The narrative continues to be an ugly one for AMC Theatres. The largest theater chain in the U.S. recently reported its third-quarter earnings and the results were brutal. The company saw more than a 90 percent drop in revenue over the three-month period. The staggering decline comes as theaters continue to struggle with the box office essentially on life support.
AMC reported $119.5 million in sales during the quarter, down from $1.3 billion during that same period last year. The company also reported $905.8 million in losses during that period, up from $54.8 million last year. Adam Aron, CEO and President of AMC, had this to say.
"The magnitude of the impact of the global pandemic on the theatrical exhibition industry was again evident in our third quarter results, as theatre operations in the U.S. were suspended for nearly two-thirds of the quarter. And yet, despite unrelenting obstacles, the AMC team continued to make significant progress in pursuit of our three key priorities: to strengthen our liquidity position; to dramatically reduce operating and capital expenditures, and to continue to safely and successfully restore our operations."
Recently, AMC revealed that they are likely to run out of money by the end of 2020 or early 2021. They also warned investors that bankruptcy is a serious possibility. On a call with investors, Adam Aron said, "All we have to do is raise a little money and we'll be just fine." To that point, AMC is currently trying to raise around $50 million through a new stock offering. Aron also said the following about the company's financials.
"Of paramount importance, as well, are our efforts to strengthen our liquidity profile. Starting in March, we raised approximately $900 million of gross proceeds from new debt and equity capital, secured more than $1 billion of concessions from creditors and landlords and raised more than $80 million from asset sales. The duration and impact of this pandemic are still affecting us to this day and are certain to continue to affect our results going forward. And yet, as has been the case at AMC for 100 years, we have remained resilient and resourceful. The liquidity enhancing and leverage reducing actions that we already have taken and will further need to take, combined with our relentless focus on efficiency and cash management, are all crucial to navigating through this storm."
In looking toward the future, the company discussed its landmark deal with Universal Studios, which will allow for much shorter theatrical release windows, with movies hitting premium VOD just 17 days after release. AMC will be entitled to a cut of those profits. Adam Aron also addressed the company's thinking with streaming, saying the following.
"AMC is not stuck back in 1955. We are willing to consider alternate models. We understand the world of streaming is upon us. We believe it optimizes our profitability and the studio's profitability if they can have a combo of theatrical releases and streaming."
With few big movies remaining on the calendar for 2020, things will continue to look bleak for AMC and other chains. Regal, for the moment, has all of its locations closed in the U.S. and the U.K. is closing theaters again, along with Germany and other countries, as new lockdowns are being put in place. This news was previously reported by Variety.