IMAX - Earnings call transcript Q2 2018

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Operator

Good day and welcome to the IMAX's Second Quarter 2018 Earnings Conference Call. All participants are currently in a listen-only mode.

Following the presentation, we will conduct a question and answer session .

As a reminder, today's conference is being recorded and at this time, I would like to turn the conference over to Mr. Michael Mougias, Vice President, Investor Relations Please go ahead sir.

Michael Mougias

Angel. you, Thank thank quarter and joining on us Good earnings you conference second XXXX call. today's afternoon for

Joining is me Foster, today Patrick is be our CEO, Rich Also Q&A. our prepared made call. website. Rob of and A Lister, joining call of available the Officer. have available for its the McClymont; in webcast Today's Legal Gelfond; Head is Entertainment, webcast entirety be each Greg who remarks will and our CFO, shortly replay after us conference will Chief being on our

slide regarding to earnings like In would accompanying addition, or forward-looking statements, future questions discussion of from posted section text to affect pertain filing and accompanying have your the of outcomes. Relations and this Actual call, to slide on information I that and a our website. deck to as call our full they results may comments remind that factors as press of our release the well future may our the outcomes. forward-looking Investor you some and the our that include answers the results detailed results today's Please been more refer following or presentation are for forward-looking statements. that occurrences differ to of SEC statements could future these materially the

this turn Gelfond. these Regulation over release. of that, of well Securities Rich use adjusted and contained our adjusted the facility EBITDA During press today's The measures and call, EPS, reconciliations as as of With references net in by may of be these management's adjusted now credit made to G measures, defined Exchange to the income, me as certain the defined non-GAAP by financial discussion are definition Commission. let measures call as to afternoon's

Richard L. Gelfond

Thanks, Mike, good everyone. afternoon, and

quarter blockbuster results of our second value illustrate and on content. consumer focus experience, global expanding the footprint Our differentiated strong

first year, IMAX China, mix million highest that quarter, the with to the of XX% tentpole Hollywood million and from last of where we box grossing of generate of increase prominence a box During $XXX of the domestic, also quarter office, ever. (sic) in the network. It our over titles of in and in $XXX our was demonstrating generated IMAX China, delivered each an of rest office, quarter line growing [XX%] IMAX international a compelling world north quarter markets history, second

continued macro trends, factors, also million, including also increasing from increase We experience period drive desire stock and impact content to growing million a last of changes an programming $XX with the content we These adjusted adjusted same ongoing recent differentiated to XX% this containing in share, benefit repurchases income several earnings which year. reflects EPS releasing focus on over compared quarter costs, on our of emphasis the million $X.XX second consumers' repurchases studios' basis, to per XX% ways. and in the On helped to $XX franchise the $XX of and to of coupled date. net period prior-year grew quarter second year

results strong in from last of half first we first adjusted the months $X.XX, XXXX, quarter six the of to also the $X.XX grown from results Through second EPS on up XXXX. quarter. Our build the have

the past the several become you office If break industry global box have increasingly down over clear. trends five years,

per of positioned office XX% in just XXXX. to believe roughly was international signaling billion office, million to box XX% is grown XX% has box global office over films trend box international up office worldwide domestic in IMAX while been blockbuster growth. box of in or blockbusterization the are generating meaningful We year, from films. the industry growing of $XXX importance XXXX, a Moreover, of office. contribution the international the from from at markets, more and year, overall markets First, in uniquely around becoming to $XX one-third generated box up benefit contributor has from Last

our In box fact, belief. performance recent office helps illustrate this

For healthy the in example, half industry XXXX. of box the XX% grew first office American a North

domestic Internationally, up IMAX period. increased box office of office in over XX% the first XX% IMAX over XXXX. However, same was the half box

company, As programming refining last by and on and our optimizing are business two containing our strategy articulated extends earnings initiatives costs. operating call, leverage of encouraged our are That key performance. said, core recent beyond our our just we global growing in improving business we core the and

Over initiatives share collectively believe during pleased through which progress across several next the months. the several these can the we to proposition grow the all course box value years, I'm several we the global say past made IMAX our of should of initiatives, strategic we meaningfully office. improve meaningful

First, discussed and launched other on call, this our people differentiates cutting-edge Experience offerings. with The movies, We Laser our IMAX the in as we successfully experience we further way between widening the innovative last gap IMAX believe technology April. see

application, with commercial thus goods developed exhibitor are broad and to and of IMAX also cost for We attractive Laser our IMAX the partners.

