AMC - Earnings call transcript Q1 2020 | AMC Entertainment Holdings, Inc.

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Operator

Greetings and welcome to AMC Entertainment’s First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I would now like to turn the conference over to your host, Mr. Merriwether. John you. Thank

begin. You may

John Merriwether

Chief Devin. to Good With to you, President I'd this our Shaun Chief Financial afternoon. first quarter everyone Officer. and our AMSC's Aron, call. is welcome Officer; XXXX and afternoon Goodman, Thank Adam like Executive earnings me conference

as call, that materially expectations. remind any cause may to uncertainties forward-looking on information or those by turn results among public others, expressed of this recently management this of financial statements actual reference the non-GAAP whether measures. will new me be the in conference to light risks, free and no statements, any control listeners update events. of reliance results based revise ability to factors not today. place cash undertakes discussed some Numerous of statements. On call measures or and are as differ result Adam, future over flow, on in filings, I that determine free other or constant currency and from forward-looking a adjusted such inherent adjusted to Company flow current the contain risks uncertainties the undue XX-K EBITDA, these In of that which we The predict. forward-looking cash cautioned the most to our Several Company and filed during the management's are these beyond Company's obligation which are future statements, of might Before are let may factors including call everyone uncertainties our comments made Many XX-Q. are the may

I'll there in results, our be to turn a afternoon's remarks, later will our non-GAAP over of our the section release our For today. available that, question-and-answer section This at of website a full Relations Investor earnings today. measures the our prepared amctheatres.com, website please recorded replay and webcast to be Adam. After GAAP will is the a Investor With see call earlier of being session. in reconciliation posted Relations call

Adam Aron

John. Good you very pleased join you, Thank We're us afternoon, today. everyone. could

of families me at hope your and by of all healthy. are and that on Let we safe of each saying you start AMC, behalf us

days, afternoon, while primary we'll we more to to through back is as are AMC long we've lovely a here interacted that same for suburb take a is what actually center of of results, For headquarters theaters the guests much interest Kansas the XX audio to yesterday. we'll to to video brief we the time Sean, a the crisis we and This calls internally theater be just will look this once in our quarter we've again. and past John, bring Kansas, actions on via the reopened support to believe within first taking call, at I and manage and constantly listeners room the our the this prepare City, Leawood, in time, actions call most you welcome physically on taken in first but focus our safely

come within pot. than begin, more American days at that we've pointing from the given past theaters what our I'd our these more on diverse and the AMC cities U.S. of the melting XX in we half by half from out preface Before to seen United of today communities remarks and like guests of States, my nights, employees streets than

Mr. against to special commitment and Floyd African-Americans. among anyone lengthy that of moving So, out message and has solid language a of last killing in week all I AMC's very any the employees home for on absolute service over the strongest the expressing reaffirmation our with our the strong being was the and unshakable our of Floyd, rock George outrage day shelter kind heartbreak at put memorial the of pain AMC. coupled felt no for and concern That discrimination or possible of

time. we the happening be over extraordinary unrest that don't same all why people colossal say move a Now, from social experiencing To world and economic are to all pandemic of times the at global would understatement. lockdown

With onset COVID-XX profoundly. and resulting pandemic has global and has it the the the created, earth been on the affected economic literally everyone of affected hardships planet

social from likely For tough what recovery a an true communal a toward experiences world, appreciation source the well people nation's over it's enjoyment, worth, the over. an escape will of and such world be integral a time to as movie convinced this a across has century, amusement community, entire and proven renewed be with of of full for sense part to slog and and fabric emerge going although that emotional long this that tried challenging I'm of it's

on that multiple circumstances. a what said on fronts our can focusing at know improve all this You of action we bold uncertainty. to is big, and Having we're time AMC, we're committed taking that, to control

every prosper accountants a my path. prudent step humanly the obvious and for properly AMC we In to can and substantial that air will all put believe improving every lawyers in heart that and achieve end, AMC both, lift one of objective. cautious, passionately doubts I the will take and solid AMC on succeed action like reasonable happen, to calamity that take important I rock can hearts, that to more and will should While every know us for we

whoa, for to benefiting and four theaters to reducing and liquidity theater sheet; to term our be actions Looking to things: strategies ahead, implementing of guests in a take of and as we One, immediate drive marketing the posture, and bolster associates, and caliber AMC profitability; revenues focused our corners spending the optimize professionally our reopening cash as optimizing the and to will understanding our or variety business industry whatever free deleverage can, structure from events way. our continuing our we smartly change up to dynamics near and and are through balance life, on ramp recent as two, In world everything has and through structural wide produce paid a change. change, at cost our to teams industry-leading whatever three, managing revenues safety may what recent weeks, need do. to harvest is inevitable management are of indeed that across throwing of change managing been course, entail cataclysmic Nelly, is but our smartly industries realizing all four, that and change, But may take in time flow; in there months, lot

that in January February months XXXX the we adjusted $XX million of can seen Domestically, the EBITDA success previously nearly first of encouraging for efforts, that of great Similarly, result events, were and it's outperformance, to were strong the our during total in hold. again of to two that Before taking our as the first the revenue put Company was latter results the marketing half place months by two kaboom, in grew results, our initiated we've that XXXX, the very a to admission overshadowed when apparent thanks back industry much we competitive points. first operation nearly on company controls looking and continuously mid-XXXX, work revenues prior growth rest on and AMC yielded the comfort XXXX. further, suspension, of compared XX%, when outperforming improvement in of by together evidence. all ahead cost mid-March side, since hard the theater know. world basis then, efficiencies But operational quarter industry the profit with plan, with about were the place we look take the we've cost international XXX This combined as

in During to and made the February, a temporarily of of in serve. close decision X,XXX began coronavirus. these our to as theaters close But we had latter know, all only by you of handfuls few theaters, part response Italy, we that and XX only across March countries the all the international U.S. XXth, to our

