AMC’s results show the devastating economic blow the pandemic has had on the exhibition industry.
Photo: valerie macon/Agence France-Presse/Getty ImagesAMC Entertainment Holdings Inc., AMC -7.13% the world’s largest movie-theater chain, registered a $2.2 billion net loss in the first quarter, underscoring the devastating economic blow the pandemic has had on the exhibition industry.
AMC saw “virtually no revenue” in the two weeks of the quarter ended March 30 when theaters closed—a 14-day period that devastated the company’s results. In the year-earlier period, the company lost $130.2 million. Revenue was $941.5 million for the period, down from $1.2 billion last year.
To survive, AMC needs to get all its theaters open and selling tickets again—a move AMC Chief Executive Adam Aron said Tuesday he expects to happen by July.
“We believe there will be a significant pent-up demand to get back into the world,” he said.
Few industries have seen revenues dry up to the extent that exhibition did following the spread of the novel coronavirus. But as consumer and entertainment companies of all stripes struggle to survive in the pandemic, AMC’s prospects appear to be among the bleakest. With more than 1,000 theaters playing movies on more than 11,000 screens in several countries, AMC is among the most high-profile of companies whose revenue relies entirely on public gatherings can weather the shutdown.
Most of the loss was due to $1.85 billion in noncash impairment charges, the company said, without specifying whether those charges were related to the pandemic.
Mr. Aron said he expects about 97% of his U.S. theaters to reopen in July, but that heading into 2021 and 2022 the company will consider closing an unspecified number of unprofitable locations.
“We’re going to have to take a very hard look, especially as theaters come up for normal lease expirations,” he said.
Earlier this month, AMC told investors that its cash balance as of April 30 was $718 million, which should tide it over until operations resume this summer or later this year. AMC warned that it may not be able to stay in business if operations couldn’t fully resume or expected releases were delayed.
AMC’s aspirations of being fully operational in July could run into resistance depending on when local lawmakers decide to reopen their economies. Some states opened their theaters last month, while the two biggest domestic box-office markets—Los Angeles and New York—are on different trajectories. California announced this week theaters could begin reopening in the state this month, while New York has said theaters fall into the fourth phase of a reopening plan that began its first phase this week.
“Whoa, Nelly, has there been a lot of change,” said Mr. Aron. “Smartly managing through change, whatever that may entail, is what management teams are paid to do.”
AMC started the year off on the right foot, with year-over-year revenue up 10% through the end of February.
“But then, ka-boom,” Mr. Aron said.
The coronavirus began spreading in countries where AMC operates, in Europe and then the U.S. All AMC theaters closed in mid-March.
Since then, AMC has been desperately trying to survive the outbreak. It furloughed nearly all of its employees, including Mr. Aron himself, renegotiated terms with landlords and took on an additional $500 million in debt.
Ten AMC theaters in Europe have reopened in recent days, and attendance at some of them was strong despite restricting auditoriums to 25% capacity, Mr. Aron said.
In the U.S., exhibitors are looking to two releases—Christopher Nolan’s “Tenet” and Walt Disney Co. film “Mulan”—to revitalize moviegoing. “Tenet” is scheduled for release on July 17 and “Mulan” on July 24.
“We’ll double or triple or quadruple the number of auditoriums showing ‘Tenet’ or ‘Mulan’ ” to make up for the reduced-capacity limitations, said Mr. Aron.
The first day of reopening will look far different than the typical moviegoing experience. AMC is consulting with faculty members from the Harvard T.H. Chan School of Public Health on protocol to keep auditoriums clean, the company said.
With theaters closed, studios have shipped would-be theatrical releases like “Trolls World Tour” and “Artemis Fowl” to streaming services and digital rentals. When Comcast Corp. ’s Universal Pictures said it would pursue such a strategy even once theaters reopen, Mr. Aron declared he would not book the studio’s movies on his screens.
“While we are in active dialogue with Universal, no movies made by Universal Studios are currently on our docket,” AMC said in its report on Tuesday.
—Micah Maidenberg contributed to this article.
Write to Erich Schwartzel at erich.schwartzel@wsj.com
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