AMC anticipates massive quarterly loss, might not survive the pandemic

[Shawn Knight]

The big picture: Businesses that cater to large groups of people were arguably hit the hardest during the pandemic and AMC is no exception. The chain theater operator this week released preliminary results for the first quarter ending March 31, 2020, and it isn’t looking good. AMC said it is expecting a net loss of between $2.1 billion and $2.4 billion. In comparison, AMC lost just $130.2 million during the same three-month period in 2019.

AMC has been struggling for a while now but appeared to have found some traction in recent memory with its Stubs A-List subscription service. When the pandemic hit and the company was forced to close down all of its theaters in the US, that momentum went out the window.

In a filing with the SEC this week, AMC said it believes they have the cash resources to reopen theaters and resume operations this summer or later.

We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because we have never previously experienced a complete cessation of our operations, and as a consequence, our ability to be predictive is uncertain. If we do not recommence operations within our estimated timeline, we will require additional capital and may also require additional financing if, for example, our operations do not generate the expected revenues or a recurrence of COVID-19 were to cause another suspension of operations. Such additional financing may not be available on favorable terms or at all. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.

In other words, if things don’t improve, AMC may be forced into bankruptcy.

Worse yet, the matter is likely only going to get worse in the second quarter. AMC shut down its theaters in mid-March and plans to keep them closed through June at the earliest. That'll be a full quarter in which AMC will generate "effectively no revenue."

AMC is expected to share its full earnings report on June 9.

Masthead credit: Syda Productions

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https://www.techspot.com/news/85501-amc-anticipates-massive-quarterly-loss-might-not-survive.html

 

[VitalyT]

Who doesn't have that doubt? Anyone and anything goes down. No way of telling who will survive. Some are just more honest about it than others. Only a proven vaccine can change things, and there's none in sight.

 

[dirtyferret]

$15 movie Tix, $8 soda, a small size popcorn can feed a city of rodents, how can it not survive?

 

[TomSEA]

I have a hard time believing they'll fold. They have billions invested in infrastructure, and pay their few employees minimum wage. Their largest expense is facilities maintenance and movie royalties/rentals. Plus I'm sure they'll be eligible for some sort of federal financial relief.

Once the stay-at-home orders are lifted, people will flock to the theaters (and other entertainment venues) after being cooped up for several months. This is a temporary situation they can climb out of, not a permanent one.

 

[Plutoisaplanet]

Every company puts business risks in their SEC filings. I’m sure AMC isn’t the only one with risk of bankrupting because of the virus.

 

[Eflow]

It will be difficult for movie theaters to make the movie-going experience special as tvs continue to get bigger and cheaper. It wasn't very long ago that 55" tvs were considered "premium", and now people can buy low-end 75" tvs for under $1k.

I would much rather shell out $30 to view a new movie in my home than take my family of four to the local theater and pay outlandish prices for popcorn and candy.

 

[Lionvibez]

Unfortunately AMC Your high prices, the lack of any original content from Hollywood, and Covid will definitely end you.

They can trim the fat and reopen after covid maybe survive but there business model is dying anyways to maybe its time to cut that loose anyways.

 

[amstech]

It will be difficult for movie theaters to make the movie-going experience special as tvs continue to get bigger and cheaper. It wasn't very long ago that 55" tvs were considered "premium", and now people can buy low-end 75" tvs for under $1k.

I would much rather shell out $30 to view a new movie in my home than take my family of four to the local theater and pay outlandish prices for popcorn and candy.

Well said.
I am on the fence about this.
I have a 75" Samsung QLED with a 5.1 Pioneer receiver, Sony subwoofer, floorstanding, center and corner speakers. It's god damn awesome.
However, last theater movie I watched was King of the Monsters and while I wouldn't go see a drama in theater, I do like seeing the big popcorn stuff still, like Guardians of the Galaxy 3 and Godzilla Vs Kong.
That being said, if I have to watch it at home, thats ok too .

 

[trparky]

I heard on a YouTube channel called Midnight’s Edge that apparently it’s due to a cut off of a major source of Chinese capital.

 

[seeprime]

I have a hard time believing they'll fold. They have billions invested in infrastructure, and pay their few employees minimum wage. Their largest expense is facilities maintenance and movie royalties/rentals. Plus I'm sure they'll be eligible for some sort of federal financial relief.

Once the stay-at-home orders are lifted, people will flock to the theaters (and other entertainment venues) after being cooped up for several months. This is a temporary situation they can climb out of, not a permanent one.

Declaring bankruptcy doesn't mean they'll fold. They'll probably move the property to a holding company that they control. When things get back to normal in a couple of years, the theaters could be leased back to AMC, or whatever they'll call themselves at that time.

 

[Irata]

$15 movie Tix, $8 soda, a small size popcorn can feed a city of rodents, how can it not survive?

Stopped going to the large multiplexes a while ago. Instead, I‘m going to a nice smaller theater that‘s in walking distance of my house. The interior is restored seventies but the tech is up to date and I can enjoy my movie with a glass of wine or a cocktail, proper food and an Espresso.

 

[p51d007]

Let's see...would I rather:
A. Drive to a theater, traffic, find a place to park, wait in line to buy a ticket (unless purchased in
advance), wait in line for overpriced concessions, find a place to sit down, put up with the
people that talk through the movie, their cell phones ringing, buzzing, lighting up, fight the
crowd back to my car, probably door dinged because they don't put enough space between
each spot, drive back home.

