Source: IMAX.

Hollywood had a tough year in 2014, with ticket sales falling substantially from prior-year records. That can have a huge impact throughout the industry, and big-screen theater company IMAX (NYSE:IMAX) had many investors worried about the possibility of huge declines in sales and net income due to the sluggish state of the entertainment industry. Yet IMAX's fourth-quarter financial report on Thursday morning gave shareholders some positive signs. Even though the company could not avoid a pullback in some of its results, it nevertheless delivered a solid showing under tough conditions. Let's look more closely at IMAX and its latest read on the state of the motion-picture industry.

How IMAX held its own
You can see the challenges IMAX faced by looking at its headline results from the fourth quarter. Revenue fell 2.5% year over year to $102.5 million, and net income attributable to common shareholders dropped by almost a full quarter. Even on an adjusted basis, earnings of $0.34 per share were a dime per share lower than what IMAX posted in 2014. Global box office fell 7% on a drop of more than $70,000 in average box office per screen, to $292,200.

IMAX showed mixed results in its three main businesses. Sales from production and digital remastering were hit the hardest, falling more than 10% to $25.6 million as the poor global box-office numbers weighed on its results. IMAX's joint revenue-sharing arrangements also provided a headwind of about 6% on the overall business, although revenue from sales and lease arrangements climbed 2% from the year-ago quarter.

CEO Richard Gelfond. Source: IMAX.

IMAX CEO Richard Gelfond largely ignored the fourth quarter's challenges, instead focusing on a successful 2014. Citing IMAX's signing of long-term film deals with major movie studios, the sale of a portion of its China business, and the completion of its new laser-projection system, Gelfond said "We believe these accomplishments position us well, not only to take advantage of the 2015 film slate, which is already off to a great start, but also to help drive long-term growth."

Can IMAX get its growth back?
IMAX's long-term plans involve further expanding its network. The company dramatically increased the pace of installations during the quarter, adding 57 theater systems. IMAX further enhanced its future growth by signing contracts for 16 more theater systems. As a result, IMAX now counts 934 systems among its extensive international network.

The mix between new joint revenue-sharing arrangements and full new sales and lease arrangements has largely reversed over the past year. In 2013, more than three-quarters of IMAX's screen growth came from joint ventures. But last year, three-quarters of the IMAX's theater signings went to the sales and lease segment. IMAX's backlog mix has also been shifting: While joint ventures still represent the majority of backlogged deals, IMAX has seen those figures come more into balance over the past year.

Source: IMAX.

Perhaps most importantly, IMAX sees a solid stable of offerings improving results in 2015. In addition to much-anticipated releases from the Avengers and Star Wars franchises later in the year, IMAX has experimented with big-screen showings of Game of Thrones episodes, and the results of those showings could well open up a new growth frontier for the theater operator.

IMAX's fortunes are linked to those of Hollywood generally, and so the ebbs and flows of movie traffic will inevitably make its results somewhat cyclical. Yet the company has demonstrated a strong ability to ride out downturns and come back stronger than ever, and with its long-term strategic plans still moving forward, IMAX has potential for further gains for shareholders in 2015 and beyond.