AMC Entertainment’s biggest problem right now may be its $4.5 billion in debt and the fact that most of it comes due in 2026. In a conference call today after the earnings release, CEO Adam Aron addressed the issue publicly for the first time, assuring investors that the giant theater chain has been successful. He has been working with lenders to extend terms for nearly a year, and he is confident that this will be the case.
“I can assure everyone listening to this call that the management of this company, which has managed the pandemic quite wisely, is entirely focused on the 2026 debt maturities. This is not something we do. “Will look at it next year or the year after.”
The good news, he said, “is that we have lender syndicates who generally like AMC, who have already worked with us and are now working with us, and he is “hoping” to reach an agreement.” “It has our utmost attention. We are aware of our future obligations and intend to refinance if possible and hope that we can do this on attractive terms.”
The company has indeed pulled out all the stops to survive Covid and its aftermath. Some have pushed for it, such as meme stock status, others have been painstaking, such as the creation and subsequent termination of a new class of stock (APE) and allowing a court to sell shares despite the objections of private shareholders. It has built up cash reserves and steadily reduced debt.
The company reported fourth-quarter results today (after pre-announced them last month) and said it had $624 million in cash at the end of March.
Hollywood strikes were another setback, but Aron was still pleasantly surprised by AMC’s first quarter market share growth. If the company ever has money left over, it will invest in more premium large format auditoriums that perform best. He is optimistic about the box office in 2025, which will be stronger than it has been in several years.
AMC increased theatrical production late last year with a foray into distributing Taylor Swift and Beyoncé concert films. Aron said the company aims to produce at least a few event films each year, some to be shared with other theater owners, others just for AMC, such as the Billie Eilish Listening Events next week – May 16-17 – in many AMC theaters across the country as her latest album drops and ahead of her Hit Me Hard and Soft: The Tour this fall. The schedule for this event was too tight for AMC to include other exhibitors.
“It’s a tremendous amount of work to get artists to showcase their talent in our theaters, but I think we’ll do several of them every year. “Even a one-off listening event is lucrative for us per screen,” he pointed out pointed out that the Billie Eilish event with Apple Music and Interscope Records was not a concert film, but an album release with visual elements. He hopes other artists will think about reaching out to fans when they release albums.