String of 2004 hits proves groundbreaking for IMAX

LOS ANGELES — With a steady string of box office hits and new demand for its large-screen theater systems, IMAX Corp. reported better-than-expected 2004 fourth-quarter earnings Thursday and raised its 2005 forecast.

The box office success of "The Polar Express: An IMAX(R) 3D Experience" has fueled much of the current momentum for the Toronto-based company with the giant-screen version of the Warner Bros. hit grossing $45 million worldwide.

"Simply put, 2004 was a groundbreaking year for IMAX," co-chairman Bradley J. Wechsler said during a conference call Thursday. "The success of 'Polar' was a transforming event in the company's history because of its positive implications for IMAX."

The company reported net income of $7.8 million, or 19 cents a share, for the quarter ended Dec. 31, compared with a loss of $507,000, or 1 cent a share, in the same period a year earlier.

Revenues were $47.5 million, up from $29.9 million in 2004.

IMAX raised its 2005 earnings outlook to a range of 35 cents to 38 cents per share, up from a preliminary forecast made in October of 32 to 35 cents a share.

IMAX has gone increasingly Hollywood-mainstream in recent years, with selected blockbusters — such as "Harry Potter and the Prisoner of Azkaban" and "Spider-Man 2" remastered for the giant screen with IMAX's DMR process, which allows for a movie to be enlarged for an IMAX screen without compromising picture quality.

The DMR process allows audiences to experience a version of a film that stretches beyond their peripheral view on screens up to eight stories high and 120 feet wide, surrounded by up to 14,000 watts of pure digital sound.

"After 'Polar Express,' the studios really took notice," co-CEO Richard Gelfond said in an interview. "We've already had inquiries from four studios about seven different films for 2006. We think we can do about four to six a year. The studios really understand the box office that an IMAX release can add."

The company is releasing "Robots: The IMAX Experience" today, the same day as 20th Century Fox distributes a regular-screen version of the computer animated film.

Other 2005 movies that will be released in IMAX form the same day as they hit regular theaters are "Batman Begins" on June 17 and "Charlie and the Chocolate Factory" on July 15.

The company signed contracts for 36 theater systems in 2004, up 44 percent from the 25 signings reported in 2003. This included two multitheater agreements to install IMAX systems in China and also added a third Russian exhibitor to the fold.

"We've invented a much lower-cost theater system which has enabled it to go into a lot more multiplexes," Gelfond said. "The level of activity from exhibitors is certainly the best it's been in years."

For the full year, IMAX reported earnings of $10.2 million, or 26 cents per share, compared with $231,000 or 1 cent per share in 2003. Revenue rose to $17.4 million, up from $13.1 million in the previous year.