AMC Entertainment Holdings, Inc. (“AMC” or “the Company”), one
of the world’s leading theatrical exhibition companies and an
industry leader in innovation and operational excellence, today
previewed results for the third quarter ended September 30, 2016.
AMC is providing these third quarter 2016 results in connection
with the proposed financing previously announced on October 20,
2016. The financial results are subject to finalization of the
Company’s quarterly financial and accounting procedures.
AMC expects third quarter 2016 total revenues to be between
$777.0 million and $780.0 million compared to
$688.8 million in the third quarter of 2015. Operating income
for the third quarter is expected to be between $63.5 million and
$66.5 million compared to $35.5 million in the same
period a year ago. Net earnings are expected to be between $28.5
million and $31.5 million compared to $12.2 million for
the third quarter of 2015, and diluted earnings per share for the
third quarter of 2016 are expected to be between $0.29 and $0.32
compared to $0.12 for the third quarter of last year.
AMC expects third quarter 2016 Adjusted EBITDA to be between
$142.0 million and $145.0 million compared to $109.0 million in the
same quarter a year ago. Adjusted EBITDA is a non-GAAP financial
measure, and a table reconciling expected net earnings to Adjusted
EBITDA is included in this release.
Total attendance for the third quarter of 2016 increased
approximately 10% to 51.9 million guests compared to the third
quarter a year ago. Average ticket price for the 2016 third quarter
increased 2.6% to $9.57 compared to the third quarter of 2015. Food
and beverage revenue per patron for the third quarter 2016
increased 4.8% to $4.80 compared to the same period a year ago.
“AMC continues to deliver on our key priorities. Even at the low
end of our projected range, Adjusted EBITDA grew 30% with a
substantial improvement in margin, and we are very proud of that
growth,” said Adam Aron, AMC Chief Executive Officer and President.
“The recent relaunch of our AMC Stubs loyalty program in July was
overwhelmingly received by guests who have signed up at rates 11
times faster than the same period a year ago - far faster than we
had anticipated. Total active memberships now exceed four million
households and are still growing rapidly. Through world class
marketing efforts like our AMC Stubs program, and our
soon-to-be-relaunched website and mobile app, guests are
discovering and returning to our theatres to enjoy our proven
innovations, including new recliner seating, MacGuffins Bars, and
premium large format offerings like IMAX® at AMC and Dolby Cinema™
at AMC. We believe that when we integrate these organic growth
initiatives with a disciplined acquisition strategy, as we move
toward completion of the Odeon & UCI and Carmike Cinemas
acquisitions, we are positioning AMC to leverage the record
potential of the 2017 and 2018 box office to create even greater
value for our customers and shareholders alike.”
AMC expects to report its complete financial results for the
third quarter ended September 30, 2016, after the market
closes on Monday, November 7, 2016. The Company will host a
conference call for investors and interested parties at 4:00 p.m.
CDT/5:00 p.m. EDT the same day. All interested parties are invited
to access a live audio broadcast of the call via webcast. To listen
to the conference call via the internet, please visit the investor
relations section of the AMC website at
www.investor.amctheatres.com for a link to the webcast. Investors
and interested parties should go to the website at least 15 minutes
prior to the call to register, and/or download and install any
necessary audio software.
Information Regarding Preliminary Results
The preliminary estimated financial information contained in
this press release reflects management’s estimates based solely
upon information available to it as of the date of this press
release and is not a comprehensive statement of our financial
results for the three months ended September 30, 2016. In addition,
the preliminary estimated financial information presented above has
not been audited, reviewed or compiled by our independent
registered public accounting firm, KPMG LLP. Accordingly, KPMG LLP
does not express an opinion on or any other form of assurance with
respect thereto and assumes no responsibility for this information.
We have provided ranges for the preliminary estimated financial
results described above primarily because our financial closing
procedures for the three months ended September 30, 2016 are not
yet complete. The information presented above should not be
considered a substitute for full unaudited financial statements for
the three months ended September 30, 2016 once they become
available and should not be regarded as a representation by us or
our management as to our actual financial results for the three
months ended September 30, 2016. The ranges for the preliminary
estimated financial results described above constitute
forward-looking statements. The preliminary estimated financial
information presented above is subject to change, and our actual
financial results may differ from such preliminary estimates and
such differences could be material. Accordingly, you should not
place undue reliance upon these preliminary estimates.
