IMAX Corporation (IMAX - Free Report) reported second-quarter 2020 adjusted loss of 44 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 49 cents. The figure marked a sharp drop from adjusted earnings of 32 cents per share reported in the year-ago quarter.
Total revenues of $8.8 million missed the Zacks Consensus Estimate by 12% and declined 91.6% from the year-ago quarter.
The year-over-year decrease in revenues was attributed to the closure of substantially the entire theater network of the company and decrease in theater system installations due to the COVID-19 pandemic in the reported quarter.
Category-wise, technology sales, Image Enhancement & Maintenance Services, Technology Rentals and financial income were down 86.4%, 93.3%, 100.5% and 2.8% year over year to $2.6 million, $3.7 million, ($137 K) and $2.5 million, respectively.
IMAX Technology Network Business
IMAX technology network business revenues were $409K, down 99.4% year over year due to decrease in IMAX DMR revenues.
IMAX Corporation Price, Consensus and EPS Surprise
As of Jun 30, 2020, 141 IMAX with Laser systems were installed, and the company’s backlog included 154 new IMAX with Laser systems and 94 upgrades to IMAX with Laser systems.
Gross margin contracted from 56.8% in the year-ago quarter to (86.8%) in second-quarter 2020.
Adjusted EBITDA per credit facility was a loss of $18.5 million, down from $41.4 million in the year-ago period.
Selling, general & administrative (SG&A) expenses decreased 7.3% year over year to $29.7 million.
Research & development (R&D) expenses increased 0.8% on a year-over-year basis to $1.2 million.
Operating income margin contracted from 18.4% in the year-ago quarter to (468.7%) in the reported quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2020, IMAX had cash and cash equivalents of $319 million compared with $352.3 million in the prior quarter.
Cash flow used operating activities was $20.8 million compared with $5.96 million generated in the prior quarter.
Negative free cash flow was $29.8 million compared with positive free cash flow of $3.25 million in the prior quarter.
As of Jul 24, 409 IMAX theaters reopened in China, 172 in the rest of the world and 43 in North America. The company has 624 theaters or approximately 40% of its global network generating revenues in 40 of the 81 countries and territories.
The company is actively preparing to reopen to what is projected to be an IMAX-friendly second-half release slate. By the end of August, the company expects approximately 1,400 screens in 70 markets or 90% of its global network to open.
Zacks Rank & Stocks to Consider
IMAX currently has a Zacks Rank #4 (Sell).
Crocs, Inc. (CROX - Free Report) , SiriusXM Holdings (SIRI - Free Report) and Take-Two Interactive Software, Inc. (TTWO - Free Report) are some better-ranked stocks in the broader consumer discretionary sector, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Crocs and SiriusXM will report results on Jul 30 while Take-Two is set to report on Aug 3.
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