Transformative acquisitions and innovative
strategic initiatives drive growth
AMC Entertainment Holdings, Inc. (NYSE: AMC) (“AMC” or “the
Company”), the largest theatrical exhibition company in the U.S.,
Europe and the world, and an industry leader in innovation and
operational excellence, today reported results for the first
quarter ended March 31, 2017.
Highlights for the first quarter ended March 31, 2017,
include the following:
- AMC set first quarter records for the
three months ended March 31 period for all revenue categories:
admissions, food and beverage and other.
- Total revenues increased 67.5% to
$1,283.4 million compared to total revenues of $766.0 million for
the three months ended March 31, 2016.
- Admissions revenues increased 69.4% to
$817.3 million compared to $482.6 million for the same period a
year ago.
- Food and beverage revenues increased
63.0% to $397.9 million, compared to $244.1 million for the quarter
ended March 31, 2016.
- Net earnings decreased 70.3% to $8.4
million compared to $28.3 million for the three months ended March
31, 2016. Included in net earnings for the first quarter of 2017
and 2016 were approximately $26.2 million and $3.9 million,
respectively, of after-tax merger and acquisition expenses
associated with prior acquisitions. Excluding merger and
acquisition expenses in both years, net earnings increased 7.5% to
$34.6 million.
- Diluted earnings per share (“diluted
EPS”) decreased 75.9% to $0.07 compared to $0.29 for the same
period a year ago. Average diluted shares outstanding in the first
quarter of 2017 increased approximately 23.6% compared to the first
quarter last year as a result of equity consideration for the Odeon
Cinemas Group (“Odeon”) and Carmike Cinemas (“Carmike”)
acquisitions completed in 2016 and the successful completion of an
equity offering in February 2017.
- Adjusted EBITDA1 increased 71.5% to
$251.3 million compared to $146.5 million for the three months
ended March 31, 2016.
- Results for the 2017 first quarter
include the contribution from two acquisitions completed during the
fourth quarter of 2016 and one acquisition completed in the last
week of the first quarter of 2017. The acquisition of Odeon and
Carmike were completed on November 30, 2016, and December 21, 2016,
respectively, and AMC completed the acquisition of Nordic Cinema
Group Holding AB on March 28, 2017.
“AMC is off to a tremendous and record start in 2017. AMC’s
ability to purposefully act on the opportunities and innovations
that drive growth continues to set us apart and further solidifies
our leadership position among movie-theatre operators in the U.S.
and Europe,” said Adam Aron, AMC Chief Executive Officer and
President. “Achieving record first quarter 2017 Adjusted EBITDA of
$251.3 million is tangible evidence of what we have been saying for
the better part of a year, that the earnings power of this new
incarnation of a larger and more influential AMC is enormous
compared to other operators and even to our own recent past."
Aron said, "We would particularly point out three important
developments at AMC so far this year. First, at the legacy
pre-acquisition AMC theatres, we grew revenues at a meaningfully
faster pace than the industry at large, due in part to our
commitment to renovating theatres and the strength of our impactful
marketing programs. Second, with our domestic acquisition, our
rapid move to achieve cost synergies and efficiencies brought
immediate bottom line benefit, offsetting revenue weakness that had
been prevalent at Carmike for eight of the twelve months and three
of the last four months of 2016. We are directly focused on
improving revenues at the acquired domestic theatres, as well as
furthering the cost reduction efforts that already are well in
hand. And third, we are thrilled both by our brisk start in driving
immediate revenue and earnings growth in constant currency in
Europe, and the likelihood that our plans to drive even more
earnings through renovation of European theatres will come to
initial fruition in quantity as early as the end of 2018."
Aron added, "We are only just beginning to unlock the growth
potential of our recent acquisitions. The initial integration
efforts of creating a transformed AMC have been done quickly and
have been very smooth. As we now move to make what we expect will
be highly lucrative investments in guest-facing initiatives like
powered recliner seats, enhanced food and beverage offerings and
the expansion of premium large format experiences, we are as
confident as we could be in the future earnings potential of AMC.
We remain optimistic about the opportunity to continue to deliver
meaningful value to our shareholders both in the balance of 2017
and in the years ahead.”
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.
