Good day and welcome to the IMAX first quarter 2019 earnings conference call. All participants are currently in a listen-only mode. [Operator Instructions]. As a reminder, today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Mougias, Vice President of Investor Relations. Please go ahead, sir..

Thank you Patrick. Good morning and thank for joining us on today's first quarter 2019 earnings conference call. Joining me today is our CEO, Rich Gelfond, our CFO, Patrick McClymont, who will have prepared remarks and will be available for Q&A. Megan Colligan, President, IMAX Entertainment and Robert Lister, Chief Legal Officer are also with us today.

Today's conference call is being webcast in its entirety on our website. A replay of the webcast will be made available shortly after the call. In addition, the full text of our first quarter press release and the slide presentation accompanying today's call have been posted on the Investor Relations section of our website.

At the conclusion of the call, our historical Excel model and guidance information will be posted to the website as well. I would like to remind you of the following information regarding forward-looking statements.

Our comments and answers to your questions on this call as well as the accompanying slide deck may include statements that are forward-looking and that they pertain to future results or outcomes. Actual future results or occurrences may differ materially from these forward-looking statements.

Please refer to our SEC filing for a more detailed discussion of some of the factors that could affect our future results and outcomes. During today's call, references may be made to certain non-GAAP financial measures as defined by Regulation G of the Securities and Exchange Commission.

Discussion of management's use of these measures and the definition of these measures as well as reconciliations to adjusted net income, adjusted EPS and adjusted EBITDA as defined by our credit facility are contained in this morning's press release. With that, let me now turn the call over to Rich Gelfond..

Endgame, which was shot in its entirety with IMAX cameras. The film opened on Wednesday in China and in the first two days, we grossed a record $21 million of IMAX box office, representing over 13% of the total country box office. On opening day, our network deliver a powerful $23,000 per screen, our highest ever opening PSA in China.

Not to mention, we achieved this with over 600 screens in the network across all tiers throughout the country. Moreover, our average ticket price for the film is up 85% compared to the prior Avengers, demonstrating the value that dynamic ticket pricing can have in that market for high quality films.

The film also opened in several international markets including Germany and France where it went on to become the biggest IMAX opening day ever. In total, we have broken opening day records in roughly 38 markets.

This is particularly impressive when you factor in the film's three hour runtime, which equates to fewer shows per day than your average film. Given our results across numerous international markets, we are very optimistic to say the least going into this weekend.

It is important to remember that much of the success we see with films like Avengers begins with our long-standing relationships with the creative talent behind these tentpole films throughout the years.

Along with our proprietary technology and our unmatched ability to deliver completely immersive audience experience, our creative collaborations truly set the IMAX experience apart.

For tentpole titles, which represent an increasing share of the overall global box office, IMAX has become a key component of how filmmakers approach the conception of their creative vision. For example, we worked with the Russo brothers for over two years to help bring their vision of Avengers to life.

Jon Favreau specifically optimized five key sequences of the highly anticipated Lion King in our proprietary aspect ratio to maximize the IMAX consumer experience. Next year, we already have three films confirmed to be using our film cameras.

Patti Jenkins is currently using these cameras on Wonder Woman 1984, creating an immersive story for moviegoers that no other format can match. I am also thrilled to announce that Bond 25, which comes out next year, will be the first Bond film to use our cameras.

And of course Chris Nolan will be using IMAX film cameras to help bring his next film to life. All-in-all, we are laser focused on introducing more IMAX DNA into the world's biggest blockbusters.

As various industry players navigate the shifting marketplace for motion picture exhibition and other mass entertainment events, partners will increasingly look for companies like IMAX that are uniquely positioned to succeed.

Based on our technology leadership, our broad global network, our positive brand perception and high-end value consumer experience, as well as our long-standing relationships with the creative community, we believe IMAX has all the attributes necessary to thrive in this time of change.

