“Looking ahead to 2020, we continue to build out a strong slate headlined by a record number of releases filmed in IMAX® and proven franchise properties — demonstrating our longstanding relationships with world-class creators, our ability to create new opportunities to drive IMAX market share on key titles, and growing demand for ourend-to-end technology,” Gelfond added.
“Building on the strength of our core business, we are developing new opportunities for future growth while maintaining cost discipline. In partnership with leading manufacturers and streaming platforms, we are leveraging our strong brand and technology to extend our offerings into the home through IMAX Enhanced. Additionally, we continue to partner with innovative artists across genres to create truly unique events that drive increased utilization throughout our global network.”
“We believe that the powerful combination of momentum in our attractive core business and new potential levers of growth under development, position us well for the future.”
Third Quarter 2019 Consolidated Results
Revenues: Total revenues of $86.4 million increased $4.3 million, or 5.2%, compared to $82.1 million for the three months ended September 30, 2018. The $4.3 million increase in revenue was driven principally by a $6.5 million, or 17.8%, increase in Network business revenue on a $39.7 million, or 19.1%, increase in gross box office to $246.1 million(see Table 2). The $39.6 million increase in gross box office was driven by a $26.5 million, or 39.8%, increase in international gross box office, excluding China, and a $14.4 million, or 23.3%, increase in domestic gross box office. Partially offsetting the strong increase in Network revenue was a $3.0 million decline in revenues related to theater installations discussed below in the segment review.Year-to-date, total revenues increased $5.9 million, or 2.2%, to $271.4 million, primarily due to an $11.3 million, or 7.9%, increase in Network revenue on a $71.9 million, or 9.0%, increase in gross box office to $867.3 million.
Network:The IMAX theater network consisted of 1,568 systems as of September 30, 2019, of which 1,473 were in commercial multiplexes, representing a year-over-year increase of 127 theaters, or 9.4%, and 1,065, or 72.3%, were located in international markets.
Signings and Backlog: IMAX signed contracts for 22 new theaters and 8 upgrades in third quarter 2019, reflecting the continuing strong demand for the Company’s technology and systems. There were 607 theaters in backlog, including 125 upgrades, as of September 30, 2019, compared to 635 in backlog, including 112 upgrades, as of September 30, 2018. For a breakdown of theater system signings, installations, backlog and the theater network, please refer toTable 3 at the end of this earnings release.
Operating Expenses: Operating expenses, defined as selling, general and administrative plus R&D, excluding stock-based compensation, were $25.9 million, essentially flat compared to the prior year period.Year-to-date, operating expenses decreased 6.6% to $77.6 million from $83.1 million in the prior year.
Net Income:Net income increased 45.2% to $10.9 million, compared to $7.5 million in the prior year period.Year-to-date, net income increased 24.8% to $37.2 million, compared to $29.8 million in the prior year period.
Adjusted EBITDA:Adjusted EBITDA increased 25.6% to $32.4 million, compared to $25.8 million in the prior year period and the adjusted EBITDA margin, defined as adjusted EBITDA per Credit Facility divided by adjusted revenues attributable to common shareholders(see Table 8), was 41.4% compared to 35.7% in the prior year.Year-to-date,adjusted EBITDA increased 5.9% to $102.4 million, compared to $96.7 million in the prior year period and the adjusted EBITDA margin was 41.8%, compared to 40.4% in the prior year.
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