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Posted by Gordon McLeod (Member # 33) on 08-13-2006, 02:42 PM:
 
From The Financial Post

Can't find buyer, IMAX says

Barbara Shecter and Lori McLeod
Financial Post

Thursday, August 10, 2006

Imax Corp. shocked investors yesterday, saying it was unable to find a buyer after a five-month auction. At the same time, the company said it is being questioned about its accounting by U.S. and Canadian regulators.

Imax, a giant movie screen technology company, put itself up for sale in March, the second time it has done so without finding a buyer.

Imax shares closed at US$9.63, down US22 cents, on Nasdaq, then plunged to around US$6 in after-hours trading after the news was released.

On a conference call with analysts, Imax executives said there was interest from a dozen potential buyers, but none was willing to pay what the board of directors had hoped for.

When the auction began, analysts said the company could fetch US$550-million, with potential buyers including Warner Bros., Texas Instruments Inc. and U.S. cinema operator Regal Entertainment Group.

But Rich Gelfond, one of Imax's co-chief executives, said yesterday that only private-equity investors were left at the end of the process.

"This is a broken auction; they just have no credibility now. The SEC thing just adds to it," said a potential buyer who walked away from talks with the company earlier.

Imax, which has faced analyst questions about its accounting for 10 years, received a letter from the U.S. Securities and Exchange Commission in late June questioning the timing of revenue recognition, the company said.

The SEC and the Ontario Securities Commission are both interested in Imax's "multiple element accounting," through which the company recognizes revenue in quarters in which it didn't receive the money.

"There's a lot of subjectivity with revenue recognition," said Anthony Scilipoti, executive vice-president at Veritas Investment Research Corp. "Because of the general bias to recognize revenue as early as possible, it's an area regulators are really cracking down on."

Brad Wechsler, Imax's other co-chief executive, said the company is co-operating with regulators and has assurances from auditor PriceWaterhouseCoopers that revenue recognition for theatre systems installed beginning in late 2005 is proper.

"We don't think it was a distraction" during the sales process, Mr. Gelfond said.
He said private-equity investors were not prepared to put as much as US$300-million in cash into the business and were unable to fund the purchase at the price sought through debt.

"Banks were not willing to provide a high amount of debt in this instance [which] made some of them uncomfortable," Mr. Gelfond said.

Imax said interest remains from several parties at "a lower valuation" and bankers Allen & Co. and UBS will pursue these potential buyers.

"We want to leave our options open," said Mr. Gelfond, declining to discuss the price he and the board of directors now hope to receive.
A sale was "something we all wanted," said Mr. Gelfond, "no one more than Brad and I, who are the largest individual shareholders."

It is the second time an attempt to sell Imax has run aground. The company was for sale in the summer of 2000 but was pulled off the market three months later after a profit warning and the near-bankruptcy of movie theatre chains.

Imax leases its giant-screen movie technology to mainstream movie houses, museums and science centres. The company had a market value of $1.2-billion when it was put up for sale in 2000.

Mr. Gelfond said one reason a buyer didn't materialize this time around was "valuation, where the company was trading."

Imax shares climbed as high US$10.85 after the company was put on the block, which valued the company at about US$440-million, before taking into account any takeover premium.

Mr. Gelfond said some potential buyers wanted a bigger network of commercial Imax movie screens "before they were willing to write that size of cheque."

He said the process gave Imax executives "a strategic kick in the rear" and they hope to speed up the rollout of joint venture movie theatres and digital movies that reduce costs by getting rid of expensive prints.

While Imax continues to sign operators on for new projection equipment and giant screens, the poor performance of some recent films, including The Ant Bully, Poseidon and V for Vendetta has slowed openings, the executives said.

IMAX CORP.
Ticker: imax/nasdaq
Close: US9.63, down US22 cents
Volume: 4,305,192
Avg. 6-month vol.: 542,882
 

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Posted by Ben Wales (Member # 92) on 08-13-2006, 03:01 PM:
 
I guess/bet Sony will bid for this, when the price falls and see their own 4K Digital Cinema system replacing 15/70mm in time.

