AMC Q2 Earnings Summary

$AMC Earnings: EPS: -$0.71 vs. -$0.91 expected BEAT

Revenue: $444.7M vs. $341M expected BEAT

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Key Points from Adam Aron:

• More than 10,000 individual AMC investors listening to webcast.
• Quarter 2 ending liquidity is at a NEW 100 year high: $2 Billion in liquidity (double Q1 mark)
• Food and Beverage sales per patron up 44%
• EBIDA loss of $144M
• Overall ticket admission rev in US vs 2019 pre pandemic is only 29% of 2 years ago levels. Currently Q3 is 45% of what it was in Q3 2019, trend line shows improvement.
• Capacity utilization was 41% in Q1 vs 2019 Q1, Q2 61%, 68% in Q3 (all vs 2019 numbers)
• European theatres, Q1 of 2021 2% of Q1 2019 levels,Q2 was 18%, Q3 is now 57% of 2019 levels.
• Capacity in Europe, Q1 53%, Q2 56%, Q3 69% (nice) (again vs 2019 numbers)
• They believe cash will become positive in Q4 of this year.
• AMC has NO debt maturities until 2023, and most do not come before 2026, gives AMC time to deleverage and refinance.
• Americans went to movie theatres "1 billion times" in 2019.
• AMC added 2 of Los Angela's highest grossing cinemas (2nd and 5th highest grossing theatres)
• AMC has added 10 new theatres, 8 of the 10 are former Arc Light locations
• In 2021, AMC will open 12 new build theatres around the world.
• Ideas from shareholders: Concert movies, E-sports, Sporting Events
• "I cannot count how many times our shareholders have asked us to partner with GameStop... more to come"
• About Crypto, Adam is on a SPAC board, acquiring Arquip (might have spelled wrong), with his new knowledge AMC is formally announcing to accept Bitcoin for payment for movie tickets if purchased online.
• They are writing code to accept Apple Pay and Google Pay.
• AMC Investor Connect, 300,000 shareholders have joined thus far
• According to twitter analytics, Adams tweets have been read over 72M times (Silverback shit).
• Deal with Warner Bros exclusive theatrical window of 45 days in 2022. (Cannot be streamed or viewed at home during that time)
• Adam recommending to the board that he as CEO be required to hold owned or granted shares up to 8 years of his salary (about $12 million dollars)
• Adam has not sold a single share, states he did not sell in March when he could have and in June when he could have.
• 10B51 plan, says it goes to independent 3rd party to sell shares for him if they see fit to diversify wealth as he is becoming 67 years of age in September (would be sold over months).

Q&A Session:

• Plans to offer a dividend again? Cannot pay a dividend until a year from now at the earliest, we know they are on shareholders mind, will take this seriously and will look into it when AMC is viable to do so.
• Will AMC consider partnering with GameStop for gaming competitions? Willing to do so, they are happy to reach out to see if GME has interest.
• Will AMC think about doing drive in theatres? Already went through an analysis, they are not a good economic idea. A lot of asphalt required, viewing is not great, also drive-ins are seasonal, unlikely AMC will ever do this.
• How is AMC preparing for possible COVID surge? Has not been a single transmission of COVID to an AMC guest (partnerships with Clorox), continuing safety protocols. Does not believe there will be another lockdown due to vaccination rates.
• Are there ways you are considering reducing debt without issuing new shares? Some debt is currently at a discount, could possibly buy it back at a discount. If they purchase some debt back earlier than expected they may be able to purchase at a discount.
• How does AMC plan to combat streaming releases for movies? Deal with Warner Brothers (noted above) committing to 45 day theatrical release, also having other conversations with studios about this same topic. Stresses importance of marketing, says they have "a few tricks" up their sleeves.
• Would you consider selling AMC merch? Would consider it, its intriguing. They have to make sure it sells so they aren't stuck with inventory.
• Could live theatre events (Broadway, concerts?) be shown at AMC theatres? Yes along with gaming and sporting events.
• Can you make AMC mascot a gorilla? Interesting question, he was a bit flustered lol. He says to watch how AMC marketing comes up in the future.
• Has AMC considered partnering with movie studios to produce their own films? Yes they have, and recently. AMC was in a joint venture with the production team that produced Spotlight (Oscar winner), but he notes making movies is very capital intensive, notes again that AMC should have issued more shares for ideas like this and to have a greater cash load.
• Would AMC keep holding viewing parties for mainstream sports? Adam hopes so, in talks with other major sports leagues, many of which not wanting to give rights to movie theatres. UFC has been successful and it is possible for that to continue, also looking into College Football.
• Have you considered expanding into family experience, bowling, arcade, restaurant, etc.? AMC does have some dine in theatres currently (about 70), they have experienced with some VR at some theatres, again he says its extremely capital intensive (notes this would likely need more shares to be issued).

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Analyst Questions:

• Is there an updated view on when AMC will return to 80-90% of 2019 levels? He hopes $5.2Billion in industry box office in 2021. Pre-Covid (2019), 5 years previous, box office exceeded $11 Billion, 5 years prior to that box office exceeded 10B, past 17 years box office has exceeded $7-8B. No definitive answer but says likely 2023-2024 for higher and normal box office numbers.
• Where is increase in F&B costs coming from? (sorry I was actually doing work and missed this answer lol)

Cheers guys!!!.