AMC Entertainment Sells 15 Million Shares to Raise Equity Level

AMC Entertainment Holdings, which operates the world’s largest movie exhibitor, AMC Theatres, Sept. 24 disclosed it has authorized the sale of 15 million shares of Class A common stock in an effort to build equity levels during the ongoing coronavirus pandemic.

Operating 70% of its domestic screens at reduced capacity due to social distancing requirements, AMC said it has seen 1.4 million  moviegoers frequent theaters through Sept. 14, which is down 81% from the previous-year period. With many AMC screens still shuttered in California, Maryland, Michigan, New York, North Carolina, and Washington State, the company said the affected theaters represented 28% of its entire 2019 revenue.

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As of Aug. 31, AMC’s cash balance was $507.9 million, which included the initial $37.5 million proceeds received from the sale of its Baltics theatres. The company’s cash burn for July and August, excluding the proceeds from the sale of the Baltic theatres, was $230.4 million, or an average of approximately $115.2 million per month, and was primarily impacted by initial reopening expenses, including initial
costs associated with the chain’s “Safe and Clean” initiative and minimum lease payments as theatres began to reopen.

With studios further delaying major releases into 2021 due in part to the lack of a virus vaccine, AMC is scrambling to keep the lights on.

“We currently estimate that unless theatre attendance levels improve significantly from the third quarter of 2020 to the fourth quarter of 2020 and again into 2021 and we achieve levels of attendance approaching approximately three-quarters of normalized levels, we will continue to require additional sources of liquidity to meet our obligations…and our required amounts of additional liquidity may be significant,” AMC said in a statement.

AMC Theatres Re-Opening 80% of Domestic Screens

AMC Entertainment Sept. 11 announced that as of tomorrow, the nation’s largest exhibitor will have resumed operations in more than 460 locations nationwide, or nearly 80% of the chain’s domestic footprint. The new tally is the result of dozens of locations re-opening in high-profile locations such as Orange County, Calif., Maryland and New Jersey.

After opening its first two locations in Jersey on Sept. 4, AMC will soon be operating fully all its theaters in the Garden State, with 24 theaters reopening this week and one theater expected to open early next week. On Sept. 10, seven AMC theaters in Maryland re-opened for the first time since mid-March when the coronavirus pandemic shuttered the entire industry.

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AMC will reopen three locations on Sept. 11 in Orange County, Calif., and a fourth on Sept. 12. These four theaters are the first AMCs in the greater Los Angeles area to resume operations since March.

Earlier this week, AMC announced that it welcomed its one-millionth moviegoing guest in the United States since reopening. The Company reached that number in less than three weeks and despite significant seating capacity restrictions in place at all open theaters of between 25% and 40% of the maximum capacity. That attendance jumped to more than 4 million when including AMC’s owned theaters in Europe and the Middle East, many of which resumed operations in June and July.

“AMC is coming off our most successful weekend since reopening, thanks in large part to Warner Bros. release of Tenet,” CEO Adam Aron said in a statement. “That is another encouraging sign that our industry is beginning its way back.”

AMC Theatres Tops 4 Million Global Attendance Since Re-Opening

AMC Entertainment Sept. 9 announced that attendance at its domestic screens topped 1 million moviegoers through Sept. 8 — less than three weeks after re-opening 70% of its theaters in the United States with seating capacity restrictions of between 25% and 40% of the maximum capacity. The tally tops 4 million when factoring in AMC’s global exhibitor locations. The news sent AMC shares up 5.1% in premarket trading.

AMC, along with other exhibitors globally, have been shuttered since mid-March due to the coronavirus pandemic.

AMC also announced that in surveys of returning moviegoers domestically, cleanliness hit all-time highs, considerably beating by a wide margin all previous theater cleanliness scores, which have been tracked by AMC via surveys for decades. AMC attributed this marked rise in cleanliness to its new sanitation protocols. Social distancing, mandatory mask wearing, the easy availability of disinfecting wipes and hand sanitizer, high tech solutions like electrostatic sprayers and numerous other new safety and cleanliness procedures were in full swing all across U.S. theaters.

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Approximately 70% of AMC’s U.S. theater circuit was open for business during the Labor Day holiday weekend, with more theaters opening around the country during September. This week more than 30 AMC theaters in New Jersey, Maryland, and Orange County, Calif., will reopen.

“We are greatly encouraged that during the last few weeks as theaters have started to reopen, moviegoers have already returned to AMC,” CEO Adam Aron said in a statement. “After a five-month closure in the United States, the movie theatre industry is finally now starting on its way back.”

Warner’s ‘Tenet’ Eyeing Second Major Weekend Box Office as AMC Re-Opens 70% of Domestic Screens

Following a surprise opening box office weekend (Aug. 26-30) of $53 million outside the United States and China, Warner Bros.’ Tenet got a boost Sept. 1 when AMC Theatres announced that 70% of domestic screens would be open for business this weekend — including screens in California. Regal Cinemas and Cinemark are re-opening screens as well in key markets.

