IMAX China Reports Half-Year 2022 Financial Results

GREATER CHINA HIGHLIGHTS
(Note: Percentage and other changes refer to first-half 2021 unless otherwise noted)

• 91% of IMAX China’s theater network has resumed operation as of July 28, 2022.
• Key signs in the market indicate increased pent-up demand for the IMAX Experience�, including 12% IMAX opening weekend indexing of ‘Jurassic World: Dominion’ in Chinese mainland; 10.5% IMAX market share in Hong Kong; and continued strong performance of IMAX at the global box office.
• IMAX China to exclusively develop IMAX Enhanced business in Greater China, where consumers can view digitally remastered blockbuster content through best-in-class consumer device and streaming platforms.

• The Company maintains a healthy, debt-free balance sheet with US$77.0 million in net cash as of June 30, 2022.

SHANGHAI, CHINA – Media OutReach – 29 July 2022 – IMAX China Holding, Inc. (“IMAX China” or the “Company”, HKSE: 1970) today reported half-year 2022 Greater China revenue of US$32.7 million, a reported and adjusted net profit of US$0.8 million and US$2.1 million, respectively. For adjustments to profit 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).

Resurgence of COVID-19 led to the rolling closure of numerous IMAX® theaters in key markets across Chinese mainland, including Shanghai and Beijing, for the majority of the second quarter. As a result, loss of box office and a decrease in theater system installations drove results down in the first-half of 2022. Additionally, a US$4.5 million one-time fair value loss on a film investment was incurred during the reporting period. Since early June, most theaters have been given permission to resume operations under various capacity limitations.

“The resurgence of COVID and the resulting closure of theaters in China posed a significant challenge to IMAX China in the first half of 2022. While these challenges persist, we are encouraged by a number of early signs of recovery, including acceleration in the local language content pipeline, incremental progress in Hollywood films securing release in China, and strong signs of demand for The IMAX Experience® in markets across the world,” said Richard L. Gelfond, Chairman of IMAX China. “We believe the continued shift to blockbusters in the theatrical marketplace and increasing involvement of IMAX technology in content production will help drive future growth for our business as the market recovers.” said Mr. Gelfond.

“Local filmmakers increasingly embrace and recognize the value that IMAX technology brings to blockbuster filmmaking with the top-grossing title of each year during the pandemic era, namely ‘The Eight Hundred’, ‘The Battle at Lake Changjin’ and its sequel all being Filmed-for-IMAX releases,” said Edwin Tan, CEO of IMAX China. “IMAX represents the pinnacle of blockbuster moments which we believe should not be confined to theatrical. IMAX Enhanced is our latest initiative to expand our footprint into the home by leveraging on our strong brand equity and industry-leading technology. We look forward to engaging new fans and creating further value for our partners.”

IMAX China Dividend

IMAX China today announced that its Board of Directors approved the payment of an interim cash dividend of US$0.001 per share, or approximately US$0.4 million in total, based on the total number of shares in issue as of June 30, 2022.

Recent Business Development

On July 25, 2022, IMAX China and IMAX Corporation entered into an Enhanced Business Required IMAX China Contribution Agreement pursuant to which IMAX China acquires and has the exclusive right to develop the IMAX Enhanced Business in Greater China.

Network Update

The Company delivered continued network expansion with a total of 788 systems in the IMAX theater network in Greater China as of June 30, 2022, of which 398 operate under full revenue sharing arrangements, 112 under hybrid revenue sharing arrangements and 278 operate under sales arrangements. The Company installed 10 theater systems during first-half 2022, compared to 23 installations in first-half 2021.

Total backlog was 208 systems as of June 30, 2022 as signings activities were significantly impacted by the resurgence of COVID-19.

Greater China Key Metrics

				Six months ended June 30,
				2022				2021
Greater China Signings
	Sales					0			5
	Revenue Share					2			3
	IMAX with Laser Upgrade					0			0
	Sales renewals					0			4
Total						2			12
Greater China Theater Installations
	Sales					2			10
	Revenue Share					7			12
	IMAX with Laser Upgrade					1			1
Total						10			23
Greater China Network
	Commercial Multiplex					773			743
	Institutional					15			16
Total						788			759
Greater China Backlog						208			237
IMAX Greater China Box Office						US$76.3 million			US$132.8 million
Film Count
	Mainland China					12			15
	HK/ Taiwan Only					8			3
Total						20			18

Conference Call

The Company will host a conference call today at 8:00 AM Hong Kong Time to discuss its half-year 2022 financial results. To access the call via telephone, interested parties in the US and Canada should dial 800-289-0720 approximately 5 to 10 minutes before the call begins. Hong Kong callers should dial 800-961-245 / 852-3018-8394 and other international callers should dial 647-484-0258. The conference ID for the call is 6573900. 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 6573900.

Hashtag: #IMAXChina

The issuer is solely responsible for the content of this announcement.

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 theaters to connect with audiences in extraordinary ways, and, as such, IMAX’s network is among the most important and successful theatrical distribution platforms for major event films around the globe.

IMAX Corporation is headquartered in New York, Toronto and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of June 30, 2022, there were 1,694 IMAX Theater Systems operating in 87 countries and territories, including 1,610 commercial multiplexes, 12 commercial destinations and 72 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® Dome, IMAX® 3D, IMAX® 3D Dome, Experience It In IMAX®, The IMAX Experience®, An IMAX Experience®, An IMAX 3D Experience®, IMAX DMR®, DMR®, IMAX Enhanced™, IMAX nXos® and Films to the Fullest®, are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. 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).

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.