IMAX Corporation (IMAX) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of IMAX Corporation. Please note that today's meeting is being recorded. It is my pleasure to turn the meeting over to Rich Gelfond, Chief Executive Officer of IMAX Corporation. Mr. Gelfond, the floor is yours.

Thank you. I'd like to call this Annual Meeting of Shareholders to order. I want to welcome all of you to this year's meeting and to thank you for joining us. Ken Weissman, Corporate Secretary, will act as Secretary of the meeting. Other members of our Board of Directors and management are present on today's webcast as well. I will chair the formal part of the meeting today, and I will then have some comments on the business and operations of IMAX. The meeting is being conducted in a virtual-only format via live audio webcast. While the meeting is virtual only, we welcome questions and comments from registered shareholders and duly appointed proxy holders. We will address questions relating to specific business items when those items are brought before the meeting, and we will address questions not related to the business items of the meeting during the Q&A session at the end of the meeting. I would now like to ask Ken to briefly go over some procedural and administrative matters.

Thanks, Rich. I have confirmed that we have not received any shareholder nominations or proposals for business at today's meeting. Voting on all matters today will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders who have not already voted prior to the meeting, can vote by selecting the Vote icon on the top right corner of your screen while the polls are open. Questions can be submitted by any registered shareholder or duly appointed proxy holder by selecting the Q&A icon on the top right corner of your screen. If you submit a question, please include your name and your affiliation and indicate if the question relates to a specific agenda item or is a general question. If there are multiple similar questions, we may combine them for efficiency. Although we may not be able to answer every question, we will do our best to provide a response to as many as possible. Before the formal part of the meeting begins, please keep in mind that comments and answers to your questions might include statements that are forward-looking and that they address future results or occurrences. Actual future results and occurrences may differ materially from these forward-looking statements. Please refer to our SEC and SEDAR filings for a more detailed discussion of some of the factors that could affect our future results and occurrences. I have received a statutory declaration from Computershare as to the due mailing of the notice of meeting, proxy circular and proxy statement, formal proxy and the annual report that contains the financial statements of the corporation. I have also received a list of the holders of the corporation's common shares as of the close of business on April 11, 2022, the record date for this meeting, as prepared and certified by Computershare, and the Scrutineers' report on attendance, which indicates that sufficient shareholders are present by electronic means to constitute a quorum pursuant to the corporation's bylaws.

Thanks, Ken. The notice of meeting, the proxy circular and proxy statement and the formal proxy will be available for inspection throughout the meeting by selecting the document icon on the top right corner of your screen. I have appointed Computershare Investor Services Inc. through its representatives to act the scrutineer. I direct that the statutory declaration and a list of shareholders be kept by the Secretary with the records of this meeting. Notice having been duly given and there being a quorum present, I declare this meeting to be properly constituted. The formal agenda for this meeting as set out in the notice is to receive the consolidated financial statements for the fiscal year ended December 31, 2021, together with the auditor's report to elect directors, to appoint the auditors of the corporation and to authorize the directors to fix the auditor's remuneration and to conduct an advisory vote on the compensation of the corporation's named executive officers. Ken will now discuss the voting procedures.

Thanks, Rich. I wish to remind everyone that only shareholders of record on April 11, 2022, the record date for this meeting are entitled to vote on the matters before the meeting today. In addition, duly appointed proxy holders for such shareholders of record are entitled to vote on their behalf. As I mentioned earlier, voting today will be conducted by electronic ballot. We now ask that the balloting be opened. If you are a shareholder and you have already voted your shares ahead of the meeting, you do not need to vote your shares again. But if you used a control number or invite code to log into the meeting and you accepted the terms and conditions, you will be provided the opportunity to vote by online ballot. Your previously submitted proxies will be revoked if you vote by online ballot during the meeting. If you do not wish to revoke previously submitted proxies do not vote again during the meeting. The polls are now open and all registered shareholders and duly appointed proxy holders who are properly logged in and who wish to vote can click on the vote icon on the top right corner of your screen. You will be able to see all motions being brought forth at the meeting, and you can select the relevant option next to each proposal. Voting will end after all items have been brought before the meeting. Rich, we are now ready to proceed with the formal business of the meeting.

