IMAX Corporation (NYSE: IMAX) recently reported financial results for the first quarter 2021 including year-over-year revenue and box office growth, margin improvement and positive EBITDA – demonstrating strong demand for The IMAX Experience as theatres reopen around the world.
“The last year has brought the strong, unique market position of IMAX into sharp focus; we are a global platform for blockbuster entertainment with a valuable brand, flexible, asset-lite business model and strong balance sheet,” said Richard L. Gelfond, CEO of IMAX Corporation. “The distinct attributes of our business and brand enable IMAX to help lead the global film industry out of the pandemic – drawing audiences back to the theatres and driving revenue across the ecosystem, as IMAX continues to grow its global footprint, box office, and market share.”
“Through our unique global footprint, we continue to see firsthand that where audiences feel safe and the virus is under control they will return quickly to the theatres. Audiences across Asia continue to rediscover the theatrical experience in impressive numbers, driving record-breaking box office and accelerating the continued shift to blockbusters at the multiplex. As Hollywood tentpoles return to theaters, the recovery is spreading to North America and key additional markets including Russia, and Saudi Arabia with the summer season ahead.”
“As the pandemic recedes, we see clear evidence of global consumers, who’ve been stuck at home with limited entertainment options, emerging to seek out experiences that transcend the ordinary. The IMAX Experience is at once accessible and affordable yet immersive and transporting. With cinema among the most significant out-of-home entertainment experiences to come back online, we believe IMAX is well-positioned to capitalise on this movement.”
“IMAX remains very confident in its leadership position in out-of-home entertainment and continues to explore ways to capitalise on the strength of its brand and technology for the in-home and streaming market as well. Our IMAX Enhanced initiative now encompasses more than 25 device manufacturer and streaming partners across Asia, Europe, and North America, and we recently announced a joint-venture with a cutting-edge artificial intelligence firm to explore solutions for high-speed image enhancement across consumer devices and streaming platforms.”
IMAX delivered global box office of $110 million for the quarter, marking the Company’s first year-over-year quarterly box office growth since the pandemic began. Results were driven by the strong rebound of moviegoing in Asia and encouraging performances at the multiplex as other global markets reopen. For the quarter, IMAX achieved record-breaking Chinese New Year opening weekend results; its number-one and number-two highest grossing Japanese local language releases of all time; and its strongest North American opening of the pandemic period with “Godzilla vs. Kong,” which also performed well in key markets including Mexico, Russia, Spain, and Saudi Arabia.
IMAX reported first quarter 2021 revenues of $38.8 million, gross margin of $17.3 million, and a net loss attributable to common shareholders of ($14.8) million, or ($0.25) per diluted share. IMAX achieved positive EBITDA per Credit Facility(1) and its first quarter of year-over-year EBITDA growth since the onset of the pandemic. In the first quarter 2021, the Company continued to strengthen its balance sheet, amending its credit facility and raising $230 million of convertible notes. As a result of the transactions, IMAX added more than $200 million in total available liquidity and reduced its pro forma annual cash interest costs by $4.3 million.
IMAX first quarter 2021 net loss attributable to common shareholders reflects the impact of COVID-19 on the Company’s network, including theatre closures and capacity restrictions, in addition to a non-cash valuation allowance to reduce the value of deferred tax assets of $7.0 million or $0.12 per share. However, the Company also benefited from a $5.2 million gain on the sale of its investment in Maoyan Entertainment ($3.7 million attributable to common shareholders) and $1.5 million of COVID-19 government relief benefits.
Additionally, IMAX today announced that Patrick McClymont, Chief Financial Officer of IMAX, will be leaving the Company to become Chief Financial Officer of a private company. McClymont, who has served in the role since 2016, will step down next month. Joseph Sparacio, who preceded McClymont as Chief Financial Officer of IMAX and more recently served as Chief Financial Officer of Entertainment One, will temporarily rejoin the Company to serve as Interim Chief Financial Officer of IMAX while a search is conducted to fill the role permanently.
“On behalf of IMAX, I want to thank Patrick for his significant and valued contributions to the Company throughout his tenure,” said Gelfond. “He is a strategic, thoughtful executive and we wish him and his family all the best of luck in their new adventure. IMAX is in a strong financial position with real momentum as we grow our network and brand throughout the world and I am confident that momentum will continue without interruption as we search for a successor.”