And with more streaming platforms coming online and more content being created than ever before, content creators are increasingly looking for ways to differentiate their work and broaden their consumer reach.

Given the global scale of our network, IMAX is the only platform capable of distributing the highest quality immersive experiences globally and launching it in our differentiated experience.

We are currently in discussions with key streaming players who understand the value of creating powerful, out-of-home events around the launch of their original content and expect to make more formal announcements in the months ahead. To summarize, 2019 is off to a great start.

We believe the robust content lineup, coupled with the continued rollout of IMAX with laser, our refined marketing effort and our prime position in the global entertainment ecosystem will drive margin expansion, increase the earnings power of our business and drive stronger returns to shareholders.

We demonstrated the success of our strategy last year and we demonstrated them in the first quarter and we are confident we will build upon that success in 2019 and beyond. With that, I will turn the call over to Patrick..

Endgame. This is another great example of the level of collaboration between IMAX and our partners. This instance leverages each of our unique intellectual properties to market the IMAX experience to fans across our global network and is yet again a prominent demonstration of our unique position in the entertainment ecosystem.

Most importantly, it looks really cool, especially on social media where there is an emotional element to it. So please take a look. I will begin by providing some additional detail on network expansion before going into our financial results for the quarter and ultimately updated guidance for the year.

Let's start with our network expansion detailed on slide four of our earnings presentation. Our sales team delivered 23 signings in the first quarter, 15 of which were for our new IMAX with laser system. We installed 14 new IMAX systems in the first quarter, largely consistent with Q1 last year. We also upgraded three systems last quarter.

Breaking our new installs out in more detail, six were for sales-type, four were JVs and four were hybrids. Now, let's turn to our financial results, which begin on slide five.

Total revenue in the first quarter was $80.2 million, $4.8 million lower than the first quarter of 2018, due almost entirely to less sales-type theater installations in the first quarter this year, which totaled seven theaters in the same quarter last year. This dynamic is entirely timing related.

We continue to expect the full year number of sales-type system installations to be a similar number in 2019, as it was in 2018. With regard to the sales-type installation line, our margin was 42% in the quarter.

This came in below historical levels due to the mix of systems as well as our decision to allocate additional engineering support resources to ensure the successful rollout and launch of the IMAX with laser systems.

For the full year, we anticipate margin on sales-type theaters to increase sequentially as the year progresses, resulting in a full year rate of roughly 50%.

As we have seen historically with other new product launches, the margins should improve in the years ahead as the technology matures and we reduce these additional engineering support to sustaining levels. During the quarter we generated $45.1 million of gross profit, which resulted in a 56.3% gross margin.

The lower gross margin rate compared to Q1 2018 was influenced by the installation of seven fewer sales-type theaters last quarter. Operating expense, which we define as SG&A plus R&D excluding stock compensation, was $24.8 million last quarter versus $27.3 million last year.

Adjusted EBITDA for the quarter came in at $28.5 million producing adjusted EBITDA margins of 39.8%. Our tax rate came in at 26% last quarter and included certain one-time discrete tax charges. Net income for the quarter was $8.3 million or $0.13 per share while adjusted net income was $10.8 million or $0.18 per share.

Please note this is the first quarter where our investment in the China mobile ticketing platform, Maoyan, is reflected in our financial statements. While the gain in the value of the investments in the quarter is included on the face of our P&L, it is not included in our adjusted EBITDA and adjusted net income figures.

We are pleased with our close collaboration with Maoyan and the team in China is already seeing tangible benefits from the relationship as they work to develop longer term strategic initiatives with our partners at Maoyan. I would like to now provide our updated guidance for 2019 which will be posted on the IR website at the conclusion of this call.

Beginning with installations, we continue to anticipate installing roughly 185 to 190 systems this year. Of this, we expect to upgrading 45 screens to laser and to install roughly 140 to 145 new systems. We expect the mix of new installations for the year to follow historic patterns and be weighted towards the back half.

