AMC Entertainment’s quarterly financial results demonstrate that moviegoing may be slowly returning after months of COVID-related struggles, but cinemas still have to dig out of a deep hole left by a public health crisis that decimated their business.
Revenues at the world’s largest exhibition chain topped out at $148.3 million, down 84.2 percent from the year-ago period, while the company logged a loss of $1.42 per share, an improvement on the loss of $20.88 per share that it reported in the year-ago period. It had a $567 million net loss, which was still a substantial improvement on the $2.2 billion the company lost in the same quarter in 2020. Wall Street had expected a loss of $1.38 per share on revenue of $157.7 million.
The year-over-year comparisons are tricky. Parts of the 2020 quarter took place before lockdowns went into effect in mid-March, which forced AMC to shutter its locations for months. That left the chain teetering on the verge of bankruptcy, something that its CEO Adam Aron was able to avoid by renegotiating the company’s debt and raising more capital. It also got a lift when traders on social media platforms embraced the stock as a cause, sending its value soaring, similar to the boost that Game Stop received on Reddit, Twitter and the like.
AMC reported that during the first quarter it repaid approximately $335 million of debt under its revolving credit facilities. The company has borrowed $5.4 billion and has more than $200 million in leases and other liabilities. It has $813.1 million in cash.
On a call with analysts, Aron hailed the work that the company had done to avert bankruptcy, noting that it almost ran out of cash five different times during the pandemic. He argued, however, that AMC was beginning to turn the page on its COVID struggles.
“We know that AMC is losing money today, not making money today,” Aron said. But he predicted recovery was at hand, noting “the circumstances of AMC are so radically different and radically improved than they were just months ago.”
“Vaccinations are our way out of all of this,” he added.
There’s been some good news, of late, that could help the heavily leveraged AMC rebound. The box office has enjoyed a few recent pandemic-era hits in “Godzilla Vs. Kong” and “Demon Slayer: Mugen Train” and is getting a boost from rising rates of vaccinations. That, in turn, has led major moviegoing centers such as Los Angeles and New York City to loosen capacity restrictions on cinemas, which could help them sell more tickets. The exhibition sector is still suffering from a lack of major movies, with many recent Hollywood releases such as “Godzilla Vs. Kong” or the upcoming “Cruella” appearing on screens at the same time they are available on streaming services like HBO Max and Disney Plus.
AMC had 6.8 million attendees during the quarter, with most of the tickets sold in its U.S. locations. Aron predicted that number will continue to rise as blockbuster such as “F9” and “Black Widow” hit theaters this summer.
“A lot of new movies are coming,” he said. “The number of guests coming to our theaters should geometrically increase.”
AMC recently rescheduled its annual meeting from May to July, which it said would allow more time for investors to cast ballots on important shareholder matters.
Shares of AMC rose slightly in after-hours trading.