IMAX Corporation (IMAX) Earnings Call Transcript & Summary

Hi. Thank you, everyone, for joining today's Fireside Chat with IMAX's CEO, Rich Gelfond. We're going to have a discussion on IMAX's growth strategy, the future of moviegoing, including PVOD and IMAX's new business initiatives, the current state of execution, including the effects of reopening measures and the impact of the Delta variant, to name a few. Rich has served as IMAX's sole Chief Executive Officer since 2009 and IMAX's Co-Chief Executive since 1996. Since 2015, Mr. Gelfond has also been Chairman and Nonexecutive Director of IMAX's subsidiary, IMAX China Holdings, Inc. My name is Mike Ng. I cover movie theaters and IMAX at Goldman Sachs, and I have the privilege of moderating today's discussion with Mr. Gelfond. We have 40 minutes, inclusive of audience Q&A. If you'd like to ask questions, please feel free to submit your question through the webcast, and I'll ask the question on your behalf. First, Rich, thank you very much for making yourself available. We're excited to have you, and I certainly appreciate your time.

Thanks, Michael. It's obviously a good time to be here, because with everything going on.

Great. Well, let's start off and talk about this past month, Shang-Chi, that was a theatrical-only release that drove a record Labor Day opening weekend. Disney then subsequently announced that 5 of its next 6 titles in 2021 will have at least a 45-day exclusive theatrical release. Also, you had then a move up and no time did I reiterated its place within the schedule. And finally, June's results in select international markets have been really strong. So could you talk a little bit about the implications of some of these developments for reopening? Is this a turning point for the industry?

It absolutely is a turning point, Michael. And I think that -- I think you use Labor Day as the day, but I think you could go back a little before that when Free Guy came out and that did some very strong numbers and our indexing was very high. And it's been a long -- it's been a long pandemic with a lot of up and downs. But I think we're finally, I finally can say that we're there and that the business looks very good going forward. Just to give you some statistics, the month of September isn't over yet. But we believe, for September, our box office will be about the same as it was for the years 2017 through 2019. And as I look into October, and you mentioned a little bit of it, but you have Venom, which has moved back, and that's opening, and that's tracking to a very strong number. And then you have Bond, which is opening a week after that. In fact, in England and some other places it's opening a week earlier than that. So even in part of September to go. The June results you mentioned, June was shot with IMAX cameras, as was Bond by the way, which generally leads us to index market share extremely strong when that happens, and June open to $26,000 of strain internationally. And by the way, the territories were not the highest grossing IMAX territories in the world, there are places like Germany and France and Russia, places like that. And just to give you a sense, $26,000 a screen is similar to what the last spider-man did, and that was one of our top-5 movies of the year during a non-pandemic period of time. You had mentioned that Disney had changed the actual release windows, just to clarify a little bit of that. Every window, every movie that they're releasing in 2021 has a window attached to it this year, including Eternals, which is a big Marvel movie, which comes out after Dune. It's an excellent. And then after Eternals, you Ghost Buster, which is doing very well. Later in the year, you have the next Spiderman, which was done with Marvel and Sony. You have Matrix. I mean it's kind of like a dream lineup for the rest of the year. So if you look at theatrical as a function of what do the numbers look like, where the release is going, I mean, it seems, although it's never this easy, but at this point, I think we've entered kind of a formulaic stage, where it's proven that people are coming to his blockbuster movies. For the first time the studios are releasing them with the actual windows around them. The audience is there for -- Bond is also tracking very well, and the presales are pretty strong globally going into it. So yes, I mean it's been a long march across the desert, Michael, but I can drink the water now.

You mentioned a lot of films, and I definitely want to dive into the film slate for the rest of the year. But before I do, I just want to talk a little bit more about windowing. Rich, you've called premium Video-on-demand, a failed experiment in the past. Could you talk a little bit about your views on PVOD in greater detail? Was PVOD a success for Black Widow? How do you think about the availability of PVOD windows, and whether or not this is something that we'll continue to see studios use? Or is this going to be a relic of the past?

