IMAX CORP [IMAX] Filings

10-Q 1 imax-20240930.htm 10-Q imax-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-35066

IMAX Corporation

(Exact name of registrant as specified in its charter)


Canada			98-0140269
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

2525 Speakman Drive, Mississauga, Ontario, Canada L5K 1B1 (905) 403-6457			902 Broadway, Floor 20 New York, New York, USA 10010 (212) 821-0142

(Address of principal executive offices, zip code, telephone numbers)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, no par value

IMAX

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class						Outstanding as of September 30, 2024
Common Shares, no par value						52,682,641

IMAX CORPORATION

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		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	64
Item 4.	Controls and Procedures	66

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 5.	Other Information	69
Item 6.	Exhibits	70
Signatures		71

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IMAX CORPORATION

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


			Page
The following unaudited Condensed Consolidated Financial Statements are filed as part of this Report:

Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023			4
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023			5
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023			6
Condensed Consolidated Statements of Cash Flows for the nine months ended Septem ber 30, 2024 and 2023			7
Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2024 and 2023			8
Notes to Condensed Consolidated Financial Statements			9

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IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. Dollars, except share amounts)

(Unaudited)


	September 30,		December 31,
	2024		2023
Assets
Cash and cash equivalents	$	104,504	$	76,200
Accounts receivable, net of allowance for credit losses	114,193		136,259
Financing receivables, net of allowance for credit losses	123,459		127,154
Variable consideration receivables, net of allowance for credit losses	74,487		64,338
Inventories	37,612		31,584
Prepaid expenses	13,310		12,345
Film assets, net of accumulated amortization	9,127		6,786
Property, plant and equipment, net of accumulated depreciation	245,106		243,299
Other assets	22,981		20,879
Deferred income tax assets, net of valuation allowance	15,687		7,988
Goodwill	52,815		52,815
Other intangible assets, net of accumulated amortization	34,279		35,022
Total assets	$	847,560	$	814,669
Liabilities
Accounts payable	$	26,018	$	26,386
Accrued and other liabilities	111,283		111,013
Deferred revenue	53,676		67,105
Revolving credit facility borrowings, net of unamortized debt issuance costs	46,239		22,924
Convertible notes and other borrowings, net of unamortized discounts and debt issuance costs	230,038		229,131
Deferred income tax liabilities	12,521		12,521
Total liabilities	479,775		469,080
Commitments, contingencies and guarantees (see Note 7)
Non-controlling interests	674		658
Shareholders’ equity
Capital stock common shares — no par value. Authorized — unlimited number. 52,682,641 issued and outstanding (December 31, 2023 — 53,260,276 issued and outstanding)	394,603		389,048
Other equity	181,911		185,087
Statutory surplus reserve	3,932		3,932
Accumulated deficit	(279,993)		(292,845)
Accumulated other comprehensive loss	(11,015)		(12,081)
Total shareholders’ equity attributable to common shareholders	289,438		273,141
Non-controlling interests	77,673		71,790
Total shareholders’ equity	367,111		344,931
Total liabilities and shareholders’ equity	$	847,560	$	814,669

(See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.)

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IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. Dollars, except per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Revenues
Technology sales	$	26,305	$	18,273	$	54,629	$	65,455
Image enhancement and maintenance services	46,891		60,250		149,428		154,244
Technology rentals	16,122		23,008		48,766		62,612
Finance income	2,134		2,365		6,713		6,510
	91,452		103,896		259,536		288,821
Costs and expenses applicable to revenues
Technology sales	10,605		7,948		24,594		28,951
Image enhancement and maintenance services	23,087		26,646		73,371		69,470
Technology rentals	6,741		6,587		19,736		19,747
	40,433		41,181		117,701		118,168
Gross margin	51,019		62,715		141,835		170,653
Selling, general and administrative expenses	31,466		36,282		100,287		109,336
Research and development	(265)		2,771		3,953		7,388
Amortization of intangible assets	1,544		1,107		4,208		3,328
Credit loss (reversal) expense, net	(1,137)		523		(963)		1,589

Restructuring and executive transition costs	—		—		—		1,353
Income from operations	19,411		22,032		34,350		47,659
Realized and unrealized investment gains	32		364		94		436
Retirement benefits non-service expense	(109)		(77)		(323)		(232)
Interest income	625		738		1,720		1,838
Interest expense	(2,240)		(1,483)		(6,467)		(5,045)
Income before taxes	17,719		21,574		29,374		44,656
Income tax expense	(2,376)		(6,555)		(3,538)		(14,901)
Net income	15,343		15,019		25,836		29,755
Net income attributable to non-controlling interests	(1,447)		(3,029)		(5,083)		(6,960)
Net income attributable to common shareholders	$	13,896	$	11,990	$	20,753	$	22,795

