Imax's larger theater network pays off in Q2

Exhibitor posts earnings of $2.6 mil on total rev of $41 mil

TORONTO -- Giant-screen exhibitor Imax Corp. on said Thursday that it returned to profit in the second quarter on a larger theater network and stronger film slate during its digital transition.

Unveiling the first fruits of its digital rollout, Toronto-based Imax posted earnings of $2.6 million to June 30, against a loss of $12.2 million in 2008, on total revenue jumping 94% to $41 million, against a year-earlier $21.2 million.

Imax CEO Richard Gelfond said that, while one quarter marks no trend, "we believe this quarter is an early indication of the benefits of our new business model and that the pieces are in place to continue to deliver revenue growth and profitability for fiscal 2009."

Imax is transitioning from traditional to digital projection, joint venture theater revenue and more supersized Hollywood movie releases.

Imax systems revenue rose 33% to $8.3 million, compared with $6.3 million in 2008 as the exhibitor installed five theater systems, including two digital upgrades, against two theater systems installed in 2008.

Joint venture theater revenue increased to $7.2 million, compared with $400,000 in 2008, another fruit of the digital transition. Imax during the latest quarter installed 24 systems under joint revenue sharing arrangements, including two digital upgrades, against none installed in second-quarter 2008.

And second-quarter film revenue rose 145% to $16.1 million, against a year-earlier $6.6 million. This included film digital remastering (DMR) revenue of $12.1 million, compared with $2.5 million in 2008.

Imax reported that gross boxoffice from its DMR titles leapt 346% to $84.2 million during the second quarter, driven by supersized screenings of DreamWorks Animation SKG's "Monsters vs. Aliens," Paramount Pictures' "Star Trek," Twentieth Century Fox's "Night at The Museum: Battle of the Smithsonian," and Paramount Pictures' "Transformers: Revenge of the Fallen."

Imax had 102 digital systems in operation at the end of June, with 91 theaters operating under joint venture agreements. Imax said it expects to install about 95-105 systems in 2009, including 25-30 traditional sales lease systems and about 70-75 joint revenue-sharing theater systems.

Overall, Imax has 394 theaters operating in 44 countries.
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