Q2 2016 – AMC Entertainment Holdings, Inc. Earnings Call Summary

AMC Entertainment.pngBelow are my key takeaways from the AMC Entertainment Q2 2016 Earnings Call on Aug 1:

Summary:

Adam Aron, CEO, said second quarter results were “much more challenging for AMC for several reasons.” For one, last year’s second quarter take of $3,100MM was an all time industry record, while several films disappointed in Q2 2016.  There were more family movies which meant more discounted tickets for younger movie goers.  And IMAX results showed a double digit weakness due to weak IMAX films.

Total revenue was down 7% in the quarter, to $764MM, compared to last year’s $821MM. Admission revenue was $481MM, down 10% from $533MM.  Concession revenue was down only 3% to $243MM, from last year’s $251MM. Online ticketing fees increased double digit YoY.

Attendance was 50.0MM, down 7% YoY. Avg. ticket price was $9.63 and avg. concession per person was actually up nearly 5% to $4.87, the highest in company history.  Q2 attendance per screen was down down 12% YoY and box office revenue per screen was down 10.7%.

Is currently in talks to buy Carmike Theaters for $1,200MM, (see Carmike’s Q2 2016 Earnings Summary here) which, along with their $1,200MM bid to buy Odeon and UCI Cinemas Group in Europe, would make AMC the world’s largest movie-theater company.

Early results of Q3 box office is turning around the bad summer.  Through July 28, industry-wide box office was up 7%.  As for August, Suicide Squad and a continuation of Jason Bourne will right the ship further.

Started working on new website and app.  Very optimistic seeing that old website attracted 150MM unique yearly visitors, and 20% of movie tickets were bought in advance online.

Created a pricing department, first time in company’s 95 year history.

Partnered with Atom Tickets to buy tickets and concessions online, along with a social feature that allows you to invite friends to watch movies with you.

As for renovations, 25% of theaters and 1,400 screens were renovated by YE 2015.  35% and 2,000 by YE 2016.  50% and 2,750 by YE 2017.  65% and 3,500 by YE 3500.

Coca Cola Freestyle machines will be in all theaters by YE 2016 and alcohol is served in 141 theaters and 155 by YE.

Premium Large Format (PLF) index revenues at 2-3 times a normal screen.  Currently has 153 IMAX screens, which is about 45% of all of IMAX US deployments.  Will expand to 185 IMAX screens.  Has 20 Dolby Cinemas and will have 100 by YE 2017.

AMC Stubs, their loyalty program, has 21% of total guests getting credit for their purchases.  Sign up is 2-3 times better than old loyalty program.

 

Financials (In millions) Q2 2016 Q2 2015 % Diff
Total Revenue  $764  $821 -7.0%
Admissions  $481  $533 -9.8%
Concessions  $39  $37 5.4%
Film Exhibition Costs  $263  $295 -11.0%
Concession Costs  $34  $36 -4.8%
Adjusted EBITDA  $130  $158 -17.9%
Adjusted Free Cash Flow  $41  $69 -40.7%
Net Earnings  $24  $44 -45.4%
Diluted EPS  $0.24  $0.45 -46.7%
Adjusted EPS  $0.24  $0.48 -50.0%

 

Other Key Metrics Q2 2016 Q2 2015 % Diff
# of Theaters  386  350 10.3%
# of Screens  5,282  4,943 6.9%
Avg. Screens/Theater 13.8 14.4 -4.2%
Attendance  49,996  53,818 -7.1%
Avg. Ticket Price  $9.63  $9.91 -2.8%
Avg. Concession/Patron  $4.84  $4.65 4.1%

List of Key Properties:

Forward Thinking:

  • Merge with new companies, Odeon and UCI Cinemas Group, and potentially Carmike Cinemas
  • Completing new website and app, which will allow for easier online ordering, and testing in 28 markets, mobile ordering of concessions to your seat

Links to Company Website:

Please comment below if there are data points from AMC Entertainment you’d like me to include in their next Earnings Call Summary.

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