Imax touts circuit growth on higher profits

CEO predicts worldwide estate of up to 1,250 theaters

TORONTO -- Like a general standing over a map, Imax CEO Richard Gelfond on Thursday predicted a worldwide footprint of 1,200 to 1,250 theaters, up from a previous estimate of 1,000 theaters.

The U.S. will have 400 of those theaters, with the rest to be installed overseas, especially in China where Gelfond sees the number of screens growing from 36 currently to 300 theaters.

"China is poised for a period of explosive growth," he told analysts during a morning call after unveiling a five-fold rise second quarter earnings on worldwide theatre network growth.

Toronto-based Imax posted second quarter earnings of $13.3 million, against a profit of $2.6 million in 2009, on revenues up 38% to $55.6 million, from a year-earlier $40.4 million.

Gelfond said theatre network growth is key to achieving recurring EBITIDA and revenue growth, more than the boxoffice performance of the latest blown-up 3D movie release.

Imax raised its full-year 2010 system installation outlook by 25% from 68 to 82 screens.

The latest theatre signings include a 14-screen deal with Cinema Park, a chain run by Russia's Profmedia Holding group, and an eight-screen deal with China's Guangzhou Jinyi Film & Television Group.

Highlighting future screen growth during Thursday's analyst call underlined Imax's continued sensitivity to criticism that it lacks enough theaters in its worldwide network to support commercial films converted to its super-sized format.

Year-to-date in 2010, Imax has signed contracts for 118 theaters, against 35 in all of 2009. That includes contracts for 38 joint venture systems, where Imax and an exhibition partner share launch costs and revenue, another 38 traditional sales-type leases and 22 digital upgrades.

Gelfond told analysts that a mix of joint-venture and sales-type lease theatre signings offers Imax both an up-front gross margin boost, and recurring EBITIDA and revenue down the road.

Imax estimated that the 96 new theatre systems signed during the first half of 2010 could generate around $24.5 million, or $0.37 per share, of recurring annual EBITDA.

And the 58 sales-type lease systems signed year-to-date could generate a one-time benefit to gross margin of $46 million, or $0.69 per share.

During the latest quarter, Imax posted film revenue up 28% to $20.7 million, against $16.1 million in 2009.

Production and (digital re-mastering) DMR revenues rose 20% to $14.5 million, against a year-earlier $12.1 million, with digital conversions of Marvel's "Iron Man 2," which generated $25.1 million in second-quarter boxoffice, and Disney Pixar's "Toy Story 3" and its $21.2 million in second-quarter boxoffice, being major drivers.

Additional Imax worldwide boxoffice to date: "How to Train Your Dragon" ($31.1 million), "Shrek Forever After 3D" ($23.2 million), "The Twilight Saga: Eclipse" ($12.5 million).

Imax' gross box office from DMR titles during the latest quarter jumped 36% to $114.6 million on an expanded theatre network.
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