Company does not intend to seek any further extensions
TORONTO, June 29 /CNW/ - IMAX Corporation (NASDAQ: IMAX; TSX:IMX) today
announced that it will not file by June 30, 2007 its 2006 Annual Report on
Form 10-K and quarterly report on Form 10-Q for the quarter ended March 31,
2007, however it expects to be able to do so shortly.
In March 2007, the Company previously announced that it would delay
filing its financial statements due to the discovery of certain accounting
errors and subsequently broadened its accounting review to include certain
other accounting matters based on comments received by the Company from the
staff of the Securities and Exchange Commission ("SEC") and the Ontario
Securities Commission ("OSC"). The Company believes that it has substantially
addressed these comments by revising its accounting policy with regard to
revenue recognition for theatre systems. The revised policy, which will be
detailed in the Company's 10-K and 10-Q, has the effect of shifting a portion
of systems revenue between periods during the years 2002 through 2006; in the
majority of cases, the timing of revenue recognition shifts by 90-180 days.
The Company previously announced that it had executed a supplemental
indenture to the indenture (the "Indenture") governing its 9 5/8% senior notes
dues 2010, pursuant to which (i) any existing defaults arising from a failure
to comply with the reporting covenant under the Indenture had been waived and
(ii) the failure by the Company to comply with the reporting covenant until
June 30, 2007 shall not constitute a default or be the basis for an event of
default under the Indenture. Because the Company will not file its 10-K and
10-Q by June 30, 2007, it expects to be in default of this covenant. However,
the Company expects to make such filings within the thirty (30) day period
(after notice of default) which allows for the cure of such default under the
Indenture before holders can seek to accelerate the indebtedness.
In addition, the Company obtained a further waiver under its bank credit
agreement of the covenant to deliver its audited financial statements until
July 31, 2007.
The Company stated it did not intend to seek any further extensions in
connection with its filing obligations from any parties.
The statements set forth in this press release are preliminary, reflect
information currently known to the Company and are subject to change as a
result of the accounting review and restatement process, subsequent events and
the completion of the financial statements by management and the audit of the
financial statements by the Company's independent auditors,
PricewaterhouseCoopers, LLP. In the event of an acceleration of any or all of
its indebtedness, the Company may not have sufficient access to capital to
refinance and/or repay any debt that is so accelerated, and any such
acceleration could have a material adverse effect on the Company's financial
position. Please see the risk factors contained in the Company's 2005 Annual
Report on Form 10-K for a discussion of other risk factors with regard to the
Company's capital structure and/or financial position.
About IMAX Corporation
IMAX Corporation is one of the world's leading entertainment technology
companies, specializing in digital and film-based motion picture technologies.
The worldwide IMAX(R) network is among the most important and successful
theatrical distribution platforms for major event Hollywood films around the
globe, with IMAX theatres delivering the world's best cinematic presentations
using proprietary IMAX, IMAX(R) 3D, and IMAX DMR(R) technology. IMAX DMR is
the Company's groundbreaking digital remastering technology that allows it to
digitally transform virtually any conventional motion picture into the
unparalleled image and sound quality of The IMAX Experience(R). IMAX's
renowned projectors display crystal-clear images on the world's biggest
screens, and the IMAX brand is recognized throughout the world for
extraordinary and immersive entertainment experiences for consumers. As of
September 30, 2006, there were 280 IMAX theatres operating in 40 countries.
IMAX(R), IMAX(R) 3D, IMAX DMR(R), IMAX MPX(R) and The IMAX Experience(R)
are trademarks of IMAX Corporation. More information on the Company can
be found at www.imax.com.
This press release contains forward looking statements that are based on
management 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 the outcome of
the accounting review, discussions with the SEC and OSC, and related matters
discussed in this press release, the timing of theatre system deliveries, the
mix of theatre systems shipped, the timing of the recognition of revenues and
expenses on film production and distribution agreements, the performance of
films, the viability of new businesses and products, risks arising from
potential material weaknesses in internal control over financial reporting,
the extent and impact of the restatement of our financial statements, the
outcome of the appeal of the NASDAQ Staff Determination letters and
fluctuations in foreign currency and in the large format and general
commercial exhibition market. These factors and other risks and uncertainties
are discussed in the Company's Annual Report on Form 10-K for the year ended
December 31, 2005.
For further information:
For further information: Media: IMAX Corporation, New York, Sarah
Gormley, (212) 821-0155, firstname.lastname@example.org; Business Media: Sloane & Company,
New York, Whit Clay, (212) 446-1864, email@example.com; Investors: Integrated
Corporate Relations, Amanda Mullin, (203) 682-8243, Amanda.Mullin@icrinc.com