Acquisitions
Odeon & UCI Cinemas Holdings
Limited: As previously announced on July 12, 2016, AMC
entered into a Share Purchase Agreement to acquire the film
exhibition business of Odeon and UCI Cinemas Holdings Limited,
referred to as "Odeon/UCI," for total consideration of (i) cash in
the amount of GBP £375.0 million ($460.8 million), (ii) shares of
AMC Class A common stock valued at GBP £125.0 million ($153.6
million) and (iii) the repayment of indebtedness of approximately
GBP £478.6 million ($588.1 million) as of October 19, 2016. The US
Dollar amounts set forth in the preceding sentence assume a
Euro/USD exchange rate of 1.0973 and a GBP/USD exchange rate of
1.2289 as of October 19, 2016. Odeon/UCI is a leading European
cinema operator with 242 cinemas and 2,236 screens. Odeon/UCI
operates in four major markets: the United Kingdom, Spain, Italy
and Germany; and three smaller markets: Austria, Portugal, and
Ireland. For the year ended December 31, 2015 and six months ended
June 30, 2016, Odeon/UCI had revenues of $1,142.0 million and
$526.0 million respectively. The closing of the Share Purchase
Agreement is subject to clearance by the European Commission and
the UK Competition and Markets Authority.
Carmike Cinemas, Inc. (NASDAQ:
CKEC): As previously announced on July 24, 2016, AMC entered
into an amended and restated agreement and plan of merger to
acquire all of the outstanding shares of Carmike Cinemas, Inc.
(NASDAQ: CKEC) (“Carmike”) for $33.06 per share, representing an
approximate 32% premium to Carmike’s March 3, 2016, closing stock
price. Carmike stockholders can elect to receive $33.06 in cash or
1.0819 AMC shares per Carmike share, subject to a customary
proration mechanism to achieve an aggregate consideration mix of
70% cash and 30% in shares of AMC stock. A shareholder meeting to
allow Carmike shareholders the opportunity to vote on the
transaction has been scheduled for November 15, 2016. The
transaction is valued at approximately $1.2 billion, including
the assumption of Carmike’s net indebtedness, based on the closing
trading price of AMC’s common stock on the New York Stock Exchange
on July 22, 2016.
About AMC Entertainment Holdings, Inc.
AMC (NYSE:AMC) is the guest experience leader with 388 locations
and 5,295 screens located primarily in the United States. AMC has
propelled innovation in the theatrical exhibition industry and
continues today by delivering more comfort and convenience,
enhanced food & beverage, greater engagement and loyalty,
premium sight & sound, and targeted programming. AMC operates
the most productive theatres in the country’s top markets,
including No. 1 market share in the top three markets (NY, LA,
Chicago). www.amctheatres.com.
Website Information
This press release, along with other news about AMC, is
available at www.amctheatres.com . We routinely post information
that may be important to investors in the Investor Relations
section of our website, www.investor.amctheatres.com. We use this
website as a means of disclosing material, non-public information
and for complying with our disclosure obligations under Regulation
FD, and we encourage investors to consult that section of our
website regularly for important information about AMC. The
information contained on, or that may be accessed through, our
website is not incorporated by reference into, and is not a part
of, this document. Investors interested in automatically receiving
news and information when posted to our website can also visit
www.investor.amctheatres.com to sign up for E-mail Alerts.
Important Additional Information Regarding the Merger
This communication may be deemed to be solicitation material in
respect of the proposed merger of Carmike with and into a
wholly-owned subsidiary of AMC. In connection with the proposed
merger, a Registration Statement on Form S-4 (the “Registration
Statement”) has been filed with the Securities and Exchange
Commission (“SEC”) containing a prospectus with respect to the AMC
Class A common stock to be issued in the proposed merger and a
proxy statement of Carmike in connection with the proposed merger
(the “Proxy Statement/Prospectus”). The proxy statement of Carmike
contained in the Proxy Statement/Prospectus replaces the definitive
proxy statement which Carmike previously filed with the SEC on May
23, 2016 and mailed to its stockholders on or about May 25, 2016.
Each of AMC and Carmike intends to file other documents with the
SEC regarding the proposed merger. The definitive Proxy
Statement/Prospectus was mailed to stockholders of Carmike on or
about October 13, 2016 and contains important information about the
proposed merger and related matters.
