EX-99.1 3 exh991.htm DRAFT

EXHIBIT 99.1

AMC Entertainment Inc. Reports Results

for Second Quarter of Fiscal 2004

KANSAS CITY, Mo. (October 29, 2003)—AMC Entertainment Inc. (AMEX: AEN), one of the world’s leading theatrical exhibition companies, today announced results for the second quarter of fiscal year 2004, ended October 2, 2003.

Revenues for the quarter were $438 million, compared to $451 million in last year’s second quarter.  Fiscal year revenues through the second quarter were $911 million, compared to $913 million through the first twenty six weeks of fiscal 2003.

Net loss for common shares for the second quarter was $4.1 million (11 cents per diluted share), compared to a net loss for common shares of $8.0 million (22 cents per diluted share) in last year’s second quarter. Net loss for common shares for the twenty-six-week period was  $42,000 (less than 1 cent per diluted share), compared to a net loss for common shares of $18.3 million (50 cents per diluted share) in the same period last year.

Adjusted EBITDA for the second quarter was $58 million, compared to $61 million in last year’s second quarter. For the twenty-six-week period, Adjusted EBITDA was $127 million, compared to $123 million for the first two quarters of last year.

“Effective cost controls were a defining characteristic of the quarter and have contributed to record year-to-date Adjusted EBITDA and after tax cash flow,” said Peter Brown, chairman and chief executive officer. “We are excited about upcoming film product and look forward to a very strong holiday season.”

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Highlights of the second quarter and year-to-date periods included:

Record year-to-date Adjusted EBITDA of $127 million and after tax cash flow of $76 million

Continued positive free cash flow: $16 million in the quarter and $33 million year-to-date

Conservative balance sheet: strong credit profile and $242 million in cash

Enhanced asset quality: improvement in screens per theatre to 15.0 (the highest screens per theatre among major circuits) through the disposition of 45 obsolete screens in the second quarter.

This press release contains non-GAAP financial measures as defined by Regulation G of the Securities and Exchange Commission. As required, the attached financial summary and the Company’s website, www.amctheatres.com, contain a discussion of management’s use of these measures and reconciliations to the most directly comparable GAAP measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, the financial measures prepared in accordance with GAAP. The financial measures as determined by management may not be comparable to the same financial measures as reported by other companies. As used herein, GAAP refers to generally accepted accounting principles in the United States of America.

Investors will have the opportunity to listen to the earnings conference call and view the supporting slide presentation at 9 a.m. CST on Wednesday, October 29, 2003, through the website www.amctheatres.com. Listeners can also access the call by dialing
(877) 307-8182 or (706) 634-8221 for international callers. A replay of the call will be available on the website and by phone through Wednesday, November 12, 2003. The telephone replay can be accessed by calling (800) 642-1687, or (706) 645-9291 for international callers, and entering the conference ID number 3322465.

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AMC Entertainment Inc. is a leader in the theatrical exhibition industry. Through its circuit of AMC Theatres, the Company operates 232 theatres with 3,497 screens in the United States, Canada, France, Hong Kong, Japan, Portugal, Spain, Sweden and the United Kingdom. Its Common Stock trades on the American Stock Exchange under the symbol AEN. The Company, headquartered in Kansas City, Mo., has a website at www.amctheatres.com. 

Any forward-looking statements contained in this release, which reflect management’s best judgment based on factors currently known, involve risks and uncertainties.  Actual results could differ materially from those anticipated in the forward-looking statements included herein as a result of a number of factors, including among others the Company’s ability to enter into various financing programs, the performance of films licensed by the Company, competition, construction delays, the ability to open or close theatres and screens as currently planned, domestic and international political, social and economic conditions, demographic changes, increases in demand for real estate, changes in real estate, zoning and tax laws, unforeseen changes in operating requirements, the Company’s ability to identify suitable acquisition candidates and to successfully integrate acquisitions into its operations and results of significant litigation.

Contact:

Richard J. King, Senior Vice President, Corporate Communications

AMC Entertainment Inc.

