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Press Release
IMAX Corporation Reports Third Quarter 2009 Financial Results; Receives Commitment Letter for $75 Million Credit Facility

HIGHLIGHTS
----------

  • Third Quarter EPS of $0.02 Per Diluted Share Includes $0.06 Charge Due Primarily to Increased Share Price
  • Third Quarter Revenue Increases 33% to $43.6 Million
  • Company Receives $75 Million Commitment Letter From Wachovia Capital Finance Corporation

TORONTO, Nov. 5, 2009 (GLOBE NEWSWIRE) -- IMAX Corporation (Nasdaq:IMAX) (TSX:IMX) today reported net income of $1.1 million, or $0.02 per diluted share for the third quarter ended September 30, 2009. The Company's third quarter net income results included a year-over-year increase of $3.4 million, or $0.06 per diluted share, in share-based compensation expense primarily due to the Company's increased stock price over the course of the quarter. For the third quarter of 2008, the Company reported a net loss of $2.1 million, or $0.05 per diluted share. Total revenues for the third quarter ended September 30, 2009 increased 33% to $43.6 million, compared to total revenues of $32.9 million in the same period last year. The Company generated operating income of $4.7 million during the third quarter, a 93% increase compared to operating income of $2.4 million in the year-ago period.

For the nine-months ended September 30, 2009, the Company reported net income of $1.0 million, or $0.02 per diluted share. The Company's nine month net income results include a year-over-year increase of $6.5 million, or $0.13 per diluted share, in share-based compensation expense primarily due to the Company's increased stock price over the course of the nine-month period. For the nine months ended September 30, 2008, the Company reported a net loss of $24.6 million, or $0.58 per share. Total revenue for the nine-month period increased 54% to $117.7 million compared to $76.4 million for the year-ago period. Operating income increased to $13.3 million for the nine months ended September 30, 2009, a $24.2 million turnaround compared to an operating loss of $10.9 million in the same period last year.

IMAX Chief Executive Officer Richard L. Gelfond stated, "We are pleased with our financial momentum, which reflects the continued positive impact that our growing theatre network and new business model are having on the Company. In addition, we are very pleased to announce that we have received a commitment letter from Wachovia with the participation of Export Development Canada, for a $75 million credit facility which, when finalized, will increase our borrowing capacity. We also announced today that we intend to redeem our remaining senior notes by year-end. We look forward to building on our year-to-date success in the fourth quarter, continue to expect full year profitability for 2009 and believe we are well-positioned to deliver increased earnings in 2010."

IMAX systems revenue increased 130% to $20.1 million versus $8.7 million in the prior year period. The Company installed and recognized revenue on 13 theatre systems, including five digital upgrades, that qualified as either sales or sales-type leases in the third quarter of 2009, compared to three theatre systems recognized in the third quarter of 2008.

Revenue from joint revenue sharing arrangements increased 175% to $3.4 million in the third quarter of 2009 compared to $1.2 million last year. In the third quarter, the Company installed a total of six systems under joint revenue sharing arrangements, including one digital upgrade, compared to 14 such installations in the year ago period. As of September 30, 2009, a total of 96 joint revenue sharing systems were in operation, compared to 26 as of September 30, 2008. Since quarter-end the Company installed 11 more theatres under joint revenue sharing arrangements, for a total of 107 joint revenue sharing theatre systems.

For the third quarter of 2009, total film revenue was $12.5 million, compared to $13.0 million in the third quarter of 2008. Production and IMAX DMR(R) revenues decreased to $7.8 million compared to $9.2 million a year ago, reflecting the record performance of last year's title, The Dark Knight: The IMAX Experience (Warner Bros.) which generated box office of $60.6 million in the third quarter of 2008. Revenue from the Company's distribution segment increased 38% to $3.3 million reflecting the continued strength of the Company's original title, Under the Sea 3D.

Mr. Gelfond continued, "Our third quarter gross box office results were the third highest we have ever achieved in a quarter. These results reflect how our expansion of the network, our ability to show more titles throughout the network, and our capability in selecting titles that are well-suited for The IMAX Experience(R) position us well over the long-term. This is further evidenced in the current quarter, with titles like Cloudy With a Chance of Meatballs, Where the Wild Things Are and Michael Jackson's THIS IS IT combining to make our theatres more productive during a seasonally slow time of year."