Net income per share attributable to common shareholders:
Basic	$	0.26	$	0.22	$	0.39	$	0.42
Diluted	$	0.26	$	0.22	$	0.39	$	0.41

Weighted average shares outstanding (in thousands):
Basic	52,682		54,618		52,605		54,424
Diluted	54,089		55,535		53,628		55,261

(See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.)

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IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of U.S. Dollars)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net income	$	15,343	$	15,019	$	25,836	$	29,755
Other comprehensive income (loss) before tax
Unrealized net gain (loss) from cash flow hedging instruments	337		(1,048)		(944)		(226)
Realized net loss from cash flow hedging instruments	162		174		240		636
Foreign currency translation adjustments	3,775		1,060		2,779		(6,559)
Defined benefit and postretirement benefit plans	(149)		(176)		(547)		(528)
Total other comprehensive income (loss) before tax	4,125		10		1,528		(6,677)
Income tax (expense) benefit related to other comprehensive income (loss)	(92)		274		328		30
Other comprehensive income (loss), net of tax	4,033		284		1,856		(6,647)
Comprehensive income	19,376		15,303		27,692		23,108
Comprehensive income attributable to non-controlling interests	(2,521)		(3,328)		(5,872)		(5,104)
Comprehensive income attributable to common shareholders	$	16,855	$	11,975	$	21,820	$	18,004

(See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.)

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IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. Dollars)

(Unaudited)


	Nine Months Ended
	September 30,
	2024		2023
Operating Activities
Net income	$	25,836	$	29,755
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	48,902		46,477
Amortization of deferred financing costs	1,478		1,742
Credit loss (reversal) expense, net	(963)		1,589
Write-downs, including asset impairments	3,034		872
Deferred income tax benefit	(7,339)		(3,724)
Share-based and other non-cash compensation	17,261		17,830
Unrealized foreign currency exchange (gain) loss	(527)		52
Realized and unrealized investment gain	(94)		(436)
Changes in assets and liabilities:
Accounts receivable	23,001		(2,392)
Inventories	(6,181)		(13,771)
Film assets	(17,892)		(14,575)
Deferred revenue	(13,393)		(4,670)
Changes in other operating assets and liabilities	(13,771)		(4,141)
Net cash provided by operating activities	59,352		54,608
Investing Activities
Purchase of property, plant and equipment	(3,816)		(2,541)
Investment in equipment for joint revenue sharing arrangements	(21,728)		(10,705)
Acquisition of other intangible assets	(4,802)		(5,418)
Net cash used in investing activities	(30,346)		(18,664)
Financing Activities
Revolving credit facility borrowings	55,000		31,032
Repayments of revolving credit facility borrowings	(32,000)		(43,057)
Repayments of other borrowings	(489)		—
Proceeds from other borrowings	—		315
Repurchase of common shares	(18,102)		(4,263)
Taxes withheld and paid on employee stock awards vested	(4,978)		(6,458)
Common shares issued - stock options exercised	98		—
Principal payment under finance lease obligations	(480)		(480)
Dividends paid to non-controlling interests	—		(1,438)
Net cash used in financing activities	(951)		(24,349)
Effects of exchange rate changes on cash	249		607
Increase in cash and cash equivalents during period	28,304		12,202
Cash and cash equivalents, beginning of period	76,200		97,401
Cash and cash equivalents, end of period	$	104,504	$	109,603

(See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.)