BEFORE MAKING ANY INVESTMENT OR VOTING DECISION, CARMIKE’S
STOCKHOLDERS ARE URGED TO READ CAREFULLY THE DEFINITIVE PROXY
STATEMENT/PROSPECTUS IN ITS ENTIRETY (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT AMC OR
CARMIKE HAS FILED OR MAY FILE WITH THE SEC IN CONNECTION WITH THE
PROPOSED MERGER, OR WHICH ARE INCORPORATED BY REFERENCE IN THE
DEFINITIVE PROXY STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.
Carmike’s stockholders may obtain, free of charge, copies of the
definitive Proxy Statement/Prospectus and Registration Statement
and other relevant documents filed by AMC and Carmike with the SEC,
at the SEC’s website at www.sec.gov. In addition, Carmike’s
stockholders may obtain free copies of the Proxy
Statement/Prospectus and other relevant documents filed by Carmike
with the SEC from Carmike’s website at
http://www.carmikeinvestors.com/.
This communication does not constitute an offer to buy or
exchange, or the solicitation of an offer to sell or exchange, any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, sale or exchange would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. This communication is not
a substitute for any prospectus, proxy statement or any other
document that AMC or Carmike may file with the SEC in connection
with the proposed merger.
Participants in the Solicitation
This communication does not constitute a solicitation of a proxy
from any stockholder with respect to the proposed merger. However,
each of AMC, Carmike and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from Carmike’s stockholders with respect to the proposed
merger. More detailed information regarding the identity of these
potential participants, and any direct or indirect interests they
may have in the proposed merger, by security holdings or otherwise,
is set forth in the Proxy Statement/Prospectus. Additional
information concerning AMC’s directors and executive officers is
set forth in the definitive proxy statement filed by AMC with the
SEC on March 15, 2016 and in the Annual Report on Form 10-K filed
by AMC with the SEC on March 8, 2016. These documents are available
to Carmike stockholders free of charge from the SEC’s website at
www.sec.gov and from the investor relations section of AMC’s
website at amctheatres.com. Additional information concerning
Carmike’s directors and executive officers and their ownership of
Carmike common stock is set forth in the proxy statement for
Carmike’s most recent annual meeting of stockholders, which was
filed with the SEC on April 15, 2016 and in the Annual Report on
Form 10-K filed by Carmike with the SEC on February 29, 2016. These
documents are available to Carmike stockholders free of charge from
the SEC’s website at www.sec.gov and from Carmike’s website at
http://www.carmikeinvestors.com/.
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,” “plan,” “estimate,” “will,” “would,” “project,”
“maintain,” “intend,” “expect,” “anticipate,” “strategy,” “future,”
“likely,” “may,” “should,” “believe,” “continue,” and other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. Estimates regarding
our preliminary results are forward-looking statements. Similarly,
statements made herein and elsewhere regarding the expected ranges
of revenues, operating income, net earnings, diluted earnings per
share, Adjusted EBITDA and other financial measures included
herein, the pending acquisitions of Odeon & UCI and Carmike
Cinemas (collectively “the targets”) and the anticipated financing
of the pending acquisitions are also forward-looking statements,
including statements regarding the anticipated closing date of the
acquisitions, the source and structure of financing, management’s
statements about effect of the acquisitions on AMC’s future
business, operations and financial performance and AMC’s ability to
successfully integrate the targets into its operations. These
forward-looking statements are subject to risks, trends,
uncertainties and other facts that could cause actual performance
or results to differ materially from those expressed in or
suggested by the forward-looking statements. See “Information
Regarding Preliminary Results” above for a description of these
risks and uncertainties. These risks, trends, uncertainties and
facts include, but are not limited to, risks related to: the fact
that accounting adjustments may be made in connection with the
final closing of the books for the quarter; the parties’ ability to
satisfy closing conditions in the anticipated time frame or at all;
obtaining regulatory approval, including the risk that any approval
may be on terms, or subject to conditions, that are not
anticipated; obtaining the Carmike stockholders approval for the
Carmike transaction; the possibility that these acquisitions do not
close, including in circumstances in which AMC would be obligated
to pay a termination fee or other damages or expenses; related to
financing these transactions, including AMC’s ability to finance
the transactions on acceptable terms; responses of activist
stockholders to the transactions; AMC’s ability to realize expected
benefits and synergies from the acquisitions; AMC’s effective
implementation, and customer acceptance, of its marketing
