Financial Performance - Total box office revenue for IMAX films reached $76.3 million in the first half of 2022, a decrease of 43% compared to the same period in 2021 due to COVID-19 related cinema closures in China[9]. - For the first half of the 2022 fiscal year, total revenue was $32,713 thousand, a decrease of 38.8% compared to $53,431 thousand in the same period of 2021[10]. - IMAX DMR film revenue was $6,519 thousand, representing 19.9% of total revenue, down from $11,493 thousand or 21.5% in the previous year[10]. - Revenue from IMAX system sales and maintenance was $20,945 thousand, accounting for 64.0% of total revenue, compared to $31,686 thousand or 59.3% in the prior year[10]. - The company reported a net loss of $0.6 million due to expected credit loss provisions primarily related to trade receivables impacted by cinema closures in China[15]. - The company reported a net loss attributable to shareholders of $11.75 million in the first half of fiscal 2022, compared to a profit of $25.44 million in the same period of fiscal 2021[20]. - Adjusted profit for the first half of fiscal 2022 was $2.1 million, down from $21.3 million in the same period of fiscal 2021[22]. - Gross profit for IMAX DMR films was $5,180 thousand with a gross margin of 79.5%, compared to $9,284 thousand and 80.8% in the previous year[13]. - Gross profit decreased from $33.1 million in the first half of fiscal 2021 to $18.6 million in the first half of fiscal 2022, with a gross margin decline from 62.0% to 56.9%[42]. - The company recorded a total comprehensive loss of $(11,753,000) for the period, primarily due to foreign exchange losses[186]. Revenue Sources - The company’s revenue is primarily derived from three main categories: IMAX technology network, IMAX technology sales and maintenance, and new business plans and others[6]. - IMAX technology sales and maintenance revenue includes fixed income from sales and leasing arrangements, maintenance services, and aftermarket sales, which are not directly tied to box office results[8]. - The company’s new business plans and other revenues encompass all income related to developing and/or startup non-core business activities[9]. - The company has implemented a mixed revenue sharing arrangement with cinema partners, which includes both fixed and variable rental income based on box office performance[7]. Expenses and Losses - Total sales, general, and administrative expenses were $9,545 thousand, which is 29.2% of total revenue, up from $7,723 thousand or 14.5% in the same period last year[14]. - Other operating expenses amounted to $1.9 million, representing 5% of total revenue, compared to $3.0 million in the previous year[16]. - Selling, general, and administrative expenses rose from $7.7 million in the first half of fiscal 2021 to $9.5 million in the first half of fiscal 2022, an increase of 23.4%[50]. - The net loss from expected credit loss provisions was $0.6 million in the first half of fiscal 2022, compared to a reversal of $2.6 million in the first half of fiscal 2021[51]. Cash Flow and Assets - Cash and cash equivalents decreased from $97.7 million as of December 31, 2021, to $76.9 million as of June 30, 2022, a decline of $20.8 million[56]. - Current assets decreased from $178.7 million as of December 31, 2021, to $171.6 million as of June 30, 2022[56]. - The company experienced a net cash outflow from operating activities of approximately $4.2 million, compared to a net cash inflow of $16.1 million in the same period of 2021, representing a decrease of 126%[60][61]. - The company incurred a net cash outflow from investing activities of approximately $7.5 million in the first half of 2022, primarily related to film investments of $4.7 million and $2.7 million for installing IMAX cinema equipment[62]. - The net cash outflow from financing activities for the first half of 2022 was approximately $6.3 million, mainly due to repayment of loans of $3.6 million and share repurchases of $1.8 million[64]. Market Conditions and Risks - The ongoing impact of the COVID-19 pandemic on the company’s business and financial performance will depend on various unpredictable factors, including the duration and extent of the pandemic and government responses[9]. - The company faces interest rate risk on floating-rate borrowings, with a potential impact of less than $1,000 on after-tax profit for a 10 basis point change in interest rates[198]. - The financial performance of the company is subject to various unpredictable factors related to the ongoing COVID-19 pandemic, including the duration and extent of the pandemic and government responses[196]. - The company’s operations are primarily exposed to foreign exchange risks involving USD and RMB, with most assets and liabilities denominated in these currencies[198]. Shareholder and Management Information - The board proposed an interim dividend of $0.001 per share (equivalent to HK$0.008) for the first half of the fiscal year 2022[78]. - As of June 30, 2022, the total equity of the company was a deficit of $8.1 million, affecting the ability to distribute dividends[79]. - The company has established a board committee to manage and oversee specific affairs of the group[91]. - The company has a structured reward mechanism that ties compensation to the group's annual performance[158]. Agreements and Licensing - The company entered into an agreement with IMAX Corporation to develop and expand the Enhanced business in Greater China, which includes licensing fees of 5% on certain revenues[72]. - The trademark licensing agreement can be renewed for an additional 25 years based on fair market value licensing fees not exceeding 6% of total applicable revenue[103]. - IMAX Corporation has entered into a trademark licensing agreement with a duration of 25 years, which is renewable, to utilize the "IMAX" brand in Greater China[104]. - The DMR service agreements provide a long-term revenue source and cost certainty for the company by ensuring access to DMR conversion services[119]. Employee and Compensation Plans - The long-term incentive plan allows for a total of 35,532,500 shares to be issued as rewards under the plan[159]. - The company has a plan for restricted stock units that vests 100% on March 12, 2022[173]. - The total number of restricted stock units granted to employees in 2020 was 239,470, with 119,736 units exercised by June 30, 2022[172]. - The performance conditions for the units granted from January 1, 2020, to December 31, 2022, must be met for full or partial vesting following the announcement of the company's 2022 financial results[177].

