AMC Entertainment Holdings, Inc. Announces Third Quarter 2018 Results

(November 8, 2018) – AMC Entertainment Holdings, Inc. (NYSE: AMC) (“AMC” or “the Company”), today reported results for the third quarter ended September 30, 2018.

Highlights for the third quarter ended September 30, 2018, include the following:

  • Total revenues increased 3.6% to $1,221.4 million compared to total revenues of $1,178.7 million for the three months ended September 30, 2017. Total revenues in the quarter included approximately $325.8 million of revenues from our international theatres as compared to $333.0 million for the three months ended September 30, 2017.
  • Admissions revenues were nearly unchanged at $751.4 million compared to $753.5 million for the same period a year ago, primarily driven by an 8.6% surge in attendance at our U.S. theatres compared to the third quarter a year earlier, which was a U.S. attendance record for the third quarter for AMC, offset by a decline in U.S. average ticket price of 6.6% and industry-wide softness in Europe.
  • Food and beverage revenues increased 6.5% to $384.8 million, compared to $361.4 million for the three months ended September 30, 2017, again primarily driven by the increased U.S. attendance.
  • Other revenues in the quarter also increased 33.5% to $85.2 million from $63.8 million for the same period in 2017, the result of several of the company’s strategies and the benefit from the adoption of ASC 606.
  • Loss before income taxes increased $29.0 million to $89.3 million, compared to a loss of $60.3 million for the same quarter a year ago. Net loss increased $57.7 million to $100.4 million compared to net loss of $42.7 million for the three months ended September 30, 2017. Included in the loss before income taxes for the third quarter ended September 30, 2018 was $54.1 million of non-cash expense as a result of an increase in fair value of our new derivative liability related to the conversion feature for the Silver Lake convertible notes due 2024, which will be marked to market, quarterly, going forward. Also included were: a $28.9 million gain on the sale of AMC’s remaining investment in National CineMedia, LLC (“NCM”), a $30.1 million gain on the Screenvision merger, $14.3 million increase related to merger and acquisition costs and $8.1 million increase in general and administrative expenses related to bonus and stock-based compensation expense due to significantly improved operating performance.
  • Diluted loss per share (“diluted EPS”) increased by $0.49 to $0.82 per share compared to a net loss of $0.33 per share for the same period a year ago. Weighted average diluted shares outstanding in the third quarter of 2018 decreased approximately 6.1% compared to the third quarter last year as a result of the effect of the 24.1 million Class B Common shares repurchased and canceled from Dalian Wanda Group Co., Ltd (“Wanda”) on September 14, 2018 and the 3.7 million Class A Common shares repurchased on the open market since August 2017. A total of 103,514,196 Class A and Class B Common shares were outstanding as of October 31, 2018, a 19.8% decrease compared to October 31, 2017.
  • Total Adjusted EBITDA(1) decreased 3.4% to $142.4 million compared to $147.4 million for the three months ended September 30, 2017. U.S. markets Adjusted EBITDA for the third quarter declined 2.4% to $105.0 million compared to $107.6 million in the same period last year. International Adjusted EBITDA for the third quarter declined 6.0% to $37.4 million compared to $39.8 million a year ago. Included in Total Adjusted EBITDA for the third quarter ended September 30, 2018 is approximately $3.9 million of impact related to salaries and wages related to bonuses and a $3.4 million decline in cash distributions from non-consolidated entities. Adjusted EBITDA was negatively impacted by approximately $6.9 million due to the launch of the AMC Stubs A-List loyalty tier and is in-line with expectations.

(1) Reconciliations and definitions of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

Adam Aron, CEO and President of AMC, said, “We are so thoroughly encouraged by AMC’s performance in the third quarter of 2018, both because of the $142.4 million of Adjusted EBITDA we generated and the enormous strategic advances our company made in the quarter. We performed significantly ahead of our expectations going into the quarter, and when combined with our stellar second quarter results, we are now highly confident in saying that from an Adjusted EBITDA perspective, full year 2018 will be the best-ever year in AMC’s 98-year history.”

Aron added, “We are especially excited by the extraordinary consumer response to our AMC Stubs loyalty program, now with 17 million member-households in the United States. AMC Stubs members make up more than 40% of AMC’s entire U.S. clientele, and as a result we are now fortunate to have a marketer’s dream, a customer database that is incredibly rich with moviegoing habits and histories. We are even more thrilled by the game changing nature of our new A-List VIP tier of AMC Stubs, which is nothing short of a runaway success for AMC. Launched on June 26 of this year, A-List had some 388,000 enrolled members by quarter-end. In the next couple of days, not even six weeks later, we will cross 500,000 members. That already translates to $120 million of annual recurring revenue for movie admission ticket buying at AMC theatres, even before considering the continued growth in membership and revenue that is surely ahead of us. What’s more, thanks to our intelligent stewardship and management of these programs, we find ourselves in the sweet spot of both offering great value to our guests and running a program that is heavily incremental and which should prove to be intriguingly profitable for AMC. Thanks to all of our compelling marketing initiatives, in 2018 we saw the highest third quarter attendance levels ever for AMC.”

