Thanks to a last-end of summer with The Meg, Crazy Rich Asians, and Mission: Impossible – Fallout as well as a robust beginning of fall with The Nun, AMC saw a record third quarter in regards to U.S. attendance hitting 58.9M patrons worldwide, +8.6% from 3Q 2017 and total global revenues increasing $1.22 billion for the period ending Sept. 30, +3.6% versus from the same frame a year ago which counted $1.178B.
Worldwide admissions revenues were nearly unchanged at $751.4 million compared to $753.5 million for the same period a year ago. Aside from great product in theaters, there was a decline in the U.S. average ticket price of 6.6% which help boost revenues.
Food and beverage revenues increased 6.5% to $384.8 million, compared to $361.4 million for the three months ended September 30, 2017, again primarily driven by the increased U.S. attendance.
However, the globe’s biggest theater chain incurred a loss before income taxes which swelled from $60.3M in in 3Q17 to $89.3M this 3Q. Net loss increased $57.7M to $100.4M compared to net loss of $42.7 million for the three months ended September 30, 2017. Included in the loss before income taxes for the third quarter ended September 30, 2018 was $54.1 million of non-cash expense as a result of an increase in fair value of our new derivative liability related to the conversion feature for the Silver Lake convertible notes due 2024, which will be marked to market, quarterly, going forward. Also included were: a $28.9M gain on the sale of AMC’s remaining investment in National CineMedia, LLC (“NCM”), a $30.1M gain on the Screenvision merger, $14.3 million increase related to merger and acquisition costs and $8.1 million increase in general and administrative expenses related to bonus and stock-based compensation expense due to significantly improved operating performance.
Total Adjusted EBITDA(1) decreased 3.4% to $142.4 million compared to $147.4 million for the three months ended September 30, 2017. U.S. markets Adjusted EBITDA for the third quarter declined 2.4% to $105.0 million compared to $107.6 million in the same period last year. International Adjusted EBITDA for the third quarter declined 6.0% to $37.4 million compared to $39.8 million a year ago. Adjusted EBITDA was negatively impacted by approximately $6.9 million due to the launch of the AMC Stubs A-List loyalty tier and is in-line with expectations.
Adam Aron, CEO and President of AMC, said, “We are so thoroughly encouraged by AMC’s performance in the third quarter of 2018, both because of the $142.4 million of Adjusted EBITDA we generated and the enormous strategic advances our company made in the quarter. We performed significantly ahead of our expectations going into the quarter, and when combined with our stellar second quarter results, we are now highly confident in saying that from an Adjusted EBITDA perspective, full year 2018 will be the best-ever year in AMC’s 98-year history.”
Aron added, “We are especially excited by the extraordinary consumer response to our AMC Stubs loyalty program, now with 17 million member-households in the United States. AMC Stubs members make up more than 40% of AMC’s entire U.S. clientele, and as a result we are now fortunate to have a marketer’s dream, a customer database that is incredibly rich with moviegoing habits and histories. We are even more thrilled by the game changing nature of our new A-List VIP tier of AMC Stubs, which is nothing short of a runaway success for AMC. Launched on June 26 of this year, A-List had some 388,000 enrolled members by quarter-end. In the next couple of days, not even six weeks later, we will cross 500,000 members. That already translates to $120 million of annual recurring revenue for movie admission ticket buying at AMC theatres, even before considering the continued growth in membership and revenue that is surely ahead of us. What’s more, thanks to our intelligent stewardship and management of these programs, we find ourselves in the sweet spot of both offering great value to our guests and running a program that is heavily incremental and which should prove to be intriguingly profitable for AMC. Thanks to all of our compelling marketing initiatives, in 2018 we saw the highest third quarter attendance levels ever for AMC.”
Aron concluded, “The third quarter of 2018 was also transformational for AMC as we attracted a new $600 million strategic investment in AMC from private equity giant Silver Lake, the global leader in technology investing, in the form of 6-year 2.95% convertible notes. The proceeds of these notes allowed us to repurchase approximately 24.1 million Class B Common shares from Wanda and issue a $1.55 per share special dividend to all shareholders. Silver Lake, who will add great insight as it enters our Boardroom, believes in the inherent value of AMC now, and in the likelihood of AMC’s success going forward. With a particularly strong industry box office now expected for both 2018 and 2019, and with our company very well positioned as the global leader among theatre operators, the future for AMC looks brighter than ever.”