AMC loss offset by gains in stock perf

Investors returning in past few months

AMC Entertainment, riding a nice spurt in its stock price recently, Wednesday posted a modestly broadened annual loss of $53.9 million due to a fourth-quarter impairment charge of $65 million for underperforming theaters.

AMC’s red ink for the 12 months ended March 29 was up from the $51.9 million loss it posted for the previous fiscal year.

The annual loss included a $15.8 million non-cash charge taken earlier in the year for the cumulative effect of adopting new accounting rules. The charge was partly offset by a $4.5 million one-time gain on certain income adjustments.

The Kansas City, Mo.-based company released its financial results — which fell in line with expectations — after the close of market trading. Company shares closed down 7¢ at $9.25 a day after setting a 52-week high.

Investors returning

Investors have returned to the stock in steady numbers over the past few months, following a crisis in confidence that saw shares fall as low as $1.13 last Oct. 23. AMC is one of the only remaining publicly traded exhibs, and the stock is being rewarded because the circuit seems to have weathered the worst of recent industry hard times that forced several competitors into bankruptcy reorg.

“Their cash flow is improving very, very nicely,” noted Kevin Skislock, an analyst Laguna Research Partners in Irvine.

Annual operating cash flow, adjusted for various one-time variances, was up 20% to $117.6 million. Annual revenue rose 4% to $1.22 billion.

In the fourth quarter, AMC narrowed red ink to $24.6 million from a year-earlier loss of $38.9 million.

Adjusted quarterly cash flow soared 213% to $27.2 million, and revenue climbed 11% to $290.5 million.

“In a year that saw almost all of our major theater company peers seek bankruptcy, our record results are a testimony to the foresight of our strategic initiatives and our unsurpassed asset quality,” chairman and CEO Peter Brown said. “We look forward to continued execution of our plan that, with our newly strengthened balance sheet, will keep us at the forefront of our industry.”

AMC’s market profile was helped recently by a $250 million private placement of convertible preferred shares with investment firm Apollo Management. The company’s balance sheet was helped when net proceeds from the private placement were used to reduce AMC’s debt.

AMC operates 180 theaters with 2,796 screens in the U.S., Canada, France, Hong Kong, Japan, Portugal, Spain and Sweden. A spokesman said the company expects to continue closing older, money-losing properties at a rate of about 75 screens per year while cautiously adding new multiplexes to the circuit.

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