To XX to with In xenon already terms our higher that than AMC; are of update Pathé IMAX Xenon look the sites, signed note with partners in backlog fact, system. only at moderately which progress of we've on rolling XX combination a recently XX-theater agreement Laser de-risking and major contract installed these an agreement with agreement signed a for systems. – IMAX and case XX-theater more these of incorporates and auditoriums. and agreements strongest a XX-theater Europe. also upgrades since Netherlands these for around all Regal; and process. to Regal, additional installation, of includes systems with after costs extend branding XXX with from we're exhibitor with the XX-theater will across we the In seating, launch, the exhibition are upgrades, forward And Europe, in broadly. you replacements in IMAX pushing the The new performing case some AMC This our which to to over early are years Europe. our Switzerland, agreement our Laser I'm an the pleased out Pathé, renewal markets deals out Overall, performance to systems our in-theatre partners France, the reaction upgrading Laser. and be In our the world by encouraged and in entryways the a from

be Another really that IMAX. brand strategic I'm fullest, films them priority appreciate area off launch week with The inspires was for the confident always global to Of campaign this of campaign. years, in that felt experience audiences over IMAX our the our officially marketing. change campaign brand kicks achievements to one our will that. could their new stronger I've to all

digital world. Our been blockbusters intended, want way to focused effectively experience see difference innovative is understand by them excited experience. ago. and enables to by to additional Overall, for IMAX look moviegoers own, drive the we're rollout with of the will incremental the customers years on led launch to in more campaign. XX in countries immersive the in early XX on be see has comprehensive With forward to their our filmmaker audience of It partners' to around fact, this to what am sales our many campaign the the funded our our working our advertising has set to-date. around and and and apart partners them support have that every continued We ticket note, from communicating the an launch brand I brand most over will inception us and XX response our marketing, since outstanding campaign languages. pleased IMAX

the Of the future. on course, we'll in progress update you

such box week to fixed movies – in impact office positively development A-List. our we pricing format, AMC's new as for introduction example, of rate AMC the three option over have subscription believe AMC's any customers of that services per will and $XX. through Another Stubs is the program, Though see a monthly for new time programs

Europe these Also big that out exhibitor opening our have have during they of has given choice seating would Given the and other than We on to IMAX plane. increasingly in not blockbuster becomes we on the This vary look and market. of traffic will there office, capacity to may more the to foot for any IMAX multiplex. IMAX. experience. North provided a prefer from IMAX years, meaningfully potentially clearly first-class, consumers predominantly been believe driving more types for successful I formats, fixed traffic, we could impact subscription exhibitor, is types important only forward no more Overall, this upcharge American premium remember, to seeing as but a weekends we would boxes increase point view largely drive there analogous other in to consumers the first-time for new seat is programs the believe an these introducing airline Customers price partners typically also like films. upcharge. for box could subscription IMAX, the no programs programs, between for offers also as which choose

Germany to with additional in theaters several in Saudi further our World. have four on commercial our same-store basis, Germany VOX signings last in XX ODEON market that quarter, screens Turning forward this standpoint, for office the was country Laser. On top have number-one the increase we box and including Arabia more sold the We're theater we the by agreements signed quarter for for of system in remained encouraged of XX% milestone five to IMAX with screens. in we XX quarter, our drove performing signed with region. look footprint in upgrades the of new a its activity agreements To screens in on in initial XX first our expanding installed in Moreover, and new the theaters theaters theater, facilitated launch Cinemas. to a the From already region. ongoing Jurassic date, in growth, last the installation recently the discussions a network the for with second performance exhibitors

in install opened our ODEON strong believe July particularly with have serve screen that Germany we incremental drive screens. office enable which backlog over and Germany. performance more our the in market, of grow, second For and theaters the example, screens screens number to will Currently, as with time. more current on early in customers we X, box seven us reference These theaters given in

would is I highlight India. to like market Another

backlog. over call, in currently We screens this As the XX I in past have XX additional mentioned made XX months. on meaningful with installed our last we've market progress

we market, our films. As this are increase in remastering part penetration of strategy language Indian more our to

