AMC Theaters has said it had doubts it could remain in business following the lockdown-forced movie theater closures.
CNN’s Frank Pallotta reported the news:
AMC Theatres, the world’s biggest movie theater chain, said on Wednesday that it has “substantial doubt” it can remain in business after closing locations across the globe during the coronavirus pandemic.
The theater chain, which closed its theaters earlier this year, expects to have lost between $2.1 billion and $2.4 billion in the first quarter.
The company also said that its revenue fell to $941.5 million, which was down roughly 22% from $1.2 billion in the same quarter last year. This quarter, the situation has gotten substantially worse.
“We are generating effectively no revenue,” the company said in a regulatory filing Wednesday.
Travis Bean from Forbes noted:
AMC Theaters—by far the biggest movie theater chain in the United States—expects to post a $2.4 billion first-quarter loss in the wake of the coronavirus pandemic.
Disclosed today in public filings, AMC claimed that the onset of COVID-19 forced the entertainment giant to close more than 1,000 of its 8,218 U.S. theaters and furlough 600 corporate employees. The company claimed that it has been operating for months with no revenue.
As of April 30, 2020, AMC had a cash balance of $718.3 million, including borrowings in March 2020 of $215 million under its $225 million senior secured revolving credit facility.
PC Magazine’s Michael Kan wrote:
The current plan is to start reopening theaters later this summer when on July 17th the upcoming Christopher Nolan film Tenet is scheduled to premiere. According to the filing, AMC has $718 million in cash and borrowings, which it intends on using to resume operations.
However, the company is forecasting a myriad of challenges that could derail the plan, including a “second wave” of COVID-19 cases that would force the theater chain to once again shut down.
If that happens, AMC will need to borrow more funding, which it may be unable to secure on favorable terms, the filing goes on to warn. It also remains unclear whether enough moviegoers will risk venturing back into theaters. “Even once theatres resume operations, a single case of COVID-19 in a theatre could result in additional costs and further closures,” AMC says in the filing.