AMC Entertainment Holdings, Inc.

Greetings and welcome to the AMC Entertainment Holdings third quarter 2024 earnings webcast. At this time, all participants are in a listen-only mode. The question and answer session will follow the presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the call over to John Merriweather, Vice President, Capital Markets and Investor Relations. Thank you. You may begin.

Thank you, and good afternoon, everyone. I'd like to welcome you to AMC's third 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 statement, 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 refer to non-GAAP financial measures, such as adjusted EBITDA, constant currency, contribution margin, 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, and thank you to everyone for joining us today. What a difference a quarter makes. As most of you know all too well, The industry-wide box office late last year, and for several months at the start of this year, was severely affected by the prolonged Hollywood strikes of 2023. Even so, when we looked ahead, knowing the movie titles that were scheduled for release, we saw better times ahead. So, earlier this year, we started saying that we all would finally get to enjoy a surge in moviegoing in the second half of 2024, and that is exactly what happened. In the third quarter of 2024, the Domestic Industry Box Office set a third quarter post-pandemic high of $2.7 billion, up 37% from the second quarter of 2024. It slightly exceeded last year's Barbenheimer-dominated third quarter, and it came within 4% of the pre-pandemic domestic box office of Q3 of 2019. The box office's return to life became evident on June 14th of this year with the release of Disney Pixar's record-breaking Inside Out 2, now the highest grossing animated film of all time, and thus far the top grossing movie of 2024, and the fourth highest grossing movie since 2019. The third quarter followed Inside Out 2's lead-in, fueled by blockbusters like Disney's Deadpool and Wolverine, Universal's Despicable Me 4 and Twisters, and Warner Brothers' Beetlejuice Beetlejuice, among many other movie titles from a multitude of studios and distributors. To illustrate the magnitude of the box office improvement since June 14th of this year, Let's compare the first five and a half months of 2024 to the next three and a half months. On a per day basis, the domestic entity-wide box office was 82% stronger between mid-June and end September than it was in 2024 prior to June 14. And that strengthened the industry-wide box office translated to strong performance by AMC Entertainment in the third quarter of 2024. Solidifying our financial metrics, our net loss in the third quarter of 2024 was narrowed by fully 37% compared to the loss in the second quarter of 2024. What's more, in this third quarter, AMC's total revenues were 31% stronger than our revenues of Q2 2024. During the third quarter of 2024, we are proud that AMC achieved a new record for our third quarter admissions revenue per patron. And we're even happier to report that we set an all-time record for any quarter ever for our food and beverage revenues per patron. AMC's adjusted EBITDA was four times stronger in Q3 of 24 than that of Q2 of 2024, four times stronger. Indeed, AMC's adjusted EBITDA posted in the third quarter of 2024 was the second best EBITDA performance of any third quarter in AMC's 104-year history, second only to last year's third quarter, of 2023. It's especially encouraging that because we've worked so hard to put in place operational and financial efficiencies that AMC realized adjusted EBITDA in this just completed third quarter that was in line with pre-pandemic Q3 of 2019, five years back, even though our attendance in the just completed quarter was a full 25% lower than it was in that third quarter of 2019 pre-pandemic. Of enormous importance, as we look ahead for the next two years, looking forward, not looking backwards, we believe that the box office will continue on its recent marked rise. There's an impressive Q4 2024 movie slate about to be released into our theaters in the coming weeks, highlighted by two beloved blockbuster Disney storylines, Mufasa the Lion King and Moana 2. Adding to the excitement is Universal's highly anticipated film Wicked, the adaptation of the 21 year running second most successful Broadway musical ever. Some people in the know are telling me that they think Moana 2 could eclipse and outshine even the success of the Inside Out 2, and early critics' reviews of Wicked are stellar. Wicked is already being described as, quote, a masterpiece, unquote. Notwithstanding the success of Taylor Swift's record-breaking year's tour concert movie, which was a top movie in last year's fourth quarter, as well as Beyonce's Renaissance film, those of which are our very own creations here at AMC, we anticipate that the Q4 2024 Domestic Box Office will emphatically surpass last year's Q4 results. And that's just the beginning. It is AMC's belief that the 2025 Domestic Industry Box Office should easily surpass that of 2024. with bankable titles hitting our theaters next year, such as Paramount's Mission Impossible 8, Universal's Jurassic World 4, and Disney's Captain America, Snow White, the new Thunderbolts, and, of course, Avatar 3 as just some of the big movies coming next year. And as for 2026, 2026 could make 2025 look small. We currently believe that the domestic box office will be bigger still two years out. Movie theater ticket sales should continue to build, led by some truly blockbuster releases, including the next chapters of the Avengers, Star Wars, Batman, Super Mario Brothers, and Toy Story franchises lighting up our huge silver screens at AMC in the United States, Odeon in Europe, and AMC cinemas in the Middle East. The buzz and excitement surrounding theatrically released movies over the next two years is nothing less than palpable. We believe that as the industry's largest player, and an increasingly efficient one at that, AMC is well poised to benefit from that highly likely increase in movie going. The other accomplishment of vital importance by AMC in the third quarter of 2024 was our continuing to successfully strengthen our balance sheet. As you know, in the quarter, we announced that we extended up to $2.4 billion of our long-term debt maturities from 2026 to 2020-29 and 2030. That is a big step forward for AMC. So, too, is that in 2024 year to date, we paid down some $345 million of debt and raised some $250 million gross proceeds of equity. This all translated to ending the third quarter with some $527 million of cash on hand. I have said many times that cash is king and that AMC must maintain ample cash reserves. Similarly, Paying close attention to our balance sheet has been a mandatory priority at AMC Entertainment. These are among the major reasons why AMC has survived these past four and a half years at a time, by contrast, when so many of our competitors failed. As we move forward, we will continue to take actions as needed to keep our cash reserves robust and to lessen our debt. Before I turn the call over to Sean, I've been asked by many of our retail shareholders to give you an update on our AMC Perfectly Popcorn home offerings. So here goes. We could not be more pleased with the response both from retailers and by consumers to our ready-to-eat and microwave lines of popcorn. As a recall, It was launched exclusively at Walmart in 2023 on Walmart.com and at more than 2,500 Walmart stores for our ready-to-eat popcorn and at 500 Walmart stores for our microwave corn. In 2024, this year, we successfully added Kroger, Publix, Meijer, and Amazon.com online, bringing our store count now to well more than 6,000 locations selling AMC Perfectly popcorn. For 2025, Walmart and Kroger have advised us that they are adding our microwave line in up to 4,000 or more of their stores on top of where it was carried previously. We also added Hy-Vee. and associated wholesale grocers, which supply several dozen regional and smaller grocery chains. As a result, we would expect to see AMC Perfectly Popcorn on the shelves of as many as 10,000 or more retail locations by early or mid-year 2025. That's about four times where it was in mid-2023. Our distribution footprint is expanding so rapidly because sales of our home-cut popcorn are brisk. And it is AMC Purple Leaf popcorn that is actually driving the category growth. Successfully launching a new packaged goods food product for the home is not at all an easy task. Most people who try fail. And as I just said, At AMC, we could not be more pleased about where we are only 18 months after initial product launch. With that, I'll now turn the call over to Sean Goodman, our Executive VP and Chief Financial Officer, to take you through the third quarter in more detail. And then I'll return afterwards for a very important update on our plans for a growth trajectory ahead.