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AMC Entertainment Holdings, Inc. Announces Fourth Quarter and Full Year 2019 Results

Fourth Quarter Highlights

  • Total Revenues of $1.448 billion, up 2.4% from last year (up 3.2% in constant currency)
  • Net Loss of $13.5 million
  • Adjusted Net Income for basic earnings per share of $38.9 million, up 105.8% compared to last year
  • Adjusted EBITDA of $269.1 million, up 11.6% (up 12.5% in constant currency) after adjusting 2018 for ASC 842 impact
  • Net cash provided by operating activities of $368.8 million, up $144.4 million from last year
  • Adjusted Free Cash Flow of $303.1 million, up $185.7 million from last year after adjusting 2018 for cash flow classification impact of ASC 842
  • Total liquidity of $597 million, comprised of $265 million of cash and $332 million of availability under revolving lines of credit as of December 31, 2019.
  • Consolidated average ticket price of $9.47, up 3.3% from last year (up 4.0% in constant currency)
  • Consolidated food and beverage revenue per patron of $4.74, up 2.4% from last year (up 2.8% in constant currency)

AMC Entertainment Holdings, Inc. (NYSE: AMC) ("AMC" or "the Company"), today reported results for the fourth quarter and year-ended December 31, 2019.

"We are very pleased to have delivered another quarter of strong results to finish 2019. Despite the U.S. industry box office declining 1.6% in the fourth quarter, AMC grew revenue 2.4%, and Adjusted EBITDA 11.6%, year-over-year, after adjusting 2018 for the non-cash accounting impact of ASC 842. These results, when combined with our disciplined approach to capital expenditures, generated approximately $303.1 million of adjusted free cash flow for the fourth quarter of 2019. These impressive results illustrate the power of customer engagement through the AMC platform, especially from our A-List subscription program and AMC Stubs loyalty program in the U.S., returns from our industry-leading recliner seating investments both in the U.S. and overseas, as well as the strength of our diversified geographic footprint," said Adam Aron, CEO and President of AMC.

Aron added, "In the fourth quarter, AMC once again vastly outperformed the rest of the U.S. theatre industry, among other metrics by a stunning 607 basis points on admissions revenue per screen. It was the seventh consecutive quarter that AMC added market share in the United States. Likewise, we generated record fourth quarter food and beverage revenues per patron in both the U.S. and international markets, as fourth quarter U.S. and international food and beverage revenues per patron grew 2.5% and 7.8%, in constant currency, respectively."

Key Financial Results (presented in millions, except operating data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31,

 

 

Year Ended December 31,

 

 

 

2019

 

2018

 

Change

 

2019

 

2018

 

Change

GAAP Results*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

 

1,447.7

 

 

$

 

1,413.3

 

2.4

 

%

 

$

 

5,471.0

 

 

$

 

5,460.8

 

 

0.2

 

%

Net earnings (loss)

 

$

 

(13.5

)

 

$

 

170.6

$

 

(184.1

)

 

 

$

 

(149.1

)

 

$

 

110.1

 

$

 

(259.2

)

 

Net cash provided by operating activities

 

$

 

368.8

 

 

$

 

224.4

 

64.3

 

%

 

$

 

579.0

 

 

$

 

523.2

 

 

10.7

 

%

Non-GAAP Results**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues (2019 constant currency adjusted)

 

$

 

1,457.9

 

 

$

 

1,413.3

 

3.2

 

%

 

$

 

5,550.1

 

 

$

 

5,460.8

 

 

1.6

 

%

Adjusted EBITDA

 

$

 

269.1

 

 

$

 

264.1

 

1.9

 

%

 

$

 

771.4

 

 

$

 

929.2

 

 

(17.0

)

%

Adjusted EBITDA (2019 constant currency adjusted; 2018 adjusted for ASC 842)

 

$

 

271.3

 

 

$

 

241.1

 

12.5

 

%

 

$

 

781.4

 

 

$

 

835.9

 

 

(6.5

)

%

Adjusted Free Cash Flow (2018 adjusted for ASC 842)

 

$

 

303.1

 

 

$

 

117.4

$

 

185.7

 

 

 

$

 

358.5

 

 

$

 

240.6

 

$

 

117.9

 

 

Free cash flow (2018 Adjusted for ASC 842)

 

$

 

198.9

 

 

$

 

8.7

$

 

190.2

 

 

 

$

 

60.9

 

 

$

 

(110.7

)

