THE VIEW FROM THE TOP; `EVEREST' DRIVING IMAX OUT OF NICHE AND INTO THE GLOBAL MARKETPLACE.

Byline: Dave McNary Daily News Staff Writer

Imax Corp., best known for showing films about the wonders of nature on eight-story screens, is about to get big.

Sometime before Memorial Day, the Imax-format film ``Everest'' should crack the top 10 list of best performers at the nation's box office.

That's not a big deal for most major studio releases, which almost always are shown in at least 1,500 theaters. But the appearance of ``Everest'' on the widely followed list would represent a huge endorsement from moviegoers since the film will be on less than 50 screens.

In short, ``Everest'' will be to Imax what ``Titanic'' has become to James Cameron and Leonardo DiCaprio.

``When `Everest' makes the top 10, it will signal to the world that Imax is a format with great commercial potential,'' said Kevin Skislock, an entertainment industry analyst with L.H. Friend, Weinress, Frankson & Presson. ``The impact will be twofold - it will say there's a huge potential audience for it if you develop compelling product, and it will send a clear message to exhibitors that giant-screen economics are compelling.''

Skislock and other analysts believe Imax is on its way to becoming a global player rather than a niche producer for science buffs.

More than three decades after its first films screened, it is in the right place at the right time - with a hit film and the movie-exhibition business growing eager to install giant-screen theaters.

``Everest'' is a documentary following a 1996 expedition that reached the summit of the world's tallest mountain a few days after eight people died. The tragedy, one of the worst climbing accidents in history, was chronicled in the best-seller ``Into Thin Air'' by Jon Krakauer, who survived the climb.

The 44-minute film offers a combination of travelogue, disaster and character study. It focuses on Jamling Norgay, who made the ascent as a tribute to father Tensing Norgay, the Sherpa who joined Sir Edmund Hillary for the first successful conquest of the mountain in 1953.

The lure of Mount Everest is such that climbers spend up to $65,000 to be in expeditions taken to the top, despite the risks. About 700 people have reached the summit at 29,028 feet and at least 150 others have died trying.

``Everest,'' which will likely run in theaters for most of this year, has already grossed close to the $6 million cost for Laguna Beach-based MacGillivray Freeman, the largest independent producer of Imax-format films.

In order to film in conditions where temperatures can drop to 70 below zero and winds can reach 100 miles an hour, the standard 80-pound Imax camera was stripped to 35 pounds and equipped with oversize knobs so it could be operated without removing gloves.

``Everest'' opened March 3 amid strong reviews and has been playing to sold-out houses ever since. While ``Titanic'' was setting records as the highest grosser ever, ``Everest'' was posting the largest per-screen averages of any movie in the country.

The movie is also receiving help from Malden Mills, makers of Polartec, which is supplying much of the $7 million marketing budget in exchange for an advertisement running at the start of the film.

Skislock said the widespread publicity about the tragedy and strong word of mouth mean the movie should play well into next year.

``What is happening is that you're getting a lot of people who have never seen a giant-screen movie before,'' he said. ``You're also getting people who come into theaters and see `Everest' and then, because it's less than an hour, buy a ticket for another movie. If you're an exhibitor, you have to love it.''

Imax leases its projection systems to specially designed theaters with 80-foot-high screens to show films shot in 70 millimeter 15-perforation frames, 10 times the size of the standard 35 millimeter format. Such films usually cost in the relatively cheap range of $5 million to $10 million.

Imax began crossing over toward traditional films in 1991 with the 90-minute ``Rolling Stones At the Max'' concert film and in 1995 with the first Imax 3-D dramatic film, ``Wings of Courage,'' with Val Kilmer.

And in a certain sign that Imax is moving to the mainstream, Imax is now in talks with Paramount to make a ``Star Trek'' 3-D movie that could be out next year.

And although a majority of Imax theaters are in museums, most new outlets are in commercial locations. The fast-growing Edwards chain, which runs Imax theaters in Ontario and Irvine, plans to open an Imax as part of a multiplex in Valencia later this year and will operate 13 by the year 2002.

Until then, Imax fans in the area have to travel to Irvine to see the nearest screening of ``Everest.'' The only Imax facilities in Los Angeles Country are at the Museum of Science and Industry south of downtown Los Angeles and the ``Back to the Future'' ride at Universal Studios, neither of which are showing ``Everest.'

Steven Bernard of Everen Securities, who carries an ``outperform'' rating on the stock, said the key contribution of ``Everest'' won't come from boosting Imax revenues - since Imax was not the producer, it receives only 7 percent of the box office - but from long-term awareness of the format.

``The film will generate repeat business and show the operators that the concept is definitely viable,'' Bernard said. ``I think it will show chains they should consider including an Imax when they open a multiplex.''

Still, the success of ``Everest'' doesn't mean you're suddenly going to see Imax theaters on every corner. There are about 160 facilities, including 90 in the United States, and there will likely be 40 more in operation by the year 2000, according to Bradley Wechsler, chairman and co-CEO of Imax.

``I think `Everest' is going to help in the public's mind re-emphasize our brand and what it stands for: high-quality family entertainment,'' Wechsler said. ``We already have awareness around 65 percent, so this helps us expand our franchise.''

Imax was launched 31 years ago as part of Expo '67 in Montreal and taken over in 1994 by Wechsler and Richard Gelfond, backed by investment bankers Wasserstein Perella & Co. The two, who had extensive background in film and financing, took Imax public that year and opened the first 3-D Imax theater at Lincoln Center in New York. The 600-seat facility quickly became the nation's top grossing theater.