Financial Performance - Revenue and adjusted net profit for 2021 reached $112.8 million and $41.7 million respectively, nearly returning to pre-pandemic levels[3]. - Operating cash flow for 2021 was $30 million, demonstrating strong financial performance despite ongoing pandemic challenges[3]. - In 2021, IMAX China recorded a total revenue of $112.8 million, representing a 116% year-over-year increase, and achieved an adjusted net profit of $42 million, compared to a net loss of $4.6 million in 2020[21]. - The gross profit for IMAX China reached $68.2 million in 2021, reflecting a 252.4% increase compared to $19.3 million in 2020, with a gross margin of 60.4%[42]. - The net profit for the year was $38.2 million, a significant turnaround from a net loss of $26.7 million in 2020, resulting in a net profit margin of 33.9%[42]. - Total box office revenue for IMAX China was $239.5 million in 2021, up 141.3% from $99.2 million in 2020, with an average box office per screen of $328[42]. - IMAX's technology network revenue increased by 159% to $39 million, with box office recovery reaching $239 million and a revenue share increase to 16.4%, up 110 basis points year-over-year[15]. - The company reported a net reversal of financial asset impairments of $4.0 million in 2021, compared to a loss of $10.9 million in 2020[82]. - The company recorded a cash and cash equivalents increase of $9.3 million in fiscal year 2021, compared to a decrease of $0.8 million in fiscal year 2020[127]. Market Expansion - IMAX China expanded its network to 783 screens, with an additional 215 screens under contract, approaching a milestone of 1,000 cinemas[3]. - The company installed 57 new and upgraded systems in 2021, compared to 42 installations in 2020, contributing to a total of 783 theaters in over 210 cities across Greater China[12]. - The number of IMAX theaters in Greater China increased from 745 on December 31, 2020, to 783 on December 31, 2021[60]. - The company anticipates that the total number of screens in China will exceed 100,000 by 2025, driven by urbanization and increasing purchasing power[63]. - The company has identified approximately 1,400 IMAX regions in Greater China, where typically only one IMAX theater will be installed per region[62]. - The company plans to expand its theater network in China by introducing IMAX laser technology and additional laser cinema systems to replace and upgrade existing IMAX xenon theaters[53]. Film Performance - Local language films generated box office revenue of $150 million, highlighted by record-breaking performances during the Chinese New Year and National Day[3]. - IMAX's contribution to the opening weekend box office of "The Battle at Lake Changjin" was nearly 6%, with the film grossing over RMB 5.7 billion, becoming the highest-grossing film in Chinese history[3]. - The box office for local language films reached $150 million, a 30% increase compared to 2019, with significant contributions from films like "Detective Chinatown 3" and "The Battle at Lake Changjin" which broke multiple records[7]. - IMAX films generated a total box office of $239 million in 2021, an increase of $140 million (141%) compared to 2020, including a record $136 million for Chinese films[55]. - The average box office share for local language films during opening weekends rose to approximately 4.6%, compared to 3.6% in 2019[7]. - IMAX's market share for Hollywood sequels continues to grow, with significant contributions from films like "No Time to Die" (15%), "F9" (9%), and "Godzilla vs. Kong" (12%)[4]. Dividend and Shareholder Returns - The company announced a proposed final dividend of approximately $9.2 million, increasing the payout ratio from 33% to 50%[4]. - The board proposed a final dividend of $0.027 per share for 2021, reflecting an increase in the payout ratio from 33% to 50% of net profit[21]. - The company declared a final dividend of USD 0.027 per share (approximately HKD 0.210) for the fiscal year 2021, pending shareholder approval[168]. Technology and Innovation - IMAX's unique end-to-end technology and strong brand association with blockbuster films position it as a preferred partner for local filmmakers in China[3]. - IMAX's laser network now covers 79 theaters, providing higher resolution and better image quality, which is expected to drive the next wave of upgrades in the Greater China commercial IMAX network[51]. - The company has shifted its focus to Chinese-language films due to delays in Hollywood releases, indicating a strategic pivot in response to market conditions[48]. - The IMAX technology network's revenue model includes three segments: IMAX DMR films, revenue-sharing arrangements, and sales and rental agreements, allowing for a diversified income stream[47]. Strategic Partnerships and Collaborations - The company has established partnerships with approximately 80 exhibitors, including major players like Wanda Film and Alibaba Pictures, enhancing its market presence[52]. - The revenue-sharing model allows exhibitors to expand their IMAX networks more rapidly by reducing upfront costs, aligning the interests of IMAX and its partners[47]. - The company continues to collaborate with local filmmakers to create IMAX-certified films, which has led to record box office results for Chinese-language films in the fiscal year 2021[49]. Management and Governance - Richard Gelfond has been the Chairman and Non-Executive Director since May 27, 2015, and has been a key shareholder and CEO of IMAX Corporation since 2009, providing strategic guidance[149]. - Chen Yuanpeng has been the CEO since December 9, 2019, focusing on expanding the company's leadership in the Greater China region[150]. - The company aims to enhance its market presence and operational strategies under the guidance of its executive team, including a focus on new product development and technology[152]. - The leadership team has a diverse background in the film and entertainment industry, contributing to strategic decision-making and operational management[153]. Risks and Challenges - The impact of the COVID-19 pandemic on IMAX's business and financial performance remains uncertain and dependent on various unpredictable factors, including the duration of the pandemic and government responses[54]. - The company faces risks from changes in laws and regulations, currency fluctuations, and economic downturns, which could impact future revenue and cash flow[67]. - The company does not currently hedge against currency fluctuations, which could adversely affect profitability if the USD/CNY exchange rate rises significantly[71]. Future Outlook - The company expects a favorable start to 2022 with unprecedented Hollywood films scheduled for release in China, including sequels to "Thor," "Doctor Strange," and "Jurassic World"[4]. - The company anticipates continued growth in the Chinese market, which is expected to be a major source of future revenue[46]. - The company plans to promote revenue-sharing arrangements to exhibitors with strong box office potential and successful track records[66].

