Q3 2023 AMC Entertainment Holdings Inc Earnings Call
Good afternoon, ladies and gentlemen.
Kim to the AMC Entertainment first quarter 2023 earnings conference call at this time all lines are in a listen only mode.
In the presentation, we will conduct a question and answer session.
Instructions will be provided at that time for you to queue up for a question.
Anyone has any difficulties hearing the conference please press.
As far as there are no for operator assistance at any time.
I would now like to turn the conference over to John Merriwether. Please go ahead Sir.
Thank you Jenny.
Good afternoon, I'd like to welcome everyone to Amc's third quarter 2023 earnings webcast.
With me. This afternoon is Adam Aron, 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 10-K and 10-Q.
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 operating cash burn operating cash generated 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.
Afternoons webcast is being recorded and a replay will be available in the Investor Relations section of our website at AMC theatres to comp Dot com later today.
With that I'll turn the call over to Ed.
Thank you John and good afternoon, everyone and thank you for joining us today.
It's almost impossible to contain our pride as the record selling strength of Amc's third quarter 2023 financial results.
First on the heels of our recent record Q2 results, we set the bar even higher in Q3.
For both revenue and adjusted EBITDA.
These were the single best third quarter results in Amcs entire.
103 year history.
By definition revenue and adjusted EBITDA beat last year's third quarter.
For the third quarter of 2019, which was the last Q3 unaffected by the COVID-19 pandemic and for that matter. They beat every third quarter results that AMC has ever reported.
Once again AMC exceeded consensus estimates.
Market expectations across the board and.
And we did so handily.
<unk> was literally in a different ballpark of accomplishment there.
And many third party observers anticipated.
Sean will discuss these exceptional third quarter results in more detail during his prepared remarks.
But suffice it to say.
Amc's posting revenues exceeding $1 4 billion.
Adjusted EBITDA of $194 million and positive net income of $12 million is a feat that has us all smiling, Italy with Kansas.
The entire quarter was rejuvenating for AMC.
In July, especially was meaningful.
As it was the second highest grossing month in <unk>.
Amcs entire century long history.
For the third quarter of the prior year.
It set a high watermark for quarterly attendance in the post pandemic era AMC.
AMC is attendance in Q3 2023.
Was the highest since the fourth quarter of 2019.
Moviegoers returned to AMC theatres in ever increasing numbers.
In the third quarter of 2023 in response to both our studio partners efforts to increase the quantity and quality of new releases.
Combined with Amc's continuing commitment to.
Two enhancing the guest experience enjoyed at our theaters.
This continuance of Amc's being on a glide path to recovery.
Is notable for three key aspects.
First.
The industry wide box office is finally, showing some strength.
Second we ended the quarter with $730 million of cash.
And we remain committed to ensure that our cash reserves remain robust.
Third amc's contribution per patron.
Was up 30% from peak prepaid debit norms.
I want to repeat that number for emphasis.
So that you all here in <unk>.
<unk> and its significance.
Amc's contribution per patron.
Was up 30%.
From that are four years ago.
As a result.
<unk> has demonstrated at least for this quarter that we can report a healthy amount of adjusted EBITDA or free cash flow positive without a complete return to the box office, so pre pandemic levels.
The pre pandemic level the box office.
It would certainly be preferable.
As for that box office.
This was an inspiring quarter.
That's all the North American the so called domestic box office surge.
<unk>.
Two 7 billion.
Exceeding Q3, 2022 by 38% and achieving 95% of the prepaid debit Q3 2019 as box office.
This is the closest our industry has come.
The quarterly box office levels that were considered normal.
In prepaid debit tons.
As for our cash.
The reason that AMC Odeon has been surviving this ravaging pandemic.
Stepping away from the bankruptcy courts.
Big change like Cineworld, Regal or small chains, like Alamo Drafthouse or arc light did not.
Is because at AMC, we have been maniacal it.
Building up our cash reserves.
For those trying to understand how AMC successfully has been defying gravity these past three and a half years.
Having ample cash on hand is the secret sauce.
It is having sufficient cash reserves.
That has enabled amc's resilience here to for.
And therefore, we will continue to seek equity capital.
When it appears smart to do so.
As for our vastly improved contribution per patron.
