AMC Entertainment Holdings, Inc. Price & Performance (AMC)

And now, I'll hand the webcast back over to Adams. On our last quarter's call, we introduced the notion that after four grueling Post pandemic years, it was finally time for AMC to get off our heels defensively and instead to play on offense once again. So on this call, I want to give you an update of the activity already underway for AMC to go on offense Specifically, AMC's Go plan [indiscernible] set in motion a series of initiatives designed to leverage our strengths and accelerate our recovery.

Aligning with our expectations for over the next several years to come. It makes sense to try to grow your revenues when revenues are in fact growing. With a central theme of improving the guest experience, inside our theaters, the AMC Go plan is multidimensional and designed to drive additional profitable attendance to our theaters.

To AMC in The U. S. And Odeon abroad. With our industry leading per patron metrics, which as you know hit record levels in 2024, What's so important about this drive to increase and bolster our attendance is that every incremental guest in our theaters is not only valued, but it drives a huge percentage of their incremental revenue down to the EBITDA line. As more capital becomes available to AMC, to invest in growth initiatives, One key aspect of the AMC Go plan is to add more premium experiences. Capitalizing on the fact that AMC Today is already without question the global leader in offering premium large format screens. I can say to you today that in calendar year 2025, and again in calendar year 2026, we currently expect to upgrade more of our IMAX auditoriums to the very popular IMAX with laser. We intend to add more Dolby Cinema screens We intend to add more Prime and AMC screens. Our so called house brand PLF format. We also intend to bring our successful XL or Extra Large Screen Concepts that was launched in Europe last year to The United States. We would hope to introduce Between 5,100 XL screens in The United States this year and add another 150 XL screens in addition in 2026, Our rollout of laser at AMC Screens with their brighter and sharper picture on the screen resulting from laser projection continues at pace It has already been installed in about one third of our U. S. Screens and we will be adding a great number more of laser projections to AMC theaters both in 2025 and in 2026.

Another part of the AMC GO plan is to improve the seating comfort and appeal at more of our theaters. Especially in ones that are already quite profitable and well attended.

Recent luxurious seat replacements at AMC Burbank sixteen in Los Angeles along with AMC Lincoln Square 13 and AMC Empire twenty five in Manhattan. Have led to dramatically improved guest satisfaction scores and importantly for us high theater gross seats. In fact, just a couple of weeks ago, on a Saturday night, out of the five hundred and fiftieth theatres in the entire United States, under the AMC brand, Our three highest grossing theaters, were Burbank, Lincoln Square and Empire, the very three theaters where we installed this new luxurious leathery seat that's wider, there's more padding, that rocks and in many cases has more leg room. Knowing that this has been a successful initiative to date, we've already identified several handfuls of important theaters theaters that are profitable and well attended that should produce even higher financial returns for AMC this new C type in those locations. We aim to deploy here again as soon as growth capital becomes available to us, such that we can invest to upgrade these theaters. Additionally, with respect to AMC's Go plan, it also includes our focusing on several exciting new innovations in our loyalty, subscription, and other marketing programs. To that end, on January 1, just several weeks ago, AMC launched our fourth and newest AMC Stubs loyalty program tier, called Premier Go.

It offers heightened program benefits it's free, and this loyalty tier is designed specifically to incentivize our current AMC AMC insider tier members who also enjoy free memberships To patronize AMC more to buy more movie tickets in our theaters and buy more food and beverage at our theaters. Premier gross status is earned when a consumer sees at least eight movies at AMC in a year or earns at least 5,000 AMC Stubs points in a calendar year. We started on 01/01/2025 with more than 300,000 moviegoers already enrolled in the Premier Go tier as members because we base their membership on their purchase history with AMC last year. 2024. We have also announced that we will be enhancing other benefits for our AMC Stubs members, especially those in our A List program. In this case, we intend to give more value to our most avid moviegoers. Moviegoers who average somewhere between twenty four and thirty two visits per year at AMC theaters in The United States. How are we improving A List? First, we have increased the weekly movie limit for A List members. They can now watch up to four movies per week, up from the current three, new A List innovations take effect on May 7.

