IMAX - Earnings call 4 2023 | IMAX Corporation

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Operator

Good day, and thank you for standing by. Welcome to IMAX Corporation's Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jennifer Horsley, Head of Investor Relations and Senior Vice President. Please go ahead.

Jennifer Horsley

you quarter us XXXX thank year today's and fourth and earnings afternoon, for on joining full Good conference call.

today Executive Fernandes, call Rich Officer, is Rob the to us financial Legal the On today. joining results Lister, Gelfond, Chief Chief Chief Officer; our Natasha also and Financial Officer. review are

the being call. made be available after the is webcast on call will its conference entirety website. webcast our Today's in A replay of shortly

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Mr. Rich? now call over Richard that, let turn the With Gelfond. me to

Richard L. Gelfond

impossible world immersed. joining us often Thanks, Jennifer, awe-inspiring into worlds the imagined, experiences are alongside offering IMAX today. for equally both a who others thanks, exclusive and premium that and around people situations, real audiences everyone, invites with powers and for

the are the and of human of innate or media global $X.XX prior such is desire gross for greater which among adjusted million any on the IMAX delivered consistent revenue, entertainment full adjusted and These $X.XX, shared from XXXX; the transcend in limitlessness $XX capitalizes experiences why year strong market local from at up playing human what on across we growth in EBITDA; movie our multiplex evergreen that for Our remains why business EPS $XX million, results is awe. unceasing of most given weekend, and winners XX% opportunities for of in margin your imagination, demand cash the up flow operating and year. XXXX: Hollywood

second of in We our worldwide, at guidance grossing IMAX billion, end high office new agreements systems systems. to upgraded box our nearly installed for our $X.X And history. we signed the XXX global grew XXX and year and highest

When the on you LA refrain the premium out-of-home shift IMAX across trend a is increasingly our it's and clear demand in that the this at I'm indeed studios across among growing ecosystems, is a filmmakers, of look cinema. results the and future Hollywood growing for IMAX month, for market office exhibition experiences, who growing increased and and to of see meet whom capitalize for on demand of the all to to entertainment. consumer all at producers, want box pressure IMAX

model global Our remarkably and technology asset-light platform resilient. remain

impacted well. heavily delays as quarter year, impacted the Strike-related in for the in guidance have was even by Hollywood. the strikes the line slate labor with Our fourth quarter current

back us our to go buy While this more an we down, created never opportunity like seeing for stock shares. has

continue our And be given expect sheet [indiscernible]. our buyer growth $XX we a IMAX repurchased in very strong to more use to at have to We XX. than IMAX stock stock is since believe million October We outlook. undervalued, balance

installs system solid EBITDA margin financial another growth adjusted XXs global full in we to total for year, office; deliver similar range. in XXX ahead, expect high for to XXX Looking box results in including XXXX to the to between performance the percent XXXX,

growth, We EBITDA expect including approximately XXXX to margin be growth, revenue high mid-single-digit single-digit at of adjusted total network percentage growth strong a XX%. year, least

for year ahead two-pronged: the activity proven portfolio. network curated portfolio sales delivers content our capitalizing global and on global by strategy clients; and and Our is two, accelerate diversified the IMAX technology returns expanding content our growth for

blockbusters, in to more and IMAX and new first the history IMAX into events. time We local XXX deliver expanding our and Experiences exclusive for Experiences language expect IMAX further by than documentaries

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you. turn Natasha. Thank with And that, it to I'll over

Natasha Fernandes

Thanks, Rich, good everyone. and afternoon,

mentioned, As IMAX strong Rich full performance delivered in year a XXXX.

experience a our business stands both out for that model. entertainment industry, the in We consumers financial provides have and the it

review for and year-end XXXX our QX and beyond. expand expectations and results, our on I'll Let's then

demand XXXX $X.XX gross in and million gross came prior grew the marketing as $X.XX up by discipline in of box year-over-year, office XXXX, basis $XX margin margin results grew was that XX% the percent expense. gross of lower XX% of model Our impact basis year QX. from $XXX margin of in adjusted of lower the XX%, underscore up points XXX EPS cost year and experience. to coming was percent a year-over-year our IMAX significantly and Full the points XXX Full QX of which $X.XX strength the year with offset at year-over-year. up was for million

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liquidity available under various million, facilities. the includes available current in revolving company's borrowing which approximately $XXX capacity million Our $XXX is

an that of repurchase coming in and with have a of of date, as $XX months, blackout we are million were have under million last From million capital $XX undervalued. in $XXX In these portion repurchasing few shares, significantly significant share authorization. $XX worth of our been we aggressive worth we our a available believe shares perspective, a our the allocation additional shares have they remaining XXXX, To XXXX, in for period although in year, we we repurchased repurchased million we QX.