This is the real enduring lesson.
Of Amc's third quarter results.
Yes, we benefited from Barbara Rimer and submission possible that record required one sounded freedom in Indiana Jones, the dollar destiny among other films.
But if you look at attendance rather in box office dollars.
The domestic industry attendance in Q3 was actually 16% down.
From the third quarter of 2019.
And yet.
AMC was more profitable.
Attendance down profits up.
This came from the cumulative impact of all of the many actions we have taken.
Specially over the past three and a half years to change our fate.
Those actions include.
One.
Our focus on expense management in a challenging inflationary environment.
To the.
The pruning of our theater fleet.
By closing marginal theaters and opening successful new lows.
Three.
Cooperatively renegotiating, many theater rents with our theater landlords.
Sure.
Leading the industry with our having more customer pleasing premium large format screens than any of our competitors.
Five amc's innovative moves to sell other things everything from Barbie seeing pink corvette models sold in our theaters. So microwavable home popcorn sold on the shelves of Walmart.
Six <unk>.
All of the many innovative marketing and pricing AMC initiatives, which have caused us to achieve dramatic increases in revenues per patron.
Especially in our high margin food and beverage activities as well as number seven.
Capitalizing on the many scale advantages and opportunities that accrue to AMC.
By being the largest movie theater company in the U S in Europe and globally.
Now I'll pass this webcast over to Sean to provide more details on the financial results of Q3, after which I'll return to talk about some of our ongoing initiatives and AMC slots.
The future Sean Thank you Adam and thank you to everyone for joining us this afternoon.
As Adam just said in the third quarter, we achieved two notable financial milestones.
One our best revenue and adjusted EBITDA since pre pandemic 2019 and to the highest revenue and the highest adjusted EBITDA for any third quarter in Amc's entire 103 year history.
Of course. This also means that we beat pre pandemic Q3, 2019, adjusted EBITDA and we did this.
A resounding 24%.
And this is a remarkable achievement because our attendance was nearly 16% lower than in Q3 of 2019.
Yet despite having a $13 5 million fewer guests, we grew revenue by six 8% or $89 million and we.
We grew adjusted EBITDA by 24% or $37 million.
Okay.
This result, clearly demonstrates the success of the actions that we have taken over the last four years to really elevate the guest experience optimize our theater fleet manage our expenses and improve our efficiency and overall profitability metrics. These results clearly illustrate our ability to deliver.
Our solid financial outcomes, even when the industry box office and attendance for below pre pandemic levels.
With a third quarter North American box office of $2 7 billion, which is 38% above the prior year. We grew revenue by 45, 2% to $1 4 billion.
We grew adjusted EBITDA by $206 6 million.
Two $193 $7 million.
And we grew net cash provided by operating activities by $299 $5 million to a positive $65 $9 million.
With this quarter's results, we've now extended our unbroken string of positive adjusted EBITDA quarters to four and for the first time since 2018, we have generated a second consecutive quarter of positive net earnings and positive earnings per share.
Now I'll turn to the North American business.
Total revenue for the quarter increased by 41, 2% compared to Q3 of 2022. This was driven by an attendance increases of 34, 4%, which was helped by an increase in our market share.
Admissions revenue per patron increased by four 8% and food and beverage food and beverage revenue per patron increased by four 1%.
That the revenue generated per patron for this quarter was 31% above pre pandemic Q3 of 2019 and the contribution dollars per patron, which is defined as the revenue per patron less film exhibition and food and beverage costs was 35, 9%.
Above Q3 of 2019.
In the international business on a constant currency basis total revenue increased by approximately 50% five zero compared to Q3 of 2022. This was driven by an attendance increase of 48, 5% admissions revenue per patron decrease of 10, 8%.
And food and beverage revenue per patron increase of eight 5%.
Note that international revenue per patron and contribution dollars per patron for the quarter were 18, 4% about pre pandemic Q3 of 2019 as measured in constant currency.
Moving to cash flow and the balance sheet.
We ended the quarter with cash and cash equivalents of $729 $7 million.
Operating cash generated a non-GAAP measure representing cash from operating activities after deducting capital expenditures and before both debt servicing costs and deferred rent payback was a positive $109 million an improvement of 288 million.