Wechsler listed three major factors spurring growth in recent years:

Imax 3-D. ``It breaks down a lot of barriers between the screen and the audience,'' he noted.

Introduction early last year of a theater system that can be integrated into a multiplex at half the usual $7 million cost.

More and better films.

Ohio Co. analyst Richard Wayman, who recently issued a ``buy'' recommendation on Imax stock, said the break-out success of ``Everest'' has altered Wall Street's perception of Imax.

``The company doesn't get a lot of coverage, but they are getting more recognition with `Everest' doing so well,'' Wayman said. ``It's going to become a mainstream offering because operators have to have something more to convince customers to come.''

``Everest'' has grossed nearly $5 million domestically in a month and came in 18th last weekend at the box office with $814,368 at 31 locations. MacGillivray Freeman, the world's leading producer of giant-screen films, will have 10 more screens added by the end of May and another 20 by the middle of fall.

Skislock, who has a ``strong buy'' rating on the stock, believes ``Everest'' will be the spur theater owners need to start routinely including an Imax theater when they open a 20-screen megaplex over the next few years.

``Right now, having an Imax theater at your megaplex is a way to differentiate yourself from the competition,'' he said. ``Pretty soon, we'll be moving into the `me too' part of the cycle, where every theater will have one.''

Imax stock has been trading around $28 this year, but Bernard believes it can hit $40 in six months.

Currently, Toronto-based Imax shows its films in about 160 theaters worldwide and recently posted a 34 percent gain in 1997 profits to $20.3 million on a 22 percent rise in revenues to $158.5 million.

Its only rival is Burbank-based Iwerks Entertainment, which also sells motion-simulation systems and lost $4 million on sales of $14 million in the six months ended Dec. 31.

Skislock is predicting continued robust growth for Imax with annual revenues jumping 24 percent to $197 million this year, $261 million in 1999, $333 million in 2000 and $428 million in 2001.

Part of Skislock's enthusiasm stems from the fact that Imax is working on several more projects - such as this fall's ``T. Rex: Back to the Cretaceous'' and ``Star Trek'' - that could be even more successful than ``Everest.'' The company usually takes a 20 percent cut on films it has produced.

``The success of `T. Rex' and `Star Trek' will result in a huge wave in theater signings,'' he said. ``Up until now, it's been a classic chicken-and-egg situation, where exhibitors have been hesitant to take giant-screen films because there hasn't been enough product to show customers and producers have been hesitant because the distribution pipeline has not been there.''

As for the long term, Wechsler is focused on reinforcing Imax as a brand that can be trusted, much like Burbank-based Walt Disney Co. is by parents for family oriented films.

``With deference to the fine movies from, say, Universal or Paramount, customers won't drive to see a movie because it's from a particular studio except for a Disney movie,'' he said. ``And they'll go see an Imax movie and a Tom Cruise movie.''

IMAX ATTRACTIONS

Now showing or coming soon:

(Film - Producer/distributor)

``Adventures in the Third Dimenson'' - Imax

``Africa's Elephant Kingom'' - Discovery Channel

``Dolphins'' - Imax

``Everest'' - MacGillivray Freeman

``Extreme'' - Fat World Production

``Galapagos'' - Smithsonian Institute

``Island of the Sharks'' - Nova Large Format Films

``Making Contact'' - Imax

``Star Trek'' - Paramount

``T.Rex: Back to the Cretaceous'' - Imax

IMAX AT A GLANCE

Headquarters: Toronto

First films: Screened at Expo '67 in Montreal

Initial public offering: 3.25 million shares at $6.25 a share on June 10, 1994 (post-split adjusted)

Highest trade: $28.875 on March 28

Largest stockholder: Wasserstein Perella with 39 percent

1994 results: Loss of $15.8 million on revenues of $102.8 million

1997 results: Profits of $20.3 million on revenues of $158.5 million.

Theaters: 160, including 70 overseas; 35 operate in 3D format

Projected theaters by 2003: 300, including 150 overseas

Backlog: 77 theaters, as of Dec. 31

Partnerships: Sony Corp., Viacom Inc., Regal Cinemas, Edwards Theaters

Attendance: 510 million since 1970, 60 million last year

Format: Frames shot on 70-millimeter stock with 15 perforations per frame, 10 times the size of conventional 35-millimeter stock; shown on screens from four to eight stories high with capacity from 100 to 1,000

Library: More than 130 films, including ``Into the Deep,'' ``The Nutcracker,'' ``The Rolling Stones - At the Max,'' ``Across the Sea of Time,'' ``Wings of Courage'' and ``Mission to Mir.''

CAPTION(S):

3 Photos, Box

PHOTO (1--Color) FILMING THE ROOF OF THE WORLD

``Everest'' director David Breashears

Why the fascination with Mount Everest? Nearly 700 climbers have reached the top. But the mountain really drew attention after eight climbers got caught in a storm and died in May 1996. Worldwide media coverage of the dramatic rescue orchestrated by the Imax expedition, and John Krakauer's subsequent best seller ``Into Thin Air,'' heightened interest in the world's highest peak.

(2--Color) Araceli Segarra, front, and Jamling Tenzing Norgay ascend the summit in ``Everest.''

(3--Color) THE BIG DEAL

Just how big is an Imax film? Compare Mick Jagger in the ``The Rolling Stones - At the Max'' on 35 mm screen, a 70mm movie theater screen and the 80-foot high Imax screen.

BOX: IMAX AT A GLANCE (see text)