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Imax, best known for its giant movie screens, on Thursday reported sharply lower fiscal first-quarter earnings, but the results were in line with Wall Street estimates.
Led by CEO Richard Gelfond, Imax reported net income attributable to shareholders of $75,000, compared with a year-ago figure of $11.3 million. The adjusted earnings per share of 6 cents, which includes a 2 cents per-share impairment charge for a documentary title write-down, met analyst expectations.
First-quarter revenue reached $68.6 million, down 25 percent from $92.1 million in the year-ago period, even as total theater signings rose slightly from 36 a year ago to 39 screens during the latest quarter. The overall revenues included an $18.5 million contribution from the Imax China business.
Gross box office from digitally remastered movie titles on Imax screens came to $212.1 million during the first quarter, against $272 million in the prior year. The giant-screen exhibitor had a tough comparison as the year-ago quarter saw Star Wars: The Force Awakens and Deadpool playing on its screens.
The gross box office line included $75 million in domestic theatrical takings, $70 million in Chinese box office and $67 million in box office for the rest of the world.
Gelfond during a morning analyst call said he was “pleased with how the first-quarter box office momentum had picked up,” with movies like Beauty and the Beast and Logan playing on Imax screens.
He also talked up more TV deals to come after ABC pacted to send Marvel’s live-action series The Inhumans to bow in Imax theaters in early September. The giant-screen exhibitor told analysts that casting for The Inhumans has been completed, as has production on the first two episodes.
Gelfond forecast Imax could eventually invest in two or three original TV series a year as his company continues to diversify beyond its movie distribution niche. He argued global TV producers need to distinguish their rookie shows in an era of peak TV, and reaching fanboy audiences via Imax screens was a way to do that.
“I would expect to do more things like this (The Inhumans) with Disney and other broadcast networks. … Over time this will be a big opportunity for us,” Gelfond told analysts. Imax is in discussions with around six TV producers about upcoming projects, with an eye to make minority investments in those TV series.
Greg Foster, CEO of Imax Entertainment, told analysts it was possible his company could invest in a TV series to stream on a major digital platform as long as Imax screens get the premiere window.
In other new businesses, Imax said it has welcomed more than 20,000 visitors to its flagship virtual reality venue in Los Angeles since opening, or around $15,000 a week in revenue.
Back on the movie front, Imax’s average global per-screen average for DMR titles fell to $189,300, compared with a year-earlier $284,000. Also down was revenue from joint revenue sharing screens and network business revenue, while Imax recorded higher marketing and sound costs for its film business.
Gelfond was upbeat about the first-quarter results and his expectations for the full fiscal year in a statement issued ahead of the analyst call. “Building on our record signings in 2016, our momentum in the first four months of 2017 has continued at an extremely strong pace,” he said.
“Not only have we witnessed record signings to date, we have also seen exceptional box-office performance from titles such as The Fate of the Furious, which did $30 million in its opening weekend in Imax and broke numerous box office records, including our biggest opening weekend ever in China,” he added.
Ahead of its quarterly results release, Imax reported a string of new theater signings, including expanding its ties with China’s Omnijoi Cinema Development with a new 40-screen deal. Gelfond during the analyst call touched on current negotiations in China to allow more Hollywood movies into its multiplexes.
“My own educated guess is that things will get better for Hollywood in this (renegotiated) agreement than they are today,” he told analysts.
The giant-screen exhibitor increased its full-year 2017 theater installation guidance to around 160 new theater systems, from 150-155 previously.
April 20, 9:30 a.m. Updated with comments by senior Imax execs during conference call.
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