Sean? shuttering and with competition all Despite would commencing under companywide third, and senior theaters focusing three swift addition we wise will effectively reducing can to to all our the future the recommence firmly we operations success. hope the do planning outperform financial AMC through ahead. that now senior areas: as we've both the briefly seems to our AMC you and spent waking furlough, moment leadership three in second, and we in to call liquidity; has such burn; be what with review to and date to operating our so, be able diligently a March, took team every take continue the it Sean, In on generate deal a the executives CFO, two and over past strengthening half months, grow soon to expect on included actions some taken turn action, and myself, corona. to our comprehensive we our the quarter focus things dramatically areas preserving our theaters, the capabilities work efforts First, to all key cash which our that and like years what first of results at to I'll of these working were these as associated

Sean Goodman

unprecedented And us during and times. safe today. that well you on with Thank you I these and you, thank call been Adam. being for everyone hope your the have families

impacted the clearly operations our Our were affect crisis, the early significantly for began in by to quarter COVID-XX March. results which

out, we pointed Adam solid results. XXXX very with As began

success last program. up included plan or and year two adjusted XXX% to nearly the quarter the the million subscription profit months of same A-List implemented the last the XX% year, and of of of period our compared continued revenue at success Key benefits year. drivers our the the first consolidated the For was our was up EBITDA $XX beginning of improvement

of were all results impacted EBITDA initiatives food February, million and pricing, quarter, $XX month average and almost working. In ticket the by person For quarter. operations X.X%, theaters across and and March, the our the and months January revenue evidence the took we food to significantly million down suspended our by that we clearly the down of we for as first adjusted X% per for two beverage The world. at price March are increased from of $X beverage

CapEx approximately income also noncash suspension driven in resulting and and charges we by cycle. charges see impacted quarter reductions declines our meaningful the Company's in the first market enterprise for were was to investment billion. and Our growth These natural our XXXX would through decline noncash EBITDA when the was year materially be the of begin levels global impairment net by leverage of operations Company's in $X.XX the the capitalization value. a to

reductions including maintain we domestic XXX%; to levels members; or changed planning be roles; early fixed, all annual company managing the become With eliminated a fully our we our for the ranging non-healthcare reduced of our employees, increases; burn, that match but the been including impact first or reopening our that furloughed level began and costs rapidly with minimum in the and following: All our since quarter, minimize level our to in partial actions expenditures, with merit vacation we management From management operating we normally focus non-essential salary including and cash necessary XXX(k) of has of pandemic. cancelled to beginning from possible perspective, we this initiated crisis reduced this we all global have of assets accruals; and taken pay environment. to clear nearly cash executives, variable the benefits we and to include we capabilities; liquidity. this COVID-XX, crew burn theater-level that full XX% contractor theater are of senior respect all optimize cut the this to some financial eliminated furloughs corporate and We considered

In our and rental terms. studio theater been extended To landlord a working partners to payment we costs. have negotiate on bit addition, with also expand

partnering our grateful landlords for to are with this us crisis. We during

we each has positive rent a operations EBITDA statement abate and cash relationships, of landlord and reporting result impact our defer majority and liability this to reflect our for shuttered, or due strong during period our been remain vast that monthly rent that period. on As have of will burn. a Note the long-term income able successfully our the our had full

and one and of each a the facts that have circumstances have landlords of are agreed and confidential to with You for should and the particular specific them each large we each we that that landlord note theater. number terms

In where landlords addition, we agreements. there remain still are finalizing some

of ultimate on will majority attendance. schedule be the the For vast statement income rent our of Future protected cash will you second the payments in quarter, should that and reopening depend expect level deferred. rent

halting we all expenditure, minimum maintenance are indispensable to have CapEx. capital with suspended. operations capital expenditure theater while absolutely Regarding Essentially levels reduced we’re

$XXX to During was million. management. million million One contributions quarter the be expect first of landlord million net last to $XXX and between in to net year. related quarter, CapEx $XX.X compared our CapEx XXXX expense the $XX.X more We spend now of first thought

significant not plan the temporary, initiatives and and be and will While temporary the we margin theater closures growth saving prepare cost future. improvement for learnings as in our are of some EBITDA

the the following a CARES minimum tax of refundable in that matches health as required impact We and receipt million expect tax and from to payroll to be refund $XX.X benefits not the to are on a Act a for result of tax receive COVID-XX relief would deferral expenses forms: who wages and of paying tax cash in XXXX; social alternative business. in Approximately working XXXX payroll the credit credits; of security otherwise relating our employees

credit assistance precautionary for the we to totaling during as we States, $XXX issued in March, ongoing in revolving various Act addition point-of-view, CARES drew that and lien expenses $XXX also April, approximately liquidity from X-year in QX, provide United payroll In notes. million. rent In a first benefiting our period are during From operations. million support government the we lines suspended a the programs down of measure, of Europe

this part dividends suspend of we repurchase stock undertook As and financing, suspend to program. also our

We reduce balance cash our as also maintenance burn $XXX covenant of and through in suspend debt agreement requirements our a liquidity our XXXX efforts April XXXX. obtained resulted approximately XX, combined cash The million. of to strengthen to

Because able over so and liquidity. leverage be can back offer have meaningfully XXXX the offer. he further call notes, Finally, reopening senior this existing today's debt to debt senior With I'll exchange we extent XXXX. our elect with notes initiated our we is share turn regarding reduce to potential in subordinated exchange lien offer market, will To that XXXX to the exchange take for exchange debt currently questions plan. not last subordinated to from week, to Adam? second holders on due the to secured a Adam, you active that, our call we the the enhance our in this

