TORONTO — A restructuring hit of $142 million put bigscreen moviemaker Imax $139 million in the red for third quarter 2001, although the company hopes to reach profitability by 2002, executives said Wednesday.
Revs for the quarter, which ended Sept. 30, were $23.3 million, down from $32.9 million a year ago, and the company lost $139.6 million, compared with a pro-forma gain a year ago of $2.4 million for the quarter.
“We are making progress with our strategy to get Imax back on solid financial footing,” said Imax co-CEOs Richard Gelfond and Brad Wechsler. “We continue to implement the restructuring that began earlier this year, and believe that most of this process is now behind us.”
Imax took a massive $142 million restructuring charge for the quarter that included layoffs and asset writedowns — including Imax’s decision to get rid of the rental and staging operations of its Digital Projection Intl. subsidiary. DPI’s results now will be treated as discontinued operations in Imax’s financials.
Adapting to changed picture
“The charges taken in the third quarter reflect the changing economic conditions that Imax has had to adapt to, including the global economic slowdown and the financial difficulties facing the North American exhibition market,” Gelfond and Wechsler said. “Our decision to exit DPI’s core business, which was never strategic for Imax, is a financial one.”
On the positive side, during the quarter Imax was able to get hold of $48 million in debt that had fallen in value to just $7.9 million in this bearish market and retire it.