The return of the domestic  and global box office is key to Hollywood returning to movie production and titles being released into retail channels, including transactional VOD and packaged media.

By this weekend AMC will have resumed operations at approximately 420 theatres nationwide. AMC will open more than 140 theaters this week, with the vast majority of re-openings taking place on Thursday, Sept. 3, the same day director Christopher Nolan’s Tenet opens in the United States.

The next day, Friday, Sept. 4, AMC expects its first California theaters to reopen, when it resumes operations at seven theaters in and around San Diego. AMC is closely monitoring all local directives and will follow all guidelines on auditorium capacity.

AMC expects to make announcements about additional markets in California, New Jersey and other areas of the country in the coming weeks, once theatres are authorized to open by state and local officials.

“The first two weekends of operations have exceeded our expectations in terms of guests returning to the movies and in terms of their feedback about our extensive ‘AMC Safe & Clean’ policies and procedures,” CEO Adam Aron said in a statement.

AMC Entertainment Selling Baltic Theaters

Cash-strapped AMC Entertainment Aug. 31 announced that it has signed a definitive agreement to sell nine theatre locations (67 screens) in the Baltic region (Latvia, Lithuania, and Estonia) for €65 million ($77 million).

The agreement calls for AMC to receive approximately half of the sale proceeds on signing and the balance upon closing in each country after antitrust resolution in the coming months.

The world’s largest exhibitor with about 1,000 screens is slowly trying to return to normal operations after shuttering all theaters in mid-March due to the coronavirus pandemic.

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“This transaction marks yet [more] decisive action taken, on the heels of our capital raising in April and debt restructuring and capital raising in July, to bolster our liquidity and strengthen our balance sheet…that underscores the inherent value of our theatre portfolio and resilience of our business,” CEO Adam Aron said in a statement.

Aron said he remains “encouraged” by attendance levels at re-opened screens in Europe and in the U.S., where almost 300 theaters are currently open for business.

Indeed, Warner Bros.’ much-hyped Christopher Nolan movie Tenet generated $53 million in ticket sales Aug. 26-30 across 41 theatrical markets outside the U.S. and China. The film opens in the world’s largest two markets next weekend.

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“Growing consumer confidence in our cleaning and safety protocols continues to generate increased attendance and food and beverage spend, and we look forward to offering a full slate of new and entertaining film product to further drive attendance over the remainder of 2020,” Aron said.

Media analyst Michael Pachter with Wedbush Securities in Los Angeles, said the sale could help AMC reduce its long-term debt load to $4.8 billion, compared with $5.1 billion in the most-recent fiscal quarter.

With its recent debt restructuring, AMC has significantly improved its debt position, while also reducing its cash outlay by [upwards of] $180 million in the next six to eight quarters,” Pachter wrote in a note. “Collectively, these moves have effectively positioned the company to survive through extended closures in its domestic markets.”

‘New Mutants’ Earns Global Weekend Box Office Gross of $10M as Theaters Gradually Reopen

The Walt Disney Co. resumed releasing box office data Aug. 30, reporting that 20th Century’s The New Mutants, the 13th and final installment in what had been Fox’s superhero “X-Men” franchise, earned an estimated worldwide gross of just under $10 million its opening weekend.

Disney noted that currently only around 62% of domestic screens are open, while the film’s international debut was limited to 10 “material” markets, including France and Spain.

The film’s domestic gross is estimated at $7 million, while overseas The New Mutants earned $2.9 million.

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AMC Theatres, the world’s largest exhibitor, began its domestic reopening process on Aug. 20, with 100 theaters. An additional 170 theaters were reopened Aug. 27, in time for the release of The New Mutants. Kansas-based AMC now has nearly 300 of its more than 600 U.S. theaters back in business, albeit at reduced capacities. A third wave is slated to reopen in time for the Sept. 3 theatrical debut of Warner Bros. Tenet. The remainder of AMC’s U.S. theaters will open only after authorized to do so by state and local officials.

AMC has more than 1,000 theaters in 15 countries, with a total of more than 11,000 screens.

No. 2 movie theater chain Regal Cinemas also began opening theaters Aug. 21. Regal has more than 800 theaters around the world, including 550 in the United States, and a total screen count of more than 7,000.

Disney says movie theaters in California, New York, New Jersey, North Carolina, Michigan, Maryland, and New Mexico remain closed, with Arizona a mixed bag.

“Next weekend sees the bulk of international openings when 20 material markets open up, including Italy, the UK, Russia, Australia and Mexico,” according to the Disney news release.  “Importantly The New Mutants launch helped markets concerned by supplying fresh, new product for them to screen and therefore encourage consumers to return to movie theaters.

