AMC Entertainment Narrows Q1 Losses Thanks to Superhero Movies

Sony Pictures’ Spider-Man: No Way Home and Warner Bros. Pictures’ The Batman contributed to AMC Entertainment narrowing its first-quarter fiscal loss (ended March 31) to $337.4 million, compared with a net loss of $567.2 million during the previous-year period when the world’s largest exhibitor was operating at less than 50% capacity. Revenue increased to $785.7 million, compared with $148.3 million for the first quarter of 2021.

“Our results represent AMC’s strongest first quarter in two full years,” CEO Adam Aron said in a statement. “We continue on our pandemic recovery trajectory, more than quintupling revenue and improving adjusted [pre-tax income] by nearly 80% compared to a year ago.”

Aron said the cumulative success of the aforementioned titles, along with Paramount Pictures’ Sonic the Hedgehog 2 drove the quarterly revenue gain.

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Indeed, global AMC attendance increased more than 39 million, from 6.8 million a year ago. U.S. theatrical attendance topped 25.8 million, from 6.2 million. International market attendance topped 13.2 million, from 558,000.
AMC operated an average of 10,099 screens in the quarter, compared with 6,724 screens a year ago.

“When Hollywood releases films that moviegoers want to see, people flock to cinemas in huge numbers to watch movies where they were designed to be seen, in theatres, on the big screen,” Aron said.

AMC Theatres Buys 22% Stake in Gold, Silver Mining Company

AMC Theatres, the largest theatrical exhibitor in the world, March 15 announced it is buying 22% of Hycroft Mining Holding Corporation and its 71,000-acre gold and silver mine in northern Nevada. AMC contends the mine has some 15 million ounces of gold deposits and some 600 million ounces of silver deposit.

In times of fiscal and global uncertainty, it is believed that investment in gold and silver can be an investment lifeline — as well as an appeal to meme stock traders.

AMC chairman/CEO Adam Aron said the attraction of the investment was that it required only a “nominal amount” ($27.9 million) of AMC cash for ownership of more than 23 million shares.

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“To state the obvious, one would not normally think that a movie theatre company’s core competency includes gold or silver mining,” Aron said in a statement.

The executive contends the theatrical chain has been able to successfully navigate the COVID pandemic through its exhibition footprint a time of severe liquidity challenge, the raising of capital, and strengthening of balance sheets, as well as communicating with individual retail investors.

“It is all that experience and skill that we bring to the table to assist the talented mining professionals at Hycroft,” Aron said.

The CEO said the box office success of Spider-Man: No Way Home and The Batman as well as 2022’s promising theatrical slate, heighten internal convictions that the chain is on the path to fiscal recovery and on solid footing to diversify its investments.

“Our strategic investment … is the result of our having identified a company in an unrelated industry that appears to be just like AMC of a year ago,” Aron said. “Investors should think creatively and boldly about AMC’s future, because within the company, we ourselves have been thinking creatively and boldly about our future.”

In 2021, Aron was able to up AMC’s financial assets to $1.8 billion through long-term debt and stock sales. To monetize that cash, Aron said AMC has to “play on offense” to grow the company. That included adding Imax and Dolby Cinema premium screens, launching non-fungible token (NFT) marketing plans with major studios, accepting cryptocurrency to boost theatre attendance, and entering the retail popcorn sales market.

“Now, we are taking AMC’s demonstrated achievement in writing the play book as to how to navigate through liquidity challenge and applying our lessons learned to another entity in Hycroft Mining,” Aron said.

AMC Theatres Narrows Q4 Loss 80%

AMC Entertainment, corporate parent of the nation’s largest movie exhibitor AMC Theatres, Feb. 1 released preliminary fourth-quarter fiscal results for the three-month period ended Dec. 31, 2021.

Driven in part by the box office phenom Spider-Man: No Way Home, total revenue topped $1.17 billion, compared with $162.5 million in the previous-year period. The net loss narrowed between $194.8 million and $114.8 million, which includes an estimated non-cash impairment charge related to long lived assets of $50 million to $125 million.

