Form: 8-K

Current report filing

November 2, 2015

8-K: Current report filing

Published on November 2, 2015

Exhibit 99.1

 

 

 

INVESTOR RELATIONS:

John Merriwether, 866-248-3872

InvestorRelations@amctheatres.com

 

MEDIA CONTACTS:

Ryan Noonan, (913) 213-2183

rnoonan@amctheatres.com

 

FOR IMMEDIATE RELEASE

 

AMC Entertainment Holdings, Inc. Announces

Record Third Quarter 2015 Results

 

Guest Experience Initiatives Help Drive 21% Increase in Adjusted EBITDA

 

LEAWOOD, KANSAS - (November 2, 2015) — AMC Entertainment Holdings, Inc. (NYSE:AMC) (“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 third quarter ended September 30, 2015.

 

Highlights for the third quarter 2015 include the following:

 

·                  Total revenues were $688.8 million compared to total revenues of $633.9 million for the three months ended September 30, 2014.

 

·                  Admissions revenues were $441.3 million compared to $417.4 million for the same period a year ago. Attendance grew 7.4% to 47.3 million.

 

·                  Food and beverage revenues were a third quarter record $216.8 million, compared to $189.1 million for the quarter ended September 30, 2014. Food and beverage revenues per patron increased 6.8% to a third quarter record $4.58.

 

·                  Adjusted EBITDA(1) was $109.0 million and Adjusted EBITDA Margin(1) was 15.8%, compared to $90.1 million and 14.2%, respectively, for the three months ended September 30, 2014.

 

·                  Net earnings and diluted earnings per share were $12.2 million and $0.12 respectively, compared to $7.4 million and $0.08, respectively, for the three months ended September 30, 2014.

 



 

“We are extremely pleased to report our strong third quarter results which we believe reflect the importance and success of our strategic focus to enhance the guest experience at our theatres,” said Craig Ramsey, AMC interim chief executive officer and chief financial officer.  “Whether it’s the comfort and convenience of our recliner reseats and reserved seating, the variety and accessibility of enhanced food and beverage offerings or the richness of our premium sight and sound experience, we believe that through relentless innovation, the AMC guest experience differentiates us from our competition and is driving our third quarter record $4.58 food and beverage revenue per patron and our 21% increase in Adjusted EBITDA.  We are excited about what the future holds for AMC.”

 


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

 

CFO Commentary

 

Commentary on the quarter by Craig Ramsey, AMC’s interim chief executive officer and chief financial officer, is available at http://investor.amctheatres.com

 

Conference Call / Webcast Information

 

The Company will host a conference call via webcast for investors and other interested parties beginning at 4:00 p.m. CDT/5:00 p.m. EDT on Monday, November 2, 2015. To listen to the conference call via the internet, please visit the investor relations section of the AMC website at http://investor.amctheatres.com for a link to the webcast.  Investors and interested parties should go to the website at least 15 minutes prior to the call to register, and/or download and install any necessary audio software.

 

Participants may also listen to the call by dialing (877) 407-3982, or (201) 493-6780 for international participants.

 

A podcast and archive of the webcast will be available on the Company’s website after the call for a limited time.

 

About AMC Entertainment Holdings, Inc.

 

AMC (NYSE:AMC) is the guest experience leader with 348 locations and 4,937 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.

 



 

Website Information

 

This press release, along with other news about AMC, is available at www.amctheatres.com.  We routinely post information that may be important to investors in the Investor Relations section of our website, www.investor.amctheatres.com. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD, and we encourage investors to consult that section of our website regularly for important information about AMC. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document. Investors interested in automatically receiving news and information when posted to our website can also visit www.investor.amctheatres.com to sign up for E-mail Alerts.

 

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,” “will,” “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, execution risks related to our pending acquisition, including obtaining regulatory approvals and satisfying closing conditions; our ability to achieve expected synergies from our pending acquisition; our ability to realize expected benefits from our pending acquisition; 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; continued effectiveness of our strategic initiatives; the impact of shorter theatrical exclusive release windows; our ability to attract and retain senior executives and other key personnel; the impact of governmental regulation, including anti-trust review of our acquisition opportunities and investigations concerning potentially anticompetitive conduct, including film clearances and participation in certain joint ventures; unexpected delays and costs related to our optimization of our theatre circuit; and failures, unavailability or security breaches of our information systems.

 

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 10, 2015, 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.

 

(Tables follow)

 



 

AMC Entertainment Holdings, Inc.

Consolidated Statements of Operations

For the Fiscal Periods Ended 9/30/15 and 9/30/14

(dollars in thousands, except per share data)

(Unaudited)

 

 

 

Quarter Ended

 

Three Quarters Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Revenues

 

 

 

 

 

 

 

 

 

Admissions

 

$

441,262

 

$

417,448

 

$

1,393,338

 

$

1,305,135

 

Food and beverage

 

216,764

 

189,065

 

667,804

 

582,426

 

Other theatre

 

30,814

 

27,391

 

101,901

 

95,674

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

688,840

 

633,904

 

2,163,043

 

1,983,235

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

 

 

 

Film exhibition costs

 

233,390

 

220,608

 

751,894

 

689,928

 

Food and beverage costs

 

31,080

 

27,209

 

95,395

 

82,673

 

Operating expense

 

195,505

 

177,949

 

588,177

 

546,925

 

Rent

 

115,861

 

112,258

 

348,804

 

341,063

 

General and administrative:

 

 

 