Financial Performance - Total revenue for the six months ended June 30, 2021, was $53.431 million, a significant increase from $6.662 million in the same period of 2020[6]. - Gross profit for the same period was $33.123 million, compared to a gross loss of $4.042 million in 2020, resulting in a gross margin of 62.0%[6]. - The company reported a net profit of $19.198 million for the first half of 2021, a turnaround from a net loss of $35.248 million in 2020, with a net profit margin of 35.9%[6]. - Adjusted EBITDA for the first half of 2021 was $33.797 million, representing an adjusted EBITDA margin of 63.3%, compared to an adjusted EBITDA loss of $13.424 million in 2020[6]. - Operating profit improved to $24.96 million in the first half of the 2021 fiscal year from a loss of $22.4 million in the first half of the 2020 fiscal year[22]. - Adjusted profit for the first half of the 2021 fiscal year was $21.31 million, compared to a loss of $15.51 million in the first half of the 2020 fiscal year[24]. - The company recorded a total comprehensive income of $25.436 million for the six months ended June 30, 2021, compared to a total comprehensive loss of $40.460 million in the prior year[181]. Revenue Sources - Total box office revenue reached $132.828 million, a substantial increase from $7.393 million in the prior year[6]. - IMAX DMR film revenue was $11.493 million, accounting for 21.5% of total revenue, compared to $701, which was 10.5% of total revenue in the first half of 2020[12]. - IMAX technology network revenue rose from $1.1 million in the first half of the 2020 fiscal year to $21.7 million in the first half of the 2021 fiscal year, primarily due to a $125.4 million increase in box office revenue[26]. - Revenue share arrangements and contingent rents generated $10.210 million, representing 19.1% of total revenue, compared to $419, which was 6.3% of total revenue in the first half of 2020[12]. - IMAX technology sales and maintenance revenue increased from $5.4 million in the first half of fiscal 2020 to $31.7 million in the first half of fiscal 2021[30]. Operational Metrics - The company installed a total of 23 cinema systems in the first half of 2021, compared to 3 systems in the same period of 2020[6]. - The number of IMAX theaters grew from 714 in the first half of the 2020 fiscal year to 759 in the first half of the 2021 fiscal year, representing a 6.3% increase[27]. - The average revenue per new system from sales and rental arrangements increased from $1.2 million to $1.5 million, attributed to installations from large clients[33]. - The installation and maintenance business in mainland China returned to pre-pandemic levels as of June 30, 2021, with potential future impacts from COVID-19 outbreaks still a concern[11]. Cash Flow and Assets - The cash and cash equivalents balance as of June 30, 2021, was $115.25 million, up from $88.47 million as of December 31, 2020, reflecting a net increase of $26.78 million during the period[63]. - The company reported a net cash inflow from operating activities of approximately $16.1 million for the first half of the 2021 fiscal year, compared to a net cash outflow of $3.8 million in the same period of 2020[64]. - Investment activities generated a net cash inflow of approximately $15.0 million in the first half of 2021, mainly from the sale of investments, offset by $2.7 million invested in installing IMAX cinema equipment[66]. - As of June 30, 2021, the company's total current liabilities increased to $62.10 million as of June 30, 2021, from $59.48 million as of December 31, 2020, reflecting a rise of approximately 2.7%[60]. Financial Risks and Management - Financial risks include market risks (foreign exchange and interest rate risks), credit risks, and liquidity risks, which the company actively manages[191]. - The group faces foreign exchange risk primarily involving USD and RMB, with a potential impact of approximately $0.3 million on net performance if RMB appreciates/depreciates by 10% against USD[192]. - The group's floating-rate borrowings are exposed to interest rate risk, with a potential change of about $4,000 in after-tax profit for a 10 basis point change in interest rates[193]. - The company has implemented measures to support local film partners facing financial difficulties due to the pandemic, including waiving maintenance fees during theater closures[191]. Shareholder and Corporate Governance - The board recommended an interim dividend of USD 0.028 per share (approximately HKD 0.217) for the first half of the 2021 fiscal year[79]. - IMAX Corporation is the controlling shareholder of IMAX Barbados, which holds over 10% of the company's equity, thus qualifying as a related party under listing rules[96]. - The company is committed to complying with the listing rules regarding related party transactions, including reporting and independent shareholder approval as necessary[97]. - The company has maintained the required public float as per the listing rules throughout the reporting period[89]. Employee and Compensation Policies - The company aims to attract and retain talent through a compensation policy linked to annual performance[157]. - The total number of restricted stock units granted as of June 30, 2021, is 2,281,669, with 780,408 units vested and 592,379 units exercised[172]. - The performance-linked restricted stock units are subject to performance conditions over a three-year period, with potential additional units based on achieving an average annual EBITDA growth rate exceeding 12.5%[176]. Agreements and Contracts - The technology licensing agreement grants IMAX Shanghai Multimedia exclusive rights in China and IMAX Hong Kong in Hong Kong, Macau, and Taiwan for 25 years, renewable[109]. - The DMR service agreement has a term of 25 years, with an option to renew for an additional 25 years[117]. - The main issuance agreement allows IMAX Shanghai Multimedia and IMAX Hong Kong to screen Hollywood films in IMAX format, with fees based on a percentage of box office revenue[138].