Second, to encourage more family movie going, we will be lowering the minimum age to sign up for A List from the current 16 to 13. Why did we pick 16 previously? Because to prevent fraud, we needed a state issued ID. Which takes us to the third improvement to A List, to make A List membership verification easier and faster at our theaters, A Listers on beginning May 7 will be able to upload their own photos to their AMC Subs profile and use this in app photo of themselves, the members, in lieu of having to show a state issued ID. That's true with children as well as adults, so we can lower the age to 13 and we think more parents are going to cause more of their children to sign up in the program. In addition, on A List, we have already announced that in May, we will launch a wholly new AMC A List Classic program a subscription program that provides for the watching of one movie a week not four movies a week or three, but one movie a week and not good at all of our theaters only at our AMC Classic theaters, But in doing so with these limitations, we have the opportunity to offer this AMC AMC Tier at a significantly reduced monthly subscription price.

A List continues to be one of the most successful programs introduced and we think it will get better still with these changes Coming soon. We have much more in store for our Moviegoing guests In the guise of more marketing programs, designed to stimulate attendance, but we're not ready to announce them yet today, So look for more important marketing initiative announcements coming from AMC to be publicly announced in the coming months. For all the talk about pursuing growth initiatives, because in so doing we can drive increased financial returns and boost the value of the company for the benefit of our shareholders I think it's imperative that I add that it is also of paramount importance to AMC and nothing has changed continuing to focus on strengthening the balance sheet reduce our debt, to lengthen maturities, to keep our cash reserves robust, remains an extremely important objective for this company. The fact that we strengthened our balance sheet over the past several years is why we are still here. And we will not take our eye off the ball. At the same time, we also believe there's enormous opportunity to grow our EBITDA to improve our financial returns, to benefit our shareholders if and as when we have access.

To more growth capital. That pretty much concludes the comments about the fourth quarter. And some of the activity underway as a company But before I close this call and move to questions, I'd like to close with just a special message to our retail shareholders many of whom thousands of whom will be listening to this webcast. I want you to know that what I've said to you for years now remains true. Every day I continue to actively read your social media commentary as it gives me a great sense of your views, and lets me read the room, so to speak, Sadly, there's so much false information floating around AMC on social media, Similarly, there are crackpot conspiracy theorists like one after another that seemed to delight speaking foolishly, about AMC, So from the horse's mouth, here's some straight talk. Please know that I am acutely aware of AMC's share price decline over the past three years.

And I AMC acutely aware of the pain that has caused for many of you.

I am after all myself I believe the largest single individual AMC shareholder. I've been increasing my share position since 2021 and I am after all or [indiscernible] January 21?

January 22. January 22.

Three years ago, right. Yes, three years ago. I haven't sold a share in three years. Instead I've increased my share position And therefore, a share price decline that hurts you Hurts me too. My interest are completely and directly aligned with yours. They are not aligned with anyone else other than you and that is exactly as it should be. So think about all that I'm seeing what you write here are two key thoughts. First, Do not allow yourself to be distracted. Our biggest problem It's not various market practices that some of you seem to detest Instead, quite simply, It's that the movie industry and the movie theater industry has been in crisis for more than four long years. Domestic industry wide movie theater attendance Believe it or not, is still down almost 40% from full year 2019 levels. That is a fact And the fact that attendance is down means our ticket revenues will be stressed. The fact that attendance is down means that we will be able to sell food and drink and merchandise to fewer people. That is the problem [indiscernible] But I tell you that not as a bearer of Bandwidth, but it's a harbinger of good news to come.

Because fortunately, as we have implemented one new idea after another, and as we have made our company more efficient, Over the past several years, AMC's profit per patron numbers are way way up. We often see our profit per patron being as much as 50% higher than it was in pre pandemic levels. So what that means is that for success, AMC does need the box office to be higher than it was in 2024 we really do not need it to climb all the way back up to 2019 levels. And even more fortunately than that, The box office finally looks to be growing significantly and materially again. We are absolutely convinced Based on our expertise, and our knowledge of what's coming, that the box office, industry wide box office in 2025 will be bigger than 2024 and that the box office in 2026 will be bigger than that of 2025. But of course, no one has a perfect crystal ball. That's our view, that's our belief as of today. Only time will tell. The second thought I want to share is that some view rail about the dilution of our stock? Or with a perfect hindsight that comes from the timing of the sale of our stock Please know that we have only raised capital if the company truly and absolutely needed that test to be in the drawer.