Thanks, Ken. The first item of business is the election of directors. Under the articles of the corporation, the Board of Directors may be comprised of a minimum of 1 and a maximum of 15 directors. Directors elected at a meeting of shareholders will hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed. At today's meeting, shareholders will be electing 8 directors. The meeting is now open for nominations.

Mr. Chairman, my name is Robert Lister, and I'm Chief Legal Officer and Senior Executive Vice President of IMAX Corporation and a shareholder. I nominate Eric A. Demirian, Kevin Douglas, Richard L. Gelfond, David W. Leebron, Michael MacMillan, Steve R. Pamon, Dana Settle, and Darren D. Throop as directors of IMAX Corporation to hold office until the Annual Meeting of Shareholders in the year 2023 or until their successors are elected or appointed.

Thank you, Rob. A motion to close the nominations and for the election of those nominated is in order.

Mr. Chairman, my name is Robert Lister. I move that nominations be closed and that the persons nominated as directors be elected directors of the corporation to hold office until the Annual Meeting of Shareholders in the year 2023 or until their successors are elected or appointed.

Thank you, Rob. May we have a seconder, please?

Mr. Chairman, my name is Kenneth Weissman. I am Senior Vice President, Legal Affairs and Corporate Secretary of IMAX Corporation and a shareholder. I second the motion.

Thank you, Ken. Mark Jafar, IMAX's Head of Global Corporate Communications, is receiving any questions that are submitted during this meeting. Mark, could you please advise if there are any questions regarding this business item?

I confirm that we have not received any questions specific to this business item.

May we now have a motion reappointing the corporation's auditors, PricewaterhouseCoopers and authorizing the directors to fix their remuneration.

Mr. Chairman, my name is Robert Lister. I move that PricewaterhouseCoopers LLP be and they are hereby appointed auditors of the corporation to hold office until the close of the next Annual Meeting of Shareholders at such remuneration as the directors may fix.

Thank you, Rob. May we have a seconder, please?

My name is Kenneth Weissman. I second the motion.

Thank you, Ken. Mark, can you please advise if we have received any questions regarding this business item.

I can confirm that we have not received any questions specific to this business item.

The next proposal, commonly known as a say-on-pay proposal, gives the corporation shareholders the opportunity to express their views on the corporation's named executive officer's compensation program. Although the vote is advisory and nonbinding in nature, the Board and the Compensation Committee will review the voting results and will consider shareholders' views in connection with our executive compensation plan. May we have a motion to approve the corporation's named Executive Officer compensation plan.

Mr. Chairman, my name is Robert Lister. I move that the corporation's named executive officer compensation program be approved.

Thank you, Rob. May we have a seconder, please?

My name is Kenneth Weissman, I second the motion.

Thank you, Ken. Mark, can you please advise if we've received any questions regarding this business item.

I can confirm that we have not received any questions specific to this business item.

We have now completed the motions related to the items to be voted upon at this meeting. Registered shareholders and duly appointed proxy holders will be given 1 final minute to complete their voting. Your votes will automatically be accepted once the balloting closes. I will pause for 1 minute. [Voting]

