Imax Maxed Out

Imax (IMAX) plunged 17% after the digital-theater company rolled out its latest debacle.

The Toronto-based company lost $11 million, or 28 cents a share, for the quarter ended Sept. 30, reversing the year-ago profit of $2 million, or a nickel a share. Revenue slid to $21 million from $33 million a year earlier, a drop Imax said was "primarily because it did not install any theatre systems in the third quarter."

Analysts were looking for a penny-a-share loss on revenue of $38 million.

"In addition to the slipping of installations, the company's 2006 third-quarter performance was affected by the disappointing box office performance of Ant Bully and higher-than-anticipated SG&A due to increased legal expenses and costs related to the company's previously reported process of exploring strategic alternatives," Imax said.

Imax put itself on the block March 9, briefly sending its shares above $10. But the stock has since plummeted, taking a particularly vicious drubbing back in August when the company admitted that it had failed to find a buyer.

There was more such talk Wednesday.

"While the company did not find a buyer willing to acquire Imax at terms initially sought by the board of directors, the special committee of the board has since authorized the investment banks Allen & Co. and UBS to explore interest existing at a lower valuation than originally sought," Imax said. "As part of this ongoing process, the company remains committed to exploring additional interest as appropriate."

Imax added that it is "still responding to informal inquiries from the U.S. Securities and Exchange Commission and the Ontario Securities Commission regarding the Company's timing of revenue recognition," though it believes its bookkeeping was righteous.

Shares dropped 84 cents to $4.

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