IMAX CORPORATION
Exhibit 99.1
[GRAPHIC - IMAX CORPORATION LOGO (R)]
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 2005 FINANCIAL RESULTS
HIGHLIGHTS
- - Company beats expectations for the March quarter, reporting net earnings
of $0.03 per diluted share and a 26% increase in total revenues as the
Company installs three times as many theatre systems as in the year-ago
quarter.
- - Company completes its best nine-month period for signings in eight years,
which started with the installation of the first IMAX(R) MPX(TM) system
last June and continued through the March quarter, when the Company signed
twelve theatre systems, double the year-ago number.
- - AMC Entertainment, Inc., the second-largest North American exhibitor,
yesterday signed an agreement to install IMAX(R) theatre systems in five
domestic multiplexes this year, marking the exhibitor's first-ever deal
with IMAX.
- - Company's 2005 film slate is complete, with Harry Potter and the Goblet of
Fire: The IMAX Experience confirmed as the fourth day-and-date Hollywood
IMAX DMR(R) release for the year.
TORONTO - May 5, 2005 - IMAX Corporation (NASDAQ: IMAX; TSX: IMX) today reported
first quarter 2005 earnings ahead of expectations, and earlier in the week
delivered two major strategic initiatives regarding the accelerating growth of
its domestic theatre network and the completion of its 2005 film slate. For the
quarter ended March 31, 2005, IMAX reported net earnings of $0.03 per diluted
share, above the Company's previously guided range of breakeven to $0.02 per
diluted share. This compares to a net loss of $0.02 per diluted share reported
for the three months ended March 31, 2004.
"The momentum in our business is undeniable, as we just completed the best
nine-month period for new theatre systems sales since 1997," said IMAX Co-Chief
Executive Officers Richard L Gelfond and Bradley J. Wechsler. "With double the
number of signings and triple the number of installs versus the year-ago
quarter,
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our first quarter results show that interest in IMAX continues to accelerate
since the introduction of our multiplex-based theatre system last June."
The Company signed agreements for twelve IMAX(R) theatre systems during the
three months ended March 31, 2005, the third consecutive quarter of double-digit
signings. Reflecting the worldwide appeal of The IMAX Experience(R), these
system signings span eight different countries on three continents. The
quarter's signings include a four-theatre agreement with CJ CGV, Korea's leading
commercial exhibitor, as well as deals for new IMAX theatres in commercial
locations in China, India, Kuwait, The Netherlands, Guatemala, Costa Rica, and
the United States.
All of the first quarter agreements were with commercial exhibition customers
and ten were for the Company's newest product, the IMAX MPX system, which allows
for the retrofit of an existing auditorium. While it has been less than one year
since the installation of the first IMAX MPX system, by the end of March the
Company had in place agreements for more than forty of these systems, and nine
are up and running today. Demonstrating the short sign-to-install window enabled
by the IMAX MPX system, Pathe Netherlands, that country's leading commercial
exhibitor, signed, installed and opened an IMAX theatre at its Amsterdam
multiplex during the first quarter.
Subsequent to the close of the quarter, IMAX reached agreement with AMC
Entertainment Inc. to retrofit five domestic multiplexes with IMAX MPX theatre
systems this year. AMC's first two IMAX theatres are scheduled to open in time
for the release of Batman Begins: The IMAX Experience in June, with the
remaining three scheduled to open in September. Under the joint venture
arrangement between IMAX and AMC, the companies will share in both the upfront
cost of the IMAX theatres and also in the ongoing profits generated by these
theatres.
"AMC's entree into the IMAX business marks a major milestone in our domestic
commercial exhibition strategy, and the structure of the deal will allow us to
generate significant additional recurring revenue for our business while quickly
expanding the IMAX network," continued Messrs. Gelfond and Wechsler. "The
addition of AMC not only bolsters IMAX's value proposition to other exhibitors,
but also makes IMAX more attractive to Hollywood studios that want to release
their event films to IMAX's growing network."
Earlier this week, IMAX announced the completion of its 2005 film portfolio. In
November, IMAX and Warner Bros. Pictures will release Harry Potter and the
Goblet of Fire: The IMAX Experience, the fourth in the Harry Potter series, to
IMAX theatres around the world. Last year, The IMAX DMR(R) version of the third
in the series, Harry Potter and the Prisoner of Azkaban, grossed approximately
$14 million throughout the IMAX network. In late November, IMAX expects to
re-release The Polar Express: An IMAX(R) 3D Experience, which broke numerous
records for an IMAX DMR film in 2004, and went on to gross approximately $45
million world-wide. IMAX's 2005 film slate also includes: an original 3D
production to be released in September titled Tom Hanks Presents Magnificent
Desolation: Men Walking on the Moon: An IMAX(R) 3D Experience; IMAX DMR releases
of Warner Bros. Pictures' summer blockbusters Batman Begins and Charlie and the
Chocolate Factory; and the IMAX DMR version of Twentieth Century Fox's animated
feature, Robots, which was released in March.
"Hollywood's level of interest in releasing event films in IMAX's format has
never been higher," concluded Messrs. Gelfond and Wechsler. "Not only is our
full-year film slate in place months earlier than in past years, but our 2006
film portfolio is already starting to take shape, as we engage in discussions
with nearly all of the major studios. Given the tremendous draw of The IMAX 3D
Experience(R), we expect that several of next year's films will be presented in
our unparalleled 3D format."