Compared to Q3 of 2022.
Capital expenditures net of landlord contributions was $49 8 million for the quarter. This brings our year to date net capex to 137 5 million.
Based on our expected Capex spend in Q4, we now anticipate net capex for 2023 to be in the range of $175 million to $225 million.
During the third quarter, we continued to actively manage our theater portfolio. We added one new theater and we closed three.
This brings the total number of locations that we've closed since the pandemic began to 156 and the total new locations opened to <unk> 57 for a net reduction of 99 locations. This portfolio rationalization together with ongoing landlord negotiations.
Has unequivocally resulted in a more profitable theater portfolio.
Just as an illustration of our effective rent expense management, it's worth noting that Q3 2023 rail was five 6% below the same period in 2019 in constant currency. This despite the significant CPI increases.
Over the last four years.
Going forward, while we continue to invest in our business and the guest experience our top two capital allocation priorities must remain one to ensure that we have sufficient liquidity to manage through our recovery period and to strengthen our balance sheet.
Now we've made considerable progress in these two areas during the third quarter, we successfully raised $325 $5 million of gross equity capital, we repurchased $24 million of debt as an average discount of 28%.
And we also repaid $22 3 million of deferred rich <unk>.
The deferred rent balance at the end of Q3 was $74 $2 million and we plan to reduce this balance by another $20 million by the end of this year.
So year to date 2023 year to date, we have now raised $550 million of gross equity capital we below at the principal value of our debt by $289 million through debt repurchases or exchanges update for equity Alan we've repaid $83 million of deferred rent.
All told we have reduced our debt and deferred rent liabilities by $372 million, thus far in 2023, and a total of $764 million since the beginning of 2022.
In summary, our results for this quarter clearly show the positive impact of the significant enhancements that we have made and will continue to make to grow and to strengthen the business.
As we navigate through this recovery phase, which may be extended by the Hollywood strikes.
Primary financial priority will be to ensure ample liquidity, while concurrently continuing to make progress reducing debt and fortifying our balance sheet of course, we will also continue to pursue growth initiatives opportunistically as they make sense.
We believe that this approach overall will best position us to thrive in the future.
And now I'll hand, the webcast backup to Adam Thank you Sean.
The successes of 2023.
And the third quarter in particular.
Clearly illustrated the lower and power of theatrical exhibition.
Movies in theaters on the giant screen.
<unk>.
Before we move to questions from our investors and equity analysts I.
I'd like to quickly update you on six specific topics.
First purchase us.
You may recall.
That.
We started getting serious about merchandise sales at our theaters and on our website as a result of specific shareholder suggestions.
That came in from our retail investors.
We embraced the idea thoroughly.
Clearly it has become a pleasant success story.
It was literally a non existent business for AMC in 2021.
In 2022, we grossed about $10 million in merchandise sales.
By year end 2023.
It will be more than a $50 million revenue source for us this year.
Way to go shareholders keep those good ideas coming in.
Second.
Popcorn in the home.
Our lines of ready to eat and microwavable AMC perfectly popcorn.
Been a huge hit our six month exclusive deal with Walmart stores, and Walmart Dot com proves to us prove the Walmart improves the other retailers that consumers find amc's product offering in this area to be compelling.
So in addition to continuing with Walmart I am pleased.
Used to announce today that over the next two months, we will be rolling out AMC perfectly popcorn to Kroger stores.
Including there are approximately one dozen brands of supermarkets around the country.
And before Christmas, we expected replacement on the shelves of all of Publix supermarkets as well.
And if all goes according to plan by Black Friday of this month the day after Thanksgiving.
AMC perfectly popcorn will be available nationwide on Amazon dot com as well.
Third.
Given our success in branding our popcorn.
In November and December this month and next.
We also will be introducing a new line of AMC conceived and branded gourmet chocolate candies.
AMC cinema suites.
Our first Skus will be chocolate covered pretzel chocolate covered <unk> chocolate covered peanuts and chocolate covered raisins.
Essentially our learning at this company in this area.
Is that just about anything taste, a whole lot better.
If it strengthens.
Amc's strategy here will be to offer a top of the line quality tree with some of the finest chocolate bid and lots of it.
Even though ours will be a gourmet line.
