IMAX Corporation Reports Second Quarter 2009 Financial Results
HIGHLIGHTS
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IMAX returns to profitability; reports second quarter net income of$2.6 million , or$0.05 per diluted share - Second quarter revenue of
$41.0 million nearly doubles last year's second quarter - Strengthens balance sheet with successful equity offering that
generated
$76.3 million in net proceeds - Gross box office from IMAX DMR(r) titles increased 346% to
$84.2 million in the second quarter of 2009
IMAX Chief Executive Officer
Included in the Company's second quarter 2009 financial results are several notable items, including a
Revenue from joint revenue sharing arrangements increased significantly to
For the second quarter of 2009, total film revenue increased 145% to
Mr. Gelfond continued, "DMR film revenue and our joint revenue sharing business combined to represent 47% of revenue in the second quarter. We showed a record four DMR titles in a single quarter which illustrates our ability to seize opportunities that digital projection brings. Our second quarter film slate was among the strongest we have had in a single quarter, and we continued to consistently drive box office results that far outpaced our percentage of screens, reflecting the consumer appetite for The IMAX Experience(r)."
Gross box office from DMR titles increased 346% to
Second quarter gross margin increased to
Selling, general and administrative expense as a percentage of revenue declined significantly to 29.9% as compared to 53.1% in the second quarter of last year. Overall, SG&A expenses increased to
At the end of the quarter, 102 digital systems were in operation, compared to zero as of
As of
At the end of the second quarter, the Company's cash position was
Turning to the remainder of the 2009 film slate, the two-week delayed domestic release of Warner Bros.'
The Company's announced 2010 film slate to date includes Avatar: An IMAX 3D Experience, which is expected to carry over from its
Mr. Gelfond concluded, "
The Company will host a conference call today at
About
The
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 Six Months
Ended June 30, Ended June 30,
-------------------- -------------------
2009 2008 2009 2008
-------- -------- ------- --------
Revenues
Equipment and product
sales $ 7,138 $ 4,237 $20,497 $ 10,935
Services 24,794 13,607 39,682 27,814
Rentals 7,999 1,636 11,246 3,180
Finance income 1,061 1,084 2,073 2,155
Other -- 611 1,216 611
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40,992 21,175 74,714 44,695
-------- -------- ------- --------
Costs and expenses
applicable to revenues
Equipment and product
sales 3,825 2,966 11,067 5,931
Services 13,348 11,275 23,287 20,964
Rentals 3,166 968 5,332 1,698
Other -- 98 245 98
-------- -------- ------- --------
20,339 15,307 39,931 28,691
-------- -------- ------- --------
Gross margin 20,653 5,868 34,783 16,004
Selling, general and
administrative
expenses 12,258 11,252 23,162 23,639
(including share-based
compensation expense
of $4.2 million and
$0.8 million for the
three months ended
June 30, 2009 and 2008,
respectively, and $4.6
million and $1.6
million for the six
months ended June 30,
2009 and 2008,
respectively.)
