AMC earnings call: Working on variable pricing, popcorn and NFTs (NYSE:AMC)

Tom Cooper/Getty Images Entertainment

AMC Entertainment (NYSE:AMC), higher by some 5% just after it released positive fourth-quarter earnings, has moderated gains during its conference call, now up 0.4%.

The exhibitor benefited from big gains in an easy comparison with the fourth quarter of 2020, with revenues jumping sevenfold and attendance rising nearly that fast. AMC turned around cash flow as well, marking gains in both operating and free cash flow.

CEO Adam Aron used his time in something of a spirited victory lap, noting some critics had said people wouldn’t ever return to movie theaters. “What a load of cr– … of cow dung,” he said.

Those making dire predictions about the company’s survivability “gravely underestimated AMC,” he says, and it’s a “simple matter of facts: They were wrong, they were wrong, they were wrong.” As a key example, he points to the success of Spider-Man: No Way Home, the third-highest grossing movie ever, “released in a time when people were battling Omicron fears, no less.”

In his time, Chief Financial Officer Sean Goodman noted recent refinancing that allowed the company to cut annual interest expense by $13 million and extend debt maturity a few years further out.

Much of the call was devoted to what has become an AMC earnings call staple: Aron reading a numerical list of innovations that the company is pursuing, and maybe most notable there was a longtime exhibitor holy grail – variable pricing. With blockbuster The Batman opening in a few days, AMC is pricing those tickets slightly higher than for other movies in the same venues at the same time.

That’s all “quite novel in the U.S.,” Aron says, but AMC has been doing it for years in European theaters, where they even charge higher prices for the best seats in each house.

He gave heavy airtime to ideas pushed by a crypto-friendly retail investor base, starting with nonfungible tokens. A collaboration on Spider-Man resulted, Aron said, in 86,000 NFTs fully subscribed within hours, with some sold on secondary markets for as much as $17,000.

Later this month, AMC will allow the ability to transact in dogecoin and Shiba Inu (following previous pushes into bitcoin, Ethereum, bitcoin cash and Litecoin). Also, it’s been “looking for some time at potentially issuing our own cryptocurrency” though that would depend on how regulatory frameworks evolve.

AMC’s foray into selling popcorn outside the theater is on track, with delivering hot popcorn via Uber Eats floated, and AMC is looking at additional theater acquisitions as well as a branded credit card.

And given some record year-end liquidity, Aron gave credit to the retail army that has backed the company for a year now. “Our shareholders have armed us with $1.8 billion … there may be creative ways to raise even more money,” he says. Excluding index funds, he says, retail investors would seem to own some 90% of issued shares: “Retail owns the float.”

On Monday, AMC named a new operations and development head and chief marketing officer.


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