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For the three months ended March 31, 2005, the Company's total revenues were
$31.4 million, up 26% from $24.9 million reported for the prior year period, and
included cash received from the previously announced settlement of litigation
with the former owners of UCI. Systems revenue was $22.1 million versus $16.0
million in the prior year period, as the Company recognized revenue on six
theatre systems, one of which was an operating lease, versus two in the first
quarter of 2004. Film revenue increased by 10% to $4.9 million from $4.5 million
in the same period last year, and Theatre Operations revenue was $3.8 million
versus $3.7 million. Other revenues were $0.5 million in the first quarter of
2005 as compared to $0.6 million in the same period last year. The Company ended
the March quarter with $29.8 million in cash and short term investments as
compared to $29.0 million at the end of December.
Earnings from operations for the three months ended March 31, 2005 increased 34%
to $4.9 million from $3.6 million reported for the same period in 2004. The
Company reported net earnings of $0.03 per diluted share for the first quarter
of 2005, as compared to a net loss of $0.02 per diluted share for the first
quarter of 2004.
The Company will host a conference call to discuss these results at 10:30 AM ET.
To access the call interested parties should call (913) 981-5540 approximately
10 minutes before it begins. A recording of the call will be available by
dialing (719) 457-0820. The code for both calls is 4344672.
ABOUT IMAX CORPORATION
Founded in 1967, IMAX Corporation is one of the world's leading entertainment
technology companies and the newest distribution window for Hollywood films.
IMAX delivers the world's best cinematic presentations using proprietary IMAX,
IMAX 3D, and IMAX DMR technology. IMAX DMR (Digital Re-mastering) makes it
possible for virtually 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 entertainment experiences.
As of March 31, 2005, there were 250 IMAX theatres operating in more than 35
countries.
IMAX(R), IMAX(R) 3D, IMAX DMR(R), IMAX(R) MPX(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's 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
performance of films, 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, 2004
and in the subsequent reports filed by the Company with the Securities and
Exchange Commission.
###
For additional information please contact:
MEDIA: ANALYSTS:
IMAX CORPORATION, New York IMAX CORPORATION, New York
Romi Schutzer Cheryl Cramer
212-821-0144 212-821-0121
rschutzer@imax.com ccramer@imax.com
ENTERTAINMENT MEDIA: BUSINESS MEDIA:
Newman & Company, Los Angeles Sloane & Company, New York
Al Newman Whit Clay
310-278-1560 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)
<Table>
<Caption>
THREE MONTHS ENDED
MARCH 31,
---------------------
2005 2004
--------- ---------
REVENUE
IMAX systems $ 22,113 $ 16,021
Films 4,947 4,489
Theater operations 3,816 3,742
Other 492 629
--------- ---------
31,368 24,881
COSTS OF GOODS AND SERVICES 15,223 12,519
--------- ---------
GROSS MARGIN 16,145 12,362
Selling, general and administrative expenses 10,243 8,335
Research and development 653 1,144
Amortization of intangibles 157 151
Receivable provisions, net of (recoveries) 212 (898)
--------- ---------
EARNINGS FROM OPERATIONS 4,880 3,630
Interest income 214 126
Interest expense (4,197) (4,068)
Loss on retirement of notes -- (784)
--------- ---------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 897 (1,096)
Recovery of income taxes 59 --
--------- ---------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS 956 (1,096)
Net earnings from discontinued operations 240 200
--------- ---------
NET EARNINGS (LOSS) 1,196 (896)
========= =========
EARNINGS (LOSS) PER SHARE:
Earnings (loss) per share - basic and diluted:
Net earnings (loss) from continuing operations $ 0.02 $ (0.03)
Net earnings from discontinued operations $ 0.01 $ 0.01
--------- ---------
Net earnings (loss) $ 0.03 $ (0.02)
========= =========
Weighted average number of shares outstanding (000's):
Basic 39,557 39,304
Fully diluted 41,920 39,304
Additional disclosure:
Depreciation and amortization 1 $ 3,548 $ 2,483
</Table>
(1) Includes $0.3 million of amortization of deferred financing costs charged
to interest expense for the quarter ended March 31, 2005 (2004 - $0.3
million)
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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)
<Table>
<Caption>
MARCH 31,
2005 DECEMBER 31,
(UNAUDITED) 2004
------------ ------------
ASSETS
Cash and cash equivalents $ 14,779 $ 28,964
Short-term investments 15,018 --
Accounts receivable, net of allowance for doubtful accounts of $8,920
(2004 - $8,390) 22,500 19,899
Financing receivables 59,453 59,492
Inventories 29,430 29,001
Prepaid expenses 3,004 2,279
Film assets 1,552 871
Fixed assets 28,226 28,712
Other assets 12,909 13,377
Deferred income taxes 6,311 6,171
Goodwill 39,027 39,027
Other intangible assets 3,070 3,060
------------ ------------
Total assets $ 235,279 $ 230,853
============ ============
LIABILITIES
Accounts payable $ 7,023 $ 5,827
Accrued liabilities 53,929 56,897
Deferred revenue 54,162 50,505
Senior Notes due 2010 160,000 160,000
------------ ------------
Total liabilities 275,114 273,229
------------ ------------
SHAREHOLDERS' EQUITY (DEFICIT)
Capital stock - Common shares - no par value. Authorized -
unlimited number. Issued and outstanding - 39,757,715 (2004 - 39,446,964) 118,887 116,281
Other equity 1,966 3,227
Deficit (159,749) (160,945)
Accumulated other comprehensive income (loss) (939) (939)
------------ ------------
Total shareholders' deficit (39,835) (42,376)
------------ ------------
Total liabilities and shareholders' equity (deficit) $ 235,279 $ 230,853
============ ============
</Table>
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