IMAX Exploring Lower Cost Approach for Private Theatre
IMAX CEO Richard Gelfond tells investors the company is bringing together partners to deliver a lower price point in-home solution that includes hardware, software and content.
In its quarterly investor conference call, CEO Richard Gelfond noted, “As you know over the past couple of years we have been doing due diligence on some in-home options. We have sold a few ultra-high-end home theater systems, which has provided an entry point into the home theater market and is allowing us to gain a better understanding of the potential in this business area.”
He continued, “In parallel, we’ve been putting together the pieces to create an integrated, end-to-end home theater solution at a lower price point market that would include hardware, software and content. To this end, we are in the midst of identifying the right partners for such an endeavor. Rest assured that cash flow growth is our priority, so if we do anything, it will be done in a measured way that doesn’t risk significant capital.”
Overall, the company reported a strong Q3, signing 99 new theaters to IMAX, bringing its year-to-date total to 158. In 2012, the company added 142 theaters. The company has a historical high of 356 theaters in its backlog. There are currently 785 total IMAX theaters worldwide. IMAX had third quarter revenues of $51.7 million, or 6 cents per share.
The company was bolstered by the release of “Gravity,” the George Clooney/Sandra Bullock hit space movie. According to Gelfond, IMAX theaters have accounted for 22 percent of the total box office gross for the film on less than 4 percent of the screens.
Regarding the IMAX Private Theatre initiative, Gelfond added, “Our goal is to spend efficiently in areas that can produce long-term growth and cash flow for the company. We believe in our business model and expect expanding margins and cash flow over the long term. We are spending small amounts of cash to explore potential new business ideas that can supplement the growth in our core business over time.”