Gross box office from DMR titles was $57.6 million in the third quarter of 2009, compared to $66.7 million in the third quarter of 2008. The primary drivers of gross box office in the third quarter were Paramount Pictures' Transformers: Revenge of the Fallen: The IMAX Experience and Warner Bros. Pictures' Harry Potter and the Half-Blood Prince: An IMAX 3D Experience. The quarter included the last four weeks of Transformers, which generated $22.6 million in gross box office during the third quarter and $44.4 million over the course of its run, for a global per screen average of $184,000 and a domestic per screen average of $187,000. The delayed release of Harry Potter arrived in domestic IMAX(R) theatres July 29th and generated $27.0 million in worldwide box office during the third quarter, for a domestic per screen average of $87,000 and an international per screen average of $174,000. On September 18, Sony Pictures Cloudy With A Chance of Meatballs: An IMAX 3D Experience was released day-and-date to IMAX theatres and generated $5.4 million in worldwide box office through the third quarter and $10.5 million to date for a per screen average of $66,000. For the nine month period, IMAX DMR gross box increased 67% to a record $170.2 million compared to $102.2 million last year.

Selling, general and administrative expense as a percentage of revenue declined to 29.2% as compared to 32.0% in the third quarter of last year. Overall, SG&A expenses increased to $12.8 million in the third quarter compared to $10.5 million a year ago. Reflected in third quarter SG&A expense was the previously mentioned net increase in share-based compensation, which primarily reflected the Company's increased stock price over the course of the quarter and its impact on employee stock appreciation rights, and a favorable foreign exchange translation adjustment of $1.0 million, which reflects an increase in exchange rates for foreign currency denominated receivables as well as the Company's hedging strategies put in place at the end of last year which have resulted in lower operating and capital expenses.

As of September 30, 2009, the Company's backlog consisted of 163 theatre systems compared to 238 theatre systems in backlog as of September 30, 2008. Included in the 2009 and 2008 system backlog totals were 61 and 132 theatres, respectively, under joint revenue sharing arrangements and 102 and 106 theatres, respectively, under sales and sales-type lease arrangements. During the quarter the Company signed contracts for 13 new systems, all of which were under sales and sales-type lease arrangements, compared to 11 system signings during last year's third quarter, seven of which were under joint revenue sharing arrangements. At the end of the third quarter of 2009, 117 digital systems were in operation, compared to 14 as of September 30, 2008.

At this time, the Company expects to install between 28 and 32 IMAX systems in the fourth quarter (4 to 8 sales/sales type lease systems and approximately 24 systems under joint revenue sharing arrangements). Assuming all of these systems are installed, the Company would install 30 to 35 systems under sales type lease arrangements in 2009, above its most recent guidance of 25 to 30 systems, and approximately 75 systems under joint revenue sharing arrangements (including digital upgrades). The Company continues to expect ending 2009 with approximately 120 joint revenue sharing theatres in operation.

FUTURE FILM SLATE

Turning to the remainder of the 2009 film slate, on October 16, Warner Bros. Pictures and IMAX released Where the Wild Things Are: The IMAX Experience day-and-date to 145 domestic IMAX theatres. Through Tuesday, the film has generated $5.8 million, or approximately $40,000 per screen. On October 28, Sony Pictures and IMAX released Michael Jackson's This Is It: The IMAX Experience, with limited show schedule domestically and full show schedule internationally. To date, the title has grossed $2.1 million in box office, with international per screen averages of over $35,000. Walt Disney Pictures' A Christmas Carol: An IMAX 3D Experience arrives in IMAX theatres tonight at midnight and James Cameron's Avatar: An IMAX 3D Experience (Twentieth Century Fox) arrives in IMAX theatres December 18, 2009. In total, the Company will show a record 13 new DMR titles in 2009.

