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IMAX Corporation Reports Third-Quarter 2016 Financial Results
IMAX Logo. IMAX Logo.
NEW YORK, Oct. 20, 2016 /PRNewswire/ --
HIGHLIGHTS
IMAX increases installation guidance to a range of 155 to 160 theatres, up from prior guidance of 155 theatres
Signed a record 162 theatre systems in the third quarter, bringing first nine month signings to 293, eclipsing the 138 system signings for all of 2015
Installed 48 new IMAX® theatres—a third-quarter Company record
Domestic Per Screen Average of $174,200 in third quarter, up 8% vs. the prior year period
Announced pilot virtual reality facilities in Los Angeles and Manchester, England, both to open late 2016
IMAX Corporation (NYSE: IMAX) today reported third-quarter 2016 revenues of $86.6 million and net income attributable to common shareholders of $2.5 million, or $0.04 per share. Adjusted net income attributable to common shareholders was $7.9 million, or $0.12 per diluted share. EBITDA as calculated in accordance with the Company's credit facility was $24.5 million. For reconciliations of adjusted net income to reported net income, adjusted net income per diluted share to reported net income per diluted share, and for the definition and reconciliation of EBITDA as calculated in accordance with the Company's credit facility, please see the end of this press release.
"The third quarter was strategic on several fronts that we believe will support the continued long-term growth and health of our business – including record signings and installation activity, the repurchase of 500,000 common shares under our buy-back program and reaching key milestones in the coming launch of our pilot location-based virtual reality offering," said IMAX CEO Richard L. Gelfond. "In just the first nine months of the year, we signed a record 293 theatre agreements, the majority of which came from existing partners looking to expand their IMAX footprint. As importantly, our accelerated install pace continued into the third quarter as well, with a record 48 new theatre installs–signaling continued demand from exhibitors to open their IMAX® theatres ahead of the highly anticipated upcoming film slate."
Network Update:
During the quarter, the Company installed 50 theatres, of which 48 were for new theatre locations and 2 were upgrades. The Company also signed contracts for 162 theatres in the third quarter of 2016. The total IMAX theatre network consisted of 1,145 systems as of Sept. 30, 2016, of which 1,037 were in commercial multiplexes. There were 547 theatres in backlog as of Sept. 30, 2016, up 23.8% from the 442 in backlog as of June 30, 2016. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.
Box Office Update:
Gross box office from IMAX DMR® titles was $186.3 million in the third quarter of 2016, compared with $189.8 million in the prior-year period. The average global DMR box office per-screen average in the third quarter of 2016 was $184,700.
"From a box office perspective, we were encouraged by a number of key markets - including the domestic market - which saw IMAX per screen averages rise 8% in the third quarter. While global box office overall was flat versus the third quarter of last year, box office is cyclical and we can expect periods that are stronger than others – such as the first five months of 2016. We anticipate box office will pick up again in the fourth quarter with titles such as Marvel's Doctor Strange, which includes more than an hour of footage specially formatted exclusively for IMAX, the Harry Potter spin-off Fantastic Beasts and Where to Find Them, and of course Rogue One: A Star Wars Story. With the anticipated strength of the tentpole-heavy film slate over the next 24 months coupled with the heightened demand from filmmakers to differentiate their movies using IMAX® cameras and the ideal content spacing, we believe we are well-positioned to take advantage of the years ahead."
Third-Quarter Segment Results
Revenue from sales and sales-type leases was $21.8 million in the third quarter of 2016, compared with $26.6 million in the third quarter of 2015. The Company installed 15 full theatre systems under sales and sales-type lease arrangements in the most recent quarter, compared with the 12 full sales-type theatres installed in the third quarter of 2015. The Company also recognized 2 upgrades under sales and sales-type lease arrangements in the most recent quarter, compared to 8 in the same period last year.
Revenue from joint revenue-sharing arrangements was $19.7 million in the quarter, compared with $19.8 million in the prior-year period. During the quarter, the Company installed 33 new theatres under joint revenue-sharing arrangements, compared with 22 in the third quarter of 2015. The Company had 592 theatres operating under joint revenue-sharing arrangements as of Sept. 30, 2016, as compared to 498 joint revenue-sharing theatres one year prior.
Production and DMR revenues were $21.5 million in the third quarter of 2016, compared with $20.9 million in the third quarter of 2015. As mentioned above, gross box office from DMR titles was $186.3 million in the third quarter of 2016, compared with $189.8 million in the prior-year period. The global DMR per screen average in the third quarter of 2016 was $184,700, compared with $220,500 in same period last year.
