AMC Theatres Posts $4.58 Billion Fiscal Loss in 2020

There was only one fiscal winner at AMC Theatres in 2020: CEO Adam Aron. As expected, the world’s largest movie exhibitor March 10 reported a $4.58 billion loss for the fiscal year ended Dec. 31, 2020. The chain, which has been operating about 67% of its domestic screens with government-mandated limited seating capacity limited to 20% to 40% due to the pandemic, lost $946.1 million in the fourth quarter, despite reporting attendance of more 8 million moviegoers worldwide in the quarter.

Revenue for the quarter dropped 89% to $162.5 million from $1.45 billion in the previous-year period. For the year, revenue tumbled 77% to $1.24 billion, from $5.5 billion.

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AMC Theatres CEO Adam Aron

“This past year has presented AMC with the most challenging
market conditions in the 100-year history of the company,” Aron said in a statement. “As unprecedented as these times have been, so too is the unprecedented drive and commitment of the AMC team to take swift and decisive actions to ensure our survival and our success.”

Indeed, despite partial re-openings, attendance in the quarter plummeted 91% to 8 million, from 92.5 million in the previous-year period. For the fiscal year, attendance fell 79% to 75.1 million, from 356.4 million in 2019.

Aron, who saw his total 2020 compensation double to $20.9 million, which included $5 million in bonuses, said better days are just around the corner for exhibitors.

“As we sit here today, we see that vaccinations are occurring in the U.S. at a brisk clip, our theaters in New York City have finally opened, with theaters in Los Angeles likely opening shortly as well, blockbuster movie titles are currently scheduled to be released in significant quantity in the coming few months, and we have more than $1 billion of cash on hand,” Aron said. “Taking these facts together, we have reason to be optimistic about AMC’s ability to get to the other side of this pandemic.”

CEO Adam Aron: A Lot of AMC Theatres Were ‘Sold Out’ Last Weekend

The past week marked a return of sorts to the milk and honey days AMC Theatres CEO Adam Aron used to take for granted. Thirteen theaters re-opened in New York City, a major barometer in the exhibition business, for the first time in 12 months, resulting in the biggest domestic weekend box office since the pandemic begun.

“A lot of our theaters were sold out [at 25% capacity],” Aron told Fox Business Network’s “The Claman Countdown.” “Saturday night across the United States was the single busiest day for AMC since March 2020. And the New York [designated market area] was the biggest for AMC. That’s an example of pent-up demand.”

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Aron, who last week was awarded $20.9 million in total compensation for 2020 by the AMC board, including $5 million in bonuses, said he expects seating capacity in theaters to begin escalating as vaccinations level rise.

AMC Theatres CEO Adam Aron

“This week we should cross 100 million injections in arms, and it looks like we’re doing, I don’t know, 75 million to 90 million injections a month now in the U.S.,” he said. “President Biden said every American adult can get vaccinated by the end of May. Clearly that means the capacity limits in movie theaters will rise.”

When asked if New York Gov. Andrew Cuomo had given any indication when 50% theater capacity could be reached, Aron said he was just happy to be open again in the Big Apple. 

“It’s been 50 and a half weeks that we were closed in New York,” he said.

In pre-pandemic 2019, AMC sold more movie tickets than any other business in the world — and only sold 17% of its available seats.

Remember that movie theaters are not sports stadiums or Broadway theaters that routinely sell out,” he said. “We’re more like churches built for Easter Sunday.”

Despite the new release of Disney’s Raya and the Last Dragon, box office grosses were a bit anemic nationwide. While more than half of all movie theatres in the country remain closed, 90% AMC screens are open.

“We have about twice as many theaters open as the rest of the industry combined,” Aron said. “Some people say we’re in the new car business, and to sell new cars you need new cars in the showrooms. There have only been half a dozen major movies released in the last year.”

Aron said he’s upbeat for the movie business from Memorial Day weekend through the Fourth of July when Paramount Pictures releases A Quiet Place Part II and Universal Pictures bows F9: The Fast Saga, among other titles.

“When Top Gun: Maverick comes with Tom Cruise, I — everything I hear is that movie is spectacular, and it’s going to be like that like, every week for the rest of 2021,” Aron said. “We’re going to see one major title after another come out. Plus, by the end of May, June, July period, the number of Americans going to be vaccinated will be huge. Right now, we don’t even have 20% of the U.S. public that’s been vaccinated.”