The Company's announced 2010 film slate to date includes Avatar, which is expected to carry over from its December 18, 2009 release; Disney's Alice in Wonderland: An IMAX 3D Experience (March 2010); DreamWorks Animation's How to Train Your Dragon: An IMAX 3D Experience (March 2010); Shrek Forever After: An IMAX 3D Experience (May 2010); Warner Bros. Pictures' Inception: The IMAX Experience (July 2010); Walt Disney Pictures' Tron Legacy: An IMAX 3D Experience (December 2010); and an IMAX original film in partnership with Warner Brothers, titled Hubble 3D (March 2010). In addition, during the third quarter, the Company announced its first 2011 DMR title, Sony Pictures' Spider-Man 4: The IMAX Experience. The Company remains in active discussions with virtually all of the major studios regarding potential titles for release as far out as 2012.

Mr. Gelfond concluded, "We are pleased with the Company's 2009 performance to date, and we look forward to 2010 with even greater anticipation. We believe that the combination of our larger theatre network, a compelling film slate and significantly reduced interest expense will result in another year of growth for IMAX and its shareholders. We believe we have put a strong foundation in place that can deliver growth over the long-term."

CAPITAL STRUCTURE

In a separate announcement this morning, the Company announced that it has received a commitment letter from Wachovia with the participation of Export Development Canada for a $75 million credit facility, which, when finalized , will consist of revolving loans of up to $40 million and a term loan of $35 million. For additional information on this announcement, please see this morning's press release.

CONFERENCE CALL

The Company will host a conference call today at 8:30 AM ET to discuss its third quarter 2009 financial results. To access the call via phone, interested parties should dial (866) 322-1159 approximately 10 minutes before it begins. International callers should dial (416) 640-3404. A recording of the call will be available by dialing (888) 203-1112 or (647) 436-0148. The code for both the live call and the replay is 6042955. The Company will also host a webcast of the conference call, which can be accessed on www.imax.com by clicking on 'Investor Relations.'

ABOUT IMAX Corporation

IMAX Corporation is one of the world's leading entertainment technology companies, specializing in immersive motion picture technologies. The worldwide IMAX 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 technology. IMAX DMR is the Company's groundbreaking digital re-mastering technology that allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality of The IMAX Experience. The IMAX brand is recognized throughout the world for extraordinary and immersive entertainment experiences for consumers. As of September 30, 2009, there were 403 IMAX theatres (280 commercial, 123 institutional) operating in 44 countries.

IMAX(R), IMAX(R) 3D, IMAX DMR(R), Experience It In IMAX(R), An IMAX 3D Experience(R) and The IMAX Experience(R) 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).

The IMAX Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6469

This press release contains forward looking statements that are based on 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 opportunities that may be presented to and pursued by the Company, the performance of IMAX DMR films, conditions in the in-home and out-of home entertainment industries, the signing of theatre system agreements, changes and developments in the commercial exhibition industry, the failure to convert theatre system backlog into revenue, investments and operations in foreign jurisdictions, foreign currency fluctuations and the Company's prior restatements and the related litigation and ongoing inquiries by the SEC and the OSC. These factors and other risks and uncertainties are discussed in the Company's most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q.



                        IMAX CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              In accordance with United States Generally
                    Accepted Accounting Principles
        (In thousands of U.S. dollars, except per share amounts)
                          (Unaudited)


                           Three Months               Nine Months
                        Ended September 30,        Ended September 30,
                       ---------------------     ---------------------
                         2009         2008         2009          2008
                       --------     --------     --------     --------
 Revenues
 Equipment and product
  sales                $ 18,217     $  7,154     $ 38,714     $ 18,089
 Services                19,445       22,103       58,449       48,777
 Rentals                  4,283        2,532       15,528        5,712
 Finance income           1,052        1,079        3,125        3,234
 Other                      646           --        1,862          611
                       --------     --------     --------     --------
                         43,643       32,868      117,678       76,423
                       --------     --------     --------     --------

