AMC Entertainment Holdings, Inc.

Entertainment's third quarter 2023 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for a question. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference over to John Merriweather. Please go ahead, sir.

Thank you, Jenny. Good afternoon. I'd like to welcome everyone to AMC's third quarter 2023 earnings webcast. With me this afternoon is Adam Aaron, our chairman and CEO, and Sean Goodman, our chief financial officer. Before I turn the webcast over to Adam, let me remind everyone that some of the comments made by management during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties, and other factors may cause actual results to differ materially from those that might be expressed today. Many of these risks and uncertainties are discussed in our most recent public filings, including our most recently filed 10A and 10Q. Several of the factors that will determine a company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned against relying on these statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events. On this webcast, we may reference non-GAAP financial measures, such as adjusted EBITDA, constant currency, free cash flow, operating cash burn, operating cash generated, among others. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the investor relations section of our website earlier this afternoon. After our prepared remarks, there will be a question and answer session. This afternoon's webcast is being recorded and a replay will be available in the investor relations section of our website at amctheaters.com later today. With that, I'll turn the call over to Adam. Thank you, John.

Good afternoon, everyone, and thank you for joining us today. It's almost impossible to contain our pride as the record-setting strength of of AMC's third quarter 2023 financial results. Fresh on the heels of our recent record Q2 results, we set the bar even higher in Q3. For both revenue and adjusted EBITDA, these were the single best third quarter results in AMC's entire 103-year history. By definition, Revenue and adjusted EBITDA beat last year's third quarter. They beat the third quarter of 2019, which was the last Q3 unaffected by the COVID-19 pandemic. And for that matter, they beat every third quarter results that AMC has ever reported. Once again, AMC exceeded consensus estimates and market expectations across the board. And we did so handily. AMC was literally in a different ballpark of accomplishment than many third-party observers anticipated. Sean will discuss these exceptional third quarter results in more detail during his prepared remarks. But suffice it to say, AMC is posting revenues exceeding $1.4 billion, adjusted EBITDA of $194 million, and positive net income of $12 million is a feat that has us all smiling in Leawood, Kansas. The entire quarter was rejuvenating for AMC, and July especially was meaningful as it was the second highest-grossing month in AMC's entire century-long history. Global attendance at AMC theaters tallied more than 73.5 million guests in the third quarter of 2023, up 38.4% over the third quarter of the prior year. It set a high watermark for quarterly attendance in the post-pandemic era. AMC's attendance in Q3 2023 was the highest since the fourth quarter of 2019. Moviegoers returned to AMC theaters in ever increasing numbers in the third quarter of 2023 in response to both our studio partners' efforts to increase the quantity and quality of new releases, combined with AMC's continuing commitment to enhancing the guest experience enjoyed at our theaters. This continuance of AMC's being on a glide path to recovery is notable for three key aspects. The industry-wide box office is finally showing some strength. Second, we ended the quarter with $730 million of cash, and we remain committed to ensuring that our cash reserves remain robust. And third, AMC's contribution per patron was up 30% from pre-pandemic norms. I want to repeat that number for emphasis. so that you all hear it and understand its significance. AMC's contribution per patron was up 30% from that of four years ago. As a result, AMC has demonstrated, at least for this quarter, that we can report a healthy amount of adjusted EBITDA or be free cash flow positive without a complete return of the box office to pre-pandemic levels. although pre-pandemic levels of box office would certainly be preferable. As for that box office, this was an inspiring quarter that saw the North American, the so-called domestic box office, surge to $2.7 billion, exceeding Q3 2022 by 38%, and achieving 95% of the pre-pandemic Q3 2019's box office. This is the closest our industry has come to quarterly box office levels that were considered normal in pre-pandemic times. As for our cash, the reason that AMC Odeon has been surviving this ravaging pandemic, happily staying away from the bankruptcy courts, and why big chains like Cineworld Regal or small chains like Alamo Drafthouse or ArcLight did not is because at AMC, we have been maniacal in building up our cash reserves. For those trying to understand how AMC successfully has been defying gravity these past three and a half years, having ample cash on hand is the secret sauce. It is having sufficient cash reserves that has enabled AMC's resilience heretofore And therefore, we will continue to seek equity capital when it appears smart to do so. As for our vastly improved contribution per patron, this is the real enduring lesson of AMC's third quarter results. Yes, we benefited from Barbenheimer and from Mission Impossible Dead Reckoning Part One, Sound of Freedom, and Indiana Jones, The Dial of Destiny, among other films. But if you look at attendance rather than box office dollars, the domestic industry attendance in Q3 was actually 16% down from the third quarter of 2019. And yet, AMC was more profitable. Attendance down, profits up. This came from the cumulative impact of all of the many actions we have taken especially over the past three and a half years, to change our fate. Those actions include, one, a focus on expense management in a challenging inflationary environment. Two, the pruning of our theater fleet by closing marginal theaters and opening successful new ones. Three, cooperatively renegotiating many theater rents with our theater landlords. Four, leading the industry with our having more customer pleasing premium large format screens than any of our competitors. Five, AMC's innovative moves to sell other things. Everything from Barbie themed pink Corvette models sold in our theaters to microwavable home popcorn sold on the shelves of Walmart. all of the many innovative marketing and pricing AMC initiatives which have caused us to achieve dramatic increases in revenues per patron, especially in our high-margin food and beverage activities, as well as number seven, capitalizing on the many scale advantages and opportunities that accrue to AMC by being the largest movie theater company in the U.S., in Europe, and globally. Now, I'll pass this webcast over to Sean to provide more details on the financial results of Q3, after which I'll return to talk about some of our ongoing initiatives and AMC's thoughts about the future.