May 12, 2008--IMAX Corporation today reported that it recorded a net loss per diluted share of ($0.25) for the first quarter of fiscal 2008, compared to a net loss per diluted share of ($0.12) for the first quarter of fiscal 2007. At the same time, the company announced that its pending digital roll-out was on schedule and that it had added DreamWorks Animation's Magadascar 2 to the 2008 film slate.

IMAX Co-Chief Executive Officers Richard L. Gelfond and Bradley J. Wechsler stated, "As anticipated, our first quarter results reflect the transitional nature of 2008 from a financial perspective as we continue implementing our key joint venture revenue sharing and digital initiatives. From a strategic standpoint, however, we are very encouraged by our accomplishments to date and believe that the company is well positioned to benefit both financially and operationally from the steps we are taking. We continue to expect improved results in the fourth quarter of 2008 and profitability in 2009."

The company signed agreements for 66 IMAX theater systems in the first quarter of fiscal 2008, compared to 13 in the first quarter of 2007. To date, IMAX has signed joint revenue-sharing agreements with prominent exhibitors for 146 theaters. To assist in funding its digital joint venture rollout, the company entered into two significant financing transactions last week, one with Wachovia Capital Finance Corporation to increase future availability and modify other terms under the company's existing credit facility, and one with the Douglas family, IMAX's largest shareholder, for the sale of 2,726,447 million common shares in a private placement at market prices, for an aggregate purchase price of $18.0 million.

"Our transition from a film to a digital platform is on track, and we are fast approaching the launch of our highly anticipated digital product. Importantly, we believe we are well positioned to fund our digital and joint venture rollouts thanks to our two recently announced financing agreements, which we expect will ultimately leave us with approximately $55-60 million in funding. The implementation of our joint venture agreements should significantly transform IMAX, and we are pleased to have the resources to roll out our 100-theater JV deal with AMC Entertainment, Inc., our 31-system JV deal with Regal Cinemas, Inc., and to pursue other joint venture revenue-sharing opportunities in the future. We are encouraged by the level of interest we continue to see in IMAX, and believe this will ultimately translate into strong network growth and recurring revenues," said Messrs. Gelfond and Wechsler.

On the film side, on May 9 the company released Warner Bros.' Speed Racer: The IMAX Experience. This family adventure from The Wachowski Brothers, the creators of The Matrix trilogy, is based on the hit animated series created by Tatsuo Yoshida and grossed $1.9 million on 84 screens over its opening weekend.

Regarding film performance in the first quarter of fiscal 2008, the company noted that the seasonally weak quarter faced an especially difficult year-over-year comparison given the strong IMAX DMR release of 300: The IMAX Experience in the first quarter of last year. The Spiderwick Chronicles: The IMAX Experience opened on February 15 and grossed $6.8 million in IMAX theaters. Shine A Light, the Rolling Stones concert film directed by Academy Award-winning filmmaker Martin Scorsese, opened April 4 and the IMAX release has grossed approximately $3.9 million to date.

"While we were disappointed that Spiderwick and Shine a Light did not perform as well as we had hoped, we remain very optimistic about the films on our slate for the balance of the year and beyond," stated Messrs. Gelfond and Wechsler. "We have already announced three films for 2009 and 2010 as part of our deal with DreamWorks Animation, and have several great prospects to fill out future film slates."

Speed Racer will be followed on June 8 by the release of the DreamWorks Animation film Kung Fu Panda: The IMAX Experience. The next installment in the Batman series, The Dark Knight: An IMAX Experience, will follow in July. The company will again partner with DreamWorks Animation to release Madagascar 2: The IMAX Experience for a two-week run beginning November 7. Finally, Harry Potter and the Half Blood Prince: An IMAX 3D Experience is scheduled for November.

November's two-week Madagascar 2 run is a further endorsement of the company's pending transition to digital technology. Digital's virtual elimination of film prints, allowing studios to recoup a higher return on their pictures over shorter periods of time, was a significant factor in the deal with DreamWorks. The company expects 35 digital theaters to be up and running in time to exhibit this film.

For the three months ended March 31, 2008, the company's total revenues were $23.5 million, as compared to $26.8 million reported for the prior year period. Systems revenue was $12.5 million versus $13.1 million in the prior year period. The company recognized revenue on four theater systems that qualified as either sales or sales-type leases in the first quarter of 2008, as compared to five in 2007.

For the first quarter of 2008, film revenues were $7.4 million, as compared to $9.1 million in the first quarter of 2007. This included Production and IMAX DMR revenues of $2.9 million compared to $4.6 million a year ago. Film distribution revenue was $2.8 million for the quarter, as compared to $3.4 million in the first quarter of 2007. Postproduction revenue was $1.7 million for the quarter, as compared to $1.1 million in the first quarter of 2007. Theater operations revenue was $2.8 million in the first quarter of 2008, as compared to $4.1 million in the first quarter of 2007.

Selling, general and administrative expenses were $12.4 million in the first quarter, up from $10.3 million a year ago. Research and development costs increased to $2.5 million in the first quarter of 2008 as compared to $1.5 million in the first quarter of 2007, largely related to investments in digital technology. Legal and professional fees (included in selling, general and administrative expenses) increased to $3.1 million compared to $2.4 million in the first quarter of the prior year.

At the end of the first quarter, the company's cash position was $18.1 million, which represents an increase from the cash position at the end of the fourth quarter of fiscal 2007.