strategies; disruption from the proposed transactions making it
more difficult to maintain relationships with customers, employees
or suppliers; the diversion of management time on
transaction-related issues; the negative effects of this
announcement or the consummation of the proposed acquisitions on
the market price of AMC’s common stock; unexpected costs, charges
or expenses relating to the acquisitions; unknown liabilities;
litigation and/or regulatory actions related to the proposed
transactions; AMC’s significant indebtedness, including the
indebtedness incurred to acquire the targets; execution risks
related to the integration of Starplex Cinemas into our business;
our ability to achieve expected synergies and performance from our
acquisition of Starplex Cinemas; AMC’s ability to utilize net
operating loss carry-forwards to reduce future tax liability;
increased competition in the geographic areas in which we operate
and from alternative film-delivery methods and other forms of
entertainment; continued effectiveness of AMC’s strategic
Initiatives; the impact of shorter theatrical exclusive release
windows; our ability to attract and retain senior executives and
other key personnel; the impact of governmental regulation,
including anti-trust investigations concerning potentially
anticompetitive conduct, including film clearances and
participation in certain joint ventures; unexpected delays and
costs related to our optimization of our theatre circuit; failure,
unavailability or security breaches of our information systems;
operating a business in markets AMC is unfamiliar with; the United
Kingdom’s exit from the European Union; and other business effects,
including the effects of industry, market, economic, political or
regulatory conditions, future exchange or interest rates, changes
in tax laws, regulations, rates and policies; and risks, trends,
uncertainties and other facts discussed in the reports AMC has
filed with the SEC. Should one or more of these risks, trends,
uncertainties or facts materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those indicated or anticipated by the forward-looking
statements contained herein. Accordingly, you are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date they are made.
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. For a detailed discussion of risks,
trends and uncertainties facing AMC, see the section entitled “Risk
Factors” in AMC’s Annual Report on Form 10-K, filed with the SEC on
March 8, 2016, and the risks, trends and uncertainties
identified in its other public filings. AMC does not intend, and
undertakes no duty, to update any information contained herein to
reflect future events or circumstances, except as required by
applicable law.
(tables follow)
AMC Entertainment Holdings, Inc.
Reconciliation of Adjusted EBITDA (Unaudited, dollars in
thousands) Three Months Ended
September, 30 2016(Preliminary
Estimates)
Three Months Ended Low High September, 30
2015 Reconciliation of Adjusted EBITDA: Net Earnings $
28,500 $ 31,500 $ 12,178 Plus: Income tax provision 19,600 20,300
9,080 Interest expense 26,250 27,000 24,968 Depreciation and
amortization 62,500 63,300 58,008 Certain operating expenses (2)
5,000 5,800 3,899 Equity in earnings of non-consolidated entities
(9,500 ) (13,500 ) (10,850 ) Cash distributions from
non-consolidated entities 3,300 3,500 8,557 Investment loss 150 200
163 Other expense 50 150 — General and administrative
expense-unallocated: Merger, acquisition and transaction costs (3)
4,500 5,000 751 Stock-based compensation expense (4) 1,650
1,750 2,199 Adjusted EBITDA (1)
$ 142,000 $ 145,000 $ 108,953 (1) We
present Adjusted EBITDA as a supplemental measure of our
performance. We define Adjusted EBITDA as net earnings plus (i)
income tax provision, (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 above. 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 and should not be construed as an alternative to net
earnings 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 U.S. 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 estimate our
value. 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; and
• does not reflect any cash requirements
for the assets being depreciated and amortized that may have to be
replaced in the future.
(2) Amounts represent preopening expense related to
temporarily closed screens under renovation, theatre and other
closure expense for the permanent closure of screens including the
related accretion of interest, non-cash deferred digital equipment
rent expense, and disposition of assets and other non-operating
gains or losses included in operating expenses. We have excluded
these items as they are non-cash in nature, include components of
interest cost for the time value of money or are non-operating in
nature. (3) Merger, acquisition and transition costs is
excluded as it is non-operating in nature. (4) Non-cash
expense included in General and Administrative: Other
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AMC Entertainment Holdings, Inc.INVESTOR
RELATIONS:John Merriwether,
866-248-3872InvestorRelations@amctheatres.comorMEDIA
CONTACTS:Ryan Noonan, 913-213-2183rnoonan@amctheatres.com
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