We will sell at the same price as mass market brands.
That's something that AMC can do.
Given the huge demand for candy products that exists within a movie theater environment.
Without a requirement for us to run up massive distribution or <unk>.
Marketing costs at least initially.
<unk> suites will only be sold at AMC theaters.
And of course in addition to carrying our own line of AMC service suites will continue to stock on the shelves at our theaters.
The name brand candy products that are there today.
Fourth.
I would like to address.
The situation that our industry has encountered.
For almost six months now do.
Due to the writers and actors strikes.
Going on for almost half of the year.
The short term impacts of the writers and actors strikes.
Will it cause additional and needless challenges for AMC in 2024.
Projects will get delayed from 2024 into future periods.
Without taking sides as to who has the blame.
With this labor stoppage.
Or how the labor challenges should be resolved in negotiation.
We strongly encourage all the parties involved to come to the negotiating table with the intent of reaching an agreement immediately.
There has been and will be much collateral damage.
These lengthy work stoppages.
For the benefit of all involved in the movie ecosystem.
AMC believes that this month's long disharmony.
Needs to come to an end now.
Whether one thinks it was studio executive or have a union member in the creative community.
It is ever so important that everyone in Hollywood returns to the task of creating World class Entertainment that.
It is admired and greatly enjoyed the rollover.
Fifth.
I'd like to quickly comment on our laser projection upgrade.
It is categorically accurate to say that the future for AMC continues to get brighter.
Thanks to our ongoing transition to laser projectors at our theaters.
The increase on screen light levels by 50% to 100% as a result, the images on the silver screen are getting sharper and brighter.
As every week passes.
By the end of 2023 a.
AMC will have converted more than 37% of our auditoriums across the United States to laser projection.
Not only does this deliver improved picture contrast, more vivid color and greater picture brightness for our guests.
This is the biggest single Green initiative ever undertaken by AMC.
Laser projection is environmentally friendly.
Because it eliminates the problem.
Of having used xenon bulbs.
And it brings a significant reduction.
Two our energy consumption efforts.
As we show movies.
Moviegoers.
And finally.
Topics six.
This is not the only thing we've been talking about talking about around here in the last five months.
Taylor Swift.
Taylor Swift.
Taylor Swift.
What can we say of our gratitude the Taylor.
For entrusting AMC.
The distributor eras tour concert movie to some 100 countries across the planet.
As you likely know.
With ticket sales expected to hover around the quarter of $1 billion.
The year is tour is already the highest grossing concert film in history.
And at the domestic box office Taylor Swift the year store was the second highest grossing movie of all time for any and all of genres to be launched during the month of October.
That's our role as distributor as for our role as exhibitor.
<unk> market share of ticket sales sold for Taylor Swift the year's tour.
It was unusually high.
So both as distributor and exhibitor AMC.
AMC benefited handsomely, both reputation Lee and financially.
Furthermore, having taken on this project.
And that benefit will not be a one time thing.
As we announced just a few weeks ago AMC theatres distribution is following its success with Taylor Swift eras tour with a concert film release of <unk> Renaissance World Tour.
Renaissance Renaissance are filled by Beyonce will be released globally on December one.
We are so privileged to be working with artists.
Taylor Swift beyond say.
As they bring their creative vision to their fans and we do so too.
In the United States and around the World.
For what it is worth and working with two of the most admired pop stars Blue planet.
We already have touched lightning.
All of us at AMC or now passionate fifties.
And our proudly in the beehive.
We're optimistic though.
This will lead to much more ahead.
This is not just a onetime thing in 2023.
We believe that we will have several more concert film products in 24, 2024 and 2025.
We intend to be working with some of the most known and most loved musical artist the world has ever known.
For those of you don't think that this will prove to be transformational for AMC watch this space.
If as and when more artist come onboard.
There is significant incremental profitability ahead for AMC from are going down this sizable Banfield road.
If one were to think back to March of 2020.
If I had to summarize our view as we sit here today.
Go back to a time when all theaters were shut.
And think about what has transpired.
You'll note that the recovery of the movie industry out of the movie theater industry has not been a straight line.
Indeed to the contrary, it's been a wild ride with pauses and turns.
No one would have predicted.