important be holiday. content which August; Overall, across to star starring broaden to we'll instance, screens during Aamir the we film hit called offering studios now the of countries. Thugs in Bollywood an effort XX will closely our spans more and work X,XXX continue screens IMAX in will local launching Khan, global For with network, November, in later Gold in Hindostan, Diwali global a

a Chinese is key we've Turning of and to during office program made periods and growing performance. China, recent effort as more the articulated Chinese recent company, the initiative our calls, there blockbusters by titles, network One are to box multiple of from. productivity encouraged where choose particularly on is to improving we're we the recently our

in Chinese more a which will our Detective office; XX% collectively that our office, For million Heavenly of played Year programming We during we we three million example, IMAX IMAX generation recently, and office exhibitors providing theaters Dee: debut The increase, $XX period. compared Kings first prior-year during theaters. this July, drove collectively year, will the Billionaire Four to across delivered played holiday of to Hello two tomorrow, three More Chinese $XX and China. films the the box box in weeks flexibility Mr. increase titles, which IMAX box New to believe Chinese

closely the the of is initiative China. key ticketing more platforms to in with work Another company

with of be turn platforms, work as coupled these these we expand improve should campaign we continued Greg. to over major all box with of IMAX proposition it Given very IMAX progress facilitate two IMAX's IMAX the our to stakeholders. on Overall, we'll the and that, and forward tickets to to With audience. for brand tickets strategic of our and able continuing initiatives, of financial growth office. encouraged over are enhanced the the IMAX differentiation one last through majority industry Overall, to broader more sell the platforms, our the quarters believe sold our I'll positioning and value grow Laser performance look we're by several

Greg Foster

listening. Thanks, you Rich, and of hi to all

box $XXX domestic was was of office basis, a delivered of rest Last quarter consecutive IMAX which coincides China office, was Greater the XX%. and On with up XX%, box over we was the quarter period. second implemented quarterly period The global prior-year fifth market regional million up XX%, up last our marked which year. up refinements programming of also world growth, the XX%

DNA of an by box on marketing the our bolstered films. been believe growth certain has also increased We office IMAX focus

movie Studios' couple box Infinity to blockbuster family of A portfolio also represented included Marvel filmed $XXX market. War, million of theaters Our million office including has China, performance last grossing in last the animated titles almost date, with IMAX quarter of all first notable film was fare. films the a from quarter generated diverse $XX cameras. our IMAX action The title entirely time from which highest in films, to Avengers:

call. share which IMAX, our released number the Another Incredibles American right in film which weekend generated American for in office to X, film North in other out than like in exclusively opening is market is theaters, strong We to animated the based on history, XD North very I'd a box film. over a film company's which the and at indexed our X% family Pixar's call any be more proved

screens year. theater received month in Universal's of with which is Impossible Armstrong Man, chronicles half in and couple – reviews. purpose-built and a partially In we'll earlier second filmed in note. premiered to fantastic ahead, this hitting we the IMAX A Opening exciting cameras. have tonight titles this IMAX Paris the Neil Fallout, has Looking launch of several First was Mission: which October, life

the worth we addition from Korea. have language highlighting films appeal. China, local local prominent It's exciting South many in an of and cross-border include Bollywood that slate also Hollywood to months In language content, Hollywood, have that films titles the coming

expected million another overseas film Dangal, in markets. an million with film, title Korean year, biggest outside in last It's X, August, grossed in released be films will For of one Secret India. to first the of in the over a Korean IMAX grossed released screens. film $XXX was hit given the title highest Along Superstar, Gods example, This Korea, years. grossing $XXX markets year, the last Indian Bollywood

successful was through international currently in Importantly, promising only it Taiwan. XX where but screens, year won't go such quite also we XXXX, have and in is we shaping I because was many successful not so have the as Kong first film but other markets Korea, Hong for films up everything nicely. next

For process, which key particular, through were bring also The garnering the tend contain DNA And the which instance, into IMAX in when IMAX cameras. comes Lion entirely IMAX action at with filmmakers and Wonder premieres, sequences of distinguish exclusive and talent helps consumer marketing Avengers Woman content, X, studios which the in anticipated with fantastic several and has King, aspect Studios film, and IMAX interest. another junkets, in awareness film was production to next buzz, their cameras. The IMAX's experience. sequences content, shot is out filmed particularly ratio. and, early will that several it highly spring film, IMAX-focused digital IMAX builds also highlight film the XXXX,

