FILMS HELP IMAX GROW EVEN BIGGER PROFITING BIG-SCREENER SIGNS EXPANSION DEALS.

Byline: Greg Hernandez Staff Writer

Riding the successful giant-screen runs this summer of ``Spider-Man 2'' and ``Harry Potter and the Prisoner of Azkaban,'' IMAX Corp. announced Monday that it has signed theater expansion deals with two top North American exhibitors.

Deals with National Amusements and Cinemark USA could increase the number of domestic multiplexes with IMAX theaters, which have screens eight stories high and 120 feet wide, by over 20 percent.

News of the two deals sent IMAX shares up 25 cents to $4.63 on the Nasdaq market. The company also announced second-quarter earnings Monday highlighted by net income of $1.55 million, or 4 cents a share, compared to $969,000, or 3 cents a share in the same quarter a year ago ended June 30.

Canada-based IMAX has gone increasingly Hollywood mainstream in recent years with selected blockbusters like ``The Matrix Reloaded'' being remastered for the giant screen using IMAX's DMR process, which allows for a movie to be enlarged for an IMAX screen without compromising picture quality.

``Increasingly, as the studios have seen the consistency of the results, they are adding on an IMAX run,'' said Rich Gelfond, IMAX co-chairman and co-CEO.

The economics for these films are becoming more and more attractive for studios and exhibitors, because the cost of converting a film to the IMAX format is $2 million to $4 million.

``As Hollywood looks at the reality of a weekend or two and you're out, the opportunity to expand a run and build franchise value for a property like `Potter' or `Spider-Man,' I think, is very attractive,'' Gelfond said.

The next major release will be Warner Bros' computer-animated ``Polar Express,'' which hits IMAX and regular theaters on Nov. 10. The IMAX version will not only be bigger, it will also be in 3-D while the regular-sized movie will not.

The new deals will add to the 120 IMAX theaters operating in the United States. In all, there are 240 of the theaters in 35 countries.

National Amusements Inc., which currently operates The Bridge Cinema de lux in West Los Angeles, will install as many as 18 IMAX theater systems over the next several years, including four this year and two more in 2005 or 2006.

``We are excited to be partnering with IMAX and feel that its new DMR technology is consistent with a number of things we are working on throughout our circuit,'' said National Amusements President Shari E. Redstone.

The deal with Cinemark USA, the third-largest operator of commercial theaters in the U.S., currently has five IMAX theaters and will install two more beginning next year.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com