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will I turn for that, Q&A. with the to operator Thank call the you. And over

Operator

the ROTH MKM. with first comes Handler from Our Eric line Instructions] question [Operator of

Eric Handler

box-office dissect this able as content about maybe could alternative always I'm the and wonder global for Hollywood you're well? if very local obviously thinking very language difficult year, I But curious view you if -- to project. Rich, -- to how just you're content versus

Richard L. Gelfond

So I Eric, there think the starting right the it. feel year there during when kind think a this of And the I like negativism. was, existed, year, visibility. now very lot the wasn't lot at turning we're first the gate around, hangover X about strike frankly, external But as months good I from of a of of of

But through I just as X. mean of things. going expectations liked X I I for high as was the than everything, Part in a better it. go better I had Dune I'm to thought, and I mentioned than number it remarks, these, not Dune I mention

I think After it's IMAX. it, understand made don't how a It's like it for thinking that. see great alone it's movie, and seeing spectacular. a story. IMAX kind of Visually, not in in I'm you I can't

going Monday time. And this show North screening -- little with IMAX-only out one they publicity are past it. day And a sold our were Oppenheimer for American The the very an we network. was just around had Sunday, virtually at than better presales it throughout sorry, same

So that. optimistic I'm extremely about

during And I And very X that. I this of year back months answer IMAX is question the about think people you, and narrative were, movies? the can the that are tell coming first to little prevailed the yes, is

think have about throughout global. and have the that. you again, seen vs. Kong, a IMAX, go have genius talked don't good some people who Kong, but you I've not seen Then it, to very be to Godzilla, to feel I And year, Godzilla I

will be -- that to going well. there's think very think I perform I

focus that a Gaga Furiosa, than positive of of looking them. now and few felt coming there's much sentiment lot on The later a gotten better Deadpool anticipated, Lady around year. at I was the feel buzz. positive just Joker projects also in as with trailer has and people highly Wicked I going a these watched are are you the into I ago lot that is months know, think, movie. most

There's And of I'm trees. other just things, top you a the of a lot giving Gladiator other the of lot X, things.

the on that's side. Hollywood So

number like strong have territories. going our Korea with a particularly we are in in I very been bases few which up, [ Najat and India, the and are coming of side, have we're have But couple summer a we'll China -- movies summer year. think fan just of filling releases. and on very And a On it the new scheduled we year. strong than Most and other a out more I is big ] movies working China. X releases China, think of language had for foreign had in movies later to the we've last We're looking

have documentary out being Powell's that we've internally spectacular. docubuster, a And coming kind And production, have final off X by middle which we blockbuster. involved, one I of May, in It cut seen Top McKay and right of it. it's narrative coined Maverick Robot. And term IMAX recently X Adam Blue the the we which of Abrams' think Amazon J.J. things. Glenn in a like crew other in is with Angels I've the shot was shot the and Bad fits Gun and or other with a of about storms, docs number including And

And alternative killed I it. mentioned, as content, Queen then

ever like a I million. still was it did think it. $X.X #X about for to go our movie, runs some XX-year-old we and there's more original rerelease. And I think It's

And Andre XXXX. as we mentioned,

that in original I with. of kind Taylor numbers. a up Swift coming opened good think we're did in number January, and there's pretty of alternative China that content And other

I think I 'XX overall, mean, to 'XX is people a So much than be stronger the going but year anticipated. dream I think is year, a

Operator

from Securities. Our comes Instructions] [Operator Eric B. question of line Riley the next with Wold

Eric Wold

or Rich, to anyone guess I will in. kind love -- get chime of I'd

systems? take globally thoughts IMAX Let's the a you looks global would margin of as growth think expect share what more get of given kind the box kind potential you it profitability X,XXX, of in coming stronger TAM markets? and that than towards or to trying years? you're productive sense as you going in in Just TAM, move of essentially so the linearity of PSA you the in that like doubling, of go that get a office screens double-ish Would line X,XXX the with to your kind from now

Richard L. Gelfond

and It's good question, a one. Eric, complex a

Japan the you America. high them XX% look have during those Of quite and in of we our many opened in, they've were extremely if year, territories performed ones were new were theaters. A good good. at think with signings, did also them 'XX, of The North which them Cinemex, the I very PSA like bunch in [indiscernible] of and Japan, areas well. that are

the indication is So short-term pretty good.

think market. the the it way when proportionally I is we And increase numbers, increase screened the did they the China of in a did in rest pretty world. not China

I think to if So think we China that like you'll going -- don't see market forecast is a doubling, slower. is growth I in The don't double.