AMC Theatres CEO Adam Aron Doubles Compensation in Pandemic Year

NEWS ANALYSIS — 2020 was a terrible year for AMC Theatres. It was a great year financially for CEO Adam Aron and other executives. Corporate parent AMC Entertainment March 5 disclosed in a regulatory filing that it paid Aron $20.9 million in salary, bonuses and stock options. That’s more than double the $9.7 million in total compensation Aron received in 2019, and $9.5 million paid in 2018 — both years when there was no pandemic shuttering most of the world’s largest exhibitor’s screens.

CFO Sean Goodman earned $4.2 million in compensation, and John McDonald, executive president of U.S. operations, made $3.4 million.

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Aron’s compensation included $1.1 million in base salary, bonuses totaling $5 million and $14.8 million in stock options. The bonuses, which included a $3.75 million check just last week, were cited by the board of directors “to recognize the extraordinary efforts of employees to maintain the company’s business and preserve stockholder value during the COVID-19 pandemic … and incentivize management and employees during the continuing and unprecedented difficult business conditions.”

While Aron and senior management did their jobs shoring up AMC finances and reworking theater leases, apparently, fiscal incentivization only flows uphill.

Goodman, McDonald and three other executives split another $1 million in bonuses. Meanwhile, most of the company’s 26,000 employees, including theater workers hailed by the board, were furloughed through much of last year without pay when AMC was forced to shutdown due to COVID-19. While the chain has re-opened about 25% of its theaters, it’s unclear how many of the idled staff have been rehired.

Notably, AMC’s non-employee board — which authorized the executive compensation — didn’t work for free either in 2020. The eight members walked off with fees and stock options ranging from $182,000 to $251,000 each. Significant fiscal largesse despite the fact AMC teetered on the edge of bankruptcy throughout much of the year.

AMC Entertainment Stock Gets Boost With New York Theater Re-Openings

AMC Entertainment, corporate parent to the world’s largest movie exhibitor, AMC Theatres, saw its stock value rise in early Feb. 23 trading following news from New York Gov. Andrew Cuomo that theaters can reopen in New York City in the first week of March.

Hollywood studios, home entertainment and the domestic box office have been under prolonged economic siege since the pandemic started — the latter following the closure of screens in major markets California, New York and New Jersey in mid-March 2020.

AMC chief executive Adam Aron said the re-openings mark another “important” step toward restoring the health of the movie theatre industry and New York City’s largest movie exhibitor.

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“We will reopen all 13 of our theaters in the city beginning March 5,” Aron said, adding that all theaters would be subjected to the company’s extensive health and safety protocols for moviegoers and employees developed in consultation with Clorox and current and former faculty at the Harvard University School of Public Health.

AMC Safe & Clean includes social distancing and automatic seat blocking in each auditorium, mandatory mask wearing, and upgraded air filtration with MERV-13 air filters, as well as many other important health, sanitization and cleanliness efforts.

“Since reopening our first theaters in August, AMC has welcomed back nearly 10 million moviegoers nationwide without a single reported case of COVID-19 transmission among moviegoers at our theaters,” Aron said. “We look forward to welcoming back our New York City guests to the big seats, big sounds and big screens that are only possible at a movie theater.”

Wedbush Securities media analyst Michael Pachter lauded AMC and Cinemark’s safety measures, but contends most moviegoers won’t return until vaccinated and virus deaths decrease. The country just passed 500,000 COVID-related deaths on Feb. 22 — the most in any country since the pandemic began.

“We think that AMC and Cinemark have taken all the right in-theater precautions, allowing some attendance over the last several months,” Pachter wrote in a note before the re-opening news. “However, major markets have remained closed and we do not expect attendance levels to begin to normalize until July at the earliest.”

The next day, Pachter contends pent-up demand by moviegoers could potentially add meaningfully to AMC’s Q1 and Q2 results given that AMC’s NYC theaters are some of its highest performing screens in its domestic circuit.

“Should this entice other densely populated areas to re-open, this could in turn entice studios to maintain Q2 and Q3 release slate plans,” Pachter wrote Feb. 23.

The 2020 North American box office ended down 81.6% compared to 2019 at $2.09 billion, while 2021 is trending down 93.6% year-to-date, according to Pachter.

AMC has not yet announced its Q4 2020 results or the timing of its release, but Pachter expects the company to report fiscal results in the first week of March.


AMC Theatres Thwarts Bankruptcy Talk, Raises $917 Million of Fresh Investment Capital

AMC Entertainment, corporate parent to AMC Theatres, the largest exhibitor globally, Jan. 25 announced that since Dec. 14, 2020, it has successfully raised or signed commitment letters to receive $917 million of new equity and debt capital. This increased liquidity should allow the company to make it through the coronavirus-impacted winter well into 2021 — and hold off talks of bankruptcy.

