Imax Corp. lost money in the first quarter of 2020 and reported revenue that was down significantly as a result of the global novel coronavirus pandemic.
The ongoing pandemic has had a severe impact on companies across the board, but cinema exhibitors have been grossly impacted as chains around the world have been forced to shut down.
Imax reported a Q1 net loss of $49.4 million, or an adjusted per share loss of 48 cents. During the same quarter last year, the company posted net income of $8.3 million, or earnings of 18 cents per share. Analysts expected the company to report a loss per share of 14 cents, according to a consensus forecast compiled by Yahoo Finance, so this morning’s news was particularly disappointing in that regard.
Revenue for the quarter also took a big hit. The top-line sales figure was down 56% to $34.9 million. It was $80.2 million a year ago. Analysts were expecting Imax to report revenue of $43.6 million, so that was another miss. The 2019 first quarter was also helped by the holdover revenue from DC’s “Aquaman,” which grossed $1.1 billion worldwide.
“Imax is uniquely positioned to manage through a temporary shutdown of theaters as a result of strategic planning which led to our strong financial position, valuable brand, and vast global footprint,” Imax CEO Richard Gelfond said in a statement. “When global economies restart, and theaters reopen, we believe audiences will turn to strong, trusted brands like Imax. In 2019, Imax delivered a record year across global, international, and local language box office — underscoring the strength of our brand and product offering throughout an increasingly diverse geographic footprint.
“We are working closely with our studio partners to reshape our slate in the second half of 2020 and into 2021 — a period that is now scheduled to see an impressive offering of marquee blockbuster films,” he continued. “Operationally, we are focused on ensuring that we can support this rich content pipeline with our proprietary post-production process and our enhanced marketing capabilities. We continue to monitor the situation and carefully plan for the reopening of theaters in China when it is safe. We look forward to circumstances continuing to improve in the market and meeting strong audience demand for immersive filmmaking and entertainment experiences.”
As of the end of March, Imax had cash and cash equivalents totaling $352.3 million. Its debt was $300 million, which was up significantly compared to $18.2 million as of December 31, 2019. As of March 31, Imax’s $300 million credit facility, due June 2023, was drawn in its entirety.
In the last five days of trading, Imax shares have grown more than 14%, but they are down nearly 27% over the last three months — and down more than 50% in the year so far.
In addition to the closure of virtually Imax’s entire theater network, the company said its first-quarter loss was also the result of a $10.2 million provision for credit losses on its theater receivables, also as a result of the pandemic.
Imax’s results also included a deferred income tax charge of $19.7 million related to its decision in the first quarter of 2020 to no longer indefinitely reinvest historical earnings from its Chinese business.