AMC Entertainment Holdings Inc. lost more than half a billion dollars in the first three months of the year while reopening almost all of its U.S. theaters, but executives see brighter days ahead.
reported first-quarter losses of $567.2 million, or $1.42 a share, Thursday afternoon, an improvement from a loss of more than $2 billion in the same quarter a year ago, which was mostly due to noncash impairment charges from the movie-theater chain revaluing its properties as the COVID-19 pandemic forced closures across the globe. Sales in the quarter totaled $148.3 million, down from $941.5 million in the first quarter of 2020.
That performance was expected after AMC revealed preliminary first-quarter results last week, while ditching a plan to ask investors to approve the potential sale of 500 million additional shares. FactSet reported that analysts were expecting losses of $1.34 a share on sales of $148 million, though some of those estimates may not have been updated after last week’s disclosure. Shares gained between 2% and 3% in after-hours trading, after declining for the eighth consecutive trading session.
For AMC investors, the path ahead was more important than the first-quarter numbers Thursday, and Chief Executive Adam Aron laid out some of the success AMC has seen so far from the reopening in the company’s conference call, after recounting being left for dead.
AMC was “within months or weeks of running out of cash five different times,” Aron admitted. “Between April of 2020 and January of 2021, a lot of smart people on this call, and many of you, were certain that AMC would collapse.”
Aron then detailed that the opening of “Mortal Kombat” and “Demon Slayer” two weeks ago created “our biggest attended weekend at AMC since March of 2020, 13 months ago,” and said that AMC’s market share has increased in the early days of theater reopenings, as many competitors folded up shop.
“We have every confidence in looking ahead that AMC will win. We certainly are well on our way,” he said.
AMC disclosed Thursday that 589 of its 593 U.S. theaters and 110 of the 357 international theaters it leases or runs in partnership with others had reopened in some capacity by the end of April. Investors and analysts want to know when those theaters will be filled enough to boost AMC’s revenue back to something close to pre-pandemic results.
“We believe the company has sufficient liquidity to allow it to survive with low utilization through at least Q3, now that most of its highest-earning theaters have reopened,” Wedbush analysts wrote in a preview of Thursday’s earnings report. “We think demand for theatrical content is high, and plenty of high-quality content is awaiting audiences.”
While executives did not provide a specific forecast for the current quarter or the full year in Thursday’s announcement, Aron did address any remaining liquidity concerns.
“Over the past 13 months, AMC has raised approximately $2.9 billion of gross cash proceeds from new debt and equity capital, secured around $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,” he noted in the company’s announcement. “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.”
AMC’s stock has been a favorite of the Reddit meme-stocks crowd, which has helped shares gain more than 130% in the past year and more than quadruple so far in 2021. Aron noted in the announcement that AMC has “a vocal, enthusiastic and avid new shareholder base comprised mostly of some 3 million individual stockholders.”
The stock price has suffered a reversal recently, however, falling more than 21% during an eight-session losing streak that continued Thursday, when shares fell 1.9% to $9 a share.