AMC Entertainment Selling $250 Million in Stock to Help Offset Low First-Quarter Box Office

AMC Entertainment, owner/operator of the the nation’s largest theater chain, March 28 announced it is selling $250 million in common stock in order to “bolster liquidity” following an underperforming first-quarter box office.

AMC, in a regulatory filing, said it had entered into an equity distribution agreement with Citigroup Global Markets, Barclays Capital, B. Riley Securities and Goldman Sachs acting as sales agents.

The company cited last year’s Writers Guild of America strike and the Screen Actors Guild-American Federation of Television and Radio Artists strike, increased seasonal working capital requirements, and the resulting cash burn for the stock sale.

AMC, which saw revenue spike 23% in 2023 due to the box office success of Barbie, Oppenheimer and the exclusive Taylor Swift concert movie, is apparently off to a slow start in 2024.

The top-grossing domestic release, Warner Bros. Pictures’ Dune: Part Two, has sold $237.5 million in tickets. The studio’s Wonka musical remains the top-grossing release worldwide with $632.2 million.

By comparison, 20th Century Studios’ Avatar: The Way of Water generated $280.1 million in Q1 ticket sales last year, followed by Marvel Studios’ Ant-Man and the Wasp: Quantumania with $211.1 million in revenue. Both movies went on to generate $2.8 billion in combined ticket sales worldwide.

AMC stock was down 11.6% in early Thursday trading.

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AMC Theatres CEO Spent Easter Sharing ‘Super Mario Bros.’ Social Media Posts During Record Box Office Debut

With Universal Pictures/Illumination’s The Super Mario Bros. Movie setting box office debut records through the April 9 weekend, AMC Entertainment CEO Adam Aron spent Easter Sunday sharing social media posts of family moviegoers frequenting AMC screens to watch the movie. AMC Entertainment is the largest theatrical exhibitor in the world.

The movie generated $378 million worldwide, the highest animated movie release ever (topping Disney’s Frozen 2 with $358 million), and No. 2 over three days in North America after Disney’s Finding Dory. The movie also broke box office record for video game adaptations, topping previous chart topper, Universal’s Warcraft at $210 million.

“Often, so much vitriol and hate on Twitter,” Aron tweeted April 9 as he shared social media posts from families attending Super Mario screenings nationwide. “But, Twitter is also filled with love. The next retweets are some of the reasons I am proud that you, AMC & I helped save moviegoing in America!”

The company later announced it saw its busiest weekend in 2023 as more than 3.6 million moviegoers watched a movie at an AMC location in the U.S. from Friday to Sunday. The strong audience turnout gave AMC its third busiest Friday to Sunday weekend since December of 2019.

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Since reopening in 2020, two of AMC’s top three revenue days occurred this past weekend, including Saturday, which was AMC’s highest revenue day in the U.S. since theaters reopened.

The weekend slate also included new Amazon Studios release Air, and holdovers Dungeons & Dragons: Honor Among Thieves (Paramount Pictures), and Lionsgate’s John Wick: Chapter 4.

“It’s official … the path to [theatrical] recovery continues,” Aron tweeted.

Analyst Says AMC Theatres’ Reverse-Stock Split, Improved Theatrical Slate Bodes Well For Exhibitor

AMC Entertainment shareholders March 14 approved a 1/10 reverse-stock split, reducing the number of outstanding common shares to 51.8 million from about 518 million. The world’s largest theatrical exhibitor’s controversial 930 million AMC Preferred Equity (APE) shares will convert to 93 million AMC common shares, resulting in 145 million total shares outstanding effective the date of conversion, when APE shares will no longer trade.

“I would like to commend our shareholders for the wisdom exhibited in your votes by approving these proposals, and doing so by a wide margin,” CEO Adam Aron said in a statement following the vote.

AMC began issuing special APE dividends last August in an effort to attract investors to help reduce its massive $12 billion debt load — much of it accrued during the pandemic when its theater operations ground to a halt.

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Some common share holders have not approved of APEs, contending the dividends dilute their shares’ value. In February Allegheny County’s (Pa.) pension fund sued AMC, alleging that the APEs circumvented AMC common shareholders’ will to not further dilute shares. The case is set to go to trial April 27.

Going forward, AMC has the authorization to issue up to 550 million additional common shares, which could generate upwards of $11 billion, according to Wedbush Securities media analyst Michael Pachter.

“We expect AMC to continue raising cash with its equity while chipping away at its massive debt balance,” Pachter wrote in a note.

Meanwhile, the analyst is buying into Aron’s optimism regarding the 2023 theatrical slate, which began with February’s Ant-Man and the Wasp: Quantumania, and features upcoming releases John Wick: Chapter 4 (Lionsgate); Universal Pictures’ The Super Mario Bros. Movie; Disney’s The Little Mermaid and Marvel Studios’ Guardians of the Galaxy Vol. 3; Sony Pictures’ Spider-Man: Across the Spider-Verse; Paramount Pictures’ Dungeons & Dragons: Honor Among Thieves and Transformers: Rise of the Beasts; and Warner Bros. Pictures’ The Flash, among others.

Regardless, AMC saw revenue decline 15% to $990.4 million in the most-recent fiscal period, from $1.17 billion in the prior-year period. The company’s net loss rose to $287 million, up from a loss of $134.4 million a year earlier.

AMC Theatres Launching Branded Credit Card in 2023

AMC Entertainment Dec. 14 disclosed that it is launching a branded AMC Visa credit card next year. The world’s largest theatrical exhibitor said the card would provide its AMC Stubs loyalty members expedited savings and discounts on movie tickets and concessions.

AMC, like its competitors Regal and Cinemark, is contending with a challenged moviegoer market following the pandemic. With few blockbuster releases to exhibit, AMC is the first theatrical exhibitor to launch a branded credit card as a means of jumpstarting consumer interest while generating incremental revenue. AMC is also launching branded popcorn at the retail level in 2023.

“The AMC Entertainment Visa Card is another example of AMC’s continued dedication to providing real value to moviegoers and strengthening the relationship we have with our loyal moviegoing guests,” CEO Adam Aron said in a statement.

Aron contends the exhibition industry is one of the few major retail sectors that hasn’t offered consumers a credit card as a way to amplify their purchase power through the use of a co-branded credit card.

“With a built-in customer base of tens of millions of existing AMC Stubs members, we know there are avid moviegoers who will benefit greatly from using their AMC Entertainment Visa Card at the movies and for their everyday purchases,” he said.

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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.”