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IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands of U.S. Dollars)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Adjustments to capital stock:
Balance, beginning of period	$	394,493	$	390,238	$	389,048	$	376,715
Employee stock options exercised	98		—		98		—
Average carrying value of repurchased and retired common shares	—		(152)		(8,575)		(249)
Restricted share units vested, net of shares withheld for employee tax obligations	12		11		14,032		13,631
Balance, end of period	394,603		390,097		394,603		390,097
Adjustments to other equity:
Balance, beginning of period	176,632		175,374		185,087		185,678
Amortization of share-based payment expense - stock options	—		—		—		92
Amortization of share-based payment expense - restricted share units	3,318		2,557		10,864		9,881
Amortization of share-based payment expense - performance stock units	1,985		2,071		5,864		5,196
Restricted share units vested	(24)		(32)		(19,815)		(20,877)
Change in ownership interest related to IMAX China	—		—		(89)		—
Balance, end of period	181,911		179,970		181,911		179,970
Adjustments to statutory surplus reserve:
Balance, beginning of period	3,932		3,932		3,932		3,932
Balance, end of period	3,932		3,932		3,932		3,932
Adjustments to accumulated deficit:
Balance, beginning of period	(293,889)		(284,208)		(292,845)		(293,124)
Net income attributable to common shareholders	13,896		11,990		20,753		22,795
Common shares repurchased and retired	—		(100)		(7,901)		(1,989)
Balance, end of period	(279,993)		(272,318)		(279,993)		(272,318)
Adjustments to accumulated other comprehensive loss:
Balance, beginning of period	(13,974)		(14,622)		(12,081)		(9,846)
Other comprehensive income (loss), net of tax	2,959		(15)		1,066		(4,791)
Balance, end of period	(11,015)		(14,637)		(11,015)		(14,637)
Adjustments to non-controlling interests:
Balance, beginning of period	75,111		66,167		71,790		65,691
Net income attributable to non-controlling interests	1,431		3,100		5,067		7,021
Other comprehensive income (loss), net of tax	1,073		299		789		(1,856)
Share-based compensation attributable to non-controlling interests	58		140		52		288
Dividends paid to non-controlling shareholders of IMAX China	—		—		—		(1,438)
Change in ownership interest related to IMAX China common share repurchases	—		—		(25)		—
Balance, end of period	77,673		69,706		77,673		69,706
Total Shareholders’ Equity	$	367,111	$	356,750	$	367,111	$	356,750

(See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.)

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IMAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands of U.S. Dollars, unless otherwise stated)

1. Basis of Presentation

Accounting Principles

IMAX Corporation, together with its consolidated subsidiaries (the “Company” or “IMAX”), prepares its financial statements in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. In the Company’s opinion, the unaudited Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature that are necessary for a fair statement of the results for the interim periods presented. The Condensed Consolidated Balance Sheet at December 31, 2023 was derived from the Company’s audited annual Consolidated Financial Statements, but does not contain all of the footnote disclosures included in the annual financial statements. The interim results presented in the Company’s Condensed Consolidated Statements of Operations are not necessarily indicative of results for a full year.

These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s 2023 Annual Report on Form 10-K (the “2023 Form 10-K”), which should be consulted for a summary of the significant accounting policies adopted by the Company. These Condensed Consolidated Financial Statements are prepared following the same accounting policies disclosed in the 2023 Form 10-K.

Principles of Consolidation

These Condensed Consolidated Financial Statements include the accounts of IMAX Corporation together with its consolidated subsidiaries, except for subsidiaries which have been identified as variable interest entities (“VIEs”) where the Company is not the primary beneficiary. All intercompany accounts and transactions have been eliminated. The Company has evaluated its various variable interests to determine whether they are VIEs as required by U.S. GAAP.

The Company has interests in ten film production companies, which have been identified as VIEs. The Company is the primary beneficiary of and consolidates five of these entities as it has the power to direct the activities that most significantly impact the economic performance of the VIE, and it has the obligation to absorb losses or the right to receive benefits from the respective VIE that could potentially be significant. The majority of the assets relating to these production companies are held by the IMAX Original Film Fund (the “Original Film Fund”) as described in Note 16. The Company does not consolidate the other five film production companies because it does not have the power to direct their activities and it does not have the obligation to absorb the majority of the expected losses or the right to receive expected residual returns. The Company uses the equity method of accounting for these entities, which are not material to the Company’s Condensed Consolidated Financial Statements. A change in the value of an equity method investment that is other than temporary is recognized in the Condensed Consolidated Statements of Operations.