That compared with a net loss of $946.1 million in Q4 2020, which included a non-cash impairment charge related to long lived assets, definite and indefinite lived intangible assets and goodwill of $466.1 million.

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Pre-tax earnings range from $146.8 million to $151.8 million, compared with a pretax loss of 327.5 million in 2020.

“AMC’s 2021 results improved significantly as the year progressed, and we finished the year with the strongest quarter in two years,” CEO Adam Aron said in a statement. “The fourth quarter of 2021 marks a meaningful milestone with positive [pretax earnings], positive operating cash generated of more than $215 million, and a record year-ending liquidity position of $1.8 billion.”

CEO: AMC Theatres Open to All Business Ideas

NEWS ANALYSIS — Following a second-quarter fiscal report that saw just 45% (22 million) of AMC Theatres’ moviegoing traffic return compared with the same period in pre-pandemic 2019, CEO Adam Aron is open to discussions with just about any potential business partner to bring customers back to the cinema.

Aron he wants customers in his theater seats consuming just about anything on the screen. That mindset was clear on the Aug. 9 fiscal call where Aron revealed the world’s largest exhibitor would begin accepting cryptocurrency as payment in its theaters by the end of the year.

“We are simultaneously writing the code right now to accept Apple Pay and Google Pay for online purchases at our U.S. theaters,” Aron said.

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Back in 2019, when Disney led all studios with $11 billion in box office revenue, Aron said the chain would begin selling movie DVDs (i.e. Frozen) in theater lobbies. It’s an idea that never left the launch pad with the arrival of COVID-19, among other issues.

AMC had a net loss of $344 million on revenue of $444.7 million in Q2. The company has about $1.8 billion in cash after raising 66% of that from equity sales in the first quarter. The chain needs revenue drivers. And Aron said he would entertain any idea that could make that happen. He said the company even considered investing in drive-in theaters during the height of the pandemic.

“We came to the conclusion that they’re a bad economic idea,” Aron confessed. “It sounds appealing, yes, to your stay in your car, but there are two problems: Go into a parking lot and look at how much asphalt is needed to park cars on a lot. The viewing experience at a drive-in theater is not necessarily great, because many people are quite far from the screen.”

And so died the AMC Drive-In.

On the call, Aron was asked whether AMC would consider partnering with video game retailer GameStop offering expanded in-theater “experiences” with local and national gaming competitions. The president of Epic Games is a member of AMC’s board of directors.

“I cannot even count the number of times that our shareholders have asked us to reach out and partner with GameStop,” Aron said. “We’re on the case, more to come.”

For Aron, that’s just scratching the surface. The chain is considering screening musical concert movies, professional sporting events and e-sports, among other attractions.

“Wasting no time, we’ve immediately started to implement these very good ideas,” Aron said. “Our first two UFC matchups, which were in July, drew significant attendance to our theaters.”

AMC’s first two concert movies, with Chance the Rapper, and Halsey, will show on screens across the country later this month.

“We’re quite optimistic that this alternative programming can be built into a real revenue opportunity for AMC in future years, and we’re chasing it hard,” Aron said. “We also hope to engage in meaningful dialog with professional sports leagues and collegiate sports conferences to see if we can obtain the rights to show more sporting events at our theaters.”

Warner Bros., AMC Theatres Agree to 45-Day Theatrical Window in 2022

AMC Entertainment Aug. 9 disclosed it has inked an agreement with Warner Bros. Pictures  for a 45-day theatrical window on the studio’s 2022 new-release movies at AMC Theatres — a shortened window similar to the studio’s existing deal with Regal Cinemas signed in April.

AMC protested last year when WarnerMedia announced it would distribute Warner Bros.’ entire 2021 theatrical slate concurrently on HBO Max. AMC had initially agreed to the concept for the studio’s initial release, Wonder Woman 1984, citing the ongoing pandemic. But the exhibitor’s tone changed when it realized the the box office/streaming strategy was more than a one-off deal.

“It’s no secret that AMC was not at all happy when Warner decided in December to take movies to the home on HBO Max simultaneously with the theatrical release,” CEO Adam Aron said on the company’s second-quarter (ended June 30) fiscal call. “Therefore, it’s especially gratifying that Warner Bros. is yet again embracing a theatrical window. It’s especially pleasing to be working so harmoniously with Warner Bros. once again.”

