TORONTO — Posting a year-end loss of $145.1 million, Imax execs Friday pronounced the restructuring of the large-screen film company complete and promise a return to profitability this year.
“We’re rocking,” Imax co-CEO Rich Gelfond told Daily Variety. During the year, Toronto-based Imax cut its overhead, which included pinkslipping more than 20% of its work force; reduced its debt by $90 million; negotiated deals to pare the costs of operating Imax theaters; and lined up a strong film slate. “Having put all those things in place, in the fourth quarter, we started to see the impact of that, and we think it will carry forward into 2002,” said Gelfond. Sometime this year, he pledged, “we can expect to be slightly profitable.”
The company’s loss of $145.1 million for the year ended Dec. 31 repped a 56% increase in red ink over 2000. Gelfond pointed out that the majority of the loss took place in the form of writedowns in the third quarter, and in the fourth quarter, Imax actually turned a net profit of $19.6 million, compared with a loss of $32.5 million a year earlier..
Revenue for the year was $118.7 million, down 32% from the year before. The company noted revenue in 2000 was particularly strong as a result of the release of “Fantasia/2000: The Imax Experience.”
Execs say a pared cost structure and blockbuster film slate promises to lead the way to profitability in 2002. “Beauty and the Beast” will be followed by the 3D film “Space Station,” Disney’s “Ultimate-X” and James Cameron’s “Ghosts of the Abyss.” In addition, Disney plans to simultaneously release “Treasure Planet” in Imax and 35mm format. “We believe that this unprecedented film slate coupled with our emergence as a new release window for Hollywood product should lead to significant new theater system sales in the future,” said Gelfond and co-CEO Brad Wechsler in a statement.
Gelfond said Imax recently developed technology to take live-action 35mm films to the Imax format, making costly 70mm shoots unnecessary. “We’ve started to show tests to the studios,” he said, and “gotten an extremely positive reaction.” Company execs are in discussions with a number of studios.
Imax signed eight new theater leases during the fourth quarter and retired $90 million in debt at a post-Sept. 11 cost of less than 24% of face value. About $20 million of that was retired shortly after the end of the fourth quarter.
During the year, the company sold subsid Digital Projection Intl. for an undisclosed sum after DPI’s staging and rental business experienced “a significant downturn.” Imax is not abandoning digital, said Gelfond, noting that the company has kept rights to DPI’s digital format.
During 2000, Imax put itself up for sale, then backpedaled after its share price plummeted from about $30 to less than $5. Gelfond said Imax has no plans to return to the block “in the near future. We took the company off the market because we believe the stock price didn’t reflect the underlying values,” he said. “Given what’s going on at Imax now, there’s too much excitement to sell it at this time.”
Imax shares rose 10.8% Friday on the Nasdaq to close at $3.89.