A frosty start to the summer movie season was devastating for AMC Theatres, the world’s biggest exhibitor.
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The theater chain’s quarterly earnings were severely impacted by a lack of blockbusters, with studio films like “Furiosa: A Mad Max Saga,” “The Fall Guy” and “Horizon: An American Saga – Chapter 1″ all collapsing at the box office. AMC is placing much of the blame on the actors and writers strikes, which delayed production for months last year and left theaters with fewer big movies to show in 2024.
Revenue at the theater chain fell 23.5% to $1.03 billion during the three-month period ending in June, down from $1.35 billion in the prior-year period. Net loss for the three months also widened to $32.8 million compared with a profit of $8.6 million for the quarter ended June 2023. Adjusted EBITDA stood at $29.4 million, down sharply from the $182.5 million in adjusted EBITDA that AMC reported in the prior-year quarter. Attendance also dropped precipitously, falling to just over 50 million from 66.4 million in the year-ago period, a time when hits like “Spider-Man: Across the Spider-Verse” and “Guardians of the Galaxy Vol. 3” were playing to packed houses.
Though the quarter was a rough one, things began to shift towards its end. In June, Disney and Pixar’s blockbuster “Inside Out 2″ and Sony’s “Bad Boys: Ride or Die” kept auditoriums full, helping revenues rebound. July, which is part of AMC’s next financial quarter, was even better, fielding hits such as “Deadpool & Wolverine,” “Despicable Me 4” and “Twisters.”
In a statement, AMC chief Adam Aron noted the turnaround and said that the “…difference between AMC’s early quarter performance and our late quarter performance was as if we were two totally different companies, surrounded by two completely different industry dynamics.”
Last month, AMC said it expected the movie business’ labor issues would mean the company’s earnings would fall short of projections. That meant that the dismal earnings results were baked into AMC’s share price — the company’s stock was actually up more than 3% in after-hours trading, hovering at $5 a share.
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The theater chain has struggled to stay solvent in recent years, having been saddled with $4.5 billion in debt, much of it amassed when it bought up a number of theater chains prior to the pandemic. However, AMC got some relief. It recently reached a refinancing agreement to restructure a portion of its debt to extend maturity dates by at least three years . As part of the pact, more than $2.8 billion of maturities were pushed from 2026 to 2029 and 2030 giving the company more breathing room.
“We are grateful that AMC’s lenders just gave our company a strong vote of confidence as to their view of the likelihood for our long-term success,” Aron said in a statement. “The power of an extension of our financial runway for many years into the future.”
Looking ahead, Aron predicted that the box office was headed for a rebound, noting that the rest of the year will bring sequels to “Gladiator” and “Joker,” as well as “Wicked,” an adaptation of the long-running Broadway musical.
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