Are Imax Days numbered.....?
 

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Posted by Mark Gulbrandsen (Member # 72) on 08-13-2006, 11:31 PM:
 
And the main problem that exists is that all Imax operators eventually figure out that Imax still takes way too much of their ticket sales.... . Imax always has been and always will be self destructing company. It costs too dam much!

Mark
 

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Posted by Floyd Justin Newton (Member # 1316) on 08-15-2006, 08:16 PM:
 
Mark==

You are sure correct on that!
 

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Posted by Gordon McLeod (Member # 33) on 08-16-2006, 06:49 PM:
 
I don't know mark not very many of the core business of institutions are jumping ship
 

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Posted by Phil Hill (Member # 371) on 08-18-2006, 06:46 PM:
 

quote: Gordon McLeod

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...not very many of the core business of institutions are jumping ship

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quote: Charles Greenlee

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Is it just too expensive?

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quote: Mark Gulbrandsen

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platter systems that scratch prints

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Platter systems don't scratch prints, bad projectionists do.
 

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Posted by Gordon McLeod (Member # 33) on 08-20-2006, 03:58 PM:
 
Mark said "unreliable digital sound systems that were definately not needed."
Right just like D cinema vs 35mm film the analog dubber is best
 

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Posted by Charles Greenlee (Member # 3856) on 08-20-2006, 10:58 PM:
 

quote: Jeffry L. Johnson

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Roundabout or rotary or traffic circle

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Ah yes, I knew that. For some reason I was thinknig of a part of the IMAX was call the roundabout. Oh well, we all have our brainfarts.
 

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Posted by Mark Gulbrandsen (Member # 72) on 08-21-2006, 01:56 PM:
 

quote: Gordon McLeod

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Right just like D cinema vs 35mm film the analog dubber is best

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Yea, Imax shouda stuck with the dubber system! D-Cinema belongs in the majority of non-professionally run booths just so there is at least a slim chance that image would be presented in a decent manner. Now Dubbers and D-Cinema.... man what a cool combo that would be .

Mark
 

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Posted by Joshua Waaland (Member # 287) on 08-21-2006, 02:38 PM:
 
My wife and I went to see an underwater 3-d Imax film while we were in Sydney Australia last week. It looked just like every other Imax theater I have been in since I was a kid. Cold, dark, black and falling apart.

I think Imax just needs to re-invent themselves. They need a new look and a new gimmick. Running feature films is a start but they need to change things up a little. Give people a reason to leave their comfy couch and go to see a film there. Just my two cents.

While visiting friends in Brisbane the week before, they took us to a theater that had something called Gold Class. There were la-z-boy chairs in the auditorium and you could order food and drinks (even alcohol) before the film and they would bring it to you at the time you designated. I think I only counted 12 or so chairs in the theater and the tickets cost about $35 AUD. Not cheap but they filled all the seats and got the people to leave their home and pay the money.
 

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Posted by Phil Hill (Member # 371) on 08-21-2006, 04:30 PM:
 

quote: Joshua Waaland

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It looked just like every other Imax theater I have been in since I was a kid. Cold, dark, black and falling apart.

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While it's a shame that particular IMAX theatre you visited was not "up-to-par", I've been to many, many IMAX venues around the world and most of them were fantastic and very professionally run and operated.

That includes museums, special venue shows like "Back To The Future" and the Disney 48fps simulator ride "Soarin'", as well as the "regular" IMAX theatres.

But I agree with others, sadly, 1570/IMAX has turned into a "gimmick" that will shortly outlive it's novelty and corporate biz practices and fail.
 

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Posted by John Wilson (Member # 269) on 08-21-2006, 05:55 PM:
 
Sydney IMAX opened the same way. Cold and dark. They even bought 15th century vintage color wheels to 'impress' their patrons between shows. Fortunately these are no longer used.

