Imax Shows Impressive Gains

Jul. 4.11 | About: IMAX Corporation (IMAX)

Imax theaters (NYSE:IMAX) have taken the summer by storm as Imax screens have outperformed the likes of competitors such as RealD (NYSE:RLD). June has been an extremely strong month for Imax. Super 8 has grossed $10 million in Imax so far and last week's box office hit Cars 2 averaged $24,000 an Imax screen. These are impressive figures which catch the eye of exhibitors around the world. Most important though is the release of Transformers: Dark of the Moon. Michael Bay shot part of the film using Imax cameras which adds to the element of it being an Imax must-see.

How have the consumers responded? Since the release of the third installment of Transformers on Tuesday night Imax theaters have averaged $75,000 per screen internationally and a strong Fourth of July Imax per screen average of at least $60,000 for the U.S. Domestic market, which is a new record for Imax and in turn should result in real demand from exhibitors for more Imax screens. Better results, which more than justify and beat the premium of an Imax ticket over those of competitors like RealD's 3D theaters. Furthermore, Transformers has only been playing in 60% of the domestic Imax theaters, allowing for incremental gains as Transformers expands to all Imax theaters until the release of Harry Potter.

As Imax's second quarter ended last night, we will see a very informative earnings report on July 30th as the backlog has seen full capacity. Joint revenue and film revenue has been the strongest ever, considering screen growth since the likes of Avatar. Increased theaters allows for more Imax maintenance, operations, and an increase in theater sales and installations. Imax box office has broken over $100,000,000 for the quarter and usually nets around 7% and upwards of 13% of this from its joint revenue agreements and film agreements respectively. (See investor presentations.)

Harry Potter and the Deathly Hallows: Part 2, the last of the series, and the full run of Transformers are poised to bring in box office records and Imax still has
more films to announce for the third quarter. Looking past Q3, a strong fourth quarter will provide for some eventful gains. These are the announced Q4 Imax films so far;

  • Real Steel
  • Puss n' Boots
  • Happy Feet
  • Mission Impossible: Ghost Protocol
  • Tintin

Mission Impossible will be a December blast with trailers grabbing strong attention six months ahead of time. Exhibitors will take a strong look at these recent gains and future prospects.

Disclosure: I am long IMAX.