Welp, this would be a bummer ...
The world's biggest theater chain may not be around much longer. AMC Theatres recently announced that it has "substantial doubt" it will be able to survive after closing all of its theaters due to the coronavirus pandemic.
AMC expects "its first-quarter financials, which were during the second half of March hit by the shutdown of its circuit, to include a loss of up to $2.4 billion." In addition to that loss, the company said that its revenue fell $941.5 million—a decrease of 22 percent from the $1.2 billion in the same quarter last year.
All of the chain's theaters will remain closed through June, but it's hopeful to reopen its theaters this summer. However, if the theaters aren't allowed to reopen, AMC will need more money, which it may not be able to borrow.
"We continue to manage proactively our cash resources to control our monthly cash spend rate. At the same time, we have begun to ramp up our cash spend with the intention of reopening theaters this summer. We believe we have the cash resources to reopen our theaters and resume our operations this summer or later. Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and our ability to generate revenues. We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because we have never previously experienced a complete cessation of our operations.
If we do not recommence operations within our estimated timeline, we will require additional capital and may also require additional financing if, for example, our operations do not generate the expected revenues or a recurrence of COVID-19 were to cause another suspension of operations. Such additional financing may not be available on favorable terms or at all. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time."
As of April, the company says it has a cash balance of $718.3 million.
The movie business has been severely affected by the coronavirus pandemic, with many entertainment companies delaying most movies from being released, instead, having them made available on-demand, like Universal's Trolls: World Tour. In April, AMC said that it would no longer play any of the studio's movies, stating,
"Effective immediately AMC will no longer play any Universal movies in any of our theaters in the United States, Europe or the Middle East. This policy affects any and all Universal movies per se, goes into effect today and as our theaters reopen, and is not some hollow or ill-considered threat."
Would you be sad to see AMC Theatres close for good? Sound off in the comments below about what you think the movie business will look like post-pandemic.