Imax Corporation Reports First Quarter Results
TORONTO, May 10 /PRNewswire/ -- Imax Corporation (Nasdaq: IMAX; Toronto: IMX) today reported results for its first quarter ended March 31, 2000. The Company reported earnings of $0.10 per share on a fully diluted basis exceeding analyst expectations and representing a 43% increase versus the $0.07 per share reported in the first quarter of 1999.
"We are extremely pleased with our financial performance during the first quarter and with the record box office and increased brand awareness driven by Fantasia/2000: The IMAX Experience(R)," said Imax co-Chief Executive Officers Richard L. Gelfond and Bradley J. Wechsler. "Fantasia/2000's $50 million domestic box office gross from only 54 IMAX(R) theatres, or roughly one-quarter of our theatre network, is even more astounding considering that 90% of all films released in 1999 grossed less than $50 million domestically. Fantasia/2000 proved the box office power of the IMAX theatre network and will help establish IMAX theatres as another distribution channel for Hollywood films."
Disney's Fantasia/2000: The IMAX Experience ran exclusively in 75 IMAX theatres worldwide from January 1 through April 30 and became the fastest grossing large-format film in history, grossing $64 million worldwide, exceeding the expectations of both Imax and The Walt Disney Company. Revenues at the five IMAX theatres in which the Company has an equity interest and were in operation one year ago increased 48% during the first quarter as a result of Fantasia/2000.
"In addition to the strength of Imax's core business, we are also pleased with the results at Digital Projection International (DPI)," added Gelfond and Wechsler. "We are excited about the future opportunities for DPI and continue to believe that the market potential for its existing product line is substantial. In addition, we believe there will shortly be significant new markets for DPI's products in the areas of digital billboards and digital cinema as digital technology replaces film technology in high-end applications. We believe that Imax is well positioned to take advantage of the changing dynamics in the media and entertainment industry."
In the first quarter, the Company's revenues increased 54% to $56.5 million from $36.7 million in the prior year due primarily to the inclusion of revenues from DPI and higher Systems revenues. Systems revenue increased 20% to $27.0 million from $22.4 million in the prior year as the Company recognized revenues on seven theatre systems in the first quarter of 2000 versus six theatre systems in the first quarter of 1999. DPI revenues were $12.9 million, driven by strong sales of the higher-end SXGA projectors as well as increased international sales. Film revenue increased 21% in the quarter to $10.5 million from $8.6 million in the prior year primarily as a result of an increase in post-production revenues. Other revenues increased 7% to $6.1 million from $5.7 million as a 93% increase in revenues from company owned theatres offset the Company's reduced focus on, and lower revenues from, its motion simulation business. Net earnings per share on a diluted basis increased 43% to $0.10 per share from $0.07 per share in the first quarter of 1999.
During the first quarter, the Company signed contracts for nine IMAX theatre systems valued at $27.1 million, and as a result, the Company's sales backlog grew by 3% or $6.2 million in the quarter to $198.7 million at March 31, 2000. The Company's sales backlog at March 31, 2000 represented contracts for 79 theatre systems. There are seven theatre systems in backlog that will be located at theatres in which the Company will have an equity interest and therefore have no dollar value ascribed to them in the Company's sales backlog.
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 210 IMAX theatres operating in 26 countries around the world as of March 31, 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 The Walt Disney Company, Famous Players Inc. (a subsidiary of Viacom Inc.), America Online Inc. and Loews Cineplex Corp. 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.
IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Amounts in Accordance with U.S. Generally Accepted Accounting Principles
(in thousands of U.S. dollars, except per share data)
(unaudited)
Three months ended March 31,
2000 1999
Revenue
IMAX systems $ 26,998 $ 22,420
Digital projection systems 12,916 --
Films 10,459 8,622
Other 6,077 5,701
56,450 36,743
Costs and expenses 33,274 20,213
Gross margin 23,176 16,530
Gain(loss) from equity accounted investees 2 (118)
Selling, general and
administrative expenses 11,528 7,989
Research and development 1,592 475
Amortization of intangibles 1,009 473
Earnings from operations 9,049 7,475
Interest income 1,543 2,411
Interest expense (5,535) (5,833)
Foreign exchange loss (141) (83)
Earnings before income taxes
and minority interest 4,915 3,970
Provision for income taxes (1,819) (1,547)
Earnings before minority interest 3,096 2,423
Minority interest -- (410)
Net earnings $ 3,096 $ 2,013
Net earnings available
to common shareholders $ 3,096 $ 2,013
Per share data (note):
Net earnings
Basic $ 0.10 $ 0.07
Diluted $ 0.10 $ 0.07
Weighted average number of shares outstanding (000's)
Basic 29,774 29,567
Diluted 30,884 30,477
SOURCE Imax Corporation
CONTACT: Victoria Dinnick, Toronto, 905-403-6366, or [email protected], or Stephen Abraham, analysts, New York, 212-821-0140, or [email protected], both of Imax Corporation; or Al Newman, entertainment media, of Newman & Company, Los Angeles, 310-777-5252, or [email protected]; or Gina Stikes of Edelman Financial, New York, 212-642-7702, or [email protected]/