XX release. aspect office we've consistently cameras result, the that is time. XX will of different and more importantly, we've In into a part months, IMAX generated grow DNA expect box pillar worked more film's IMAX our As or the that exclusive teams, only a directors demonstrated number when filmmakers And production and last are we ratio over more titles. including are most their with

into is IMAX Another introduce opportunity us for language local to titles. DNA

example, Wanda For X film to IMAX last plans Detective cameras. with announced month, Chinatown

happening look IMAX, more of For don't are the in generating those If future. Chinese of forward we on call can market this language closely share which portfolio huge the hit million I'll we to there of blockbuster all, become updating can to Patrick. of international more the that on was blockbusters we believe work with our its a the directors global exciting know, what synonymous prequel holiday, local With over recent All office we to titles, front. run. the lot in New similar and achieved in and ahead. look exciting turn a We progress over markets, Year forward Hollywood is things the you now we've even box $XXX increase during with that, to

Patrick S. McClymont

you, everyone. Thank good afternoon, and Greg,

factors, agreements the ongoing the costs. introduction with slate IMAX a our coupled network containing believe promising blockbusters, campaign, outlined financial Laser, the expansion, from compelling exhibitors focus Broken partners largest our we incrementalities of for X type grow the benefited with Our quarter. ahead. our of Rich launch to of deal the productivity with majority which as of of which some continued by affords global type, validator performance earnings in presentation, should on We these of were network IMAX JV. quarter our and signed footprint, and in and the box biggest encouraged continue XX these with existing brand earnings years second trends in the on theaters our the the slide our and view the growth IMAX macro to the is new sales that partners. XX office mentioned, and The network and of were world. new the were improve growth, continue partners Beginning facilitate X to full of best our second We're around in their we for that see exhibitor world differentiation up

the hybrid XX leases, to and including we with agreements X installed second signed signings, From upgrades new IMAX to JVs. new by JVs, an which agreements addition we the quarter, also XX Regal. in for sales-type installation In theaters launch full XX with standpoint, was AMC XX driven our Laser, X and theater

fewer activity over as strong compared last Revenue $XX revenues year from Turning up period XX% of Theater quarter was our most total included a to year. the quarter to theaters one-time last on the of was begin of business of slide in box related second was payment million increase business million of $XX our results, office $XX which last and development same financial million new result revenue XX% X, year. VR Network a below installation the camera quarter. the three an from last $X.X year. installing and in resulted our business second million, to sales-type of recent slightly revenue

In we leverage $XX.X generated last addition notable in was compared to our million revenue year. achieved $XX.X to profit XX% up operating growth, of million the quarter. we Gross the

Our resulting second points basis quarter over margin gross which roughly last in up was XX%, year. the was XXX

better last earnings previous strong demonstrating periods. our our XX of total network, during particularly power margin than box office was fact, quarter the quarters, gross In the

a share the million XXXX. to this been do that matter. figures charge since to an included adjusted has up EPS one-time previously down than higher We to anticipate role. is $X call, Turning of Adjusted $XX.X reconciliation to operating XX% $XX.X adjusted Net related in marketing This stock-based related $X.X also expenses was million year, compared $X.X EBITDA On last respectively. the spend, roughly of our note, compares an Adjusted our on XXX XXXX. inclusion finalized $X.X indicated Laser per margins the million, SG&A, and we our excluding in and EBITDA as million, additional charges we income Please last was roughly to $X.XX basis, EBITDA or reflecting per a as pending technology. were million XXXX. compensation, expenses, income compared was was of GAAP second of basis earnings of million net adjusted XXX%, basis or recurring not year, our was last $XX share. quarter normalizing any IMAX to to up a QX roughly of loss played million and development on a FX spend $X.XX, to result R&D million $X.X million $X.XX or $X.X lower related to of was XX.X%. a arbitration as up with points

repurchased Furthermore, and entered also to average power million at price into facility interest of and per $XX.XX from million, last quarter, strong In new $XXX an second addition $XX year-to-date. million our price million expanding credit $XXX share also to of we reducing average quarter, the a our rate. at performance borrowing our while in of achievements, $XX $XX.XX stock we financial an strategic