They seem to think it's perfectly fine to have an absolute skeleton staff and put a movie on their 'world's biggest screen' and that'll do. Not sure what they use for 3D glasses now, but when I was there they'd lost a whole bunch of batteries from the electronic glasses from ushers not bothering to 'lock' them in. Instead of getting new batteries, they simply (!) removed them ALL and gave the now non-electronic glasses to the patron to have a lack-lustre 3D 'experience'. If IMAX corporate had known I'm sure they would've shit bricks.

I'm not sure it's ever made a cent.

Must say though that Tim Gunn as Chief there does a good job and deserves kudos simply for putting up with their management's continual bullshit.
 

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Posted by Cameron Glendinning (Member # 3516) on 08-21-2006, 07:23 PM:
 
John, since you left sydney, IMAX here has lost its ground floor Foyer, it is now 100% retail with only a staircase as there only entrance!!!! out of sight, out of mind, Im sure that the business, once one of the most profitable in the world, will only continue to decline. The huge amount of concrete dust caused by the renovations, is not helping, the biggest screen in the world? or dirtiest screen in the world?.

Three Cheers For Tim Gunn, he will always get a big thumbs up from me

 

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Posted by Paul Trimboli (Member # 1509) on 08-22-2006, 05:39 AM:
 
Well IMAX here in Perth was a fantastic place, nothing like the one in Sydney. The building even won an award for design, a really nice place to be even if you were not watching a movie. Everyone used to come in an coment how great it was. There were no issues with building up keep here, but when I went to the Sydney IMAX I thought it was very run down and I was sad to see if looking like it did.

Gold Class does really good bussiness here in Perth also, defiantly something you can get used to! You order your food and its bought in when you organise prior to the movie starting. Amazingly you don't notice the staff! Here are what the seating is like.


 

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Posted by Cameron Glendinning (Member # 3516) on 08-22-2006, 07:39 AM:
 
Part of the reason sydney IMAX is so run down would have to be that it alone generated the tens of millions of dollars to build the most insane australia wide chain of IMAX theatres. Sydney IMAX is located in Darling Harbour, a tourist attraction!!!!! for some reason, they built them in key Cinema locations.
And they promply closed!!!!!!!!!!!
If only they had spent a fraction of what was generated on maintainence, or better still upgrades. Perhaps an IMAX gold class
 

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Posted by Mark Gulbrandsen (Member # 72) on 11-10-2006, 03:59 PM:
 
I am beginning to realize that Imax really is indeed a dead issue.... Not only did it not sell but I am pretty sure that all I saw in the Imax room at Showeast was a tumble weed or two rolling through. I noticed no one in there at all when ever I walked by.

Mark
 

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Posted by Bobby Henderson (Member # 840) on 11-10-2006, 07:38 PM:
 
IMAX is really doing a good job of killing off itself with all those wasteful "DMR" blow-ups of 35mm films. The CGI cartoon blow-up movies aren't much better. And when video-graphed movies like Superman Returns and Star Wars: Episode II are blown up to IMAX, it is very clear the business people involved making these decisions just don't get it at all. Just throwing the "DIGITAL" buzzword out there is NOT any kind of substitute for natively shot extreme-high rez 15-perf 70mm photography.

Superman Returns looked like shit in IMAX.

Basically, the IMAX format is lying in the hospital intensive care unit and these idiot business people are pissing in IMAX's I.V. tube! They need a vicious punch in the left ear.

 

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Posted by Adam Martin (Member # 641) on 11-10-2006, 07:43 PM:
 

quote: Mark Gulbrandsen

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I am beginning to realize that Imax really is indeed a dead issue.

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quote: Adam Martin

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Then why do you keep bringing it up?

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Other than Imax doing some really stupid buisness related things I don't ever remember saying that before. Its the first time I've seen an Imax room go empty for the most part at a trade show.

Brian... A few good films is not going to save them. All those films will far outgross Imax in their 35mm counterparts.

Mark
 

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Posted by Brian Michael Weidemann (Member # 2243) on 11-11-2006, 02:47 AM:
 
Sarcasm is lost on you, Pinky.
 

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Posted by Adam Martin (Member # 641) on 11-11-2006, 10:38 AM:
 
I think I'm in love with Brian.
 

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