NEW YORK, Feb. 26, 2019 /PRNewswire/ --
- Delivered full-year 2018 GAAP net income per share of $0.36, compared to GAAP net income per share of $0.04, in 2017.
- 2018 adjusted net income per share was $0.91, compared to $0.62 in 2017, an increase of 46.8%.
- Strong box office and continued cost discipline drove a 381-basis point increase in 2018 operating income margin, compared to 2017.
- IMAX surpassed $1 billion in global box office for the first time in its history and delivered its highest-grossing year in China.
- Year-to-date in 2019, IMAX box office in China reached $78 million, up 61%, compared to last year.
IMAX Corporation (NYSE: IMAX) today reported fourth quarter 2018 revenues of $109.0 million, gross profit of $54.6 million and net income attributable to common shareholders of $1.7 million, or $0.03 per diluted share. Adjusted net income attributable to common shareholders for the fourth quarter was $16.4 million, or $0.26 per diluted share. Adjusted EBITDA was $36.4 million. For reconciliations of reported results to non-GAAP financial results, and for the definition and reconciliation of Adjusted EBITDA, please see the end of this press release.
The Company also reported full year 2018 revenues of $374.4 million, gross profit of $207.9 million and net income attributable to common shareholders of $22.8 million, or $0.36 per diluted share. Adjusted net income attributable to common shareholders for the year ended December 31, 2018 was $57.8 million, or $0.91 per diluted share. Adjusted EBITDA was $133.2 million.
"We believe our achievements last year set the stage for IMAX to have a blockbuster year in 2019. We further differentiated The IMAX Experience®, increased awareness of the IMAX brand and tackled key challenges in China, where we delivered our strongest box office year ever and doubled the industry growth rate," said IMAX CEO Richard L. Gelfond. "While these achievements have already begun paying dividends—as evidenced by the 47% year-over-year increase in adjusted earnings per share—we anticipate these initiatives to continue to improve the performance of our business in 2019 and beyond. And we have hit the ground running in 2019. Year-to-to date, we have already achieved $78 million of box office in China, a 61% increase compared to 2018. Overall, we are encouraged by our recent results as we head into the blockbuster filled calendar, which includes highly anticipated films such as Captain Marvel, Avengers: Endgame, The Lion King and Star Wars Episode IX."
Fourth Quarter 2018 Results
During the quarter, the Company installed 88 theater systems, 67 of which were for new theater locations. The total IMAX® theater network consisted of 1,505 systems as of December 31, 2018, of which 1,409 were in commercial multiplexes. There were 564 theaters in backlog as of December 31, 2018, compared to the 499 in backlog as of December 31, 2017.
IMAX also signed contracts for 12 new theaters and 2 upgrades in the fourth quarter. During 2018, the Company signed agreements for 203 IMAX with Laser systems, 59 of which were new systems, 114 of which were upgrades to existing IMAX theaters and 30 of which were amendments to existing backlog arrangements. For a breakdown of theater system signings, installations, network and backlog by type for the fourth quarter, please see the end of this press release.
"The story is quite simple. Beginning in 2017 we made a series of strategic decisions to turn around our business," said Gelfond. "From top to bottom, the evidence is clear in 2018 that these initiatives are working as our growth, margin and return metrics are on solidly positive trend lines. We have confidence each of these trends will continue in 2019 and our margin and return improvement should accelerate as we continue to execute against the initiatives we laid out."
Box Office Update
Gross box office from IMAX DMR® films was $236.7 million in the fourth quarter of 2018 compared to $278.1 million in the fourth quarter of 2017, primarily due to a stronger film slate in the fourth quarter of 2017 which included Star Wars: The Last Jedi. Gross box office was generated primarily by the exhibition of 29 films (22 new and 7 carryover), as compared to 26 films (22 new and 4 carryover) exhibited in the fourth quarter of 2017.
Fourth-Quarter Consolidated Results
The gross margin across all segments in the fourth quarter of 2018 was $54.6 million, or 50.1% of total revenues, compared to $60.1 million, or 47.9% of total revenues, in the fourth quarter of 2017. Operating expenses (which includes SG&A, excluding stock-based compensation, plus R&D) were $28.0 million in the quarter, compared to $27.2 million in 2017.
