The financial viability of AMC Theatres appears at risk after executives warned investors of "substantial doubt" about the company's ability to continue through the coronavirus pandemic.
With its screens shuttered for months because of the coronavirus pandemic, the Kansas City-based chain has lost practically all revenue. The chain previewed its first quarter earnings Tuesday morning, predicting a net quarterly loss of $2.1 billion to $2.4 billion.
In an SEC filing, the company said it could not be certain it would have access to enough capital to continue paying its bills through the pandemic. Private sector loans or government relief might be inadequate, the company said, or come with onerous terms.
"Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time," the company wrote.
In late March, AMC furloughed every corporate employee in Leawood, including CEO Adam Aron. All staffers had their working hours and pay cut with some receiving no pay.
AMC employs some 400 people at its corporate headquarters, according to the Kansas City Area Development Council.
The company plans to reopen theaters this summer, it told investors. But if that timeline does not pan out, it will require more funding to stay afloat. In April, AMC announced plans to raise $500 million in a private debt offering as speculation of a possible bankruptcy reorganization swirled.
As of April 30, the company reported a cash balance of $718.3 million.
Executives believed that pent-up demand would help theaters once stay-home orders were lifted across the country. But it's unclear how the worsening national economy will impact consumer spending and how safe moviegoers will feel with social distancing measures still widely recommended.
"The COVID-19 pandemic has had and will continue to have a significant and adverse impact on our business," AMC wrote.
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