With regard to our 45 upgrades, we expect roughly five these upgrades to come at full sales-type margin and be installed in the back half of the year. For the second quarter, we expect seven sales-type installations.

Given the early traction of our consumer electronics licensing business, we now expect to draw in roughly $3 million of revenue associated with this business. Given the licensing nature of the business, we anticipate close to full flow-through to pretax profit on this revenue.

We also reiterate our flat OpEx guidance for the full year which would mark our fourth consecutive year of holding the line on operating expenses. With regards to tax, given the discrete tax charges in the first quarter, we expect our full year tax rate to be roughly 23%.

Excluding the one-time charges from the first quarter, our tax rate would have been the initial 22% we guided to. Turning to box office and margin guidance. Our box office in the first quarter exceeded internal expectations and we now expect our full year box office to grow in the low double digits.

We expect most of the revenue from the box office increase will flow to the bottomline. As a result, we now anticipate adjusted EBITDA margins attributable to common shareholders will increase to between 41% and 42% compared with our previous guidance of 40.5%. To close, we continue to see positive momentum for IMAX.

Our efforts and accomplishments in 2018 set the stage for us to capitalize on what is shaping up the blockbuster 2019 in terms of box office performance, margin expansion and increased return on capital, all of which increase site for shareholders. With that, I will turn the call over to the operator for Q&A..

[Operator Instructions]. We will take our first question from Eric Handler with MKM Partners. Please go ahead..

Thank you very much and good morning. Rich, quick question for you on dynamic pricing in China. How big of an impact has it been for other films aside for Avengers? And are you seeing that most of growth, is it from the pricing side or is it from the attendance side? And then I have got a follow-up..

It's Patrick. I will give you some initial thoughts on that. This film in particular, they really stretched on the dynamic pricing and that's across the market, including IMAX and particularly midnight showing the first day and into this first weekend.

And so from an attendance standpoint, we are seeing numbers that are similar to what we saw at the last Avengers, but the increase in pricing is delivering very attractive growth in box office..

Although that's, I don't think Eric was asking about one picture, I think he was asking about overall trends. And I think if you look at Wandering Earth, it was kind of both, Eric. It was pricing in the early phases but it was bodies in the later phases. So I think it's actually it's both. And installed I think that's fantastic.

First of all, it shows somewhat the inelasticity of the IMAX experience, meaning that people want it so badly that whatever the increase is, they are willing to still come which is an important point. But as I say for other titles, we have seen it in bodies..

That's great. And then as a follow-up, when the IMAX cameras or a film has IMAX DNA, as you say, you seem to get above average market share.

And I am just curious, is there enough equipment or is there enough interest from directors where you can eventually get to the point where maybe you have one film a quarter that uses IMAX cameras?.

I mean, they are already for next year. As I said in the remarks, we have three films using IMAX cameras. Chris Nolan's new film using the film cameras. Wonder Woman 1984 and Bond which was just announced yesterday and Megan is sitting across from me who might want to add a little bit of color. But there is sometimes competition for the cameras.

And I think there is way more and more interest around them. And I think we are navigating that, but that's a high-class problem. Megan, why don't you talk about just how difficult it is to manage that..

Yes. I would say that the point of distinction is the film cameras are one bucket and the film cameras are in high demand and Rich just pointed out that we are maximizing the use of the film cameras. When you talk about Avengers, you are talking about digital cameras. And Russo brothers used the digital cameras and shot that film entirely digitally.

And that happens on a regular basis and there is movies happening all the time that are shot with the digital cameras. So there's films happening on a regular basis that are using the full aspect ratio and filmmakers are coming in talking about all the time about how to work with us.

And then there are situations where filmmakers come to us later in the process like Jordan Peele with Us and then discover the process and then talk about their next film and how they may use it in the future.

So it's a constant conversation that we are having with creators all the time about upcoming movies and how to best utilize the format for what they are creating and how they can work with us. We are in a state conversation with all sorts of creators at every studio on an ongoing basis..

