Monday, July 23, 2007

Imax Moving Forward

Pleasant surprise...

Imax pleased investors Friday with its first-quarter results. Although it posted a loss, the release helps the company move past troublesome accounting problems.

Imax (nasdaq: IMAX - news - people ) announced Friday that its first quarter loss widened to $4.9 million, or 12 cents per share, from $3.7 million, or 9 cents per share a year ago. Analysts polled by Thomson Financial were expecting a loss of 14 cents per share for the period ending March 31.

Shares of the company jumped 47 cents, or 10.7%, to $4.87, as the company also completed its restatement of previous financial results. The move sets the company to move beyond accounting problems that have clouded its stock.

In March, Imax announced it would need to delay the filing of its annual and quarterly reports because it found errors in the accounting of its films, inventory capitalization and taxes. The errors led the company to overstate earnings by about $4.0 million between 2002 to 2006.
The company filed the delayed annual and quarterly reports on Friday. Imax Co-Chief Executives Richard L. Gelfond and Bradley J. Weschler said they were "happy to be moving ahead unencumbered by the overhang of delayed filings."

However, Imax isn't completely clear of its accounting problems yet. Investigations by the U.S. Securities and Exchange Commission and the Ontario Securities Commission are ongoing.
Imax, which is headquarter in Ontario, Canada, operates giant movie screens. It operates 283 theaters in 40 countries. Last year, the company put itself on the auction block. Although the company reportedly received offers from companies like Sony (nyse: SNE - news - people ), it couldn't find an acceptable deal. (See: "Imax Off The Block")

Despite its problems, Imax is drawing movie-goers. Its showing of Harry Potter and the Order of the Phoenix grossed $11.6 million at its first week in Imax theaters. That's the company's biggest opening week ever.

--The Associated Press contributed to this article.