AMC Theater Chain Draws 6.8 Million Q1 Moviegoers, Narrows Loss

AMC Entertainment, parent of the world’s largest theatrical chain, AMC Theatres, May 6 reported that 6.8 million moviegoers worldwide frequented its screens in the first quarter (ended March 31). While that’s a 89% drop from 60+ million moviegoers in the same quarter a year ago, it’s a positive re-start for a company that has had scant new movie releases, and many observers left for dead during the height of the pandemic.

Adam Aron

Operating at 15% to 60% seating capacity across 585 domestic theaters, AMC operated an additional 97 international leased and partnership theaters, with limited seating capacities, representing approximately 27% of international theaters.

Revenue plummeted 84% to $148.3 million, from $941 million in the previous-year period. Net loss narrowed to $567.2 million from more than $2.1 billion a year ago.

“We finally can now say that we are looking at an increasingly favorable environment for moviegoing and for AMC as a company over the coming few months,” CEO Adam Aron said in a statement. “This is the result of a successful and steadily growing vaccination program in the U.S., Europe and the Middle East — especially so across the United States.”

Over the past five months, AMC has raised around $2 billion in fresh equity and debt capital, including the conversion of $600 million of convertible notes into equity at a price of $13.51 per share. Over the past 13 months, AMC raised approximately $2.9 billion of cash proceeds from new debt and
equity capital, secured $1.2 billion of concessions from lenders and landlords, obtained more than $150 million of assistance from European governments, and generated more than $80 million from asset sales.

“Taken together, we have made well more than $4 billion of progress from our implementing a myriad of capital actions to help us make it through this global storm,” Aron said.

AMC: 98% of U.S. Theaters to Open Beginning March 19

AMC Theatres, the largest theatrical exhibitor in the world, on March 17 announced that beginning March 19, more than 98% of its U.S. screens will be open at 25% capacity. AMC expects that by March 26, 99% of its 11,000 U.S. screens will be open.

More than 40 AMC locations in California are reopening beginning March 19, including all 25 locations in Los Angeles County and all eight locations in San Diego County. As of March 22, AMC expects that 52 of its 54 locations in California will be open. The company is preparing to resume operations at its remaining California screens once the proper local approvals are in place. AMC will only reopen its theaters once approved to do so by state and local authorities.

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Among the upcoming openings in California are two new theaters in the Los Angeles area that will be serving guests for the first time ever. AMC Porter Ranch 9 at the Vineyards at Porter Ranch will have its grand opening on March 19. Guests can expect AMC’s most popular amenities, including Dolby Cinema at AMC and AMC’s Signature Recliners.

On March 22, AMC’s newest dine-in location, AMC Dine-In Montclair Place 12, will open for the first time. Along with the dine-in menu, moviegoers will have access to Imax at AMC, Dolby Cinema at AMC and the AMC Signature Recliners. Montclair Place 12 will open with a limited menu on March 22 and will expand to its full menu on March 26.

“It was exactly one year ago that we closed all AMC locations in the United States,” CEO Adam Aron said in a statement. “AMC is reopening and operating with the highest devotion to the health and safety of our guests and associates through our Safe & Clean policies and protocols, which were developed in consultation with Clorox and with current and former faculty at the Harvard University School of Public Health.”

AMC Theatres in California reopening March 19:

Contra Costa County
AMC Brentwood 14

Los Angeles County
AMC Atlantic Times Square 14
AMC Burbank Town Center 6
AMC Burbank Town Center 8
AMC Broadway 4
AMC Covina 17
AMC Del Amo 18
AMC Fallbrook 7
AMC Galleria At South Bay 16
AMC Glendora 12
AMC La Mirada 7
AMC DINE-IN Marina 6
AMC Marina Marketplace 6
AMC Marina Pacifica 12
AMC Montebello 10
AMC Norwalk 20
AMC Promenade 16
AMC Rolling Hills 20
AMC Santa Anita 16
AMC Santa Monica 7
AMC Sunset 5
AMC Universal CityWalk 19
AMC Porter Ranch 9
AMC Anaheim Garden Walk 6
AMC DINE-IN Fullerton 20
AMC Tustin 14
AMC Woodbridge 5

Riverside County
AMC Temecula 10
AMC Tyler 16

San Bernardino County
AMC Apple Valley 14
AMC DINE-IN Montclair Place 12 (Opening March 22)
AMC Ontario Mills 30
AMC Victoria Gardens

San Diego County
AMC Chula Vista 10
AMC Fashion Valley 18
AMC La Jolla Village 12
AMC Mission Valley 20
AMC Otay Ranch 12
AMC Palm Promenade 14
AMC Plaza Bonita 14
AMC Poway 10

Ventura County
AMC Thousand Oaks 14

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.”

