Imax Quarterly Loss Widens on Transition to Digital
Imax Corp. (IMAX), the chain of giant- screen movie theaters, reported a wider fourth-quarter loss as it makes the transition to digital-projection systems.
The net loss expanded to $10.1 million, or 25 cents a share, from $9.21 million, or 23 cents, a year earlier, Imax said in a statement today. Merriman Curhan Ford & Co. analyst Eric Wold estimated a loss of 14 cents. Sales fell 11 percent to $32.3 million.
Imax had a $4 million writedown related to its conversion to digital-projection from film-projection systems, according to the statement. The switch to digital, which the company plans to start in the second half of the year, will eliminate film costs that might be prohibitive for some studios, Chief Executive Officer Bradley Wechsler said in an interview in December.
The company also recorded a $2.5 million gain from discontinued operations related to the sale of a theater in Providence, Rhode Island. Excluding the writedown and gain, the net loss would have been 21 cents a share.
``With the imminent launch of our digital product, the Imax story has moved from one of development to one of execution and implementation,'' Wechsler and Co-Chief Executive Richard Gelfond said in the statement.
The company said it signed agreements for 107 Imax theater systems in the fourth quarter, compared with nine the year earlier. An agreement in December to install 100 digital- projection systems in AMC Theatres is the largest in Imax history, the company said.
``The pending introduction of a digital system plus more joint venture deals should, in our opinion, reaccelerate Imax theater growth and profitability,'' Wold wrote today in a note to investors. Wold, based in New York, recommends investors buy Imax shares and owns them.
Imax declined 12 cents, or 1.8 percent, to $6.62 at 4 p.m. New York time in Nasdaq Stock Market trading. The Mississauga, Ontario-based company has lost 2.9 percent this year.
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