Imax Q1 Box Office Posts First Year-To-Year Gain Since Start Of Pandemic As Results Hit Wall Street Targets
Imax’s first-quarter results met Wall Street analysts’ expectations and showed signs of the movie industry’s rebound from the depths of Covid-19 a year ago.
Net losses per share narrowed to 25 cents in the quarter, from 82 cents a year ago, better than analysts’ consensus for 26 cents. Total revenue rose 11% to $38.8 million, a hair lower than the Street’s forecast for $39 million.
Box office receipts in Imax venues showed their first year-to-year quarterly increase since the start of the pandemic, reaching $110 million globally. In the year-earlier period, which was when theaters shut down in the U.S., Europe and other regions, box office was $95.2 million. While Imax doesn’t keep all of the box office, of course, the metric is a good way to gauge how fast turnstiles are spinning.
Addressing analysts on the company’s earnings call, CEO Rich Gelfond continued to highlight Imax’s competitive advantages in the media landscape. He suggested the company’s large-format locations can be seen as a measure of the public’s appetite for returning to public spaces.
“We believe the post-Covid future of entertainment is coming into view for the first time,” he said of the quarterly numbers.
He noted that the average Imax movie plays for a week or two, which blunts the impact of shorter theatrical windows. Major studios have all set windows deals with a much more limited theatrical run than before the pandemic, but Gelfond says the tightening is not a threat. “Imax box office is driven by blockbusters that benefit from theatrical releases, helping to insulate from the rise of streaming and premium video-on-demand releases,” he said.
The CEO also pointed to a restlessness in the moviegoing public. “Streaming media sustained many of us throughout lockdown — and did a great job of it,” he said. “It turns out, people stream a lot of TV .… particularly when it’s the only thing they can do. But the data shows people are ready for more. Having lived through lockdowns, we don’t believe consumers will be content to stay in their homes.”
While there were stirrings of life in the quarter, particularly outside the U.S., Gelfond pointed to more recent releases like Godzilla vs. Kong, Mortal Kombat and Demon Slayer as standouts. Japan has also been a particularly strong territory. Imax has played the nation’s No. 1 and No. 2 pandemic releases, Demon Slayer and Shin Evangelion. Since last April, the per-screen average in Japan has been $1.2 million.
Because it is not officially an exhibitor, with interests in equipment and technology apart from the theater business, Imax is less vulnerable to the cash crunch that has crippled AMC and others. Still, the pandemic has tested the company’s resources. Imax noted that it amended its credit facility during the quarter and raised $230 million of convertible notes. As a result, it added more than $200 million in total available liquidity and reduced its pro forma annual cash interest costs by $4.3 million.
In addition to the quarterly financials, Imax announced that CFO Patrick McClymont will be leaving the company to become CFO of a private company. McClymont, who has served in the role since 2016, will step down next month. Joseph Sparacio, who preceded McClymont as CFO of Imax and more recently was CFO of Entertainment One, will temporarily rejoin the company as interim CFO of Imax. A search is being conducted for a permanent exec in the role.
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