The funding, which helped boost AMC’s stock 35% in pre-market trading, comes as studios continue to delay releasing major movies due to the ongoing pandemic that has reduced moviegoers to diehard fans.

Of the $917 million, $506 million is from the issuance of 164.7 million new common shares, along with the previously announced securing of $100 million of additional first-lien debt and the concurrent issuance of 22 million new common shares to convert $100 million of second-lien debt into equity.

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In addition, AMC has executed commitment letters for $411 million of incremental debt capital in place through mid-2023, unless repaid before then, through the upsizing and refinancing of its European revolving credit facility.

Based on a variety of assumptions, including future attendance levels, AMC estimates that its financial runway has been extended deep into 2021. AMC also is presuming that it will continue to make progress in its ongoing dialog with theater landlords about the amounts and timing of owed theater lease payments.

“Today, the sun is shining on AMC,” CEO Adam Aron said in a statement. “Any talk of an imminent bankruptcy for AMC is completely off the table.”

Aron contends that with the renewed government push to vaccinate the general population, an increase in cinema attendance seems likely, although the executive notes that no one knows for sure the future course of this and other strains of the coronavirus, and therefore thoughts as to future cash needs of AMC are uncertain.

“To that end, we are grateful to the world’s medical communities for their heroic efforts to thwart the COVID virus,” he said. “Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program.”

Regal Cinemas Owner Eyes New Warner Release Window; AMC Entertainment CEO Livid

Reaction from Warner Bros.’ landmark decision to effectively scuttle the theatrical window on all new movie releases in 2021 has run the gamut of emotions among exhibitors.

Adam Aron, CEO of AMC Theatres parent AMC Entertainment, blasted the decision, contending WarnerMedia is sacrificing “a considerable portion of the profitability of its movie studio division” to help jumpstart SVOD platform HBO Max. Aron said the decision also negatively affects filmmakers and production partners.

AMC Entertainment CEO Adam Aron

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“We have already commenced an immediate and urgent dialog with the leadership of Warner on this subject,” Aron said in a statement.

The CEO over the summer hammered out a reduced theatrical window agreement with Universal Pictures, which affords the studio PVOD distribution into homes 17 days (at least three weekends) after theatrical release on titles with less than $50 million box office. AMC also shares in the PVOD revenue.

Aron had been understanding of Warner’s decision to release DC superhero sequel Wonder Woman 1984 in theaters and HBO Max on Christmas Day. But an entire year’s film slate is another issue.

“As this issue gets sorted out, we are nonetheless encouraged that vaccines protecting society at large against the coronavirus are very much at hand,” Aron said. “So, it is our expectation that moviegoers soon will be able once again to delight in coming to our theaters without any worry — viewing the world’s best movies safely in our big seats, with our big sound and on our big screens.”

Read Also: Warner Bros. Releasing All Movie Releases Same Day on HBO Max, Theaters in 2021

Meanwhile, Cineworld, owner of No. 2 (and temporarily shuttered due to the pandemic) exhibitor Regal Cinemas, with more than 7,000 screens in the U.S., said it expects to iron out a new distribution agreement with Warner going forward.

In a statement, Cineworld said it understood Warner’s decision to bow Wonder Woman 1984 directly to Max due to the theater closings. It also remains “very encouraged by the giant steps achieved” with regards to the coronavirus vaccination process, which it expects will be put in place earlier than previously anticipated.

“This will generate significant relief for our industry and enable our cinemas to make a great comeback,” Cineworld said.

The exhibitor said that when a vaccine is available, it would look to reach an agreement with Warner about release windows and financial terms that will work for both sides.

“Big movies are made for the big screen and we cannot wait to reopen our cinemas in [the first quarter] in order to offer our customers, as always, the best place to watch a movie,” Cineworld said.

AMC Theatres CEO: ‘We Came Out Ahead’ on ‘Come Play’ PVOD Release

AMC Theatres’ landmark PVOD agreement with Universal Pictures has generated positive revenue for the fiscally-challenged exhibitor — 18 days before its first direct-to-consumer release. Speaking Nov. 2 on the third-quarter call, CEO Adam Aron said the studio’s PVOD release of horror movie Come Play, slated for Nov. 20, has already proven fiscally accretive to AMC.

“On the only one of [six planned] PVOD movies that has been released as of yet, our analysis is that AMC came out ahead financially as we had modeled, but much better than some [analysts] had postulated or feared,” Aron said.

