HIGHLIGHTS
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- IMAX remains on track to install approximately 50 digital systems by
year-end
- Summer blockbuster The Dark Knight: The IMAX Experience has grossed
over $32 million, sets new IMAX DMR(R) 2D record
- Completes 2008 film slate with DreamWorks Pictures/Paramount's
Eagle Eye for September/October time period
- Adds Three Films to 2009 Film Slate: Watchmen; Night at the Museum 2:
Escape to the Smithsonian; and Transformers: Revenge of the Fallen
- Company signs first international joint venture agreements
- Ends second quarter with record backlog of 246 theatre systems driven
by joint revenue sharing model
TORONTO, Aug. 7 /CNW/ - IMAX Corporation (NASDAQ: IMAX; TSX: IMX) today
reported that it recorded a net loss per diluted share of $0.29 for the second
quarter of fiscal 2008, compared to a net loss of $0.11 per diluted share for
the second quarter of fiscal 2007. At the same time, the Company announced
that the roll out of its IMAX(R) Digital system technology launched as
scheduled, with the successful delivery and installation of its first three
digital projection systems at three AMC Entertainment, Inc. ("AMC") theatres
located in the Baltimore/Washington D.C. area, during the second quarter.
IMAX Co-Chairmen and Co-CEOs Richard L. Gelfond and Bradley J. Wechsler
commented, "We are very pleased with the significant strategic progress made
thus far in 2008, despite the fact that, as we have previously discussed, our
financial results do not yet reflect the pieces being put in place that should
return IMAX to profitability. Importantly, the execution of our digital roll
out launched on time, our future film slate is strong and growing, our
pipeline of new business remains robust, we have the largest systems backlog
in our history reflecting our joint revenue sharing strategy, and we believe
we have the necessary financing in place to fund our joint venture initiative.
Looking ahead, we believe the combination of having approximately 50 digital
systems in operation by year-end and the strength of our second half film
slate, led by The Dark Knight: The IMAX Experience, should drive improved
second half financial performance. We continue to expect profitability in
2009."
The Company signed agreements for six IMAX theatre systems in the second
quarter of fiscal 2008 compared to agreements for six IMAX theatre systems in
the second quarter of 2007. At the end of the second quarter, the Company's
backlog consisted of a record 246 theatre systems compared to 79 theatre
systems in backlog at the end of last year's second quarter. Included in the
2008 and 2007 system backlog totals were 139 and three joint revenue sharing
arrangements, respectively, for which there is no assigned backlog value. To
date, the Company has signed contracts for 189 IMAX Digital theatre systems.
In late July, the Company delivered its second set of digital systems to three
AMC theatres in the Philadelphia market and expects the systems to be
operational by next weekend, as planned.
Messrs. Gelfond and Wechsler continued, "The launch of our digital
technology and 100-theatre joint revenue sharing arrangement with AMC are
important strategic milestones for IMAX and represent the first steps toward
what we expect to be a period of significant future growth for our
organization. The advent of IMAX Digital virtually eliminates high film print
costs incurred by the studios and lowers installation costs for exhibitors,
allowing for greater programming flexibility. In addition, with digital we
will have the ability to show 10 to 12 major studio releases per year, as
opposed to six to eight historically, which should translate into higher
revenue and greater per-theatre profitability."
In addition to the Company's joint revenue sharing arrangement with AMC
announced in the fourth quarter of 2007 as well as its 31 digital theatre
joint revenue sharing arrangement with Regal Cinemas, Inc. announced in the
first quarter of 2008, exhibitor interest in IMAX Digital and the Company's
joint revenue sharing model continues, evidenced by recently announced theatre
deals with leading international exhibitors Hoyts Cinemas Ltd. in Australia
and Tokyu Recreation in Japan.
"Our joint revenue sharing business model makes it more affordable for
exhibitors to be in the IMAX business while driving greater recurring revenue
into our business. This model, coupled with our digital platform, should
enable us to rapidly increase the size of our worldwide network. The
installation of our commercial system backlog will roughly triple the number
of IMAX theatres in domestic multiplexes and more than double the size of our
commercial international network by 2010," said Messrs. Gelfond and Wechsler.
Turning to second quarter financial results, for the three months ended
June 30, 2008, total revenues were $21.2 million, as compared to $27.1 million
reported for the prior year period.
- Systems revenue was $10.6 million versus $14.0 million in the prior
year period. The Company installed four theatre systems in the second
quarter, same as last year, however revenue recognition was deferred
on two of those systems due to contractual rights for digital
upgrades.
- Film revenue was $6.6 million during the second quarter of 2008
versus $8.0 million in the second quarter of 2007. This included
IMAX DMR(R) revenues of $2.5 million compared to $3.8 million in
2007.
- Theatre operations and other revenue of $4.0 million in the second
quarter of 2008 compared to $5.1 million in the second quarter of
2007.
Regarding second quarter film performance, in April the Company released
Paramount Pictures' Shine A Light: The IMAX Experience which grossed
$4.6 million worldwide as of quarter end, and was followed on May 9 by
Warner Bros. Pictures' Speed Racer: The IMAX Experience, which grossed
$5.3 million worldwide as of quarter end. On June 6, the Company released
DreamWorks Animation's Kung Fu Panda: The IMAX Experience, which grossed
$8.1 million worldwide for the quarter and has grossed $11.7 million to date.
Selling, general and administrative expenses were $11.2 million in the
second quarter compared to $11.1 million in the same period a year ago.
Research and development costs increased to $2.0 million in the second quarter
of 2008 as compared to $1.1 million in the second quarter of 2007, reflecting
the Company's investment in digital technology.
Messrs. Gelfond and Wechsler commented, "The Company's second quarter
results reflect investments made to transition the Company to a digital
platform, two fewer system installations for which we could recognize revenue
as well as difficult year-over-year comparisons to last year's highly
successful Spider-Man 3: The IMAX Experience. We believe The Dark Knight: The
IMAX Experience, combined with strength of our second half film slate, should
offset much of the softness of our year-to-date IMAX DMR film performance."
The Company's cash position was $24.6 million as of June 30, 2008,
compared to cash and short term investments of $16.9 million as of
December 31, 2007 and $18.5 million as of June 30, 2007. The Company's
increased cash position includes the private placement sale of approximately
2.73 million common shares in May of this year at market prices, and resulting
proceeds of approximately $18 million. The Company made its bi-annual interest
payment on its senior notes of $7.7 million in June.
With respect to the third quarter, on July 18th, IMAX released
Warner Bros. Pictures' blockbuster hit The Dark Knight: The IMAX Experience
which is currently showing on 94 domestic and 29 international screens.
Director Christopher Nolan shot six sequences of the film with IMAX cameras,
marking the first time ever that a major Hollywood film has been even
partially shot using IMAX cameras. In its first 19 days of release the film
has grossed approximately $32.0 million worldwide, or $257,000 per screen,
making it the highest grossing 2D Hollywood feature film in IMAX history and
it continues to perform extremely well both domestically and internationally
with several international markets still to open.
"The Dark Knight appears to be nothing short of a cultural phenomenon and
we are delighted to be a part of it," said Messrs. Gelfond and Wechsler.
