Imax Reports Q1 Losses Without Blockbusters Like 'Avatar'

Disappointing first quarter box office leads Imax to post a first quarter loss on plunging film revenue, despite record theater signings.

TORONTO – Lacking an Avatar 3D to boost sales this past winter, Imax Corp. on Thursday swung to a first quarter loss on sharply reduced box office revenue.

  Toronto-based Imax reported a loss $1 million for the three months to March 31, down sharply from earnings of $26.6 million in 2010, on revenue of $45.1 million, off from a year-earlier $72.7 million.

  “The first quarter lacked event films, particularly compared to the phenomenal strength of last year's Avatar, and our financial results as compared to last year reflect this," Imax CEO Richard Gelfond said in a statement ahead of an analyst call Thursday morning.

  Imax during the latest frame screened Walt Disney Pictures' Tron: Legacy 3D in its theatres, along with Sony Pictures' The Green Hornet 3D and DreamWorks' and Disney's I Am Number Four.

  But disappointing box office overall meant first quarter film revenue was $11.5 million, against $29.3 million in 2010.

  Production and digital re-mastering, or DMR, revenue was $7.3 million, against $23.5 million in the year-ago period, with Avatar 3D on Imax screens last year accounting for $16.2 million of that business.

  Gross box office from DMR titles, mostly Hollywood studio pictures blown up for Imax screens, was $62.1 million during the latest frame, compared to $232.2 million in the first quarter of 2010.

  The company’s bottom line was also dented by one-time charges, including a change in the value of Imax’s variable stock compensation, a non-cash tax benefit, and a $2.1 million charge related to an arbitration case stemming from a discontinued subsidiary.

  At the same time, Imax boosted its 2011 outlook for new theatre installations by around 40% to reflect 101 theatre signings during the latest quarter.

  Imax’s theatre backlog now stands at a record 283 systems.

  And the giant screen exhibitor, now expanding with joint venture theatre deals internationally, expanded its credit facility with Wells Fargo to $110 million, replacing a previous $75 million facility.

  Imax expects its commercial theatre network to grow by at least 30% in 2011 for the third consecutive year, or by between 115 and 125 new theatre installations this year.