Adjusted EBITDA: 84% decrease compared to the same period last year.
Cash Reserves: Ended the second quarter at $770 million.
North American market share: increased by approximately 50 basis points compared to last year.
Domestic admission revenue: decreased 25.6%, outpacing industry box office revenue of 27.2%.
Consolidated revenue per patron: $20.61, up 33% from 2019 and 1.5% from the previous year.
Donation profit per patron: $13.77, up 41% from 2019 and 4.6% from the previous year.
Revenue per patron in North America: $22.36, up 38% compared to Q2 2019 and 2.8% compared to Q2 2023.
Food and beverage revenue per patron reached an all-time high of $8.34.
International revenue per patron (constant currencies): $15.96, 20.8% vs. Q2 2019.
Debt Refinancing: Extending the maturities of up to $2.45 billion of debt from 2026 to 2029 and 2030.
Net cash used in operating activities: $34.6 million in the quarter, an increase of $21.0 million from the second quarter of 2023.
Theatrical Portfolio: Since December 31, 2019, we have closed 9 unprofitable locations, resulting in a total net reduction of 118 locations.
Release date: August 2, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
good points
AMC Entertainment Holdings Inc (NYSE:AMC) ended the second quarter with $770 million in cash, providing strong liquidity.
The box office is showing signs of recovery, with films such as Disney and Pixar’s “Inside Head 2” and Universal’s “Despicable Me 4” achieving huge success.
AMC set a June monthly adjusted EBITDA record, making it the best June in the company’s 104-year history.
The company was able to extend the maturities of $2.45 billion of debt from 2026 to 2029 and 2030, providing financial comfort.
Despite reducing the number of theaters, AMC expanded its market share in North America and achieved increased revenue and profits per audience member.
Minus points
AMC reported an 84% decrease in adjusted EBITDA for the quarter compared to the same period last year.
The North American box office in the first half of this year was tough, with a 19% decline compared to the same period in 2023.
The company faces competitive pricing pressures in the UK market, impacting its ability to increase prices.
Despite the improvement, AMC’s domestic profit margins remain below pre-pandemic levels, making it a challenge to return to profit margins in the mid-to-high teens.
The company continues to close unprofitable stores, resulting in a net reduction of 118 stores since the pandemic began.
story continues
Q&A highlights
Q: Please give us an update on the current situation in the UK and international markets. How does it compare to the U.S. in terms of moviegoing demand and pricing power? A: Sean Goodman, CFO, said European markets, particularly the U.K., are performing well, but with high operating leverage and competitive He explained that the company is facing challenges due to certain pricing pressures. Despite these challenges, AMC’s European operations maintain strong contribution margins, slightly higher than in the United States. The company expects its market share to increase as the competitive environment stabilizes.
Q: How do you see AMC’s chances of returning to pre-pandemic profit margin levels, especially in the U.S.? A: CEO Adam Aron and CFO Sean Goodman are confident of returning to pre-pandemic profit margins. was shown. They highlighted that June 2024 adjusted EBITDA was higher than June 2019 due to increased F&B revenue per occupancy and cost reduction measures. They believe that as the industry recovers, AMC’s profits could expand due to higher incremental profits associated with higher revenue.
Q: What are the current trends in the theatrical market and how will they impact AMC? A: Adam Aron says the movie industry has a 45-day window before movies move to streaming services. He pointed out that it has almost settled down to the exclusive screening period of . It is unclear whether this has had a negative impact on theaters, but box office revenues have not yet returned to pre-coronavirus levels. However, the company believes that the 45-day period does not have a significant impact on audience attendance, and that box office revenue is expected to increase as more titles are released.
Q: Can you talk about AMC’s strategy for screen-based rationalization and the potential for further closures? A: Adam Aron said AMC has focused on underperforming locations with unsustainable rent structures and He explained that he had closed 160 theaters in four years. The company negotiates with landlords to improve terms and renovate theaters. As box office revenue expands, we expect fewer closures, but AMC will continue to evaluate theaters based on profitability and market conditions.
Q: What are AMC’s plans to enhance the auditorium experience? Are there opportunities outside of the trade show industry? A: Adam Aron is looking to expand profitable theaters with better seats and better large format. We highlighted our continued efforts to upgrade with screens. AMC is also exploring alternative content and merchandise opportunities. While external M&A is not a priority due to financial constraints, the company is focused on internal growth efforts to improve the consumer experience.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.