AMC Entertainment Holdings Inc. reported a narrower quarterly loss late Monday as people returned to its movie theaters and even splurged on its marked-up drinks and snacks, but the company tempered its optimism, saying that a Hollywood happy ending is far from certain.
AMC said it lost $344 million, or 71 cents a share, in the second quarter, compared with a loss of $561 million, or $5.38 a share, in the year-ago period. Revenue rose to $445 million, from $19 million a year ago.
Analysts polled by FactSet expected a loss of 94 cents a share on revenue of $382 million for the quarter.
“We are still losing money. We are still burning cash. We’re burning less of it,” Chief Executive Adam Aron told investors on a call about the results. “So we’re not out of the woods yet. We do still live in a COVID-infected world.”
The company, however, can see “a light at the end of this tunnel,” he said.
Shares of AMC
rallied more than 5% in the extended session, after ending the regular trading day up 3.4%. AMC shares have gained nearly 1,500% so far this year, compared with gains around 18% for the S&P 500 index
Aron announced that for 2022, AMC has reached an agreement with AT&T’s
Warner Bros. to show its movies in theaters exclusively for 45 days before they’re available to stream. Warner Bros. stunned the movie industry last year, announcing that due to the pandemic, it would stream its new releases for 2021 on HBO Max for 31 days starting the same day they hit theaters.
“It’s no secret that AMC was not at all happy,” with that move last year, Aron said on the earnings call. “It’s especially pleasing to be working so harmoniously with Warner Bros. once again.”
In the call, Aron also said that the company is exploring “how else” it can be part of the “burgeoning cryptocurrency universe,” with more details on a “serious involvement” to be shared soon, he said.
For the time being, AMC will accept bitcoin
as payment for tickets and concessions, he said, and its IT employees are writing the code for the theater chain to accept Apple Inc.’s
Apple Pay and Alphabet Inc.’s
Google Pay. These new payment methods could be implemented by the end of the year, he said.
AMC is one of the so-called “meme stocks,” getting boosted on popular social-media forums, and in the company’s release accompanying results, CEO Aron alluded to that support numerous times, all the while making quips about the movie-going business.
AMC raised $1.24 billion in new equity capital, boosting liquidity to more than $2 billion including cash and revolving credit lines, “which is about double the previous highest ever such mark in AMC’s 101-year history,” Aron said in a statement.
“We believe this gives AMC financial staying power to navigate boldly amidst coronavirus waters,” he said.
New blockbuster movies released in the quarter helped the company’s bottom line, and “fortunately for us, as guests returned to our theaters, they splurged on our food & beverage offerings, which admittedly is quite a high-margin business,” he said.
“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,” Aron said.
Aron alluded to the support from retail investors, saying that the company’s “sheer will to drive through this COVID-19 crisis clearly resonated amongst those who also were committed to our survival, because seeing movies in theaters has been a central part of the cultural fabric of society.”
“They can take comfort in knowing that as we rebuild our company, our deeper cash reserves allow us to stay the course, to innovate again and to capitalize on opportunities around us,” he said. “In short, as the largest movie theater operator in the world, AMC is playing on offense again.”
The company has taken ample advantage of its rising share price. In April, it launched an at-the-market equity program to sell up to 43 million shares, raising about $427.5 million before commissions and fees. In June, it raised another $587.4 million through the selling of 11.55 million shares.