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Aron said the exhibitor, which struck revenue-sharing agreements with Universal Pictures to accommodate the studio’s expedited move toward retail channels, including PVOD, is in discussions with other studios.

“We actually are in active dialogue with every major studio on this very important topic,” Aron said. “We are hearing considerable support in Hollywood that an exclusive theatrical window is an important way to build big and successful movie franchises. Clearly, though, this whole subject is quite topical. It’s very much a work in progress.”

Indeed, a return to quasi normalcy resulted in AMC generating $444.7 million in revenue, up from just $18.9 million during the previous-year period when the pandemic had most domestic screens shuttered. Through six months of the fiscal year, revenue is down 38.3% to $593 million, from $960.4 million in the same period in 2020. The net loss decreased to $344 million, from $561.2 million. Through the half-year, revenue is down to $911.2 million, from $2.73 billion in 2020.

“AMC is playing on offense again,” Aron said.

AMC Entertainment Looking to Acquire Former Arclight Cinemas, Pacific Theatres Leases; Sells $230.5 Million Worth of Shares to Private Equity Group

AMC Entertainment, corporate parent of AMC Theatres, June 1 announced it has entered into an agreement to raise $230.5 million of cash from the sale of 8.5 million shares of Class A Common stock to Mudrick Capital Management. The equity, which represents about 1.7% of AMC’s outstanding stock, was raised at a price of about $27.12 per share.

AMC said the cash proceeds from the sale would be used to acquire third-party theater leases and enhance the consumer appeal of existing theaters. In addition, AMC said it also intends to use the cash for “deleveraging” opportunities, or the reduction of debt.

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“AMC is being presented with highly attractive theater acquisition opportunities,” CEO Adam Aron said in a statement. “We are in discussions with multiple landlords of superb theaters formerly operated by Arclight Cinemas and Pacific Theatres [in Los Angeles]. With our increased liquidity, an increasingly vaccinated population and the imminent release of blockbuster new movie titles, it is time for AMC to go on the offense again.”

Chinese Wanda Group Exits AMC Theatres Ownership

Dalian Wanda Group, the multi-industry Chinese company that acquired AMC Entertainment for $2.6 billion in 2012, has quietly liquidated most of its shares in the world’s largest theatrical exhibitor.

Wanda America Entertainment May 21 in a regulatory filing disclosed reducing its AMC stake to stake to 0.002% — down from 6.8% in early April. The company has been reducing its shares as the pandemic continued undermining much of the exhibitor business worldwide through closures, limited movies from studios and reduced seating capacity, among other issues.

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In addition, Wanda saw its shares in AMC further diluted earlier this month when the exhibitor sold 43 million shares to institutional investors, raising $428 million in new equity funding in the process.

“Wanda has been a terrific shareholder of AMC for almost a decade,” CEO Adam Aron said in a statement. “Under their ownership, AMC became the biggest movie theater operator in the world. Importantly, Wanda also has supported our reinvesting billions of dollars to upgrade and enhance our network of theaters for the benefit of moviegoers throughout the United States, Europe and the Middle East. I salute Wanda for the immensely constructive role they played in building our company, and want to express my sincerest appreciation and affection for their wise counsel and friendship.”

Interestingly, AMC shares are up more than 470% this year largely due to individual day traders crowdsourcing moves on the exhibitor, and separately video game retailer GameStop, via Reddit forums.

 

AMC Theatres CEO Open to Concurrent Streaming Windows — Depending on Fiscal Terms

It’s not often the CEO of a company that lost $946 million in its most-recent fiscal quarter, and $4.6 billion for the fiscal year, is giddy with excitement. Nor is it common to hear the same executive say he’s not opposed to concurrent streaming/theatrical distribution.

But it was all there in virtual color on AMC Entertainment’s March 10 fiscal call spearheaded by CEO Adam Aron.

