AMC Entertainment CEO Adam Aron was nearly giddy Thursday, quoting Winston Churchill, trying to top him, talking up a box office recovery, the chain’s expanded market share, cash position and hiring plans and millions of new retail investors who have replaced China’s Wanda Group as its core shareholder base.
Like an Oscar acceptance speech, he thanked former President Donald Trump for Operation Warp Speed, current President Biden for the fast vaccine rollout and the CEO of Pfizer, and Hollywood studios. “Thank you Universal for F9. Thank you Disney for Black Widow.”
Channeling Churchill — the second time he’s done it publicly in a year — he recalled November, 1942, years before World War II ended, when Churchill said: “‘This is not the end. It not even the beginning of the end. But it is perhaps the end of the beginning.’… “Sir Winston won his titanic fight. I believe that AMC will win our war too.”
Later, in his own words, he said exhibition’s recovery “has not year started. It’s just about to start. We can feel it, we can taste it, we can see it over the horizon.”
Aron was speaking on a conference call after the chain reported first-quarter financial results. It had already released a sneak peek at the figures in late April. Revenue plunged to $148 million from $941 million. Net losses narrowed to $576 million from $2.2 billion but that’s because the year-earlier quarter from included a one-time write-down $1.85 billion.
AMC nearly ran out of cash five times since the pandemic hit over a year ago and Aron recounted blow by blowy how he and his team scrambled to raise debt and equity financing to keep it afloat. He sees clear sailing through 2022 with two assumptions — that box office recovers in the second half and ends 2021 with domestic grosses of $5 billion, and that it rises to $8 billion for 2022. He thinks an historical lookback and a 2019 box office of well over $11 billion means those estimates could be “reasonable.”
Meanwhile, he noted the nation’s largest chain has boosted its market share from about 26%-27% pre-pandemic to 33% currently — taking up slack from theaters that stayed closed, went bankrupt or just underperformed. It will probably lose a bit of that lead but not all once everyone’s back open.
As big releases ramp up and the summer approaches, he said the chain will be hiring between 5,000 and 10,000 staffers over the next several weeks alone.
Some of AMC’s cash raise was helped earlier this year by a swarm of retail investors into the stock notably but not only on Reddit chatroom WallStreetBets, pushing up the share price. Wanda’s position was eroded and it’s no longer the controlling shareholder, instead 3.2 million new individual investors are. It’s very different, Aron said.
“Before, when I wanted to talk to AMC’s ownership, I could fly to Beijing and talk to four of five people who had 75% of the company. Or talk to 15 securities analysts who talk to all of the institutional investors. Now we have 3.2 million people we will have to explain what we want to do, how it impacts them and do they agree.
“I have started tweeting again… We are communicating with our shareholder base. Try to get four minutes on CNBC, that’s hard. We got 90 minutes on YouTube and it has 250,000 views. Over 20,000 people took the time to rate it and 99% gave it a thumbs up.”