IMAX Corporation Reports First Quarter 2012 Financial Results

April 27, 2012 – 12:01 pm

NEW YORK, April 27, 2012 /PRNewswire/ —

HIGHLIGHTS

  • Q1 2012 Gross Box Office Up 95% year-over-year to $121.7 million
  • Q1 2012 Revenues Increased 23% to $55.6 million
  • Q1 2012 Adjusted Net Income Increased 58% to $4.0 million
  • Summer 2012 Slate Kicks off This Week with the International Release of The Avengers: An IMAX 3D Experience

IMAX Corporation (NYSE:IMAX; TSX:IMX) today reported first quarter 2012 revenues of $55.6 million, adjusted EBITDA as calculated in accordance with the Company’s Credit Facility of $16.4 million, adjusted net income of $4.0 million, or $0.06 per diluted share, and reported net income of $2.6 million, or $0.04 per diluted share. In the first quarter of 2012, the Company incurred a charge of $0.7 million to enable certain theatres to play movies, such as The Dark Knight Rises, in either digital or analog format. For reconciliations of adjusted net income to reported net income and for the definition of adjusted EBITDA, please see the tables at the end of this press release.

“Our first quarter financial results were driven by strong year-over-year increases in recurring revenues, which reflects the powerful combination of film performance and our growing worldwide theatre network, the key ingredients of our business model,” said IMAX Chief Executive Officer, Richard L. Gelfond. “Our rapid global expansion has led to 32% commercial network growth versus the same time last year. In addition, the box office momentum we experienced in the first quarter has continued into the second quarter, with gross box office to date up roughly 500% versus the same period last year and the summer movie season still ahead. We believe that the momentum we are currently experiencing, together with our growing network, backlog of theatres, cutting-edge technology and the introduction of our new brand campaign should result in continued growth over the long-term.”

First Quarter Segment Results
First quarter 2012 total film revenue was $19.1 million, compared to $11.5 million in the first quarter of 2011. Production and IMAX DMR® revenues were $13.8 million in the first quarter of 2012, versus $7.3 million in the year-ago period. Gross box office from DMR titles was $121.7 million in the first quarter of 2012, compared to $62.3 million in the first quarter of 2011. The average DMR box office per screen in the first quarter of 2012 was $247,600 ($212,400 domestic, $304,100 international).

“Both our domestic and international theatres enjoyed significant per-screen increases in box office during the quarter, which we attribute in part to the ‘halo effect’ of Mission: Impossible – Ghost Protocol and being involved in the right titles for the IMAX brand,” added Mr. Gelfond. “The 2012 IMAX summer movie season kicks off this week, featuring The Avengers, Men in Black 3, Prometheus, The Amazing Spider-Man and Christopher Nolan’s The Dark Knight Rises, which will include at least an hour of footage shot using IMAX cameras. Differentiation continues to be a key focus of our film strategy in 2012 and beyond. In fact, The Avengers: An IMAX 3D Experience, opened in Russia yesterday, a full week in advance of the wide release, and so far we are working with filmmakers on approximately 10 of our 2012 and 2013 films to incorporate various forms of IMAX differentiation.”

In the first quarter of 2012, revenue from joint revenue sharing arrangements was $11.7 million, compared to $4.0 million in the prior-year period. During the quarter, the Company installed 8 new theatres under joint revenue sharing arrangements, compared to 10 in the year-ago period. As of March 31, 2012, there were 265 IMAX® theatres operating under joint revenue sharing arrangements, compared to 181 joint revenue sharing theatres open as of March 31, 2011.

In the first quarter of 2012, IMAX systems revenue was $15.7 million, compared to $22.3 million in the first quarter of 2011, primarily reflecting the installation of 8 full, new theatre systems and 10 upgrades in the most recent first quarter, compared to 11 full, new systems and 22 upgrades in the first quarter of 2011.

Network Growth Update
In the first quarter of 2012, the Company signed contracts for 23 theatre systems and installed 26 theatre systems. There were 261 theatre systems in backlog as of March 31, 2012, compared to 263 systems in backlog as of December 31, 2011 and 283 systems in backlog as of March 31, 2011. As of March 31, 2012, there were a total of 510 IMAX theatre systems installed in commercial multiplexes, compared to 386 systems at the end of last year’s first quarter. For a breakdown of system signings, installations and backlog by type, please see the end of this press release.

2012 Theatre Installation Schedule from March 31, 2012 Backlog
In the first quarter of 2012, the Company installed 16 new IMAX theatre systems. For the second quarter of 2012, 17 to 21 new theatre systems in backlog as of March 31, 2012 are scheduled to be installed. There are 62 to 63 new theatre systems in backlog as of March 31, 2012 that are scheduled to be installed in the second half of 2012. However, in any given year, the Company will sign agreements for new theatres that will install within that same year. Therefore, the Company expects to install more than the 95 to 100 theatres currently scheduled to be installed out of backlog this year. The Company cautions that installations can slip from period to period, usually for reasons beyond its control.