Additional information detailing select unaudited pro forma
financial data for the three-month period ended March 31, 2016 is
included in the first quarter 2017 CFO Commentary. The select
unaudited pro forma data for the three-month period ended March 31,
2016 combines the historical financial data of operations of AMC,
Odeon and Carmike, giving effect to the acquisitions, financings
and theatre divestitures as if they had been completed on January
1, 2016. The historical consolidated financial information for
Odeon has been adjusted to comply with U.S. GAAP. The
classification of certain items presented by Odeon under U.K. GAAP
has been modified in order to align with the presentation used by
AMC under U.S. GAAP. In addition to the U.S. GAAP adjustments and
the reclassifications, amounts have also been translated to U.S.
Dollars. The unaudited pro forma financial information is provided
for informational purposes only and is not necessarily indicative
of what our results of operations would actually have been had the
acquisitions occurred on the date indicated. Please refer to the
March 13, 2017 Form 8-K/A for additional information on pro forma
financial statement adjustments.
Dividend
On February 14, 2017, the Company declared a regular quarterly
dividend of $0.20 per share for the quarter ended December 31,
2016, which was paid on March 27, 2017, to shareholders of record
as of March 13, 2017. The total dividends paid in the first quarter
of 2017 were approximately $26.2 million.
On April 27, 2017, the Company declared a regular quarterly
dividend of $0.20 per share for the quarter ended March 31, 2017,
which is payable on June 19, 2017, to shareholders of record on
June 5, 2017.
Recent Acquisition
Nordic Cinema Group: As previously
announced, AMC completed the acquisition of Stockholm-based Nordic
Cinema Group Holding AB (“Nordic”), the largest theatre exhibitor
in seven countries in Scandinavia, and the Nordic and Baltic
regions on March 28, 2017. Nordic operates 71 theatres and has a
substantial minority interest (approximately a 50% ownership) in
another 51 associated theatres to which Nordic provides a variety
of shared services. Nordic's theatres hold the #1 market share in
Sweden, Finland, Estonia, Latvia and Lithuania. Nordic currently is
number two in market share in Norway, and with a new theatre
currently under construction in Norway and scheduled to open next
year, is expected to increase market share in Norway to number one
as well. Nordic also has theatres in Denmark. AMC purchased Nordic
from European private equity firm Bridgepoint and Swedish media
group Bonnier Holding in an all-cash transaction valued at
approximately $968.8 million, which includes the repayment of
debt.
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.
CT/5:00 p.m. ET on Monday, May 8, 2017. 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 (NYSE: AMC) is the largest movie exhibition company in the
U.S., in Europe and throughout the world with 1,027 theatres and
11,247 screens across the globe. AMC has propelled innovation in
the exhibition industry by: deploying more plush power-recliner
seats; delivering enhanced food and beverage choices; generating
greater guest engagement through its loyalty program, web site and
smart phone 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, Spain, Sweden and UK
& Ireland. amctheatres.com
Website Information
This press release, along with other news about AMC, is
available at www.amctheatres.com. We routinely post information
that may be important to investors in the Investor Relations
section of our website, www.investor.amctheatres.com. We use this
website as a means of disclosing material, non-public information
and for complying with our disclosure obligations under Regulation
FD, and we encourage investors to consult that section of our
website regularly for important information about AMC. The
information contained on, or that may be accessed through, our
website is not incorporated by reference into, and is not a part
of, this document. Investors interested in automatically receiving
news and information when posted to our website can also visit
www.investor.amctheatres.com to sign up for email alerts.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
“forecast,” “plan,” “estimate,” “will,” “would,” “project,”
“maintain,” “intend,” “expect,” “anticipate,” “prospect,”
“strategy,” “future,” “likely,” “may,” “should,” “believe,”
“continue,” “opportunity,” “potential,” and other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. These
forward-looking statements are based on information available at
the time the statements are made and/or management’s good faith
belief as of that time with respect to future events, and are
subject to risks, trends, uncertainties and other facts that could
cause actual performance or results to differ materially from those