As of September 30, 2024 and December 31, 2023, total assets and liabilities of the Company’s consolidated VIEs are as follows:


	September 30,		December 31,
(In thousands of U.S. Dollars)	2024		2023
Total assets	$	1,449	$	1,425
Total liabilities	$	246	$	246

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Estimates and Assumptions

In preparing the Company’s Condensed Consolidated Financial Statements, management makes judgments in applying various accounting policies. The areas of policy judgment are consistent with those reported in Note 2(b) of the Company’s audited Consolidated Financial Statements included in its 2023 Form 10-K. Management also considers that its determination of operating and reporting segments represents an area of judgment, and has made this conclusion on the basis of what comprises the discrete financial information produced, but not provided to or used by its Chief Operating Decision Maker (“CODM”) to carry out this function. In addition, management makes assumptions about the Company’s future operating results and cash flows in deriving critical accounting estimates used in preparing the Condensed Consolidated Financial Statements. The significant estimates made by management include, but are not limited to: (i) the allocation of the transaction price in an IMAX System arrangement to distinct performance obligations; (ii) the amount of variable consideration to be earned on sales of IMAX Systems based on projections of future box office performance; (iii) expected credit losses on accounts receivable, financing receivables, and variable consideration receivables; (iv) provisions for the write-down of excess and obsolete inventory; (v) the fair values of the reporting units used in assessing the recoverability of goodwill; (vi) the cash flow projections used in testing the recoverability of long-lived assets such as the system equipment supporting joint revenue sharing arrangements; (vii) the economic lives of the system equipment supporting joint revenue sharing arrangements; (viii) the useful lives of intangible assets; (ix) the ultimate revenue forecasts used to test the recoverability of film assets; (x) the discount rates used to determine the present value of financing receivables and lease liabilities, as well as to determine the fair values of the Company’s reporting units for the purpose of assessing the recoverability of goodwill; (xi) pension plan assumptions; (xii) estimates related to the fair value and projected vesting of share-based payment awards; (xiii) the valuation of deferred income tax assets; and (xiv) reserves related to uncertain tax positions.

2. New Accounting Standards and Accounting Changes

Recently Issued FASB Accounting Standard Codification Updates Not Yet Adopted

In November 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 820): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The purpose of ASU 2023-07 is to enhance the interim disclosure requirements by more closely aligning them with the annual requirements. ASU 2023-07 requires interim and annual disclosures to include information about the company’s significant segment expenses. ASU 2023-07 will be effective for the Company’s year ended December 31, 2024 and all interim periods thereafter. The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements.

In December 2023, the FASB issued Accounting Standard Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in ASU 2023-09 improve the transparency of income tax disclosures by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation, and (ii) income taxes paid disaggregated by jurisdiction. ASU 2023-09 will be effective for the Company’s year ended December 31, 2025. The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements.

The Company considers the applicability and impact of all recently issued FASB accounting standard codification updates. Accounting standard updates that are not noted above were assessed and determined to be not applicable or not significant to the Company’s Condensed Consolidated Financial Statements for the period ended September 30, 2024.

3. Receivables

The ability of the Company to collect its receivables is principally dependent on the viability and solvency of individual theater operators which is significantly influenced by consumer behavior and general economic conditions. Theater operators, or other customers, may experience financial difficulties that could result in them being unable to fulfill their payment obligations to the Company.

In order to mitigate the credit risk associated with its receivables, management performs an initial credit evaluation prior to entering into an arrangement with a customer and then regularly monitors the credit quality of each customer through an analysis of collections history and aging. This monitoring process includes meetings on at least a monthly basis to identify credit concerns and potential changes in credit quality classification. A customer may improve their credit quality classification once a substantial payment is made on an overdue balance or when the customer has agreed to a payment plan and payments have commenced in accordance with that plan. Changes in credit quality classification are dependent upon management approval. The Company’s internal credit quality classifications are as follows:

•Good Standing — The theater operator continues to be in good standing as payments and reporting are received on a regular basis.

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•Credit Watch — The theater operator has demonstrated a delay in payments, but continues to be in active communication with the Company. Theater operators placed on Credit Watch are subject to enhanced monitoring. In addition, depending on the size of the outstanding balance, length of time in arrears, and other factors, future transactions may need to be approved by management. These receivables are in better condition than those in the Pre-Approved Transactions Only category, but are not in as good condition as the receivables in the Good Standing category.

•Pre-Approved Transactions Only — The theater operator has demonstrated a delay in payments with little or no communication with the Company. All services and shipments to the theater operator must be reviewed and approved by management. These receivables are in better condition than those in the All Transactions Suspended category, but are not in as good condition as the receivables in the Credit Watch category. In certain situations, a theater operator may be placed on nonaccrual status and all revenue recognition related to the theater may be suspended, including the accretion of Finance Income for Financing Receivables.

•All Transactions Suspended — The theater operator is severely delinquent, non-responsive or not negotiating in good faith with the Company. Once a theater operator is classified within the All Transactions Suspended category, the theater is placed on nonaccrual status and all revenue recognitions related to the theater are suspended, including the accretion of Finance Income for Financing Receivables.

