IMAX CEO says digital conversion to benefit company

SmallCapInvestor.com reporter Jennifer Schonberger is reporting from the 20th Roth Capital Partners Annual OC Growth Stock Conference this week in Dana Point, Calif. The conference features presentations from more than 300 small-cap companies.

After 40 years of being reliant on analogue for film production, IMAX Corp. (Nasdaq: IMAX) has converted its antiquated business model to digital and formed joint ventures with movie studios and theaters that, according to IMAX’s CEO, will turn around the ailing company next year.

With its analogue model, the maker of digital and film-based motion picture technologies and large-format two-dimensional and three-dimensional film presentations had astronomical costs upfront that made it difficult to expand its movie offerings.

“IMAX film prints were the size of Volkswagons and they weighed about 400 pounds,” said Richard Gelfond, CEO of IMAX, in a presentation yesterday at the Roth OC Growth Stock Conference in Dana Point, Calif. “More importantly, they cost $25,000 per print 2D and $40,000 per print in 3D. In the digital world, it’s a hard drive and the cost of the print rounds out to free.”

Last year was a transitional one for the company, in which IMAX committed its resources to amending its business model for the transfer to digital.  

“Going digital will enable IMAX to cut costs, expand film offerings and boost revenues and earnings,” Gelfond said. “We will be cash-flow positive this year. The third and fourth quarters next year will see a real turnaround with sales of digital picking up.”

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