expressed in or suggested by the forward-looking statements. These
risks, trends, uncertainties and facts include, but are not limited
to, risks related to: motion picture production and performance;
AMC’s lack of control over distributors of films; intense
competition in the geographic areas in which AMC operates;
increased use of alternative film delivery methods or other forms
of entertainment; shrinking exclusive theatrical release windows;
international economic, political and other risks; risks and
uncertainties relating to AMC’s significant indebtedness;
limitations on the availability of capital; risks relating to AMC’s
inability to achieve the expected benefits and performance from its
recent acquisitions; AMC’s ability to comply with a settlement it
entered into with the U.S. Department of Justice pursuant to which
it agreed to divest theatres and divest holdings in National
CineMedia, LLC; AMC’s ability to refinance its indebtedness on
favorable terms; optimizing AMC’s theatre circuit through
construction and the transformation of its existing theatres may be
subject to delay and unanticipated costs; failures, unavailability
or security breaches of AMC’s information systems; risks relating
to impairment losses and theatre and other closure charges; AMC’s
ability to utilize net operating loss carryforwards to reduce its
future tax liability; review by antitrust authorities in connection
with acquisition opportunities; risks relating to unexpected costs
or unknown liabilities relating to recently completed acquisitions;
risks relating to the incurrence of legal liability; general
political, social and economic conditions and risks, trends,
uncertainties and other factors discussed in the reports AMC has
filed with the SEC. Should one or more of these risks, trends,
uncertainties or facts materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those indicated or anticipated by the forward-looking
statements contained herein. Accordingly, you are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date they are made. Forward-looking statements
should not be read as a guarantee of future performance or results,
and will not necessarily be accurate indications of the times at,
or by, which such performance or results will be achieved. For a
detailed discussion of risks, trends and uncertainties facing AMC,
see the section entitled “Risk Factors” in AMC’s Annual Report on
Form 10-K, filed with the SEC on March 10, 2017, and the risks,
trends and uncertainties identified in its other public filings.
AMC does not intend, and undertakes no duty, to update any
information contained herein to reflect future events or
circumstances, except as required by applicable law.
AMC Entertainment Holdings, Inc. Consolidated
Statements of Operations For the Fiscal Periods Ended
3/31/17 and 3/31/16
(dollars in millions, except share and per
share data)
(unaudited)
Quarter Ended March
31, 2017 2016 Revenues Admissions $
817.3 $ 482.6 Food and beverage 397.9 244.1 Other theatre
68.2 39.3 Total revenues 1,283.4
766.0 Operating costs and expenses Film
exhibition costs 420.7 262.3 Food and beverage costs 60.6 34.0
Operating expense 363.9 202.3 Rent 182.6 124.6 General and
administrative: Merger, acquisition and transaction costs 40.4 4.6
Other 34.5 18.5 Depreciation and amortization 125.3
60.4 Operating costs and expenses 1,228.0
706.7 Operating income 55.4 59.3 Other
expense (income): Other income (2.7 ) — Interest expense: Corporate
borrowings 51.1 24.9 Capital and financing lease obligations 10.8
2.2 Equity in (earnings) losses of non-consolidated entities 2.3
(4.2 ) Investment income (5.3 ) (10.0 ) Total other
expense 56.2 12.9 Earnings
(loss) before income taxes (0.8 ) 46.4 Income tax provision
(benefit) (9.2 ) 18.1 Net Earnings $ 8.4
$ 28.3 Diluted earnings
per share $ 0.07 $ 0.29
Average shares outstanding diluted (in thousands) 121,401
98,207
Consolidated Balance
Sheet Data (at period end):
(dollars in millions)
(unaudited)
As of As
of March 31, December 31, 2017 2016
Cash and equivalents $ 313.1 $ 207.1 Corporate borrowings 4,195.2
3,760.9 Other long-term liabilities 726.5 706.5 Capital and
financing lease obligations 701.1 675.4 Stockholders' equity
2,600.6 2,009.6 Total assets 9,940.0 8,641.8
Consolidated Other Data:
(in millions, except operating data)
(unaudited)
Quarter Ended March
31, Consolidated
2017 2016 Net cash
provided by operating activities $ 166.0 $ 22.9 Capital
expenditures $ (161.3 ) $ (57.7 ) Screen additions 19 12 Screen
acquisitions 683 — Screen dispositions 17 38 Construction openings
(closures), net 4 (20 ) Average screens 10,434 5,313 Number of
screens operated 11,247 5,380 Number of theatres operated 1,027 385
Screens per theatre 11.0 14.0 Attendance (in thousands) 93,354
51,245
Segment Other Data:
(unaudited)
Quarter Ended March
31, 2017 2016 Other
operating data: Attendance (patrons, in thousands): U.S.
