AMC Entertainment Holding Inc. (NYSE: AMC) has announced its first-quarter earnings results, on June 9 for fiscal 2020 which ended on March 31, 2020. The Chief Executive Officer, Adam Aron, has said that the revenues for the first two months of the quarter increased by 10% compared to the same quarter last year, but in the third month due to the social distancing restrictions imposed by the local governments in response to COVID- 19 pandemic the theatres in Italy and Europe were closed down following the lockdown procedures and same conditions later were also imposed in the U.S which led to the suspension of all the operations in domestic and international theatres and this resulted in fall of revenues in the month of March.
The CEO also mentioned that various measures were taken to maintain the company’s business in the long run, which included furloughing employees and executives in the U.S and the major portions of their global workforce and aims to eliminate all non- essential operating and capital expenditures. The Company is in talks with the landlords and studio partners to reduce their theatre and film rents.
- Revenue: The Revenue for Q1 ended on March 31, 2020, was $941.5 million which has decreased by 21.5% compared to $1.2 billion in Q1ended on March 31, 2019 (Y-o-Y). The company earns revenue from three segments, the revenue from admissions for Q1 2020 was $568 million which decreased by 22.35% compared to Q1 2019, the revenue from food and beverage for Q1 2020 was $288.1 million which has decreased by 21.8% compared to Q1 2019, the revenue from other theatres for Q1 2020 was $85.4 million which has decreased by 14.6% compared to Q1 2019.
- Gross profit: The Gross profit Q1 2020 was $217 million which has decreased by 83.15% compared to $1.28 billion in Q1 2019 (Y-o-Y), this sharp decline was because of the rate of reduction in revenue was more than the operational costs.
- Gross Margin: The Gross margin for Q1 2020 was 2.3% which has decreased compared to 10.72% in Q1 2019 (Y-o-Y).
- Operating Expenses: The Operating expenses for Q1 2020 were $2 billion which has increased compared to $162.5 million in Q1 2020, the increase was due to the $1.85 billion non- cash impairment charges related to long term assets, intangible assets and goodwill.
- Operating Loss: The Company has suffered an operating loss for Q1 2020 was $1.98 billion which has increased compared to $33.7 million in Q1 2019.
- Net Loss: The Company has suffered a net loss of $2.17 billion in Q1 2020 which has increased compared to a net loss of $130.2 million in Q1 2019 the increase in the loss for the current quarter was due to impairments charges as mentioned before.
- Loss per Share: The Diluted loss per share for Q1 2020 was $20.88 per share which has increased compared to a loss of $1.25 per share in Q1 2019.
Balance Sheet Highlights
The Cash and cash equivalents for Q1 2020 were $299.8 million (excluding restricted cash) which has increased by 62.4% compared to $184.6 million in Q1 2019 (Y-o-Y) and by 13.13% compared to $265 million in Q4 2019 (Q-o-Q). The Company has a short term debt of $611.7 million in Q1 2020 which has increased by 2.37% compared to $597.5 million in Q1 2019 (Y-o-Y). The company has a long term debt of $9.8 billion in Q1 2020 which has increased by 2.15% compared to $9.6 billion in Q1 2019. The Shareholder’s equity is negative (deficit) for Q1 2020 which reported is around $1.07 billion.
Cash Flow Highlights
The net cash from operating activities in Q1 2020 was negative $184 million, the net cash from investing activities in Q1 2020 was negative $87.4 million, the net cash from financing activities in Q1 2020 was $312.4 million. The business has generated a negative free cash flow of $275.7 million in Q1 2020.
The Company has issued 10.5% first-lien notes worth $500 million in April 2020. In the first quarter has used $215 million under their $225 million senior secured revolving credit facility. The Company has suspended its stock repurchase program and future dividend payments, the suspension of dividends for the first quarter will save around $17.5 million. The Company has taken steps to maintain its cash balances by eliminating non-essential costs, which includes full or partial furloughs of all corporate-level company employees, including senior executives and plans to reduce salary by 20% to 100%.
The Company expects to receive relief funds from the CARES Act which include $18.5 million as tax refunds. The Company on average has 8,873 screens in Q1 2020 which has reduced compared to an average screen count of 10,684 in Q1 2019. The customer attendance has reduced in Q1 2020 to 60.49 million compared to 79.82 million in Q1 2019.