In return for allowing Universal to sell PVOD access to its theatrical releases in the home 17 days after a movie’s box office debut, AMC gets an undisclosed cut of the PVOD revenue. Come Play from Focus Features won the domestic weekend box office with$3.1 million in ticket sales.

On the heels of a $905 million quarterly fiscal loss, scant domestic moviegoers and new government mandates to re-close screens across the United Kingdom, Ireland, Germany, Italy, and in parts of Spain due to coronavirus infection upticks, Aron’s back remains against the wall.

The CEO borrowed from former British Prime Minister Winston Churchill’s famous wartime rally speech in the House of Commons during the early days of World War II.

“We shall not flag or fail,” Aron said. “We shall fight on the seas and oceans. We shall fight in the air. We shall defend our islands. We shall fight on the beaches. We shall fight on the landing grounds. We shall fight in the fields and in the streets. We shall fight in the hills. That is exactly where we are now at AMC. We are fighting this virus with all of our smarts, and all of our minds.”

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AMC’s enemy is multifaceted: A resurgent virus, ongoing public concern, government regulation and dwindling cash to fund operations. To counter the challenges, which include restructuring debt, selling shares and offloading movie screens in the Baltics, AMC is marketing transactional VOD titles on its website, and offering free 30-day passes to SVOD services AMC Networks’ Shudder and Sundance Plus.

Aron remains upbeat that a vaccine will be found and that backlogged tentpole studio releases portend a record 2021 box office.

“At AMC, it is our considered opinion that there is good news down the road,” Aron said. “Once the movies start flowing next year, there will be a new big title almost every single week.”


AMC Theatres Posts $905 Million Q3 Fiscal Loss

Fiscally challenged AMC Theatres Nov. 2 revealed the ongoing hardships imposed upon the theatrical industry by the coronavirus pandemic led to the world’s largest exhibitor reporting a $905.8 million third-quarter (ended Sept. 30) loss, compared with a loss of $54.8 million during the previous-year period. Revenue plummeted 91% to $119.5 million, from $1.31 billion a year ago as theaters either remain shuttered in key markets or have limited seating capacity due to social distancing guidelines.

Through nine months of the fiscal year, AMC has lost $3.64 billion, compared with $135 million in 2019. Moviegoer attendance is down nearly 97% to 1.96 million, from 61.1 million a year ago. For the fiscal year-to-date, attendance is down 78% to 41.6 million, from 188 million.

“The magnitude of the impact of the global pandemic on the theatrical exhibition industry was again evident in our third quarter results, as theater operations in the U.S. were suspended for nearly two-thirds of the quarter,” CEO Adam Aron said in a statement.

While not high on the list of protected industries during the pandemic, AMC has proactively sought third-party financial lifelines. In March, the chain raised $900 million from new debt and equity capital, secured more than $1 billion of concessions from creditors and landlords, and raised more than $80 million from asset sales in the Baltic region.

Earlier today, AMC announced it would sell 20 million Class A common shares for $47.7 million.

“The liquidity enhancing and leverage reducing actions that we already have taken and will further need to take, combined with our relentless focus on efficiency and cash management, are all crucial to navigating through this storm,” Aron said.


AMC Theatres Re-Opening in Key New York State Locations

Fiscally challenged AMC Theatres Oct. 19 announced that several of its locations throughout New York state will resume operations beginning Oct. 23. The re-openings are a result of the recent announcement by New York Governor Andrew Cuomo, allowing movie theaters throughout much of the state to reopen following lengthy closures due to the coronavirus pandemic.

New York, along with California and New Jersey, are seen as vital markets to the movie theater industry.

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About 12 AMC locations are expected to resume operations primarily in portions of Upstate New York and on Long Island. As a result of these openings, AMC expects to have approximately 530 of its 600-theater circuit open by the end of October. Beginning Oct. 23, AMC will be operating theaters in 44 of the 45 states where it has business operations.

News of the re-openings sent AMC Entertainment shares up 22% in early morning trading.

“The reopening of movie theaters around the country is essential to the theatrical industry and the entire entertainment ecosystem,” CEO Adam Aron said in a statement, adding that studios are pushing back new releases without major market re-openings.

“Therefore, it is a monumental step in the right direction for our entire industry that theaters are starting to open across the state of New York,” Aron said.

The CEO said AMC continues to work closely with state and local authorities about re-openings, which Aron believes will increase confidence among moviegoers to return to cinemas.

