AMC warns of 'going concern' as COVID-19 puts strain on theaters
AMC had a cash balance of $718.3 million as of April 30
AMC Entertainment Holdings Inc said on Wednesday there were "substantial doubts" about its ability to continue operating, if the company was forced to keep its theaters closed for a longer period because of the COVID-19 pandemic.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMC | AMC ENTERTAINMENT | 5.04 | +0.09 | +1.82% |
Movie theaters worldwide have been shut since mid-March to help contain the spread of the novel coronavirus and many potential box-office draws such as "Top Gun: Maverick", the new James Bond film "No Time To Die" and Walt Disney's "Mulan" have been pushed later into the year.
AMC CLOSE TO BANKRUPTCY AS CORONAVIRUS PUTS MOVIES ON PAUSE
Closed signs are seen on an AMC Theatre during the outbreak of the coronavirus disease in New York City on April 29, 2020. (Reuters/Brendan McDermid)
In the United States, individual states are now considering when to allow businesses to reopen.
"We cannot predict when or if our business will return to normal levels," the world's largest movie theater operator said in a regulatory filing.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The company, which operated about 996 theaters and 10,973 screens globally as of end-March, also warned that it may not have sufficient liquidity to tide over until its cash-generating operations are back to normal.
AMC said it had begun a ramp-up in cash spending as it aims for a summer reopen. The company had a cash balance of $718.3 million as of April 30, and has said it had enough liquidity to sustain the closures till the end of July.
However, the company raised fears that even after theaters reopen it may not have enough films to show and attendance will be further impacted as people may switch over to other forms of entertainment or be wary of health risks.
CLICK HERE TO READ MORE ON FOX BUSINESS
Shares of the company fell 3% in trading before the bell.
The company also said it expected to report a loss of between $2.12 billion to $2.42 billion for the first quarter ended March 31, largely due to an impairment charge of about $2 billion related to assets and goodwill.