1 circuitAMCEntertainment, which is saddled with about $4.8 billion in debt, is bound for bankruptcy.
But no major exhibitors are expected to fold at least just yet.
From what we hear, there arent any exhibitors behind in rental payments to major studios.
AMC CEO Adam AronGetty/Courtesy
Again, this not Covid, which pushed Regal parent Cineworld into bankruptcy in the fall of 2022.
It re-emerged last year a private company, having shed most of its debt and a number of theaters.
Can you imagine if AMC filed for bankruptcy to do a reorganization of its theaters?
The retail investors would riot, exclaimed one Wall Street insider.
AMC itself should have gone belly up more than once.
A few weeks ago it said it plans to sell more $250 million worth of stock.
At yesterdays closing share price, it is actually worth $1,345,000.
So my compensation valued presently was $16.5 million less, he wrote.
Distribution insiders say AMC could afford to shed 100-150 theaters and it would only help the bottom line.
The looming issue for AMC debt-wise is the $2-plus billion that comes due in 2026.
The exhibitor will need to renegotiate with lenders, and likely push out the maturity.
It has lenders who have been supportive of the company in the past.
The major point worth making on AMC is that they are hyper-aware of the debt they have coming due.
They need to prepare for that.
Like other exhibitors, its seeing higher concession revenue and exploring alternative content.
The exhibitor, which also releasedRenaissance: A Film by Beyonce, has said it hopes to do more.
So studios bosses might be looking at AMC cockeyed, but Wall Street is more sanguine.
AMC reduced the principal balance of its debt by $448 million last year.
Free cash flow was negative $149 million for the fourth quarter.
After equity raises last year, the company ended 2023 with a $885 million in cash.
Not to say the company and others in the space are worry-free far from it.
Its either more movies or less screens, they say.
And the general sense is that there are and perhaps will continue to be fewer releases.
Consumer habits have changed since the pandemic.
AMC has reduced its theater count to 904, from 1,000 back in 2019, it said.
As leases on theater properties come up for renewal, we expect exhibitors will exit underperforming locations.
AMCs ancillary businesses include branded popcorn sold in retail stores, and its own branded candy.
It invested in a silver mine a few years ago.
It continues to get a licensing fee from Sauda Arabia movie theaters it sold in early 2023.
These wont really move the needle.
The companys debt, like Cineworlds, was swelled by a string of acquisitions.
Others say yes, there are occasional theater sales, but prices are very low.
No one wants to sell at the bottom.
In regards to more concert movies, the question remains how profitable they were for AMC.
Theyre great to have but it did a fraction of whatDunewould have done had it stayed on the weekend.
As more tentpoles arrive on marquees, the anticipation is that theatrical will boom again.
The hope is that January and February were the slowest months of the year, says Reese.
March popped a bit.
April depends onCivil War, which is eyeing a $20M opening.
The rest of the tentpole films throughout the year look really strong.
The fourth quarter will be much better, and sail into a really strong 2025.
