In light of the pandemic, according to The Wrap, AMC Entertainment's net losses jumped to $2.18 billion, which included $1.8 billion in non-cash impairment charges for the first quarter of the year, following a negative $130 million hit the year before, in what CEO Adam Aron called "unprecedented times."
According to CNBC, AMC's Revenue dropped 22% from $1.2 billion to $941 million in the first three months of 2020. The nation's largest entertainment chain had presaged the numbers last week when announcing preliminary, unaudited results within a range that it filed with the SEC. The loss was closer to the lower end of the range that it had predicted (between $2.1 to $2.4 billion). Without the charges, the adjusted net loss was $231 million.
As things began to look grim for AMC, right on the heels of their 100th birthday coming up this year, Aron gave a nod to his strategic and financial allies in Silver Lake and Citibank for standing with the company. Over the past few months, Wall Street feared that AMC would not have enough capital to continue operating without filing for chapter 11 bankruptcy.
AMC has been successfully renegotiating with "hundreds and hundreds of landlords" around the world, including getting the first quarter rent forgiven, and moving fixed-price rent to a percentage of revenue going forward in 2020. Lowering rents for the second half of the year or for the rest of the duration of the lease.
AMC is planning to reopen almost all of their U.S. and U.K. locations in July, allowing themselves to show Warner Bros' new Christopher Nolan film Tenet, which is set to release July 17. While AMC is in conversation with Universal, no movies made by Universal Studios are currently set to premier, Aron said. The companies had clashed over the studio's rollout of Trolls World Tour directly to the home and subsequent commeent by executives about their future strategy and theatrical windows. Aron said the company said is taking steps aimed "at optimizing the timeliness, safety and profitability of our reopenings". According to AMC's first quarter results, the following precautions will be implemented to ensure the safety of movie goers:
- Maintaining close contact with local, national and international officials to understand and coordinate the timing and requirements under which we can reopen.
- Consulting with current and former faculty from the Harvard University School of Public Health to seek guidance from the best scientists and experts on how best to create a safe environment for our guests and associates. Personal protection equipment, cleaning protocols, limited theatre capacity, blocked seating, and other strategies are all being planned. We are especially looking at high tech solutions as well, to aid in our sanitization techniques including the use of electrostatic sprayers, HEPA vacuums and wherever possible upgraded MERV 13 air ventilation filters.
- Establishing a protocol partnership with the Clorox Company, as they advise as to how we can make our theatre environments as safe and clean as possible.
- Educating guests so that they understand the actions we are taking with their safety in mind.
- Implementing aggressive marketing communications and promotional activity aimed at jumpstarting consumer demand.
- Reducing cost structure, intensely examining every category of expenditures to lower spending wherever possible.