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On Monday, AMC reported overall third quarter revenue of $119.5 million, down 91 percent from revenue of $1.31 billion in the same period of 2019. The company recorded a loss of $8.41 per share, compared to a year-earlier 53 cents per-share loss. That latest performance missed a consensus Wall Street estimate for a $4.66 per-share loss, according to Zacks Consensus Estimate.
AMC also posted a third quarter loss of $905.8 million, compared to a year-earlier loss of $54.8 million, before the pandemic forced the closure of its global circuit in March 2020. The widened loss included $195.9 million in non-cash impairment charges following the recent closure of theaters and “the further delay or cancellation of film releases.”
The revenue collapse is a worrying sign for the exhibition giant as it has reopened most of its U.S. circuit, albeit with reduced seating capacity. As of Oct. 31, AMC said it had 539 of its 600 domestic locations showing movies, and around 261 of its 358 international locations back in operation.
AMC’s recovery after the COVID-19 crisis has been complicated by too little new content at the local multiplex as the major Hollywood studios continue to push back theatrical releases for their tentpoles, or send them to streaming platforms.
The latest financial results come as the exhibition giant has faced Wall Street speculation that it may not survive the novel coronavirus pandemic and resulting recession and may need to file for a Chapter 11 bankruptcy restructuring or do more to address its high debt load to stay in business.
AMC this past weekend reopened cinema screens in northern California after they were ordered to close amid the pandemic.
AMC president and CEO Adam Aron said in a statement: “The magnitude of the impact of the global pandemic on the theatrical exhibition industry was again evident in our third quarter results, as theatre operations in the U.S. were suspended for nearly two-thirds of the quarter. And yet, despite unrelenting obstacles, the AMC team continued to make significant progress in pursuit of our three key priorities: to strengthen our liquidity position; to dramatically reduce operating and capital expenditures, and to continue to safely and successfully restore our operations.”
On an analyst call, Aron on three separate occasions quoted from Winston Churchill’s famous “Fight Them On The Beaches” war-time speech to underline his resolve to solve AMC’s liquidity woes. At one point he told investors: “We are fighting this virus with all of our smarts and all of our might.”
In a bid to raise fresh cash to stay alive, AMC sold 15 million class A shares to raise around $56.1 million in September. Last month, the company sold an additional 15 million shares to secure another $41.6million.
“We are currently seeking again to raise additional equity capital,” Aron said after earlier in the day his company unveiled plans to sell another 20 million class A common stock. He argued the future of AMC will depend on whether the exhibitor can secure enough fresh cash to bridge to when the major studios got their tentpoles back into the local multiplex in 2021.
“The simple question becomes will we raise that needed capital, or not,” he told analysts. Aron added his company was in talks with around a dozen strategic investors about taking an equity stake in AMC.
“All we got to do is raise a little money and we’ll be just fine,” Aron added. AMC had a cash burn of around $115 million a month in July and August to keep its circuit open.
To secure additional cost savings, Aron said AMC was in talks with some of its multiplex landlords to go beyond further reducing or delaying rent payments to getting out of leases. Asked if he had comment on media reports about a possible sale of AMC’s remaining European movie theaters to raise additional cash, Aron answered: “No. We do not comment on rumors and speculation.”
Nov. 2, 3 p.m. Updated with comments by AMC execs made during an analyst call.
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