Financial Performance - Total box office revenue for 2020 decreased by 72.9% to $99.2 million due to cinema closures and delayed Hollywood releases[9]. - The revenue for the Greater China region in the fiscal year 2020 was $52.3 million, a decrease of 57.9% year-over-year, with an adjusted net loss of $4.6 million[21]. - IMAX China reported total revenue of $52.33 million for 2020, a decrease of 57.9% compared to $124.29 million in 2019[47]. - The gross profit for 2020 was $19.35 million, down 74.8% from $76.65 million in the previous year, resulting in a gross margin of 37.0%[47]. - The company experienced a net loss of $26.74 million in 2020, representing a 162.3% increase in losses compared to a profit of $42.89 million in 2019[47]. - Adjusted EBITDA for 2020 was $7.78 million, a decline of 88.7% from $68.83 million in 2019, with an adjusted EBITDA margin of 14.9%[47]. - The company incurred a tax expense of $18.1 million in FY2020, up from $12.0 million in FY2019[86]. - The total comprehensive loss attributable to the company’s owners for FY2020 was $(14.7) million, compared to a comprehensive income of $36.6 million in FY2019[86]. Box Office and Market Share - In 2020, IMAX China generated box office revenue of approximately RMB 9.2 million, increasing market share from 2.8% to 3.6% compared to the same period last year[4]. - The market share of local films in IMAX increased to 2.7% in 2020, up 70 basis points from the previous year[4]. - The box office for the first weekend of the Chinese New Year broke records, increasing by approximately 45% compared to 2019[4]. - The Chinese Spring Festival box office reached a record of RMB 7.8 billion, with attendance of 160 million people[9]. - The revenue share from Chinese-language films increased from 31.4% to 66.3% year-over-year due to the pandemic's impact on Hollywood film releases[53]. - The top ten box office films in China for 2020 were all Chinese-language films, which were part of the IMAX lineup[68]. Network Expansion - IMAX China signed agreements with 38 theaters during the year, including 20 with Wanda and 12 with Jin Yi[4]. - The company expanded its network to 745 theaters across over 200 cities, achieving a penetration rate of 1.2%, an increase of 20 basis points year-on-year[4]. - IMAX China expects to reach over 1,000 theaters with 251 additional systems under contract by the end of 2020[6]. - The IMAX network in Greater China reached 996 theaters, with 251 systems under contract as of December 31, 2020[12]. - The number of IMAX cinema systems in the backlog decreased from 253 as of December 31, 2019, to 251 as of December 31, 2020[65]. - The number of IMAX cinemas under revenue-sharing agreements increased from 463 as of December 31, 2019, to 482 as of December 31, 2020[67]. Technology and Innovation - IMAX's laser projection system enhances the viewing experience with higher brightness, improved contrast, and a wider color gamut, contributing to its competitive advantage in the market[29]. - IMAX's laser system was installed in 8 new theaters and upgraded in 3 existing theaters in 2020, expanding the IMAX laser network to 50 theaters[55]. - The company specializes in digital and film animation technology within the entertainment industry[164]. - The company is focused on developing new technologies and products to enhance the cinematic experience, aligning with industry trends[156]. Strategic Focus and Partnerships - The company collaborates with approximately 80 exhibitors, including major players like Wanda Film and Guangzhou Jin Yi, leveraging unique relationships with Hollywood studios[56]. - IMAX's strategic focus remains on Chinese-language films, which resonate well with local audiences, especially in lower-tier cities[53]. - The company aims to enhance strategic revenue-sharing arrangements with exhibitor partners, which are expected to yield significant returns[58]. - The company plans to promote revenue-sharing arrangements to high-quality cinema operators with proven box office potential[70]. Cash Flow and Financial Management - The company continues to implement proactive cash management measures to preserve sufficient cash amid uncertainties related to the pandemic[60]. - The net cash generated from operating activities for the fiscal year 2020 was approximately $9.2 million, a significant decrease from $39.3 million in 2019[128]. - The company plans to utilize existing liquidity and raise additional funds as needed to support ongoing operations and administrative expenses[127]. - The company has drawn RMB 50 million (approximately $7.6 million) from its unsecured revolving credit facility as of December 31, 2020[137]. Leadership and Governance - The company aims to expand its leadership and participation in the Greater China region under the management of its CEO, Chen Yuanpeng[152]. - The board of directors includes members with extensive experience in the film and entertainment industry, contributing