“We continue to see state and local governments all across the United States recognize the strong steps we have taken through [our sanitation and safety protocols],” Aron said.

AMC’s clean protocols feature social distancing, mandatory mask wearing, availability of disinfecting wipes and hand sanitizer, along with high-tech solutions like electrostatic sprayers, HEPA vacuums and enhanced air filtration through MERV 13 filters.

In areas where theaters are not yet able to open, Aron said AMC continues to have discussions with local authorities about resuming operations.

The re-openings are key to AMC staying in business. Parent company AMC Entertainment Oct. 13 disclosed it has only enough cash to maintain operations through the end of the year.

AMC Theatres Warns It Will Be Out of Cash by the End of the Year

With a delayed release slate and moviegoers wary of COVID-19, AMC Entertainment, parent to the world’s largest theatrical chain, said it will be out of cash by the end of the year or early 2021 without a renewed external infusion of funds.

Cash burn, or monthly use of cash to fund operations, is impacted by, among other things, the timing of resumption of theater operations, the timing of movie releases and the slate of future releases, theater attendance levels, landlord negotiations and minimum lease payments, costs associated with the enhanced safety and sanitation protocols, and food and beverage receipts.

“To meet its obligations as they become due, the company will require additional sources of liquidity or increases in attendance levels,” CFO Sean Goodman wrote in the Oct. 13 filing. “The required amounts of additional liquidity are expected to be material.”

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AMC said it has generated about $40 million to date selling new shares of stock, in addition to lopping off hundreds of millions of dollars owed on long-term debt.

The filing revealed what most observers already knew: The exhibition business is facing extinction if pandemic conditions remain the same and liquidity issues aren’t further addressed. And even if they are, the business realities facing theaters is dire.

“There can be no assurance that the assumptions used to estimate our liquidity requirements and future cash burn will be correct, or that we will be able to achieve more-normalized levels of attendance described above, which are materially higher than our current attendance levels, and our ability to be predictive is uncertain due to the unknown magnitude and duration of the COVID-19 pandemic,” Goodman wrote.

The filing stands in contrast to the confidence CEO Adam Aron has been projecting in recent weeks, including boasts that AMC, unlike rival Regal Cinemas, could remain open in the current business climate due in part to its groundbreaking distribution agreement with Universal Pictures. That deal allows Universal to significantly shrink the theatrical window in exchange for sharing revenue from early transactional VOD and premium VOD releases in the home.

As of Oct. 9, AMC had resumed operations at 494 of its 598 U.S. theaters, with limited seating capacities of between 20% and 40%, representing approximately 83% of the U.S. theaters and 77% of 2019 U.S. same-theater revenue.

Since the resumption of operations in its U.S. markets, AMC said it has seen more than 2.2 million moviegoers frequent theaters, representing a same-theater attendance decline of approximately 85% compared to the same period a year ago.

The remaining 17% of the U.S. theaters left to reopen are primarily located in California, Maryland, New York, North Carolina and the state of Washington, and include some of the chain’s most productive locations, representing approximately 23% of 2019 U.S. revenue.

Twenty-five theaters in North Carolina and Washington State are scheduled to reopen Oct. 16. AMC says it has an “active dialogue” with local and state government officials in the remaining states, however, there is “limited visibility” around the timing for resumption of theatre operations in these locales.

Meanwhile, AMC’s fiscal situation not only affects employees and shareholders, but landlords as well. The company said it had resumed operations at 308 leased and partnership international theaters. This represents about 86% of its international screens and approximately 90% of 2019 international same-theater revenue. Since the resumption of operations in its International markets June 3, AMC has seen more than 5.2 million consumers return, representing a same-theater attendance decline of approximately 74% compared with the same period a year ago.

“It is very difficult to estimate our liquidity requirements and future cash burn rates, and depending on the assumptions used regarding the timing and ability to achieve more normalized levels of operating revenue, the estimates of amounts of required liquidity vary significantly,” Goodman wrote.

Micheal Pachter, media analyst with Wedbush Securities in Los Angeles, doesn’t expect attendance levels to begin to normalize until mid-2021. He said that with 30% of moviegoers in the 50+ age group and another 30% between 30 and 50 (according to MPAA, 2018), a significant portion of moviegoers are not going to be bold enough to return to theaters without a virus vaccine. Losing a substantial portion of this demographic, and especially their children, is driving studios to delay theatrical releases.

“We think the relatively lackluster domestic box office for Tenet, juxtaposed with the seemingly tepid response to Mulan as a PVOD release, have made film releases seem like a risky business in the current environment,” Pachter wrote in a note.