During the period when the accretion of Finance Income is suspended for Financing Receivables, any payments received from a customer are applied against the outstanding balance owed. If payments are sufficient to cover any unreserved receivables, a reversal of the provision is recorded to the extent of the residual cash received. Once the collectability issues are resolved and the customer has returned to being in good standing, the Company will resume recognition of Finance Income.

When a customer’s aging exceeds 90 days, the Company’s policy is to perform an enhanced review to assess collectability of the theater’s past due accounts. The over 90 days past due category may be an indicator of potential impairment as up to 90 days outstanding is considered to be a reasonable time to resolve any issues.

The Company develops an estimate of expected credit losses by class of receivable and customer type through a calculation that utilizes historical loss rates, which are then adjusted for specific receivables that are judged to have a higher-than-normal risk profile after considering management’s internal credit quality classifications. Additional credit loss provisions are also recorded taking into account macro-economic and industry risk factors. The write-off of any billed receivable balance requires the approval of management.

Management’s judgments regarding expected credit losses are based on the facts available to management and involve estimates about the future. As a result, the Company’s judgments and associated estimates of credit losses may ultimately prove, with the benefit of hindsight, to be incorrect. The impacts of inflation, and rising interest rates may impact future credit losses. The Company will continue to monitor economic trends and conditions and portfolio performance and adjust its allowance for credit loss accordingly.

Accounts Receivable

Accounts receivable principally includes amounts currently due to the Company under IMAX System sale and sales-type lease arrangements, contingent fees owed by theater operators as a result of box office performance, and fees for maintenance services. Accounts receivable also includes amounts due to the Company from movie studios and other content creators principally for digitally remastering films into IMAX formats, as well as for film distribution and post-production services.

The following tables summarize the activity in the allowance for credit losses related to Accounts Receivable for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended								Nine Months Ended
	September 30, 2024								September 30, 2024
(In thousands of U.S. Dollars)	Theater Operators		Studios		Other		Total		Theater Operators		Studios		Other		Total
Beginning balance	$	14,095	$	651	$	1,080	$	15,826	$	14,355	$	616	$	1,006	$	15,977
Current period (reversal) provision, net	(2,079)		600		(13)		(1,492)		(2,120)		638		61		(1,421)
Write-offs, net of recoveries	—		—		—		—		(178)		(3)		—		(181)
Foreign exchange	118		—		—		118		77		—		—		77
Ending balance	$	12,134	$	1,251	$	1,067	$	14,452	$	12,134	$	1,251	$	1,067	$	14,452

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	Three Months Ended								Nine Months Ended
	September 30, 2023								September 30, 2023
(In thousands of U.S. Dollars)	Theater Operators		Studios		Other		Total		Theater Operators		Studios		Other		Total
Beginning balance	$	11,640	$	894	$	1,486	$	14,020	$	11,144	$	1,699	$	1,276	$	14,119
Current period provision (reversal), net	1,953		100		(463)		1,590		3,392		(699)		(253)		2,440
Write-offs, net of recoveries	(405)		—		—		(405)		(1,202)		—		—		(1,202)
Foreign exchange	(84)		—		—		(84)		(230)		(6)		—		(236)
Ending balance	$	13,104	$	994	$	1,023	$	15,121	$	13,104	$	994	$	1,023	$	15,121

For the three and nine months ended September 30, 2024, the Company’s allowance for current expected credit losses related to Accounts Receivable decreased by $1.4 million and $1.5 million, respectively.

For the three and nine months ended September 30, 2023, the Company’s allowance for current expected credit losses related to Accounts Receivable increased by $1.1 million and $1.0 million, respectively.

Financing Receivables

Financing receivables are due from theater operators and consist of the Company’s net investment in sales-type leases and receivables associated with financed sales of IMAX Systems. As of September 30, 2024 and December 31, 2023, financing receivables consist of the following:


	September 30,		December 31,
(In thousands of U.S. Dollars)	2024		2023
Net investment in leases:
Gross minimum payments due under sales-type leases	$	29,612	$	30,459
Unearned finance income	(1,033)		(467)
Present value of minimum payments due under sales-type leases	28,579		29,992
Allowance for credit losses	(517)		(453)
Net investment in leases	28,062		29,539
Financed sales receivables:
Gross minimum payments due under financed sales	131,652		135,684
Unearned finance income	(26,751)		(28,452)
Present value of minimum payments due under financed sales	104,901		107,232
Allowance for credit losses	(9,504)		(9,617)
Net financed sales receivables	95,397		97,615
Total financing receivables	$	123,459	$	127,154

