AMC Leisure (AMC) earnings Q3 2022

AMC Leisure on Tuesday reported one other quarterly loss regardless of increased income from a yr in the past, because it spent extra on operational prices.

The world’s largest movie show chain is contending with a large debt load, dilution of its inventory and a movie launch schedule brief on blockbusters. Whereas the summer time field workplace was robust, August and September have been extra tepid, as studios launched fewer movies on the massive display.

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For the interval ended Sept. 30, the corporate’s internet loss elevated barely from a yr in the past to $226.9, or 22 cents per share, which was wasn’t as steep as Wall Road anticipated. Income rose and in addition beat expectations. AMC mentioned its general per-patron metrics have been up when it got here to admissions income and elevated client spending on meals and drinks at its theaters.

This is what the corporate reported, versus what Wall Road anticipated, in response to a Refinitiv survey of analysts:

  • Loss per share:  lack of 22 cents adjusted vs. a lack of 26 cents anticipated
  • Income: $968 million vs. $961.1 million anticipated

The corporate’s inventory was down practically 4% in after-hours buying and selling.

AMC has been working to lighten its debt load. In October it refinanced and paid down a few of its debt, extending its maturities out to 2027, after finishing a $400 million personal providing.

The corporate got here again from the brink of chapter in 2021 because of tens of millions of retail traders who turned its shares right into a meme inventory. Since then, AMC has devised a number of plans to lift extra capital to pay down its money owed and spend money on acquisitions, theater upgrades, a popcorn enterprise and even a gold mine.

“We’re not out of the woods but,” mentioned CEO Adam Aron on Tuesday’s name with traders. “Whereas the field workplace is unmistakably on the rise, it is nonetheless falling brief to pre-pandemic ranges.”

Whereas AMC has a big conflict chest of money, it continues to spend greater than it makes every quarter on operations together with concession prices, movie exhibition prices and lease. The corporate mentioned it burned greater than $179 million in money in the course of the third quarter.

The corporate will proceed to spend money on its theaters, upgrading film screens and rising the variety of particular results screens, similar to IMAX and Dolby Cinema, throughout its footprint.

CFO Sean Goodman mentioned on Tuesday’s name that the corporate expects its money burn to enhance in the course of the fourth quarter. Whereas decreasing debt and rising its liquidity are its key initiatives, the corporate is open to exploring “engaging alternatives,” and has been keeping track of its movie show opponents which were struggling financially.

Earlier this yr, AMC issued a dividend to frequent shareholders within the type of most well-liked shares referred to as “APE.” However the firm was unable to completely capitalize on promoting off the brand new shares earlier than traders pulled their help, analysts say. 

The corporate mentioned it is going to promote as much as 425 million of those most well-liked shares. As of Tuesday, it offered roughly 14.9 million shares, which raised internet proceeds of about $36.4 million.

Audiences have returned to cinemas within the wake of the coronavirus pandemic and are spending greater than ever on tickets and popcorn. Nevertheless, the dearth of regular theatrical releases will weigh closely on the business in the course of the remaining months of the yr.

The home field workplace tallied $1.95 billion in ticket gross sales between July 1 and Sept. 30, down 31% from 2019 ranges, in response to ComScore. The field workplace additionally noticed fewer large releases in the course of the interval in contrast with pre-pandemic occasions, with solely 19 movies debuting in additional than 2,000 areas throughout their opening weekends, down 24% from 2019.

AMC administration expects the upcoming launch of Walt Disney’s “Black Panther: Wakanda Endlessly” to be one of many largest field workplace performances of the yr.

Theaters are anticipated to see a stronger slate of movie releases in 2023, and AMC ought to be capable of trip out the dearth of releases till then due to its vital money stockpile.

Shares of AMC have declined practically 80% since January and hit a 52-week low on Monday, slipping to $5.17 a bit, forward of the corporate’s earnings report Tuesday. Aron attributed AMC’s falling inventory value to macroeconomic headwinds, particularly inflation, and the efficiency of opponents similar to Cineworld, which lately filed for chapter safety.

Correction: An earlier model of this story misstated the identify of the corporate’s CFO, Sean Goodman.

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