IMAX Corp. (IMAX) reported strong financial results for the fourth quarter of 2013. Both the top and the bottom line significantly outpaced the respective Zacks Consensus Estimate. Quarterly total revenue was $105.1 million, up 35.7% year over year, surpassing the Zacks Consensus Estimate of $94 million.
Quarterly GAAP net income was $27.8 million or 40 cents per share compared with $12.9 million or 19 cents per share in the year-ago quarter. Fourth-quarter earnings per share of 40 cents were well above the Zacks Consensus Estimate of 30 cents.
Quarterly gross margin came in at 64.1% against 54.8% in the prior-year quarter. Operating margin stood at 38% compared with 21% in the year-ago quarter. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $52.2 million. IMAX also reported fourth-quarter 2013 per screen average of $366,300 compared with $264,000 in the prior-year quarter.
In 2013, IMAX generated around $55 million of cash from operations against $73.6 million in 2012. Free cash flow in 2013 was $12.8 million compared with $38.1 million in 2012. At the end of 2013, IMAX had $29.6 million of cash and cash equivalents and no outstanding debt against $21.3 million of cash and cash equivalents and $11 million of outstanding debt, at the end of 2012.
Segment Wise Results
Sales and Sales-type leases: Quarterly total revenue was $32.6 million, up 61.4% year over year. In the reported quarter, the company installed 24 new theater systems and upgraded 4 digital systems in existing locations.
Joint-revenue sharing arrangement: Quarterly total revenue was $24.5 million, up 44.1% year over year. During the quarter, IMAX installed 30 new theaters. The company had 382 theatres operating under joint revenue-sharing arrangements as of Dec 31, 2013 compared with 316 theatres a year ago.
Production and IMAX DMR (Digital Re-Mastering): Quarterly total revenue was $28.6 million, up 49% year over year.
Category wise Results
In the fourth quarter of 2013, revenues from Equipments and product sales totaled $38 million, up 69.6% year over year. Services revenues were $42.5 million, up 25.1% from the prior-year quarter. Rental revenues were $22.5 million, up 22.6% year over year. Finance Income was $2.1 million, up 3.9% year over year.
Network Growth Statistics
In the reported quarter, the company signed 116 new theaters compared with 28 in the prior-year quarter. Total theater singing, at the end of 2013 was 277 against 142 at the end of 2012. In the fourth quarter, IMAX installed 54 new theaters compared with 43 in the prior-year quarter. Total theater installation, at the end of 2013, was 133 against 125 at the end of 2012.
As of Dec 31, 2013, total theaters in backlog were 407 against 276 at the end of 2012. As of Dec 31, 2013, total IMAX theater network was 837 spanning 57 countries compared with 731 at the end of 2012.
Other Stocks to Consider
IMAX currently carries a Zacks Rank Ran #3 (Hold). Other better-ranked stocks in the movie industry include DreamWorks Animation SKG Inc. (DWA), Lions Gate Entertainment Corp. (LGF) and News Corp. (NWSA). While DreamWorks currently has a Zacks Rank #1 (Strong Buy), both Lions Gate and News Corp. carry a Zacks Rank #2 (Buy).
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