AMC Entertainment Holdings, Inc. (NYSE:AMC, “the Company”), one
of the world’s largest theatrical exhibition companies and an
industry leader in innovation and operational excellence, today
reported results for the fourth quarter and full year ended
December 31, 2013.
Gerry Lopez, AMC’s president and chief executive officer,
stated, “Our strong operating results in 2013 give us confidence
that our strategy, as laid out during the recent initial public
offering (“IPO”) is working. Our year-over-year revenue improvement
in 2013 was fueled by the progress we are making in our efforts to
further set ourselves apart as the guest experience leader in movie
exhibition. Our five strategic action fronts, led by innovations in
comfort and convenience as well as our enhanced food and beverage
offerings, are changing industry standards. These initiatives drove
improved performance, and in combination with our
expense-management focus, also produced adjusted EBITDA gains for
the year. These results demonstrate the strength of our
differentiated business model, heightened brand awareness, and
solid execution by our entire team at AMC.”
Mr. Lopez continued, “With the extremely robust AMC Stubs
membership loyalty program as an anchor, we delivered record
revenues and our revenue growth outpaced the domestic box office
performance. Furthermore, with the completion of our IPO and the
subsequent refinancing of a significant portion of our outstanding
debt, we have increased our financial flexibility. This will enable
us to continue to reinvest in our business and receive a high
return on project investments that both enhance our guests’
experience, and our long-term overall profitability.”
Quarter Results
AMC’s revenues for the three months ended December 31, 2013
increased 2.3% to $713.0 million, compared to $697.0 million for
the three months ended December 31, 2012. For the three months
ended December 31, 2013, admissions revenues increased 2.1% and
food and beverage revenues increased 0.3%, driven by a 5.5%
increase in average ticket price, and a 3.7% increase in food and
beverage revenues per patron, offset somewhat by a 3.2% decline in
attendance.
Adjusted EBITDA for the three months ended December 31, 2013 was
$112.9 million compared to $114.8 million for the three months
ended December 31, 2012. The current quarter was negatively
impacted by additional expenses of $3.8 million, (compared to $1.3
million in the prior period) related to a cash-based management
profit sharing plan which was terminated at December 31, 2013 and
$3.2 million related to a voluntary retirement program both of
which were undergone in connection with the company’s IPO.
Reconciliations of non-GAAP financial measures are provided in the
financial schedules accompanying this press release.
Net earnings attributable to AMC for the three months ended
December 31, 2013 was $279.6 million compared to $0.4 million for
the three months ended December 31, 2012. Diluted earnings per
share for the three months ended December 31, 2013 was $3.58
compared to $0.00 for the three months ended December 31, 2012. Net
earnings attributable to AMC for the three months ended December
31, 2013 included reversal of a non-cash deferred tax asset
valuation allowance of $265.6 million, or $3.40 per share on a
diluted basis.
Full Year Results
As a result of the August 30, 2012 Wanda merger, we do not have
comparable financial results for the period December 30, 2011
through August 30, 2012. In order to present investors a meaningful
period-to-period comparison of our financial results, we have
combined the prior year Predecessor with prior year Successor
operating information, on an unaudited pro forma combined basis.
The pro forma information for the calendar year ended December 31,
2012 does not purport to represent what our consolidated results of
operations would have been if the Successor had actually been
formed on December 30, 2011 (the first day of that fiscal year),
nor have we made any attempt to either include or exclude expenses
or income that would have resulted had the Successor been formed on
December 30, 2011. In addition, this pro forma information is not
presented in accordance with GAAP; for a presentation of our GAAP
results of operations, see the “predecessor” and “successor”
information for 2012 provided in the financial schedules
accompanying this press release.
AMC’s revenues for the year ended December 31, 2013 increased
3.6% to $2,749.4 million from $2,654.0 million for the year ended
December 31, 2012, which included two additional days due to change
in accounting periods. For the year ended December 31, 2013,
admissions revenues increased 3.2% and food and beverage revenues
increased 5.8%, primarily due to a 3.0% increase in average ticket
price and a 5.6% increase in food and beverage revenues per
patron.
Adjusted EBITDA for the year ended December 31, 2013 increased
2.2% to $448.1 million from $438.3 million for the year ended
December 31, 2012 and was negatively impacted by additional
expenses of $11.3 million, (compared with $2.6 million in the prior
period) related to a cash-based management profit sharing plan
which was terminated at December 31, 2013 and $3.2 million related
to a voluntary retirement program both of which were undergone in
connection with the company’s IPO.
Net earnings attributable to AMC for the year ended December 31,
2013 increased to $364.4 million from $46.0 million for the year
ended December 31, 2012. Diluted earnings per share for the year
ended December 31, 2013 was $4.76 compared to $0.68 for the year
ended December 31, 2012. Net earnings attributable to AMC for the
year ended December 31, 2013 included reversal of a non-cash
deferred tax asset valuation allowance of $265.6 million, or $3.47
per share on a diluted basis.