AMC Reopening Additional 170 Screens on Aug. 27

After reopening more than 100 locations nationwide, AMC Theatres is preparing to reopen its second wave of theaters, with 170 additional locations set to open Aug. 27, ahead of the release of 20th Century’s The New Mutants. After the second wave of theaters re-openings, AMC will have nearly 300 locations operational nationwide. Kansas-based AMC is the world’s largest exhibitor, with about 1,000 screens, which have been effectively shuttered since mid-March due to the coronavirus pandemic.

This second wave of reopenings is part of a phased plan to reopen AMC in the United States. AMC currently expects to open approximately two-thirds of its more than 600 U.S. theaters in time for the Sept. 3 release of Warner Brothers’ Tenet. The remainder of AMC’s U.S. theaters will open only after authorized to do so by state and local officials.

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In addition to New Mutants, moviegoers can screen Unhinged (Solstice Studios), Words on Bathroom Walls (Lionsgate/Roadside Attractions), and The Personal History of David Copperfield (Disney). Pending new releases include The Broken Hearts Gallery (Sony Pictures/TriStar) and Infidel (American Cinema International) on Sept. 11, and The War with Grandpa (101 Studios) on Sept. 18.

AMC CEO Adam Aron said consumer feedback to theater reopenings has been positive, with the theater imposing seating restrictions and mandating moviegoers wear masks while inside.

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“Our comprehensive commitment to operating our theaters safely now includes social distancing through limiting ticket sales and automatic seat blocking, seamless contactless ticketing, greatly enhanced cleaning procedures, the availability of hand sanitizer and disinfecting wipes throughout our theaters,” Aron said in a statement.

Whether that will be enough to lure consumers remains to be seen. Wedbush Securities media analyst Michael Pachter contends consumers won’t feel safe returning to the cinema until there is a coronavirus vaccine — a requirement that likely won’t materialize until 2021.

AMC Theatres locations are also screening catalog titles such as Warner Bros.’ Inception; Universal Pictures’ Jurassic Park; Raiders of the Lost Ark; The “Rocky” franchise; Spider-Man: Homecoming; Spider-Man: Far From Home; Shrek; and Sonic: The Hedgehog. Tickets are just $5 each.

AMC is also offering an array of $5 food and beverage treats, including regular popcorn, regular Coca-Cola Freestyle drinks and KidsPacks, through the end of October. All AMC Stubs members will earn double points on all ticket and food and drink purchases through the end of October.

“We have invested millions for high tech solutions to sanitization and disinfection, including electrostatic sprayers, HEPA vacuums and MERV 13 air filters,” Aron said. “Guests returning to AMC can do so knowing that we’ve been in constant dialog with top scientists and experts in public health and cleaning about how best to reopen our theaters in ways that will be responsible and welcoming.”

Nathanson: 17-Day Theatrical Window a ‘Dangerous Precedent’

With the coronavirus pandemic shuttering movie theaters, studios have slowly embraced premium VOD and releasing lesser titles early into digital retail channels. When Universal Pictures and AMC Theatres announced plans to shrink the traditional 90-day theatrical window to 17 days for new-release movies, the studio business model was thrown on its ear.

Perennial box office champion Disney — a long-time champion of the traditional theatrical window — broke ranks announcing it would bypass theaters and offer live-action Mulan to consumers in the home next month.

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“We were not surprised by Mulan. We thought [the movie] would go SVOD direct,” Michael Nathanson, analyst with MoffitNathanson, said Aug. 20 on the DEG: The Digital Entertainment Group Mid-Year 2020 Digital Media Entertainment Report webcast. “We’ve speculated changing the theatrical window for years, and here we’re seeing it happen in real time. It’s been a year of experimentation.”

Nathanson said the theatrical business has been Disney’s domain for years (64% of all industry pre-tax earnings in 2019, according to Nathanson), and CEO Bob Chapek’s decision to alter traditional distribution models will “ripple” through the industry (including home video) for years to come. The analyst contends the country has too many movie screens operating under current market conditions.

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“The number [of screens] has to fall,” he said in response to the slate of original movies moving to SVOD and other digital channels. The analyst said that trend will accelerate as studios and their media parents roll out digital distribution platforms such as HBO Max, Peacock and Disney+.

Nathanson said he believes Disney has no plans to abandon the theatrical window altogether since the studio makes money ($1.4 billion operating profit) on most of its major releases at the box office. And theatrical releases often inspire amusement park rides and consumer goods.

“Disney is not all-in [on shrinking the window],” Nathanson said, adding he never expected the window to shrink below 30 days.

“We were shocked at AMC’s deal,” he said. “We think it’s a very dangerous precedent.”