Cinemark Reports 95% Quarterly Revenue Drop as Pandemic Continues to Ravage Movie Theaters

Cinemark Theatres Nov. 5 reported a third-quarter (ended Sept. 30) loss of $148 million, compared with income of $31.9 million during the previous-year period. The nation’s third-largest exhibitor saw revenue plummet more than 95% to $35.4 million, from $821.8 million a year ago, due to shutdowns and limited seating brought on by the ongoing coronavirus pandemic.

Through nine months of the fiscal year, Cinemark revenue is down 76.5% to $588 million, from $2.5 billion a year ago. Net loss tops $378 million, compared with a profit of $167 million.

Through the quarter, the company had 252 domestic and 15 international theaters open to limited hours, showing library content and some new releases.

“As the COVID-19 pandemic continues to have an unprecedented impact on the theatrical exhibition industry, our top near-term priorities remain stringently managing liquidity, driving productivity and reigniting moviegoing,” CEO Mark Zoradi said in a statement. “With nearly 90% of our domestic theaters now operating, we have been encouraged by our results to-date, wherein we have been burning less cash open than when we were shut down.”

Zoradi said the chain has been able to burn less cash through “innovative new ways” of operating theaters and maximizing revenue, such as the “Private Watch Party” concept launched in July.

“We look forward to a more normalized pipeline of new film content,” he said.

Cinemark operates 345 theaters nationwide, in addition to 86 theaters in Brazil, 36 in Chile, and 22 in Argentina. The company’s aggregate screen count was 5,974 and it had commitments to open two new theaters and 16 screens during the remainder of 2020, and 20 new theaters and 205 screens in 2021.

AMC Theatres Announces Another Key California Re-Opening

AMC Theatres Oct. 27 announced that several locations in Northern California, including San Francisco and the greater Bay Area, will resume operations beginning Friday, Oct. 30. As a result of these openings, AMC expects to have approximately 540 of its 600-theater circuit open and serving guests by the end of the month.

Moviegoers can return to AMC Metreon 15, AMC Kabuki 8, AMC Eastridge 15, AMC Mercado 20, AMC Saratoga 14, AMC NewPark 12 and AMC Bay Street 16, as well as the all new AMC Dine-In Sunnyvale 12, a brand new theater that will open for the first time. Upon reopening, these AMC locations will abide by all state and local ordinances.

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“The reopening of movie theaters around the country is essential to the theatrical industry and the entire entertainment ecosystem, and we thank local leaders in the Bay Area communities for allowing our guests to return to AMC,” CEO Adam Aron said in a statement.

Aron said an “overwhelming majority” of state and local governments recognize the “strong” steps the chain has taken to focus on the health and safety of moviegoers and theater workers.

In areas where theaters are not yet able to open, AMC continues to have discussions with local authorities about resuming operations. AMC said would reopen its remaining theaters once authorized to do so by state and local officials.

New theatrical releases include Come Play on Oct. 30; Let Him Go on Nov. 6; Freaky on Nov. 13; The Last Vermeer on Nov. 20 and The Croods: A New Age on Nov. 25, as well as local-language films in certain countries outside the United States.

AMC Theatres Says Q3 Revenue Plummeted 91%

AMC Theatres’ summer blockbuster was a no-show due to the coronavirus effectively shutting down all screens. On Oct. 20 the exhibitor disclosed the harsh fiscal reality: The nation’s largest movie chain generated just $119.5 million in revenue for the fiscal period ended Sept. 30. That was 91% less than the $1.32 billion generated during the previous-year period. Revenue year-to-date through the quarter topped $1 billion, which was down about 75% from $4 billion a year earlier.

Parent AMC Entertainment disclosed the results in a regulatory filing as it entered into an equity distribution agreement with Citigroup and Goldman Sachs to sell up to 15 million shares of Class A common stock.

