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AMC Entertainment swung to a profit last quarter and saw revenue jump 45%, besting Wall Street forecasts. CEO Adam Aron found the numbers “quite satisfying.” But, he said, the short-term impacts of the writer’s and actor’s strikes will cause additional and needless challenges for AMC in 2024. Without taking sides as to who is to blame and how the labor challenges should be resolved, we strongly encourage all the parties involved to come to the negotiating table with the intent of reaching an agreement immediately.”
Exhibitors are extremely antsy as films major and minor continue to shift release dates, reluctant to open without actors to promote them.
AMC made solid progress last quarter, swing to a profit of $12.3 million in the September quarter from a loss of $227 million the year before. Sales surged to $1.4 billion. Barbie and Oppenheimer released in late July were standouts. The results didn’t include Taylor Swift: The Eras Tour, which didn’t open until after the third quarter ended. It’s grossed about $232 million worldwide since opening Oct. 13. Renaissance: A Film by Beyoncé will debut Dec. 1. AMC is distributing both, launching a lucrative new business line.
Aron noted that AMC’s strong results “came at a time when our attendance at the domestic box office in the quarter was still 16% below comparable 2019 levels. That success is because our contribution per patron was up 30% versus 2019. Our overall profitability has improved in part from all the actions we have taken over the past three and a half years, including innovative marketing and pricing initiatives that have significantly increased per patron spend, especially in our high-margin food and beverage business, the pruning of our theatre fleet by closing marginal theatres and opening successful new ones, as well as a continued focus to manage expenses in a challenging inflationary environment.”
Diluted earnings per share improved of $0.08 compared with negative $2.20 the year before. Adjusted EBITDA swung to $194 million from negative $12.9 million.
Net cash provided by operating activities improved by $289.5 million to $65.9 million, cash generated was $108.7 million, an improvement of $287.9 million from a year ago. Cash and cash equivalents at September 30 was $729.7 million.
It was an eventful quarter for AMC with Aron warning as recently as July that the chain could run out of cash if it wasn’t able to raise some cash. To do that, it had to win approval by a judge in a convuluted Delaware Chancery Court case. Eventually, it got the green light and was allowed to sell stock for fresh funds, which it did.
On the strikes, he also said, “Without taking sides as to who is to blame and how the labor challenges should be resolved, we strongly encourage all the parties involved to come to the negotiating table with the intent of reaching an agreement immediately. There has been and will be much collateral damage from these lengthy work stoppages. For the benefit of all involved in the movie ecosystem, this months-long disharmony needs to come to an end now. Whether one thinks of a studio executive or a union member in the creative community, it is ever so important that everyone in Hollywood returns to the task of creating world class entertainment that is admired and greatly enjoyed the world over.”
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