Imax announces robust second quarter results

The company reported net income increased to $13.3m or $0.20 per diluted share compared to reported second quarter 2009 net income of $2.6m or $0.05 per diluted share.

Adjusted net income, which excludes the impact of variable stock compensation, increased 35% to $8.4m or $0.13 per diluted share, compared to adjusted net income of $6.2m, also $0.13 per diluted share, on the same basis in last year’s quarter, reflecting a year-on-year gain in weighted average shares outstanding.

A foreign exchange loss related to the Canadian dollar and expenses associated with the increase in global sales activity and new business initiatives affected the quarter by approximately $0.03 per share.

Imax Corporation signed contracts in the second quarter for 57 theatre systems (comprising joint venture systems, sales and sales-type leases, and digital upgrades) compared to seven in the corresponding period of 2009. Through the first six months the number climbed to 98 compared ten in the same period of 2009.

Total revenue for the six-month period ended June 30 increased 75% to $128.4m compared to $73.5m for the same period last year. Reported net income for the six-month period increased to $39.9m, or $0.60 per diluted share, compared to a loss of $100,000, or nil per share in the same period in 2009.

Adjusted net income, which excludes the impact of variable stock compensation, increased to $43.7m, or $0.66 per diluted share for the six-month period ended June 30, compared to adjusted net income of $3.7m, or $0.08 per share, on the same basis last year. 

Adjusted EBITDA (as defined by the company’s credit facility) was $16.3m and $92.7m for the second quarter and last 12 months ended June 30, respectively, compared to $17m and $34m for the second quarter 2009 and last twelve months ended June 30, 2009, respectively.

“We are pleased with our second quarter results, which reflect not only solid performance and revenue growth across our key business segments, but also our ability to leverage strong film performance into significant network expansion,” Imax CEO Richard Gelfond said. “The level of signings activity we have seen during the first half of the year from all around the world is giving us increased visibility into our business and positioning us for commercial network expansion of approximately 26% in 2010. We believe our signings momentum combined with the recurring revenue nature of our model will serve as a catalyst for EBITDA growth.

“In addition, as a result of new signings announcements to date, our continued discussions with exhibitors throughout the world and significant exhibition industry expansion in emerging markets such as China, we believe the worldwide market opportunity for Imax theatres is potentially closer to 1,200 to 1,250 instead of our previous outlook of 1,000 worldwide theatres.”

Gelfond added that releases of Inception, Toy Story 3,Shrek Forever After and the Chinese hit Aftershock meant that the third quarter was shaping up well.