Tag - IMAX

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.”

On a conference call, Imax Corp. (Nasdaq: IMAX) executives said the company will see improved financials in 2007, but that the year will be “transitional from a financial perspective” as the company continues its transition to a digital format from prints, co-CEO Bradley Wechsler said. The company is paying for theaters to update to its new digital delivery system and hopes the cost savings to theater owners will help the company expand its network, Wechsler said.

This morning, the company restated its financials back to 2002. Imax also said it will finally file its last five quarterly statements with the SEC today. The company changed its recognized revenue practices – now only treating completed and signed-for new installations will count as recognized revenue. Previously, the company booked theater components installed in old locations.

Wechsler also announced that the company has 19 new deals during the first half of the year.

For the first quarter ended March 31, the company said it lost $4.9 million, or $0.12 per share, compared with a $23.3 million loss, or $0.15 per share, in the same period of 2006. First-quarter revenue rose to $27.2 million, from $23.3 million a year earlier. The company saw record revenues from 300 and Spider-Man 3, Wechsler said. Imax expects its future lineup to be strong as well, with the big-budget CGI movie Beowulf released this fall and a new Batman movie being released in summer 2008, he said.