- Adjusted EPS of $0.22, up 214% over prior-year period, attributable to robust global box office growth and operating expense leverage
- Global Box Office of $272 million, up 64% from Q1 2015, driven by strong growth domestically and continued strength in international markets.
- Revenues increased 48% from prior-year period to $92.1 million, primarily due to strong box office
- Adjusted EBITDA grew 97% year-over-year to $31.5 million, resulting in adjusted EBITDA margins of 37.4%, up over 1,000 basis points from Q1 2015
- Signings growth of 71%, with 36 new signings up from 21 in Q1 2015
IMAX Corporation has reported first-quarter 2016 revenues of $92.1 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of$31.5 million, and adjusted net income after non-controlling interest of $15.5 million, or$0.22 per diluted share, representing a 214% increase over the prior-year period. GAAP net income after non-controlling interest was $9.5 million, or $0.14 per diluted share. The Company also reported a first-quarter global per-screen average of $284,400, up 40% over Q1 2015. For reconciliations of adjusted net income to reported net income and for the definition of adjusted EBITDA, please see the tables at the end of this press release.
"2016 is off to an exceptional start for IMAX," said IMAX CEO Richard L. Gelfond. "The pace of IMAX® theatre signings, installations and box office growth, both domestically and globally, continues to drive real momentum in the business. We saw strong financial results in the first quarter, with 48% revenue growth, over 1,000 basis points of EBITDA margin expansion, and adjusted EPS growth of more than 214% compared to the same period last year. We believe significant opportunity lies ahead as we continue the year with a robust pipeline of films featuring major blockbuster titles including a strong start to the second quarter with The Jungle Book, followed by Captain America: Civil War, Independence Day: Resurgence, Star Trek Beyond, Fantastic Beasts and Where to Find Them, Rogue One: A Star Wars Story and numerous other "IMAX-centric" motion pictures that are ideally sequenced throughout the year. We think we are well-positioned to continue to deliver sustainable long-term growth for our shareholders."
Network Growth Update
The total IMAX theatre network consisted of 1,066 systems as of March 31, 2016, of which 952 were in commercial multiplexes. There were 388 theatres in backlog as of March 31, 2016, compared to 372 in backlog as of December 31, 2015. In the first quarter of 2016, the Company signed contracts for 36 theatres, of which 35 were for new locations and one was an upgrade. In the quarter, the Company also installed 19 theatres, of which 10 were for new theatre locations and nine were upgrades. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.
"We continue to see substantial signings momentum in key geographical areas includingChina, Japan and India," continued Gelfond. "This sustained international expansion, coupled with a North American outlook about which we are very optimistic, reflects the strong opportunity within our business moving forward."
First-Quarter Segment Results
Revenue from sales and sales-type leases was $18.0 million in the first quarter of 2016, compared to $8.6 million in the first quarter of 2015, primarily reflecting nine digital system upgrades in existing locations, compared to two upgrades (one sale and one operating lease) in the first quarter of 2015. In addition, the company installed five full new theatre systems under sales and sales-type lease arrangements in the most recent first quarter, compared to the five sales-type theatres the Company installed in the first quarter of 2015.
Revenue from joint revenue-sharing arrangements was $23.4 million in the quarter, compared to $15.9 million in the prior-year period. Gross margins on joint revenue-sharing arrangements grew from 66.9% in Q1 2015, to 76.9% in the first quarter of 2016. During the quarter, the Company installed five new theatres under joint revenue-sharing arrangements, compared to six in 2015. The Company had 534 theatres operating under joint revenue-sharing arrangements as of March 31, 2016, as compared to 457 joint-venture theatres one year prior.
Production and IMAX DMR® (Digital Re-Mastering) revenues were $29.8 million in the first quarter of 2016, compared to $17.7 million in the first quarter of 2015. DMR gross margins grew from 74.8% in Q1 2015, to 76.6% in the first quarter of 2016. Gross box office from DMR titles was $272.0 million in the first quarter of 2016, compared with$165.6 million in the prior-year period. The average global DMR box office per screen in the first quarter of 2016 was $284,400 compared with $202,900 in same period last year.
Gross margin of 56.6% compared to 57.8% last year, which was impacted by the installation of nine digital upgrades under sales and sales-type lease arrangements. Excluding the impact of these upgrades, gross margin grew 480 basis points from 58.6% to 63.4%.
