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UPDATED with conference call comments: AMC Entertainment CEO Adam Aron shrugged off Covid, streamers and windows as real issues for exhibition currently, saying the biggest challenge facing the industry “above all else, is that movie theater operators need more movies.”
“At this point, there is only one topic that should be… on the tip of all of all tongues,” he said during a conference call Tuesday after reporting quarterly earnings. Studios are doing what they can to “pick up the pace” and there’s “considerably progress,” but the number of films is still down 20%-30% from pre-pandemic levels.
That said, “the industrywide box office is on a rebound both domestically and globally, clawing and climbing its way back.” He anticipates this weekend’s Black Panther: Wakanda Forever will be he biggest release of the year after Top Gun: Maverick and that the 2022 box office will be at close to 75% of pre-pandemic levels. Next year should grow by 15% to 20%, maybe more, he said.
Meanwhile, the exhibitor continues to announce new projects to roll out next year including an AMC-branded credit card on the way in the first quarter; AMC Perfectly Popcorn on grocery store shelves in the first half; and the recently announced cross-market Zoom Rooms for businesses in partnership with the online meeting powerhouse. The company is investing in new laser projectors and large-format screens and keeping some powder dry for more theater acquisitions.
Aron noted AMC Stubs A*List three-movie-a-week loyalty program has built back up to between 600,000 to 700,000 members, “up from zero during” Covid, and the company plans to be “very aggressive” in pushing the plan. He is not planning to invest in AMC On Demand. “It has always had low usage and candidly, while it’s a good little product, I think our money is best spent elsewhere… at a time when dollars are scarce.”
“We’re going to look to either phase out AMC On Demand or joint venture with another party to offers that same capacity to our guests.”
PREVIOUSLY: Giant theater chain AMC Entertainment saw revenue rise and losses widen slightly last quarter, but CEO Adam Aron cited a stronger slate ahead and moves on debt reduction, capital raising and new projects.
Sales of $968 million for the quarter ended in September compared with $763 million for the 2021 period. Net losses were $226 million versus $224 million. EPS was flat at 22 cents a share.
Operating cash burn for the quarter was negative $179.2 million. And available liquidity at September 30 was $896 million, including $211 million of undrawn capacity under the company’s revolving credit facility.
Attendance for the quarter was about 53.2 million, with 38.3 million in the U.S., on over 10,000 screens.
Operating expenses rose, passing $1 billion from just over $900 million in the year earlier quarter.
“Exactly as anticipated and foreshadowed on our last quarterly earnings call, our third quarter results were impacted by a particularly soft industry-wide box office in the latter two-thirds of the 2022 third quarter, but encouragingly our overall per-patron metrics for both admissions revenue and food and beverage spending remain well above pre-pandemic levels, growing a sizable 12% and 30%, respectively, compared to the third quarter of 2019,” said Aron said.
“Our recovery continues, and we look forward with enthusiasm to a return to a more robust film slate in the fourth quarter of 2022, which has already started strong with the release of Black Adam.” Successive blockbusters include this coming weekend’s Black Panther: Wakanda Forever, Strange World and Avatar: The Way off Water.
The exhibitor said it’s been strengthened by recent capital markets activities, notably debt reduction, debt refinancing, and equity capital raising. “These actions bolster our agility and allow us to pursue strategic opportunities, like our recently announced Zoom Rooms at AMC, to transform our company in a post-pandemic environment. We expect to make more business development announcements in the coming weeks and months, which along with an improving movie theatre sector positions AMC Entertainment to create value for all our stakeholders,” Aron said.