Q2-2015: Record box office boosts Imax y-o-y revenue 30%, income per share 79%

BENGALURU: Joint-venture revenue sharing arrangements played a leading role in the 79 per cent increase in income per share to US$ 0.34 from US$ 0.19 for the Toronto, Canada based, New York Stock Exchange traded entertainment, technology and distribution company Imax Corp (Imax) for the quarter  (Q2-2015, current quarter) ended June 30, 2015. For the six month (YTD, 6M-2015) period of the current year, Joint-venture revenue arrangement sharing  also played a lead in the 70 per cent increase in income per share to US$ 0.34 from US$ 0.20 in 6M-2014. The company’s y-o-y revenue in the current quarter increased 29.8 per cent to US$ 107.16 million as compared to the US$ 79.145 million in Q2-2014. YTD, Imax revenue increased 33 per cent to US$ 169.371 million from US$ 127.342 million in 6M-2014. Company speak Revenue from sales and sales type leases was US$ 18.7 million in the second quarter of 2015, compared to US$ 14.5 million in the second quarter of 2014, primarily reflecting the installation of 15 full theatre systems (14 new, 1 used) under sales and sales type lease arrangements in the most recent second quarter, compared to the 11 sales type theatres the Company installed in the prior year period. In addition, there were no upgrades in existing locations in the second quarter of 2015, compared to 4 xenon upgrades in the second quarter of 2014. Revenue from joint revenue sharing arrangements was US$ 31.6 million in the quarter, compared to US$ 19.4 million in the prior year period. During the quarter, the company installed 20 new theatres under joint revenue sharing arrangements, compared to 19 in the same period in 2014. The company had 477 theatres operating under joint revenue sharing arrangements as of June 30, 2015, as compared to 408 joint venture theatres one year prior. Production and IMAX DMR® (Digital ReMastering) revenues were US$ 36.6 million in the second quarter of 2015, compared to US$ 24.0 million in the second quarter of 2014. Gross box office from DMR titles was US$ 343.0 million in the second quarter of 2014, compared to US$ 216.0 million in the prioryear period. The average global DMR box office per screen in the second quarter of 2014 was US$ 414,600 compared to US$ 299,800 in the prior year period. “The second quarter of 2015 was one of the strongest in IMAX’s history, delivering our highest revenue ever, growing adjusted EPS by 60 per cent compared to the same period last year, record box office and quarterly per screen averages that we have not seen since Avatar in 2010,” stated Imax CEO Richard L. Gelfond. “We believe the strength of this quarter clearly demonstrates the impact that a strong slate of blockbuster films can have on Imax and the operating leverage that results.” “Momentum also continued to build on the network side of our business with higher than expected installations and strong signings activity in the quarter,” continued Gelfond, who was in Vienna for the world premiere of Mission Impossible: Rogue Nation at the historic Vienna Opera House, which has been transformed into an Imax theatre for this event. “Tonight’s M:I5 event is the continuation of the transformation of Imax’s brand from the smaller successes onto center stage. More agreements to use Imax cameras as well as Imax premieres such as Furious 7 and Jurassic World are a powerful marketer for our brand and also signal the increasingly important role Imax plays in the entertainment ecosystem.” Let us look at the other numbers reported by Imax Imax net income in Q2-2015 almost doubled (went up by 1.92 times) to US$ 24.35 million as compared to the US$ 13.307 million in the corresponding year ago quarter. Similarly, 6M-2015 net income almost doubled (went up 1.94 times) to US$ 278.65 million as compared to the US$ 143.58 million in 6M-2014. Note: (1) The primary revenue sources for the Company can be categorized into two main groups: theatre systems and films. On the theatre systems side, the Company derives revenues from theatre exhibitors primarily through either a sale or sales-type lease arrangement or a joint revenue sharing arrangement. Theatre exhibitors also pay for associated maintenance and extended warranty services. Film revenue is derived primarily from film studios for the provision of film production and digital re-mastering services for exhibition on IMAX theatre systems around the world. The Company derives other film revenues from the distribution of certain films and the provision of post-production services. The Company also derives a small portion of other revenues from the operation of its own theatres, the provision of aftermarket parts for its system components, and camera rentals (2)The Company has seven reportable segments identified by category of product sold or service provided: IMAX systems? theater system maintenance? joint revenue sharing arrangements? film production and IMAX DMR? film distribution? film postproduction? and other. The IMAX systems segment includes the design, manufacture, sale or lease of IMAX theater projection system equipment. The theater system maintenance segment includes the maintenance of IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment includes the provision of IMAX theater projection system equipment to an exhibitor in exchange for a share of the boxoffice and concession revenues. The film production and IMAX DMR segment includes the production of films and the performance of film remastering services. The film distribution segment includes the distribution of films for which the Company has distribution rights. The film postproduction segment provides film postproduction and film print services. