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Giant screen Imax reports 1st qtr.drop

Profits down 52 percent

Imax Corp. reported Friday that net earnings fell 52.1% to $2 million in the first quarter on flat revenues of $36.7 million.

The large-format film and theater company said that revenues in the quarter ended March 31 — virtually equal to the $36.4 million posted in the year-earlier period — included larger contributions from its “film” and “other” categories, offset by a 15% decrease in its “systems” category.

The decline in systems revenue to $22.4 million reflected the company’s recognition of income from six theater systems during the quarter, two fewer than recognized in the first quarter of 1998.

Film revenue increased 21% to $8.6 million, primarily due to the release of “T-REX: Back to the Cretaceous,” which grossed nearly $20 million in its first five months,

Other revenues jumped 98% to $5.7 million, buttressed by an increase in the number of theaters in which Imax has an equity interest.

Operating income dropped 25.1% to $7.5 million, however, reflecting the diminished contribution from the company’s high-margin systems business.

Imax set the stage for the income dip with its earlier announcement that full-year operating earnings will approximate those of 1998, before one-time charges due to a decline in theater system deliveries.

On the bright side, Imax said it signed $32.5 million worth of contracts during the quarter for 11 of its theater systems.

These signings increased the company’s backlog by 10% to $192.9 million, or 80 theater systems, at the end of the quarter.

Currently, there are more than 185 permanent Imax theaters in 25 countries worldwide.

Looking forward, Imax co-CEOs Bradley Wechsler and Richard Gelfond said in a statement that “Imax’s continued theater network growth, near-record theater backlog, untapped worldwide expansion potential and impending release of the Walt Disney Co.’s “Fantasia 2000″ exclusively in Imax theaters beginning on Jan. 1, 2000, will all provide significant near and long-term value for our shareholders.”

Imax stock gained 53¢ Friday to close at $19.97 a share.