Through Oct. 16, AMC had resumed operations at 519 of its 598 U.S. theaters, with limited seating capacities of between 20% and 40%, representing approximately 87% of the U.S. theatres and 80% of 2019 U.S. same-theater revenue. Since the resumption of operations in its U.S. markets, AMC has fielded more than 2.6 million moviegoers, representing a same-theater attendance decline of about 85% compared with the same period a year ago.

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AMC said the remaining 13% of the U.S. theaters left to reopen are primarily located in California, Maryland and New York, and include some of the company’s most productive theaters, representing approximately 20% of 2019 domestic revenue. As previously reported, 12 theaters in New York State are scheduled to open Oct. 23. AMC said it has an “active dialog” with local and state government officials, however there is “limited visibility” around the timing for resumption of the remaining theater operations.

As of Oct. 16, 2020, AMC had resumed operations at 309 leased and partnership international theatres, representing about 86% of the company’s international theatres and approximately 91% of 2019 international same-theater revenue. Seating capacity at the reopened international theatres remains limited to between 25% and 50% of capacity to ensure social distancing. Since the resumption of operations in its International markets June 3, AMC has entertained more than 5.7 million moviegoers, representing a same-theater attendance decline of approximately 74% compared with the same period a year ago.

To lure consumers into theaters, AMC launched “AMC Private Screening,” which allows movie goers to reserve a separate AMC auditorium for a private screening for up to 20 people, starting at $99 plus tax.

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.

Liam Neeson Drama ‘Honest Thief’ Tops Another Quiet Domestic Weekend Box Office

Open Roads Films’ thriller Honest Thief, starring Liam Neeson, finished atop another subdued domestic weekend box office, generating $3.7 million in North American ticket sales Oct. 16-18. Neeson plays a burglar who turns himself in, only to be double-crossed by the FBI.

The previous week’s topper, The War With Grandpa, starring Robert De Niro, finished second with $2.5 million. The movie from 101 Studios has generated $7.3 million in 10 days. Warner Bros.’ Tenet, from director Christopher Nolan, ended third on the weekend with $1.6 million, upping its domestic theatrical take to $50.6 million.

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U.S. movie ticket sales continue to be hamstrung by coronavirus pandemic-related theater closures in key markets and social distancing protocols in cinemas operating. In addition, studios continue to push back into 2021 major new tentpole releases living operating theaters with lower profile movies and re-releases.

Indeed, Disney re-releases The Nightmare Before Christmas and Hocus Pocus finished fourth and fifth over the weekend with $1.3 million and $756,000 in ticket sales, respectively.

European Cinema Operators ‘Shocked’ at Movies Bypassing Theaters for Disney+

Similarly to the situation in the United States, European theater operators are reeling from studios delaying new-release movies due to the coronavirus pandemic. Now the International Union of Cinemas (UNIC), the trade group representing European exhibitors, has lashed out at Walt Disney Studios’ decision to bow Pixar Animation’s Soul on SVOD service Disney+ rather than in theaters.

“Disney’s decision to release Soul directly onto their streaming platform, depriving many audiences across Europe from seeing it on the big screen, has shocked and dismayed all cinema operators,” UNIC said in a statement.

Indeed, Soul represents the third major Disney title (after Artemis Fowl and Mulan) to forgo a theatrical release due to the pandemic. UNIC is upset since control of the pandemic is better in Europe than in the U.S., which has resulted in significantly better box office revenue.

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The vast majority of cinemas across Europe are now open and able to offer a “safe and enjoyable” return for moviegoers, according to UNIC. Like U.S. exhibitors, European operators have invested heavily in social distancing and sanitation protocols in theaters.

“Yet again, however, they find a distributor delivering another blow,” UNIC wrote. “The decision on Soul is doubly frustrating for operators who were counting on the release after the film was previewed at a number of key European film festivals.”

The trade group argues that there is compelling evidence that where moviegoers have returned, their experience was both safe and enjoyable. It also stressed that without major new releases, consumers won’t return to the big screen. Indeed, across Europe, many cinemas have since re-opening screened countless local releases, underlining the fact that first-run titles are now more important than ever.

UNIC said decisions to postpone titles, bypassing cinemas and the value they create, are extremely disappointing — and concerning — and will only delay the day that the whole industry is able to put crisis behind it.

“It is no exaggeration to say that by the time some studios decide that the moment is right to release their films, it may be too late for many European cinemas,” read the statement.

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.