corporation is headquartered in New York, Toronto and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of June 30, 2021, there were 1,654 IMAX Theater Systems operating in 85 countries and territories, including 1,569 commercial multiplexes, 12 commercial destinations and 73 institutional locations. On October 8, 2015, shares of IMAX China, a subsidiary of IMAX Corporation, began trading on the Hong Kong Stock Exchange under the stock code "1970".

IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D Experience®, The IMAX Experience®, IMAX Is Believing® and IMAX nXos® are trademarks of IMAX Corporation. More information about IMAX Corporation can be found at www.imax.com. You may also connect with IMAX on Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).

This press release contains forward looking statements that are based on IMAX Corporation and IMAX China management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include, but are not limited to, references to future capital expenditures (including the amount and nature thereof), business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, plans and references to the future success of IMAX Corporation, IMAX China or any other consolidated subsidiaries of IMAX Corporation (each, a "Group Member", and collectively, "IMAX Group") and expectations regarding the future operating, financial or technological results of any Group Member. These forward-looking statements are based on certain assumptions and analyses made by the IMAX Group 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 any Group Member is subject to a number of risks and uncertainties, including, but not limited to, risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada; risks related to IMAX Group's growth and operations in China; the performance of IMAX DMR films; the signing of 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 any Group Member operates; competitive actions by other companies; the failure to respond to change and advancements in digital technology; one Group Member's largest customer accounting for a significant portion of its revenue and backlog; risks related to 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 a Group Member; risks related to cyber-security; risks related to any Group Member's inability to protect its intellectual property; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; the failure to fully realize the projected cost savings and benefits from any Group Member's restructuring initiative; and other factors, many of which are beyond the control of any Group Member. These factors, other risks and uncertainties and financial details are discussed in IMAX Corporation's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.