AMC said it plans to have cinemas operating under social distancing guidelines as early as next month, following what it called an 'exhaustive analysis' of underperforming theaters in its global chain.
The decision followed weaker-than-expected first quarter revenues of $941.5 billion for the world's biggest cinema group, as well as a net loss of $2.176 billion that included nearly $1.9 billion in impairment charges.
"Our current plan is to have almost all of our theaters globally operating in July, which is time for and assumes that the industry stays on schedule for Warner Bros' release of Christopher Nolan's Tenet, currently scheduled for July 17 followed by Disney's release of Mulan currently scheduled for July 24," CEO Adam Aron told investors on a conference call late Tuesday.
"The second half of this year continues to have a strong film slate that benefits from really big titles such as Wonder Woman 1984, Black Widow, Top Gun: Maverick, A Quiet Place II, among many, many others," he added. "Of course, I should point out that this entire situation is fluid and we stand prepared to adjust the timing of our theater operation schedule as necessary to comply with local regulations and the timing of major studio releases."
AMC shares were marked 4.9% higher in pre-market trading Wednesday to indicate an opening bell price of $6.28 each, a move that would trim the stock's year-to-date gain to around 13.25%.
Last week, AMC said there was "substantial doubt" as to whether it could ride out the current year as a going concern, adding it only had $718.3 million in cash to last until the end of July.
The group also launched an exchange offer, which expires on June 16, to reduce its outstanding debt, after Standard & Poor's cut its credit rating to CC from CCC- while adding a negative outlook.
"We believe the company would be better off going bankrupt, ridding itself of its bad leases, restructuring its debt and coming out a leaner company," said Loop Capital analyst Alan Gould in a research note published prior to Tuesday's earnings.
"However, that would mean that its majority shareholder, the Dalian Wanda Group would see its equity value decline to zero," he added.. We believe the longer AMC tries to survive and attempts to turn itself around, the weaker a competitor the company will be.