to strategic guidance and operational management[150]. - The company has a strong leadership team with significant experience in the film and entertainment sectors, contributing to its operational strategies[153][154]. Dividend and Shareholder Returns - The board proposed a final dividend of $0.02 per share for 2020, consistent with the previous year, and plans to increase the payout ratio from 33% to 50% starting in 2021[21]. - The company declared a final dividend of USD 0.02 per share, equivalent to approximately HKD 0.155 per share, for the fiscal year 2020[170]. Challenges and Risks - The pandemic significantly impacted the company's revenue, profit, and operating cash flow, leading to a substantial decline in total box office revenue[60]. - The company assessed the recoverability of receivables, resulting in an expected credit loss provision of $10.9 million for the year 2020[61]. - The performance of new IMAX cinemas is closely tied to the real estate market, with potential demand fluctuations impacting business outlook[71].

Financial Performance - Total revenue for the six months ended June 30, 2020, was $6.662 million, a decrease of 88.8% compared to $59.256 million for the same period in 2019[6]. - Gross loss for the same period was $(4.042) million, resulting in a gross loss margin of (60.7%), down from a gross profit margin of 69.3% in 2019[6]. - Net loss for the period was $(35.248) million, representing a net loss margin of (529.1%), compared to a net loss margin of 40.4% in 2019[6]. - Adjusted EBITDA for the six months was $(13.424) million, with an adjusted EBITDA margin of (201.5%), down from 64.2% in the previous year[6]. - Total box office revenue for the period was $7.393 million, a significant decline from $235.959 million in the same period of 2019[6]. - The adjusted loss per share for the period was $(0.10), compared to a profit of $0.07 per share in the same period of 2019[6]. - The company reported a significant increase in costs related to revenue-sharing arrangements, with a cost of $6,586 thousand for revenue-sharing arrangements, reflecting a 1,571.8% increase from the previous year[15]. - The company reported a net cash outflow from operating activities of approximately $3.8 million for the first half of the 2020 fiscal year, compared to a net inflow of $17.1 million in the same period of 2019[63][64]. - The company experienced a pre-tax loss of $21.7 million for the first half of 2020, highlighting the financial impact of operational challenges during this period[64]. - The total comprehensive loss for the period was $40,460 thousand, reflecting a significant increase from the previous year's loss[182]. Revenue Sources - IMAX technology sales and maintenance revenue is not directly linked to box office results, indicating a shift in revenue generation strategy[10]. - IMAX DMR film revenue dropped to $701 thousand, accounting for 10.5% of total revenue, down from $17,921 thousand and 30.2% in the prior year[13]. - IMAX technology network revenue fell by 96.7% from $33.7 million in the first half of the 2019 fiscal year to $1.1 million in the first half of the 2020 fiscal year[26]. - Revenue share arrangements and contingent rents fell by 97.3% from $15.8 million in the first half of the 2019 fiscal year to $0.4 million in the first half of the 2020 fiscal year[29]. - IMAX DMR film gross profit decreased from $15.3 million in the first half of fiscal 2019 to $0.7 million in the first half of fiscal 2020, a decline of 95.6%[47]. - The gross profit from revenue-sharing arrangements turned from a profit of $10.1 million in the first half of fiscal 2019 to a loss of $6.2 million in the first half of fiscal 2020, a decrease of 161.3%[48]. Operational Challenges - The company anticipates ongoing challenges even after theaters reopen, as consumer habits and spending may take time to return to normal[11]. - The impact of COVID-19 led to the closure of approximately 700 IMAX theaters in mainland China, resulting in a significant drop in revenue and operating cash flow[187]. - The company continues to face uncertainties related to the pandemic, which may affect its operational and financial performance in the near future[187]. - The company has implemented significant cash preservation measures, including reducing employee hours and minimizing non-essential capital expenditures, to manage the financial impact of the pandemic[11]. - The company anticipates that the recovery of consumer spending on movies may be delayed, impacting its ability to generate significant box office revenue[187]. Cash Flow and Liquidity - The cash and cash equivalents balance as of June 30, 2020, was $74.1 million, a decrease of $15.3 million from $89.3 million on December 31, 2019, with significant reductions in USD and RMB holdings[61]. - Operating cash flow for the six months ended June 30, 2020, was $(3,819) thousand, a significant decrease from $17,125 thousand in the same period