Operating expenses, excluding stock based compensation, were lower than the prior year period and contributed to the significant operating expense leverage realized in the first quarter. Adjusted EBITDA margins of 37.4% grew over 1,000 basis points versus a prior year level of 26.9%.
As previously disclosed, the Company repurchased 1,627,645 shares in the first quarter of 2016, which includes 181,227 shares purchased in connection with the Company's long-term incentive plan. The Company purchased the shares at an average price of $30.98 for a total value of $50.5 million.
On April 20, 2016, the Company's board of directors approved an incremental $50.0 million increase to the repurchase allowance under the Company's previously-announced share repurchase program, for an aggregate repurchase allowance of $200.0 million. All other terms of the repurchase program remain unchanged. In addition, on February 22, 2016, the Company amended the terms of its credit facility to increase the general restricted payment basket thereunder (which covers, among other things, the repurchase of shares) from $150.0 million to $350.0 million in the aggregate after the amendment date.
2016 DMR Films:
In addition to the 11 IMAX DMR films released to the IMAX theater network during the first three months of 2016, 17 additional IMAX DMR films have been announced so far to be released in the remaining nine months of 2016:
- The Crew: An IMAX 3D Experience (Russia-1 Channel, April 2016, Russia only);
- The Jungle Book: An IMAX 3D Experience (Walt Disney Studios, April 2016);
- Captain America: Civil War: An IMAX 3D Experience (Walt Disney Studios, May 2016);
- X-Men: Apocalypse: An IMAX 3D Experience (20th Century Fox, May 2016);
- Alice in Wonderland: Through the Looking Glass: An IMAX 3D Experience (Walt Disney Studios, May 2016);
- Warcraft: An IMAX 3D Experience (Universal Studios, June 2016);
- Finding Dory: An IMAX 3D Experience (Walt Disney Studios, June 2016);
- Independence Day: Resurgence: An IMAX 3D Experience (20th Century Fox, June 2016);
- The Legend of Tarzan: An IMAX 3D Experience (Warner Bros. Pictures, July 2016);
- Ghostbusters: An IMAX 3D Experience (Sony Pictures, July 2016);
- Star Trek Beyond: An IMAX 3D Experience (Paramount Pictures, July 2016);
- Suicide Squad: An IMAX 3D Experience (Warner Bros. Pictures, August 2016);
- Deepwater Horizon: The IMAXExperience (Lionsgate Entertainment, September 2016);
- The Duelist: The IMAX Experience (Non-Stop Production LLC, October 2016, Russiaonly);
- Doctor Strange: An IMAX 3D Experience (Walt Disney Studios, November 2016);
- Fantastic Beasts and Where to Find Them: An IMAX 3D Experience (Warner Bros. Pictures, November 2016); and
- Rogue One: A Star Wars Story: An IMAX 3D Experience (Walt Disney Studios,December 2016).
In addition, the Company will be releasing an IMAX original production, A Beautiful Planet, on April 29, 2016 and a documentary film, Voyage of Time, on October 7, 2016.
To date, the Company has announced the following 9 titles to be released in 2017 to the IMAX theater network:
- Attraction: An IMAX 3D Experience (Art Pictures Studio, January 2017, Russia only);
- The Maze Runner: The Death Cure: The IMAX Experience (20th Century Fox, February 2017);
- Wolverine: The IMAX Experience (20th Century Fox, March 2017);
- Kong: Skull Island: An IMAX 3D Experience (Warner Bros. Pictures, March 2017);
- Guardians of the Galaxy Vol. 2: An IMAX 3D Experience (Walt Disney Studios, May 2017);
- Pirates of the Caribbean: Dead Men Tell No Tales: An IMAX 3D Experience (Walt Disney Studios, May 2017);
- Spider-Man: Homecoming: An IMAX 3D Experience (Sony Pictures, July 2017);
- Thor: Ragnarok: An IMAX 3D Experience (Walt Disney Studios, November 2017);
- Star Wars: Episode VIII: An IMAX 3D Experience (Walt Disney Studios, December 2017);
The Company remains in active negotiations with all of the major Hollywood studios for additional films to fill out its short and long-term film slate, and anticipates that a similar number of IMAX DMR films will be released to the IMAX network in 2016 to the 44 films that were released to the IMAX network in 2015.
Click here for the full press release, including balance sheets and theater signings and installations.
Source: IMAX Corporation