Imax posts record Q1 profits of $26.6 mil

Revenue up 120% to $72.8 mil

TORONTO – Imax Corp. on Thursday posted record first quarter profits on revenue-driving 3D blockbuster releases and theatre expansion.

Toronto-based Imax recorded $26.6 million in profits for the three months to March 31, against a year-earlier loss of $2.64 million, on revenue up 120% to $72.8 million, compared to $33.1 million in 2009.

A key driver was gross box office from digitally remastered (DMR) titles at $232.2 million, against $28 million last year. Twentieth Century Fox's "Avatar 3D" generated $171.9 million in the first quarter on Imax's worldwide network, and Disney's "Alice in Wonderland 3D" secured another $51.6 million in the same period.

Receiving a split from that boxoffice, Imax earned first quarter production and DMR revenue of $23.5 million, up sharply from $3.7 million in 2009.

Imax CEO Richard Gelfond told analysts during a morning call that, beyond the "Avatar 3D" and "Alice 3D" windfall releases, the giant screen exhibitor continued to lay the groundwork for recurring revenue down the road.

"Such benefits are perhaps best evidenced by the number of theatre deals we are doing, which will fuel additional growth for the company over the long-term, and an increased level of tent-pole movies being committed to the Imax theatre network," he said.

Gelfond added Imax was ploughing increased earnings back into the company, including developing portable giant screen theatres, and partnering with Sony and Discovery on a 3D cable channel.

"Some day you may see a very high end Imax home entertainment system," he added.

As Imax transitions from a film-based theatre network to digital systems, Imax signed deals for 41 theatres in Q1, more than all of fiscal 2009, with a focus on joint revenue sharing arrangements with traditional exhibitors.

Theatre system revenue fell to $11 million, against $16.4 million in 2009, on lower installs. At the same time, revenue from JV theatres jumped to $18.9 million, against $1.9 million last year.

Theater operations revenue jumped to $6 million, against a year-earlier $2.1 million, as Imax in part benefited from increased 3D glasses sales on strong movie releases.

Imax installed six JV theatres in the quarter, including one digital upgrade.

On the strength of its "Avatar 3D" and "Alice 3D" releases, Imax said its JV theatres generated gross boxoffice per-screen averages of around $665,000 during the latest quarter, against $152,000 in 2009.

As 3D film releases turbo-charges Imax's international theatre build-out, Imax forecast it will install 40 to 45 joint revenue sharing theatres from backlog in fiscal 2010, up from previous guidance of 35 to 40 installations.

And Imax will install around 15 to 20 new sales and sales-type lease systems this year, up from around 10 to 15 new installations.