$

 

171.6

 

 

Adjusted net earnings (loss) for basic earnings per share

 

$

 

38.9

 

 

$

 

18.9

$

 

20.0

 

 

 

$

 

(112.1

)

 

$

 

12.5

 

$

 

(124.6

)

 

Operating Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attendance (in thousands)

 

 

92,563

 

 

 

94,063

 

(1.6

)

%

 

 

356,443

 

 

 

358,901

 

 

(0.7

)

%

U.S. markets attendance (in thousands)

 

 

62,319

 

 

 

65,194

 

(4.4

)

%

 

 

250,370

 

 

 

255,736

 

 

(2.1

)

%

International markets attendance (in thousands)

 

 

30,244

 

 

 

28,869

 

4.8

 

%

 

 

106,073

 

 

 

103,165

 

 

2.8

 

%

Average screens

 

 

10,656

 

 

 

10,695

 

(0.4

)

%

 

 

10,669

 

 

 

10,696

 

 

(0.3

)

%

* Please refer to our form 10-K filed today for a discussion of items included in GAAP net earnings (loss).

** Please refer to the tables included later in this press release for definitions and full reconciliations of non-U.S. GAAP financial measures.

Selected Fourth Quarter Financial Results

  • Revenue: Fourth quarter total revenues were $1.448 billion, up 2.4% on a GAAP basis (up 3.2% in constant currency) from the year-ago quarter. This reflects a 2.4% increase in constant currency admissions revenue driven by strong U.S. average ticket price growth of 6.4%, a 1.3% increase in constant currency food and beverage revenue driven by solid constant currency food and beverage revenue per patron growth of 2.8%, and a 15.4% constant currency increase in other revenues, largely from increases in online ticketing fees.
  • Net Loss: Net loss was $13.5 million, as compared to net income of $170.6 million in the year-ago quarter. The fourth quarter loss includes approximately $84.3 million of expense related to impairments of long-lived assets, the majority of which is attributable to impairments of operating lease right-of-use assets from the adoption of ASC 842, and approximately $9.6 million of expense associated with the fair-value remeasurement of a derivative liability and derivative asset related to the Company’s Convertible Notes due 2024, offset by approximately $41.5 million of income from a non-recurring tax benefit related to international operations. Net income for the fourth quarter a year ago included approximately $165.5 million of income related to the fair-value remeasurement of a derivative liability and derivative asset associated with the Company’s Convertible Notes due 2024.
  • Adjusted Net Income: Adjusted net income for basic earnings per share was $38.9 million, up 105.8% from the prior year quarter. Adjusted net income normalizes results for the impact of the fair-value remeasurement of the derivative liability and derivative asset related to the Company’s Convertible Notes due 2024, the impact related to the impairment of long-lived assets, and the benefit of the non-recurring international tax credit in each period presented.
  • Adjusted EBITDA: Total Adjusted EBITDA was $269.1 million. Total Adjusted EBITDA grew 11.6% year-over-year (up 12.5% in constant currency), after adjusting the year-ago quarter for $23.0 million in non-cash accounting impact of ASC 842 for comparability. U.S. markets Adjusted EBITDA increased 18.4%, while International markets Adjusted EBITDA was unchanged (increased 2.7% in constant currency) after adjusting the year ago quarter for the non-cash accounting impact of ASC 842.
  • Cash Flow: Net cash provided by operating activities was $368.8 million growing 75.5% or $158.7 million after adjusting 2018 for the $14.3 million cash flow classification impact of ASC 842 from financing activities to operating activities. Adjusted Free Cash Flow was $303.1 million and Free Cash Flow was $198.9 million, up $185.7 million and $190.2 million, respectively, compared to last year, after adjusting for the cash flow classification impact of ASC 842.