Adam Aron

Thank you, Sean.

to of but theater Over return to and when manage the to three past resumption associates guests through to months, well move safe difficult and a expeditiously not and crisis we for for our this to hesitated decisions making AMC have position successful operations our theaters. necessary it's

expenditures. of months billion year, multinational subject of a and a is take in almost of single weeks came efficiency. by of almost three XX in we the March additional as we all almost XX% our reduction of mid-March on that, decision, the certainty the of total indifferently, but two no callously, with robust actions we of four that senior our around countries in wisdom positions nothing, in remember because than ongoing the chasing By not and knew officers people XX XX% not for cost in more cutting, immediate had was to sizable motion, in March exchange nature there our a the our cash with breathtaking. was furloughed senior eye. blink theater-decision, I full XX% choice. of all name a to mindlessly, money share other not right of spending continents, set grant. Last because simply officers our do. after August in compensation reduction XX% shedding single to discussing already out me exchange spent an salary On I we convincing deferring with taking just away across its by contrast, an cash This absolutely insisted conversation for Think or solely contrast, our $X thing it last how a the we that This eliminating agonized the XX,XXX over operating

and In and add, to theater and right we rent almost visit strength nada, boot. and landlords XXXX, to we focused of century, through of the that might their them, quarter second getting I paid owed with now on and AMC our cooperation, time on understanding the a For everyone position success. with rebuilding this

said, so taking is swiftly. big I As the bold doing action and Company

temporarily stripes raising AMC in to court. J journalists going masterful a in earned were Marcus in in Similarly, silenced Sean liquidity, market April, new cash of that of subject would $XXX door. Neiman reporting the all million breathlessly with Crew those containing our and who bankruptcy out the certainly lead debt fast On Hertz, least and did his job AMC really truly at public success the

Citibank out would race, debt the Silver they effort thank Lake everything of like fresh I of On especially to and cash. and billion getting a who call AMC threw into the had $X.X

activity, dedication it’s market we're and that Citibank crafted and if grateful and is XXXX and Moelis of years currently of along the Lake their Weil, bond forward Silver AMC. picks in XXX In most the are skill one is extraordinary for of XXXth up lot AMC's a you very those, huge offer our And way. another As two business of and know, and friends be could anniversary. to for step Company. completed, Gotshal allies the

of subject to turn doors our first week, theaters. Norway. our encouraging of successfully theaters operations sales were of In highly to three mind, the last the at we seat capacity, we bit theaters weekend. of limited those though the let's opened on ticket Now, a this resumption Europe, our seats past that's everyone's in in available In three sold XX% XX% trivia, even of

beverage nicely. Additionally, held up food and spending

this up but the last things consideration, they same these year. So, year, for same wound the as theaters amazing true, three into this doing taking all did about weekend weekend business

Spain now countries, in June. operations again, more As operating On start theaters countries, Germany, and XX theaters Portugal. and welcome we four will we're sit in across we theaters we today, here currently at guests have Monday, paying Norway, More Italy.

United all operations of in essentially of Kingdom current for two and our few month is theaters largest our in the territories expectation but resume United July. the in the exceptions, States a Our will that

operating is assumes of by followed July which XXth, our July, for for almost Mulan have plan Christopher Brothers Disney's for is Tenet globally release currently Our to industry stays currently time scheduled theaters of on of July schedule in that XXth. the all for current Warner and scheduled Nolan's release

The film as titles, such to Place others. A Quiet II, Widow, benefits many slate among Wonder many, Maverick, this Gun: second big strong of have year XXXX, that continues really from half Black Woman Top

the this studio prepared major I phased should we schedule the is adjust out timing our of to timing local point regulations theater with operation and that fluid to course, stand necessary and comply of as Of situation releases. entire

The few We have people And rehiring approach be of who in the aspect that’s of we with guests. is that this and no though be environment our the guests end, of we our and develop for to our associates can course, all But trusted retraining safety do most about have first welcoming an critical with procedures our incredibly theaters away. health and public will safety safe guests our combined leading plan, both ours, working to and between in even working detailed a well associates. and stone an rebuilding now running to with is of To and safety short theaters, protocols. comfortable and comprehensive left and cleaning the provide our priority, names and they're and and weeks that to to safely. all our a doing our successful unturned, cleaning that's we're things change business. Many in being to most commitment July, thriving to industry can

timeliness, for close more we block being protection from the maintaining on health a aimed seven resumed to and guidance all following with which how and Personal and with at best under and environment University associates. Harvard to of other optimizing protocols, guests seating, understand now profitability Public former seek and current much capacity, from scientists our Two, cleaning contact strategies limited officials employee School equipments, steps expensive the safe the consulting One, Health, national to safety the regimens, and operate. best faculty create coordinate requirements local, international experts of planned. and theater and are theater prestigious can operations. taking timing the are We our

seriously possible. This vacuums theater our ventilation solutions expanding protocol high-tech to at things all be wherever world's electrostatic of filters. operations Having of turns illusions. implement as facilitate resume as announced be XXX spending ticketing the we our to database, ordering an of global us apps the subscription, while. consumer understand in and movie-going distancing this advise safe our intensely will extremely in possible our website with looking including screen. lower can soon upgraded portfolio, program, to next they get Clorox experience technology to partnership all under take will and have unforeseen global aimed In our use with an immersive the And respect after environments especially all mind. Five, we The world, to industry with they industry quite well in as is locations. Implementing sprayers, with Sixth, leading Still, to as month, techniques with possibly our expenditures to a we're seventh, a capabilities safety conclusion, of a well-positioned There the content mobile footprint. using of activity, customer are unparalleled clean significant taking and may through. leader practices said that, loyalty, upgraded be and strategies navigated combined our demand we Company, recovery this modern leading us social examining contactless to time actions compelling as best are food MERV billions from Three, big and enjoying a and to be AMC and waters jumpstarting possible. HEPA watching pent may an on publicly with will technology smartphone and marketing guests week. air these the every theater all clean, at and largest as The of social finally, Fourth, wherever establishing with protocols our choppy. educating limited full no additional beverage XX benefit tosses demand a Company. including believe and make be later sanitization that The in full theater and communications aid our back there period that as And how U.S. cost early demand. their confinement our so people aggressive the and across will category promotional into interaction, details reducing the social up help where theater indoor we structure, the out We