Through it all though.
AMC has clearly emerged as the leader of the pack.
And we've done so backed by an army.
Enthusiastic shareholders.
Looking ahead.
There likely will be challenges for us to Congress still.
A prolonged actors stripe and rising interest rates are not helpful.
We still have significant debt to pay down or to refinance.
Although thats mitigated somewhat because most but not all of our current maturities do not start.
Before 2026.
But looking again.
Sure.
The glass half empty.
Many of our shareholders are incensed.
Truly incentives.
Stock market practices that they do not trust.
If that's not enough there is war in Europe.
We're in the Middle East.
The list of problems, we dealt with it goes on.
On and on.
But if there ever was a time.
To look past the immediately foreseeable challenges of the day.
For AMC it might be right now.
Right after reporting Amc's third quarter 2023 earnings.
It was after all the single best third quarter for AMC in.
Some 100.
In three years.
These were stellar results.
To our shareholders listening in today.
This webcast.
We hope you share our pride in.
And the progress that's being made by AMC.
This after all is your company.
And we benefit in so many ways.
12 of your enthusiasm.
And from your passion.
For AMC.
With thought with that Sean, let's now move to questions from our shareholders and industry analysts and as a change of pace.
Let's start with questions from industry analysts.
And our legal position and then we will take questions from our shareholders batting clean up so to speak as we close out today's call.
Jenny can you.
<unk> instructions.
Thank you ladies and gentlemen, we will now begin the question and answer session.
Have a question. Please press the star followed by the one on you touched on filing you will you Richie ton Trump technology your request.
Questions will be taken in the order received could you wish to cancel your request.
That's the star followed by the tail.
We are using a speaker phone please lift the handset before pressing any change.
Your first question is from Tom <unk>.
Please ask your question.
Hi, Adam and Sean how are you guys doing nice quarter congrats.
Congrats on that.
Thank you Tasha and to answer your question, we are doing well because it was a nice quarter.
Thanks Cindy.
So I have a couple of questions first of all I am wondering if you could talk a little bit more quantitatively in terms of tailored Taylor Swift in terms of the <unk>.
Distribution versus just exhibiting this film.
And same for beyond say, if you could talk about that quantitatively.
What's the benefit of of distributing that in terms of.
Market share or in terms of.
Film rent and if not that then.
It'll be far qualitatively about that if you can.
Sure, let's start quantitatively <unk>.
We know to the Penny I mean literally to the penny.
It's sizable but those are set stats that we're going to unveil in the fourth quarter call not in the third quarter call.
For what it's worth.
We did very well.
<unk>.
We're going to make a handsome profit.
From having.
Ah facilitated.
Was in July only in stadium concert tour getting it converted to film and getting it in theaters quickly.
Okay.
<unk>.
As I said, we know the numbers, we know unfold, we review them all as daily with.
The entourage that surrounds Taylor.
We're all smiling, they're smiling worthwhile.
Our market share is abnormally high of the tickets sold.
And I think that in part is because we've been so committed to the project, it's pretty hard to pick up a newspaper anywhere in the world where to go on the Internet and look at news and not see the AMC name connected to Taylor Swift.
The answer is right behind it.
As you know Taylor's film.
Gross.
Yeah.
And four weeks grows to $165 million domestically at about 240 something million dollars.
I'm, sorry $220 million globally.
It's still going in theaters.
Stopping at four weeks, there will be a weekend five and weekend six that weekend seven and weekend.
And so the numbers will continue to grow.
We don't expect.
Beyond <unk> concert tour will.
We will be as large.
In theater as was tailors.
We do expect it to be significant and meaningful and both the <unk> tour and the Renaissance tour taken together.
We will provide.
<unk> by the profitability for AMC in calendar year 2023.
What's also exciting to us.
Is not just the profitability.
That comes our way this year.
But our prospects for 2024 and 2025.
Our phone has been dancing off the hook.
Really since the day, we announced the ear as to our.
Project on August 31.
There are a significant number.
Of.
Of the world's best artists.
Who would like to explore doing things with AMC.
Taylor and balancing those Carter just yet so again I think our prospects are this is a moneymaking venture in 2023, and it will be a moneymaking venture for us in 2024 and beyond.