Fourth-Quarter Segment Results
- Network business revenues were $41.7 million in the quarter, compared with $53.8 million in the prior-year period. Gross margin for the network business was 59.2% in the most recent quarter, compared to 64.3% in the prior-year period.
- IMAX DMR revenues were $25.2 million in the fourth quarter of 2018, compared to $31.7 million in the fourth quarter of 2017. Gross margin for the IMAX DMR segment was 60.5%, compared to 60.6% in the prior-year comparative period.
- Revenues from joint revenue-sharing arrangements were $16.5 million in the quarter, compared with $20.7 million in the prior-year period. Gross margin for joint revenue-sharing arrangements was 57.2%, compared to 67.8% in the prior-year comparative period.
- Theater business segment revenues were $61.9 million in the quarter, compared with $55.5 million in the prior-year period, primarily reflecting the variable consideration being recognized due to the adoption of ASC Topic 606, as well as 2 additional installations of sales-type theaters.
- Gross margin on sales and sales-type leases was 51.0% compared with 61.4% in the year-ago period. The decline was driven by the mix of theater installations (new vs. upgrades) compared to the prior year, which can vary each year.
In addition to the Company's core revenue segments, new business revenues were $0.8 million in the quarter, compared to $13.0 million in the same period last year. New business revenues in 2017 were driven primarily by the launch of Marvel's Inhumans. The company recognized a gross loss of $0.5 million in the quarter, compared to a gross loss of $2.7 million in the fourth quarter of 2017.
For more information about the Company's results, please refer to the IMAX Investor Relations website located at investors.imax.com .
Investor Relations Website and Social Media
On a weekly basis, the Company posts quarter-to-date box office results on the IMAX Investor Relations website located at www.imax.com/content/investor-relations . The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one-week lag. In addition, the Company maintains a Twitter account: @IMAX_Investors. The Company intends to use Twitter to disclose the box office information, as well as other information that may be of interest to the Company's investor community.
The information posted on the Company's website and/or via its Twitter account may be deemed material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website and its Twitter account in addition to the Company's press releases, SEC filings and public conference calls and webcasts.
The Company will host a conference call today at 4:30PM ET to discuss its fourth quarter and full year 2018 financial results. This call is being webcast by Nasdaq and can be accessed at investors.imax.com . To access the call via telephone, interested parties in the US and Canada should dial (800) 667-5617 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 490-5367. The conference ID for the call is 7993555. A replay of the call will be available via webcast at investors.imax.com or via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 7993555.
About IMAX Corporation
IMAX, an innovator in entertainment technology, combines proprietary software, architecture and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX theaters to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe.
IMAX is headquartered in New York, Toronto and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of December 31, 2018, there were 1,505 IMAX theater systems (1,409 commercial multiplexes, 14 commercial destinations, 82 institutional) operating in 80 countries. On Oct. 8, 2015, shares of IMAX China, a subsidiary of IMAX Corp., began trading on the Hong Kong Stock Exchange under the stock code "HK.1970."
IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D Experience®, The IMAX Experience®, IMAX Is Believing® and IMAX nXos® are trademarks of IMAX Corporation. More information about the Company can be found at www.imax.com . You may also connect with IMAX on Facebook (www.facebook.com/imax ), Twitter (www.twitter.com/imax ) and YouTube (www.youtube.com/imaxmovies ).
This press release contains forward looking statements that are based on IMAX management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include, but are not limited to, references to future capital expenditures (including the amount and nature thereof), business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, plans and references to the future success of IMAX Corporation together with its consolidated subsidiaries (the "Company") and expectations regarding the Company's future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada; risks related to the Company's growth and operations in China; the performance of IMAX DMR films; the signing of theater system agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which the Company operates; competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to recent consolidation among commercial exhibitors and studios; risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company's inability to protect the Company's intellectual property; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; the failure to fully realize the projected cost savings and benefits from any of the Company's restructuring initiatives; and other factors, many of which are beyond the control of the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no obligation to update publicly or otherwise revise any forward looking statements, whether as a result of new information, future events or otherwise.
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SOURCE IMAX Corporation