Imax Corporation Reports First Quarter Results
HIGHLIGHTS
Sales backlog increases by 10% or $17 million in quarter representing the second largest increase in backlog in any quarter in Company history.
Backlog increase driven by strong theatre system signings with contracts signed for 11 new IMAXâ theatre systems valued at $32.5 million.
Signings in quarter benefit from continued penetration of international and commercial markets.
First quarter earnings per share exceed analyst expectations.
Toronto, Canada - May 7, 1999 Imax Corporation (Nasdaq:IMAX; TSE:IMX) today reported results for its first quarter ended March 31, 1999. As previously announced, Imax's operating earnings in 1999 are expected to be approximately equal to those of 1998 before one-time charges due to a decline in theatre system deliveries. As such, the Company reported earnings of $0.07 per share on a diluted basis for the first quarter which exceeded analyst estimates.
During the first quarter, the Company signed contracts for 11 IMAXâ theatre systems valued at $32.5 million. As a result of the strong signings, the Company's sales backlog grew by 10% or $17.1 million in the quarter to $192.9 million at March 31, 1999. The $17.1 million increase is the second largest increase in sales backlog in any quarter in Company history.
"We continue to see strong demand for IMAX Theatres around the world as a result of the appeal of the IMAX experience," said Imax co-Chief Executive Officers Bradley J. Wechsler and Richard L. Gelfond. "The international markets hold tremendous potential for us as do the commercial markets which we are just beginning to penetrate. During the first quarter, three of our existing exhibitor clients expanded their initial IMAX theatre commitments which will further boost our commercial presence."
The Company's signings in the first quarter established a new record for the value of theatre system signings in a first quarter exceeding the $31.6 million dollar value of the 12 third-party contracts signed last year. The Company's signings were highlighted by a six-theatre agreement with Medusa Film S.p.A., Italy's largest theatre chain, which will bring IMAX theatres to multiplexes and other commercial locations across Italy.
"We believe that there is substantial value to be realized in Imax and are committed to building on the potential of the IMAX brand and The IMAX Experience," added Wechsler and Gelfond. "We believe Imax's continued theatre network growth, near-record theatre backlog, untapped worldwide expansion potential and impending release of The Walt Disney Company's Fantasia 2000 exclusively in IMAX theatres beginning on January 1, 2000, will all provide significant near and long-term value for our shareholders."
In the first quarter, the Company's revenues increased to $36.7 million from $36.4 million in the prior year as higher Film and Other revenue offset a decrease in Systems revenue. Systems revenue decreased 15% to $22.4 million from $26.4 million in the prior year as the Company recognized revenues on six theatre systems in the first quarter of 1999 versus eight theatre systems in the first quarter of 1998. Film revenue increased 21% in the quarter to $8.6 million from $7.1 million in the prior year as a result of an increase in film distribution and post-production revenues due primarily to the release of T-REX: Back to the Cretaceous which has grossed nearly $20 million in its first five months of wide release. Other revenues increased 98% to $5.7 million from $2.9 million as a result of an increase in the number of theatres in operation in which the Company has an equity interest. Gross margin decreased to $16.5 million from $21.0 million primarily as a result of the decrease in higher margin systems revenue. Net earnings per share on a diluted basis declined to $0.07 per share from $0.14 per share in the first quarter of 1998.
The Company's sales backlog at March 31, 1999 represented contracts for 80 theatre systems. There are 12 theatre systems in backlog which 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.
Founded in 1967, Imax Corporation has consistently delivered the world's premiere cinematic experiences. As of March 31, 1999, there were more than 185 permanent IMAX theatres in 25 countries, with a backlog of 80 theatre systems scheduled to open in 15 new countries during the next few years. Over 500 million people have seen an IMAX presentation since the medium premiered in 1970. In 1999, more than 70 million people worldwide are expected to attend an IMAX theatre. 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.) and Loews Cineplex Corp. In 1997, Imax was awarded an Oscar¨ for Scientific and Technical Achievement by the Academy of Motion Picture Arts and Sciences.
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, 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, 1998 and in the subsequent reports filed by the Company with the Securities and Exchange Commission.
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Imax Corporation, Toronto |
Imax Corporation, New York |
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Newman & Company, Los Angeles |
Edelman Financial, New York |