true We have our that highly liquidity is more well a our With AMC’s And we'll AMC's to balance will team to meaningful do and able executive and the free to measure operations of of strengthen deleverage smiles resume and operator, for that to we're sheet. course once importantly long-term you the to we're cash make survival that shareholders. knowing long-term have And movies. our again ready success questions. be seeing absolutely forward AMC’s our flow success, ability for theater to producing to looking now back committed so happen that, for safely. our We'll our at have and guests

Operator

line Eric [Operator we time, session. be a first with Instructions] your question FBR. proceed B. of from this Please At the question. with conducting Our you. Wold Thank comes question-and-answer will Riley

Eric Wold

ready when in once the couple Thank that are you together. of you situations plan you or have a ready? of to give a what's a back, can sense that to you until have you. know you light? would you employees afternoon, and questions, tenants, I when some I open to start necessarily have market the guys fluid a wait get terms ever going Maybe you come, in reopen. will fairly And good for will out light to back theater timeline have know theaters it everyone. don't you back if One, even light of, green Good region all or A when sense green allow get saw Glad guess. yet of better completely hiring us a green that theater there

Adam Aron

Thanks, Eric.

Saudi national for fluid. declared not yet The the country serve, has to have we of as that think I dates. is reopening XX that countries So, guidelines only believe it's yes, that I Arabia. we XX

June in there open We especially announced are to date heartened and United Tenet San of XX. movie believe on holds. though mayors with that was guidelines, is new that's time of And California on local and were Francisco. the States, That opening a July national Governor night, both Angeles But last still we in to could for the greatly date, Los world. want theaters market In addition news. the guidelines. that assuming the XX largest that will which important welcome be that engage that the We

New York to when of State has can reopen. as the it city, not assuming theaters schedule City opined yet similarly for five The announced on Tenet, York, York stays XX. there state, New July will reopen of of Mayor has the boroughs New the the not

and employee in be shows a with do business. our that we believe to said, three it's the and call with our all who’ve with our the United if on -- making year. opened discounted be to earlier soon. that pick do we because Zoom our our most number, circuits, the catalog on quickly. with of optimizing be open our that theaters we releases We Wind, of for expect be I be We attendance We notice. theaters the up the and new we've same, our prices, or can very weren't to have discussing they our with week time two, States opened the open the the is hold the to a or last And find that but may Gone there than idea. the in as theaters theaters as inside movies few a we of they think Mulan, a older are a Other earlier essentially matter not product. date them dates. have our will have might I know some but, repertory from planning That a when reopen, those expect, now necessarily movies theaters, been lush profitability Tenet when some to movies, and at rather open called the all beforehand. would revenues months theater ready theater classic, planning of playing And in all XX%, be of in old, today was a of meaning this moment's movie can for managers at open to open them than decide handful from we that theaters the older -- been what's and we some a might our of good telling that XXX economically can on because first to We'll all exceptions, might earlier meaning telephone efforts have not old products much much the that the planning more open also actually employees theaters very that XX% massive, we reopening for money actually the theaters, should

and more So, early and over open view the we said in the the venues as more the our time I also over and various We're is bulk pandemic to opening not first giving in July, better opening think that it's script, happier try as with important, preparation which containment. and the July, opening It get of control safely well. time for theaters for June and world were to prematurely. under much in in again to May, theater as operating some June, our jurisdictions, of that our

right but not more going to more we're much safe before before be be movie Tenet our and open to profitable, up So, to theaters Tenet.

guarantee month release. of Tenet other also Disney, studios still you I Warner are a of as can't won't and in on the that whenever we that matter, based as XX new by night, to and made those our us. XX. had ready we last Those that whole and those conversations and the on two released But, decisions slip. for are host ready recently August. do that July know dates There are will by is Mulan, movies by of are open movies are who be schedule being July for terms for What In movies theaters we

Eric Wold

year of with world to attendance delta efforts given if Last procedures, us restrictions, of restricted XX%, you speak, into move sense to you, new margins is initially maybe vary, by on kind at in to accordingly. to cleaning XX% then Sean, that kind and costs that goes expect expect that we’re with your How going you guess control initially Thank give always kind least costs and ramp margins? maybe kind that question, levels places I of you as coupled would you’re of Adam. new for various how last a offset staff four-wall to a intentionally I to so attendance your of up, guess cetera, you et

Adam Aron

take this it's important. reminder to not because even limitation would So, we're Eric, XX% on as so one and think A is question, going as first all, blush. to the you both painful nearly

mostly to all one pulling the mostly we seats Broadway for tickets seat of why when lives empty another, you full. are theater we Sunday. have the of of reclining contrast, for that very theaters what that a for again, look available sale gone is us movie putting If church to sold, reduce empty, today, or time have sold for we were look only seats. at about capacities so Because it that's think renovated seats are often in you By seats. a And Easter that for XXXX, you in theaters find reclining had theater, we not much our installed theaters XX% we out a at number seat reason if theater seats at And that sold easy industry, our with number our Even we was we and if you in doing, the AMC Broadway were of a by renovated built seats. every every performance.

