IMAX F3Q07 (Qtr End 9/30/07) Earnings Call Transcript

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2007-11-09 06:19:15.0

Tags: Accounting, R&D, Call Transcript, Earnings, Question, Research & Development, Operational Accounting, Financial Services, Business Operations, Finance, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Rich Ingrassia - Roth Capital Partners.

Brad Wechsler

Rich, we can't hear you.

Operator

Mr. Ingrassia, is your line on mute, sir? We will go to the next question.

Brad Wechsler

Operator?

Operator

Hi, sir.

Brad Wechsler

We can't hear anything. Are you putting through the questions?

Operator

Your next question comes from Eric Wold –Merriman Curhan Ford. Mr. Wold, please go ahead.

Eric Wold –Merriman Curhan Ford

You gave the amount you are spending this year on legal and accounting fees of $12 million and $8 million on R&D. What should we think about into '08? How much of that legal and accounting fee won't be there next year? How much do you think is centered just purely on this year to get the filings up to speed and all that? How much digital spend would be left for 2008?

Brad Wechsler

Eric, let me answer that a little differently, because I think you are asking obviously a very important question. Before we had our regulatory issues and before we were doing our digital R&D, I think you might see legal and professional fees, legal and accounting/professional fees, in the $3 million to $4 million range. I think you would also see a run rate of R&D of $3.5 million.

Now '08 is a hybrid year, meaning we are still going to be spending some money on R&D development certainly through the early parts of next year and we are also going to be continuing with the regulatory inquiries. I think our expectation obviously is that we hit the high points in this previous year and it starts tailing down, and we hit hopefully a normalized run rate towards the end of next year.

So that is not quantifying the answer for '08, but it just means I think you have seen the peak in '07 and I gave you some sense of what the normal run rate is.

Eric Wold –Merriman Curhan Ford

I gather, obviously, that with the digital install coming or the digital projector available around the middle of the year, obviously as you talked about, you are probably not going to see a lot of installs in the first half of the year. People wait and obviously for your sense, it's probably not worth installing something you are going to upgrade anyway in a few months.

Knowing that, you are probably going to see a pretty back-weighted year for installs into '08. What is your capacity to get those installs done? What are your thoughts on if you do get almost all the installs kind of pushed into the last two quarters, how difficult will that be to get complete?

 

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