AMC Entertainment Holdings, Inc.

Greetings and welcome to the AMC Entertainment Holdings Inc. First Quarter of 2024 Earnings Webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, John Merriweather, Vice President, Capital Markets and IR. Please go ahead, sir.

Thank you, Joe. Good afternoon. I'd like to welcome everyone to AMC's first quarter 2024 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 10Q and 10K. Several of the factors that will determine the 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, 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, one and all, and thank you for joining us today. Against the backdrop of an industry box office that was hampered by Hollywood's strike-induced production delays, AMC once again outperformed. We exceeded Wall Street expectations for total revenues, adjusted EBITDA, net income, and diluted earnings per share. It was no surprise to most astute observers that the number of major film releases in the first quarter of 2024 would be greatly reduced because the production delays caused by the five months long actors and writers strikes of 2023 in Hollywood. Indeed, we saw that one major studio had its first quarter domestic box office revenues decreased by an astounding 98% compared to the first quarter of 2023. That studio's decline was not because of some strategic shift to streaming or a disinterest by consumers and going to movie theaters. It was solely because they were not able to release new films into the market due to the actors and writers' strikes of midsummer last year. However, at AMC, we were heartened by several important events in the first quarter. that moviegoing bounced back in March, which was a considerably stronger month than January or February. Second, that our company's intensive review of the movies coming out later in 2024, 2025, and 2026 suggests, in our view, that very good times are ahead for the movie theater industry. And third, that our company, AMC Entertainment, performed so well in Q1, increasing our market share and continuing to become a more potent and more efficient operator. Notwithstanding a 6% decline in the quarter's North American box office compared to 2023, AMC's total revenue remained broadly in line with the prior year. And our per patron revenue and per patron profit continued along their stellar growth trajectory with all-time first quarter records achieved on these two metrics in our domestic business. At AMC in the quarter, our total revenue per patron was almost 36% above the pre-pandemic level in Q1 of 2019. And even more impressive is that our contribution margin per patron defined as total revenue, less film exhibition costs, and less food and beverage costs divided by the number of patrons was almost 44% above pre-pandemic Q1 of 2019. These achievements are thanks to our relentless focus on enhancing the guest experience at our theaters while at the same time driving efficiency in our operations. Through our resilience, resolve, creativity, and flexibility, AMC continues to adeptly navigate through changing and challenging circumstances. Our surging revenues per patron and surging profit per patron numbers are why at AMC we believe that there is now a path for AMC to achieve the same levels of EBITDA that we enjoyed pre-pandemic, even at lower levels of revenue. What's more, even when the industry revenue does fully recover, we would then expect to be able to achieve substantially higher levels of EBITDA than we did in the past. Moviegoer sentiment is clear. Guests want to see movies on a huge silver screen, and they are consistently willing to pay more for the best possible experience. That certainly favors AMC, as we have more premium large format screens, namely IMAX, Dolby Cinema, and Prime, than any other cinema operator in the world. Consumers are also paying up for innovative food and beverage offerings, and AMC continues to outsell all our major competitors in F&B. All moviegoers also are now buying movie-themed merchandise from us online and at our concession stands in quantities that we have never before seen. Enough said from me about the first quarter of 2024. Because my focus is not on a strike that impacted January and February movie releases. It is instead on two other things. First, it's not the movies that were not released in January and February. It is instead the movie slate that is coming over the next two years to two and a half years. I am more optimistic now about the future of movie theaters than I have ever been. And that's because of the movie slate that's coming, especially towards the end of 2024, in 2025, and again in the first half of 26, which hold, in my opinion, great promise. Second, I'm paying great attention to our cash reserves. I've said over and over again on these calls and webcasts that cash is king and that the smartest thing AMC has ever done since COVID hit in 2020 was to make sure that our cash reserves at AMC were robust while other theater operators fell by the wayside. To that end, it is so energizing and so reassuring that we had $624 million of unrestricted cash at the end of Q1 and that AMC has raised yet another $124.1 million of equity capital since March 31. With cash in the bank, we are better prepared to weather any storm. But fortunately, storms do end. As a result, we see the box office turning an important corner later this year and again in full year 2025. This is not just AMC's view. Having recently returned from our industry's largest and most important annual gathering, CinemaCon, the positive energy in the air was palpable. One studio after another confirmed that film production was once again in full motion, that they were eager to bring more titles to the silver screen and that the value of theatrical exhibition has never been more evident. I'm not going to regale you on this webcast with all the titles of the cavalcade of big movies that are coming, but they are indeed coming. And it all starts in just a few months with a great slate of movies exclusively for theatrical exhibition. They include new characters and captivating storylines, along with familiar faces and popular franchises. When I look at year-end 2024, and especially at full year 2025, and I see an industry box office, I don't think I should say yet, hallelujah, let the good times roll. But I can finally say with confidence, hallelujah, let the significantly better times roll. Things are looking up as we look ahead. I'll now pass this webcast over to Sean to provide more details on our financial results just released, after which I'll return to update you on some key initiatives before taking questions from our self-signed analysts and from our retail shareholders.