B. Wait for it to come out on streaming, or the theater releases it direct to video, watch it on a
large flatscreen with a sound bar, in the comfort of my own home, eating and drinking anything
I want, and when I'm done, I'm at home.

I think I'll pick B.

 

[Adhmuz]

Well said.
I am on the fence about this.
I have a 75" Samsung QLED with a 5.1 Pioneer receiver, Sony subwoofer, floorstanding, center and corner speakers. It's god damn awesome.

Well excuse me Mr. "I Have a Sony subwoofer", guess my plebeian JBL unit just isn't cutting it. ?

I agree with the on the fence thing, as good as my home theater setup is, which is nothing special, just a humble 7.1 Atmos/DTS-X ?, I still mostly enjoy the experience of going to a theater with friends or on a date. I say mostly because lately, well, the last few times I went to the local theater it wasn't the best experience, too many disrespectful people, *****s talking, on their phones, something I can gladly say I will not miss.

 

[Axil00]

It will be difficult for movie theaters to make the movie-going experience special as tvs continue to get bigger and cheaper. It wasn't very long ago that 55" tvs were considered "premium", and now people can buy low-end 75" tvs for under $1k.

I would much rather shell out $30 to view a new movie in my home than take my family of four to the local theater and pay outlandish prices for popcorn and candy.

Absolutely. Personally I prefer the experience at home and that's on an old 55" plasma. I don't have to worry about people talking or kicking the back of my seat and I can pause it when I need to pee.

Sitting around with my family on our couch eating a pizza and watching the movie the way we want too is my ideal experience. If movies were released directly to digital I'd never step foot in a theater again.

I think that's what AMC is afraid of, with COVID people are getting new releases right at home and Hollywood will cut them out in a heartbeat if they believe they can make more money going directly to the consumer.

 

[Jerry in WA]

I love going to the theater. But the costs of seeing the movie in a theater are absurd now. A nice home theater is truly nothing like the experience of going out to the movies, but it's not a terrible alternative, by any means. For all of the great things about theaters, there are plenty of annoyances too.

The pandemic might be more than this industry can sustain now that we can have every new release delivered to our home in digital.

 

[PEnnn]

If they do the following for a year, they will recover: Lower their prices, offer free popcorn and soda (which costs them pennies to begin with), eliminate the sound of 200 people chewing loudly / opening 10 noisy bags of food (sold at theater of course).....I can guarantee they will start seeing way more people and not go belly up.

 

[wiyosaya]

I say mostly because lately, well, the last few times I went to the local theater it wasn't the best experience, too many disrespectful people, *****s talking, on their phones, something I can gladly say I will not miss.

I will add noise from adjacent theaters in the one AMC theater in our area, as well as a floor that is the equivalent of fly paper for humans in almost all of the Regal theaters (and moldy popcorn in at least one of those Regals) in our area.

 

[Mr Majestyk]

$15 movie Tix, $8 soda, a small size popcorn can feed a city of rodents, how can it not survive?

Or you could move to Australia and pay $23 for a ticket and for the privilege get kicked in the back and listen to morons talk and post to facebook.

 

[Dimitrios]

Let's see...would I rather:
A. Drive to a theater, traffic, find a place to park, wait in line to buy a ticket (unless purchased in
advance), wait in line for overpriced concessions, find a place to sit down, put up with the
people that talk through the movie, their cell phones ringing, buzzing, lighting up, fight the
crowd back to my car, probably door dinged because they don't put enough space between
each spot, drive back home.

B. Wait for it to come out on streaming, or the theater releases it direct to video, watch it on a
large flatscreen with a sound bar, in the comfort of my own home, eating and drinking anything
I want, and when I'm done, I'm at home.

I think I'll pick B.

You win best comment!

 

[toooooot]

That would be sad. They provide many entry level jobs we need to keep people away from having temptation to join looters and thugs in times like right now.

 

[loki1944]

That would be sad. They provide many entry level jobs we need to keep people away from having temptation to join looters and thugs in times like right now.

Our local movie theater is owned by our public school system and provides work for high schoolers.

 

[rub900]

I have a hard time believing they'll fold. They have billions invested in infrastructure, and pay their few employees minimum wage. Their largest expense is facilities maintenance and movie royalties/rentals. Plus I'm sure they'll be eligible for some sort of federal financial relief.

Once the stay-at-home orders are lifted, people will flock to the theaters (and other entertainment venues) after being cooped up for several months. This is a temporary situation they can climb out of, not a permanent one.

To be blunt. If you stupid enough to "flock" to a nasty, dirty theater you deserve to get sick. Until a vaccine is developed anything involving touching any hard surfaces touched by hundreds of other people is out. But you be you and I hope you don't get me sick. I bet you don't believe in wearing a mask either...

 

[Bp968]

I love going to the theater. But the costs of seeing the movie in a theater are absurd now. A nice home theater is truly nothing like the experience of going out to the movies, but it's not a terrible alternative, by any means. For all of the great things about theaters, there are plenty of annoyances too.

The pandemic might be more than this industry can sustain now that we can have every new release delivered to our home in digital.

Your right. Its nothing like the theater, its better in every way. I can pause, hit the restroom, rewind, and do whatever I want.

I don't care if others like the theater, enjoy away. Just end the first line release to theaters and offer it both in theaters and on streaming at release and let the buyers choose. You can have your theater "experience" and ill watch it at home.

But we all already know what happens to the big theater chains if that option is on the table. Even AMC knows, which is why they had a s*** fit when universal said they would release on both at the same time. Without their first run monopoly they are toast.