Throughout 2020, AMC Theaters has closed their theaters in the United States, and later reopened them in most of the country, only to find that few customers are ready to return to the movies in person, and for that reason, Hollywood studios aren’t releasing major movies into theaters. This has been punctuated with occasional news reports that AMC, the nation’s largest movie theater chain, is either pursuing financial machinations or possibly facing imminent bankruptcy.
It was more not-so-great news for AMC when it announced its quarterly earnings after the bell on Monday. The company posted third quarter revenue of $119.5 million, a 91 percent decline from the same period in 2019. AMC has made $1.08 billion in revenue in the first nine months of the year, down from $4.02 billion in that period in 2019.
“The magnitude of the impact of the global pandemic on the theatrical exhibition industry was again evident in our third quarter results, as theatre operations in the U.S. were suspended for nearly two-thirds of the quarter,” CEO Adam Aron said in the company’s earnings release. “And yet, despite unrelenting obstacles, the AMC team continued to make significant progress in pursuit of our three key priorities: to strengthen our liquidity position; to dramatically reduce operating and capital expenditures, and to continue to safely and successfully restore our operations.”
The company did say that it’s now operating 539 of its 600 locations as of the end of October, while it’s pushing local authorities to allow the reopening of theaters in places where that hasn’t yet happened, such as New York City.
Another report, also Monday, from CNBC said that AMC is looking to sell twenty million Class A shares, in order to obtain new capital.
On October 23, AMC said in an SEC filing that a lack of liquidity could lead the company to file for bankruptcy.
“In the event the company determines that these sources of liquidity will not be available to it or will not allow it to meet its obligations as they become due, it would likely seek an in-court or out-of-court restructuring of its liabilities, and in the event of a future liquidation or bankruptcy proceeding, holders of the company’s common stock would likely suffer a total loss of their investment,” AMC said in the filing, as stated by Variety.
AMC had issued a warning earlier in October, but did not specifically mention bankruptcy at the time.
Also in October, AMC launched an offer in which groups of people can rent movie theaters, at rates starting at $99, but going as high as $349, depending on the movie. As of early November, however, “all upcoming private theater rentals have been sold out.”
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.