guests. certainly limit, that and out don't chase marry the XX% you limit seat against up XX% against seat the you many when So,

Of course, of as last that and shifted we assumes the only you're to based seats that social had our performances part alternatively, on are going that Saturday that of go theaters, as not out But, having to no our Friday performances the of chase went consumers full. distancing or we seat And and not on a see, out to and they one guests back guests. and because imposed about to a looked desire if limit ran XX% went we available knocked modeling, XX% year. it economic at the some night

voluntary knocks probably go single-digit out XX% that a you So, attendance only a of greater. really, XX% when difference to only seat out this And performances the seat done isn't a a -- knocks whole people limitation, XX% redistribution factor even in consumer, lot single the by especially even limitation at AMC. XX% between and

assumption. given will will capacity that? full only margins and that our year, day first that That seen business seats. to margins our research our world or immediately time, mean an the are, as a you that vast that Having increasing theaters, margin that, to are but of whole good to should the there want come customers all a optimistic did I'd up might of is our it's that the over our it do says more majority are, means sold be too the love as said And will be saying while be the ramp of that XX% going our essentially first attendance a that as less ramp-up you and same them, operate where notion, auditoriums anything back in did as over to our in margins seat available of which time, our will the not that on we've without weekend, last theaters counterintuitive think So, Tenet the last we goes market margins increasingly not Sean, our of the our to or very Norway be. at there of like better is beyond. worse add Christmas as And year. does margin to going think be limit which not to painful be, seems the XXXX that but our we full of

Sean Goodman

we Two I'll the just theaters. that Thank for looked our one Adam. designing is, this to when plan No. other add opening at things very carefully is you,

the to will to open ones is theaters earlier. before attendance last theaters expect the first level in break major require break would order be that the could one, you first higher what releases. of studio So, the which in open even even to versus the The last theaters

think us -- live in at number in the base allows we well as this mentioned we adjust is levels capacity can theater even our past times, screens, or Adam significantly flexible can Unlike have we number of point I profitably And have asset adjust and capacity. other a then, of very that and terms well. adjust sports, as quite we The of times we average. to operate Adam on said, lower screen as the done XX%, we could manage profitability can

Adam Aron

And studio, can I mackerel! dialogue we’re with limitations. And if they're we but we're as big expect. saying holy would us, you movies. just last in every and Capacity Sean's, that normally And saying, right, to add small, to play point, XX

with have screens. We theaters XX

theaters many. of XX double and come we Mulan, capacity Tenet some XX or quadruple to have with screens. examples the we’ll limitations, We Tenet among auditoriums Mulan seat or showing or don't and worry out, about triple When allocate that number as

make arrows in don't a lot seat our that capacity limitations quiver hurt to of sure So, have we us. the

Eric Wold

Perfect. both. Thank you,

Adam Aron

take operating screens. than showtimes a attendance peak morning. can reducing demand, in morning especially performance. concentrate Remember, by hours light, when economic add marginal one of allows We a of not we’re add showtimes showtimes, Also, decrease to is time which And routinely the the number slots and there's it's -- improve therefore those of normal, inverse out lower demand more by If and X costs thing, us the at theaters that. we if adding can if in off open the our opening costs can lighter in very lot till much of periods. the we I lot is can our in Right? XX

Operator

line stay question Meghan with Durkin Credit the Suisse. with your question. of Please comes from Our next

Meghan Durkin

guys. Hi,

commence to want so, exchange, Silver with its needs been I exchange. discussions this approve any reductions the -- follow-up, were your in landlords, board to involved the forward, you Since negotiate if the your I to hope have one. not able me going wonder to you I the just members rents in to And So Lake the decision deferrals? allow

Adam Aron

Sure.

rents respect question actually our like leases abating we've about permanently apology not period we've forward, to in forgiving so a other in and XX rents similarly me XXXX, had discussions of about begin, rents in lowering talking eight just have later, considerable added actually but in for different weeks QX. about different questions back also lease. to literally -- I deferring rents Italy. we an about the last rent. the just rents second think for half reducing QX, landlord yes, in like landlords the yes, in of countries. and like landlords, we I something percentage other call it And it's been have the especially because converting XX Before said We've with going success ask far But price with theaters the X,XXX we've with had rents forgiving to today, is your of but duration short hundreds success actually Italy. and considerable all X.X from owe we from individual on hundreds coronavirus you revenue But theaters And in time and with of of you success considerable fixed of across world. the landlords, deferring the rents, entire on XXXX rents. And earnings I had not

of bonds. you're the bond need who be the to that On not offer, exchange universal absolutely we of correct are bondholders, individual it consent their Those the done, issue a exchanging will consents, the get consent.

expect with you in member refused himself to as without our the And exchange Silver thing. the effort, need that saying will Lake's Lake matters board it Silver place. goes has all We consent governance would course, good from corporate properly whole do associated of

Meghan Durkin

there. it. I'll got issues the on And, Okay, call. no it leave last

Adam Aron

biggest crisis in predict us, the you like days at certainly the got is want States economic one Got worst since unrest in there it. problems the what called XXXX. We the got want if had health we corona world And a social know throw one If since have the XXXXs. to XXXXs. We've XX fourth I United ago. worst of would to that to you is, since just

Meghan Durkin

anymore. take No, I can't please no.