I a established more will markets. in Again, So in think better hesitate the the going many because though, be growth have will developing the traditionally variables so I markets it of there's on, than conclusion kind to Eric. be

of calculation content get other kind not think are I the at that of in the into where that cost and special in versioning, language I today. our theater should This But in network the be our this network detail, we're there's as macro it's the way. lies putting new AI do Obviously, in. the effects growth least things, film, call to territories hard very of put the because as all but like to changes good that cost in is of world foreign think

Operator

Fargo. Omar with the Instructions] line Next Mejias Wells [Operator comes from of question

Omar Mejias Santiago

the 'XX going you us do about grow the China just the We feel China. the prospects were What is how you down. if know how And a a saw address versus when Maybe there inning you of give China? you recovery about explain I things into Rich, in 'XX? -- last about and union feel you state shut year recovery forward. very China, summer bit XXXX talked like a in in guys little can opportunity strong expect to on

Richard L. Gelfond

Yes. Sure. Omar. that. Happy Sure, to do

until it to did was our throughout wasn't surprise any than And time be fully is office open box but it in $XXX well as open million, many in people, And and around year. which didn't in a 'XX. So up significantly pretty the movie general, really said, pandemic. will you it industry the January, during the China,

is good, point, macro done So have positive price of affordable a over IMAX trends still has premium The the and next are particularly pretty outlook appear couple And economically an a at movies luxury. well. very years. even

Our very indexing strong. is

imported I for So just other what the normal and does like, for both to Hollywood is how continue with look China, films. think the imported quickly it approach films does and backlog domestic question slate films and

Natasha It's And China we my believe, in, it and part I nature, XXXX. better jump this could was budgeted to but I of Omar. in year be believe than

looking feel pretty still themselves the sort good that have future, few into but So there out. a it, are we to variables about

Operator

Steven from question [Operator comes next Rosenblatt the with Our Instructions] of line Frankel Securities.

Steven Frankel

me So good would a you caught a were guard always bunch progress. that it seems reasons That was there it America and a for territory little up. off with Latin the of like IMAX, be why never scaled

can insight that how of meaningful you? be some and into maybe for us changed give a territory So what's

Richard L. Gelfond

Steve. I be to clear, think changed has don't So much yet,

we're to And I South high tariffs. think us very change. in has America the one what been might prospectively obstacles of looking biggest

clear, because to differently ways the we but some internal mitigate mostly in on things of view you from territory. North of there. America, the of those think progress, tariff charge some whatever So expectation costs. hope be do that of to modeling approximately double point and us And business given made a And we tariffs better it's some could that's I in

outside. if you the mean per say, at one would would they've screen I been anticipate I good. in from really than better thing much look quite LatAm, other the The averages

maybe relationship relationships we of of our progress view, I'd thing from is a third And pre-existing over certain with made point the say there.

breakout and I more want So deal, it makes optimistic. a done I But think we're think if you year. don't you X put things that's this LatAm us in that, together, to predicting those a

trending it's direction. the think in I right

Steven Frankel

that New Okay. were holiday China Lunar year went on the function else that that Was exciting. question. anomaly was box-office movies weren't period? And for that Or just bit an then a this there of what something more your Year the during a during With results of one very available window?

Richard L. Gelfond

we when mean, did this year not say I very and you When ever XX, did our we best year last year. XX exciting, was

think it's a an of I kind errors. So rounding of trend. It's don't [indiscernible] necessarily

the much we of time our and X, and of movie year, very last had more in Wandering But mixture all is genres. which language a sweet was sci-fi and Earth this in biggest it year, And China local spot.

would So a that coming have Year Steve, of this like add, out the we would Year to New typical summer, performed are Chinese we the without said I would I movies sort New the about also, And of have I film. from think boost a liked like summer. Chinese I lot that seen say in

for So will the lot make up I a that over think it summer. of

Operator

next comes from the Instructions] The line of with [Operator Benchmark Mike Hickey Company. Our question