 Costs and expenses
  applicable to revenues
 Equipment and product
  sales                   8,727        4,097       19,793       10,028
 Services                13,903       12,124       36,542       31,994
 Rentals                  1,961        1,691        7,293        3,388
 Other                      390           --          635           98
                       --------     --------     --------     --------
                         24,981       17,912       64,263       45,508
                       --------     --------     --------     --------
 Gross margin            18,662       14,956       53,415       30,915
 Selling, general and
  administrative
  expenses               12,756       10,531       35,917       34,185
  (including
   share-based
   compensation
   expense of $3.2
   million and $7.8
   million for the
   three months and
   nine months ended
   September 30, 2009,
   respectively
   (2008 - ($0.2) million
   and $1.4 million,
   respectively)
 Research and
  development               998        1,619        2,731        6,155
 Amortization of
  intangibles               144          119          424          389
 Receivable provisions,
  net of recoveries          89          265        1,078        1,114
                       --------     --------     --------     --------
 Income (loss) from
  operations              4,675        2,422       13,265      (10,928)
 Interest income             23           82           49          282
 Interest expense        (3,094)      (4,471)     (11,592)     (13,307)
 (Loss) gain on
  repurchase of Senior
  Notes due December
  2010                     (220)          --          224           --
                       --------     --------     --------     --------
 Income (loss) from
  continuing operations
  before income taxes     1,384       (1,967)       1,946      (23,953)
 Provision for income
  taxes                    (344)        (229)        (885)        (755)
                       --------     --------     --------     --------
 Income (loss) from
  continuing operations   1,040       (2,196)       1,061      (24,708)
 Income (loss) from
  discontinued
  operations                 22           89          (79)         149
                       --------     --------     --------     --------
 Net Income (loss)     $  1,062     $ (2,107)    $    982     $(24,559)
                       ========     ========     ========     ========

 Net Income (loss) per
  share - basic & diluted:
   Net income (loss) per
    share from continuing
    operations         $   0.02     $  (0.05)    $   0.02     $  (0.58)
   Net income (loss)
    per share from
    discontinued
    operations               --           --           --           --
                       --------     --------     --------     --------
                       $   0.02     $  (0.05)    $   0.02     $  (0.58)
                       ========     ========     ========     ========

 Weighted average
  number of shares
  outstanding (000's):
   Basic                 58,390       42,181       49,574       42,026
   Fully Diluted         60,710       42,181       50,934       42,026

 Additional Disclosure:

 Depreciation and
  amortization  (1)    $  5,353     $  4,523     $ 14,629     $ 12,799


 (1) Includes $0.3 million and $0.4 million of amortization of
     deferred financing costs charged to interest expense for the
     three months and nine months ended September 30, 2009 (2008
     - $0.8 million and $1.1 million)




                         IMAX CORPORATION
                  CONDENSED CONSOLIDATED BALANCE SHEETS
               In accordance with United States Generally
                     Accepted Accounting Principles
                    (in thousands of U.S. dollars)


                                             Sept. 30,       Dec. 31,
                                                2009           2008
                                             ---------      ----------
                                            (unaudited)
 Assets
 Cash and cash equivalents                   $  98,692      $  27,017
 Accounts receivable, net of allowance
  for doubtful accounts of $2,969
  (December 31, 2008 -- $2,901)                 21,427         22,982
 Financing receivables                          58,711         56,138
 Inventories                                    14,315         19,822
 Prepaid expenses                                2,368          1,998
 Film assets                                     2,892          3,923
 Property, plant and equipment                  52,724         39,405
 Other assets                                   16,692         16,074
 Goodwill                                       39,027         39,027
 Other intangible assets                         2,117          2,281
                                             ---------      ---------
 Total assets                                $ 308,965      $ 228,667
                                             =========      =========

 Liabilities
 Bank indebtedness                           $  20,000      $  20,000
 Accounts payable                               12,391         15,790
 Accrued liabilities                            72,213         58,199
 Deferred revenue                               59,689         71,452
 Senior Notes due December 2010                104,437        160,000
                                             ---------      ----------
 Total liabilities                             268,730        325,441
                                             =========      =========



 Shareholders' equity
  (deficiency)
 Capital stock, common shares -- no par
  value. Authorized -- unlimited number.
     Issued and outstanding --
     62,269,486 (December 31, 2008
     -- 43,490,631)                            276,201        141,584
 Other equity                                    5,946          5,183
 Deficit                                      (246,027)      (247,009)
 Accumulated other
  comprehensive income                           4,115          3,468
                                             ---------      ----------
 Total shareholders' equity (deficiency)        40,235        (96,774)
                                             ---------      ----------
 Total liabilities and shareholders'
  equity (deficiency)                        $ 308,965      $ 228,667
                                             =========      =========




