Accounting & Tax

Big-screen Maker Missed Some Details

Last August, Imax was targeted by at least two class-action lawsuits alleging that it made ''false and misleading statements'' about the company's ...
Stephen TaubMarch 16, 2007

Imax Corp. has disclosed it will restate its results over a six-year period after identifying $2.6 million of accounting errors.

The biggest maker of big-screen theaters also delayed filing its fiscal 2006 annual report, due March 16, but assured shareholders work would be completed within the 15-day grace period.

Imax acknowledged it had capitalized some costs that should have been expensed, and that it would also make certain adjustments for errors it had previously identified and determined to have been immaterial. The company added it is evaluating its internal control over financial reporting and expects to report material weaknesses with respect to certain of these matters.

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“We recognize that the delay in filing the 10-K and the underlying causes are unacceptable, and we are committed to rebuilding our financial staff,” said Richard L. Gelfond and Bradley J. Wechsler, Imax’s co-CEOs and co-chairmen, in a statement.

They also gave a vote of confidence to their top finance executive, noting that since the resignation of Francis Joyce last August, “we have been ably led by our acting chief financial officer, Edward MacNeil.” Imax added it is in the process of hiring a permanent CFO.

Shortly after Joyce’s departure, Imax was targeted by at least two class-action lawsuits alleging it made “false and misleading statements” about the company’s financial health. The company also disclosed it was the subject of an informal probe by the Securities and Exchange Commission.

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