In what may become the next casualty of COVID-19, AMC Entertainment (NYSE:AMC), the world's largest movie theater company, said in filing that it may not be able to survive the pandemic. The company has generated close to zero revenue as government regulations have kept theaters closed and people are staying home to stay safe.
A sobering earnings report
Although AMC is planning to release its first-quarter earnings report on June 9, the company released a preliminary report today. For the quarter ended March 31, AMC's revenue was $941.5 million, a 22% decrease year over year. Net loss is expected to be between $2.1 billion and $2.41 billion compared to a loss of $130 million in 2019.
AMC took out its maximum credit under the terms of its revolving credit lines in March and said that as of April 30 it has $718.3 million left. It said it was confident that with a new influx of cash from a debt sale it will make it to the third quarter and the potential to bring in revenue from operations, but it's not sure it will last longer than that. Meanwhile, film studios have been pushing off release dates or sending movies straight to streaming platforms, and there may not be too many films coming out when theaters are ready to open.
Going where they never have before
Since the company has never experienced a total loss of revenue, it said it was not able to make any predictions about what might happen. AMC said it will be investing its current cash in preparing to open for the fall season but may not be able to recoup the expenses. "Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time," it noted.