EXHIBIT 99.1
[IMAX LOGO]
IMAX CORPORATION
2525 Speakman Drive
Mississauga, Ontario, Canada L5K 1B1
Tel: (905)403-6500 Fax: (905)403-6450
www.imax.com
IMAX CORPORATION REPORTS FIRST QUARTER RESULTS
HIGHLIGHTS
o Company beats expectations with first quarter earnings from continuing
operations of $0.07 per share.
o Company signs an agreement with Warner Bros. Pictures to bring the next
two chapters in The Matrix trilogy to IMAX(R) theatres, including the
Company's first day-and-date release of an IMAX(R) DMR(TM) film, The
Matrix Revolutions, in November.
o Company introduces a new, lower-cost IMAX theatre system, IMAX(R) MPX(TM),
targeted to multiplex operators, and signs its first IMAX MPX system deal.
o Company has strong quarter for system signings with six signings, compared
to three signings in the first quarter of 2002, marking the best first
quarter for signings since 2000.
Toronto, Canada - May 5, 2003 - IMAX Corporation (Nasdaq:IMAX; TSX:IMX) today
reported net earnings from continuing operations of $0.07 per share on a basic
and fully diluted basis for the first quarter ended March 31, 2003. The first
quarter results, which exceeded analyst estimates, compare to earnings from
continuing operations of $0.06 per share in the prior-year period which excludes
a $0.26 per share gain from the Company's 2002 repurchase of certain of its
subordinated notes. Including the gain on the repurchase of the subordinated
notes, the Company reported net earnings of $0.07 per share on a basic and fully
diluted basis compared to net earnings of $0.32 per share in the first quarter
of 2002.
"We are very pleased with our quarterly results, which continue to demonstrate
the fundamental positive change that our business has experienced over the last
twelve months," said IMAX Co-Chief Executive Officers Richard L. Gelfond and
Bradley J. Wechsler. "The momentum in new theatre signings that began in the
fourth quarter of 2002 has continued into the first quarter as we doubled the
number of new theatre signings as compared to the first quarter of 2002. Given
our strong first quarter and the developments in our commercial business, we are
increasingly optimistic about our future and expect this momentum to continue in
2003."
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In early March, the Company introduced a new lower-cost IMAX(R) theatre system,
IMAX(R) MPX(TM), designed specifically for use in multiplex theatres. The IMAX
MPX is a new, lighter and easier to operate IMAX projection system with lower
cost theatre geometries which should significantly reduce construction,
installation, facility and operating costs. This new theatre system allows
commercial exhibitors to add an IMAX theatre to an existing multiplex or to
retrofit two existing multiplex auditoriums into one IMAX theatre. The IMAX MPX
is optimized for the projection of IMAX(R) DMR(TM) films and is also capable of
showing traditional 2D and IMAX(R) 3D films.
On April 23, 2003, the Company announced that both The Matrix Reloaded and The
Matrix Revolutions, the second and third chapters in Warner Bros. Pictures'
Matrix trilogy, will be coming to IMAX theatres this spring and fall. Both films
will be digitally re-mastered into the unparalleled image and sound quality of
The IMAX Experience(R), using the revolutionary and proprietary IMAX DMR
(Digital Re-mastering) technology. The Matrix Reloaded: The IMAX Experience will
open shortly after the film's 35mm release on May 15th. Subsequently, on
November 5th, The Matrix Revolutions: The IMAX Experience will be released
simultaneously on giant IMAX screens in IMAX's 15/70 format and in conventional
theatres in the standard 35mm format. This will mark the first time ever that a
Hollywood live action event film is released concurrently, or "day-and-date", in
35mm and IMAX's format. The agreement with Warner Bros. marks the Company's
first multiple IMAX DMR film commitment.
Messers. Gelfond and Wechsler continued, "The introduction of the IMAX MPX
theatre system and the agreement to release the next two Matrix films, including
our first day-and-date release of an IMAX DMR film, are significant milestones
in IMAX's history, and are critical elements of our commercial theatre strategy.
We believe that the combination of IMAX DMR and IMAX MPX will drive financial
returns for potential theatre operators and Hollywood studios, and is key to
helping us realize our goal of becoming a new release window for event Hollywood
films. Becoming a new release window for Hollywood films should help continue
the growth of IMAX theatres around the world, translating into further financial
success for IMAX."
During the first quarter, the Company signed new theatre contracts for six IMAX
theatre systems compared to contracts for three theatre systems in the first
quarter of 2002. These signings included a three-theatre deal in India, a
two-theatre deal with Regal Entertainment Group and the first contract for an
IMAX MPX system, with Jack Loeks Theatres Inc.
In the first quarter, the Company's revenues were $34.0 million as compared to
$31.3 million in the prior year period. IMAX systems revenue was $22.3 million
versus $20.4 million in the prior year period, as the Company recognized
revenues on eight theatre systems in the first quarter of 2003 versus six
theatre systems in the first quarter of 2002. Film revenue was $6.8 million
versus $6.1 million in the first quarter of 2002, due primarily to the continued
strong performance of the Company's film SPACE STATION. Other revenue was $4.8
million in the quarter, consistent with the first quarter of 2002.