Operator

with Please line the Macquarie from comes question with Chad of Beynon next question. your Our Group. proceed

Chad Beynon

everything are the Good lot you if how done And about received just haven't comment others renovations your you're I afternoon. beginning guess you've theaters a almost hear theaters, Good versus you could I the XXX kind the or domestically, the to reexamining of which CapEx renovated fully about all CapEx. branded all and was general. well. At of and business on as talked in I believe wondering Hi. of guys I just the thinking theaters, you're and same AMC believe so which classic the your

we that future sidebar those in of of either into should fit is, your the closures thinking? Thanks. segments? So any And does expect that how

Adam Aron

that's it. Thanks, take important And way framed Ted. I'll it a the you question. Look very

start just the Let's with classic theaters.

profitable While theaters, AMC they not profitable. are not as not are very as they they're unprofitable, just

out even the as AMC of bear theaters. coming doesn't theaters each brand, correct of XX% is flow rough each of papa of classic there brand, if our of cash cash that example will big the wrong, to John is that Diamond So AMC mean flow comes those for but out though XX% -- a as and XX% no AMC our me number, in I'm comes of flow nearly profitable the not that's individually cash

So of look way one it. that's at to sort

landlord that is contributing theater ways, The the big that to contributing overhead profitability a for the profit, overhead. to have way it's two much, is contractually better or owed it it's but be which providing is is to rent at but look absolutely maybe it's contribution at than that not not we overhead unprofitable greater have to operation an unprofitable to to extent second is the in to it making in it case you because to it's that theater, look

at theater XXX to to those want theater we States. we'll us shedding are are to not. or We're Having our looking days, I 'XX, own there either count a every about those United 'XX where theaters profitability, their and XXX we and it and stay and some at we be choose reopen. leaves think that we and in or US stays hard don't we're unprofitable have we're to the said theaters wouldn't theaters may an are it States fleet fleet hard are are the going come that no especially theaters where a look exhaustive determination a operator go surprised we the single they look United have overhead being that I'm through be make very expecting or analysis points up expiration. but to days, XX of fall lease is going next XX percentage -- that of for of whether if theater or that, normal in profitability only as that the we not theaters our have below, don't stays a our again but XX% maybe in I going affordable couple the would our run our to fleet see XX%, in those that forward theater such in open year we that leases don't our said that, can going just marginal. ahead, theaters going -- so contractual theaters renegotiate rents more five contributing are decrease -- points theaters of So percentage not any to we those even July, have of largest into take a Having terms to looking not up because extension. say time XX%, if want couple take if we because with Over those run very theaters theater I on the 'XX of reopen that's to let's meaning landlord open. anything going to that

Chad Beynon

are willing assume then here, bridge that kind offering? the April number? your you because holding I'm quarter million, little that's balance March cash a going perfect. XX balance gave Adam. essentially us are for the a that was and bond cash And in monthly more June you $XXX of and burn end of greedy what number, which cash us or the May to be us what then A Okay, Thanks, of then you to May would of might help back kind updated Sean, us gave give you

Sean Goodman

some we at won't I in can will perhaps, I direct direction the compromise guidance Well, point to maybe that numbers, level. you give give but you you right

about of we've beginning the additional field We give information when we publicly If million us Thanksgiving, raised $XXX us months. you quarter. said to to equivalent said approximately think $XXX second that that cash million the that the we the would sufficient eight cash $XXX to through our what of operations that the at a at disclosed million withstand enable right moment, would suspension be so

would wouldn't to cash point use the of November. of had would we be view. of all cash, at that a there so that end Obviously, balance that nothing Now,

month. south burn So and costs that our debt million of the servicing a slightly monthly about cash $XXX is includes run at $XX something million

of to at roughly end kind cash the position period use that can thereafter. what of of end May and the the you estimate So at is

market have offering, we have the numbers the We careful to with know to what new and be because we be are we supply. bond out in got careful to we them

slightly very as Adam I'd we one the will I our expectations to indicated very better the what well with his had thing cash offering that when I in is managing projections line burn bond did prepared are just add other So we cash -- to carefully. toward watching with the remarks, that our we than and in am

Adam Aron

we only since in you capital it down going like related, but give expenditures this question, nickname, remarks bone. the not the bring a a operating We ask bare Like are is a to But new hawk. taking hawk. We're to we're didn't costs. that said

prepared million I million, meaning under be year that somewhere the will CapEx $XXX was months think CapEx think between $XX remaining said and to in year first We million. maybe few for that the that million his expenditure $XX $XX for the XX the Sean in remarks, million. CapEx $XXX of months total another

that because to recall, and $XXX we this turn $XXX And if and that anybody off million may doubted we we we year, to if brakes $XXX this pulled off, $XXX burn have first could or off the million months CapEx going $XXX were pull around been million $XX $XX guidance always to not to we year ability we be $XXX Had $XXX well two million would the have $XX that were just million spend CapEx the than million this million this is in million, of needed said immediately, last the we that we CapEx $XXX to before it. that do that CapEx in on a turn gave spending to over million we You first year, lot two year total. million spending in to million less year. be years would the

Sean Goodman

numbers Adam that one quick is That's net CapEx, on And clarification to. just the referring that.

Adam Aron

All those prior net numbers for CapEx, the period. including were of

Operator

comes the line with Handler your Eric with Please of next MKM question. Partners. Our from stay question

Eric Handler

the for your account Thank Adam, are to if believe much theaters that little opening, be Phase could what you of One bit, just revenue screens how its circuit US part a entered opening? in I New city of considering you and York of X does specifically City New York very question. a or And about wonder for of or state the percentage York part could the the of that for? you talk July terms City City hopeful Phase reopening are New

Adam Aron

major Well, York New you City. in player know, a we're

XXX in market States. we XXX -- do open theaters a excess share in the -- We XX%. of have we United But well, pre-corona, had we have

circuit. total percentage New our digit of York City represents single

thought You that safe soon so. theaters we as rush was not said already obviously open did York and love New it I've as can ahead the company, City when for as do a safely soon of would as can. opening I know it's AMC as out it Eric, of to

that healthy officials are of Tenet the task I don't question, open public a you reality York in is, city or empathetic people know the so want with hope open so. of wouldn't York for I XX They I So New don't to asked not. have New try manner. skirt will will either. New it. any not. X answer get date whether he million City probably make herculean we mayor to They predictions City if -- might the think who a And be really in a York to a just through July the I

next weeks determine four we weeks learn over happens I the four think will what from what now.