So I want to put it in 2 categories for second, Michael. I think for movies that IMAX does, blockbuster movies, PVOD is something -- is the thing in the past, and I'll explain why in a minute. I think for smaller movies, more niche movies, it's possible that PVOD remains. So why do I think that PVOD is the thing of the past? I mean, you just have to look at the data. And by the way, I give Disney a lot of the credit. I think Disney looked at the data, they said it was an experiment, and they would analyze the results. They saw what the results were around Black Widow. They saw what the results were around Jungle Cruise. Their next few movies, Free Guy and Shang-Chi, they saw those results, and then they decided to go with a theatrical window. And what the results showed was that the day and date release, whether it was PVOD or whether it was straight to a streaming service, significantly cannibalized the theatrical window. So you saw really -- and wasn't just Disney, I mean Warner tried the same thing early in the year, and they've announced that all of their films will have the actual windows, 45 days in 2022. There isn't a studio now that has day and date release patterns for blockbuster. And there's a lot of reasons for that. One of them is piracy. Some of these movies were among the most pirated in history. And you looked at some of the Torrent websites and you look at more people were watching on illegal downloads, so they were watching on the streaming services. And that's not good for the studios or the exhibitors. The studio is my licensed streaming services, but free doesn't really work for their model. So that was one major reason. Another one was when you look at the second week drops after the opening weekend, those were extreme. So on a like-for-like basis, most of the PVOD movies dropped theatrically about 70%, 80%. You look at the drops around Free Guy, Shang-Chi, Quiet Place, F9. I mean those were more in the 40% to 50% range, which is consistent with pre-pandemic levels. I think you also look at how you create an event around the property. And we could use examples like let's go back for the Wonder Woman. The first one did $800 million theatrically. The second one did $150 million theatrically. And I think because once people have access to even legally, turning it on in their home, it just doesn't take the same effort. They say, oh, I'll sample and I'll see how it goes. When they see it, they're eating a snack, they're talking on the telephone or they're texting, they're doing all kinds of things. So it doesn't create a cultural event in the same way. And anecdotally, I think the best example is Shang-Chi. I mean Shang-Chi was really the first cultural event film this year. People are talking about it. People are writing about it. I predict the merchandise as a sell-through will be a lot higher around it. They haven't announced it, but I wouldn't be surprised to see a sequel come out of it. There's a reason that a window existed for decades and decades because you create an event around the property, you made the property much more valuable. And at the same time, you created the ability to sell the same content multiple times. So I'll just be very brief, but F9 is $700 million theatrically without a simultaneous release. And it's streaming value and its ancillary values are all intact. Some of these simultaneous ones, the best ones been around half of that. And they did that and they already ate through their streaming window. And we have that access to what downloads were or what the ancillaries were. But anecdotally, I can tell you and the actions of every studio, it just doesn't make economic sense for the studios or the streaming service.

And shifting over to a discussion around content. IMAX has a relatively stacked slate of upcoming blockbusters for the rest of the year. You mentioned several of them at the onset of our conversation. Can you walk us through your thoughts on the slate for the rest of the year? And is there a particular title that excites you the most that you think could actually be a catalyst that brings more people back into the theaters who have been reticent to come back otherwise?

I mean the data, I'm sure some people are hesitant, Michael, but the data has shown, I think Shang-Chi is about to pass at them for Marvel in terms of domestic box office. And that's during a pandemic and it wasn't known intellectual property. So I don't think it needs an extra year. I think we're pretty much there. And I think that when you look at -- it's actually the one, it's hard, it's like choosing between your children, which are the favorite one to come out. But Bond was shot with IMAX cameras, the Director of Bond, Cary Fukunaga, said after using those cameras, "I feel like I've flown first class, and I don't want to go back to Coach anymore." Dune was shot with IMAX cameras. Denis Villeneuve, the new Director, he kind of went crazy in some of the recent interviews in Harper's Bazaar. He's told his fans, "Go see it in IMAX. Don't watch it -- certainly, don't watch it in other ways, including streaming." And he said -- I'm paraphrasing a band of brothers should be formed that only wants to show things at IMAX and we support each other and do that. By the way, I agree with that. He's a very smart man to say that. And then although there's a lot of other things in there, I've heard great things about the upcoming Spiderman. And I've heard that even from people at Marvel, who are typically modest about their own views about where they're going. So I look at those 3, look at Ghost Busters. I think pretty much all of them, look at Ghost Busters, I think pretty much all of them are very exciting for this year. As I said, I'd be really surprised if there was a hiccup. I think it has to be something not on the grid now.

And can we look out a little bit further and could you just share any early views that you might have on the 2022 slate? It'd be helpful to hear what films you have the highest expectations for? And whether or not there are any films that you think are currently underappreciated and might be able to surprise to the upside?