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items. Imax Theater Systems Imax Theater Systems revenue in Q2-2015 increased 37.1 per cent to US$ 63.117 million as compared to the US$ 46.032 million in Q2-2014. YTD, revenue increased 37.2 per cent to US$ 99.949 million from US$ 72.843 million in 6M-2014. Gross margin from Imax Theater System increased 46.7 per cent in Q2-2015 to US$ 40.695 million from US$ 27.748 million in the corresponding year ago quarter. YTD, gross margin during the current six month period also ncreased by 46.7 per cent to US$ 62.778 million as compared to the 42.805 million in 6M-2014. Joint venture revenue sharing arrangement numbers The Imax Theater System growth (as well as growth in Imax overall numbers) was led by a 63.2 per cent growth in the revenue from Joint revenue sharing arrangements at US$ 31.594 million in the current quarter, as compared to the US$ 19.363 million in the corresponding year ago quarter. Gross Margin reported by Imax Joint revenue sharing arrangements increased 79.9 per cent in Q2-2015 to US$ 24.069 million from US$ 13.378 million in the corresponding year ago quarter. YTD, gross margin during the current six month period increased by 67.9 per cent to US$ 34.686 million as compared to the 20.661 million in 6M-2014. Imax systems numbers Imax systems revenue in Q2-2015 increased 24.3 per cent to US$ 22.365 million as compared to the US$ 17.996 million in Q2-2014. YTD, revenue increased 33,9 per cent to US$ 34.479 million from US$ 25.8756 million in 6M-2014. Gross margin from Imax systems increased 16.8 per cent in Q2-2015 to US$ 13.537 million from US$ 11.589 million in the corresponding year ago quarter. YTD, gross margin during 6M-2015 increased by 32.8 per cent to US$ 21.722 million as compared to the 16.362 million in 6M-2014. Theater system maintenance numbers Theater system maintenance revenue in Q2-2015 increased 5.6 per cent to US$ 9.158 million as compared to the US$ 8.673 million in Q2-2014. YTD, revenue increased 6.8 per cent to US$ 18.008 million from US$ 16.868 million in 6M-2014. Gross margin from Theater system maintenance increased 11.1 per cent in Q2-2015 to US$ 3.089 million from US$ 2.781 million in the corresponding year ago quarter. YTD, gross margin during 6M-2015 increased by 10.2 per cent to US$ 6.370 million as compared to the 5.782 million in 6M-2014. Films Films revenue increased 34 per cent in the current quarter to US$ 36.369 million as compared to the US$ 29.383 million in Q2-2014. For 6M-2015, revenue improved 24.5 per cent to US$ 61.323 million as compared to the US$ 49.257 million in the corresponding year ago six month period. Gross margin from Films improved 46.2 per cent in Q2-2015 to US$ 28.454 million from US$ 19.592 million in Q2-2014. For the six month period ended June 30, 2015, Films gross margin increased 35.1 per cent to US$ 42.392 million as compared to the US$ 31.381 million in 6M-2014. Production and IMAX DMR numbers Production and IMAX DMR was the only segment in ‘Films’ to attain revenue and gross margin q-o-q  and YTD growth. Revenue in Q2-2015 grew 52.2 per cent to US$ 36.603 million as compared to the US$ 24.050 million in the corresponding year ago quarter. During 6M-2015, revenue grew 38.3 per cent to US$ 54.279 million from US$ 39.235 million in 6M-2014. Production and IMAX DMR gross margin in the current quarter grew 52.9 per cent in Q2-2015 to US$ 28.488 million as compared to the US$ 18.634 million in Q2-2014. YTD, gross margin grew 40.4 per cent to US$ 41.713 million from US$ 29.708 million in 6M-2014. Distribution numbers Distribution revenue in Q2-2015 declined 60.6 per cent to US$ 1.158 million as compared to the US$ 2,942 million in Q2-2014. For 6M-2015, Distribution revenue declined 42.2 per cent to US$ 2.546 million in 6M-2015 as compared to the US$ 4.405 million in 6M-2014. Distribution reported negative Gross margin Q2-2015 at US$ 0.351 million as compared to the US$ 0.594 million in Q2-2014. For the six month period ended June 30, 2015, Distribution gross margin was negative US$ 0.216 million (loss) as compared to the US$ 0.784 million in 6M-2014. Post Production numbers Post Production revenue in Q2-2015 declined 32.7 per cent to US$ 1.608 million as compared to the US$ 2.391 million in Q2-2014. For 6M-2015, revenue declined 19.9 per cent to US$ 4.498 million as compared to the US$ 5.617 million in 6M-2014. Post Production gross margin in the current quarter declined 12.9 per cent in Q2-2015 to US$ 3.17 million as compared to the US$ 364 million in Q2-2014. YTD, gross margin grew 0.7 per cent to US$ 0.895 million from US$ 0.889 million in 6M-2014. ‘Other’ numbers Revenue from ‘Other’ in Q2-2015 grew 25.3 per cent to US$ 4.674 million as compared to the US$ 3.73 million in Q2-2014. 6M-2015 revenue grew 54.5 per cent to US$ 8.099 million as compared to the US$ 5.242 million in 6M-2014. The ‘Other’ segment reported a negative gross margin in Q2-2015 of US$ 0.114. For 6M-2015, gross margin was negative US$ 0.154 million as compared to the US$ 0.016 million in 6M-2014. Click here to view Press Release