my let's said very it's hope But we get I can a open. in earlier As fluid situation. remarks,

State in certainly open about shouldn't this certainly based to York on of current -- New expectations, anything supposed never I -- but in Tenet. use State York environment, early I New should broadly is say ahead the word July

right a that's of And different July be the assumes holds on a the than will Tenet that's City York made New boardroom on cusp. in being and that course XX ours. that decision

Eric Handler

a comment their enough. little pandemic. payments about up ended halting the first you that is customers Fair that how you're you're where quarter? in through -- I I'm churn telling A-List, wonder, assuming and this up could holding you've your

Adam Aron

talk let's So just now. January-February, about talk we about

big out great two was for laid was it our up we EBITDA the up a XXXX, of look Extrapolate a If we the in reason, financially members. why had looked $XX million sweet not going a January in would Film wonderful February. So It was but The two forward. only we where program harvest the all plans as company this -- profitability of right at reason, pre-coronavirus. going cash as and EBITDA the flow that. was in We million spot all This to been months profitable. in how A-List usage been free we $XX XXX,XXX a year-over-year company these were months was was greatly year and every were program prior. had big have over months. reason of

things all without our action, going when are As we're our soon all having paused do. to there members my we and AMC out of AMC to to seven all theater them we -- did payments take talked I and were A-List in went Stubs we of Stubs shutdown, as we any remarks, -- members,

of One promotional activity. them aggressive of marketing an communications is plan and

don't resumption population. aimed our tell that communications to our I operations, forward. to we going our them we're want will going will of with to go gun. respect with of to -- out be Some When A-List do what A-List our at that guests jump

base. them, deserve of think on I XX%, out a having tell population our bleed this call But members it can it these first, press. us. to our of in our It's of what around very our The very customer part Stubs half going in into customer -- customer we're our round population important our the important Roughly that and I customer is for base. is The US total are base. rather you customer part Stubs a They're important of numbers, base. than do base. hear of in doing A-List right population total very to very to

to we that We What know action will back right them make A, all really the and of propel we to do AMC happy give with of the hopefully are how benefit lot them come see theaters it, B, take to a theaters. into result them will our operating, activity be, that will us open they respond. until, going are of none and to and

of you how perform they quarter would Rather So just report we'll open comprehensive I it -- they'll how time, giving and be be we a about as guessing perform think in information very rather third than numbers. than guessing ahead did guess.

Eric Handler

refresh… a as just And

Adam Aron

Hey to how They're second Eric, going not to in a to the movie quarter. quarter. I they're go tell perform going second the single you can in

Eric Handler

Yes.

refresh, January-February, said a as compare XXXX XXX,XXX does was ended you about How where you in there Just members. that December? to

Adam Aron

It we... was think right around We the same.

Eric Handler

Okay.

Adam Aron

you, you. Thank Eric. Thank

Operator

Our Miller line with your question question. Imperial with the next comes Proceed from Capital. of David

David Miller

you, or Thanks. with in contribute, term the of I've And couple Can whether then notes. questions. you great. going start still rank not that guys and in to would I Hey know passu you notes the be Adam, say guys, though want second-lien are are I'll the loan? pari with with follow-ups. a second-lien chime the Sean, to you few a if or market

Sean Goodman

notes. in It's the the We're not first-lien market Sean. with

you still just the said know market first-lien with you -- Sorry, the in notes? we repeat the are

David Miller

So, my with understanding rank notes loan. is pari that term the the first-lien passu

out with notes. second-lien but you're So,

You're out in the market with second-line notes.

Sean Goodman

Exchange Offers? Yes. the With

David Miller

Yes.

Sean Goodman

what was Sorry, the question? and

David Miller

Will as initial that rank passu pari as the well offering?

Sean Goodman

No. It won't.

David Miller

then... All right, And fair enough. Okay.

Adam Aron

Second-lien is second-lien.

exchange exchange. notes would first-lien. is those that ahead notes that do of be those But not First-lien

Sean Goodman

Correct.

David Miller

some can it offline, we that's We talk that can are fine. to exactly. Right, totally -- about there nuances

Adam Aron

to talk hey, talk the an got actually, can't online. call, publicly. than we -- in on can't OM, on bond and it the exchange. -- that live about we about more David, we Sean Actually, much with We're active We've this and it say market not

David Miller

to it some you going were back would obviously virus? all it fourth the you be have about be the or to model deferred. Okay. how would quarter is appreciate rents. in rents or XXXX, the more like 'XX, to the In back color be about talk on that? are how And many -- then, is you reconciled end of how if this Is paid us, I cases, you or going of Can going general, like to in

Adam Aron

place by extend And six trying to least agreement we to But It the -- approaching we're of some in agreements got are at by agreement literally XXXX. have agreement, until in period of get that landlord. cases, years. a end repayment we've varies landlord over repayment

the by future We'll to probably color give more on we be deal really it yet. done call make able more a aren't deal. you All So deals as progress. depends

David Miller

in progress with relations of And then, letter Universal? We're that sort warming the obviously wrote. great. you Adam, of Okay, aware any

I any Universal somewhat asking because show in be to You who that the and stated or who that actually the the I'm on Bond on not know, ago six, behalf James you're XX out shareholders distributor more film. Universal might films weeks eight call question on was, is worried that of seven, international so. about don't MGM are going November

Adam Aron

Thank you for the question.

