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 FromWachovia Capital Finance Corporation
For the nine-months ended
IMAX Chief Executive Officer
Revenue from joint revenue sharing arrangements increased 175% to
For the third quarter of 2009, total film revenue was
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
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
As of
At this time, the Company expects to install between 28 and 32
FUTURE FILM SLATE
Turning to the remainder of the 2009 film slate, on
The Company's announced 2010 film slate to date includes Avatar, which is expected to carry over from its
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
CAPITAL STRUCTURE
In a separate announcement this morning, the Company announced that it has received a commitment letter from Wachovia with the participation of
CONFERENCE CALL
The Company will host a conference call today at
ABOUT
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
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 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
========= ========= ======== =========
----------------------
- 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. - 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 endedSeptember 30, 2009 compared to$0.5 million in the nine months endedSeptember 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]