IMAX China Reports Full-year 2019 Financial Results
GREATER CHINA HIGHLIGHTS
Achieved record IMAX China box office of US$365.8 million,up 8.7% year-on-year and 14% in RMB terms in mainland China.
Record revenue of US$124.3 million,up 5.8% year-on-year,driven by box office growth that outperformed the industry,and adjusted net profit of US$44.6 million.
The IMAX China network reached 717 systems as of Dec 31,2019,with an additional 253 systems in backlog,including a 40-theatre deal signed with CGV featuring IMAX with Laser® projection systems.
Announced the Board of Directors' recommendation to pay a final dividend for year 2019 of US$0.02 per share,or approximately US$7 million,representing an earnings payout ratio of 33%,consistent with prior years.
SHANGHAI,Feb 20,2020 -- IMAX China Holding,Inc. ("IMAX China" or the "Company",HKG: 1970) today reported full-year 2019 Greater China revenue of US$124.3 million,up 5.8% year-over-year,primarily driven by 11.0% growth in our network business on the back of our record-breaking box office performance. Gross profit of US$76.6 million represented 61.7% of revenue. Adjusted profit for full-year 2019 came in at US$44.6 million,up 0.6% from the prior year. For adjustments to profit for the period and a full detail of financial results,please refer to the corporate filing posted with the Hong Kong Stock Exchange or to the earnings results posted on the Investor Relations section of the IMAX China web site (http://www.imax.cn/investor).
"For the year ended 2019,we hit new records across multiple metrics including box office,market share,revenue and profit,thanks to strong execution and our refined local programming strategy. Increasing consolidation towards top-grossing movies and gravitation of local content towards 'IMAX-friendly' genres sets a favorable backdrop for our continuous market share gain. Through dividends and share buybacks,we also returned a total of US$33 million capital to our shareholders in the year 2019,reinforcing our commitment to creating long-term value for shareholders," said Richard L. Gelfond,Chairman of IMAX China.
"The recent coronavirus outbreak has resulted in a challenging start to 2020. The safety of our employees and audiences is our top priority. IMAX China and IMAX Corporation strongly supported the decision to postpone the release of the Chinese New Year film slate and closure of theaters in an effort to contain the outbreak. Our thoughts remain with the people of Wuhan and the rest of the country,for whom we wish a swift resolution to this issue," said Mr. Gelfond. "While difficult in the near term,we believe this unfortunate one-time event will not impact the long-term strength of IMAX China's business given our proven offering in the market and China's strong fundamental demand for quality content and social entertainment experiences. We remain optimistic and committed to the long-term growth potential in China."
IMAX China Dividend
IMAX China today announced that its Board of Directors recommended the payment of a final dividend of US$0.02 per share or approximately US$7 million in total based on the total number of shares in issue as of 31/12/2019,representing a 33% earnings payout ratio. The dividend will need to be voted on by the shareholders at the Company's annual meeting.
Network Update
The Company also hit key milestones in network expansion with a total of 717 systems in the IMAX® theatre network in Greater China as of Dec 31,2019. The Company signed agreements for 64 theater systems in full year 2019,exceeding the 60 signed in the prior year. This brings total backlog as of Dec 31,2019 to 253 theater systems. Signings were headlined by a 40-theatre agreement with CGV,the fifth and largest in scale with them in China since our original partnership in 2010 and predominantly featuring IMAX with Laser® projection systems.
The Company installed 95 new and upgraded theatre systems during the full-year 2019,compared to 101 installations in 2018. Among the 717 systems in Greater China as of Dec 31,357 operate under full revenue sharing arrangements,106 under hybrid revenue sharing arrangements and 254 operate under sales arrangements.
Box Office Update
The Company's refined programming strategy,expanding network and customer recognition as the 'go-to' destination for blockbusters drove an 8.7% increase in IMAX China gross box office to US$365.8 million in the full-year 2019,or 14% year-over-year growth in our mainland China box office in RMB terms,compared to industry growth of 5%. In 2019,nine out of the top ten movies were available in the IMAX theatre network.
"As Chinese local IP franchises develop with rising production value,we plan to introduce more IMAX DNA into our film slate,which includes Detective Chinatown 3,entirely shot with IMAX Cameras. We believe there will be strong demand for our highly anticipated Chinese New Year film slate when the films are released,which we anticipate to be later this year at times that optimize their box office potential," said Mr. Edwin Tan,CEO of IMAX China.
Fiscal Year 2020 Company Guidance
The Company continues to work closely with our partners in preparation for when the outbreak subsides and theaters re-open. Given the situation is still evolving,we cannot provide guidance at this time for 2020. We intend to provide more information related to installation guidance when the situation has further stabilized.
Greater China Key Metrics
Twelve months ended Dec 31,
2019
2018
Greater China Signings
Sales
20
30
Revenue Share
43
30
IMAX with Laser Upgrade
1
Total
64
60
Greater China Theatre Installations
Sales
27
27
Revenue Share
56
70
IMAX with Laser Upgrade
12
4
Total
95
101
Greater China Network
Commercial Multiplex
702
624
Institutional
15
15
Total
717
639
Greater China Backlog
253
272
IMAX Greater China Box Office
US$366 million
US$337 million
Film Count
Mainland China
44
45
Hong Kong/ Taiwan Only
7
12
Total
51
57
Film Slate for 2020
To date,IMAX China or IMAX Corporation have announced the following 22 titles for release in 2020. While not all of these titles are assured of release in China,IMAX China would have access to them in the event they secure official Chinese release dates. The Company intends to announce and exhibit additional titles upon confirmation of film release dates in China. All release dates below relate to their US release date unless otherwise noted.