The analyst said that when analyzing the percentage of box office revenue in the 90-day window, upwards of 30% of most $100 million movies’ box office is generated beyond 17 days.

“It didn’t make sense to us to cannibalize days 17 to 30,” he said. “We’re still puzzled by that decision to go to the shorter timeframe.”

He said much of the economics will be determined by how much Universal charges for the home video releases, but said that at the end of the day it will be a “bad outcome” for exhibitors.

Indeed, despite a saturation of movie screens, rising SVOD, AVOD and digital distribution for non-blockbuster movies has left plenty of opportunity for the traditional 90-day window, according to Nathanson.

“We are the most over-screened country in the world,” he said. “We don’t understand why we won’t see a reduction in screens first. We’ve been waiting for changes in the theatrical business for some time. And this crisis has really escalated behavior by some media companies that feel they have the green light to experiment.”

AMC Re-Opening 100 Domestic Screens Aug. 20 With 15-Cent Tickets

AMC Theatres is celebrating its 100th anniversary by offering “Movies in 2020 at 1920 Prices.” When the first wave of more than 100 AMC theatres reopens Aug. 20, moviegoers for one day only can purchase tickets for 15 cents (plus sales tax).

The world’s largest exhibitor has been shuttered since mid-March due to the coronavirus pandemic.

AMC currently expects to open approximately two-thirds of its more than 600 U.S. theater locations in time for the Sept. 3 release of Warner Bros.’ Tenet, following Disney’s Aug. 28 release of The New Mutants. The remainder of AMC’s U.S. theaters will open only after authorized to do so by state and local officials.

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The one-day 15 cent ticketing celebration kicks off several promotions moviegoers will find as they return to screens. After the Aug. 20 promotion, titles such as the special Inception 10th anniversary event, as well as Black Panther, Back to the Future, Ghostbusters, Grease and Star Wars: The Empire Strikes Back will be priced at $5.

AMC is also offering an array of $5 food and beverage treats, including regular popcorn, regular Coca-Cola Freestyle drinks and KidsPacks, through the end of October. And all AMC Stubs members will earn double points on all ticket and food & drink purchases through the end of October.

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“We are thrilled to once again open our doors to American moviegoers who are looking for an opportunity to get out of their houses and apartments and escape into the magic of the movies,” Adam Aron, CEO of AMC Theatres, said in a statement.

In addition to the throwback movie titles that start Aug. 20, moviegoers the day after will have access to new movie releases available at normal admission prices. They include:

8/21

  • Unhinged
  • Train to Busan Presents: Peninsula
  • Cut Throat City
  • Words on Bathroom Walls
  • Inception 10th anniversary event

 

8/28

  • The New Mutants
  • Personal History of David Copperfield

 

9/3

  • Tenet

 

9/11

  • Infidel

 

9/18

  • The King’s Man
  • War With Grandpa 

CEO: AMC Theatres in PVOD Discussions With Other Studios; Q2 Revenue Plummets 98.8%, Net Loss Skyrockets to $561 Million

On the heels of its landmark premium VOD agreement with Universal Pictures, AMC Theatres is reaching out to other studios in hopes of securing similar revenue-sharing deals, CEO Adam Aron disclosed Aug. 6 on the second-quarter (ended June 30) financial disclosure. AMC will share with Universal in all PVOD movie rental revenue 17 days after a title’s theatrical debut.

“AMC is an innovator and we are embracing change that we are confident will be financially beneficial for AMC shareholders,” Aron said in a statement. The CEO did not disclose the names of other studios AMC is in discussions with.

On the fiscal call, Aron said he had no issues with Disney removing Mulan from theatrical distribution to PVOD on Disney+. Calling Disney “no bigger friend” to AMC, Aron said the exhibitor and media giant had to do what’s in the best interest of their fiscal position during the pandemic.

“[Disney] provided us with more content last year than any other studio in the world.” Aron said. “As both companies do businesses, we will thrive.”

As expected, the world’s largest movie exhibitor saw its financial quarter decimated by the ongoing coronavirus pandemic that has seen the majority of its 11,000 screen shuttered since mid-March.

With the chain generating just $18.9 million in revenue, which was down 98.8% from revenue of more than $1.5 billion in the previous-year period, AMC reported a net loss of $561.2 million — the worst in the company’s 100-year history.

“A once in a century event has transformed 2020 into a brutal year,” Aron said in a statement.

Indeed, the company spent the bulk of the quarter restructuring more than $2.6 billion in long-term debt. Aron said more than 130 theaters are operating in Europe and the Middle East — more than one-third AMC’s international theaters. Aron expects all screens to resume operations in the next two to three weeks.

“Theatrical exhibition has always been resilient, and we are confident that at AMC we are taking the right steps to emerge from this crisis and to thrive once again as the leader in our industry,” he said.