Vista expansion company by Overall, which and loan, company. pursue refinance to existing the the network the will enhanced our facility buybacks, are the we Playa facility continue share outcome providing new and we flexibility use additional our the with also pleased flexibility expense. addition lower In the interest as we it to of to provides

website the our the be review the Next, outline to posted of like I would Please as of of for an guidance call. this well at remainder year. this will quarter the third the conclusion guidance note, to as IR

to this and we new JVs expect XXX XXX to consisting systems XX hybrids. up continue roughly year, XX systems type, upgrades. FTLs, Breaking We systems of new and the deal XX install XX by expect

For XX in that total we new to consisting from expect quarter, roughly down third $XX X to is million. systems, DMR hybrids. I'm guidance to to With we range, regard which $XX pleased $XX JVs XX expect and expense million fall $XX theater of to the FTLs, now DMR note our million XX previous install of expense, to million the

As a calls, pre-tax to previous This made process payment we're of progress expect mentioned previous further we VR in new and a pleased and with million. loss centers. the million loss With our $X.X of consists spend regard and $X.X from DMR and on our VR guidance VR closing to $X primarily of million. million the a our business initiatives, of this $X one-time business Reduction now reflects down priority is camera related automating which the front. Home two new on our to we've to refining the of is of company

to ventures, a decision from our expect home to during to few reducing business, and the order in months. Regarding reach new VR we initiatives on continue next theater costs focus these on

of we total call operating that the our April. what All compared our SG&A, plus business. excluding be last QX comp to The from which the R&D, the last performance unchanged on financial leverage our is expected with year, on in operating quarters helps inherent in laid call. over our out on, Moving exists in consistent to of guidance is several consists core demonstrate all, flat our balance expenses, is guidance stock-based past which

our our growing to questions. more I'll footprint continue and increasing operator long will Studios' increase with approach combined term. Looking business that, to it on disciplined power earnings of global the turn blockbusters, With the ahead, believe of over to theaters costs, we emphasis for

Operator

comes from line Partners. Thank And of the MKM our first Please go ahead. Handler Eric you. of question

Eric O. Handler

Yes, I'm – the that guys you Rich, and afternoon. good this you're thank is laser you're curious that consumers, you very first, to can without seeing Two for finding systems much with installing, things, revenue-enhancing a side-by-side to some do can can forward comparison, difference? initiatives that the with? you think the moving going secondly, they talk you little then about And that readily a bit be you're of see marketing

Richard L. Gelfond

Sure.

So I think a Eric. consumers have that. will tell be able I to about doubt difference, no

online that publication superior Digital reference, this is the about reporter in of experience should released you just as an how it. laser a on Trends As for a going do investors aside, might had we're that ever an think demos really to but IMAX analysts goes which There matter piece some and to of fact, on was seen anything like and image who by to which is I see called quality. terms

the signed States, of on. objective I at – have – more United has a that's number our biggest the it's think So Also, to already to incredible so far. a Wanda clients number of laser view. deals in agreed in that Europe do mean, signings have you look I

operation there have about that. So exhibitors ones and of terms think in I also, far, people's is done some the that positive the results so clearly, in reactions, the and are proof think the the the about we've incredibly been out We've what studies the exhibitors pudding; on feel so.

million overwhelmingly as but I artistic; initiative. clients I we're paid about experience an you able But so advertising an and was think I templates of very plans going there's to significant magnitude mean, something Remember, order There's estimate. different this. marketing about told have ticket there's and The it's goes in it's to there's you a for on tied hopefully, specific a it to launched are our but the describe the It's in-theater, second them of always there hard there's so things, equate part. it. have you'll want think to soon so world this yet, to far, – see a it, to think thing which as lot our their and we on to of be us advertising make assets, stick it, $XX I their it to excited number, around booth, and pieces even digital, ask up about assets haven't about don't tomorrow. lot I big clients difference. Eric, paid

during was remarks, it I think, dynamic I at performance done when we my tenure prepared creative, marketing my better said time. nailed one As we and I think the thing have I that more under more look company's could this

Eric O. Handler

Thank you very much.