I also would like to say that as much credit as.
AMC is received.
From taking the lead on this project.
<unk>.
I might add that.
With the writers and actors strikes there were some movies that were going to move out of the fourth quarter.
So there were some holes in the calendar in the fourth quarter. It was a pleasant thing for movie theater operators, the rollover, Kevin unanticipated gift.
Of.
Hey, Taylor Swift concert film.
I'd say those Carter concert film added to the calendar.
For the fourth quarter just added just literally.
A month or two in advance of the quarter commencing.
We could not have done this alone.
And I would specifically like to give credit.
To so many.
All of our competitors.
We will also chose.
Play the Taylor Swift movie and the balance movie.
We could not have done this without the cooperation of Cinemark and Regal.
Or have sent uplifts in <unk> in Mexico, or Cineplex in Canada.
And it's also true that literally all across the globe.
Movie Theater chains in some 100 countries have embraced the showing of the year and store and the Renaissance tour.
So this is something that is particularly good for AMC, because we did it.
It's particularly good for our entire industry.
Because literally just about everyone in our industry is benefiting from.
From the incremental revenue.
That no one would have expected to see just a few months ago.
As for the specifics of the question Alicia.
This will give you every number there is but we're going to do it on the next call.
Yes that makes sense I appreciate that if I can ask one more.
Just wondering if you can give some commentary around the premium large format screens and the impact on your market share.
For IMAX Dolby.
And then how your proprietary pls, Sir performing a crusher circuit right now.
Sure so.
I actually think this is one of the biggest success stories of AMC.
When.
When we look at our Pls and.
And Thats IMAX Dolby cinema.
Prime here in the United States <unk> in Europe.
They are our most successful screens.
First of all they sell first.
And they fill.
Higher than regular screens, if you take a look at.
The box office dollars for us.
The premium large format screen.
It essentially becomes the equivalent.
For regular screens.
Think about that.
Every one of our Pls on average.
Is grossing about four times that of irregular screen.
And in the case of AMC.
We have 550 of these things around the world.
No one.
Anywhere.
Close to the number of Pls that we have.
About half of all the IMAX screens in North America are at AMC, a 100% of all the Dolby cinema screens in the United States are at AMC.
So.
<unk>.
So this is just a massive success for us.
And it's something that we're committed to doing.
We would like to we not only have expanded the number of pls in our company.
Improve the quality of our Pls, So we've gone back.
Almost all of our Dolby cinemas have been installed over the last eight years, but some of our IMAX screens are much older. So we've gone back into our IMAX screens.
And reinvested in those screens with IMAX laser.
And upgraded sound systems and in both cases.
Both IMAX and Dolby.
We'd like to increase the number of our locations so the only.
And similarly, we intend to grow the number of our so called House brand.
The ice census in Europe in the primes here.
We think we have 550 in round numbers 550 of these things today.
<unk>.
We think we could add 150 more.
And the only.
Where the consumer would support that level of supply of premium large format screens.
Only.
<unk>.
Limiting factor.
And a balancing factor is cash.
Because.
As Sean said.
We're always balancing chasing growth and that growth initiatives on the one hand.
And ensuring that we have ample liquidity on the other.
And strengthen our balance sheet by using some of our cash to pay down debt.
So what tempers our <unk>.
Ability.
Hi.
To capitalize on the growth initiatives that are right there in front of our eyes.
Is this art form of how much money do we invest in growth initiatives and how much.
Do we invest and pay down debt and how much do we just put in the bank.
Save for a rainy day.
To bolster our cash position.
And but but there is no doubt.
There is enormous opportunity ahead, and we really do believe that more than any other chain in the world AMC is home of the pls or the so called premium large format screens.
That's an advantage that we intend to sustain and improve upon in the years going forward.
Okay.
Adam with that should we got some questions from our shareholders. Please let's say any.
Questions from equity analysts, but I think at this point as questions from our shareholders.
The first question Adam is about alternative content and we've spoken a lot about Taylor Swift.
The question is can you talk more about future opportunities and what other sort of content are we considering to bring into our theaters.
Well given that.
No.
In one of our most important forays into all of the content. We just added.
Quarter $1 billion for the worlds box office.
And 165 of that is in the United States alone.
