Big B.O., new screens drive 17% boost for qtr.
NEW YORK — AMC Entertainment Inc. increased net profit 17%, to $8.2 million, in the March quarter on 36.1% higher revenue of $222 million, driven by stronger box office and the exhibitor’s expanded screen count, the company said Tuesday.
The quarter capped a fiscal year that saw AMC open 314 new screens at 17 sites, taking its total circuit to 1,973 screens in 227 theaters. For the year to April 3, AMC increased revenue 14.3%, to $749.6 million, and more than doubled net profit to $19 million. AMC stock fell 25¢ Tuesday to close at $22.87.
AMC did not disclose precisely how much of the quarterly growth came from having more screens open and how much came from “Star Wars”-inspired pickup in theater attendance in the period, although AMC VP for finance Craig Ramsey said attendance per screen rose 6% in the quarter.
The company’s earnings reflect the cost of extra debt taken on to finance its expansion. Earnings before interest, taxes, depreciation and amortization rose 47%, to $42.9 million, in the quarter but that was diluted to a 17% growth in the bottom line as a result of a 40% increase in interest expense to $7 million and higher depreciation charges reflecting the opening of new theaters.
During the quarter AMC sold $200 million worth of bonds and used the proceeds to reduce its outstanding bank debt to $115 million. Ramsey said AMC wanted to “lock in what we thought were attractive long-term interest rates” by issuing the bonds, but in the short term the new debt has increased interest costs.
AMC slowed the rate of new-screen openings in the quarter, from 134 screens in the third quarter to just 54 in the March period.
As a result, startup costs related to the screen openings that dented profit growth earlier in the fiscal year, such as manager training expenses, is having less of an impact, execs said.