1917: The IMAX Experience (Universal Pictures (domestic) and eOne International (international),January 2020) IMAX expanded aspect ratio;
Bad Boys For Life: The IMAX Experience (Sony Pictures,January 2020);
Dolittle: The IMAX Experience (Universal Pictures,January 2020);
Birds of Prey: The IMAX Experience (Warner Bros. Pictures,February 2020);
The Invisible Man: The IMAX Experience (Universal Pictures,February 2020);
Bloodshot: The IMAX Experience (Sony Pictures,February 2020/Domestic March 2020);
Onward: The IMAX Experience (Walt Disney Studios,March 2020);
I Still Believe: The IMAX Experience (Lionsgate,March 2020);
A Quiet Place: Part II: The IMAX Experience (Paramount Pictures,March 2020);
Mulan: The IMAX Experience (Walt Disney Studios,March 2020);
Beastie Boys Story: The IMAX Experience (Apple,April 2020,select global markets);
No Time to Die: The IMAX Experience (United Artists Releasing (domestic) and Universal Pictures (international),April 2020) Filmed with IMAX cameras;
Black Widow: The IMAX Experience (Walt Disney Studios,May 2020);
Fast & Furious 9: The IMAX Experience (Universal Pictures,May 2020);
Wonder Woman 1984: The IMAX Experience (Warner Bros. Pictures,June 2020) Filmed with IMAX cameras;
Top Gun: Maverick: The IMAX Experience (Paramount Pictures,June 2020) Filmed with IMAX cameras;
Tenet: The IMAX Experience (Warner Bros. Pictures,July 2020) Filmed with IMAX cameras;
Godzilla vs. Kong: The IMAX Experience (Warner Bros. Pictures,November 2020;
Detective Chinatown 3: The IMAX Experience (Wanda Studios,TBD 2020,China) Filmed with IMAX cameras;
The Rescue: The IMAX Experience (Maoyan,China);
Vanguard: The IMAX Experience (Tencent,China); and
Leap: The IMAX Experience (Lian Ray Pictures,China).
Conference Call
The Company will host a conference call today at 8:00 AM Hong Kong Time to discuss its full-year 2019 financial results. To access the call via telephone,interested parties in the US and Canada should dial (866) 548-4713 approximately 5 to 10 minutes before the call begins. Hong Kong callers should dial 800-961-105 and other international callers should dial (647) 484-0477. The conference ID for the call is 2800682. A replay of the call will be available via webcast at www.imax.cn/investor/l-en or via telephone by dialing (888) 203-1112 (US and Canada),or (647) 436-0148 (international). The Conference ID for the telephone replay is 2800682.
About IMAX China
IMAX China is a subsidiary of IMAX Corporation,and was incorporated as a limited liability company under the laws of Cayman Islands. IMAX China was established by IMAX Corporation specifically to oversee the expansion of IMAX's business throughout Greater China. IMAX China trades on the Hong Kong Stock Exchange under the stock code "1970."
About IMAX Corporation
IMAX,an innovator in entertainment technology,combines proprietary software,architecture and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX theatres to connect with audiences in extraordinary ways,and,as such,IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe.
IMAX is headquartered in New York,Toronto and Los Angeles,with additional offices in London,Dublin,Tokyo,and Shanghai. As of Dec 31,there were 1,624 IMAX theater systems (1,529 commercial multiplexes,14 commercial destinations,81 institutional) operating in 81 countries and territories. On Oct. 8,2015,shares of IMAX China,a subsidiary of IMAX Corp.,began trading on the Hong Kong Stock Exchange under the stock code "1970."
IMAX®,IMAX® 3D,IMAX DMR®,Experience It In IMAX®,An IMAX 3D Experience®,The IMAX Experience®,IMAX Is Believing® and IMAX nXos® are trademarks of IMAX Corporation. More information about the Company can be found at www.imax.com. You may also connect with IMAX on Facebook (www.facebook.com/imax),Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).
This press release contains forward looking statements that are based on IMAX Corporation and IMAX China management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include,but are not limited to,references to future capital expenditures (including the amount and nature thereof),business and technology strategies and measures to implement strategies,competitive strengths,goals,expansion and growth of business,operations and technology,plans and references to the future success of IMAX Corporation,IMAX China or any other consolidated subsidiaries of IMAX Corporation (each,a "Group Member",and collectively,"IMAX Group") and expectations regarding the future operating,financial or technological results of any Group Member. These forward-looking statements are based on certain assumptions and analyses made by the IMAX Group in light of its experience and its perception of historical trends,current conditions and expected future developments,as well as other factors it believes are appropriate in the circumstances. However,whether actual results and developments will conform with the expectations and predictions of any Group Member is subject to a number of risks and uncertainties,including,but not limited to,risks associated with investments and operations in foreign jurisdictions and any future international expansion,including those related to economic,political and regulatory policies of local governments and laws and policies of the United States and Canada; risks related to IMAX Group's growth and operations in China; the performance of IMAX DMR films; the signing of theater system agreements; conditions,changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which any Group Member operates; competitive actions by other companies; the failure to respond to change and advancements in digital technology; one Group Member's largest customer accounting for a significant portion of its revenue and backlog; risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by a Group Member; risks related to cyber-security; risks related to any Group Member's inability to protect its intellectual property; general economic,market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; the failure to fully realize the projected cost savings and benefits from any Group Member's restructuring initiative; and other factors,many of which are beyond the control of any Group Member. These factors,other risks and uncertainties and financial details are discussed in IMAX Corporation's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
