AMC Entertainment Holdings Inc. on Aug.1 disclosed plans to slash domestic costs and enhance revenue as the company anticipates weaker-than-expected second-quarter results and "a very challenging third quarter."
The company expects to achieve at least a $30 million adjusted EBITDA contribution by the end of the year through various initiatives, including "strategic pricing, promotional incentives, adjusting scheduling practices, reductions in operating hours, staffing levels, and additional general operating expense line items."
The cost reduction initiatives, which began in July and continue through year-end, will affect both the Theatre Support Center based in Leawood, Kan., and AMC's domestic theater locations.
The plan will help the company better align operating expenses with theater attendance in its markets and help reduce general and administrative costs for the balance of 2017 and into 2018, the company said.
AMC Entertainment expects a second-quarter net loss of $174.5 million to $178.5 million, or a loss of $1.34 per share to $1.36 per share, compared to net earnings of $24.0 million, or 24 cents per share in the year-ago quarter. The second-quarter loss includes a $202.6 million pretax impairment charge related to the company's investment in National CineMedia LLC.
The S&P Capital IQ consensus estimate for the second-ended quarter is a loss of $1.13 per share on a normalized basis, or a loss of $1.34 per share on a GAAP basis.
AMC's results also reflect industry box office trends. The North American box office decreased 3.3% in the second quarter, and the U.S. box office decreased 4.4% year over year, said AMC.
AMC expects second-quarter revenues of about $1.20 billion, compared to $764.0 million a year ago.
For full-year 2017, the company forecasts total revenues of $5.10 billion to $5.23 billion, adjusted EBITDA of $860 million to $900 million and net capital expenditures of $500 million to $550 million. The company expects a full-year net loss of $150.0 million to $125.0 million, or a loss of 97 cents per share to $1.17 per share.
The S&P Capital IQ consensus estimate for full year 2017 is a loss of 65 cents per share on a normalized basis, or a loss of $1.04 per share on a GAAP basis.