Selected Full-Year Financial Results

  • Revenue: Full-year total revenues were a record $5.47 billion, up 0.2% on a GAAP basis (up 1.6% on a constant currency basis) from last year. Results were driven by strength in food and beverage revenues, up 2.9% (up 4.1% in constant currency) from a combination of higher food and beverage revenues per patron and increases in international attendance, and by increases in other revenues which were up 11.3% (up 13.6% in constant currency), primarily the result of higher online ticket fee revenues.
  • Net Loss: Net loss was $149.1 million, compared with net earnings of $110.1 million last year. The 2019 net loss included an increase in impairments of long-lived assets of $70.5 million, primarily related to the implementation of ASC 842, and an increase in income tax benefit of $41.5 million related to our international operations. The 2018 net earnings included approximately $111.4 million of income related to the fair-value remeasurement of a derivative liability and derivative asset.
  • Adjusted Net Income (loss): Adjusted net loss for basic loss per share was $112.1 million compared to adjusted net income of $12.5 million a year ago. Adjusted net income normalizes results for the impact of the fair-value remeasurement of the derivative liability and derivative asset related to the Company’s Convertible Notes due 2024, the impact related to the impairment of long-lived assets, and the benefit of the non-recurring international tax credit in each period presented.
  • Adjusted EBITDA: Total Adjusted EBITDA was $771.4 million. Total Adjusted EBITDA declined 7.7% year-over-year (down 6.5% in constant currency), after adjusting the prior year for $93.3 million in non-cash accounting impact of ASC 842. 2018 Adjusted EBITDA benefited from a one-time $35 million reduction in rent expense related to a lease modification.
  • Cash Flow: Net cash provided by operating activities was $579.0 million, up 24.4% or $113.4 million after adjusting 2018 for the $57.6 million cash flow classification impact of ASC 842 from financing activities to operating activities. Adjusted Free Cash Flow was $358.5 million and Free Cash Flow was $60.9 million, up $117.9 million and $171.6 million, respectively, compared to last year, after adjusting 2018 for the cash flow classification impact of ASC 842.

Other Key Highlights

  • Industry Performance: In the fourth quarter of 2019, the U.S. industry box office generated $2.9 billion in admissions sales (a 1.6% year-over-year decline on a 5.3% decrease in attendance and a 3.8% increase in average ticket price). AMC outperformed the U.S. industry on both attendance per screen and admissions revenue per screen by approximately 230 and 490 basis points, respectively, and after excluding AMC from the U.S. industry statistics, that outperformance grew to approximately 285 and 610 basis points, respectively. The fourth quarter of 2019 marks the seventh consecutive quarter of attendance per screen outperformance and the fourth consecutive quarter of admissions revenue outperformance versus the industry. Internationally, the industry box office in countries served by Odeon grew 9.7%, in constant currency, or 6.1%, weighted for the countries in which we operate. The industry box office across Europe benefited from a more family friendly film slate compared to a year ago, offset by less local content. The 2019 fourth quarter marked the second highest fourth quarter attendance ever for AMC, both in the U.S. and International markets.
  • AMC Stubs A-List Program: Since its launch in June 2018, the A-List tier of our successful AMC Stubs loyalty program has attracted more than 900,000 subscribers. During the first quarter of 2019, AMC implemented a 10% membership price increase in ten states and a 20% price increase in five states. Based on an average monthly frequency of 2.4x for our A-List members in the fourth quarter, their associated full-price bring-along guest attendance, their food and beverage spend and the price increases in the first quarter, we believe the A-List program was profitable in the fourth quarter and year ended December 31, 2019 compared to our estimated results if the program had not existed. A-List membership levels and contributions continue to exceed our expectations.
  • Circuit Update: As of December 31, 2019, AMC owned, operated, or had interests in 636 theatres in the U.S. and 368 theatres internationally. In the fourth quarter, the Company added premium recliner seating to 20 theatres, including 10 in the U.S. and 10 internationally, bringing the U.S. penetration of theatres offering recliner seating to approximately 81% of addressable theatres, and approximately 19% of addressable European theatres. Premium large format offerings continue to attract guests by delivering the best sight and sound experience, and the Company added nine new Dolby screens, four new IMAX screens and three new Prime at AMC screens during the quarter.
  • New Lease Accounting Standard (ASC 842): The Company adopted ASC 842 on January 1, 2019. As previously disclosed, ASC 842 is an accounting change with no impact on AMC’s business or total cash flows. While this new rule introduces certain presentation changes to all three of AMC’s core financial statements, it does not affect day-to-day operations or cash generation. As a result of adopting ASC 842, the key changes are as follows: (i) the Company’s consolidated balance sheet now includes operating lease right-of-use assets and operating lease liabilities of $4.8 billion and $5.5 billion, respectively, at December 31, 2019; (ii) the Company’s income statement for the three months ended December 31, 2019 includes additional rent expense of $28.9 million, a decline in depreciation and amortization of $24.0 million and a decline in interest expense of $6.9 million; and (iii) the Company’s cash flows provided by operating activities for the twelve months ended December 31, 2019 is lowered by $56.0 million, offset by an equivalent increase in the Company’s cash flows provided by financing activities.