markets 66,822 51,096 International markets 26,532
149 Consolidated 93,354 51,245
Average
ticket price (in dollars): U.S. markets $ 9.27 $ 9.42
International markets $ 7.46 $ 7.38 Consolidated $ 8.75 $ 9.42
Food and beverage revenues per patron (in dollars):
U.S. markets $ 4.88 $ 4.77 International markets $ 2.72 $ 3.36
Consolidated $ 4.26 $ 4.76
Average Screen Count (month
end average): U.S. markets 8,163 5,297 International markets
2,271 16 Consolidated 10,434 5,313
Segment Information
(unaudited, in millions)
Quarter Ended March
31, 2017 2016
Revenues U.S. markets $ 992.2 $ 764.2 International markets
291.2 1.8 Consolidated $ 1,283.4 $ 766.0
Adjusted EBITDA U.S. markets $ 198.0 $ 146.4 International
markets 53.3 0.1 Consolidated $ 251.3 $ 146.5
Capital Expenditures U.S. markets $ 150.3 $ 57.7
International markets 11.0 — Consolidated $ 161.3 $
57.7
Reconciliation of Adjusted EBITDA:
(dollars in millions)
(unaudited)
Quarter Ended
March 31, 2017 March 31, 2016 Net
earnings $ 8.4 $ 28.3 Plus: Income tax provision (benefit) (9.2 )
18.1 Interest expense 61.9 27.1 Depreciation and amortization 125.3
60.4 Certain operating expenses (2) 5.3 3.4 Equity in (earnings)
losses of non-consolidated entities 2.3 (4.2 ) Cash distributions
from non-consolidated entities 24.4 17.7 Investment expense
(income) (5.3 ) (10.0 ) Other income (3) (2.3 ) — General and
administrative expense—unallocated: Merger, acquisition and
transaction costs (4) 40.4 4.6 Stock-based compensation expense (5)
0.1 1.1 Adjusted EBITDA (1) $ 251.3
$ 146.5 (1) We present Adjusted EBITDA as a
supplemental measure of our performance. We define Adjusted EBITDA
as net earnings plus (i) income tax provision, (ii) interest
expense and (iii) depreciation and amortization, as further
adjusted to eliminate the impact of certain items that we do not
consider indicative of our ongoing operating performance and to
include any cash distributions of earnings from our equity method
investees. These further adjustments are itemized above. You are
encouraged to evaluate these adjustments and the reasons we
consider them appropriate for supplemental analysis. In evaluating
Adjusted EBITDA, you should be aware that in the future we may
incur expenses that are the same as or similar to some of the
adjustments in this presentation. Our presentation of Adjusted
EBITDA should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring items.
Adjusted EBITDA is a non-GAAP financial measure and should not be
construed as an alternative to net earnings as an indicator of
operating performance or as an alternative to cash flow provided by
operating activities as a measure of liquidity (as determined in
accordance with U.S. GAAP). Adjusted EBITDA may not be comparable
to similarly titled measures reported by other companies. We have
included Adjusted EBITDA because we believe it provides management
and investors with additional information to measure our
performance and estimate our value. Adjusted EBITDA has
important limitations as an analytical tool, and you should not
consider it in isolation, or as a substitute for analysis of our
results as reported under U.S. GAAP. For example, Adjusted
EBITDA:
• does not reflect our capital
expenditures, future requirements for capital expenditures or
contractual commitments;
• does not reflect changes in, or cash
requirements for, our working capital needs;
• does not reflect the significant
interest expenses, or the cash requirements necessary to service
interest or principal payments, on our debt;
• excludes income tax payments that
represent a reduction in cash available to us; and
• does not reflect any cash requirements
for the assets being depreciated and amortized that may have to be
replaced in the future.
(2) Amounts represent preopening expense related to
temporarily closed screens under renovation, theatre and other
closure expense for the permanent closure of screens including the
related accretion of interest, non-cash deferred digital equipment
rent expense, and disposition of assets and other non-operating
gains or losses included in operating expenses. We have excluded
these items as they are non-cash in nature, include components of
interest cost for the time value of money or are non-operating in
nature. (3) Other income for the current year includes $2.7
million of foreign currency transaction gains and a $0.4 million
loss on redemption of the Bridge Loan Facility. (4) Merger,
acquisition and transaction costs are excluded as it is
non-operating in nature. (5) Non-cash or non-recurring
expense included in General and Administrative: Other
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AMC Entertainment Holdings, Inc.Investor
Relations:John Merriwether,
866-248-3872InvestorRelations@amctheatres.comorMedia
Contact:Ryan Noonan, 913-213-2183rnoonan@amctheatres.com
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