I don't think anybody has been chasing all of the content more aggressively than AMC.
Clearly.
This whole genre of concert films and something that we've learned.
There's a lot of demand for out there and so we will chase it hard, but it's not limited to.
The concert artist I continue to think that professional sports is an enormous opportunity for the movie theater industry. If you think.
Watching.
A football game on your <unk>.
<unk> 45 inch or 55 inch or 65 inch TV at home looks good.
Imagine how it looks on a 45 foot or a 55 foot or 65 foot screen.
At an AMC theater, and so I think the second thing that you'll see us chasing beyond these concert films is sports.
It's been a multi year effort to try to get the rights to do so but it's something that we are in active pursuit of as we speak.
And then beyond that there is all sorts of other content.
Whether it's.
Ethnic film product like Bollywood product.
Or some of the Asian language film or Hispanic language film, who could bring here in the United States.
Those are opportunities that we're already.
Pursuing.
And.
Our year over year growth, they're small, but our year over growth in those segments has been quite high.
We've had a partnership with thousands of events for a long time.
They bring lots of other interesting content.
Two our screens as well so clearly there is an opportunity here.
And it's.
Taylor Swift demonstrated.
So that it can be sizable dollars if it's done right.
So it's clearly on Amc's radar screen.
A lot of interest in our food and beverage offerings.
And there is a question about other than popcorn.
Our other food and beverage initiatives and what plans do we have to bring other AMC products food and beverage products through retail distribution channels.
If there's one area, where we can take enormous pride in.
EMC is what's happened to our F&B business.
And the last three or four years.
Higher to the pandemic.
<unk> spending was about $5 ahead in round numbers at AMC.
And these are domestic numbers that I'm using right now.
And post pandemic, it's been about $8.
That increase of $3 ahead is meaningful.
When you think that.
We have a very high margin food and beverage business.
I, often joke that we sell air and water, we sell popcorn and soft drinks.
And.
And so it's a very profitable business for us.
And the fact that we've seen such an increase in the spending per patron.
Is very beneficial to us other chains also have seen.
Increases in their food and beverage capture well.
But I continue to believe that the not the so-called dining the small dine in theatre chains.
<unk> market brands are food and beverage capture continues to be.
The highest in the industry.
And.
And it's no accident, we work at it and we work at.
Getting an interesting variety of products.
At our dine in theaters and on the concession.
<unk> in our in our non dine in theaters.
We've.
<unk>.
And there continues to be opportunity. So the thing we are doing right now of course site on this call I announced that we're launching AMC cinema suites.
This month and next.
Bob.
Quarter financial Pretzel about four inches of chocolate on top of the vessel.
A lot of chocolate, it's really good chocolate too.
And we're optimistic we're going to start with that.
Our theaters first.
But just like we proved that we could take AMC perfectly popcorn in the home.
If we see that there are big sales of <unk> and the suites in our theaters, we might take that.
After that.
The outside World the same way, we took perfectly popcorn to Walmart krogers.
Publix.
Amazon Dot com.
There it's been it's been a great success story for us.
And we continue to look for ways to grow further.
As one last fall and the growing and further apart.
I think.
So fascinating to me is how successful we've been.
With merchandise movie themed <unk>.
That's being sold of our concession stands just about every week of the year now.
We're selling anywhere from hundreds of thousands of these things a weekend to a $1 billion of these things the weekend.
We're selling them on a handsome profit.
And.
Whether it's.
Ken.
<unk> corn crop.
Bob.
For Taylor Swift movie or Pink corvette for Barbie movie.
Or any other array of creative things that we've introduced over the course of the year title by title by title by title.
We're driving a lot of business that with these things that we're going to keep that going in 2024 as well.
So, let's talk a little bit more about the operating improvements that we have done.
Since the beginning of 2020, which are clearly evident in our results for this quarter.
Questions about.
Those operating improvements that we've made that will really allow AMC to thrive in the future.
So we had no choice.
We had to get more efficient.
Because during the <unk>.
<unk> of the pandemic, we had no revenues.
And so we've gotten this company to be.
Much leaner than it ever was before.
The head count in our corporate headquarters is way down.
The managerial head count in our theaters is way down.
In the case of our European theaters, we've automated.