Very helpful. Thank you..

We will take our next question from Steven Frankel with Dougherty. Please go ahead..

Good morning and thank you.

Rich, I wonder if you might give us a sense of what same-store sales are looking like in China? Or how you are contributing the strong performance to network expansion versus again that performance of the same-store sales basis?.

Yes. In the first quarter same-store sales, we are up in China. And as I said during my remarks, the second quarter with Avengers is off to a pretty impressive start right now. I mean when I mentioned the fact in the script, it was the highest PSAs for opening day ever in China. And remember, that's at 600 theaters.

We did movies at 300 theaters and 200 theaters and I know a lot of you are concerned at times about openings in lower tier markets and what that does for the business. But I think for the right content, it's incredibly encouraging how you can drive people through a network that large and achieve the right results.

And as you look forward this year, particularly on the Hollywood films, there is an awful lot of impressive blockbuster content. Also I should mention that we have a film called 800 coming out in China this year, which is the first film to use IMAX cameras in China. So we will see how that affects the index..

Great.

And maybe some just color around the impact of subscription programs like A-List on your domestic business?.

So a film like this, I mean I think it's got to help. And the reason I say that is, this the kind of film that has a lot of repeat business. We had a New York friends and family screening and my step kids were there and they both said, they want to see it two or three times. It's not a scientific sample, but it's a family sample.

And I would think, when you look at the A-List program where you can see up to three movies a week, I have got to believe that's going to facilitate a lot of additional people going.

And particularly when you have a movie shot with IMAX cameras or with IMAX DNA and people have a choice, I have got to believe a lot of people are going to go see it in IMAX. I would say, I think it will have a positive impact..

Okay.

And then for Patrick, any update on where you are on the share buybacks?.

Hi Steve. No change in how we think about that which is, our first priority is to continue to invest in growing our network where we see opportunities and then our second priority when we believe that we have got excess capital and we believe there is an opportunity for a share price perspective to buy back stock. So no change in our framework..

Okay. And then lastly, you mentioned the ticket partnership with the online vendor in China.

What you learning there from a data perspective? Or is this really more about point-of-sale marketing?.

At the moment, it's point-of-sale marketing and being integrated into their information flow. But we are in the process of negotiating a broader relationship and I think we will get more data. I think we have gotten some things now.

But I think, you know, they are going to help us build out our CRM and we think there is a lot there we can learn, which we will learn. Again, just this morning, Megan I had a conversation before this call.

She was on the phone with China last night and she said that they believe that the integration with Maoyan has definitely helped in the Avengers release in our first quarter results..

Great. Thank you..

[Operator Instructions]. We will take our next question from Alexia Quadrani with JPMorgan. Please go ahead..

Hi. This is David, on for Alexia. Rich, earlier you mentioned in your prepared remarks, conversations with streaming services and the potential to carry some of their movies in IMAX. I am interested to see if there's any update on this? And Megan, it would be great to get your thoughts as well. Thanks..

Well, I will just say, there are no official updates. We are in discussions, I said. And we have time. When deals are signed, we will announce them. But Megan has been spearheading some of those negotiations, so maybe you can give some flavor..

Yes. I would say that there is things that are on the horizon.

I think that the streaming services are in a place where they are still developing their strategies and they are still relatively young in their development as content companies and getting there suites together and building their strategy and being able to have the kind of event, films that work in our network.

And we have excellent relationships with all of the leaders of those streaming services and we have great conversations with them. And as I said, announcements are imminent..

Okay. And I know you touched on this in your prepared remarks a little bit. Can you maybe discuss a bit more of your performance in Japan in the quarter? What does the success of from like Bohemian Rhapsody potentially mean for how moviegoers and exhibitors view the IMAX experience there? Thank you..

