IMAX Corporation (NASDAQ:IMAX; TSX:IMX) and Cinema Park, the exhibition chain owned by Russia's largest media holding company, Profmedia, today announced an agreement to install up to 14 IMAX® theatre systems throughout Russia, beginning in 2010.
The agreement, which marks the single largest European theatre deal in IMAX's 45-year history, was signed as IMAX theatres in Russia and The Commonwealth of Independent States (CIS) continue to produce tremendous box office results. During the past nine months, the seven IMAX theatres in the region have produced some of the highest per screen box office averages in the world.
Under the terms of the agreement, the first three Cinema Park IMAX locations will open prior to the end of 2010, followed by another seven by the end of 2012. The exhibitor has the option to add another four IMAX systems in addition to the ten that are committed. Most of the locations will be in regional markets throughout Russia, expanding the IMAX network beyond the areas of greater Moscow and St. Petersburg. Today's announcement brings the total number of IMAX theatres scheduled to be operating in Russia and the CIS by 2012 to 27, making that region IMAX's third largest market behind the United States and China. The Company's announced number of theatre systems signings year-to-date has increased to 114 worldwide, which compares to 35 system signings in all of 2009.
"The incredible success of the current IMAX theatres in Russia and the attractive economics of IMAX's proven business model gave us more than enough incentive to start rolling out our own IMAX locations across our wide and expanding circuit," said Sergei Kitin, General Director of Cinema Park. "We're very excited to link the famous IMAX brand with our powerful Cinema Park name and to offer our customers across Russia the world's most immersive cinema experience. We look forward to opening the first three locations before the end of this year."
"Signing this large deal in Russia demonstrates how IMAX box office success translates into growth in our worldwide theatre network," said IMAX CEO Richard L. Gelfond. "This new relationship significantly accelerates the growth of the IMAX network in one of our key international markets, and it builds on the momentum of theatre systems signings activity that we have experienced year to date."
Mr. Gelfond continued, "So far this year we have more than tripled the total number of systems signings as compared to 2009, with many of these new locations scheduled to open in 2010 and 2011. We believe this network expansion will have a positive impact on IMAX's future revenues and EBITDA given the upfront revenues from the sales of the systems and recurring revenues from IMAX DMR® releases, theatre maintenance and potential box
"We see tremendous potential for growth in Russia and the CIS, where we continue to see great exhibitor and consumer enthusiasm for The IMAX Experience®," added Larry T. O'Reilly, IMAX's Executive Vice President,
Theatre Development. "Cinema Park's expertise in the regional markets throughout Russia, combined with their well established exhibition brand, makes them an ideal partner to have as we expand our own brand and business
in the region."