People walk outside the newly embarked AMC 34th Street 14 theater as the city continues with Phase 4 of the reopening following restrictions imposed to slow the spread of the coronavirus on September 4, 2020 in New York City.
Noam Galai | Getty Images
AMC, the largest movie theater chain in the United States, may run out of cash by year-end or early 2021.
The exhibitor warned investors on Tuesday in a public filing that a bare movie slate and lackluster attendance has left his business in a state of bleeding with little hope of recouping losses in the near future.
The company’s shares fell about 5% in pre-market negotiations on Tuesday.
As of Oct. 9, AMC has been able to reopen 494 of its 598 U.S. theaters, but only at a limited capacity of 20% to 40%, the company said. The other theaters are located in California, Maryland, New York, North Carolina, and Washington. These theaters, although only around 17% of the company’s total footprint, accounted for almost a quarter of the company’s total revenue last year.
As of right now, there are only four big movies on the slate for the rest of the year: Universal “The Croods: A New Age”, From disney Paramount Pictures’ “Free Guy,” “Coming 2 America” and Warner Bros. ‘ “Wonder Woman 1984”. And even the release dates for those movies could change.
AMC said it is in talks with state and local government officials in those states, but there is no specific timeline for these sites to reopen.
California has eased restrictions on theaters, but only about 139 of the state’s more than 500 theaters are open. The New York guidelines remained staunchly opposed to reopening theaters. Last weekend, only two of New York City’s 300 or so locations were open.
AMC has already renegotiated its debt to improve its balance sheet this year and is currently exploring several ways to acquire additional sources of cash and ways to increase visitation rates, which are down 76% from last year.
The company is exploring additional debt and equity financings, renegotiating with lessors regarding lease payments, possible asset sales, a joint venture with an existing business partner and minority investments in its stock.
“There is a significant risk that these potential sources of cash will not materialize or be insufficient to generate the significant amounts of additional cash that would be required until the company is able to achieve revenue levels. more standardized operating systems, “AMC warned.