Sure. So next year's slate is ridiculous in a good way, largely because films got moved out of 2020 and 2021. So you have 4 Marvel films coming out next year. Again, if you ask me to pick the one with the highest potential in that group, it's difficult, but Black Panther 2 clearly has a lot of good heritage behind it, so particular outside levels, but that one in particular. Top Gun and Mission Impossible and Jurassic World are part of next year. I had the privilege of seeing Top Gun. And I think it's one of the best theatrical release I've ever seen. And I think it's going to resonate. It's hard to believe that almost 40 years later, but I'm going -- I'm not going out of the limb, because I've seen it. It's really incredible. I think people have high expectations, but I think it will surprise. I was on the set of Mission Impossible when the restrictions came along and Tom Cruise is still doing stunts and they're beyond anything anyone seen before. Obviously, Jurassic world, it doesn't take a genius to put together IMAX and dinosaurs and get a brand association. I think the public gets that, and we always do really well. And then you're going to find this ironic when I talk about the most unappreciated one of the year. I think that's Avatar. And it comes out at the end of the year. And I know you're laughing, because it's the biggest movie of all time, so how could it be unappreciated. But I don't think people realize that IMAX did over $200 million in IMAX in the original Avatar. And I think we had around 140 screens at the time, and we have roughly 1,700 now. We rereleased Avatar in China and on 1% of the screens, we did 30% of the box office. I think there's an incredible brand association between IMAX and Avatar. I think people -- even though it was released over a decade ago, again, the rerelease in China, I mean, people somehow remember and said I've got to see it in IMAX. So I think it's a dream slate. I'm always picking off the high points for you. There are 2 DC movies, DC Comics coming out next year that we're very excited about. So it's good year in the almost 30 years since I've been at IMAX.

Okay. Well, that's a good segue. You mentioned China, so let's dive in there a little bit more. Could you talk a little bit about some of the growth that you've seen in IMAX in China? It's certainly been really impressive. There's been continued network expansion in China. Are you seeing any slowing growth at all as IMAX gains more market penetration in the country?

So we have about 750 theaters open in China, and we have a backlog, I think, of around another 300. That could be low or high by a little bit, maybe it's 250. And those are going to roll out over the next several years. So that growth has kind of locked in. Last year -- and this to me is one of the more incredible statistics about IMAX -- when the world was closed, we had 70 signings around the world, and I think around 40 of those were in China. So while they were shut down, they were doing one thing, which was signing up more IMAX theaters. There's a lot of activity going on in that area right now. Again, the usual caveat, I don't know if it will come to fruition or not, but all the deals going on, there's probably over 100 theaters that we're discussing right now in China, and we'll see where that goes. Also, the pandemic had one kind of good side effect for us in China, which is the way people say the pandemic accelerated technology that it took 5 years and have put it into 1 year. We have a strategy in China that we've been implementing about local language films and issuing more Chinese-made films and the genres they were in. Well, the pandemic because Hollywood was releasing domes, forced us to do more Chinese language films. And those were enormously successful. So the most successful film in the whole world during 2020 was called the 800, which was the Chinese film that was shot with IMAX cameras. And it was also an incredibly successful IMAX film. They released in different genres, including science fiction, action, adventure. And those films all worked really well. And our indexing, historically in China for local language films, was we did at around 3% of the box office. And now post-pandemic, we've been doing around 4.5% of the box office. So we're about 50% better market share since that ended. So I think the local audience has got used to seeing these films in IMAX. And I think people enjoy them that way. And because their box office has gone up, they're going to make more local language content. So I'm quite enthusiastic. I think it will be a strong growth market for us.

Great. On the topic of local language, as you mentioned, it's been a really bright spot for IMAX, particularly in the last year. Can you talk a little bit about how local language help to balance out the film slate, when Hollywood production was shut down? And could you discuss your view on how local language films will fit into the film strategy going forward? I know that IMAX has 3 great Chinese local language films on the docket, Battle for Lake Changjin (sic) [ The Battle at Lake Changjin ], Waterboys, My People My Parent (sic) [ My People My Homeland ]. So maybe you can talk a little bit about those as well.