As of December 31, 2013, the Company’s aggregate screen count
was 4,976. During 2013, the Company opened one new theatre with a
total of 12 screens and acquired four theatres with 37 screens in
the U.S., permanently closed four theatres with 29 screens in the
U.S., and temporarily closed 371 screens and reopened 339 screens
in the U.S. to implement our strategy and install guest experience
upgrades.
Public Offering
On December 23, 2013, the Company closed its IPO, including the
full exercise of the underwriter’s option to purchase additional
shares of 21,052,632 shares of Class A common stock at $18.00 per
share. The net proceeds to the Company were approximately $355.3
million after deducting underwriter discounts and commissions, and
offering expenses.
Subsequent Events
On February 7, 2014, the Company completed the private offering
of $375.0 million aggregate principal amount of senior subordinated
notes due 2022 (the “Notes”). The Notes were sold to investors at a
price of 100.000% of the principal amount thereof and bear interest
at a rate equal to 5.875% per annum.
In conjunction with the offering of the notes, on February 14,
2014 the Company completed a tender offer (“the Tender Offer”) and
acquired $463.9 million, or approximately 77.3%, of its outstanding
8.75% Senior Notes due 2019. The Company expects to call the
remaining $136.1 million of untendered notes in June of 2014.
Upon completion of the offering of the Notes and Tender Offer,
the Company had total debt outstanding of approximately $2.0
billion, with a weighted average interest rate of 6.6% per annum.
The Company has no debt maturing during the remainder of 2014.
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 can also 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 March 11,
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 13576163. The archive of the webcast will be
available on the Company’s website for a limited time.
About AMC Entertainment Holdings, Inc.
AMC Theatres® delivers distinctive and affordable movie-going
experiences at 345 theatres and 4,976 screens primarily in the
United States. AMC has propelled a history of industry innovation
and continues today by delivering comfort and convenience, enhanced
food and beverage, guest engagement and loyalty, premium sight and
sound and targeted programming to audiences in its theatres across
the United States.
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,” and other similar expressions that predict or indicate
future events or trends or that are not statements of historical
matters. These forward looking statements include any statements
regarding the Company’s strategic and operational plans. 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.
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. For a detailed
discussion of these risks and uncertainties, see the section
entitled “Risk Factors” in the final prospectus contained in our
Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on December 19, 2013. 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
Quarters and Four Quarters Ended 12/31/13 and 12/31/12 (dollars
in thousands, except per share data) (Unaudited)
Quarter Ended Four
Quarters Ended December 31, December 31, Pro
Forma 2013 2012 2013 2012 Revenues
Admissions $ 482,149 $ 472,276 $ 1,847,327 $ 1,790,489 Food and
beverage 197,886 197,374 786,912 743,468 Other theatre 32,942
27,336 115,189 120,050 Total Revenues
712,977 696,986 2,749,428 2,654,007
Operating costs and expenses Film exhibition costs 258,187
256,902 976,912 949,291 Food and beverage costs 27,293 25,767
107,325 100,491 Operating expense 192,582 184,375 726,641 699,114
Rent 112,615 109,881 451,828 443,179 General and administrative:
Merger, acquisition and transaction costs 931 2,862 2,883 10,036
Management fee - - - 3,750 Other 37,491 21,841 97,288 71,754
Depreciation and amortization 50,102 55,031 197,537 209,451
Impairment of long-lived assets - - -
285 Operating costs and expenses 679,201 656,659
2,560,414 2,487,351 Operating income 33,776
40,327 189,014 166,656 Other expense (income) Other expense (1,231)
- (1,415) 2,545 Interest expense: Corporate borrowings 32,259
35,018 129,963 155,219 Capital and financing lease obligations
2,350 1,431 10,264 5,751 Equity in (earnings) of non-consolidated
entities (9,292) (898) (47,435) (15,760) Investment expense
(income) 1,322 291 (2,084) 224 Total
other expense 25,408 35,842 89,293
147,979 Earnings from continuing operations before income
taxes 8,368 4,485 99,721 18,677 Income tax provision (benefit)
(274,243) 3,400 (263,383) 6,505
Earnings from continuing operations 282,611 1,085 363,104 12,172
Earnings (loss) from discontinued operations, net of income taxes
(2,994) (712) 1,296 33,845 Net
earnings $ 279,617 $ 373 $ 364,400 $ 46,017 Diluted earnings
per share: Earnings from continuing operations $ 3.62 $ 0.01 $ 4.74
$ 0.18 Earnings (loss) from discontinued operations (0.04)
(0.01) 0.02 0.50 Net earnings (loss) per share
