--- title: Imax Corporation Announcement publisher: "IMAX" description: "2525 Speakman Drive Mississauga, Ontario, Canada L5K 1B1 Tel: (905) 403-6500 Fax: (905) 403-6450 www.imax.com Toronto, Canada – October 11, 2000-- IMAX Corporation (Nasdaq:IMAX; TSE:IMX) today announced that due to a number of factors, including a continuing decline in the financial strength of the" canonical: "https://www.imax.com/pr/imax-corporation-announcement" date: 2000-10-11 last_updated: 2000-11-02 --- Imax Corporation Announcement ============================= Wed, Oct 11, 2000 2525 Speakman Drive Mississauga, Ontario, Canada L5K 1B1 Tel: (905) 403-6500 Fax: (905) 403-6450 www.imax.com Toronto, Canada – October 11, 2000-- IMAX Corporation (Nasdaq:IMAX; TSE:IMX) today announced that due to a number of factors, including a continuing decline in the financial strength of the North American exhibition industry and increased research and development spending on digital technologies, the Company’s earnings will fall short of analyst estimates for the third quarter and fiscal year 2000. The Company also announced that during the third quarter it experienced strong international demand for new IMAX® theatre systems which resulted in the Company recording the highest level of new theatre system signings of any quarter in the last two years with signed contracts for 14 new theatre systems valued at approximately $38 million. “The financial state of the commercial exhibition industry and the North American multiplex operators in particular continues to worsen and impact our delivery schedules,” said IMAX’s co-Chief Executive Officers Richard L. Gelfond and Bradley J. Wechsler. “While we are very disappointed at our reduced earnings expectations in 2000, we continue to be optimistic about IMAX’s future as most recently evidenced by our strong third quarter signings. We also believe that once the current financial restructuring in the North American exhibition industry concludes, the resulting industry may once again become a key market for new theatre system signings. In spite of the difficult environment, we still expect more new theatre system deliveries in 2000 as compared to 1999.” The Company expects to report earnings for the third quarter ended September 30, 2000 in early November and anticipates that it will report a modest loss for the third quarter. The Company currently expects its results for the 2000 fiscal year will be in the range of $0.60 - $0.70 per share. Earnings in the quarter and for the full year are being impacted in particular by a slowdown of deliveries to North American commercial exhibitors and increased research and development spending on digital technologies. Messrs. Gelfond and Wechsler continued “Notwithstanding the weakness in the North American exhibition industry, we continue to see very strong demand for IMAX theatres internationally. The IMAX theatre network continues to grow, more filmmakers are participating in the industry and our Digital Projection subsidiary has significant opportunities for future growth not only in its core markets but also in the emerging multi-billion dollar digital cinema and digital billboard markets. Although the impact of the weakness in the North American exhibition market is significant, the long-term outlook for IMAX, driven by our thrust into international markets and emerging digital businesses, remains strong.” The Company noted that its previously reported process to explore strategic alternatives to maximize value for IMAX shareholders, including a possible sale of the Company, is proceeding but that it cannot predict how the uncertainty in the commercial exhibition market or its earnings outlook will impact the ultimate outcome of the process. The Company also announced that 19 of the 72 third party theatre system deliveries in its sales backlog as of June 30, 2000 are scheduled to be delivered to North American multiplex customers. Of the 19 systems, six are scheduled to be delivered to Edwards Theatres, three to Cinemark USA, three to Regal Cinemas, two to Famous Players and five to smaller regional theatre chains. The Company also has four theatre systems in backlog that are scheduled to be joint-ventures between the Company and North American exhibitors although those contracts have no value represented in sales backlog. The reforecasted results discussed above do not include possible non-cash charges which may result from any implementation of new, industry-wide SEC and other accounting regulations, as discussed in the Company's second quarter Report on Form 10-Q. IMAX Corporation and its subsidiaries comprise one of the world’s leading entertainment technology companies, with particular emphasis on film and digital imaging technologies, including giant-screen images, 3D presentations, digital post-production and digital projection. There were more than 220 IMAX theatres operating in 26 countries around the world as of June 30, 2000. IMAX’s subsidiaries include Digital Projection International, whose primary business is the design and manufacture of high-end digital image delivery devices, and Sonics Associates, a designer and manufacturer of high-end sound systems. IMAX has forged strategic alliances and relationships with some of the most prominent corporations in the world including Famous Players Inc. (a subsidiary of Viacom Inc.), America Online Inc. and Texas Instruments Inc. IMAX Corporation is a publicly traded company listed on both the Toronto and Nasdaq stock exchanges. 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 effect these statements include 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 viability of new businesses and foreign currency fluctuations. 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, 1999 and in the subsequent reports filed by the Company with the Securities and Exchange Commission. For additional information, please contact: IMAX Corporation, Toronto Victoria Dinnick 905-403-6366 vdinnick@imax.com IMAX Corporation, New York Stephen Abraham (Analysts) 212-821-0140 sabraham@imax.com Newman & Company, Los Angeles Al Newman (Entertainment Media) 310-777-5252 asn@newman-co.com Edelman Financial, New York Gina Stikes 212-642-7702 gina\_stikes@edelman.com