Conference Call / Webcast Information

The Company will host a conference call via webcast for investors and other interested parties beginning at 4:00 p.m. CST/5:00 p.m. EST on Thursday, February 27, 2020. To listen to the conference call via the internet, please visit the investor relations section of the AMC website at www.investor.amctheatres.com for a link to the webcast. Investors and interested parties should go to the website at least 15 minutes prior to the call to register, and/or download and install any necessary audio software.

Participants may also listen to the call by dialing (877) 407-3982, or (201) 493-6780 for international participants. An archive of the webcast will be available on the Company’s website after the call for a limited time.

About AMC Entertainment Holdings, Inc.

AMC is the largest movie exhibition company in the United States, the largest in Europe and the largest throughout the world with approximately 1,000 theatres and 11,000 screens across the globe. AMC has propelled innovation in the exhibition industry by: deploying its Signature power-recliner seats; delivering enhanced food and beverage choices; generating greater guest engagement through its loyalty and subscription programs, web site and mobile apps; offering premium large format experiences and playing a wide variety of content including the latest Hollywood releases and independent programming. AMC operates among the most productive theatres in the United States' top markets, having the #1 or #2 market share positions in 21 of the 25 largest metropolitan areas of the United States. AMC is also #1 or #2 in market share in 12 of the 15 countries it serves in North America, Europe and the Middle East. For more information, visit www.amctheatres.com.

Website Information

This press release, along with other news about AMC, is available at www.amctheatres.com. We routinely post information that may be important to investors in the Investor Relations section of our website, www.investor.amctheatres.com. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD, and we encourage investors to consult that section of our website regularly for important information about AMC. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document. Investors interested in automatically receiving news and information when posted to our website can also visit www.investor.amctheatres.com to sign up for email alerts.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "forecast," "plan," "estimate," "will," "would," "project," "maintain," "intend," "expect," "anticipate," "prospect," "strategy," "future," "likely," "may," "should," "believe," "continue," "opportunity," "potential," and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements are based on information available at the time the statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks, trends, uncertainties and other facts that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks, trends, uncertainties and facts include, but are not limited to, risks related to: motion picture production and performance; AMC’s lack of control over distributors of films; intense competition in the geographic areas in which AMC operates; AMC Stubs A-List may not meet anticipated revenue projections which could negatively impact projected operating results; increased use of alternative film delivery methods or other forms of entertainment; shrinking exclusive theatrical release windows; general and international economic, political, regulatory and other risks, including risks related to the United Kingdom’s exit from the European Union or widespread health emergencies, such as the novel coronavirus or other pandemics or epidemics; risks and uncertainties relating to AMC’s significant indebtedness; AMC’s ability to execute cost cutting and revenue enhancement initiatives; box office performance; limitations on the availability of capital; certain covenants in the agreements that govern AMC’s indebtedness may limit its ability to take advantage of certain business opportunities;; AMC’s ability to refinance its indebtedness on favorable terms; optimizing AMC’s theatre circuit through construction and the transformation of its existing theatres may be subject to delay and unanticipated costs; failures, unavailability or security breaches of AMC’s information systems; risks relating to impairment losses, including with respect to goodwill and other intangibles, and theatre and other closure charges; AMC’s ability to utilize interest expense deductions, interest deduction carry forwards and net operating loss carryforwards to reduce its future tax liability or valuation allowances taken with respect to deferred tax assets; our ability to recognize certain international deferred tax assets which do not have a valuation allowance recorded; review by antitrust authorities in connection with acquisition opportunities; risks relating to the incurrence of legal liability including costs associated with recently filed class action lawsuits; general political, social and economic conditions and risks, trends, uncertainties and other factors discussed in the reports AMC has filed with the SEC. Should one or more of these risks, trends, uncertainties or facts materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by the forward-looking statements contained herein. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. For a detailed discussion of risks, trends and uncertainties facing AMC, see the section entitled "Risk Factors" in AMC’s reports on Forms 10-K and Form 10-Q filed with the SEC, and the risks, trends and uncertainties identified in its other public filings. AMC does not intend, and undertakes no duty, to update any information contained herein to reflect future events or circumstances, except as required by applicable law.

AMC Entertainment Holdings, Inc.