Yes. I think that we were all surprised at how strong Bohemian Rhapsody is. I mean just think about that, it did better than Star Wars in Japan. And I spoke to some of our Japanese exhibitors and they said, there is just something about the culture where if you penetrate the zeitgeist, everybody needs to see it. And that movie, for whatever reason.

Although you have to remember, a year ago The Greatest Showman also did extremely well in Japan. I think clearly they like musicals, clearly, they felt the IMAX experience, where particularly the Live 8 concert in the stadium was something that couldn't be replicated anywhere else.

As for the marketing itself, as you probably know, Japan is a famous place for being second. And I don't think they wanted to be the leaders in going into the IMAX business. But once they got into it, the results speak for themselves. They have among the highest PSAs in the world for IMAX.

So that success has made them more comfortable with opting for more theaters. And I think some of the largest companies still aren't in the business and are kicking the tires right now. And as I said in my remarks, it's the third largest film market in the world. So I think there is significant box office upside for IMAX in that market..

Thank you..

[Operator Instructions]. We will take our next question from Aravinda Galappatthige with Canaccord Genuity. Please go ahead..

Good morning. Thanks for taking my question. Rich, so obviously you have made the investment in Maoyan. Patrick, maybe correct me if I am wrong, I think that $15 million number that is in the investment in equity securities is entirely that. I know that you sort of stepped away from new initiatives going back to sort of focusing on the core business.

But as you sort of see attractive opportunity like this in businesses that are adjacent to you and there is synergistic potential and given your balance sheet, is there still an appetite to kind of move in that direction and maybe build off of some of the opportunities you have?.

I think I would say, if it's related to our existing business in some kind of a direct way and it is relatively small, I could see making selective investments that support the core business or expand the core business. But we are not in the mindset to cast a big net and look for major acquisitions.

We feel that our technology, our relationships and network and our brand have us in a very good place. And if we could find small fill-ins to help us lever off of those and grow the business with a clear payback, that is something we will consider..

Okay. Thank you. And then with respect to the laser installations, I know you have installed a number of laser systems during June and December and it's early days.

Is there anything sort of early feedback in terms of the numbers that gives you a sense of comparability with the rest of the network?.

Again, I think numerically it's too early to say. I think anecdotally, our clients are happy and people are happy with the experience. But whether it's translated into financial results, we just can't say it. Again, because different movies, it's hard to compare, periods-to-periods..

Okay. Thanks, Rich. And just last question for Patrick on working capital. Obviously you saw a little bit of extra working capital use this quarter. It was obviously a positive swing last year for the full year. Any sense as to how we should think about the full year, sort of management of working capital? Thanks..

So in the first quarter, you saw some inventory growth and a lot of that is related to wrapping up the laser product. Some of that will come down over the course of this year just as we get closer to steady state levels of productivity. So I would think inventory will have that coming down.

And the receivables numbers just moves around mostly with what happens with box office and sort of scheduling of things. So that guidance plays a little bit based upon some of the films in the fourth quarter and then also the early part of this year because we have strong first quarter.

So nothing of concern there, just the normal seasonality in the business. We expect to see improvements on the working capital side, largely due to inventory issues over the course of the year..

Thanks. I will pass the line..

Thanks Aravinda..

We will take our next question from Jim Goss with Barrington Research. Go ahead..

Thank you and good morning. Your raised IMAX box office to low double digit percentage growth for the full year is noteworthy in that it's in the context of a year when flattish to nominally higher domestic overall box office would be a good achievement.

You have a number of drivers including your global platform growth, perhaps a steadying of PSAs, your film selection.

I am wondering how you are thinking about this process just continuing a pattern that you have actually had over the past several years in which your total IMAX box office has been on a pretty steady upward trend?.

Endgame campaign. And if you think back a couple years, the posters used to say and IMAX, where you needed a magnifying glass to see it. But I think all of the studios have done a better job and particularly Disney, in this case, integrating us into the marketing campaigns.

