AMC Theatres Says It Will Be Out of Cash by Early 2021

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AMC Theatres Says It Will Be Out of Cash by Early 2021

Bummer of a Tuesday SEC filing sends stock price under $4 per share

AMC Entertainment says that unless things change, it will be out of cash by late 2020 or early 2021.

The largest U.S. movie-theater exhibitor laid out the grim news in a Tuesday SEC filing, which sent company stock price below $4 per share. At the time of this writing, AMC stock (AMC) had declined 8% from Monday’s close.

Here is the key part about liquidity from the company’s Securities and Exchange Commission filing this morning:
“Given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the Company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021. Thereafter, to meet its obligations as they become due, the Company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material.”

AMC warns that the already sparse movie slate could get even sparser since “certain competitors” (they’re talking about Cineworld/Regal Cinemas) have announced the re-closure of their own theatres amid the ongoing coronavirus pandemic.

Alternative methods for AMC to achieve liquidity include borrowing money, taking on investors, selling off assets, attempting to renegotiate theatre leases and simply hoping attendance levels are able to increase as COVID-19 continues to shut down everyday American life.

Good luck with that last one.

As of Oct. 9, 2020, 494 of AMC’s 598 U.S. theatres have resumed operations — but with very limited seating capacities between 20% and 40%. The company is experiencing same-theatre attendance declines of -85%.

“There is a significant risk that these potential sources of liquidity will not be realized or that they will be insufficient to generate the material amounts of additional liquidity that would be required until the Company is able to achieve more normalized levels of operating revenues,” the filing continued.

Yeah, it was all one big bummer of a filing. Read it all here.

Tony Maglio

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