of 2019, reflecting a decline due to the pandemic[183]. - The total cash flow from financing activities was $(8,983) thousand for the six months ended June 30, 2020, compared to $(19,247) thousand in the same period of 2019, showing a reduction in financing outflows[183]. - The company has drawn RMB 1.7 million from its unsecured revolving financing of up to RMB 200 million as of June 30, 2020, with no other bank borrowings or commitments[73]. - The total current liabilities decreased to $40.5 million as of June 30, 2020, from $43.5 million on December 31, 2019, indicating improved liquidity management[60]. Shareholder and Equity Information - The company declared an interim dividend of $0.02 per share for the first half of the 2020 fiscal year, equivalent to approximately HKD 0.155 per share[79]. - The company repurchased a total of 906,400 shares during the six months ended June 30, 2020, with a total expenditure of HKD 11,885,233.59[84]. - As of June 30, 2020, the company's total equity was $211,277 thousand, down from $259,031 thousand as of December 31, 2019, indicating a decrease of approximately 18.4%[182]. - The total number of shares that may be issued under the long-term incentive plan is capped at 35,532,500 shares[156]. - The company has approximately 108 employees, all located in Greater China, and aims to attract and retain talent through its compensation policy[155]. Related Party Transactions - The company engaged in related party transactions with IMAX Corporation, which is considered a related party under the listing rules[93]. - IMAX Shanghai Multimedia and IMAX Corporation entered into a personnel secondment agreement effective from August 11, 2011, lasting 25 years until October 28, 2036[94]. - The maximum annual fee for the personnel secondment agreement is set at $5,800,000 for the fiscal years 2018, 2019, and 2020[96]. - IMAX Corporation received approximately $210,000 under the trademark licensing agreement for the six months ended June 30, 2020[103]. - The company has received exemptions from compliance with certain listing rules regarding related party transactions, including DMR software licensing agreements and equipment supply contracts[146]. Risk Management - The group faces foreign exchange risk primarily related to transactions denominated in currencies other than its functional currency, mainly involving USD and RMB[188]. - The group has not changed its risk management policies since the end of the previous year[188]. - Management believes that the credit risk associated with trade receivables from product sales is not significant[191]. - The group expects limited credit risk from bank deposits and receivables from related companies due to their placement in banks with good credit ratings[192]. - The group monitors short-term and long-term liquidity needs through rolling forecasts to ensure sufficient cash and easily convertible securities for operational needs[193].

Financial Performance - IMAX China recorded revenue of $124.3 million in 2019, representing a year-over-year growth of 5.8%[4] - Adjusted EBITDA for IMAX China was $68.8 million, with adjusted net income of $44.6 million[4] - IMAX China achieved a total box office revenue of $365.8 million in 2019, representing an 8.7% year-over-year growth, significantly outpacing the industry growth of 5%[8] - Total revenue for 2019 was $124.294 million, representing a 5.8% increase from $117.520 million in 2018[40] - Adjusted profit for 2019 was $44.570 million, a 0.6% increase from $44.283 million in 2018[40] - The company recorded a total sales cost of $47.647 million in 2019, which is 38.3% of total revenue, up from 36.0% in 2018[73] - Gross profit for the fiscal year 2019 was $76.647 million, with a gross margin of 61.7%, down from $75.251 million and 64.0% in 2018[74] - The total comprehensive income attributable to the company was $36.6 million in FY 2019, compared to $32.5 million in FY 2018, an increase of 12.9%[80] Box Office Performance - The box office for IMAX China reached $365.8 million, an increase of 8.7% compared to 2018, significantly outperforming the industry growth of 5%[4] - The film "Avengers: Endgame" set a record for IMAX China with a box office of $83.5 million, accounting for 13% of the film's total box office[4] - "The Wandering Earth" achieved a box office of $47.9 million, becoming the highest-grossing local language film for IMAX China[4] - The local language films accounted for 31% of IMAX China's total box office, with a year-over-year growth of 15%[4] - The Lunar New Year period in 2019 saw a 40% increase in box office revenue, largely due to the success of the film "The Wandering Earth," which grossed $47.9 million[8] - The average box office per screen in China was RMB 3,798, a slight decrease of 2.1% from RMB 3,881 in 2018[40] - In the fiscal year 2019, the average box office per screen for IMAX theaters in Greater China was $0.57 million, significantly higher