And I think it's not an accident that the opening has among the strongest we have ever seen. And then I would add a different kind of marketing. The increase of laser, upgrading the seats, more branding in theaters, all of that. And I think all of that makes us extremely comfortable.

There have been other years where maybe a big film opens and you are feeling very excited about it. But I think this year was unique about this year and 2020 is the films, there is a lot of other things going on, as I said, the marketing, the technology, the use of IMAX DNA, all kinds of things. So it's all of that that gives us the confidence..

Okay. And thank you for that. And one other question is, between the joint revenue-sharing model, STLs and hybrid, do you have any current orientation of one model toward another? I know it's going to be each effort on an unique basis.

But are there things about the areas you are penetrating right now that took you in one direction or another?.

Sure. I will take that, Jim. As we have talked about, it's great that we have three different flavors and there's obviously flexibility around each of those. And so we use that to figure out ways to create value for our exhibitor partners and make sure we are doing deals that make sense for IMAX. We have talked about that in China.

We have started to lean much more toward hybrids as a solution, particularly in markets where we just may not see the kind of box office opportunity that would justify us putting our capital into a joint revenue deal. And so you saw deals last year where with one client, we had a mix of all three different types.

And that's the strategy we have continued to focus on over there. Really look market-by-market and deploy different solutions depending on what we see as the opportunity. And our clients have been receptive to that as well because they want to grow with IMAX.

So I think the flexibility is great and we are trying to lean more toward hybrids and opportunities where we just don't see box office getting to the right level..

Okay.

And is Japan most of the hybrids?.

No. It's a combination there. In fact, we have done a number of sale deals and some deals that are revenue-sharing. So it's a mix, depending on the clients' objectives..

All right. Thank you very much..

We will take our next question from Chad Beynon with Macquarie. Please go ahead..

All right. Good morning. Thanks for taking my question. Rich, you mentioned that you have met with a lot of the operators out at CinemaCon. And I am sure they were all excited about the Hollywood lineup, obviously, Avengers being the big one here.

Was there any buzz from any of your partners around any local language films that we might not be aware of, just anything coming out through the balance of the year in any particular market that might be a little off the radar for us? Thanks..

I am trying to think. I mean, I think there are a couple in China for the summer that we are coming out that I can't name. There were one or two in India.

I don't know, Megan, did you hear anything?.

800, as Rich mentioned earlier, has been shot with IMAX cameras. It's also been dated for July, I want to say 5th, but it will be the big title for the summer. And we also have locked in Russia which will be the New Year title which is shot with some IMAX cameras for New Year's next year. So those are two big titles for China.

And we were having a lot of conversation about the Indian market. There is a lot of enthusiasm around that market, but it is still a very fluid market and one that we are looking at very closely. But now overall, China was the one we were spending some time looking at and talking about..

And as you reflect on the first quarter which was extremely strong in China, do you feel like you are not missing out on any films? Obviously, that was a concerted effort of you guys.

But have you kind of declared victory at least in the first quarter in terms of not missing out on any local films that may be bigger in Tier 2 or Tier 3 cities?.

Yes. I think, we certainly declared victory and if you look at what happened with the New Year holiday, going into that, we had three films and the market thought that Crazy Aliens was probably going to the biggest movie. And most people had reasonable but not high expectations for Wandering Earth and so we ended up doing three.

We had all three available for the exhibitor partners. And then we worked with them closely over the course of the opening weekend and it became clear very quickly that Wandering Earth was going to be the runaway hit and we were able to shift our showings to that.

And that ended up, as of right now that's the biggest IMAX box office movie ever in China. I expect that's going to change over the next week or so with Avengers. But the strategy is extremely successful and importantly, it doesn't just work for IMAX.

It's really important for our exhibitor partners because we are giving them flexibility and optionality, so they can drive as much box office as possible..

Okay. Thank you very much. Nice quarter. Best of luck..

Thanks Chad..