So many of them with automated box offices and automated food beverage operations.
We're starting to bring.
The automated food and beverage kiosks back into the United States.
As well.
The.
Yes.
We added again more vision and we did get more efficient you in your prepared remarks talked about the progress we made with landlords.
Where we renegotiated Rs downwards to the tune of tens of millions of dollars of benefits a year.
Also we've just gotten more efficient in terms of what's in our fleet.
As you said we.
Closed about 150 marginal theaters that were.
Either marginally profitable or not for our money losers.
And replace them with 50 theaters that are enormous successes.
The 50 theaters that we opened.
Our grossing far more.
Then the 150 theaters that we closed and yet our operating expenses by definition are a third of what they were to operate.
Triple the theater count so just in area after area after area.
The company has gotten leaner and more efficient.
And that's something that.
Drove these third quarter results, which are so good if you look at.
Are the numbers hard.
You'll still see attendance was up 16%.
Compared to 2019.
And if attendance is up 16%, 16% fewer bodies that you can sell food and beverage too and yet with attendance down 16%.
We still are far more profitable in.
In 2023 than we were in 2019, that's the direct result of becoming more efficient and that efficiency that we realized.
As a permanent efficiency.
So thats going to be something thats going to continue in our numbers going forward.
Yes.
Theres a final question, which I think relates very much to what we just discussed about the operations, but just about.
Use of technology to really enhance the customer experience and you mentioned some of that about the kiosks and I guess there is other things that we're doing model using technology as well right. So.
We joke that we can't go to the bathroom in this company without.
Programming in the computer first.
But you would think this is a pretty simple business.
You have a building you turn on the lights.
We project very shy a picture on the wall, maybe have people a cup of Coca Cola popcorn in the way in the door.
Yes.
Surprisingly intricate and complicated.
And one of the reasons for that is.
Literally everything that goes on in our theaters as automated in some shape or fashion.
And we've used technology to our advantage.
We have a loyalty program stubs.
Stubs a list.
Okay.
Where we track the purchase here.
History of our best customers and reward them for it.
The reason, we can pull that off is because our tech is so good.
Very quietly during the pandemic.
We put mobile order.
On our website and smartphone app.
So that.
Literally every guest who buys a ticket online.
Has the opportunity to pre buy.
Their AMC food and beverage.
And our experiences we are selling more food and beverage products to the people who are using mobile order again that could happen.
But for our tech.
The way, we distribute movies to theaters.
Christopher Nolan still like 70 millimeter film.
But everybody else.
And even Chris Nolan everybody else sensor movies to our theatres digitally via satellite as it received on a computer server. That's a direct result of our tech.
So.
I do believe that.
From a technological standpoint, we're pretty sophisticated as an operator today and we're committed to continuing to invest in technology both to benefit the guest.
To make the experience better.
To make ourselves more efficient.
Which means we can squeeze out more profitability on the same revenues.
And it is also to stay ahead of the curve in an era, where.
All things seem to be affected by tech.
Terrific that that concludes the questions from investors.
<unk>.
So let me end the call simply by saying this.
It doesn't get any better.
Then the third quarter of 2023.
We beat market expectations.
About 50%.
It was a profitable quarter when people were expecting a loss.
Revenues were booming.
But.
<unk>.
But it wasn't just the revenue growth that caused by our success.
It was also our management of expenses.
The combination of which.
Led to a very successful quarter we.
We do have it would be helpful with Hollywood and the actors strike.
It'll be helpful. If we don't see movies movies.
<unk> from 24 to 25.
But as I sit here today.
I think we are enormously optimistic and confident in the future of the movie business.
<unk> is the leader of it.
We do what we do well and the third quarter of 2023 reminds us.
That would all things are aligned this can be a very profitable.
<unk>.
Industry with that thank you wanted all for listening.
If you haven't seen Taylor Swift move yet go see it.
If you haven't bought a ticket yet for biopsies movie go buy one.
And we will happily C U as Christmas movies.
Out at our theaters.
Just a few weeks' time, there are a lot of big movies coming.
The theaters are going to be bustling.
In December of 2023 and beyond.
Holidays to want it all and we'll talk to you next quarter.
Thank you ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect.
Ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect.