IMAX China Reports Half-year 2020 Financial Results
GREATER CHINA HIGHLIGHTS
(Note: Percentage and other changes refer to first-half 2019 unless otherwise noted)
401 out of IMAX China's approximately 700 theatre network in Chinese mainland have resumed operations under the China Film Administration's guidelines. Including the Hong Kong and Taiwan network,411 IMAX Greater China theatres are open as of the reporting date.
IMAX China signed 22 deals in the first half of 2020,led by a 20-theatre agreement with longtime partner and industry leader Wanda Film,and a new agreement at the highly anticipated Universal Beijing CityWalk.
Backlog reached 271 systems as of June 30,2020.
Revenue of US$6.7 million,down 89% year-over-year,with an adjusted net loss of US$15.5 million due to the adverse impact of COVID-19 and the temporary closure of most of the theatre network.
The Company maintains a strong balance sheet with US$73.8 million in net cash as of June 30,2020.
Approval of a stable interim dividend of approximately US$7 million (US$0.02 per share) for the first half of 2020.
SHANGHAI,July 29,2020 --IMAX China Holding,Inc. ("IMAX China" or the "Company",HKSE: 1970) today reported half-year 2020 Greater China revenue of US$6.7 million,gross and adjusted loss of US$4.0 million and US$15.5 million,respectively. For adjustments to profit (loss) for the period and a full detail of financial results,please refer to the interim results announcement posted with the Hong Kong Stock Exchange or on the Investor Relations section of the IMAX China web site (http://www.imax.cn/investor).
Loss of box office and other revenue due to the closure of approximately 700 IMAX theatres in Chinese mainland from January 24,2020,through to the end of the reporting period,and a decrease in theatre system installations during the COVID-19 outbreak drove results down in the first-half of 2020. Many theaters in Chinese mainland were given permission to start reopening on July 20,2020 under China Film Administration's guidelines which include certain safety protocols.
"We are happy to see theaters reopen and look forward to welcoming back IMAX fans to enjoy their favorite films in an unparalleled experience." said Richard L. Gelfond,Chairman of IMAX China. "IMAX China's financial strength built upon a unique asset-light business model,strong cash position and disciplined cost management over the years has helped us navigate through the unprecedented temporary shutdown of our theatre network. Given our proven product offering,we are confident that consumers cannot wait to return to trusted brands like IMAX for its differentiated entertainment experience and for what shapes to be a formidable content pipeline through 2021," said Mr. Gelfond.
"We believe trends including blockbusterization and local language content gravitating towards IMAX-friendly genres will continue to play out post-COVID,enabling IMAX China to emerge from this crisis with an even stronger foothold," said Edwin Tan,CEO of IMAX China. "The theatrical debut of Bloodshot and Dolittle in Chinese mainland generated an IMAX box office of RMB5.2 million over the past weekend,representing close to 10% box office indexing. We remain optimistic about the long-term growth potential in China and look forward to welcoming back our patrons in the second half of 2020."
IMAX China Dividend
IMAX China today announced that its Board of Directors approved the payment of an interim cash 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 June 30,2020.
Network Update
The Company continued to build new partnerships and expand existing ones during the reporting period. Signings were headlined by a 20-theatre agreement with longtime partner and industry leader Wanda Film,including IMAX with Laser® upgrades at ten of its top-grossing IMAX theatres,in addition to ten IMAX systems at new locations throughout the country.IMAX China's first half also included important agreements with Universal Beijing CityWalk Cinema and the China National Film Museum's laser upgrade. This brings total backlog as of June 30,2020 to 271 theater systems.
As of June 30,there were 714 systems in the IMAX® theatre network in Greater China,of which 358 operate under full revenue sharing arrangements,104 under hybrid revenue sharing arrangements and 252 operate under sales arrangements.
Fiscal Year 2020 Company Guidance
With theatres having reopened only for a week at the time of this press release,the Company would defer installation guidance for the year of 2020 until we have greater visibility. The Company continues to work closely with its partners and intends to update the market when more information is available.
Greater China Key Metrics
Six months ended Jun 30,
2020
2019
Greater China Signings
Sales
12
8
Revenue Share
43
IMAX with Laser Upgrade
10
Total
22
51
Greater China Theatre Installations
Sales
1
5
Revenue Share
2
19
IMAX with Laser Upgrade
6
Total
3
30
Greater China Network
Commercial Multiplex
699
647
Institutional
15
15
Total
714
662
Greater China Backlog
271
298
IMAX Greater China Box Office
US$7.4 million
US$236 million
Film Count
Mainland China
22
HK/ Taiwan Only
8
4
Total
8
26
Film Slate for 2020
To date,IMAX China or IMAX Corporation have announced the following 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.
Bloodshot: The IMAX Experience (Bona,July 2020 in China);
Dolittle: The IMAX Experience (Universal Pictures,July 2020 in China);
Interstellar: The IMAX Experience (Warner Bro. Pictures,August 2020 in China) (re-release);
1917: The IMAX Experience (Alibaba Pictures,August 2020 in China) IMAX expanded aspect ratio;
Ford vs. Ferrari: The IMAX Experience (Walt Disney Studios,August 2020 in China);
Bad Boys For Life: The IMAX Experience (Sony Pictures,August 2020 in China);
Harry Potter and the Sorcerer's Stone: The IMAX Experience 3D (Warner Bro. Pictures,August 2020 in China)
Tenet: The IMAX Experience (Warner Bros. Pictures,August 2020 (International); September 2020 (U.S.)) Filmed with IMAX cameras;
Wonder Woman 1984: The IMAX Experience (Warner Bros. Pictures,October 2020) Filmed with IMAX cameras;
No Time to Die: The IMAX Experience (Universal Pictures,November 2020) Filmed with IMAX cameras;
Black Widow: The IMAX Experience (Walt Disney Studios,November 2020);
Dune: The IMAX Experience (Legendary East,December 2020) Filmed in IMAX;
Mulan: The IMAX Experience (Walt Disney Studios,TBD);
The King's Man: The IMAX Experience (Walt Disney Studios,TBD);
Onward: The IMAX Experience (Walt Disney Studios,TBD);
Detective Chinatown 3: The IMAX Experience (Wanda Studios,TBD,China) Filmed with IMAX cameras;
The Eight Hundred: The IMAX Experience (Huayi Bros.,China) Filmed with IMAX cameras;
The Rescue: The IMAX Experience (Maoyan,China) IMAX expanded aspect ratio;
Leap: The IMAX Experience (Lian Ray Pictures,China); and
Vanguard: The IMAX Experience (Tencent,China).
Conference Call
The Company will host a conference call today at 7:30 AM Hong Kong Time to discuss itshalf-year 2020financial 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 6095229. 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),or 800-901-108 (Hong Kong). The Conference ID for the telephone replay is 6095229.
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. Shares of IMAX China trade on the Hong Kong Stock Exchange under the stock code "1970."
About IMAX Corporation
IMAX Corporation,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 Corporation is headquartered in New York,Toronto and Los Angeles,with additional offices in London,Dublin,Tokyo,and Shanghai. As of June 30,there were 1,615 IMAX Theater Systems operating in 81 countries and territories,including 1,527 commercial multiplexes,13 commercial destinations and 75 institutional locations. On October 8,2015,shares of IMAX China,a subsidiary of IMAX Corporation,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 IMAX Corporation 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.