Gross margin across all segments in the third quarter of 2016 was 51.9%, compared to 49.8% in the third quarter of 2015.
Operating expenses (which include SG&A and R&D, and excludes stock-based compensation) were $27.5 million in the quarter, compared with $23.4 million in the third quarter of 2015.
"While we remain focused on our core business, in the third quarter we expanded our efforts to deliver differentiated entertainment experiences with the coming launch of our premium location-based VR offering, IMAX VR™," Gelfond said. "I am pleased to report that we have already made significant progress on this initiative and have received strong interest for centre partnerships, content deals and many other opportunities that we hope to begin announcing over the coming months. While we are still in the early test phase of this effort, we are optimistic about VR and the potential sizeable opportunity that it presents our business."
Share Buybacks
The Company repurchased 500,000 shares in the third quarter of 2016. The Company purchased the shares at an average price of $29.32, for a total value of $14.7 million. The Company did not repurchase any shares in connection with the administration of the Company's long-term incentive plan in the third quarter of 2016.
Supplemental Earnings Materials
For more information about our results, please refer to the earnings slides posted on the IMAX Investor Relations website located at www.imax.com/content/investor-relations.
Investor Relations Website and Social Media
Beginning the week of October 24, 2016, and on a weekly basis thereafter, the Company intends to post quarter-to-date box office results on the IMAX Investor Relations website located at www.imax.com/content/investor-relations. The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one week lag. In addition, the Company has created a new Twitter account: @IMAX_IR. The Company intends to use Twitter to disclose the foregoing box office information, as well as other information that may be of interest to the Company's investor community.
The information posted on the Company's website and/or via its Twitter account may be deemed material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website and its Twitter account in addition to the Company's press releases, SEC filings and public conference calls and webcasts.
Conference Call
The Company will host a conference call today at 8:30 AM ET to discuss its third-quarter 2016 financial results. To access the call via telephone, interested parties in the US and Canada should dial (800) 505-9568 approximately 5 to 10 minutes before the call begins. Other international callers should dial (416) 204-9271. The conference ID for the call is 6905161. A replay of the call will be available via webcast on the IMAX Investor Relations website located at www.imax.com/content/investor-relations or via telephone by dialing (88
203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 6905161.
IMAX Logo. IMAX Logo.
NEW YORK, Oct. 20, 2016 /PRNewswire/ --
HIGHLIGHTS
IMAX increases installation guidance to a range of 155 to 160 theatres, up from prior guidance of 155 theatres
Signed a record 162 theatre systems in the third quarter, bringing first nine month signings to 293, eclipsing the 138 system signings for all of 2015
Installed 48 new IMAX® theatres—a third-quarter Company record
Domestic Per Screen Average of $174,200 in third quarter, up 8% vs. the prior year period
Announced pilot virtual reality facilities in Los Angeles and Manchester, England, both to open late 2016
IMAX Corporation (NYSE: IMAX) today reported third-quarter 2016 revenues of $86.6 million and net income attributable to common shareholders of $2.5 million, or $0.04 per share. Adjusted net income attributable to common shareholders was $7.9 million, or $0.12 per diluted share. EBITDA as calculated in accordance with the Company's credit facility was $24.5 million. For reconciliations of adjusted net income to reported net income, adjusted net income per diluted share to reported net income per diluted share, and for the definition and reconciliation of EBITDA as calculated in accordance with the Company's credit facility, please see the end of this press release.
"The third quarter was strategic on several fronts that we believe will support the continued long-term growth and health of our business – including record signings and installation activity, the repurchase of 500,000 common shares under our buy-back program and reaching key milestones in the coming launch of our pilot location-based virtual reality offering," said IMAX CEO Richard L. Gelfond. "In just the first nine months of the year, we signed a record 293 theatre agreements, the majority of which came from existing partners looking to expand their IMAX footprint. As importantly, our accelerated install pace continued into the third quarter as well, with a record 48 new theatre installs–signaling continued demand from exhibitors to open their IMAX® theatres ahead of the highly anticipated upcoming film slate."
Network Update:
During the quarter, the Company installed 50 theatres, of which 48 were for new theatre locations and 2 were upgrades. The Company also signed contracts for 162 theatres in the third quarter of 2016. The total IMAX theatre network consisted of 1,145 systems as of Sept. 30, 2016, of which 1,037 were in commercial multiplexes. There were 547 theatres in backlog as of Sept. 30, 2016, up 23.8% from the 442 in backlog as of June 30, 2016. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.