Michael Hickey

Natasha, a Jennifer, guys, great XXXX. Rich, congrats, on

Just -- curious, you so especially domestically sort pretty mentioned start when you on look does slate, regions. amazing, the at to of great in China, amount do and fan Rich, other 'XX that I blockbusters boy least it of guess look with the at

if your just installations So it you on current curious [indiscernible] or any will. slate guess, having influence, think I that is or if

see imagine great got little spike. big like mean now of And seems films, would a before, full films. I a it we've you historically year

view a curious just we'd there. see corresponding So And your spike in signings.

to sales installations expect just somewhere curious, to 'XX 'XX. had And should there mix those similar we phasing to the and JV, XXX in XXX, Natasha, what it's the quarterly between you then on of if sort 'XX installations, of the in hybrid,

Richard L. Gelfond

the I than much so which think out prominently is advance Well, sales it's far in will the team, extent slate. certainly, go slate And greater 'XX when the play movies we've there 'XX our they been. [indiscernible] and historically to

and that, hope would would this I and signings year. help think installs drive that So

pretty that in 'XX, earlier And the in good. the summer. it's a were films not some year for of number the [indiscernible] are There just films

we and expectation. would approach, So will sales our hope that and had and meeting, that be be just certainly, internal our our

true. And in I guess, so early historically, that's been the it's But year.

I to we're it that going other a And think way. that have question. for wait to bit see to little to plays your I'll turn whether Natasha out over

Natasha Fernandes

well, similar type the mix year on deals weighted, well. think model It's for last year. sales and similar similar. heavily for between QX to installation XXX the last very cadence yes, to to we Mike, standard our cadence as sales will the be cadence the as systems, historical and of JVs installations on XXX

Operator

Goldman the [Operator Laszczyk line next from Sachs. comes Instructions] of Stephen Our question with

Stephen Laszczyk

sensitive capital this maybe capital perhaps quarters, repurchases forward then bit you're on sheet optionality to the maybe to repurchases maintaining share hoping about M&A? might was a be? over for balancing pace reoccurring comment broadly, we you forward, expect How the potential buybacks Natasha, On of back for in how going balance the the returns more last with X just thinking any excuse future the on could ramp share how it of I And price, be me? allocation, little or the could

Natasha Fernandes

at said, our repurchased we've when repurchases the Yes, as right we've committees, already $XX for there's always share allocation, a into buyback in levels. great we've so done will with and I conjunction year, and the obviously, past our with million this repurchase, particularly And over far. this capital the in amount year-to-date an us repurchasing Board just with market the to opportunity -- over be we of year mean in quarter last -- and in

And we to balance liquidity to you have and a support be sheet as healthy position, strong that. able know, a

flow, prepared we so have heard starting of And we lots my you it look start as in we're grow mentioned, high-performing and to And from CapEx, about how thinking the model allocate continue do would have as a the opportunity. to remarks, our we there growth we're where at network Rich and to really, to particularly screens. free cash are because regions in excluding want

return. regions, us will those model that And in greater so a give JV

And JVs. are of average targets were excluding about XXXX, CapEx, back the are to allocating of is you when the cash that so free we with flow, And that XXXX, way really, about closer around think in XX%. But gross we XX%. respect in -- we being capital our thoughtful to

would that time. So continue towards to be we'd growing over and the where see opportunity move

Operator

[Operator Instructions] of Goss comes Barrington line the from with Jim Next question Research.

James Goss

you like the it considerations of to nearly would even though could in options be driver because I'd raised the market would development be penetration. screens management, factors more you equity that wondering I'm a a would accelerating pursue the that All right. a more could what values. little or with Eric that of good joint limiting Wold terms be in Would of capital infrastructure, add. venture you to X,XXX think XX% subject more penetration shift

Richard L. Gelfond

our know, you as signings Jim, and 'XX So between level tripled. 'XX virtually

good right there. a been I'm and I've L.A. whatnot. So consumer for after I the a that's of meeting And in world and pretty Oppenheimer. filmmakers demand sign in month about now, feedback lot of mean studios leading gotten a and with a is I've

I'm going launch I the world -- is few a into involved low-level And the This next in you getting days then studio XXX% And mentioned filmmakers. IMAX got my need with executives. the nominations. part which it. you as be And with was that And in if a was next to this blockbuster, just we're filmed studio senior films XX IMAX in week, Dune, is from is from feedback not of want IMAX. to remarks,

