AMC Theatres parent signals it could face bankruptcy
AMC Entertainment Holdings Inc., the nation's largest movie theater operator with 17 locations across Michigan, signaled in public filings Wednesday that it could face bankruptcy as a result of the coronavirus pandemic.
The parent of AMC Theatres expects to have the cash to reopen sites this summer or later, but that will depend on when it can resume full operations, the timing of movie releases and its ability to generate revenues, according to a Security and Exchange Commission filing. The company will require more capital and possibly additional financing if it doesn't generate enough revenue or if there's a recurrence of COVID-19, causing its theaters to close again.
"Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time," the company said. "Going concern" refers to companies that have enough money to stay stable, continue operations and avoid bankruptcy.
AMC has 1,000 movie theaters worldwide. More than half of those are located in the U.S., including 17 in Michigan. As The Detroit News previously reported, AMC in April closed its Star Southfield 20-screen multiplex theater.
The company said it opted to close the operation after its lease ended, and that the decision was not due to COVID-19. At the time, a spokesman said AMC locations would reopen in accordance with local directives.
AMC shuttered all of its U.S. locations March 17 due to the coronavirus pandemic. COVID-19, the deadly disease caused by the virus, has killed more than 106,000 in the U.S., according to the Centers for Disease Control and Prevention.
The company's acknowledgement of financial distress comes as AMC, one of the world's largest movie theater companies, expects to report a net loss for the first quarter of 2020 of between $2.1 and $2.41 billion after moving to close theaters to help stop the spread of the coronavirus.
Total revenues for the three months ending March 31 are expected to be $941.5 million compared with $1.2 billion made in the first quarter of 2019. As of April 30, 2020, AMC had a cash balance of $718.3 million.
Staff reporter Jordyn Grzelewski contributed