Consolidated Statements of Operations

For the Calendar Periods Ended December 31, 2019 and December 31, 2018

(dollars in millions, except share and per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

December 31,

 

December 31,

 

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Admissions

 

$

877.0

 

 

$

862.3

 

 

$

3,301.3

 

 

$

3,385.0

 

Food and beverage

 

 

438.3

 

 

 

435.1

 

 

 

1,719.6

 

 

 

1,671.5

 

Other theatre

 

 

132.4

 

 

 

115.9

 

 

 

450.1

 

 

 

404.3

 

Total revenues

 

 

1,447.7

 

 

 

1,413.3

 

 

 

5,471.0

 

 

 

5,460.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

Film exhibition costs

 

 

434.5

 

 

 

433.5

 

 

 

1,699.1

 

 

 

1,710.2

 

Food and beverage costs

 

 

73.6

 

 

 

68.9

 

 

 

278.7

 

 

 

270.9

 

Operating expense, excluding depreciation and amortization below

 

 

427.4

 

 

 

417.8

 

 

 

1,686.6

 

 

 

1,654.7

 

Rent

 

 

241.2

 

 

 

204.7

 

 

 

967.8

 

 

 

797.8

 

General and administrative:

 

 

 

 

 

 

 

 

 

 

 

 

Merger, acquisition and other costs

 

 

4.3

 

 

 

4.2

 

 

 

15.5

 

 

 

31.3

 

Other, excluding depreciation and amortization below

 

 

26.1

 

 

 

43.7

 

 

 

153.0

 

 

 

179.3

 

Depreciation and amortization

 

 

112.9

 

 

 

139.4

 

 

 

450.0

 

 

 

537.8

 

Impairment of long-lived assets

 

 

84.3

 

 

 

13.8

 

 

 

84.3

 

 

 

13.8

 

Operating costs and expenses

 

 

1,404.3

 

 

 

1,326.0

 

 

 

5,335.0

 

 

 

5,195.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

43.4

 

 

 

87.3

 

 

 

136.0

 

 

 

265.0

 

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

Other expense (income)

 

 

8.3

 

 

 

(165.6

)

 

 

13.4

 

 

 

(108.1

)

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate borrowings

 

 

74.1

 

 

 

74.1

 

 

 

292.8

 

 

 

262.3

 

Capital and financing lease obligations

 

 

1.6

 

 

 

9.0

 

 

 

7.6

 

 

 

38.5

 

Non-cash NCM exhibitor services agreement

 

 

10.0

 

 

 

10.3

 

 

 

40.4

 

 

 

41.5

 

Equity in earnings of non-consolidated entities

 

 

(6.4

)

 

 

(12.7

)

 

 

(30.6

)

 

 

(86.7

)

Investment expense (income)

 

 

2.7

 

 

 

1.2

 

 

 

(16.0

)

 

 

(6.2

)

Total other expense

 

 

90.3

 

 

 

(83.7

)

 

 

307.6

 

 

 

141.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

 

(46.9

)

 

 

171.0

 

 

 

(171.6

)

 

 

123.7

 

Income tax provision (benefit)

 

 

(33.4

)

 

 

0.4

 

 

 

(22.5

)

 

 

13.6

 

Net earnings (loss)

 

$

(13.5

)

 

$

170.6

 

 

$

(149.1

)

 

$

110.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

 

$

(0.13

)

 

$

0.43

 

 

$

(1.44

)

 

$

0.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding diluted (in thousands)

 

 

103,850

 

 

 

135,450

 

 

 

103,832

 

 

 

130,105

 

Consolidated Balance Sheet Data (at period end):

(dollars in millions)

(unaudited)

 

 

 

 

 

 

 

 

As of

 

As of

 

 

December 31, 2019

 

December 31, 2018

Cash and cash equivalents

 

$

265.0

 

$

313.3

Corporate borrowings

 

 

4,753.4

 

 

4,723.0

Other long-term liabilities

 

 

195.9

 

 

963.1

Finance lease liabilities

 

 

99.9

 

 

560.2

Stockholders' equity

 

 

1,214.2

 

 

1,397.6

Total assets

 

 

13,675.8

 

 

9,495.8

Consolidated Other Data:

(in millions, except operating data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

December 31,

 

December 31,

Consolidated

 

2019

 

2018

 

2019

 

2018

Net cash provided by operating activities

 

$

368.8

 

 

$

224.4

 

 

$

579.0

 

 

$

523.2

 

Net cash used in investing activities

 

$

(167.7

)

 

$

(202.9

...