I think think laid our part I the you really be think to has I and on office these where it start is And growth. and see which the IMAX groundwork IMAX in And would that as really needs And that. to -- significant see I on if And box expect partners at starting also exhibition, The is drive you'll I think sales DNA you'll to been we'll of continues, look 'XX, has Dune it. to understand the releases. indexing, Deadpool, that. sales see you'll on it there see

just but takes something all to And doesn't happening, change, that that. in means. the town can't within to that of meeting a X disappointing it this world it's go of people little Remember, without understanding I us than longer a what minutes

many could as internal we're we sufficient need as a constraints, as as design could think there signings long manufacture well as to. install see So we have we We can -- time. We Jim, positioned And much to we we lead pace. good if need have you no I you'll to. whatever know, to as as need are think whatever I

Operator

line with question the next [Operator Macquarie. Beynon Instructions] comes Our of from Chad

Aaron Lee

for Chad. on Aaron is This

from concert success you a film, upon obviously great Queen So builds which recent the mentioned Taylor Swift last year.

more events, events can approaching more like takeaways And these of you how forward? the more As any that any learnings this? you're are just pipeline for there building you color on or do roll

Richard L. Gelfond

Yes.

are think of a number learnings. I there

concert but IMAX. was it successful, was I Swift It released just released extremely Taylor think -- more not was in remember broadly. the

our lean you at you'll IMAX And do in if system Experience, the look and results numbers look into IMAX the we're going China, drive and think to of that. at indexing the the But IMAX you more our in I you higher specialness sound I think IMAX. visuals the and

look to a this basis. on think global also, have I And you at

concert So France but for very much an Swift big China, was band are success. a years never few that with a you've is extremely a example, China Taylor a we heard which named bigger in ago did name there in film And in names [indiscernible], of. big

a matter well conjunction concert we lean really really And of did France. in fact, it As did [indiscernible] in Japan. a well in France with in and

So of Swift do business Taylor not somewhat there golden is good nuggets is where high cost, really really the in markets. world. you find And some in parts and production those different unique, but the lessons talent can are really it's a of

approaching results people we one Queen as help there's they're question the interested. you and because and to pretty your as surprise a use that the business they're There And Taylor manage who in use is think the did another Heads your saw results, and social us, of media terms good pipeline, which promote pipeline I I as part results, won't said, other I the long and saw it of Talking there. a a pretty and it, is you mean, Swift costs you. good saw And group

Aaron Lee

on you color. merging awesome with the That's Enhanced SSIMWAVE, last business. SSIMWAVE And quarter, then IMAX licensing about just I talked Great. think

how use for planning brand? have can a under what you new So time? your to belt, your in look now And is years' that could about this what months more this you vision a like couple you're just few talk

Richard L. Gelfond

way I the also way and monitor We've network. mean, and to content only remain it's a streaming It's for incredibly quality streaming been money to in but streamers about a I Well, quality. broadcast sports save our also technology. but content consumer not excited streaming the strides the only making the not consumer to improve to to streamers,

getting larger. keeps think the TAM So I

things than this. we There, we I the that not expected we've one product invent oh, think well, maybe in like the at because is it's waiting a organizations, been of you cycle for these is learned beginning like longer to the sales

sell are. to to figure have out staff, where you and how the the financial it You fits where in savings

but side the for both of prospects on marketing it's sales about job But the feel I think and good be going and I plug-and-play of building we've done not infrastructure our the side. the side tomorrow, remainder And a the to very the good year.

Operator

turn at over I'm Gelfond I'll the to Mr. time. questions for currently no back further showing this Richard closing comments. call

Richard L. Gelfond

financial very you results XXXX, operator. good. Thank speak I themselves. much, I Okay. -- for They're in were mean think the extremely

surprisingly especially at EBITDA and and and look you balance multiples model. adjusted strong view, If my on the from point the adjusted asset-light given trading, they're our EPS both low, sheet of we're where

wind of IMAX continue the other those future importance a you we doing Avatar we're thanks think as of Unlike you Oppenheimer think is. call. we future as for a I I material ride, at the long have in companies, been forward way, And very at what and X rewarded. of which next and to that what around our include, backs. fairly you lot to for nonfinancial accomplishments, lot be soon doing, of and of the we'll our thank we're doing, to and who And things, IMAX, we existential cinema around the keep bloodstream look there's introducing into other I a which risks look are mean the cinema. are there our if And of of going

Operator

your conference participation. today's Thank call. for Thank concludes you. This you

You disconnect. day. may Everyone, now a wonderful have

IMAX (IMAX) 27 Feb 242023 Q4 Earnings call transcript