Operator

will next Eric ahead. go And we ahead our go B. with Riley. Please question from Wold of

Eric Wold

the press I terms issues I I the think for keeping and get China can you think Hollywood And slate questions versus on fluctuations? two one, stabilizing is calls, what is importing back And of and and in happen market, kind on case a where films or to market. content the you're Thanks. about yourselves? guess, getting that this Good Where do in China first forth increase a one, you be in hearing and this stabilized around was to which the would there afternoon. guess, maybe guess, excluding PSA enough how worst of content region. the Greg you one that you your two, same topic. getting what in been bit Rich; that past the for trying of I tariff there of do obviously little we from the market? slate guess, received a China I how lot scenario terms potentially you kind IMAX of are couple a Hollywood for Thanks. kind much in and in support thoughts to to impacted are do then obviously, including we're of normal from you of what in local released think in guess of, is on could strong well the enough again? China, do other language impact what that talked in if factors stuff

Richard L. Gelfond

Eric, the when opening. are ones not On lots the the slate, old are as theaters variables seasoning of opening, I one think, ones are second there said, but only new when also you first, of

there, I years of we're we can't in the that mean seen think global go doesn't you the overall we're we're We're we're think the a and comfortable for know, stabilized. it with can't in (XX:XX) question been down you those markets; campaign the services; back doesn't it addressed believe internally ticketing And us we new stabilized, a little, say, done; introducing a lot little, go we and bring over more. a that but working how between, wouldn't towards process make better with mean being but levels laser it mark last of doing that we've the the working of is past. it's was couple the the know, programming but I falls That been on we're we've changes it in it up lot can have it it. doing

external the handle any but that general, in can't towards downside on the we you upside. and a working Of course, completely, are control think, market there I realizing factors in have we're

is two tariffs, One about other, and the it separate On your the pieces you the think part the IMAX. question into hardware have of to films. I other with

is tariffs, in China should went when that mitigate we to IMAX with side, related of a it was the at IMAX. Kong Exchange to there one that's of issues risks some the were hardware look didn't the since risk add on On was But public that time Hong those corporation, I like necessary. Canadian a reasons Stock a not no so

some of a have some So, ways, in state-owned shareholders enterprises, and we a from feel others you have we lot to remember us there, noise. that the are protects of there, company public among

Hollywood films, gotten to terms kind going IMAX, of also personally Chinese it. to to think an on on but the better. low the that's at development in been a it's great better that of the of you've And and the the Hollywood of the interesting Chinese I China things list for – have has take and image into if go market. It's to for great kind Hollywood after. have movies Hollywood In be for a noticed the of theme been And we of China market, development go

whereas keeping might the a I natural on. guy finding ago, around. with in on area look China's concentrated when turned China, the of another aspects things, little important is tariff some have market, important Chinese think So portrayed been the more you of bad that's consequence put a than or Hollywood movies list of movie, at And going might to much the opening have years that be as as to relationship negative

think leaders of think, being in unpredictable, So, world but I somewhat countries, two two those never say somewhat the it's with both never, you I this remote.

Eric Wold

That's Rich. helpful all around. Thanks,

Operator

Your next comes Cannonball question from Research. from Go Karasyov ahead. Vasily

Vasily Karasyov

about the office Good My trends. Thank box question you. is afternoon.

IMAX decelerated. international look accelerated at you the box Chinese in QX, If box, IMAX and box ex-China, it office office actually

year the can – So, big at trends in and are the driving think see growth I of this box closer the can in you kind to you talk of right, far? remainder such XX%-plus a which where do China of, office, is we so my takes, think, if you of can overall And math about what the is in what divergence? what year, puts least terms get

Greg Foster

this Greg. things. So, Two is

really opened I Cup, August in June to think timing. of the or have a it's First second one might lot the in territory Because all, July of titles note territories. other opened in quarter, of in World important that in

month too I because it's unique anomaly, little period focused an that So, wouldn't in think bit that of three-month and on just a I June. get of

relates one. part, titles outsmarting multiple going and question do can ourselves little for sort on asked another we're of to versus meaning Eric title, pick to of ultimately earlier to other that err with it we deciding Rich, China, that side only the Hollywood. as both And has the something and from language local a The which that's

growth, we've DMRing because significantly makes I reason net. that's to only terms that's significant to – reducing terms of when because more cast titles that is to a wider able nimble, more side made the cause nimble of we're So, benefits us on cost to in do our in going think us we're it going significant but do more And the you going the to of costs. look also efficient. And not

other local that clear that's because very territories that only a initiative So, about the going our but effect, very in not on positive huge we I programming have forward. some to also language think of is in language part it's China, side, local a going talked of the