Yes. So I think, again, because the pandemic force all of us to make best with what we had available. So another country besides China that also benefited greatly from local language film was Japan. So we had a 5-picture deal with Toho, which is one of the major studios in Japan. And during the pandemic, those films were released. And 2 of them became among the highest grossing films in the history of Japan, one of them called Demon Slayer, which is single highest grossing film ever in Japan, and it was the highest grossing IMAX film ever in Japan. The genre of many of these was anime, which is very popular with IMAX fans. Another film in that package called Shin Evangelion, became one of the most popular movies in the history of Japan. As a result of that deal, we have another 5 picture deal with Toho, which we're going to roll out now. We released some films in Korea. We've released films in Russia. We've talked about films in the Middle East. So we are truly a global company. We're in 84 countries, only 1/3 of our revenue comes from the United States. 2/3 from different international markets. So the next evolution makes sense to be the mix in the local language films with the Hollywood releases. And from a Box Office point of view, I think that will give us some tailwinds in some of those markets. You asked about the Chinese holiday, which comes up on October 1, you mentioned the 3 movies we're doing. The first one you mentioned, I'm going to butcher it, so I'm not going to say it again.

Battle for Lake Changjin.

Yes, that's opened the Beijing Film Festival. It got extremely great feedback, Maoyan, which tracks expected box office, raises our estimates based on audience reactions. I think you can never predict a record, and I don't want to overpromise. But the records were set in '19 and '20. And it looks like based on what we think in advance that the combination of those 3 will be in the ballpark of what the records were for those years.

Great. And you talked a little bit about Japan. I was just wondering if we could talk about some of the other international markets that you're also in, Korea, Saudi Arabia. First, what are some of the growth strategies in those markets? And are you seeing any particular markets gain more traction than anticipated? Any meaningful growth opportunities in a particular market that you would call out?

Yes. So I think you hit 2 of the 3 I'm most excited about. I mean Japan, partly because of the local language, its average per screen average for our 39 screens in Japan was $1.5 million. Remember, last year was the pandemic. The #2 market was Australia at 750. So that just shows you just how it gives you a framework for how successful we've been in that market. And our addressable market is 100 screens in that market. We only have 39. So I think given that success, I have high expectations for there. In the Middle East, we signed a fair number of deals in Saudi Arabia, but not that many theaters are open yet. And obviously, because of the pandemic has slowed down the opening pace, you just -- construction kind of came to a halt there. So I think you'll see a lot more box office in Saudi Arabia. As a matter of fact, I leave for my first -- well, my second big trip post-pandemic early next week for the Middle East, and I have a number of discussions going on with our Head of Sales and our clients while I'm over there. The results, again, on a per screen basis. And the formula, I use those 2 examples. But the formula is you need a foothold in a country and then you need a demonstrable business success. So that means strong per screen averages. And when you do that and you look at the business model from the exhibitors point of view, the paybacks are very rapid. The return on investment is very good, and you tend to build out those markets very quickly. I mean some of the markets might surprise you a little bit, Michael. Like, Western Europe is very, very much underpenetrated. So in Germany, we're opening the biggest IMAX theater in the world in [indiscernible] -- it's the size of a 737 -- in the next week or 2. In Con, it's well-known for the film festival and other things. We just opened our first IMAX theater in Con, which will be a tremendous showcase for us because of all the conferences, especially the film festival and using that as a tool that happened there. And I think a lot of other countries that you wouldn't expect are going to be surprising. One great thing on North America, we haven't typically been that successful with smaller exhibitors. But as a result of the pandemic, there's been some roll-offs into larger hands. And one of the best circuits in the U.S. was a small circuit called ArcLight, which went bankrupt. And 2 of ArcLight theaters were picked up by AMC and several were picked up by Regal. And as a result, they're including IMAXs in all of those. So I think it's a little bit like a second bite at the Apple, where you think you've kind of penetrated the market and the fact all 4 of those theaters are in the LA market, we are, for obvious reasons, that's where the directors are, the studios are, the talent is. So I think there may be opportunities that haven't been fully identified yet because of some of the consolidation.

Why don't we shift gears a little bit and talk about network expansion. The IMAX backlog is still very strong. That said, some exhibitors are facing challenges, and I think the rollout in terms of network expansion feels a little uncertain. But could you walk through, #1, which exhibitors are your biggest counterparties? And what conversations are you having as it relates to network expansion?