The Company reported net earnings from continuing operations of $0.07 per share
on a basic and fully diluted basis for the quarter, compared to $0.06 in the
prior-year period which excludes a $0.26 per share gain from the Company's 2002
repurchase of certain of its subordinated notes, which the Company presents to
allow a more meaningful comparison of its operational performance. The Company
reported net earnings of $0.07 per share on a basic and fully diluted basis
compared to net earnings of $0.32 per share, including the gain on the
repurchase of certain of its subordinated notes.
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The Company will be hosting a conference call to discuss these results at 10:30
AM EDT. To access the call interested parties should call 913-981-5571.
ABOUT IMAX CORPORATION:
Founded in 1967, IMAX Corporation is one of the world's leading entertainment
technology companies. IMAX's businesses include the creation and delivery of the
world's best cinematic presentations using proprietary IMAX and IMAX 3D
technology, and the development of the highest quality digital production and
presentation. IMAX has developed revolutionary technology called IMAX DMR
(Digital Re-mastering) that makes it possible for any 35mm film to be
transformed into the unparalleled image and sound quality of The IMAX
Experience. The IMAX brand is recognized throughout the world for extraordinary
and immersive family experiences. As of March 31 2002, there were more than 230
IMAX theatres operating in 34 countries.
IMAX(R), IMAX(R) 3D, IMAX(R)DMR(TM) and The IMAX Experience(R) are trademarks of
IMAX Corporation. More information on the Company can be found at www.imax.com.
This press release contains forward looking statements that are based on
management assumptions and existing information and involve certain risks and
uncertainties which could cause actual results to differ materially from future
results expressed or implied by such forward looking statements. Important
factors that could affect these statements include the timing of theatre system
deliveries, the mix of theatre systems shipped, the timing of the recognition of
revenues and expenses on film production and distribution agreements, the
viability of new businesses and products, and fluctuations in foreign currency
and in the large format and general commercial exhibition market. These factors
and other risks and uncertainties are discussed in the Company's Annual Report
on Form 10-K for the year ended December 31, 2002 and in the subsequent reports
filed by the Company with the Securities and Exchange Commission.
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For additional information please contact:
MEDIA: ANALYSTS:
IMAX CORPORATION, New York IMAX CORPORATION, New York
Romi Schutzer STEPHEN G. ABRAHAM
212-821-0144 212-821-0140
rschutzer@imax.com sabraham@imax.com
ENTERTAINMENT MEDIA: BUSINESS MEDIA:
Newman & Company, Los Angeles Sloane & Company, New York
Al Newman WHIT CLAY
818-784-2130 212-446-1864
asn@newman-co.com wclay@sloanepr.com
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IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(in thousands of U.S. dollars, except per share amounts)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
2003 2002
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REVENUE
IMAX systems $ 22,315 $ 20,385
Films 6,835 6,067
Other 4,822 4,823
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33,972 31,275
COSTS OF GOODS AND SERVICES 18,266 17,868
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GROSS MARGIN 15,706 13,407
Selling, general and administrative expenses 9,201 10,830
Research and development 712 204
Amortization of intangibles 140 388
Loss (income) from equity-accounted investees (287) 56
Restructuring costs and asset impairments (recoveries) - (988)
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EARNINGS FROM OPERATIONS 5,940 2,917
Interest income 265 85
Interest expense (4,288) (4,319)
Gain on repurchase of convertible subordinated notes - 12,224
Foreign exchange gain (loss) 443 (360)
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NET EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 2,360 10,547
Provision for income taxes (137) -
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NET EARNINGS FROM CONTINUING OPERATIONS 2,223 10,547
Net earnings from discontinued operations 200 -
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NET EARNINGS 2,423 10,547
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EARNINGS PER SHARE:
Earnings per share - basic and fully diluted:
Net earnings from continuing operations $ 0.07 $ 0.32
Net earnings from discontinued operations $ - $ -
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Net earnings $ 0.07 $ 0.32
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Weighted average number of shares outstanding (000's):
Basic 32,973 32,913
Fully diluted 33,273 33,099
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IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(in thousands of U.S. dollars)
MARCH 31,
2003 DECEMBER 31,
(UNAUDITED) 2002
---------------- ----------------
ASSETS
Cash and cash equivalents $ 37,113 $ 37,136
Accounts receivable, less allowance for doubtful accounts of $9,838
(2002 - $9,248) 14,914 15,054
Financing receivables 52,478 51,918
Inventories 30,159 34,092
Prepaid expenses 2,498 2,383
Film assets 560 419
Fixed assets 44,278 45,308
Other assets 9,908 10,455
Deferred income taxes 3,821 3,821
Goodwill 39,027 39,027
Other intangible assets 3,396 3,363
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Total assets $ 238,152 $ 242,976
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LIABILITIES
Accounts payable $ 6,680 $ 6,768
Accrued liabilities 45,279 43,451
Deferred revenue 78,264 87,284
Senior notes due 2005 200,000 200,000
Convertible subordinated notes due 2003 9,143 9,143
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Total liabilities 339,366 346,646
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (DEFICIT)
Capital stock. Common shares - no par value. Authorized -
unlimited number.
Issued and outstanding - 32,973,366 (2002 - 32,973,366) 65,563 65,563
Other equity 1,575 1,542
Deficit (168,997) (171,420)
Accumulated other comprehensive income 645 645
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Total shareholders' equity (deficit) (101,214) (103,670)
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Total liabilities and shareholders' equity (deficit) $ 238,152 $ 242,976
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