The electronic balloting is now closed. I ask that the scrutineer compile the results of the votes on all business matters into a report. Results will be published on Form 8-K on EDGAR as well as on SEDAR. This concludes the formal business of the meeting. At this point, I would like to make some comments and the meeting will then be open for questions or comments from registered shareholders and duly appointed proxy holders. We need today in a moment of great opportunity for IMAX. The movies are back and IMAX is leading the charge. This summer blockbuster season marks the kickoff of a formidable slate of blockbuster releases, a pipeline of long-awaited tentpole films that stretches across the next 2 years and represents the most bankable franchises, filmmakers and stars in the world. Top Gun: Maverick ruled the skies with a $34 million global opening weekend in IMAX, our biggest Memorial Day weekend ever, including $22 million in North America, good for 14% of the domestic box office. Marvel's Doctor Strange in the Multiverse of Madness delivered the biggest May opening weekend ever for IMAX on its way to $57 million. And this weekend, Jurassic World Dominion opens across the IMAX network worldwide, including China. This is just the beginning of what lies ahead and no company is better suited to take advantage than IMAX. We command powerful global reach and a unique end-to-end technology. We empower visionary creators with proprietary cameras and image enhancement, and we create global events around world-class content with unmatched clarity and sound, scope and scale. Just look at what we accomplished in 2021. IMAX global box office recovered at twice the rate of the global exhibition industry, up 146% over 2020. We captured our largest share of the global box office ever. We delivered the highest gross in the fourth quarter in the history of the company, up 15% over our record-breaking 2019. And now we have close to $452 million in available liquidity, ensuring the financial flexibility to take full advantage of our momentum. Furthermore, prevailing trends across the entertainment landscape represent tailwinds for IMAX. Blockbusters are growing their dominance at the global box office. Hollywood studios have recommitted to exclusive theatrical releases for blockbuster films after failed experiments with day-and-date streaming distribution and fierce competition among streaming services for new subscribers has underscored the power of theatrical as a large platform and an exclusive window. For 2022 and beyond, we aim to build on our lead at the box office and further establish IMAX as the premier global technology platform for entertainment and events. This year, more films than ever will feature IMAX technology with at least 10 releases either filmed with IMAX cameras or featuring an IMAX exclusive aspect ratio. That includes Doctor Strange and Top Gun as well as Pixar's Lightyear, which makes pioneering use of IMAX technology for animation. The next installment of Thor, which was shot with IMAX cameras and Jordan Peele's Nope, which was shot with IMAX film cameras and will make never before seen use of our technology. On the heels of summer, followed the highly anticipated releases, including Marvel's Black Panther sequel and DC's Black Adam. And we continue to look forward to the December release of Avatar: The Way of Water, the first of 4 planned Avatar sequels given the first Avatar still stands as the highest grossing IMAX film of all time. We've also dramatically accelerated our local language strategy with films from across China, Japan as well as the fast-growing industries in India and South Korea. In the first quarter of 2021, we released a record 7 local language films. This strategy has proven very successful in diversifying our global box office and expanding our brand. In fact, 2021 was our highest grossing year ever for local language box office. We're building on our success to further transform the IMAX experience. We continue to bring more exclusive live and interactive events to IMAX, including our first ever live concert featuring Kanye West and Drake and our presentation of The Beatles: Get Back. And at CinemaCon, we announced upcoming live events, including performances from a diverse range of acts like Pink Floyd legend, Roger Waters. We also took a big step forward for our enhanced in-home entertainment initiative when we launched on Disney+ late last year. Finally, we're also reigniting our heritage and documentary filmmaking and bringing a new generation of narrative-driven modern IMAX documentaries to our network around the world. Our newest project, the Blue Angels, coproduced by J.J. Abrams arrives in IMAX next year. Around the world and across platforms, IMAX continues to evolve into a destination for fandom of all kinds and unique events and experiences globally. As we do, we will continue to expand our worldwide audience, grow our global platform and deliver value for our shareholders. Thank you again for joining us today and for your continued support of IMAX. With that, I will take questions from registered shareholders and duly appointed proxy holders. Please limit your questions to topics relating to today's subject matter. We will answer as many questions as time permits. Due to time constraints, we ask that you limit yourself to 1 question. And assuming we have time remaining at the end, we will take follow-ups. For each question we answer, we will summarize the question, read out loud the name of the person who asked the question. And if applicable, the entity that the person represents. Mark, are there any questions?

I can confirm that no questions have been submitted.

There are -- there are no remaining questions. Thank you, Mark. This completes the business of the meeting. A motion to conclude the proceedings is now in order.

Mr. Chairman, my name is Robert Lister. I move that the Annual Meeting of the Shareholders of IMAX Corporation to be concluded.

Thank you, Rob. Can we have a seconder.

My name is Kenneth Weissman. I second the motion.

Thank you, Ken. Thank you for joining us today and for your continued interest and support in IMAX. The meeting has now concluded.

You may now disconnect.