Giant-screen firm squares with regulators
Embattled giant-screen movie theater company Imax Corp. is squaring itself with regulators in the United States and Canada, with a revised accounting policy, caught up fiscals and the re-statement of some numbers between 2002 and 2006.
“Many of the events that impacted the company in fiscal 2006 are now behind us, and several compelling growth opportunities lie ahead,” said Imax co-CEOs Rich Gelfond and Brad Wechsler.
Toronto-based Imax, which unsuccessfully put itself on the block last year and subsequently found accounting errors dating back to 2001, missing several filing deadlines, reported Friday that it has now caught up on all of its fiscal reporting, and in cooperation with the Securities and Exchange Commission and the Ontario Securities Commission, it has revised the way it recognizes revenue from theater systems sales.
“We are pleased to complete our restatement and to file our 10K and 10Q today,” Gelfond and Wechsler said.
They noted, however, that the SEC and OSC inquiries “remain ongoing.”
In spite of a strong film lineup, Imax posted a loss of $18.3 million for 2006, compared with earnings of $5.8 million in 2005.
For the first quarter of 2007 ending March 31, Imax lost $4.9 million, compared with a loss of $3.7 million the previous year. Revenue was up 17% from the same quarter a year ago, however, to $27.2 million, thanks in part to a strong perf from releases like “300” and “Spider-Man 3.”
Imax inked deals for 13 new theater systems in the first quarter, two of which are joint ventures. Six more systems deals were signed in the second quarter.
The company’s most recent day-and-date release, “Harry Potter and the Order of the Phoenix” which opened July 11, was its strongest ever, grossing $11.6 million on 126 Imax screens in its first week, a per-screen average of $92,063. In the Imax version, the 18-minute finale has been digitally converted into live-action Imax 3-D.
“For the last several years, we have discussed the impact of the growing theater network on our film and other recurring revenues,” said Gelfond and Wechsler. “The performance of ‘Harry Potter 5,’ as well as our other recent releases, is demonstrating the power of the expanded network.”
Investors seemed relieved by the news, with shares up 12% on the day at C$5.14 ($4.90).
Going forward, company brass committed to focusing on the introduction of a new digital projection system and to expanding its theater system sales using a joint venture initiative introduced in January.