Bigger screen, bigger loss

Film, systems revenue hit Imax Q2

Giant-screen exhibitor Imax Corp. on Thursday posted a widening second-quarter loss on shrinking revenue.

Toronto-based Imax reported red ink of $4.6 million for the quarter ending June 30, compared with a loss of $1.6 million a year ago, on second-quarter revenue of $27.5 million, down sharply from $38.1 million a year ago.

Imax's film revenue came to $8 million, compared with $11.7 million in 2006. Such digitally remastered Hollywood releases as "300" and "Spider-Man 3" contributed to the quarter.

The biggest fall came with systems revenue, which came in at $14 million, compared with $21.1 million a year ago. Imax recognized revenue on four theater systems during the latest quarter, compared with nine theater systems last year.

Also during the latest quarter, Imax installed three theater systems under its new joint-venture revenue-sharing arrangements. Theater operations revenue came to $4.6 million, compared with $4.1 million last year.

Imax co-CEO Bradley Wechsler told financial analysts that his company spent the past five months hard at work restating faulty financial results for fiscal 2002-05 before releasing them last month.

"We went through a difficult time for our finance group," Wechsler said. "That is behind us. We're now caught up. We've been very happy with the strides we've been making."

Imax also is following a new accounting policy when it comes to recognizing theater installations, a move prompted in part by ongoing probes into its finances by the U.S. Securities and Exchange Commission and the Ontario Securities Commission.