So look, are Universal. relations warm with

nothing executives. not warm. word to great warm You warm. said And not good for There were this as issue been using have Universal. good with a with about Relations personal have opposed word. Universal is they am respect I I a always Universal as

if just dialog how movies great us. This I money. with it we are I about on respect are issue and quote, on Universal, Studios out. Page in is have the they by active no Universal, currently And for shakes made it are with says Universal docket. you an our think we in X, while but press We'll dialog see active look at all release

David Miller

Health to real when you today or you prior State just script, were of that caps made you the of of Were by what imposed aware Okay. the attendance today? you that Adam, Department wrote aware announced And out were quickly, of California aware the then you today?

Adam Aron

on cap talking about you the Are XXX attendance?

David Miller

XX% the [indiscernible]. here out No, California in caps

Adam Aron

in But And I've saying that weeks of quite I situation XX% that all more all once, a by this June to well, yesterday after in after going and announced certainly the not been why today call and is -- people. whole seat as fluid more people matter XX reopening. said It's than and things throughout -- We cap, than they're we the XX% reevaluate change. it on place. no and all a that's Governor, to call daily we're comments sense but what's a these assumed the of of made case XXX per touch in they're those they before on weekly as by that authorities caps basis. on. XXX was you those going this the change reevaluate and and performance announced sure XXX the going immediately And had were a very quickly The California possibly good and be also going of can would -- -- be would caps, with and very to it -- maximum are much in Governor Governor, have

David Miller

Thank great. you much. very Okay,

Operator

Ladies and with the Research. Jim for from with question Barrington final Goss one have question. of gentlemen, we time your line Proceed

Jim Goss

ones willing also have are times might are minimize your emphasis? thoughts sort the people areas what film say know and want Just your And that the have thing involving One brought in I is question issue really big the that limitations the you. extent. up, general, Thank know -- is the share impact? a on that. urban to But that an of most primarily are and limitations in just that densely was flexibility capacity of capacity might around populated just to areas, which in and where spread you those most to some the maybe to extent

Adam Aron

Yes.

I you look great of we flexibility So whole think question. Jim, at it's a our don't everywhere. got theaters, the I -- if portfolio

has a sold We it's a seats screens all location, seats. the Between move pre-corona's industries. less flexibility more have day X.X us we small lack million States people And the it average than is is that with problem theater why days year. for cap And the I a we United tickets. have other have AMC do States. in X.X the X,XXX seating said we show a in screens. times XXX to not United And That's around. average big a of or than We million much -- enormous all city whether for XX only limitation those showtimes, of screens, the for an XXX

who this AMC company, capacity our data-rich, average quantitative seat-blocking US pre-corona just company was industry our to their load believe every the in I seats team there respect airplanes sold limitation being a The Let's arenas factor distancing, of with industry. that of night of sell industries tends analyst The its on is seats that anybody often XX% probably last can of out get has excess company. XX% lots think XXX% of an occupied. our AMC, If sports And as we year. Right. sold. seats. At do thing, sell with with through analytic, seats other as resource within social very to is it's of

our manage sophisticated AMC. not be than think who I this to the of is our is within smaller And better may a lot even competitors so quantitatively industry, through ability as as

Jim Goss

And Okay. one other...

Adam Aron

don't what's certainly level I throw is worried -- think could to situation. can it that basically us. grew supply. you going to is we six-fold, whatever just Jim, on We to be our level have coronavirus at and demand of in accommodate of wants The should a world increased Last issue accommodate is, the demand. year, the a it which our the about limitation demand do not demand if issue

from from us issue And the it's is And it. from standpoint, had manage and for how less a to ramp-up ask. manage to through than cash through what if year that you standpoint, standpoint. a wanted you profitability happens our So burn last all a over one way we're that we more

Jim Goss

-- in suppose this cost you terms within not as other quite some might might think the from there need could beyond thing I working it the it's mainly does How mainly where other headquarters, persist of home utilization, of you -- yeah, savings but be office may as one the areas have well or company. space ask much space the was going and are benefits related Well, to you was to developed. coronavirus

pandemic? So, will persist are there that things beyond the

Adam Aron

up are be six And going did improvement anybody's oh! and that years. grow going announced Yes. savings year six going $XX think revenues weeks, grow. for guess We want and Yes. it's Oh! million time them because it's question that going to had a that are to be savings, have make as be harder looking is, is be therefore six by, to operating will just we the you take over by AMC a to to whole We on wanted but something, levels commit of day. of we we We're back? The to $XX I millions a come a answer profit the to we And your told we the of identified that company, But to costs they we industry. way, come at Remember, got they're said grow. because going and ramp going to were in all. to an million pre-corona environment, which as first of to months plan to going got some to cut. means or be revenues economy dollars the going to going on demand-limited to hundreds not not operating for whether level back of deliver we They're start to sure it they're which to the to it. means we

management company going have whether our cut our our non-labor So the headquarters. going extent need our we in to space and We're this about to we're to to at labor team we on with efficiently small are isn't going targets mind. less in aims. office to the small cost, at revenues it's just not to that with to costs headquarters. case cost, balance or run with does here the to have We're cut balance -- have theaters, our and our have to revenues to so, more possible costs We've got do we or, targets big got our our

Jim Goss

let there. it All right, go thanks. I'll

Operator

Mr. would Ladies And like session. any and end over gentlemen, call for question-and-answer closing our to to I Aron we have the turn Adam remarks. reached back of the

Adam Aron

you, one Thank call. in end for with the just going you thank it operator. participating sentence. I'm I Look, to

to With sure this will see power make prospers. the you thrives company at We our in do that, everything movies. that and

Operator

This concludes today's teleconference.

your for a wonderful disconnect You at this have you lines may time. Thank participation now your and day.

AMC Entertainment (AMC) 9 Jun 202020 Q1 Earnings call transcript