Research and development 1,185 2,047 1,732 4,535
Amortization of
intangibles 136 137 281 271
Receivable provisions
net of recoveries 480 101 990 849
Asset impairments 129 -- 129 --
-------- -------- ------- --------
Income (loss) from
operations 6,465 (7,669) 8,489 (13,290)
Interest income 5 74 26 200
Interest expense (4,071) (4,340) (8,498) (8,836)
Gain on repurchase of
Senior Notes due
December 2010 444 -- 444 --
-------- -------- ------- --------
Income (loss) from
continuing operations
before income taxes 2,843 (11,935) 461 (21,926)
Provision for income
taxes (282) (258) (541) (526)
-------- -------- ------- --------
Net income (loss) $ 2,561 $(12,193) $ (80) $(22,452)
======== ======== ======= ========
Net income (loss) per
share:
Net income (loss) per
share - basic $ 0.06 $ (0.29) $ -- $ (0.54)
======== ======== ======= ========
Net income (loss) per
share - diluted $ 0.05 $ (0.29) $ -- $ (0.54)
======== ======== ======= ========
Weighted average number
of shares outstanding
(000's):
Basic 46,493 42,181 45,095 41,313
Fully diluted 47,966 42,181 45,095 41,313
Additional disclosure:
Depreciation and
amortization(1) $ 5,154 $ 4,069 $ 9,148 $ 8,272
(1) Includes $0.3 million and $0.6 million of amortization of
deferred financing costs charged to interest expense for the
three and six months ended June 30, 2009 (2008 - $0.4 million
and $0.7 million )
IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In accordance with United States
Generally Accepted Accounting Principles
(in thousands of U.S. dollars)
June 30, Dec. 31,
2009 2008
-------- --------
(unaudited)
Assets
Cash and cash equivalents $ 49,000 $ 27,017
Accounts receivable, net of allowance for
doubtful accounts of $2,722 (December 31,
2008 -- $2,901) 31,842 22,982
Financing receivables 57,810 56,138
Inventories 17,202 19,822
Prepaid expenses 2,951 1,998
Film assets 4,502 3,923
Property, plant and equipment 48,876 39,405
Other assets 17,048 16,074
Goodwill 39,027 39,027
Other intangible assets 2,190 2,281
-------- --------
Total assets $270,448 $228,667
======== ========
Liabilities
Bank indebtedness $ 20,000 $ 20,000
Accounts payable 18,395 15,790
Accrued liabilities 65,198 58,199
Deferred revenue 69,330 71,452
Senior Notes due December 2010 115,662 160,000
-------- --------
Total liabilities 288,585 325,441
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Shareholders' deficiency
Capital stock common shares -- no par value.
Authorized -- unlimited number. Issued and
outstanding -- 55,023,590 (December 31, 2008
-- 43,490,631) 218,895 141,584
Other equity 6,266 5,183
Deficit (247,089) (247,009)
Accumulated other comprehensive income 3,791 3,468
-------- -------
Total shareholders' deficiency (18,137) (96,774)
-------- -------
Total liabilities and shareholders'
deficiency $270,448 $228,667
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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:
Three Months Six Months
Ended June 30, Ended June 30,
------------------ --------------------
2009 2008 2009 2008
------- -------- -------- --------
Revenue
IMAX systems $ 8,339 $ 6,283 $ 24,792 $ 14,441
Theater system
maintenance 4,433 3,850 8,793 7,833
Joint revenue sharing
arrangements 7,193 433 9,100 781
Films
Production and IMAX DMR 12,135 2,489 15,836 5,405
Distribution 3,494 2,307 6,736 5,060
Post-production 515 1,798 1,387 3,522
Theater operations 4,216 3,163 6,930 5,994
Other 667 852 1,140 1,659
------- -------- -------- --------
Total $40,992 $ 21,175 $ 74,714 $ 44,695
======= ======== ======== ========
Gross margins
IMAX systems $ 4,535 $ 3,454 $ 13,430 $ 9,014
Theater system
maintenance 2,319 1,529 4,631 3,117
Joint revenue sharing
arrangements(1)(2) 4,635 (112) 4,980 (73)
Films
Production and IMAX DMR 7,914 (603) 9,684 (270)
Distribution 654 773 989 2,120
Post-production 55 834 695 2,386
Theater operations 504 (200) 394 (503)
Other 37 193 (20) 213
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Total $20,653 $ 5,868 $ 34,783 $ 16,004
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(1) Included in the gross margin were certain advertising, marketing
and selling expenses of $1.5 million associated with the
initial launch of 22 new theaters opened during the quarter.
Excluding these launch expenses, the gross margin would have
been $6.1 million for the second quarter of 2009 compared to a
loss of $0.1 million in the second quarter of 2008.
(2) Included in the margin in the first six months of 2009 were
certain advertising, marketing and selling expenses of $2.2
million associated with the initial launch of 39 new theaters
opened during the period. Excluding these launch expenses,
gross margin would have been $7.2 million for the six months
ended June 30, 2009 compared to a loss of less than $0.1
million in the six months ended June 30, 2008 .
CONTACT:
Media:
212-821-0155
[email protected]
Investors:
212-821-0121
[email protected]
Rogers & Cowan,
Elliot Fischoff/Jason Magner
310-854-8128
[email protected]
Business Media:
Whit Clay
212-446-1864
[email protected]