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Author
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Topic: IMAX Profit report/statement
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Joe Tommassello
Expert Film Handler
Posts: 127
From: Coatesville, PA, USA
Registered: Jan 2008
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posted 05-12-2008 12:40 PM
Read this on my financial site this morning. I highlighted my favorite part.
TORONTO (Dow Jones)--Imax Corp.'s (IMAX) first-quarter loss more than doubled, but the company remains focused on the roll-out of its new digital projector later this year.
The large-format cinema pioneer lost $10.3 million, or 25 cents a share in its latest quarter, compared with a loss of $4.7 million or 12 cents a year earlier. Revenue fell to $23.5 million from $26.8 million, or 12%. However, Imax said results are expected to improve in the fourth quarter, paving the way for a profitable 2009.
Imax reiterated that its 2008 financial results reflect its transition to a digital format from its antiquated film system , and said it's encouraged by various accomplishments on that front to date.
In an interview, Imax co-chief executive Richard Gelfond said the company is on track to deliver its first three digital systems to exhibitor AMC Entertainment, with which it signed a record 100-theater joint-venture deal in June. Two of the theaters will be located in Washington, D.C., and the other in Baltimore. Three more will open in August in the Philadelphia area.
In the meantime, Imax continues to test the product at its lab outside Toronto, near its corporate headquarters in Mississauga. Within the next couple of weeks, the company will begin running the projector on a "24/7 basis" to make sure it can handle "real operating conditions," Gelfond said, adding the company hopes to open 20 Imax digital theaters in the third quarter and up to 30 in the fourth quarter.
The company also added another title to its 2008 film slate - "Madagascar 2" from DreamWorks Animation SKG Inc. (DWA) - which will run for just two weeks in Imax. Imax is squeezing the film in before the next "Harry Potter" sequel in November, something its digital transformation now allows it to do.
With about 35 digital Imax screens expected to be open in time for the release of "Madagascar 2," the average cost of film prints per screen for the brief release will be low enough to make the presentation economical for both Imax and DreamWorks. "As our network gets more digital, the cost of releasing in Imax will get closer and closer to nominal, and therefore there should be more and more studio releases," Gelfond explained.
Box office results from the first few films this year have been disappointing, but the company still expects a strong year because of titles like "Kung Fu Panda," "The Dark Knight," and "Harry Potter."
While research and development costs are expected to be lower in 2009, Gelfond doesn't see a normalization until 2010. That's because Imax continues work on a couple of key projects: a digital system capable of replacing its larger movie screens, and technology that allows it to show live-action content, like the Super Bowl, in Imax quality.
Though most joint-venture theater deals, in which Imax provides the system in return for a share of the box office revenues, have been signed in the U.S., the company is trying to be more aggressive overseas. Once Imax completes the roll-out of systems contracted to AMC and Regal Entertainment Group (RGC), it will have theaters in 250 of a possible 400 film "zones" it's identified in North America (areas that generate about $20 million in box office annually). In contrast, Imax only has theaters in 200 of 600-700 international zones. Because movie ticket prices in other countries can be double those in the U.S., and the cost of system installation is about the same, the returns to Imax are "very attractive," Gelfond said.
On Nasdaq Monday, Imax shares are off 14 cents, or 1.9%, to $7.08 on about 190,000 shares.
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