Remember, that many of our competitors both big ones and small ones, both the most important ones and the most unimportant ones. So many movie theater chains have been forced into bankruptcy. In the last four years. Because they ran out of cash not AMC. I repeat, not AMC, We stayed strong We stayed alive We stayed healthy. We stayed on a path towards recovery because of the actions that we took to bring cash in the door. Having said that though, here is a pledge that I am making to you today. There will be no more cash raised from the sale of common stock in calendar year 2025 unless we first take that matter of authorizing more common shares to you, our shareholders, for you to vote and help us make such a decision. In summary, The entire team at AMC is absolutely committed to do all that we can to grow our revenues and to grow our adjusted EBITDA. We are constantly striving to enhance the value of our business which after all is your company. AMC is the acknowledged leader of this industry We have kept AMC alive and relatively strong in very troubled times and we will continue to do everything humanly possible to keep AMC moving forward, And to that end, we just delivered one hell of a fourth quarter of twenty twenty four.

Sean, let's move to questions. Both from our securities analysts and from our retail shareholders.

Thank you. We'll now be conducting a question and answer session.

Our first question is coming from Chad Boynton from Macquarie. Your line is now live.

On for Chad. Thanks for taking our question.

So on the AMC Go plan, if the number of wide release films and the box office growth materializes as you expect, Is that when CapEx will rise to the $375,000,000 or so annual level implied by the high end of the CapEx range? Or is there anything else you can share in terms of further visibility for the magnitude or cadence of the CapEx deployment? Thank you.

I'm happy to respond, Chad. Our CapEx budget is going to stay around $200,000,000 plus or minus a little change Until such time, as we have access to growth capital, And how we have access to growth capital? Is something that we are sorting through right now. There are a number of really creative ideas in place inside the company where we might be able to get third parties to finance some of our growth there are other opportunities that are so obvious, the growth the returns on some of these growth initiatives is so high that we'd love to be able to convince people to impress us with more growth capital Until we have access to growth capital, we're going to keep CapEx tightly constrained The time will come when we can grow it. But you'll know it way in advance. We will flag it in advance We're not going to surprise you. CapEx expenditures without having told you prior to doing so.

Understood. Appreciate that. As a quick follow-up, IMAX recently announced a deal for the movie Narnia. To have an exclusive theatrical run and I think this is a film otherwise would have gone direct to streaming. So just curious to hear your thoughts and your views on the potential for more deals like this to come through and how you see the dynamic between streaming and theaters evolving from here? Thanks.

So There are streamers and then there are streamers. There are some streamers who have actively embraced [indiscernible] Apple and Amazon come to mind. [indiscernible] we've had superb meetings and conversations with both Apple and Amazon We're highly encouraged, for example, that Amazon, which is a combination of Amazon and the old MGM. Now it's just about a week or two ago, that they were staffing up and boosting their distribution personnel with significant numbers because they would like to dramatically increase the number of films that Amazon is releasing. Doubling, even potentially tripling. We're not quite tripling, but more than doubling the potential releases coming out of of the Amazon SPEAR, [indiscernible] Apple is so excited about the movie F1, which is coming out in June.

Which they're hopeful and we're hopeful is going to be a major blockbuster gangbuster [indiscernible] Director of Top Gun Maverick. I believe it starts Brad Pitt. Apple is behind it completely.

Being distributed in The U. S. By Warner Brothers is behind it completely. AMC is behind it completely. So the notion that some of these streaming services might actually embrace the app releases is something that's quite exciting to us. I think that one of the industry experimented, with all sorts of different release patterns post COVID, a general consensus has emerged in Hollywood not by all, but by most. That the most successful movies on streaming platforms are those go to theaters first. And those movies that have a a great theatrical release