than the average of $0.14 million for all screens in China[57] Theater Expansion and Technology - The number of theaters in operation increased to 717 by the end of 2019, with a same-store sales growth of 12%[4] - IMAX China signed contracts with 64 new theaters during the year, including a major expansion agreement for 40 theaters with a partner[3] - As of the end of 2019, 40 IMAX laser systems utilizing new technology had been adopted[3] - The company installed 95 new systems in 2019, including 56 revenue-sharing theaters and 12 IMAX laser upgrade systems, expanding its network to 717 theaters across 191 cities[9] - The number of IMAX theaters under revenue-sharing agreements increased from 410 as of December 31, 2018, to 463 as of December 31, 2019, indicating a growth in the network[57] - IMAX's cinema network in Greater China increased from 639 theaters on December 31, 2018, to 717 theaters on December 31, 2019[54] Revenue Segments - Network business revenue grew by 11.0% to $52.9 million, driven by the 8.7% increase in box office and a 30 basis point improvement in net sharing[12] - Cinema business revenue increased by 2.1% year-on-year to $71.0 million, driven by network expansion and two new hybrid installations[16] - The network business segment contributed $52.919 million (42.5% of total revenue) in 2019, up from $47.678 million (40.6%) in 2018[71] - The cinema business segment generated $71.033 million (57.2% of total revenue) in 2019, compared to $69.599 million (59.2%) in 2018, indicating a slight decline in percentage contribution[71] Market Share and Future Growth - The market share of IMAX China increased from 3.7% to 4.0%, with local language films contributing 31.4% to the total box office[8] - The company has a backlog of 253 theater contracts, including 58 full revenue-sharing theaters, indicating potential future growth[9] - IMAX China plans to continue expanding its market share in Hollywood films as its geographic coverage increases[8] - The company aims to enhance the number of Chinese films screened and increase annual revenue from these films[51] - IMAX has identified approximately 1,400 potential IMAX regions in Greater China for future expansion[55] Management and Governance - The company’s management team includes experienced professionals with extensive backgrounds in the entertainment and cinema industry[156] - The group focuses on expanding its market presence and enhancing its operational strategies through experienced board members[148][149][150][151][152][153] - The management team is committed to enhancing shareholder value through effective governance and strategic initiatives[148][149][150][151][152][153] Risks and Challenges - The company anticipates that the impact of the COVID-19 pandemic will significantly affect the first quarter of 2020, with uncertainty regarding the duration of theater closures[4] - The company faces risks from the Chinese real estate market, which may impact the demand for new IMAX theaters if growth slows[63] - The Chinese market is subject to various risks, including regulatory changes and economic downturns, which could significantly affect revenue and cash flow[65] Cash Flow and Capital Management - The net cash generated from operating activities for the fiscal year 2019 was approximately $39.3 million, a decrease of 30.2% from $56.4 million in 2018[119][120] - The company experienced a cash decrease of $30.9 million during the fiscal year 2019, contrasting with an increase of $3.5 million in 2018[119] - The company’s capital expenditures for fiscal year 2019 were $34.4 million, compared to $25.1 million in 2018, reflecting an increase in investment activities[128] Dividend and Shareholder Returns - The company proposed a final dividend of $0.02 per share, maintaining a payout ratio of 33%[14] - The company declared a final dividend of USD 0.02 per share, equivalent to approximately HKD 0.156 per share, for the fiscal year 2019[163] Strategic Agreements - IMAX Corporation agreed to a personnel secondment agreement with IMAX Shanghai Multimedia for a term of 25 years, ending on October 28, 2036[174] - The trademark licensing agreement grants IMAX Shanghai Multimedia exclusive rights to use the "IMAX" brand in China for a term of 25 years, which can be renewed[179] - The technology licensing agreement has a 25-year term, renewable based on fair market value licensing fees not exceeding 9% of total revenue[188]

IMAX CHINA HOLDING, INC. 於 開 曼 群 島 註 冊 成 立 之 有 限 公 司 股份代號：1970 2019年中期報告 IMAX 公司資料 2 財務摘要 3 目 錄 IMAX CHINA HOLDING, INC. 2019年中期報告 | --- | |--------------------------| | | | 管理層討論及分析 | | 企業管治摘要及其他資料 | | 中期財務資料的審閱報告 | | 簡明綜合中期全面收益表 | | 簡明綜合中期財務狀況表 | | 簡明綜合中期權益變動表 | | 簡明綜合中期現金流量表 | | 簡明綜合中期財務資料附註 | | 釋義 | | | 4 24 60 61 62 63 64 65 107 詞彙 111 2019年中期報告 1 IMAX 公司資料 | --- | --- | |------------------------------------------|--------------------------------------------------| | | | | 董事會 | 核數師 | | | 羅兵咸永道會計師事務所 | ...

