AMC Q&A Q3 2021: no one should have any illusions
Q&A is a session under a company's earnings conference that institutional and retail investors ask some most-concerned questions to the management. On this page, you may discover info that might affect the stock price in the following weeks. $AMC Entertainment (AMC.US)$
Key Takeaways
Attitudes: even amid beating earnings, the management emphasize that no one should have any illusions. There is more challenge ahead of us still to be met. The virus continues to be with us.
Goals: based on a Q4 domestic box office forecast of approximately $2 billion, the company believes that the adjusted EBITDA and our operating cash burn is likely to turn positive in Q4.
Products: AMC continues to look at other cryptocurrencies it can accept and has spoken with third parties about launching its own cryptocurrency and'll be able to launch the acceptance of Dogecoin in the first quarter of '22.
Will you accept Shiba Inu?
There's just been a tidal wave of inbound messaging to our company and to me personally that we ought to get much more active in the sphere of cryptocurrency and that there was real opportunity for AMC. And in a groundbreaking announcement back in August or September, we announced with some bravado that we're going to accept Bitcoin. And we are on track right now to accept, as we promised, Bitcoin, Ethereum, Litecoin, Bitcoin Cash and others. We think we'll be able to launch the acceptance of Dogecoin in the first quarter of '22, and we are now figuring out how we can take Shiba Inu as a currency.
What are the opportunities for AMC with respect to NFTs?
That's just a really smart idea. And the more I saw this cavalcade of advice from our shareholder base that we should explore commemorative movie theater tickets as NFTs, the more they set us down this path. We have already commenced serious discussions with multiple Hollywood studios, major studios, about launching NFTs in conjunction with some of the major titles of movies that are playing in our theaters. As I said in the prepared remarks, there's nothing to report today. But stay tuned, this space is very intriguing to us.
Will AMC offer a method by which people can buy retail AMC merchandise?
Well, you seem to be on the hit parade of suggestions of our shareholders. Over and over and over and over and over again, people are telling me that we ought to launch various lines of AMC merchandise. It's a whole variety of things that would carry the AMC logo, whether it's golf shirts or coffee mugs or hats or a lot of other things. And again, it seems like a good idea to us, especially if we can connect it to major movie titles that are playing in our theaters. And so we're going to be exploring this area very carefully as we enter the new year 2022.
Will AMC offer eSports and gaming in the theaters?
This is something we looked at repeatedly over the six years that I have run AMC. There are reasons to think it might be one of these many ideas where we could branch out our company and do something different going forward than we have done in the past, hopefully creating shareholder value in the process. We're living up to the shareholder value that's already implied in our share price. Interestingly for us, on our board of directors, is another Adam, Adam Sussman, who's the president of Epic Games. So we're going to take a look at what opportunity is available to AMC through gaming and eSports as the new year comes forward.
I think you said that based on a $2 billion box office in the fourth quarter, that you'll be adjusted EBITDA positive. Is there a way you can give us the idea of how that breaks down in the U.S. versus international?
On the expectation for Q4, what I said in the prepared remarks was assuming a $2 billion domestic box office. And the expectation that is both positive from an EBITDA point of view, adjusted EBITDA point of view that we disclosed, and also from an operating cash burn point of view as well. So that's the expectation for Q4. And if you look at our October attendance numbers, what you'll see is actually the international business outperformed the U.S. So the domestic business was, from an attendance point of view, was around 30% below 2019's level, and the international business was around 26% below 2019's level.
This article is a script from the Q&A session of AMC's earnings call on Nov 8. In order to facilitate reading, we have made appropriate cuts. If you want to know more details, you can click here to re-watch the earnings call.
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