Monday, August 9, 2021

Silverback's News and Questions from Today's Call

Summarized AMC News from the Silverback himself - TLDR but....A LOT OF BANANAS

  1. 2 Leases to add to fleet of theatres. 2 of LA highest grossing theatres - to open later this month. However, can confirm today that this might be 10 additional theatres. 6 new Letter of Intents (LA, Chicago, Atlanta) and in negotiations for 4 additional locations with 8 of the 10 coming from former Ark locations - BANANAS
  2. New Theatres - In 2021 will have opened dozen new build theatres globally. 3 new theatres in 2021 - AMC Porter Ranch and Montclaire are in top 25 grossing theatres in the US. New AMC dine-in Sunnyville is doing amazing well and in 94th percentile of highest grossing in US - BANANAS
  3. First 2 UFC Matchups drew significant attendance. 2 concert movies will show across country later this month. Optimistic that alternative programming can grow the company in future years and chasing it at heart. Hoping to engage with sporting leagues to obtain rights to show more sporting events. For gaming opportunities, president of Epic Games is president and can't count # of times that shareholders have asked to partner with GameStop. MORE TO COME ON THIS - BANANAS
  4. Increased blockchain knowledge, AMC will have info and technology to accept BitCoin as a payment for movie tickets and concessions if purchased online at all of US theatres. Also in prelim. stage of exploring how AMC can further participate in the crypto universe. MORE DETAILS TO COME WHEN PLANS ARE MORE FIRM - BANANAS
  5. IT programming of BitCoin, writing code to accept apple and google pay for online purchases. New payment methodologies can be implemented by YE - BANANAS
  6. New Shareholders, in June introduced AMC Investor Connect that received a lot of attention. Offers shareholders full stub benefits. 300K shareholders have joined. Goals to improve communications with shareholders and to convince individuals to become added customers of theatres. Made discounted offers for participants and setting up advanced screenings for these members. - BANANAS
  7. According to Twitter analytics, AA tweets have been read 72M times. In addition, AA is actively following 2K people interested in AMC to get better sense of thoughts. - BANANAS
  8. Labor costs going up in US = rising costs. Noticed that there is little price resistant to increased pricing at theatres. Imposed 5% admissions ticket price ($0.50) increase at many of theatres but will meaningfully strengthen the bottom line - BANANAS
  9. AMC just reached formal agreement with Warner Bros. to show all 2022 movies, importantly respecting 45 day window before showing in home. Gratifying that WB is now embracing exclusive theatrical window and pleasing to be working harmoniously with WB once again. Active dialogue with every studio on this topic and hearing considerable support that exclusive window is an important way to build large, successful franchises. Will keep us posted as things turn out. - BANANAS
  10. Proposing that AA as CEO be required to hold a number of shares at least equal to 8 years of his salary which would be $12M ownership stake in AMC of owned or granted AMC shares. CFO would be required to hold 6 years of his salary. Exec. VP would be required to hold 4 years of salary and Sr. VPs asked to hold 2 years of salary. Board to consider proposal as new policy at next regularly scheduled meeting. AA hasn't sold 1 share of AMC stock in 5 years he has been running company. - BANANAS

*****Questions Submitted with Greatest Shareholder Interest from Say Platform*****

  1. Dividends - Are some commitments to debt issuance such that they can't pay dividend until about 1 year from now. Do know that they are on minds of shareholders and will take this seriously when they have ability to make these.
  2. Partnering with Gamestop - certainly willing to do so and seems to AA that it is an interesting idea that has floated in and happy to reach out to GME to see if they have interest
  3. Consider re-establishing drive-ins? - AA asked same question last July and went through exhaustive analysis and came to conclusion that they are bad economic idea (i.e. Asphalt, viewing experience isn't the same, seasonality from weather and lighting).
  4. Preparation for large-scale COVID surge? - Most proud of preventing catastrophe and the safe-clean protocols that were developed. No transmission of COVID to AA's knowledge and staying committed to safe and clean protocols to continue to operate. In addition, can hope that there may not be a large scale COVID surge that would force a similar lock-down.
  5. Reduction of debt without dilution? - May be able to buy back debt and deferred rent at discount if willing to pay with $1.8B of unrestricted cash or unused Credit Facility
  6. AMC plan to combat releases on streaming platforms - pleased that Warner Bros. has decided to move away from daily releases. Private Convos. with every major studio and a lot of consensus that exclusive theatrical window is good way to build major motion piture franchises. Studios will do what is in their financial interest so they are making sure that marketing programs are as vibrant, powerful and potent as they can possibly be. AMC been marketing leader for past 5 years and have a few tricks up their sleeves coming, hopefully driving audiences to see more BANANAS.
  7. AMC Merchandise? - Would consider selling. Intriguing, but complicated to send to 600 retail locations and make sure they aren't stuck with inventory that make it less profitable but plan to take a hard look at it
  8. Experimenting with concert movies and in discussions with major musical talent about whether this could become a permanent line of business. Not a new concept. Opportunity here and they plan on chasing it.
  9. Mascot a Gorilla?! - Interesting but not sure. He knows why we ask and will probably go without a mascot. A lot of branding work going on and they intend to be the strongest marketing company around over the next weeks, months and years.
  10. Partnering with movie studio to produce own films? - Have considered and the notion of making exclusive content is interesting. About 5 years they were in joint venture with operator to co-fund Open Road films (Spotlight movie which won Oscar). Making of movies is risky business as they aren't cheap and take capital. AA Personally thought it would be wise to sell more shares to raise more equity to build up the war chest to entertain these capital intensive ideas. Was clear to AA that SH base is split on dilution.
  11. AMC hopes to continue holding UFC type events. Have talked to major sporting leagues, but not willing to grant rights just yet. Holy grail would be if they could secure rights with one of 4 major leagues to show events. Some collegiate football would be a powerful draw to AMC. Experimented 2 years ago with NFL games and categorically and seeing an NFL game on 40 ft screen is amazing. If they can secure the rights affordably, it would be a big hit
  12. Expansion to more of a family environment (i.e. bowling, arcade, dining, etc.) - Have experimented with some of thus (70 dining locations). Couple of years back expanded with hot menu items. Would be pretty inexpensive to put in a laser tag parlor, but a full blown entertainment center would require a lot of capital amongst multiple locations. Ideas like this one is a reason to raise more capital.

*****Analyst Question*****

  1. Industry admission revenue - updated view on where this can get to in 2022 or 2023, what has changed in the crystal ball? Can we get back to peak levels? ---- $64,000 question?! Put out a number for 2021 to hope industry gets back to $5.2B in 2021, which is fairly sizable recovery in 2H. If you look at industry box office, pre-COVID in 2019, the 5 years before were all >$11B. Estimates have been all over the map. Nobody's crystal ball is good enough to know. 2022 likely to still be transitional year and will likely settle back in to 2023/2024

1A. Food and beverage strength from per cap stand-point, where is this coming from? Mobile ordering? Mix of products and have prices been taken up similar to ticket pricing? --- When people are coming back, people are eager and happy and want the whole BANANA. 4 equal contributing drivers causing F&B to increase... 1) mobile ordering is appreciated and is in place at all locations 2) raised prices 3) people buying more items and 4) more people are going to concession stand and buying

THANK YOU AA you fucking GOAT APE - SEE YOU AT THE MOVIES!@


No comments:

Post a Comment