 

 

 

 

 

 

Merger, acquisition and transaction costs

 

751

 

78

 

2,590

 

1,012

 

Other

 

18,706

 

12,961

 

41,384

 

46,330

 

Depreciation and amortization

 

58,008

 

54,327

 

173,034

 

160,854

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

653,301

 

605,390

 

2,001,278

 

1,868,785

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

35,539

 

28,514

 

161,765

 

114,450

 

Other expense (income)

 

 

 

 

 

 

 

 

 

Other expense (income)

 

—

 

(11

)

9,273

 

(8,397

)

Interest expense:

 

 

 

 

 

 

 

 

 

Corporate borrowings

 

22,682

 

26,897

 

73,478

 

84,544

 

Capital and financing lease obligations

 

2,286

 

2,448

 

6,990

 

7,459

 

Equity in earnings of non-consolidated entities

 

(10,850

)

(13,087

)

(21,536

)

(17,300

)

Investment expense (income)

 

163

 

181

 

(5,039

)

(7,504

)

 

 

 

 

 

 

 

 

 

 

Total other expense

 

14,281

 

16,428

 

63,166

 

58,802

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations before income taxes

 

21,258

 

12,086

 

98,599

 

55,648

 

Income tax provision

 

9,080

 

4,710

 

36,360

 

21,700

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

 

12,178

 

7,376

 

62,239

 

33,948

 

Gain from discontinued operations, net of income taxes

 

—

 

—

 

—

 

313

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

12,178

 

$

7,376

 

$

62,239

 

$

34,261

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

 

$

0.12

 

$

0.08

 

$

0.63

 

$

0.35

 

Earnings from discontinued operations

 

—

 

—

 

—

 

—

 

Net earnings per share

 

$

0.12

 

$

0.08

 

$

0.63

 

$

0.35

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding diluted

 

98,073

 

97,628

 

98,024

 

97,628

 

 



 

Balance Sheet Data (at period end):

(dollars in thousands)

(unaudited)

 

 

 

As of

 

 

 

September 30,

 

December 31,

 

 

 

2015

 

2014

 

Cash and equivalents

 

$

97,939

 

$

218,206

 

Corporate borrowings

 

1,756,395

 

1,791,005

 

Other long-term liabilities

 

438,944

 

419,717

 

Capital and financing lease obligations

 

103,893

 

109,258

 

Stockholders’ equity

 

1,513,934

 

1,512,732

 

Total assets

 

4,667,160

 

4,763,732

 

 

Other Data:

(in thousands, except operating data)

(unaudited)

 

 

 

Quarter Ended

 

Three Quarters Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Net cash provided by operating activities

 

16,310

 

12,342

 

209,225

 

118,590

 

Capital expenditures

 

(71,817

)

(67,760

)

(215,574

)

(182,968

)

Screen additions

 

—

 

—

 

12

 

12

 

Screen acquisitions

 

—

 

18

 

40

 

30

 

Screen dispositions

 

—

 

—

 

—

 

26

 

Construction openings (closures), net

 

(94

)

(27

)

(62

)

(33

)

Average screens-continuing operations

 

4,916

 

4,878

 

4,914

 

4,870

 

Number of screens operated

 

4,937

 

4,946

 

4,937

 

4,946

 

Number of theatres operated

 

348

 

342

 

348

 

342

 

Screens per theatre

 

14.2

 

14.5

 

14.2

 

14.5

 

Attendance (in thousands) -continuing operations

 

47,298

 

44,048

 

145,874

 

139,012

 

 

Reconciliation of Adjusted EBITDA:

(dollars in thousands)

(unaudited)

 

 

 

Quarter Ended

 

Three Quarters Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Earnings from continuing operations

 

$

12,178

 

$

7,376

 

$

62,239

 

$

33,948

 

Plus:

 

 

 

 

 

 

 

 

 

Income tax provision

 

9,080

 

4,710

 

36,360

 

21,700

 

Interest expense

 

24,968

 

29,345

 

80,468

 

92,003

 

Depreciation and amortization

 

58,008

 

54,327

 

173,034

 

160,854

 

Certain operating expenses (2)

 

3,899

 

3,587

 

11,313

 

17,725

 

Equity in earnings of non-consolidated entities

 

(10,850

)

(13,087

)

(21,536

)

(17,300

)

Cash distributions from non-consolidated entities

 

8,557

 

5,140

 

24,328

 

23,758

 

Investment expense (income)

 

163

 

181

 

(5,039

)

(7,504

)

Other expense (income) (3)

 

—

 

(11

)

9,273

 

(8,397

)

General and administrative expense-unallocated:

 

 

 

 

 

 

 

 

 

Merger, acquisition and transaction costs

 

751

 

78

 

2,590

 

1,012

 

Stock-based compensation expense (credit) (4)

 

2,199

 

(1,596

)

9,377

 

6,072

 

Adjusted EBITDA (1)

 

$

108,953

 

$

90,050

 

$

382,407

 

$

323,871

 

Adjusted EBITDA Margin (5)

 

15.8

%

14.2

%

17.7

%

16.3

%

 


(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 expense for the three quarters ended September 30, 2015 was due to a net loss on extinguishment of indebtedness related to the cash tender offer and redemption of the Notes due 2020.  Other income for the three quarters ended September 30, 2014 was due to net gains on extinguishment of indebtedness related to the cash tender offer and redemption of the Notes due 2019.

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

(5) We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Total Revenues.

 

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