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Cinema giant AMC Entertainment has posted a smaller second-quarter loss and a rebound in revenue as it mounts a recovery from the severely disruptive pandemic.
The parent of AMC Theatres also unveiled a formal deal with Warner Bros. to show the Hollywood studio’s 2022 slate of tentpoles on its screens via an exclusive 45-day window and plans to pick up at least six new theaters in Los Angeles, Chicago and Atlanta, and potentially four more locations. It also will accept Bitcoin as payment for movie tickets and concessions at its theaters by the end of the year.
After the closing bell, AMC Entertainment recorded a loss of 71 cents per share, which beat a consensus Wall Street estimate of 91 cents, and did far better than a year-earlier loss of $5.38 per share. The loss for the three months to March 31 hit $344 million, compared to a year-earlier loss of $561.2 million.
“The second quarter of 2021 was transformational for AMC. We raised yet another $1.25 billion of new equity capital (before commissions and fees) in the quarter, boosting our quarter-ending liquidity to more than $2 billion (including cash and undrawn revolving lines of credit) which is about double the previous highest ever such mark in AMC’s 101–year history. We believe this gives AMC financial staying power to navigate boldly amidst coronavirus waters,” AMC CEO Adam Aron said in a statement.
At the same time, Aron added AMC’s recovery was no sure bet: “AMC’s journey through this pandemic is not finished, and we are not yet out of the woods. However, while there are no guarantees as to what the future will bring in a still infection–impacted world, one can look ahead and envision a happy Hollywood ending to this story. We would like to think that someday when a movie is filmed about AMC and COVID, its title will be one compelling word, ‘Recovery.’ But, only time will tell.”
To illustrate recovery strength for AMC, the company announced six new cinema pickups, and possibly another four, as it puts some of its recently-raised fresh cash to work. And the movie theater giant said eight of the potentially 10 new theaters it could potentially operate are former Arclight Cinemas locations.
Three of the new theater pickups that AMC either has leases or signed letters of intent for will be in Los Angeles, another two will be in Chicago and another location will be in Atlanta. AMC added it is also in advanced negotiations for another four movie theaters to take its stable of new locations to 10.
The deal for new theater locations follows AMC negotiating a deal to operate two high-profile Los Angeles-area movie theaters located in prime outdoor shopping malls, The Grove near West Hollywood and The Americana at Brand in Glendale. Both locations are part of the defunct Pacific Theatres chain, which owner the Decurion Corp. shut down permanently in April, along with sister chain ArcLight Cinemas.
AMC in June struck a deal to raise more than $230 million for possible theater acquisitions and investments to make its cinema circuit stronger post-pandemic. And Aron in recent comments has revealed theaters owned and operated by Pacific Theatres, including the ArcLight chain, were in AMC’s sights as it looked to make one-off deals for new theater locations, rather than go on a major buying spree.
On Monday, AMC also unveiled a formal agreement with Warner Bros. to put the Hollywood studio’s 2022 slate of tentpoles on its big screens via an exclusive 45-day window. “It’s especially gratifying that Warner Bros is yet again embracing a theatrical window. For us at AMC, it’s especially pleasing to be working so harmoniously with Warner Bros. once again,” Aron told analysts during an after-market call.
AMC also announced that the chain plans to accept Bitcoin as payment for movie tickets and concessions at all of its domestic theaters by the end of 2021.
During the latest quarter, overall revenue came to $444.7 million, which blew past a $382 million Wall Street forecast, and compared well to a year-earlier revenue line of $18.9 million. The coronavirus pandemic has hammered AMC’s business as much of its theatrical circuit was shuttered in 2020 and its revenue streams were greatly constricted before recent re-openings.
But the cinema giant has survived the pandemic via new debt and stock offerings and the help of retail traders that are active on online platforms like Reddit and TikTok. Around 80 percent of AMC’s 3.2 million individual investors as of March 11 were retail shareholders.
These individual traders have supported AMC as a “memestock,” propelling its stock price to all time highs. Aron and other AMC Theatres execs during the after-market analyst call for the first time took questions from its online army of retail investors via a dedicated website. Only one of the conference call questions came from a financial analyst.
Stock in AMC rose in after-hours trading by $1.45, or just over 4 percent, to $35.25.
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