Vasily Karasyov

not expect to QX China, in compared to office in think the IMAX you unreasonable it's So, box an acceleration in of growth? year remainder the

Greg Foster

that actually over a place predicting be you time, so-called again because to good in because QX a we're productive don't But periods. predict should of ever that quite language, thing local can't it and just tends a do. we to but really I feels quarter-to-quarter, a place, in quarter-by-quarter. really, it blackout like better Obviously, is a higher be not has the mean, think I position in

Vasily Karasyov

right. Thank much. very you All

Operator

Your question line of will Goss Please go Barrington Research. from Jim next come from ahead. the

James Charles Goss

enough splits related than subscription to of that price, the the does A-List revenue I Got your couple. AMC would wondering, Thanks. One impact those extent offset couple how more to $XX in to Stubs program, a be a that instances? was views that

Richard L. Gelfond

With the equation. that on side of studios, they're unaffected the

ticket we're have we off with where imputed Jim. downside, And the an we're So, formula AMC, on paid price. protected a

upside they'll us it so And So, kind being if difference. us. write is the it's check up make-whole, a it for less, ends a for of only

James Charles Goss

know standpoint. from Okay. That's good to your

you and your uplift you thing, objectives each that? do with that into Another in markets, in can of campaign, think PSAs brand going to some that's promotional the or are you any longer-term program, expecting to objectives have play initial the have general

Richard L. Gelfond

it, more longer-term studios with to money don't the you of brand primarily though, and the after filmmakers make Mission, studios to and certainly by reinforce movie, that expect is be through a on to that and that reinforced while, But I going think day difference when all pricing but by it PSAs objective reinforced, the campaign. proposition because a be doing and make see put to difference chain, should to advertising, do that the I which economics IMAX are driven, box I exhibitors next this going on I Well, and change the and think reinforced, when theater you butts there on for is around aspects overall we're firm on we launch, the to everyone. seats, It's it are a in campaign. do, our takes as office. iconic expect to hope brand screen, you all aspects the the in

James Charles Goss

it's But just little geometry. Okay. today talked in what might distance you and geometry of in with the solutions and some that. changes participate place, IMAX IMAX trying final of have up a that seating. the wondering And one again historically, about tougher theater the of with taken coming been slope IMAX to participate the because that the you've for to the kind of just seating I'm compatible are thing; be

Richard L. Gelfond

of Well. a done rockers. they're number plush Jim, and mostly we've already, retrofits

sort and But that, So, part familiar AMC them that four not you're if for with we've doesn't down a of recliner of way and think it the a go Square, of Lincoln retrofit at it. have all foot to like doesn't the Theatres, large example, already.

Unknown Speaker

XX.

Richard L. Gelfond

already. theaters we've and XX four the retrofit ones, overall No, big of

the around to and why and elements: tie and The for audiences reseating as you'll we We three we been – and to increase. see think theaters, we're will our the of and in but create AMC our a not And the reduce very deals, campaign, new branding these understand the Regal the which slope we've reseat is to full think philosophy upgrade; So, important that expense, IMAX. and to don't the experience, rebrand want way also going in branding the is us don't want blockbusters largely think laser the an are implementing portals that's theaters, the we and in and part capacity differentiation solution the again, blockbusters and at recliners. in interested capacity, their

James Charles Goss

very it. Okay. Thanks Appreciate much.

Operator

ahead Mike our Company. go Hickey from go we'll The Benchmark next Please of And ahead. question with

Mike Hickey

that guys. that's questions Thanks looking congrats question been we bit year, the of in XXXX I'm a a movies. that's true and mix what first curious and is sort the creates, I XX towards we sort the top films and a saw you, to at our so follow-up. strong then for Thank on and XXXX; guess, guess, in of maybe slate, year, a of quarter. compared shift this if for blockbusters; the sort quote maybe, different we know missed seems next I've that the of you I taking there on comparable next if year you think family/kid

