IMAX announces new $200M share repurchase plan, cost reduction initiative
IMAX announced a number of actions aimed at increasing company value, including the approval by the company's Board of Directors of a new share-repurchase program which authorizes the repurchase of up to $200M of its common shares by June 30, 2020. In addition, the company is implementing a cost-reduction plan that will target approximately $20M in annualized cost savings aimed at increasing profitability, operating leverage and free cash flow. The company's previously announced $200M repurchase program, which will conclude this month, is expected to result in the total repurchase of more than 6.4M shares and a 4% net reduction in shares outstanding since the program began in 2014. This includes second-quarter-to-date repurchases of 1,468,100 shares. As part of its cost-reduction plan IMAX expects approximately 100 full-time positions, including positions at IMAX China, will be eliminated, equal to roughly 14% of the company's full-time global workforce. IMAX expects to report an aggregate pre-tax restructuring and impairment charge of approximately $15M in 2017 in connection with its cost-reduction efforts. The Company further expects approximately $11M of the restructuring and impairment charges will be recognized in the second quarter of 2017. The Company anticipates the cost savings to take effect beginning in the third quarter of 2017. IMAX will provide updated 2017 cost guidance on its upcoming second-quarter earnings call in late July.