UPDATE, 6:40 AM: In a conference call with analysts, CEO Rich Gelfond continued to talk up future opportunities while acknowledging that “like you we’re not happy” with recent box office sales. He’s talking to studios about making films available to IMAX venues before they open elsewhere and is “optimistic about obtaining a title in the not-too-distant future.” He’s also considering making a bigger bet on potential blockbusters by reducing the number of films IMAX shows each year. No decision has been made but “my own vote is for less (films) with longer lead times.” Gelfond also will change the mix of films IMAX runs: “Our audience is more of a fanboy-driven audience than a family-driven audience, so we are going to make an adjustment.” Gelfond says he’s excited about a new digital laser projection technology he hopes to introduce in 2013 that would brighten screen images and reduce costs on bulbs. He’s not sure, though, whether he’ll accomodate director Peter Jackson’s effort to have his upcoming film The Hobbit shown at 48 frames per second vs the industry average of 24 fps. “We’re in discussions with Warner as to whether it makes sense,” he says.
PREVIOUS, 4:55 AM: Not a happy quarter for IMAX. The large-screen theater company reported 2Q net income of $1.8M, down 86.5% vs the same period last year, on revenues of $57.2M, up 3%. After adjusting for stock compensation and deferred taxes, earnings came in at … Read More »
Add Imax to the list of companies taking advantage of today’s low interest rates by borrowing or refinancing debt. The big-screen exhibition company says that Wells Fargo and Export Development of Canada have agreed to to provide up to $110 million in credit. The new arrangement replaces a $75 million credit facility with the lenders that charged a higher interest rate. The cash will “provide us with enhanced flexibility as we pursue our strategic initiatives and continue the global expansion of our business,” CEO Rich Gelfond says
Here’s the strange thing about IMAX these days: the large screen exhibitor reported terrible financial results for the first quarter although analysts were projecting it would continue to report a profit. Yet its stock price closed up 6% at $34.24, for a more than 60% gain over the past year. Even this morning, Wall Street was reassured by the IMAX upbeat projections for ticket sales and global expansion plans. Which is why CEO Richard Gelfond today tells me that 1st quarter financial results are not nearly as terrible as they look.
GELFOND: If you strip out nonrecurring things, it really shows up as a 4 cent (earnings per share) number. That was a little short of expectations among analysts. And I think frankly some of that happened because we incurred expenses in China in building our business there. Some in R&D, and reinvesting in our business. And I think people didn’t understand that the first quarter was devoid of any blockbuster films. For us, if the box office drops 25% — as it did — as long as there are blockbuster films that doesn’t matter. We don’t play a full film slate. We play just a couple of films. But what made the quarter noteworthy was that there were no blockbuster films. That has a big impact on us. Fortunately, starting tonight at midnight, we have Fast Five domestically and Thor internationally. So the blockbuster season … Read More »