Mr. Gelfond concluded, “2012 is off to a strong start. We are still in the early stages of our international expansion, and our pipeline of new theatre deals remains robust. We believe that the IMAX platform is becoming increasingly important to our business partners and consumers, and we look forward to bringing The IMAX Experience® to more and more audiences around the world.”

First quarter 2012 total revenues were $55.6 million, adjusted net income was $4.0 million, or $0.06 per diluted share, reported net income was $2.6 million, or $0.04 per diluted share, and adjusted EBITDA as calculated in accordance with the Company’s Credit Facility was $16.4 million. For the first quarter of 2011, the Company recorded revenues of $45.2 million, adjusted net income of $2.5 million, or $0.04 per share, a reported net loss of $1.0 million, or $0.02 per share, and adjusted EBITDA of $9.0 million. Last year’s reported net loss included a one-time charge of $2.1 million, or $0.03 per share, related to an arbitration proceeding arising from a discontinued subsidiary.

Conference Call
The Company will host a conference call today at 8:30 AM ET to discuss its first quarter 2012 financial results. To access the call via telephone, interested parties should dial (866) 321-6651 approximately 5 to 10 minutes before it begins. International callers should dial (416) 642-5212. The participant passcode for the call is 3201874. This call is also being webcast by Thomson Financial and can be accessed on the ‘Investor Relations’ section of www.imax.com. A replay of the call will be available via webcast on the ‘Investor Relations’ section of www.imax.com or via telephone by dialing (888) 203-1112, or (647) 436-0148 for international callers. The participant passcode for the telephone replay is 3201874.

About IMAX Corporation
IMAX Corporation is one of the world’s leading entertainment and technology companies, specializing in the creation and delivery of premium, awe-inspiring entertainment experiences. With a growing suite of cutting-edge motion picture and sound technologies, and a globally recognized entertainment brand, IMAX is singularly situated at the convergence of the entertainment industry, innovation and the digital media world. The industry’s top filmmakers and studios are utilizing IMAX theatres to connect with audiences in extraordinary ways, and as such, the IMAX network is among the most important and successful theatrical distribution platforms for major event films around the globe. The Company’s new digital projection and sound systems – combined with a growing blockbuster film slate – are fueling the rapid expansion of the IMAX network in established markets such as North America, Western Europe, and Japan, as well as emerging markets such as China and Russia. IMAX deliver the world’s best cinematic presentations using proprietary IMAX®, IMAX 3D®, and IMAX DMR® (Digital Re-Mastering) technologies. IMAX DMR enables virtually any motion picture to be transformed into the unparalleled image and sound quality of The IMAX Experience®.

IMAX is headquartered in New York, Toronto and Los Angeles, with offices in London, Tokyo, Shanghai and Beijing. As of March 31, 2012, there were 643 IMAX theatres (510 commercial multiplex, 20 commercial destination and 113 institutional) in 52 countries.

IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D Experience® and The IMAX Experience® are trademarks of IMAX Corporation. More information about the Company can be found at www.imax.com. You may also connect with IMAX on 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 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, general economic, market or business conditions, including the length and severity of the current economic downturn, the performance of IMAX DMR films, the opportunities that may be presented to and pursued by IMAX, competitive actions by other companies, conditions in the in-home and out-of home entertainment industries, the signing of theatre system agreements, changes in law or regulations, conditions, changes and developments in the commercial exhibition industry, the failure to respond to changes and advancements in digital technology, the failure to convert theatre system backlog into revenue, new business initiatives, investments and operations in foreign jurisdictions and any future international expansion, the inability to protect IMAX’s intellectual property foreign currency fluctuations and IMAX’s prior restatements and the related litigation. These factors and other risks and uncertainties are discussed in IMAX’s most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q.

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UPDATE: More on IMAX’s financial results:

DailyFinance: IMAX Misses Where It Counts | IMAX Warms Up for the Summer Movie Slate

Associated Press: Imax Posts 1Q Profit as Theater Network Grows

Retirement Planning: Earnings Scan (ALV, CPN, DTE, GT, IMAX, IP)

New York Post: Imax misses profit estimates by a cent

Proactiveinvestors: TSX/TSX-V News: CP, Imax, TransCanada, Iamgold, SilverCrest Mines and more

The Hollywood Reporter: Imax Swings to Q1 Profit as Recurring Revenue Jumps

Deadline.com: IMAX Shares Fall After Q1 Earnings Miss Analyst Estimates

The Canadian Press: Imax swings to Q1 profit of $2.6M as quarterly revenue soars 22%

Reuters: Imax posts 1st-qtr profit

Wall St. Cheat Sheet: IMAX Earnings: A Surprise and Thoughts on the Upcoming Release Slate

Seeking Alpha: Imax Corporation First Quarter Earnings Offer Hint Of Strong Year Ahead