AMC Theater Chain Has 'Substantial Doubt' It Can Remain in Business After Coronavirus Closures
AMC Theaters, the largest movie-theater chain in the U.S., is struggling.
In a recent financial filing, AMC reported that it has "substantial doubt" it can remain in business following extended closures due to the coronavirus pandemic, according to CNN.
"We are generating effectively no revenue," the company said on Wednesday in the filing, estimating to have lost between $2.1 billion and $2.4 billion in the first quarter after having to close earlier this year.
The company also reported that its quarterly revenue is down roughly 22 percent this year, having fallen to $941.5 million from $1.2 billion in the same quarter last year.
In April, AMC recorded a cash balance of $718.3 million, per CNN. While the company said it had the resources to reopen "this summer or later," it added, "Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and our ability to generate revenues."
AMC said that while it plans to monitor "potential lifting of various government operating restrictions," it warned there would still be serious challenges to its operation, such as studios holding back new films.
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"Even if governmental operating restrictions are lifted in certain jurisdictions, distributors may delay the release of new films until such time that operating restrictions are eased more broadly domestically and internationally, which may further limit our operations," the company said.
Many of this year's highly anticipated films — including Mulan, Wonder Woman 1984 and F9 — were delayed amid the pandemic and movie theater closures. However, some studios have also opted to release its films on demand.
Additionally, in May, a new study from Performance Research and Full Circle Research Co. indicated that the majority of moviegoers — 70 percent — would prefer to watch the first-run of a movie as a digital rental at home instead of heading to a theater.
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