IMAX Turns the Multiplex Corner

Yesterday was a good day for IMAX (Nasdaq: IMAX  ) . The stock shot 10% higher, and it wasn't just because 300 proved to be a cinematic smash on the company's bigger than life film projection systems. IMAX announced a pair of domestic screen installation deals that will help the company grow its reach even deeper into the entertainment-devouring masses.

In a pair of press releases issued just minutes apart, IMAX announced deals with multiplex operators Regal (NYSE: RGC  ) and Kansas-based Dickinson.

The Regal pact calls for an IMAX retrofitted installation in Florida. The companies also signed a joint venture agreement to get two more screens up in California and Oregon. All three will be up and running before May's debut of Spider-Man 3. In other words, after shocking investors back in November with zero installations during the September quarter, you can count on at least three new openings in the upcoming quarter.

The Dickinson deal calls for IMAX to install its system in five locations over the next two years.

IMAX is sitting pretty at this point. 300 generated the highest opening weekend gross in IMAX history, and that record stands to be broken again when the Spider-Man and Harry Potter sequels open in May and July, respectively.

The domestic emphasis is intriguing. Before yesterday's double dose of multiplex fun, the past few months were marked with IMAX screen orders from places like China, Mexico, and Colombia. Are stateside exhibitors now starting to get in on the fun? Industry giant Cinemark is gearing up to go public, and IMAX investors can always hope that some of that IPO money will go to expand the number of Cinemark theaters with IMAX MPX screen systems.

These are challenging times for theater chains. Folks who spend thousands at Best Buy (NYSE: BBY  ) , Circuit City (NYSE: CC  ) , and Tweeter (Nasdaq: TWTR  ) to flesh out their home theater systems see that as an investment. Chains will need to try harder to win the patrons back. The industry is off to a good start in 2007, but like any good flick, this is where the plot thickens.

Part the curtain for a little more screen time with IMAX:

IMAX was recommended two summers ago to Motley Fool Rule Breakers newsletter subscribers. No, it hasn't gone well and you can read the original recommendation and have access to all of the growth stock picks with a free trial subscription. Thankfully, the average pick has beaten the market. Best Buy is a Stock Advisor pick.

Longtime Fool contributor Rick Munarriz loves to spot great things early. It's why he's been with The Motley Fool since 1995. He does not own shares in any of the companies in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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