Net financed sales receivables due within one year	$	33,452	$	32,031
Net financed sales receivables due after one year	61,945		65,584
Total financed sales receivables	$	95,397	$	97,615

As of September 30, 2024 and December 31, 2023, the weighted-average remaining lease term and weighted-average interest rate associated with the Company’s sales-type lease arrangements and financed sales receivables, as applicable, are as follows:


	September 30,		December 31,
(In thousands of U.S. Dollars)	2024		2023
Weighted-average remaining lease term (in years):
Sales-type lease arrangements	8.5		8.3
Weighted-average interest rate
Sales-type lease arrangements	7.47	%	7.88	%
Financed sales receivables	8.94	%	8.97	%

Table of Contents

The tables below provide information on the Company’s net investment in leases by credit quality indicator as of September 30, 2024 and December 31, 2023. The amounts disclosed for each credit quality classification are determined on a customer-by-customer basis as per the origination year of the relationship, and include both billed and unbilled amounts.


(In thousands of U.S. Dollars)	By Origination Year
As of September 30, 2024	2024		2023		2022		2021		2020		Prior		Total
Net investment in leases:
Credit quality classification:
In good standing	$	1,100	$	2,954	$	4,291	$	6,042	$	1,847	$	1,049	$	17,283
Credit Watch	—		—		—		—		—		—		—
Pre-approved transactions	—		—		426		2,669		1,495		6,305		10,895
Transactions suspended	—		—		—		—		—		401		401
Total net investment in leases	$	1,100	$	2,954	$	4,717	$	8,711	$	3,342	$	7,755	$	28,579


(In thousands of U.S. Dollars)	By Origination Year
As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Total
Net investment in leases:
Credit quality classification:
In good standing	$	2,435	$	3,262	$	6,241	$	2,173	$	1,677	$	1,138	$	16,926
Credit Watch	—		490		—		—		—		313		803
Pre-approved transactions	—		—		3,462		1,182		5,221		1,997		11,862
Transactions suspended	—		—		—		—		—		401		401
Total net investment in leases	$	2,435	$	3,752	$	9,703	$	3,355	$	6,898	$	3,849	$	29,992

The tables below provide information on the Company’s financed sales receivables by credit quality indicator as of September 30, 2024 and December 31, 2023. The amounts disclosed for each credit quality classification are determined on a customer-by-customer basis as per the origination year of the relationship, and include both billed and unbilled amounts.


(In thousands of U.S. Dollars)	By Origination Year
As of September 30, 2024	2024		2023		2022		2021		2020		Prior		Total
Financed sales receivables:
Credit quality classification:
In good standing	$	611	$	8,713	$	5,888	$	6,295	$	5,214	$	50,643	$	77,364
Credit Watch	—		—		—		—		—		1,054		1,054
Pre-approved transactions	—		466		348		2,791		1,560		8,114		13,279
Transactions suspended	—		158		—		602		149		12,295		13,204
Total financed sales receivables	$	611	$	9,337	$	6,236	$	9,688	$	6,923	$	72,106	$	104,901


(In thousands of U.S. Dollars)	By Origination Year
As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Total
Financed sales receivables:
Credit quality classification:
In good standing	$	6,660	$	5,921	$	5,961	$	5,415	$	8,058	$	44,870	$	76,885
Credit Watch	—		30		—		—		317		796		1,143
Pre-approved transactions	607		313		2,619		1,455		2,084		8,508		15,586
Transactions suspended	—		—		728		345		1,546		10,999		13,618
Total financed sales receivables	$	7,267	$	6,264	$	9,308	$	7,215	$	12,005	$	65,173	$	107,232

Table of Contents

The following tables provide an aging analysis for the Company’s net investment in leases and financed sales receivables as of September 30, 2024 and December 31, 2023:


	As of September 30, 2024
(In thousands of U.S. Dollars)	Accrued and Current		30-89 Days		90+ Days		Billed		Unbilled		Recorded Receivable		Allowance for Credit Losses		Net
Net investment in leases	$	108	$	176	$	1,606	$	1,890	$	26,689	$	28,579	$	(517)	$	28,062
Financed sales receivables	1,426		2,671		13,490		17,587		87,314		104,901		(9,504)