(816) 221-4000

(FINANCIAL SUMMARY FOLLOWS)

AMC ENTERTAINMENT INC.
FINANCIAL SUMMARY
(In thousands, except per share and other data)

Thirteen Weeks Ended

Twenty-six Weeks Ended

 

                                                  

Oct. 2,
2003

Sept. 26,
2002

              Oct. 2,
               2003

Sept. 26,
  2002

 

 

                                

 

 

Statement of Operations Data

                   

                   

 

               

 

        

 

          

 

 

 

Admissions

                   

$301,035

$307,234

$623,223

$616,701

 

 

 

Concessions

112,425

120,145

 

237,006

246,316

 

 

 

Other theatre

12,608

10,505

25,082

23,259

 

 

 

NCN and other

  12,144

  13,214

  26,115

  26,448

 

 

 

Total revenues

438,212

451,098

911,426

912,724

 

 

 

Film exhibition costs

162,595

169,338

341,056

344,058

 

 

 

Concession costs

12,584

13,684

27,011

29,647

 

 

 

Theatre operating expense

104,444

111,576

212,818

221,584

 

 

 

Rent

78,875

74,162

157,792

148,112

 

 

 

NCN and other

10,387

11,861

22,708

24,352

 

 

 

General and administrative expense:

 

 

 

    Stock-based compensation

876

503

1,169

1,012

 

 

 

    Other

11,597

9,658

23,431

41,439

 

 

 

Preopening expense

389

451

1,431

1,248

 

 

Theatre and other closure expense

1,116

1,459

1,734

1,230

 

 

Depreciation and amortization

28,767

31,985

57,244

61,417

 

 

Disposition of assets and other gains

   (1,956)

   (1,236)

   (1,956)

   (1,422)

 

 

Total costs and expenses

409,674

423,441

844,438

872,677

 

 

Interest expense

19,140

19,321

37,439

38,788

 

 

Investment income

     (611)

     (783)

    (1,262)

   (1,785)

 

 

Total other expense

  18,529

  18,538

   36,177

  37,003

 

 


Earnings before income taxes


10,009


9,119


30,811


3,044

 

 

Income tax provision 

   4,400

11,900

     13,400

   6,700

 

 

Net earnings (loss)

$      5,609

$  (2,781)

$     17,411

$    (3,656)

 

 

Preferred dividends

     9,662

   5,228

  17,453

   14,647

 

 

Net loss for common shares

$   (4,053)

$  (8,009)

$        (42)

  $ (18,303)

 

 

Net loss per share:

 

 

    Basic

                     

$       (.11)

$     (.22)

$            -

$       (.50)

 

 

    Diluted

$       (.11)

$     (.22)

$            -

$       (.50)

 

 

Average shares outstanding:                            

 

 

    Basic

   36,744

   36,302

   36,586

   36,289

 

 

    Diluted

   36,744

   36,302

   36,586

   36,289

 

 




Thirteen Weeks Ended


        Twenty-six Weeks Ended

 

Oct. 2,
2003

Sept. 26,
2002

Oct. 2,
2003

Sept. 26,
2002

 

Other Financial Data:

 

 

  Net cash provided by operating activities

$  14,222

$   8,502

$   57,556

$   46,147 

 

  Net cash used in investing activities

(19,305)

(23,675)

(50,424)

(84,420)

 

  Net cash provided by (used in)
       financing activities


(14,287)


105


(8,983)


2,297

 

  Adjusted EBITDA (1)

57,730

60,819

126,610

122,782

 

  After tax cash flow (1)

35,252

29,707

75,824

69,311

 

  Net capital expenditures (2)

19,115

9,362

43,274

29,785

 

  Free cash flow (3)     

16,137

20,345

32,550

39,526

 

Other Data:

 

  Screen additions

-

-

34

18

 

  Screen acquisitions

-

-

-

641

 

  Screen dispositions

45

58

59

58

 

  Average screens

3,494

3,515

3,498

3,520

 

  Attendance (in thousands)

46,590

51,363

96,724

104,194

 

  Number of screens operated (period end)


3,499


3,500

 

  Number of theatres operated (period end)


233


242

 

  Screens per theatre circuit wide

15.0

14.5

 

 

Oct. 2,
2003

April 3,
2003

 

Balance Sheet Data:

 

  Cash and equivalents

$  241,685

$  244,412

 

  Corporate borrowings

668,842

668,661

 

  Capital and financing lease obligations

61,546

59,101

 

  Net debt (4)

488,703

483,350

 

  Stockholders' equity

316,582

291,904

 

  Total shares (5)

78,133

76,481

 

 

 

 


  (1)We have included Adjusted EBITDA and After tax cash flow because we believe they provide investors with additional information to measure our performance and liquidity, estimate our value and evaluate our ability to service debt.  In addition, we use Adjusted EBITDA for incentive compensation purposes.  Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation and amortization as adjusted for stock-based compensation and special compensation expense (related primarily to forgiveness of loans to executive officers in fiscal 2003) included in general and administrative expense, preopening expense, theatre and other closure expense, disposition of assets and other gains and investment income.

