AMC CEO Sees “Serious Liquidity Issues” Even As Box Office Booms; “The Dumbest Thing We Could Ever Do In This Industry Is Run Out Of Cash”

deadline.com:

AMC Entertainment’s CEO Adam Aron warned that the chain risks financial peril if it can’t raise fresh cash as needed while exhibition continues its post-Covid recovery amid Hollywood strikes.

The world’s biggest move chain saw second-quarter earnings surge, sales jump and things looked great in movieland with the three months ended in June and the current month of July setting records on key metrics.

But the numbers mask an AMC skirmish with shareholders that turned into a messy, ongoing Delaware Chancery Court case requiring a judge’s approval for the company to sell equity to raise cash.

Yes, Aron said he’s heartened at AMC’s liquidity of $643 at the end of June, but retail shareholders, who own most of the company’s stock, “are underestimating the potential for cash burn in seasonally weaker winter months, especially given the uncertainties of the actors’ and writers’ strikes, since no one knows when they will end.” “We continue to seek the flexibility to raise fresh capital on the best possible terms…to avoid the pitfalls that sank others in our industry,” he said on a call with investors after market close, reiterating a warning from last month. “The dumbest thing we could ever do in this industry is to run out of cash,” he added.