So pretty much every client in the world. I don't -- I think it's every, but I don't want to overgeneralize, because maybe we missed a few of the smaller ones, but we have about 350 theaters in backlog. And virtually every client has reaffirmed its commitment to the backlog. So it's a legally binding agreement already. And over the years, we've had very little slippage out of it. But we went back and everybody is still committed, and that's not surprising because the early data on the pandemic -- coming out of the pandemic shows that audiences prefer IMAX and prefer premium entertainment. So again, in a world where windows are shorter and more -- you have more things to see at home, it makes common sense that people would say, if I'm going to go out, I want something really special. And I mentioned to you the statistics in China, greater market share, and we've seen the same thing in Japan and experience with doing this weekend. So I think the exhibitors get it. But the way to get people back to the theater is not going to be more older theaters and more -- let's clean our theaters less and let's help people to talk on the telephone more. These are pretty smart people. They understand if they're going to win audiences over, they need to provide better and better experiences, and IMAX does that. In terms of -- inherited in your question was the pace of coming out of it. As I said, we installed 70 theaters in 2020, or something like that. It might have been a little bit more than that. Obviously, when people grow little cash constrained, they slow that down. But I think their analysis is going to be what's the opportunity and what's the cost and benefit of weighing -- of waiting. And the best event I could give you is, I think it was 2009, and it became so famous at IMAX, we called it the Avatar effect, which is when it became clear how big a movie Avatar was going to be, well, it wasn't clear until the end, but how successful it'd be, the installs we had budgeted for the quarter were well exceeded because people wanted to get open for Avatar. And as I said to you earlier, the financial results were so good, you looked at the payback and people open before Avatar had such a higher ROI and such a shorter payback period. And I'd like to think that the slate we have next year is so good, which you and I went through in some detail. Clearly, by the end of the year for Avatar, but I would think for movies like Jurassic World and Top Gun and Mission and the Marvel movies and the DC movies that they're going to want to be open. So you never know until that happens. And then the last part of your question was who are the biggest parts of our backlog with? And it's with a lot -- in terms of the new builds, there was a lot of different people in different countries, usually the biggest exhibitor, so, for example, in France, it's with F8. But then in Korea, it's with CJ. So mostly like that. But a lot of our backlog is also upgrades to our new digital system and the largest counterparties in those agreements are AMC and Regal.

Can you talk a little bit more about IMAX's relationships with CDOs and exhibition today? How is that evolving? Particularly given changes to things like windowing, are there any changes to the DMR or the joint revenue sharing agreements that exhibitors and studios have with IMAX because of things that are happening in the industry?

No. These tend to be relatively long. Well, now, 2 or 3-year agreements, and they've been relatively consistent since we've been in business with the studios. One could argue that IMAX has more value in a world of shorter windows of 45-day windows instead of 90-day windows. And the reason for that is that IMAX helps create an event around movie, helps us stand out from the path and be special. And for the studio is more of their value chain, is going to come by using the theatrical release sort of as a trailer for the streaming and whatever PVOD, electronic sell-through, whatever the later windows are. So my view is like, for example, if you look at the marketing put together Doom, I mean, IMAX is front and center in a way I really haven't seen in my many years here. And I think that if your value chain is more weighted towards your ancillaries, you really have to make sure that it's launched the right way. And consumer studies show that people who see movies at IMAX, like the movie better. They actually give it a better cinema score. So I think the dynamic is quite good there. Maybe there's a little inside baseball. But in the next -- the rest of this year, I've seen more fighting over studios for IMAX slots than I've seen in a very long time, meaning that someone wants to release a movie this day and someone else wants to release it on the same day. And they'll say, "Well, then I'll move my movie to this day. Could you do it on that day?" So I feel very good about where our deals are right now.

Great. And you mentioned AMC and Regal picking up some of the ArcLight theaters. And I think you're probably going to see more consolidation in the exhibition industry, particularly among some of the smaller players. So the big players like AMC, Cinemark, Regal, they're probably well positioned to take market share. Can you talk about how the dynamics affect IMAX, if at all?

Yes. I mean I'd like to think they're positive. We have a little bit of experience with that. So when Cineworld in the U.K. bought Regal, Regal upped many more theaters than they had before. Or when AMC bought Odeon in the U.K. as in some other European territories, I think it was UCI, they upped the number of IMAX theaters in those territories that they acquired. Or CGV in Korea, when they bought chains in other areas, they upped their IMAX commitment. So I mean it's not purpose, but most of our bigger clients are the acquirors in these situations. So I think as assets flow from the smaller chains -- and the smaller chains, sometimes they're not sophisticated enough to understand what IMAX will do for them. They're brand centric. So in the case of ArcLight, I think ArcLight thought -- the ArcLight brand had its own residents, so they have to do IMAX. But in general, virtually every acquisition, consolidation way that's gone through, has been good for us. So I hope that would happen. I certainly don't think it's negative. I can't. Because most of the smaller chains are the ones that are undercapitalized, are not really the core IMAX clients.

