Imax Corporation posted a loss of $49.4 million in the first quarter of 2020, as theater closures — due to the coronavirus pandemic — were a drag on earnings. In the prior-year quarter, Imax had reported a profit of $8 million. Revenues for the company also sank to $34.9 million, a sharp drop from the $80.2 million the big-screen company had logged in the year-ago period. That resulted in a loss of 48 cents a share. The declines are further evidence of how hard-hit the exhibition sector has been by the public health crisis roiling the world.
Imax’s first quarter results fell short of Wall Street’s expectations. Analysts had expected a loss of 12 cents per share, according to Zacks Investment Research, and revenues of $43.9 million.
Imax felt the impact from closed theaters before other exhibition companies, because the company is heavily dependent on China, where the coronavirus epidemic raged for much of January, a full month before it halted daily life in the U.S. Those closures have also left studios pushing back the releases of blockbusters, such as “Wonder Woman 1984” and “No Time to Die,” that fuel Imax’s core business of showcasing special-effects heavy spectacles and franchise fare. Many of those films are now slated to premiere at the end of 2020 and 2021. Imax said it expects that a back half of the year filled with comic book movies and high-profile sequels will help it improve its balance sheet. Of course, when theaters’ re-ignite their marquees, they will be doing so in the midst of a recession, possibly even a depression. Imax tickets cost more than most movies, but CEO Richard Gelfond said he didn’t expect that a lack of disposable income will hurt his business.
“Historically cinemas have done well in down times,” Gelfond said on a call with analysts shortly after the company released its financial results.
Imax said theater owners are taking the lead when it comes to re-opening cinemas. Imax licenses its technology to theater chains. However, the company said it is in discussions about how to safely return to business.
“It’s ultimately the exhibitors’ decision when to re-open … but there’s very much an ongoing dialogue,” Gelfond said.
Gelfond said theater owners are looking at ways to have their audiences social distance, including filling every other seat and implementing software programs that would allow families to sit together while providing space between other audience members. The Imax chief said he hopes that “Tenet,” Christopher Nolan’s upcoming sci-fi thriller, will be the first major release to launch in re-opened theaters.
“Chris really would like to be coming out with the film that opens theaters,” Gelfond said. “I don’t know anyone in America who is pushing harder to get the theaters re-opened and to get his movie released than Chris Nolan.”