AMC Entertainment, the largest theater operator in the world, has “substantial doubt” about its ability to survive the financial damage inflicted by COVID-19 pandemic, the company said Wednesday in a filing with the Securities and Exchange Commission.
The Leawood, Kansas-based cinema chain, which reports first-quarter financial results next week, released preliminary results for the period ended March 31. The company expects to post a loss for the quarter of between $2.1 billion and $2.4 billion. That compares to a loss of $130 million for the same quarter last year. Revenue is expected to be about $942 million, down from $1.2 billion a year ago.
With all of its nearly 1,000 theaters across the world suspending operations in March and continuing those closures through late June, the company is “generating effectively no revenue,” according to the filing.
AMC is actively taking measures to reduce all non-essential costs. That includes cutting marketing costs, travel expenditures, utilities and employment costs. The company has furloughed employees, reduced salaries and eliminated some benefits.
The company reported it has a cash balance of $718.3 million as of April 30, and it said in Wednesday’s filing that it is working to refinance existing debt.
AMC expressed concern that, even as government restrictions are lifted and theaters reopen, the release of films may be delayed. Additionally, the filing said, patrons may be reluctant to return to theaters due to health concerns, social distancing norms and “depressed sentiment over economic conditions.”
The filing also cited the threat of a second wave of COVID-19 that extends the closure of theaters for a longer period of time.