Aron concluded, “The third quarter of 2018 was also transformational for AMC as we attracted a new $600 million strategic investment in AMC from private equity giant Silver Lake, the global leader in technology investing, in the form of 6-year 2.95% convertible notes. The proceeds of these notes allowed us to repurchase approximately 24.1 million Class B Common shares from Wanda and issue a $1.55 per share special dividend to all shareholders. Silver Lake, who will add great insight as it enters our Boardroom, believes in the inherent value of AMC now, and in the likelihood of AMC’s success going forward. With a particularly strong industry box office now expected for both 2018 and 2019, and with our company very well positioned as the global leader among theatre operators, the future for AMC looks brighter than ever.”

Highlights for the nine months ended September 30, 2018, include the following:

  • Total revenues increased 10.5% to $4,047.5 million compared to total revenues of $3,662.4 million for the nine months ended September 30, 2017. Total revenues for 2018 included approximately $1,040.4 million of revenues from our international theatres as compared to $917.2 million in the nine-month period a year ago.
  • Admissions revenues grew 8.2% to $2,522.7 million compared to $2,332.4 million for the nine months ended September 30, 2017. Attendance increased globally by 4.1% and increased by 6.4% in the U.S.
  • Food and beverage revenues increased 9.1% to $1,236.4 million, compared to $1,133.1 million for the nine months ended September 30, 2017.
  • Other revenues increased 46.5% to $288.4 million from $196.9 million for the same period in 2017, the result of several of the company’s strategies, the benefit from the adoption of ASC 606, and the Nordic acquisition
  • Loss before income taxes improved $299.9 million to $47.3 million, compared to a loss of $347.2 million for the same quarter a year ago. Net loss improved by $150.3 million to $60.5 million compared to a net loss of $210.8 million for the nine months ended September 30, 2017. Included in the loss before income taxes for the nine months ended September 30, 2017 was a $204.5 million other-than-temporary pre-tax impairment loss related to AMC’s investment in NCM and a $22.2 million loss on sale of NCM shares.
  • Diluted loss per share decreased by $1.17 to $0.48 per share compared to a loss of $1.65 per share for the same period a year ago. Weighted average diluted shares outstanding for the nine months ended September 30, 2018 decreased approximately 1.2% compared to the third quarter last year as a result of the 24.1 million Class B Common shares repurchased and canceled from Wanda on September 14, 2018 and the 3.7 million Class A Common shares repurchased on the open market since August 2017 offset by the additional public offering of 20.3 million Class A Common shares in February 2017.
  • Total Adjusted EBITDA(1) grew 24.5% to $665.1 million compared to $534.3 million for the nine months ended September 30, 2017. U.S. markets Adjusted EBITDA for the nine months grew 27.3% to $535.6 compared to $420.6 million in the same period last year. International Adjusted EBITDA grew 13.9% to $129.5 million compared to $113.7 million in the same period a year ago. Much of the growth in international Adjusted EBITDA is due to the March 28, 2017 acquisition of Nordic Cinema Group Holding AB (“Nordic”).

(1) Reconciliations and definitions of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

CFO Commentary
Commentary on the quarter by Craig Ramsey, AMC’s Executive Vice President and Chief Financial Officer, is available at http://investor.amctheatres.com.

Dividends
On May 3, 2018, the Company declared a regular quarterly dividend of $0.20 per share for the quarter ended March 31, 2018, payable on June 25, 2018 to stockholders of record on June 11, 2018. The total dividends paid in the second quarter of 2018 were approximately $25.6 million.

On July 24, 2018, the Company declared a regular quarterly dividend of $0.20 per share for the quarter ended June 30, 2018, payable on September 24, 2018 to stockholders of record on September 10, 2018.

On September 16, 2018 the Company declared a special dividend of $1.55 per share, payable on September 28, 2018 to stockholders of record on September 25, 2018.

The total dividends paid in the third quarter of 2018 were approximately $186.0 million.

On November 1, 2018, the Company declared a regular quarterly dividend of $0.20 per share for the quarter ended September 30, 2018, payable on December 26, 2018 to stockholders of record on December 10, 2018.

Conference Call / Webcast Information
The Company will host a conference call via webcast for investors and other interested parties beginning at 4:00 p.m. CST/5:00 p.m. EST on Thursday, November 8, 2018. To listen to the conference call via the internet, please visit the investor relations section of the AMC website at www.investor.amctheatres.com for a link to the webcast. Investors and interested parties should go to the website at least 15 minutes prior to the call to register, and/or download and install any necessary audio software.

Participants may also listen to the call by dialing (877) 407-3982, or (201) 493-6780 for international participants. An archive of the webcast will be available on the Company’s website after the call for a limited time.

About AMC Entertainment Holdings, Inc.
AMC is the largest movie exhibition company in the U.S., in Europe and throughout the world with more than 1,000 theatres and nearly 11,000 screens across the globe. AMC has propelled innovation in the exhibition industry by: deploying its Signature power-recliner seats; delivering enhanced food and beverage choices; generating greater guest engagement through its loyalty program, web site and mobile apps; offering premium large format experiences and playing a wide variety of content including the latest Hollywood releases and independent programming. AMC operates among the most productive theatres in the United States’ top markets, having the #1 or #2 market share positions in 22 of the 25 largest metropolitan areas of the United States, including the top three markets (NY, LA, Chicago). Through its Odeon subsidiary AMC operates in 14 European countries and is the #1 theatre chain in Estonia, Finland, Italy, Latvia, Lithuania, Norway, Spain, Sweden and UK & Ireland. For more information, visit www.amctheatres.com.

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