Box Office Performance - Total box office revenue for IMAX China increased by 16% to $336.6 million in 2018, setting a new record[7]. - The company screened 45 films in mainland China, including 19 Chinese films, with Chinese films accounting for 30% of total box office revenue, up from 24% in 2017[4]. - IMAX China achieved a 40% increase in box office during the 2019 Chinese New Year compared to the same period in 2018, while the industry remained flat[3]. - The film "The Wandering Earth" generated $45 million in IMAX box office, becoming the highest-grossing IMAX film in China[3]. - IMAX's box office share during the Chinese New Year for "The Wandering Earth" was 11% on the first day, and 8% of the total box office for the film as of February 26, 2019[3]. - Total box office revenue reached $336.63 million, up from $290.82 million in 2017, with box office per screen at $616[38]. - In fiscal year 2018, IMAX format Chinese films accounted for 30.0% of the company's box office in China, up from 24.1% in fiscal year 2017[56]. - The share of Chinese films in China's total box office was 62.0% in fiscal year 2018, compared to 54.0% in fiscal year 2017[56]. - The average box office per screen for IMAX theaters in Greater China was $0.62 million, significantly higher than the average of $0.15 million for all screens in China[55]. Revenue and Financial Performance - Total revenue for 2018 was $117.52 million, down from $126.47 million in 2017, with a gross profit of $75.25 million and a gross margin of 64%[38]. - Adjusted profit for 2018 was $44.28 million, with an adjusted profit margin of 37.7%, reflecting a 140 basis point increase[38]. - Network business revenue increased to $47.7 million, benefiting from a 16% growth in box office revenue, with a gross margin improvement of 920 basis points[12]. - The average revenue per cinema system rose to $1.4 million, although overall cinema business revenue decreased due to 14 new installations in 2017[15]. - The company returned $27 million to shareholders through dividends and share buybacks in 2018[5]. - The company reported a pre-tax profit of $54.0 million for the fiscal year 2018, compared to $55.8 million in 2017[121]. - Total comprehensive income attributable to the company’s owners decreased from $52.0 million in FY2017 to $32.5 million in FY2018[77]. - Adjusted profit decreased from $45.9 million in FY2017 to $44.3 million in FY2018, a reduction of 3.6%[116]. - The company’s cash and cash equivalents balance as of December 31, 2018, was $120.2 million, compared to $116.7 million at the end of 2017, reflecting an increase of $3.5 million[120]. Expansion and Network Development - IMAX installed 101 systems in 2018, including 70 revenue-sharing theaters and 11 IMAX laser systems, expanding its network to 639 theaters across 185 cities[11]. - The company plans to install approximately 90 to 95 new cinemas in 2019, maintaining a similar installation pace as the previous year[39]. - IMAX has 639 theaters in Greater China as of December 31, 2018, with 624 located in commercial areas and an additional 272 theaters under contract[43]. - The number of IMAX theaters increased from 544 in FY2017 to 639 in FY2018, representing a growth of 17.5%[83]. - The company aims to increase the number of Chinese films screened and the annual revenue generated from these films[49]. - IMAX plans to continue expanding its network in first, second, third, and fourth tier cities, with a focus on identifying new IMAX theater locations[54]. - The company has established approximately 1,260 identified IMAX regions in Greater China, allowing for potential new theater openings without negatively impacting existing theaters[53]. Strategic Partnerships and Investments - IMAX's marketing efforts included a $15 million investment in Maoyan, China's largest ticketing platform, which accounts for approximately 60% of all movie ticket sales in China[5]. - The company is investing in a film fund focused on Chinese-language blockbusters to strengthen ties with local filmmakers[45]. - IMAX has a long-term partnership with local production houses to enhance its film offerings and adapt to market changes[45]. - The company continues to leverage its unique relationships with Hollywood studios to secure a diverse range of film content[48]. - IMAX's revenue-sharing arrangements include comprehensive and hybrid models, allowing partners to expand their IMAX networks with reduced upfront costs[44]. Cost Management and Profitability - The company maintained a strong cost control strategy, as evidenced by a 280 basis point increase in gross profit margin[17]. - Selling, general, and administrative expenses totaled $16.11 million, representing 13.7% of total revenue, up from 11.5% in 2017[72]. - The company incurred restructuring expenses of $0.1 million in 2018, a decrease from $0.6 million in 2017, as part of its cost reduction plan[73]. - The cost of sales for the fiscal year 2018 was $42.27 million, which is 36.0% of total revenue, compared to $49.12 million or 38.8% in 2017[70]. - The company emphasizes the importance of a balanced mix of Hollywood and Chinese films to ensure box office success[55]. Management and Governance - The senior management team includes CEO Chen Jiande, CFO and COO Jim Athanasopoulos, and CMO Zhou Meihui, among others[153]. - Megan Colligan has been appointed as a non-executive director since February 2019, bringing extensive experience from Paramount Pictures and IMAX Corporation[148]. - The company is focused on providing strategic advice and guidance through its board members with diverse backgrounds in media and finance[153]. - The management team is committed to expanding the company's market presence and enhancing operational efficiency[153]. - The board includes members with significant experience in the entertainment and investment sectors, which supports the company's strategic initiatives[153]. Risks and Challenges - The company faces risks from fluctuations in the real estate market, which could negatively impact the demand for new IMAX theaters[61]. - The ability to maintain pricing and profit margins is crucial, as a significant portion of operating costs are fixed, particularly related to network business[62]. - The company does not currently hedge against currency fluctuations, which could adversely affect profitability if the USD/CNY exchange rate rises significantly[63]. - The company's operations are seasonal, with higher profitability typically seen in the second half of the year due to installations before the Chinese New Year[63]. Agreements and Licensing - IMAX Corporation agreed to a personnel secondment agreement with IMAX Shanghai Multimedia for a term of 25 years, effective from August 11, 2011, to October 28, 2036[173]. - The trademark licensing agreement grants IMAX Shanghai Multimedia exclusive rights to use the "IMAX" brand in China for a term of 25 years, effective from October 28, 2011, with an option to renew[178]. - The technical licensing agreement requires IMAX Shanghai Multimedia and IMAX Hong Kong to pay a quarterly fee of 3% of total revenue from cinema and film operations during the initial 25-year term[190]. - The DMR service agreement has a term of 25 years, effective from October 28, 2011, with an option for renewal for an additional 25 years[196]. - The agreements are critical to the business, and shorter terms are deemed not in the shareholders' best interests[183].