Imax Corp - News Release
Imax earns 16 cents per share in nine months
Imax Corp IMX
Shares issued 29,808,888 2000-11-07 close $7.25
Wednesday Nov 8 2000 News Release
Mr. Richard Gelfond reports
Financial results for the third quarter ended Sept. 30, 2000, were as follows:
As previously announced, the company reported a modest loss, of four cents per share on a fully diluted basis versus earnings of 11 cents per share for the third quarter of 1999. For the nine months ended Sept. 30, 2000, the company reported earnings of 16 cents per share on a fully diluted basis versus 24 cents per share reported in the prior-year period.
"Our earnings for the third quarter were negatively impacted by the difficult financial conditions in the North American commercial exhibition industry," said Imax co-chief executive officers Richard L. Gelfond and Bradley J. Wechsler. "While we are disappointed by our third quarter results and our reduced earnings expectations for 2000, we are encouraged by the continued strong demand from international markets, as evidenced by our strong signings in the third quarter."
During the third quarter, the company signed contracts for 14 new theatre systems valued at approximately $38-million, driven by strong international demand. This represents the highest level of new theatre signings during any quarter in the last two years. The signings included an agreement with E-Citi, a subsidiary of ESSEL Group, which is one of the largest media companies in India, for a minimum of six Imax theatres to be located in India. The company also signed agreements for the first Imax theatre in the Philippines as well as the first Imax theatre to be located on a cruise ship.
In mid-October, the company announced that because of its stock price decline it was terminating the formal process of examining potential strategic alternatives, including a possible sale of the company. The company also announced at the end of October that company directors, officers and managers purchased approximately 800,000 shares of the company's common stock in the open market.
"In spite of the difficulties of the North American exhibitors and our disappointing quarter, we believe Imax's share price does not accurately reflect the long-term value of the company," added Mr. Gelfond and Mr. Wechsler. "Imax's brand, technology and theatre network are valuable assets that will drive our growth in the future. Our purchases of Imax stock represent our continued commitment to Imax as well as our belief that the long-term future of Imax is bright."
The company anticipates that its operating results for the 2000 fiscal year will be in the range of 60 cents to 70 cents per share. These operating results do not include the affect of any possible charges including those that may result from any implementation of new, industry-wide Securities & Exchange Commission (SEC) and other accounting regulations or any reserves against the company's exposure to North American exhibition clients, as more fully discussed in the company's second and third quarter report on Form 10-Q. The company's total potential net balance sheet exposure to the North American exhibitors is $17.8-million. The company has not yet reserved against any exposure it might have to North American exhibitors because the amount of probable loss, if any, cannot be reasonably estimated at this time.
In the third quarter, the company's revenues increased 26 per cent to $53.6-million from $42.5-million in the prior year, due primarily to the addition of revenues from Digital Projection Limited (DPI). Systems revenue decreased 3 per cent to $24.7-million from $25.5-million in the quarter as the company delivered nine theatre systems in the third quarter of 2000 versus seven theatre systems in the third quarter of 1999, however the average value of the systems delivered in 2000 was lower than those delivered in 1999 due to the product mix of systems delivered. DPI revenues were $14.1-million in the third quarter versus $2.0-million in 1999 as the 1999 results included only one month of DPI's postacquisition results. Film revenue decreased in the quarter to $10.6-million from $11.0-million in the prior year due to a decline in postproduction revenues resulting from the timing of film releases. Other revenues increased 7 per cent to $4.1-million from $3.9-million due primarily to an increase in revenues from camera rentals. Earnings from operations decreased 60 per cent to $3.5-million from $8.9-million in the prior-year period due to an increase in selling, general and administrative expenses primarily due to the addition of DPI. Earnings before taxes and minority interest declined to a loss of $1.9-million versus earnings of $6.2-million in the prior-year period due to the decline in earnings from operations, foreign exchange losses and a decrease in interest income. Net earnings per share on a diluted basis were a loss of four cents per share in the quarter versus earnings of 11 cents per share in the third quarter of 1999.
For the nine-month period ended Sept. 30, 2000, the company's revenues increased 48 per cent to $167.5-million from $113.5-million in the prior-year period as a result of higher system revenues and the addition of revenues from DPI. Systems revenue increased 24 per cent to $82.9-million from $66.8-million in the prior-year period as the company delivered 23 theatre systems as compared with 17 theatre systems in the prior-year period. DPI revenues were $38.3-million, driven by strong sales of the higher end SXGA projectors as well as increased international sales. Film revenue increased 4 per cent to $31.4-million from $30.1-million in the prior-year period on an increase in postproduction revenues. Other revenues increased to $14.9-million from $14.7-million as an increase in company-owned theatre and camera revenues more than offset the company's reduced focus on, and lower revenues from, its motion simulation business. Earnings from operations decreased 2 per cent to $22.0-million from $22.5-million in the prior-year period as increased revenues were offset by increased selling, general and administrative expenses primarily due to the addition of DPI. Earnings before taxes and minority interest decreased 46 per cent to $7.7-million from $14.3-million in the prior-year period due to foreign exchange losses and a decrease in interest income. Net earnings per share on a diluted basis were 16 cents per share versus 24 cents per share in the prior-year period.
During the third quarter, the company signed contracts for 14 Imax theatre systems valued at $37.7-million. The company has signed contracts for 29 new Imax theatre systems valued at $82.8-million through the first three quarters of 2000. The company's sales backlog was $199.3-million at Sept. 30, a 2-per-cent increase from June 30, 2000, and a 4-per-cent increase from Dec. 31, 1999. The company's sales backlog at Sept. 30, 2000, represented contracts for 76 theatre systems. There are five theatre systems in backlog that will be located at theatres in which the company has an equity interest and therefore have no dollar value ascribed to them in the company's sales backlog.
WARNING: The company relies upon litigation protection for "forward-looking" statements. |
