AMC Entertainment Holdings, Inc. Announces Second Quarter 2014 Results

  AMC Entertainment Holdings, Inc. Announces Second Quarter 2014 Results

Business Wire

LEAWOOD, Kan. -- July 30, 2014

AMC Entertainment Holdings, Inc. (“AMC” or “the Company”), one of the world’s
leading theatrical exhibition companies and an industry leader in innovation
and operational excellence, today reported results for the second quarter,
which ended June 30, 2014.

Highlights for the quarter include the following:

  *Total revenues were $726.6 million compared to total revenues of $762.7
    million for the three months ended June 30, 2013.
  *Admissions revenues were $478.7 million compared to $515.3 million for the
    quarter ended June 30, 2013. Average ticket price increased to $9.55.
  *Food and beverage revenues were $211.6 million and food and beverage
    revenues per patron increased 4.5% to $4.22, representing the highest in
    the history of the Company.
  *Earnings from continuing operations were $31.4 million compared to
    earnings of $61.9 million for the three months ended June 30, 2013, and
    diluted earnings per share from continuing operations were $0.32 compared
    to $0.81 for the three months ended June 30, 2013.
  *Adjusted EBITDA was $131.8 million compared to $134.7 million for the
    three months ended June 30, 2013^(1).
  *Net earnings were $31.4 million compared to a net earnings of $61.6
    million for the three months ended June 30, 2013, and diluted net earnings
    per share were $0.32 compared to $0.81 for the three months ended June 30,
    2013.

“In spite of some tough comparisons, we enter the second half of the year
building momentum behind our continuing transformation of the AMC guest
experience.Our five strategic action fronts continue to deliver innovation,
additional revenue opportunities, improved profit flow-through and
better-than-industry results,” said Gerry Lopez, AMC president and chief
executive officer. “Our vision for the circuit is working and is long-term,
and we’re keeping our focus on it.”

“Our comfort and convenience, and enhanced food and beverage initiatives drive
significant benefits for our guests and the Company, and are helping us
outperform our peers. One of the newest, best examples is open source internet
ticketing. After rolling out our own ticketing engine in April, tickets to an
AMC theatre are now both easier to get and available in more places on the web
than any of our competitors’. So far, we’ve seen a 45 percent increase in
online ticket revenues this year, and have sold approximately 13 million
online tickets this year. ”

(1) (Reconciliations of non-GAAP financial measures are provided in the
financial schedules accompanying this press release.)

Conference Call / Webcast Information

The Company will host a conference call via live webcast for investors and
other interested parties beginning at 5 p.m. Eastern Time today. Participants
may access the live webcast by visiting the Company’s investor relations
website at investor.amctheatres.com. The call also can be accessed by dialing
(877) 407-3982, or (201) 493-6780 for international participants.

The replay of the call will be available from approximately 8 p.m. Eastern
Time today through midnight Eastern Time on August 13, 2014. To access the
replay, the domestic dial-in number is (877) 870-5176, the international
dial-in number is (858) 384-5517, and the passcode is 13585928. The archive of
the webcast will be available on the Company’s website for a limited time.

About AMC Entertainment Holdings, Inc.

AMC (NYSE:AMC) is the guest experience leader with 342 locations and 4,968
screens located primarily in the United States. AMC has propelled innovation
in the theatrical exhibition industry and continues today by delivering more
comfort and convenience, enhanced food & beverage, greater engagement and
loyalty, premium sight & sound, and targeted programming. AMC operates the
most productive theatres in the country’s top markets, including No. 1 market
share in the top three markets (NY, LA, Chicago). www.amctheatres.com

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,” “estimate,” “project,” “intend,”
“expect,” “should,” “believe,” “continue,” 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 those statements are made and/or management’s good faith
belief as of that time with respect to future events, and are subject to risks
and uncertainties that could cause actual performance or results to differ
materially from those expressed in or suggested by the forward-looking
statements. These risks and uncertainties include, but are not limited to,
decreased supply, quality and performance of, and delays in our access to,
motion pictures; risks relating to our significant indebtedness; our ability
to utilize net operating loss carry forwards to reduce future tax liability;
increased competition in the geographic areas in which we operate and from
alternative film delivery methods and other forms of entertainment; the impact
of shorter theatrical exclusive release windows; the impact of governmental
regulation, including anti-trust review of our acquisition opportunities; and
unexpected delays and costs related to our optimization of our theatre
circuit.

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 these risks and uncertainties, see the section entitled
“Risk Factors” in our Annual Report on Form 10-K, filed with the Securities
and Exchange Commission on March 4, 2014, and our other public filings. The
Company does not intend, and undertakes no duty, to update this information 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 6/30/14 and 6/30/13
(dollars in thousands, except per share data)
(Unaudited)

                      Quarter Ended                  Two Quarters Ended
                      June 30,                       June 30,
                                                                       
                       2014          2013         2014            2013      
Revenues
Admissions            $ 478,667       $ 515,306      $ 887,687         $ 898,190
Food and                211,597         219,477        393,361           387,414
beverage
Other                   36,309          27,882         68,283            54,863
theatre
                                                                    
Total                  726,573       762,665      1,349,331       1,340,467 
revenues
                                                                       
