AMC Entertainment’s biggest issue right now may be its $4.5 billion debt and the fact that most comes due in 2026. On a conference call post-earning today, CEO Adam Aron addressed it publicly for the first time, assuring investors the giant theater chain has been working with lenders for almost a year to extend the maturities and he’s hopeful they will.
“I can assure everyone listening to this call that the management of this company, which has been pretty smart in how we’ve navigated through the pandemic … is wholly focused on the debt maturities that are due in 2026. This is not something that we will look at next year or the year after.”
The good news, he said, “is that we have lender syndicates who generally like AMC, have worked with us before, and are working with us now, and he’s “hopeful” for an agreement. “It has our highest attention. We know about our obligations going forward and we intend to refinance, if at all possible, and we hope that we can do so on attractive terms.”
The company has indeed pulled out all the stops to survive Covid and its aftermath, some thrust on it like meme stock status, other just scrappy like creating, and then terminating, a new class of equity (APE), getting a court to allow it to sell shares over the objections of retail stockholders. It built up cash reserves and has been steadily paying down debt.
The company reported fourth-quarter earnings today (after preannouncing them last month) and said it had $624 million in cash at the end of March.
Hollywood strikes were another setback but Aron was still pleasantly surprised by the first quarter that saw AMC’s market share grow. If and when the company ever has cash to spare it will invest in more premium large format auditoriums, which are the ones doing the best. He’s upbeat looking forward atthe 2025 box office, which will be stronger than it’s been in several years.
AMC boosted theatrical late last year with a leap into distribution for Taylor Swift and Beyonce concert films. Aron said the company will aim for at least few event films each year, some to share with others theater owners, others just for AMC like the Billie Eilish Listening Events next week — May 16-17 — at many AMC theaters nationwide as her latest album drops, and ahead of her Hit Me Hard and Soft: The Tour this fall. The timing was too tight for this event for AMC to get other exhibitors involved.
“It’s a tremendous amount of work to get artists to agree to showcase their talent in our theaters but that having been … I think we will be doing several per year. Even a one-time listening event is lucrative for us on a per screen basis.” He noted the Billie Eilish event, with Apple Music and Interscope Records, is not a concert film but an album release with visuals, something he hopes other artists will consider to reach fans when they release albums.