Financial Q4 / Year Results Bode Well For Industry Growth
Gail Chiasson, North American Editor
For the past month or so we’ve been watching the Q4 and full year financial results of several companies in diverse sectors of the industry – including ones that were on quite a downturn during the recession – and from what we’ve seen, it’s now almost full steam ahead.
Here’s a quick summary of what we’ve seen recently from the ever-growing IMAX Corporation, as well as improvements for both Wireless Ronin Technologies Inc. and Lamar Advertising Company, although the latter two are still posting losses.
IMAX reported the highest annual revenues, earnings and EBITDA for any year in its 43-year history. Its annual revenues increased 45% to $248.6 million; 2010 adjusted EBITDA increased 73% to $101.4 million; annual gross box office from DMR titles doubled to $546 million in 2010.
The company’s Q4 revenues increased 28% over the same quarter of 2009 to $69.2 million; reported net income for the fourth quarter of 2010 increased to $54.2 million; adjusted EBITDA Increased 23% to $25.8 million. And IMAX boasted a record number of system installations in Q4 and year 2010. In 2010, the company installed a total of 123 theatre systems, compared to 118 theatre system installations in 2009. (Total installations include both new IMAX theatre systems and the upgrade of existing IMAX film-based theatre systems to digital.
“In 2010, we saw most aspects of our strategy come together,” says Richard Gelfond, IMAX CEO. “The public came to enjoy The IMAX Experience in record numbers; our commercial network grew by 30%, our digital network grew by more than 80%; and we signed new theatres in record numbers. The year’s record revenues and earnings reflect the success of our model.
“The success of the company’s digital strategy and the transformation to a business model that benefits from dual recurring revenue streams became evident through this year’s financial results. When we consider our contracted-in theatre backlog, our announced film slate, film deals we are working on and the pipeline of theatre deals we are working on, we believe we are positioned to grow revenue, adjusted earnings and EBITDA in 2011.”
A total of 16 DMR titles were released on the IMAX platform in 2010, heavily skewed toward major Hollywood blockbusters and including nine of the top 10 films of the year.
Wireless Ronin reported record revenues of $8.6 million in fiscal year 2010, representing a 71% increase year-over-year. Its record gross margin on a percentage basis showed an improvement from 28% for fiscal 2009 to 47% for fiscal 2010. It had record recurring and hosting revenue of $1.3 million, up 142% in fiscal 2010 over 2009. And it showed a reduced quarterly cash burn from $1.8 million in the fourth quarter of 2009 to $1.1 million in the fourth quarter 2010, the lowest level since its initial public offering. Sales from RoninCast software licenses increased 96% fiscal 2010 year-over-year.
Scott W. Koller, Wireless Ronin’s president and CEO, says, “Over the past year, we have successfully demonstrated a business model capable of driving substantial revenue and margin growth. As we move into 2011, we are extremely well positioned to capitalize on these efforts as our customers, such as Chrysler, continue to roll out our technology on a larger scale. We believe the continued decline in hardware costs provides a more rapid ROI for our customers and will accelerate deployments in the future.”
The 71% increase in the Wireless Ronin’s revenue was due primarily to Chrysler, whose sales were reportedly up 457% from the previous year. The Company’s net loss in 2010 totaled $7.9 million, compared to $10.2 million in the prior year. The improvement in the company’s net loss from 2009 to 2010 was primarily the result of a 180% increase in gross margin dollars.
Wireless Ronin’s Q4 2010 revenue increased to $2.9 million, an 89% increase from the prior year’s Q4 of $1.5 million.. The increase in revenue for the fourth quarter of 2010 over the prior year resulted primarily from orders received from Chrysler for its Branded Tower program for 200 of its dealers. The Company reported a fourth quarter net loss of $1.7 million compared to a net loss of $2.2 million a year ago.
For the fourth quarter of 2010, gross margin averaged 46%, compared to a gross margin of 37% in the fourth quarter of fiscal 2009 although down from 50% from Q3 2010. The sequential decline was due primarily to additional costs incurred to fulfill the 200 dealer deployment of the Chrysler Branded Towers in those dealerships and related volume pricing. The company continues to believe its gross margin will improve as its recurring hosting and support revenue base grows.
Darin McAreavey, Wireless Ronin’s senior vice- president and CFO, says, “Our cash burn for the fourth quarter of 2010 of $1.1 million was the Company’s lowest quarterly cash burn since going public and down sequentially from $1.5 million during the third quarter of 2010. Our near term objective continues to be delivering a non-GAAP EBITDA break-even quarter. We believe that our November 2010 capital raise and continued access to our $2.5 million line-of-credit with Silicon Valley Bank provide us adequate working capital to fund our operations through 2011.”
Lamar Advertising Company reported net revenues of $1.09 billion for the twelve months ended December 31, 2010 versus $1.06 billion for the same period in 2009, a 3.4% increase. Operating income year was $139.5 million as compared to $97.6 million for the same period in 2009. Adjusted EBITDA increased to $465.2 million versus $441.4 million for 2009. There was a net loss of $40.1 million for the twelve months ended December 31, 2010 as compared to a net loss of $58.0 million for the same period in 2009.
Free cash flow for year increased 4.3% to $251.5 million as compared to $241.1 million for the same period in 2009. As of December 31, 2010, Lamar had $331.6 million in total liquidity that consists of $239.9 million available for borrowing under its revolving senior credit facility and $91.7 million in cash.
Lamar reported net revenues of $275.7 million for Q4 2010 versus $262.3 million for the fourth quarter of 2009, a 5.1% increase. Operating income was $32.8 million as compared to $20.4 million for Q4 2009. There was a net loss of $7.1 million for Q4 2010 compared to a net loss of $19.7 million for the same period a year ago.. Adjusted EBITDA for Q4 2010 was $115.4 million versus $106.8 million for the fourth quarter of 2009, an 8.0% increase.
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