Operating costs
and expenses
Film
exhibition              257,220         285,395        469,320           476,719
costs
Food and                30,341          30,550         55,464            53,748
beverage costs
Operating               189,283         187,219        368,976           351,429
expense
Rent                    113,861         113,542        228,805           227,348
General and
administrative:
Merger,
acquisition and         572             706            934               1,653
transaction costs
Other                   15,149          17,034         33,369            33,347
Depreciation
and                    51,750        50,370       106,527         98,832    
amortization
Operating costs        658,176       684,816      1,263,395       1,243,076 
and expenses
                                                                       
Operating               68,397          77,849         85,936            97,391
income
Other expense
(income)
Other income            (4,157  )       (294    )      (8,386    )       (294      )
Interest
expense:
Corporate               27,989          32,310         57,647            65,483
borrowings
Capital and
financing lease         2,486           2,637          5,011             5,308
obligations
Equity in
earnings of             (9,597  )       (23,274 )      (4,213    )       (23,820   )
non-consolidated
entities
Investment             172           282          (7,685    )      (3,337    )
expense (income)
Total other            16,893        11,661       42,374          43,340    
expense
                                                                       
Earnings from
continuing              51,504          66,188         43,562            54,051
operations before
income taxes
Income tax              20,090          4,330          16,990            7,430
provision
                                                                    
Earnings from
continuing              31,414          61,858         26,572            46,621
operations
Gain (loss) from
discontinued           (21     )      (282    )     313             4,697     
operations, net
of income taxes
                                                                       
Net earnings          $ 31,393       $ 61,576      $ 26,885         $ 51,318    
                                                                       
Diluted
earnings per
share:
Earnings from
continuing            $ 0.32          $ 0.81         $ 0.27            $ 0.61
operations
Earnings from
discontinued           -             -            0.01            0.07      
operations
Net earnings          $ 0.32         $ 0.81        $ 0.28           $ 0.68      
per share
                                                                       
Average shares
outstanding            97,628        76,000       97,628          76,000    
diluted
                                                                                   

                                                       
Balance Sheet Data (at period end):
(dollars in thousands)               
(unaudited)
                                          As of
                                            June 30,        December 31,
                                            2014            2013
Cash and equivalents                        $ 235,305       $  546,454
Corporate borrowings                          1,799,350        2,078,811
Other long-term liabilities                   387,049          370,946
Capital and financing lease obligations       112,811          116,199
Stockholders' equity                          1,524,429        1,507,470
Total assets                                  4,709,696        5,046,724
                                                               

                                                               
Other Data:
(in thousands, except operating data)
(unaudited)
     
                        Quarter Ended                  Two Quarters Ended
                        June 30,                       June 30,
                                                                        
                         2014          2013         2014           2013     
Net cash provided
by operating            $ 107,823       $ 97,622       $ 106,248        $ 133,504
activities
Capital                   (59,609 )       (65,345 )      (115,208 )       (104,695 )
expenditures
Screen                    12              -              12               -
additions
Screen                    11              18             12               25
acquisitions
Screen                    13              12             26               29
dispositions
Construction
openings                  13              (10     )      (6       )       (47      )
(closures), net
Average
screens-continuing        4,878           4,837          4,865            4,855
operations
Number of screens                                        4,968            4,937
operated
Number of                                                342              343
theatres operated
Screens per                                              14.5             14.4
theatre
Attendance (in
thousands)                50,139          54,312         94,964           96,977
-continuing
operations
                                                                        

                                                                
Reconciliation of
Adjusted EBITDA:
(dollars in      
thousands)
(unaudited)
                                                                         
                         Quarter Ended                   Two Quarters Ended
                         June 30,                        June 30,
                                                                         
                          2014          2013          2014          2013    
Earnings from
continuing               $ 31,414        $ 61,858        $ 26,572        $ 46,621
operations
Plus:
Income tax                 20,090          4,330           16,990          7,430
provision
Interest                   30,475          34,947          62,658          70,791
expense
Depreciation and           51,750          50,370          106,527         98,832
amortization
Certain operating          7,982           3,216           14,138          6,354
expenses (2)
Equity in earnings
of non-consolidated        (9,597  )       (23,274 )       (4,213  )       (23,820 )
entities
Cash distributions
from                       1,793           2,528           18,618          12,579
non-consolidated
entities
Investment expense         172             282             (7,685  )       (3,337  )
(income)
Other income (3)           (4,157  )       (240    )       (8,386  )       (240    )
General and
administrative
expense-unallocated:
Merger, acquisition
and transaction            572             706             934             1,653
costs
Stock-based
compensation expense      1,311         -             7,668         -       
(4)
Adjusted EBITDA          $ 131,805      $ 134,723      $ 233,821      $ 216,863 
(1)
                                                                         

(1) We present Adjusted EBITDA as a supplemental measure of our performance
that is commonly used in our industry. We define Adjusted EBITDA as earnings
(loss) from continuing operations plus (i) income tax provision (benefit),
(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 commonly used in our industry and should not be construed as an
alternative to net earnings (loss) 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
liquidity, estimate our value and evaluate our ability to service debt.

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, theatre and other closure expense,
deferred digital equipment rent expense, and disposition of assets and other
gains included in operating expenses.

(3) Other income was due to net gains on extinguishment of indebtedness
related to the cash tender offer and redemption of the Notes due 2019,
partially offset by other expenses.

(4) Non-cash expense included in General and administrative: Other

Contact:

AMC Entertainment Holdings, Inc.
Investor Relations:
Dan Foley, 866-248-3872
InvestorRelations@amctheatres.com
or
Media:
Jessica Liddell, 203-682-8200
Jessica.Liddell@icrinc.com
 
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