IMAX Corporation Reports First Quarter Results

In a May 11, 2001 announcement, entertainment technology company IMAX Corporation reported its results for the first quarter ended March 31, 2001. The company reported a loss of $0.23 per share for the first quarter before the impact of a previously announced restructuring charge. After the impact of the restructuring charge, IMAX reported a loss of $0.46 per share. The company's comparative results for the first quarter of 2000 were: earnings of $0.06 per share before the cumulative effect of changes in accounting principles and a loss of $1.92 per share after such changes. IMAX co-chief executive officers Richard L. Gelfond and Bradley J. Wechsler commented, "While the company's earnings for the quarter are disappointing, they are consistent with our expectations given the current environment. We are making progress in advancing our strategy of attracting Hollywood film content, developing new digital markets and revenue streams and returning IMAX to profitability in 2002." During the first quarter, IMAX signed an agreement with Sweden's DHJ Media AB to develop and install digital media network systems that will replace traditional poster advertising with high revenue digital billboards. The London Underground is the first location to signup for installation of such a digital billboard system. Also during the first quarter, The Walt Disney Company announced that it is moving up its large-format release of BEAUTY AND THE BEAST to January 1, 2002, following on the success of last year's January 1 release of FANTASIA/2000: THE IMAX EXPERIENCE. In the first quarter, IMAX revenues decreased 36% to $35.1 million from $54.8 million in the prior year. Systems revenue decreased 36% to $16.3 million from $25.3 million in the prior year as the company recognized revenues on three theatre systems in the first quarter of 2001 versus five theatre systems in the first quarter of 2000. These results reflect the change in accounting principles (SAB 101) effective January 1, 2000. Other revenues decreased 49% to $3.1 million from $6.1 million in part due to the strong company-owned theatre revenue in the first quarter of 2000 as a result of the release of FANTASIA/2000: THE IMAX EXPERIENCE. During the first quarter of 2001, IMAX recorded a restructuring charge related to a previously announced 15% reduction in its workforce and the consolidation of its manufacturing facilities. The total after-tax impact of this charge was $6.9 million or $0.23 per share. The company's sales backlog was approximately $210 million at March 31, 2001 representing contracts for approximately 70 theatre systems.

With Fantasia/2000, Imax looked to be a great hope for animation. In IMAX May Be The Greatest Film Delivery System Ever, Karl Cohen investigates.

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