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Imax Earnings Rebound Thanks to Return of Hollywood Blockbusters

A QUIET PLACE 2
Photo Credit: Jonny Cournoyer

Imax may not have returned to pre-pandemic levels, but the cinema company got a lift during its most recent quarterly earnings from the renewed interest in moviegoing, as well as the arrival of a few well-timed blockbusters.

For the three-month period ending in June, revenues at the company climbed to $51 million, a 475.4% jump from the $8.9 million that Imax reported in the year-ago quarter. Of course, there’s a good reason those comparisons are so dramatic. Last summer was a period when much of Imax’s network of theaters were shuttered due to the spread of COVID-19 or only operating at limited capacity. Imax also reported a net loss attributable to common shareholders of $9.2 million, or 16 cents per diluted share. That was a significant improvement on the $26 million the company lost in the year-ago period.

Analysts projected that Imax would post a loss of 27 cents on sales of $42.8 million. It bested those estimates and Wall Street seemed to like what it saw. Shares of Imax climbed nearly 4% in after-hours trading.

“Not only are theaters reopening — audience demand is encouragingly strong,” Imax CEO Richard Gelfond said during an earnings call with analysts. “And we expect it to continue to grow as COVID recedes and more moviegoers regain their comfort level returning to theaters.”

The box office, at least in countries with lower rates of the virus, has showed signs of life in recent months. It’s been buoyed by several high profile releases such as “Fast 9,” “A Quiet Place Part II” and “Godzilla vs. Kong,” all of which were among Imax’s highest-grossing films last quarter. But the industry faces headwinds, with the Delta variant forcing some communities to experience a surge in pandemic cases, potentially making audiences anxious about returning to multiplexes. At the same time, due to the availability of new releases such as “Black Widow” and “Space Jam: A New Legacy” on streaming services, ticket sales have been softer than anticipated for some major releases.

In an interview with Variety shortly after the results were disclosed, Gelfond said he thought the variant wouldn’t significantly impact revenues.

“I’ve been pretty good at predicting movies, but there’s a reason I’m not an epidemiologist,” he said. “I’m less good at predicting course of the disease. In places like Asia, where movie theaters have been open for a long time, it seems like the box office is much more content dependent than variant dependent.”

There are also reasons to feel more optimistic that the box office will continue to recover. If coronavirus doesn’t scramble plans, the rest of 2021 should field many tentpole films, including a sequel to James Bond, “Dune,” and Marvel’s “Shang-Chi” and “The Eternals.”

Imax reported cash-on-hand of $214.1 million and $241 million in debt. The company’s global network of theaters is 90% open as of last weekend — higher than at any time in the pandemic era.