We will take our next question from Eric Wold with B. Riley. Please go ahead. Mr. Wold, your line is open..

Sorry, I was on mute. Good morning guys. Two questions. One on the guidance for low double digit growth in box office for 2019.

Can you parse that out in terms of what you are expecting for three reported regions U.S., China and then international ex-China? And then you talked a little about this, about the continued strategy in China moving towards more hybrid and sales type deals to kind of mitigate risk somewhat in the smaller markets.

Unfortunately, obviously, the reported box office and reported per screen average captures, all of that, it kind of muddies it a little bit. Is there any way to discuss the relative box office performance of those under full JVs versus those under sales-type lease/hybrid.

Because obviously under the latter models, any box office is kind of gravy, since your capital is kind of being pulled out, maybe give us a sense of kind of how that strategy has been working? Thank you..

So on your first part, Eric, we don't forecast by regions, but we do a fairly detailed build up. So we look at each title. We look at how performance was during that period of time over prior years. We analyze the title. A lot of people are involved and we make judgments.

But it's hard enough to forecast box office on particular titles, let alone by region. So no, we don't do that.

In terms of the China mix, why don't you talk about that Patrick?.

I think your question is overall, can we share sort of the breakdown between the different types of sales. And I don't think it would be a value added exercise, Eric, because it varies so much depending upon movie to movie.

And so for example, in the first quarter of this year, we have got a lot of JVs domestically because of big partners with AMC and Regal. And as everyone knows, domestically there was one big movie which was Captain Marvel, but otherwise little bit quiet.

Whereas in the second quarter, with Avengers, we are going to see tremendous performance domestically. So it really is so movie dependent that disclosing that and then talking about relative differences is not value added. What matters is the fact that we have got 1,600 screens around the world.

What matters is that we have got exposure only to these big blockbuster films. And yes, we have got multiple ways to make money own it, both from studio side and then from the exhibitor side. And so that's what we focus on is making sure that we have got exposure to these big opportunities..

Okay. And then maybe Rich, if I can follow up, I just think you don't want to give out guidance for each regions, I get that.

So can we assume that you are assuming growth in all three regions for the year?.

Yes..

Okay. Perfect. Thank you..

We will take our final question from Mike Hickey with The Benchmark Company. Please go ahead..

Hi guys. Congrats on a strong quarter. Thanks for taking my question..

Thanks Mike..

I realize we are just through the first quarter of 2019 here, but obviously it's looking good. You are raising your investments for the year.

So I am sort of wondering if you can share with us maybe what you are thinking about in terms of 2020? I know with the ways out maybe with the box office, but sort of your thoughts on the growth opportunity more medium term. Thanks..

Endgame in terms of who is going to live and who wasn't. But I am sure Marvel will have a number of very exciting blockbusters for next year. And then you end the year with Avatar. So I mean as far out as we are, it looks about as good as any year I have seen in the blockbuster department. So quite encouraged..

Nice. Thanks guys. Best of luck this weekend..

This concludes the Q&A portion of the call. Mr. Rich Gelfond, I would like to turn the conference back to you for any closing remarks..

So yesterday we had our Board meeting here in New York and I started my comments by saying, we should all have smiles on our faces because being in the IMAX business doesn't get much better than it is right now. And why is that? We are looking back on a first quarter that was much stronger than we thought.

We are opening Avengers now and the early results are extremely encouraging. I feel very good, not just about the weekend, but the prospects for the run of that movie. It's kicking off the blockbuster lineup for the rest of the year which we talked about on this call. We have more optimism in China than we have had for a long time.

We have our new marketing campaign which is in full bloom. We are rolling out our laser program and our upgrades of our theaters. And we look forward into 2019 and 2020 with a lot of optimism. So as I said, it's a good time to be in the IMAX business.

And for those of you who have supporting us for a while, we really appreciate it and we hope we can deliver on the long term promise..

This concludes today's call. Thank you for your participation. You may now disconnect..