Box Office Update:
Gross box office from IMAX DMR® titles was $186.3 million in the third quarter of 2016, compared with $189.8 million in the prior-year period. The average global DMR box office per-screen average in the third quarter of 2016 was $184,700.
"From a box office perspective, we were encouraged by a number of key markets - including the domestic market - which saw IMAX per screen averages rise 8% in the third quarter. While global box office overall was flat versus the third quarter of last year, box office is cyclical and we can expect periods that are stronger than others – such as the first five months of 2016. We anticipate box office will pick up again in the fourth quarter with titles such as Marvel's Doctor Strange, which includes more than an hour of footage specially formatted exclusively for IMAX, the Harry Potter spin-off Fantastic Beasts and Where to Find Them, and of course Rogue One: A Star Wars Story. With the anticipated strength of the tentpole-heavy film slate over the next 24 months coupled with the heightened demand from filmmakers to differentiate their movies using IMAX® cameras and the ideal content spacing, we believe we are well-positioned to take advantage of the years ahead."
Third-Quarter Segment Results
Revenue from sales and sales-type leases was $21.8 million in the third quarter of 2016, compared with $26.6 million in the third quarter of 2015. The Company installed 15 full theatre systems under sales and sales-type lease arrangements in the most recent quarter, compared with the 12 full sales-type theatres installed in the third quarter of 2015. The Company also recognized 2 upgrades under sales and sales-type lease arrangements in the most recent quarter, compared to 8 in the same period last year.
Revenue from joint revenue-sharing arrangements was $19.7 million in the quarter, compared with $19.8 million in the prior-year period. During the quarter, the Company installed 33 new theatres under joint revenue-sharing arrangements, compared with 22 in the third quarter of 2015. The Company had 592 theatres operating under joint revenue-sharing arrangements as of Sept. 30, 2016, as compared to 498 joint revenue-sharing theatres one year prior.
Production and DMR revenues were $21.5 million in the third quarter of 2016, compared with $20.9 million in the third quarter of 2015. As mentioned above, gross box office from DMR titles was $186.3 million in the third quarter of 2016, compared with $189.8 million in the prior-year period. The global DMR per screen average in the third quarter of 2016 was $184,700, compared with $220,500 in same period last year.
Gross margin across all segments in the third quarter of 2016 was 51.9%, compared to 49.8% in the third quarter of 2015.
Operating expenses (which include SG&A and R&D, and excludes stock-based compensation) were $27.5 million in the quarter, compared with $23.4 million in the third quarter of 2015.
"While we remain focused on our core business, in the third quarter we expanded our efforts to deliver differentiated entertainment experiences with the coming launch of our premium location-based VR offering, IMAX VR™," Gelfond said. "I am pleased to report that we have already made significant progress on this initiative and have received strong interest for centre partnerships, content deals and many other opportunities that we hope to begin announcing over the coming months. While we are still in the early test phase of this effort, we are optimistic about VR and the potential sizeable opportunity that it presents our business."
Share Buybacks
The Company repurchased 500,000 shares in the third quarter of 2016. The Company purchased the shares at an average price of $29.32, for a total value of $14.7 million. The Company did not repurchase any shares in connection with the administration of the Company's long-term incentive plan in the third quarter of 2016.
Supplemental Earnings Materials
For more information about our results, please refer to the earnings slides posted on the IMAX Investor Relations website located at www.imax.com/content/investor-relations.
Investor Relations Website and Social Media
Beginning the week of October 24, 2016, and on a weekly basis thereafter, the Company intends to post quarter-to-date box office results on the IMAX Investor Relations website located at www.imax.com/content/investor-relations. The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one week lag. In addition, the Company has created a new Twitter account: @IMAX_IR. The Company intends to use Twitter to disclose the foregoing box office information, as well as other information that may be of interest to the Company's investor community.
The information posted on the Company's website and/or via its Twitter account may be deemed material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website and its Twitter account in addition to the Company's press releases, SEC filings and public conference calls and webcasts.
Conference Call
The Company will host a conference call today at 8:30 AM ET to discuss its third-quarter 2016 financial results. To access the call via telephone, interested parties in the US and Canada should dial (800) 505-9568 approximately 5 to 10 minutes before the call begins. Other international callers should dial (416) 204-9271. The conference ID for the call is 6905161. A replay of the call will be available via webcast on the IMAX Investor Relations website located at www.imax.com/content/investor-relations or via telephone by dialing (88
203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 6905161.