  (2)We have included Net capital expenditures because we believe it provides investors with additional information concerning our net cash requirements for property, excluding acquisitions. 

(3)Represents After tax cash flow less Net capital expenditures.  We have included Free cash flow because we believe it provides investors with additional information concerning the resources available for strategic opportunities including, among others, to invest in the business, make acquisitions and strengthen the balance sheet. 

(4)Represents corporate borrowings and capital and financing lease obligations less cash and equivalents.  We have included Net debt because we believe it provides investors with additional information to estimate our value and evaluate our leverage. 

(5)Represents outstanding shares of Common Stock and Class B Stock and incremental shares issuable under stock options and stock awards, using the treasury stock method, and upon the conversion of Series A Convertible Preferred Stock to Common Stock.


The following tables provide reconciliations of our non-GAAP financial measures to their most directly comparable GAAP measures.

                                                              

Thirteen Weeks Ended

Twenty-six Weeks Ended

Oct. 2,
2003

Sept. 26,
2002

Oct. 2,
2003

Sept. 26,
2002

 

Adjusted EBITDA Reconciliation
(In thousands)

         

    

 

Net earnings (loss)

$    5,609

    

$  (2,781)

$ 17,411

    

$   (3,656)

 

Interest expense

19,140

19,321

37,439

38,788

 

Income tax provision

4,400

11,900

13,400

6,700

 

Depreciation and amortization

28,767

31,985

57,244

61,417

 

Investment income

(611)

(783)

(1,262)

(1,785)

 

Stock-based compensation expense and
special compensation expense


876


503


1,169


20,262

 

Theatre and other closure expense

1,116

1,459

1,734

1,230

 

Disposition of assets and other gains                                       

(1,956)

(1,236)

(1,956)

(1,422)

 

Preopening expense

       389

       451

    1,431

    1,248

 

Adjusted EBITDA

$  57,730

$  60,819

$126,610

$122,782

 

Thirteen Weeks Ended

Twenty-six Weeks Ended

 

Oct. 2,
2003

Sept. 26,
2002

Oct. 2,
2003

  

Sept. 26,
2002

 

After Tax Cash Flow and Free Cash Flow Reconciliation
(In thousands)

 

 

Net cash provided by operating activities

$  14,222

$   8,502

$ 57,556

$  46,147

 

Disposition of assets and other gains

1,956

1,236

1,956

1,422

 

Changes in working capital items and other                                 

19,074

29,569

15,602

26,142

 

Deferred taxes

            -

    (9,600)

      710

  (4,400)

 

After tax cash flow

$  35,252

$  29,707

$ 75,824

$  69,311

 

Less net capital expenditures

  19,115

    9,362

  43,274

  29,785

 

Free cash flow

$  16,137

$  20,345

$ 32,550

$  39,526

 

Thirteen Weeks Ended

Twenty-six Weeks Ended

 

Oct. 2,
2003

              

Sept. 26,
2002

            

Oct. 2,
2003

                   

Sept. 26,
2002

 

Net Capital Expenditures Reconciliation
(In thousands)

                  

                

               

                  

 

Net cash used in investing activities                                                                         

$  (19,305)

$  (23,675)

$  (50,424)

$  (84,420)

 

Acquisition of GC Companies, Inc., net of cash acquired
     and proceeds from sale of venture capital investments


-


3,898


-


46,253

 

Acquisition of Gulf States Theatres

-

701

-

701

 

Purchase of leased furniture, fixtures and equipment

-

4,194

-

7,052

 

Proceeds from disposition of long-term assets

(514)

(2,237)

(1,017)

(3,338)

 

Other, net

         704

     7,757

      8,167

      3,967

 

Net capital expenditures

$   (19,115)

$  (9,362)

$ (43,274)

$ (29,785)