Greg Foster

instance, top are at all, to the and the for X, – those it's I Toy it biggest any all particularly to there's you think Story, of don't look like we Frozen should billion-dollar King, it King, franchises movies IMAX franchise, and Lion difficult are and and Aladdin, movies be that part Lion want and and that I at, those the The does, those some flexibility. X because and be think be Wonder and of like No. Marvel there's a are when compare you that very want don't biggest to titles part all world, in whatever – At of I there's of movies seemingly because that we movies and think Disney are movies there to how the We're obviously a same versus mixed other titles, a our of. too. the issue at game, of it, the throughout are there's I play like an know going does of so much year Woman part obviously that plenty time, Episode IX that's

talked in family there's network kinds, working for and goal our is title, about if want for they're a them, of room blockbuster blockbusters. to the process, Fanboy of long it's blockbuster as call, we all part plenty in our it's So, in a consumers. it that's we as a all think a a of often Rich or title, the If be that's

Mike Hickey

Thank that. you enough. Okay. Fair for

subscriber question out, greater that than like question of which terms the percent something in example, on point because days, if being last on in moviegoers, stand plan, for think is is your quick early curious would equal and AMC you you so, proposition IMAX plane, and think you fact, of XX% box. if any looks like lift last you of sales Now, incremental increases XX% you're maybe the and in A look you. a class their guess value your think what I see answers installations AMC a that is, or model Thank I potentially analogy. you in if I I despite like I the clearly I'd views. can plan, this at to that guess, a at which visibility can Stubs that potential to – seeing three can is AMC scale thinking program first I'm the partner, with if of about parts see if guess And you but give to – I which big movie a biggest what in your a domestic – own wondering the still footprint. the can you'd this, movie when appreciate see subscriber it part scale, My you a from ticket can any you program? questions, domestically, on think I Europe, you attendance think If but is lot do good so, screen the a of sort your to was – you seems which of the have A-List, want; one they

Richard L. Gelfond

you me the it's the caveat option are How is it of going appreciate and I answering it's going? With well. early, briefly. they very them giving Yes,

we I haven't think the but me yet it's are numbers both talking people anecdotally, I but they to don't uptake. too the result they because going and we expected; IMAX well; on, early AMC and are numbers than more seen better the pleased AMC, with yet, in going small, have theaters. to It's told

parts for us. positive So two the key are

it's for seating European came reserved terms which have just been advanced In like Europe, and things to U.S. think scalability scalable. model, of of the ticketing, I do In the years there

years, I varies doing around in it had decade increase model lot doing heard things been cited, them chain say been it Cineworld's but that; in think you worked a and online you it's like Cathay think European around it until the number to has of remember, XX%. the and the chain, Europe for know, wouldn't for – a I've from XX have fact, and trying ticketing, you in to I'm So I

lot fact there's AMC America. owns look to the so have and of programs of institutionalized You how that the Regal, also of that those, joint ownership North at work Cineworld so ODEON, a in history is now owns

installations to think affected, IMAX with I Europe. being the most market it terms AMC world; their with big way the the America know, as do it's North down in in of And on the same business So in you penetrated doubled scale going upgrade AMC did is recently laser deal.

those So, AMC there the and with context zones combine to all available, zones works are I it I others think in and take will the if and got think again, it you've going to the be going experience and experience in-theater is where branding image, the be better. differentiation the increased to consumer is sound better, to both be better and is going in

you be So, IMAX I will put all for theaters that demand together, the still there. think of

Mike Hickey

luck, Good Rich. guys. Thanks, right. All

Operator

closing I'd for turn remarks. call like now over this the Rich section. Gelfond to the Q&A And concludes to

Richard L. Gelfond

earnings had can better, and our bring we the India, Germany; on in containing Studios long-term. ever we're So, there you do make a more of IMAX programs, end. differentiates and and in developments we're box increase not quarter just blockbuster but more that our Arabia, underway. as Hollywood more with activities around in are and emphasizing running costs campaign, the We our our something big use equaled hands, as IMAX and of strongest the content, new celebrating. business hear, of signing on say, further innovative from on audiences. do exciting power such kind office, that and we pricing not lastly, we're are markets, sitting We consumer and experience, sure how Saudi better momentum capitalizes get we China continued and do we to we company that to expect in brand installation the the focus have, lot the Laser how

with you So, we call, the we you and look forward the end next back quarter. of to all at appreciate joining being

Operator

for this Thank your concludes you today's And call. participation.

wonderful day, your may You disconnect have and a now everyone. lines

IMAX (IMAX) 25 Jul 182018 Q2 Earnings call transcript