                             IMAX CORPORATION
                         SELECTED FINANCIAL DATA
                In accordance with United States Generally
                       Accepted Accounting Principles
                      (in thousands of U.S. dollars)

 The Company has eight reportable segments identified by category of
 product sold or service provided: IMAX systems; theater system
 maintenance; joint revenue sharing arrangements; film production
 and IMAX DMR; film distribution; film post-production; theater
 operations; and other. The IMAX systems segment designs,
 manufactures, sells or leases IMAX theater projection system
 equipment. The theater system maintenance segment maintains IMAX
 theater projection system equipment in the IMAX theater network.
 The joint revenue sharing arrangements segment provides IMAX
 theater projection system equipment to an exhibitor in exchange
 for a share of the box-office and concessions revenue. The film
 production and IMAX DMR segment produces films and performs film
 re-mastering services. The film distribution segment distributes
 films for which the Company has distribution rights. The film
 post-production segment provides film post-production and film
 print services. The theater operations segment owns and operates
 certain IMAX theaters. The other segment includes camera rentals
 and other miscellaneous items.

                         Three Months                 Nine Months
                     Ended September 30,          Ended September 30,
                   -----------------------       ---------------------
                      2009          2008           2009        2008
                   ---------     ---------       --------    ---------
 Revenue
 IMAX systems       $ 20,070      $  8,731       $ 44,861     $ 23,172
 Theater system
  maintenance          4,502         4,156         13,295       11,989
 Joint revenue
  sharing
  arrangements         3,432         1,246         12,532        2,027
 Films
   Production and
    IMAX DMR           7,822         9,174         23,658       14,580
   Distribution        3,339         2,412         10,075        7,472
   Post-production     1,368         1,433          2,755        4,955
 Theater operations    2,414         4,928          8,666        9,782
 Other                   696           788          1,836        2,446
                   ---------     ---------       --------    ---------
 Total              $ 43,643      $ 32,868       $117,678     $ 76,423
                   =========     =========       ========    =========

 Gross margins
 IMAX systems(1)    $ 11,190      $  4,848       $ 24,620     $ 13,862
 Theater system
  maintenance          2,109         2,063          6,740        5,180
 Joint revenue
  sharing
  arrangements(1)      1,749            79          6,729            6
 Films
   Production and
    IMAX DMR(1)        2,840         6,282         12,524        6,012
   Distribution(1)       675           538          1,664        2,658
   Post-production       211           355            906        2,740
 Theater operations     (293)          741             72          194
 Other                   181            50            160          263
                   ---------     ---------       --------    ---------
 Total              $ 18,662      $ 14,956       $ 53,415     $ 30,915
                   =========     =========       ========    =========


 ---------------------- 

  1. Included in the gross margin were certain advertising, marketing and selling expenses of $0.3 million associated with the initial launch theaters opened during the quarter as compared to $0.5 million in the third quarter of 2008. Excluding these launch expenses, the gross margin would have been $2.0 million for the third quarter of 2009 compared to $0.6 million in the second quarter of 2008.
  2. Included in the margin for the nine months ending September 30, were certain advertising, marketing and selling expenses of $2.5 million associated with the initial launch of theaters opened during the period as compared to $0.5 million in 2008. Excluding these launch expenses, gross margin would have been $9.2 million for the nine months ended September 30, 2009 compared to $0.5 million in the nine months ended September 30, 2008.

CONTACT: IMAX Corporation, New York

Media:
Sarah Gormley
212-821-0155
sgormley@imax.com

Investors:
Heather Anthony
212-821-0121
hanthony@imax.com

Rogers & Cowan, Los Angeles
Entertainment Media:
Elliot Fischoff/Jason Magner
310-854-8128
jmagner@rogersandcowan.com

Sloane & Company, New York
Business Media:
Whit Clay
212-446-1864
wclay@sloanepr.com