UPDATED with details from management conference call:
Imax has significant exposure in China but is growing rapidly around the world. Over 70% of its theaters are in international markets. It’s currently got 1,529 commercial theaters worldwide and sees that potentially expanding to 3,300 locations.
“We are clearly facing headwinds in China. We are grateful that all our employees are accounted for and healthy. At this time, all theaters in the country remain closed [but] before the closures, the China business was performing well and had strong momentum following a very successful 2019,” Gelfond said.
Imax ended the year with 702 locations there, up 13%, and a box office tally of $366 million, up 9% and about a third of its total of $1.1 billion. “Overall. we are encouraged by the long-term trajectory in China. The coronanavirus is a serious short-term challenge [but] we see it as a rare, out-of-the-ordinary event that will pass and business will rebound once the situation normalizes … We remain long term as excited about China as we have ever been.”
But Gelfond said it’s impossible to predict when the theaters will reopen. “There are a lot of issues, not just the slowdown of the infection but getting infrastructure back and what government policies are, and certainly we are not smart enough to predict that.” He noted small positives recently like the fact that the number of cures have outpaced new infections and the virus continues to be mostly contained in the area of Wuhan city and Hubei province.
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