Imax Corp. narrows Q1 loss

Company sees first fruits of digital rollout

TORONTO -- Imax Corp. on Thursday narrowed its first quarter loss as it offered the first long-promised fruits of its digital rollout.

Toronto-based Imax posted a loss of $2.6 million to March 31, compared to a loss of $10.2 million in 2008, on revenue up 43% to $33.7 million, against a year-earlier $23.5 million.

Imax recorded sharply lower R&D costs compared to 2008 when it incurred steep digital projection rollout costs.

The first quarter operating profit was $2 million, compared to a loss of $5.6 million in 2008.

Imax CEO Richard Gelfond told analysts that the first quarter signaled “early progress” as the giant screen exhibitor transitions to digital projection, joint venture theatre revenue and more supersized Hollywood movie releases.

Gelfond reiterated Imax would return to profitability in 2009.

“This is our year to deliver, assuming the films perform,” Gelfond told analysts.

Shares in Imax continued their recent climb Thursday, rising 5 cents to $7.20 on the NASDAQ Exchange, as investors anticipate a bigger payoff from the digital transition down the road.

During the latest quarter, Imax systems revenue doubled to $16.5 million, against $8.2 million in 2008 as the exhibitor installed and recognized revenue on nine screens, compared to four in 2008. The latest installs included the conversion of five traditional 35mm screens to premium Imax screens.

Revenue from joint revenue sharing theatres jumped to $1.9 million, against $300,000 last year.

Imax also saw film revenue rise 6% to $7.8 million, which included production and DMR revenues of $3.7 million, compared to $2.9 million in 2008.

First quarter boxoffice from digitally-remastered Hollywood titles came to $29.9 million, against a year-earlier $15.7 million, with the big drivers being big screen versions of WB’s “Watchmen,” and DreamWorks Animation SKG's “Monsters vs. Aliens.”

Imax currently has 371 theaters internationally, up 24% year-over-year.
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