When asked about Disney, Warner Bros. and Universal Pictures’ efforts to shorten the theatrical window for specific titles and slates of movies, Aron said change and thinking outside the box has been part of AMC’s DNA for years. He recalled signing onto the 2016 concept, dubbed “Screening Room,” from Napster founder Sean Parker that would have made new-release movies available in consumer homes concurrently with their theatrical launches.

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“That never took off … but over the past several years, [we have] indicated in private conversations with every major studio that we were willing to be the most experimental movie circuit around with respect to windows strategies that were different than the traditional norm,” Aron said.

But with change and experimentation, the executive stressed there always had to be a positive for AMC and its shareholders; not just the studios.

“When we couldn’t strike deals with studios on shorter windows, we resisted them with all of our might,” Aron said. “This is an area I feel very good about.”

He recalled the exhibitor’s very public 90-day letter writing campaign with Universal Pictures that resulted in a landmark agreement enabling the studio to distribute theatrical titles directly into homes within 17 days of their box office debut, depending on ticket sales.

“It suggested there were alternate ways of distribution,” Aron said.

Fast-forward to Warner’s HBO Max announcement that the studio would release its entire 2021 theatrical slate simultaneously on WarnerMedia’s upstart subscription streaming video platform.

“We put out a very clear statement: That we were not willing to let Warner advantage its streaming service at AMC shareholder’s expense,” Aron said.

Yet, it doesn’t take a sleuth to notice that AMC is screening Warner Bros. movies such as Judas and the Black Messiah and Tom & Jerry — both of which are also streaming on Max.

“You should probably assume that if we’re playing Warner Bros. movies, we came to an agreement with the studio that benefits our shareholders,” Aron said without elaborating.

The executive said AMC is willing to engage with every major studio on the same topic, arguing that since the exhibitor has been business partners with all the major studios for decades, it can adjust business relationships.

“They can support their streaming services and theatrical leases, and do so not at our expense,” Aron said, adding that discussions with studios where the window policy has changed, “we think we have come out ahead and not behind.”

Separately, as of March 5, about 90% of AMC Theatres domestic screens were open. The exhibitor is slated to re-open screens in Alameda, Calif., which includes Oakland and East Bay on March 12, with a possible reboot in SoCal possibly by March 19.

To put the magnitude of a Los Angeles market re-opening into perspective, the “designated market area” is about double the size of the NY City market. Indeed, almost 33% of all AMC domestic movie viewing dollars is generated in just four states: California, New York, New Jersey and Connecticut. AMC permanently closed 60 underperforming theaters, including 48 domestically and 12 internationally in 2020.

“The New York re-opening is a harbinger of things to come,” Aron said. “We are like La Guardia Airport closed by a thunderstorm with tons of planes circling above, all waiting to land and all needing to land.”

The executive said the week will mark the 100th million vaccination in arm nationwide, with another 60 million to 90 million injections scheduled monthly.

“The real salvation of our company will be because of vaccinations,” Aron said, adding that in his eyes, the most important person in the entire movie business is Albert Bourla, CEO of Pfizer.

“He and his talented colleagues, and those of Moderna and Johnson & Johnson, are who have given us our new fortitude,” Aron said, adding he had the privilege of thanking Albert firsthand for saving AMC.

“And those sentiments of thanks were never more deserved,” he said.

 

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.”

AMC Entertainment Selling 50 Million Shares for $125 Million

Fiscally challenged AMC Entertainment, parent of world’s largest movie theater chain, AMC Theatres, is selling 50 million shares of Class A Common Stock to generate about $125 million in much-needed funding.

AMC said it will use the proceeds for “general corporate purchases, which include repayment, refinancing, redemption, or repurchase of outstanding debt.”

AMC shares are down 68% in 2020 after the pandemic all but shuttered the chain’s business in mid-March as the coronavirus began to spread. Earlier this month, AMC announced it had enough funds to keep the doors open through January.

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Headquartered in Leawood, Kansas, AMC celebrated its 100th birthday this year. The chain is the largest operator of movie theaters in world; as of December 2020 it has a global count of 960 theaters and 10,700 screens, down from  1,004 theaters and 11,041 screens at the beginning of this year, according to its corporate website.