$ 3.58 $ - $ 4.76 $ 0.68 Average shares outstanding diluted
78,092 76,000 76,527 67,230
Balance Sheet Data (at period end): (dollars in
thousands) (unaudited)
As of
December 31, 2013 2012 Cash and
equivalents $ 546,454 $ 133,071 Corporate borrowings 2,078,811
2,078,675 Other long-term liabilities 370,946 433,151 Capital and
financing lease obligations 116,199 122,645 Stockholders' equity
1,507,470 766,774 Total assets 5,046,724 4,273,838
Other
Data: (in thousands, except operating data) (unaudited)
Quarter Ended Four Quarters Ended December 31,
December 31, Pro Forma 2013 2012
2013 2012 Net cash provided by operating activities $
152,677 $ 106,017 $ 357,342 $ 150,438 Capital expenditures (96,878
) (62,136 ) (270,884 ) (167,166 ) Screen additions 12 - 12 - Screen
acquisitions 12 166 37 166 Screen dispositions - - 29 60
Construction openings (closures), net 2 20 (32 ) (12 ) Average
screens-continuing operations 4,865 4,730 4,859 4,744 Number of
screens operated 4,976 4,988 Number of theatres operated 345 344
Screens per theatre 14.4 14.5 Attendance (in thousands) -continuing
operations 50,400 52,086 199,270 199,034
Reconciliation
of Adjusted EBITDA: (dollars in thousands) (unaudited)
Quarter Ended Four Quarters Ended December 31,
December 31, Pro Forma 2013 2012
2013 2012 Earnings from continuing operations $
282,611 $ 1,085 $ 363,104 $ 12,172 Plus: Income tax provision
(benefit) (274,243 ) 3,400 (263,383 ) 6,505 Interest expense 34,609
36,449 140,227 160,970 Depreciation and amortization 50,102 55,031
197,537 209,451 Impairment of long-lived assets - - - 285 Certain
operating expenses (2) 4,194 6,411 13,913 16,696 Equity in earnings
of non-consolidated entities (9,292 ) (898 ) (47,435 ) (15,760 )
Cash distributions from non-consolidated entities 10,701 10,184
31,501 29,794 Investment expense (income) 1,322 291 (2,084 ) 224
Other expense (income) 3 - (127 ) 2,882 General and administrative
expense-unallocated: Merger, acquisition and transaction costs 931
2,862 2,883 10,036 Management Fee - - - 3,750 Stock-based
compensation expense (3) 12,000 -
12,000 1,321 Adjusted EBITDA (1) $
112,938 $ 114,815 $ 448,136 $ 438,326
(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 below. 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 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;
• does not reflect any cash requirements
for the assets being depreciated and amortized that may have to be
replaced in the future; and
• does not reflect management fees that
were paid to our former sponsors.
(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)
Non-cash expense included in General and administrative: Other
GAAP Results 2012 (dollars in thousands)
(unaudited)
December 30, 2011
From Inception
March 30, 2012
August 31, 2012
Four Quarters
Ended
through through through December 31,
2012
March 29, 2012
August 30, 2012
December 31, 2012
Pro Forma
(Predecessor) (Predecessor) (Successor)
Revenues Admissions $ 425,826 $ 816,031 $ 548,632 $ 1,790,489 Food
and beverage 171,599 342,130 229,739 743,468 Other theatre 39,018
47,911 33,121 120,050 Total Revenues
636,443 1,206,072 811,492
2,654,007 Operating costs and expenses Film
exhibition costs 221,191 436,539 291,561 949,291 Food and beverage
costs 22,620 47,326 30,545 100,491 Operating expense 171,352
297,328 230,434 699,114 Rent 110,719 189,086 143,374 443,179
General and administrative: - Merger, acquisition and transaction
costs 2,253 4,417 3,366 10,036 Management fee 1,250 2,500 - 3,750
Other 15,621 27,023 29,110 71,754 Depreciation and amortization
56,847 80,971 71,633 209,451 Impairment of long-lived assets
285 - - 285
Operating costs and expenses 602,138 1,085,190
800,023 2,487,351
Operating income 34,305 120,882 11,469 166,656 Other expense
(income) Other expense 1,536 960 49 2,545 Interest expense: -
Corporate borrowings 42,346 67,614 45,259 155,219 Capital and
financing lease obligations 1,488 2,390 1,873 5,751 Equity in
(earnings) of non-consolidated entities (10,695 ) (7,545 ) 2,480
(15,760 ) Investment expense (income) (25 ) (41 )
290 224 Total other expense
34,650 63,378 49,951
147,979 Earnings from continuing operations before
income taxes (345 ) 57,504 (38,482 ) 18,677 Income tax provision
(benefit) 505 2,500 3,500 6,505
Earnings from continuing operations (850 ) 55,004 (41,982 ) 12,172
Earnings (loss) from discontinued operations, net of income taxes
(620 ) 35,153 (688 ) 33,845
Net earnings $ (1,470 ) $ 90,157 $ (42,670 ) $
46,017 Diluted earnings per share: Earnings from
continuing operations $ (0.01 ) $ 0.86 $ (0.56 ) $ 0.18 Earnings
(loss) from discontinued operations (0.01 ) 0.55
(0.01 ) 0.50 Net earnings (loss) per
share $ (0.02 ) $ 1.41 $ (0.57 ) $ 0.68
Average shares outstanding diluted 63,335
63,715 74,988 67,230
Media:AMC Entertainment Holdings, Inc.:Jessica
Liddell, 203-682-8200Jessica.Liddell@icrinc.comorInvestor
RelationsAMC Entertainment Holdings, Inc.:Dan Foley,
866-248-3872InvestorRelations@amctheatres.com
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