And one other theme I wanted to explore is just the domestic box office becoming more concentrated with the largest blockbusters representing a greater proportion of the total potentially crowding out some of the small and mid-budget films. I think in the past, you've called this blockbusterization. Can you talk a little bit about the implications of this trend for IMAX? And do you see any reason for this trend to change at all?

Well, it's demonstrable trend even before the pandemic. You look at the number of movies and blockbusters are of the global box office in any given year, that's been going up for a decade. And I think probably the pandemic accelerated that trend, because I think if you're a studio, you're -- particularly, if you have a streaming business on the side which is most of them, you're going to want to release some theatrical films that will really benefit downstream from the IP that you've created. So again, Disney just put windows around its movies, but you and I talked briefly about Shang-Chi as an example. But I would think you would really want to focus at the actual releases among the blockbusters where you could get revenues from all these windows. One of the things, Michael, is I never understood, which is I get why Netflix went day and day with its movies, because it didn't have a lot of valuable IP originally. But if you have IP and you could sell something 5x across 5 windows, let's just say, I'd rather sell it once. I don't think that's as good a model for them. So I think for these blockbusters, they're going to continue to be made, and I think that will benefit IMAX by the studios. In terms of one thing that we haven't talked about a lot, it has -- it's going to be interesting to see whether the streaming services decide to make their bigger movies available theatrically and whether they create some kind of a window around it. Netflix sort of did that with the Irishman, when they released it a little bit early and tried to create some buzz around. But I think, again, when you talk about streaming and theatrical and blockbusters, when you kind of go back in time, what built HBO and what built Netflix was releasing Hollywood bond busters in an aftermarket and streaming, which they had a lot to do with that market or an HBO as cable. I think that still holds that creating blockbusters create a brand fee or property and let it play over a longer time. So I think we -- I have to admit, I'm hoping I don't know, but I wouldn't be surprised to see some of the streaming services jump into blockbuster business with a different release path.

I know we're approaching time, but I do want to get 2 more questions in. First, on the CFO search, could you just give us a little bit of an update there and what you're looking for in an executive to take that role?

We're seeing people are very active in it. As you know, our acting CFO is Joe Sparacio, who is CFO of IMAX for a fairly long time. So we're not on a short time views. My only short time views is Joe wanting to get back to his other life, as he reminds me from 2 offices down from me. But we have the luxury of having a terrific interim CFO right now. It won't surprise you the things that we're looking for strong leadership, integrity, lots of good experience. And in this case, the good news is we don't have to settle, because we have someone with those attributes here right now.

Great. And just as a closing question, IMAX is often associated with the exhibition industry, but there are a lot of differences, right? It's capital-light, focused on more narrow film slate and blockbusters and there's a more diverse geographical footprint. Would you talk about some of the key differences this year and how that translates into a different financial profile for IMAX versus a traditional theater?

Look, you mentioned some of them, but I'll cover them in a little bit more detail, Michael, but one of them is we're in 84 countries. So as the pandemic shows, we're much more diversified than anyone else in the world. And we have exposure to we get to show different films. When the pandemic started, China was closed, but we had a profitable first quarter without China. For those of your team, I know you follow this, but we've had positive EBITDA for the last 3 quarters in a row. So we weren't nearly as affected as extra business. We don't have high fix cost. We're a license model. We license our technology to exhibition partners. So we don't pay late land orders. Our balance sheet, we have no net debt. We have $500 million in liquidity. Our asset-light model, as soon as the business turned around, we turned around our financials. Even during the pandemic, I think our maximum cash burn in any 1 month was $10 million, which compares to over $100 million for many of the exhibitors. I think we're just an entirely different business. We have better margins. We have dual revenue sources. We get paid by the studio and by the exhibitor. We have very little credit exposure to any one particular entity. We have global brand recognition. I think probably Disney has -- certainly, Disney has global brand recognition, but other than this they -- I don't know another kind of entertainment brand out-of-home that has the kind of recognition that IMAX does. We're in a sweet spot now, I think, which is premium branded entertainment as people readjust to what they want to do. And I think they might be more picky about how they spend their money in this period. So different animal. We both show movies, those are the similarities. But the financial characteristics and the business characteristics are very difficult.

Well, we're a few minutes over. Rich, I want to thank you again for all of your time and your insights. It's an incredible privilege for me to be able to share the stage and speak with you. So thank you again. This is deeply appreciated.

Thank you, Michael. I appreciate it.