AMC Entertainment, the country’s largest exhibition chain, acknowledged in public filings on Wednesday that the coronavirus pandemic could push it into bankruptcy.
Noting that the onset of COVID-19 has forced it to shutter its more than 1,000 theaters and layoff or furlough 600 corporate employees, the company said it has been operating for months with no revenue. It acknowledged that when movie theaters are allowed to reopen, customers may be hesitant to come back, complying with new health guidelines could add costs and cut into profits, and the heavily indebted company could force problems gaining access to capital. Because of this laundry list of unknowns, AMC writes that “…substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.”
The acknowledgment of the stark reality facing the exhibition space came as AMC said that it expects its first-quarter financial results to include a loss of between $2.1 billion to $2.4 billion. That is largely attributable to a $2 billion impairment charge related to the coronavirus shutdown. Net losses for the quarter increased to $224.5 million, up from $101.8 million in the prior-year period, while revenue fell to $941.5 million, down from $1.2 billion in the same quarter in 2019.
Read the source article at Variety