AMC Entertainment reported a whopping $2.2 billion loss in the first quarter on Tuesday, the result of the global theatrical shutdown caused by COVID-19.
In a statement, the company said it is focused on its liquidity as it looks to fully reopen worldwide in July. Last week, the company said in filings that there were bankruptcy concerns, noting that “substantial doubt exists” about its ability to be “a going concern.”
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“These are truly unprecedented times,” CEO Adam Aron said in a statement. “We are confident we are taking the necessary steps on a broad array of fronts to ensure AMC’s future success as we navigate these turbulent and uncertain times.”
In an earnings call with analysts shortly after numbers were disclosed, Aron downplayed suggestions that the company might be forced to contend with a cash crunch.
“In the end, AMC will both succeed and prosper,” he said.
The earnings report reflected the unprecedented disruption caused by the coronavirus closures. The losses included $1.85 billion in impairment charges. In the prior-year quarter AMC suffered a loss of $130 million. Adjusted net losses per share was $2.22. Revenue topped out at $941.5 million, down from $1.2 billion in the prior-year quarter. Wall Street was expecting losses of $1.44 per share and revenue of $947 million. In his remarks with analysts and investors, Aron noted that the theater business had been hit by a tsunami of public health and economic catastrophes.
“Whoa Nelly, has there been a lot of change,” said Aron. “Cataclysmic change.”
Aron said that AMC expects that the business will gradually return this summer when blockbusters such as “Tenet” and “Mulan” come out on July 17 and July 24. There has been some question about whether or not those movies will move forward if major markets such as New York City remain closed, but Aron suggested that the films were on track to make their release dates.
When theaters do resume business, Aron said he expected consumers will be looking to get out of the homes they’ve been holed up in during social isolation.
“There will be significant pent-up demand to get back out into the world,” said Aron, noting that there would still be set-backs.
“The waters will be choppy,” Aron added. “There may be unforeseen tosses and turns to be navigated through.”
The AMC chief also addressed the company’s feud with Universal Pictures, which angered the exhibitor with its decision to release movies such as “Trolls World Tour” and “King of Staten Island” on-demand while most cinemas were closed. AMC had threatened to stop showing Universal films, potentially depriving the theater chain of access to Fast and Furious sequels and Jurassic World installments.
“Relations are warm with Universal,” Aron said. “Relations with Universal have always been warm. There is nothing personal about this issue with Universal…this is just an issue about money.”
AMC is in “active dialogue” with Universal, Aron said, meaning that a deal could be reached.
“We’ll see how it all shakes out,” he said.
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