AMC(US:AMC)2024-08-02 20:17AMC Entertainment Holdings, Inc. Reports Second Quarter 2024 Results Second Quarter 2024 Summary Results AMC experienced a significant decline in Q2 2024 financial performance, shifting from net earnings to a net loss and a substantial decrease in Adjusted EBITDA Q2 2024 Key Financial Metrics vs. Q2 2023 | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Total Revenues | $1,030.6 million | $1,347.9 million | | Net Earnings (Loss) | $(32.8) million | $8.6 million | | Net Loss per Diluted Share | $(0.10) | $0.06 (Earnings) | | Adjusted EBITDA | $29.4 million | $182.5 million | | Net Cash Used in Operating Activities | $(34.6) million | $(13.4) million | | Cash and Cash Equivalents (at June 30, 2024) | $770.3 million | N/A | Management Commentary Management highlighted a strong finish to Q2 2024, driven by successful film releases and strategic debt refinancing, despite an initial slowdown from Hollywood strikes - The quarter began slowly due to the impact of the 2023 Hollywood strikes but finished with incredible strength, leading to the highest-ever June Adjusted EBITDA in the company's history3 - Strong box office momentum continued into July with major releases like 'DESPICABLE ME 4', 'TWISTERS', and 'DEADPOOL & WOLVERINE', the latter setting records for an R-rated movie's opening weekend3 - The company is confident in its future, citing a strong slate of upcoming blockbuster movies and transformative capital market transactions that extended up to $2.45 billion of debt maturities from 2026 to 2029 and 203035 Capital Markets Activity AMC executed significant capital market transactions in Q2 and Q3 2024, including debt-for-equity exchanges, stock sales, and a major debt refinancing extending maturities to 2029 and 2030 - In Q2 2024, AMC exchanged $173.9 million of 2026 Second Lien Notes for 25.0 million shares of Class A common stock6 - The company raised $250.0 million in gross proceeds during Q2 2024 by selling 72.5 million shares of Class A common stock6 - In Q3 2024, AMC refinanced up to $2.45 billion of debt due in 2026, extending maturities to 2029 and 2030 through the issuance of approximately $2.0 billion in New Term Loans and approximately $414 million in new Exchangeable Notes due 203067 Consolidated Financial Statements Consolidated Statements of Operations AMC's Q2 2024 consolidated statements of operations show a significant year-over-year decrease in total revenues and a shift from operating income to a net loss Consolidated Statements of Operations (in millions) | Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Total Revenues | $1,030.6 | $1,347.9 | | Admissions | $564.4 | $744.1 | | Food and beverage | $367.1 | $488.2 | | Operating Income (Loss) | $(47.4) | $84.8 | | Net Earnings (Loss) | $(32.8) | $8.6 | | Diluted Earnings (Loss) per Share | $(0.10) | $0.06 | Consolidated Balance Sheet Data As of June 30, 2024, AMC's balance sheet reflects a decrease in cash and total assets, alongside a slight improvement in total stockholders' deficit Balance Sheet Data (in millions) | Item | As of June 30, 2024 | As of Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $770.3 | $884.3 | | Corporate borrowings | $4,335.5 | $4,577.4 | | Total assets | $8,594.7 | $9,009.2 | | Total stockholders' deficit | $(1,696.6) | $(1,847.9) | Consolidated Other Data Q2 2024 saw increased net cash used in operating activities and free cash flow outflow, coupled with a significant decline in total attendance and fewer theatres operated Cash Flow and Operational Metrics (in millions, except operating data) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(34.6) | $(13.4) | | Free cash flow | $(79.2) | $(62.0) | | Capital expenditures | $(44.6) | $(48.6) | | Attendance (in thousands) | 50,013 | 66,368 | | Number of theatres operated | 886 | 906 | Segment Information Segment Operating Metrics Q2 2024 segment operating metrics show a decline in attendance across both U.S. and international markets, with mixed trends in average ticket price and food and beverage revenue per patron Q2 2024 vs Q2 2023 Segment Operating Metrics | Metric | Market | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Attendance (thousands) | U.S. | 36,493 | 50,023 | | | International | 13,520 | 16,345 | | Average Ticket Price | U.S. | $12.01 | $11.78 | | | International | $9.32 | $9.48 | | F&B Revenue per Patron | U.S. | $8.34 | $8.22 | | | International | $4.65 | $4.72 | Segment Financial Performance Both U.S. and international segments experienced significant declines in Q2 2024 revenues and Adjusted EBITDA, with international markets reporting an Adjusted EBITDA loss Q2 2024 vs Q2 2023 Segment Financials (in millions) | Metric | Market | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Revenues | U.S. | $815.9 | $1,087.4 | | | International | $214.7 | $260.5 | | Adjusted EBITDA | U.S. | $49.3 | $174.8 | | | International | $(19.9) | $7.7 | | Capital Expenditures | U.S. | $33.8 | $36.8 | | | International | $10.8 | $11.8 | Reconciliation of Non-GAAP Financial Measures Reconciliation of Adjusted EBITDA Q2 2024 Adjusted EBITDA significantly declined to $29.4 million, with reconciliation from net loss reflecting substantial adjustments including gains on debt extinguishment and shareholder litigation recoveries Reconciliation of Net Earnings (Loss) to Adjusted EBITDA (in millions) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net earnings (loss) | $(32.8) | $8.6 | | Income tax provision | $0.7 | $0.4 | | Interest expense | $99.0 | $102.6 | | Depreciation and amortization | $78.8 | $96.8 | | Other expense (income) | $(105.0) | $(30.1) | | Other adjustments | $(0.4) | $14.2 | | Adjusted EBITDA | $29.4 | $182.5 | - Other expense (income) for Q2 2024 included $(19.1) million in shareholder litigation recoveries and $(85.3) million in gains on debt extinguishment32 Reconciliation of Free Cash Flow Q2 2024 free cash flow was a larger outflow of $(79.2) million, driven by increased net cash used in operating activities and capital expenditures Free Cash Flow Reconciliation (in millions) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(34.6) | $(13.4) | | Total capital expenditures | $(44.6) | $(48.6) | | Free cash flow | $(79.2) | $(62.0) | Reconciliation of Contribution Margin Per Patron Consolidated contribution margin per patron increased to $13.76 in Q2 2024, with both U.S. and international markets showing improvements Contribution Margin Per Patron | Market | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | U.S. markets | $14.73 | $13.90 | | International markets | $11.16 | $10.88 | | Consolidated | $13.76 | $13.16 | Reconciliation of Adjusted Net Loss AMC reported a significantly increased adjusted net loss of $(137.9) million for Q2 2024, primarily due to adjustments for gains on debt extinguishment and shareholder litigation recoveries Adjusted Net Loss Reconciliation (in millions, except per share data) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net earnings (loss) | $(32.8) | $8.6 | | Gain on extinguishment of debt | $(85.3) | $(21.6) | | Shareholder litigation | $(19.1) | $(1.2) | | Other adjustments | $(0.7) | $7.6 | | Adjusted net loss | $(137.9) | $(6.6) | | Adjusted diluted loss per share | $(0.43) | $(0.04) |