AMC Entertainment Holdings, Inc. (AMC) Earnings Call Transcript

Good afternoon. It is precisely 1:00 central time. And therefore, it is my pleasure to welcome all of you in the room and those who are listening live or eventually later on by webcast. As a welcome to the 2026 Annual Shareholders Meeting of AMC Entertainment Holdings, being held here in-person, in our Leawood, Kansas headquarters and also being attended by many of our shareholders both in the room. And as I said before, on our accompanying webcast. I am Adam Aron, Chairman of the Board and Chief Executive Officer of AMC Entertainment Holdings. Joining me for today's meeting is our Board of Directors who are joining remotely by phone. I have been advised that either in-person or by proxy, there is a quorum present for this meeting. It is now there for my pleasure and honor to formally call to order this annual meeting of our shareholders. An agenda outlining the order of business has been made available. Eddie Gladbach sitting to my right, who is our Senior Vice President, General Counsel and Secretary of the company, will serve as Secretary of today's meeting and preside over the voting process on the various shareholder proposals. He has delivered an affidavit from Computershare, the notice agent for the annual meeting. which states that on August 10, 2026, a notice of the meeting was mailed to all shareholders of record as of the close of business on July 31, 2026, the record date for this meeting. This affidavit will be filed with the minutes of this meeting. Eddie will now discuss the procedures for transacting the actual business of the meeting and take you through voting on the various proposals. Eddie?

Thanks, Adam. The meeting will take place as described in the agenda. A quorum of stockholders is present in person or via proxy. Rules and procedures for the meeting were filed with the SEC on September 17 and are planted on the back of your agenda. When the proposals before the meeting for consideration, questions and comments should be limited to that proposal. An opportunity will be provided at a designated time for other questions relevant to the company's business. If you wish to make a statement about pending proposal, please raise your hand and be recognized. Once you are recognized, please approach a microphone. Actually, someone will bring a microphone to you. State your name and whether you're a stockholder or a proxy holder. If you're a proxy holder, please state the name of the proxy holder that granted you the proxy. Please keep statements brief and limited the specific item up for discussion. We may have to interrupt any statement that continues for an unreasonable amount of time. Speakers will be limited to a maximum of 2 minutes. You may not record the proceeding today and phones and other recording devices are not permitted in the meeting room. Anyone disrupting the orderly conduct of business or acting in a threatening manner toward AMC employees or fellow stockholders will be asked to leave the premises and if necessary as quartered out by security. If you've not already submitted your votes and would like to vote during the meeting, you may do so on the ballot provided at check-in. Ballots will be collected at the conclusion of business items on the agenda, ballots not received when called for will not be counted. We will announce the preliminary results at the conclusion of the meeting and official results we published in an 8-K filing with the SEC. The Board of Directors has appointed Jeff Bennett and Kelly Schemenauer as inspectors of election for the meeting. They have signed an oath to act as inspector of election, which will be filed with the minutes of the meeting. The inspectors have the registered shareholder list of the company as of the record date for determining stockholders eligible to vote at the meeting. Except for Proposal 1, the polls will remain open until all items of business have been presented and discussed in the tabulation of votes has been completed. The polls will close for Proposal 1. After any questions or comments have been discussed with respect to that proposal. We are aware there's considerable interest in knowing how many shares have been voted at the meeting. The number of shares devoted prior to the meeting are approximately 553 million shares which is approximately 62% of our -- of the outstanding 892,64,638 shares as of the record date. That number includes broker discretionary voting on certain items such as ratification of auditors. From nonroutine items on which brokers cannot submit discretionary votes, we only have about 42% participation. We would remind our shareholders that voting is an important opportunity and encourage all of you to vote at future meetings. We'll now move to the items of business. First item of business is an amendment to the company's certificate of incorporation to declassify the Board of Directors shorten all existing terms to expire at this meeting and remove restrictions on the number of directors. The amendment, along with the reasoning, therefore, is set forth in the proxy statement, and the Board of Directors recommends [indiscernible] of this proposal. Are there any questions or comments on this proposal? Seeing none, we will declare the polls closed on this proposal, and we'll proceed with the agenda. The next item of business is election of directors. However, based on the proxies received prior to the meeting and the number of shares present at this meeting, Proposal 1 has not obtained support of a majority of the company's outstanding stock and their core sale. Since Proposal 1 is failed, we will proceed with Proposal 2b to elect Class II directors for the term ending at the 2029 Annual Meeting. As disclosed in the proxy statement, the candidates for Director who have been nominated by the company's Nominating and Corporate Governance Committee are Dee Clark; Sony Jane and Keri Putnam. In accordance with the company's bylaws, stockholders are required to provide advanced notice of their intent to nominate candidates for director. No such notice was properly received and therefore, no additional nominations can be accepted at this time. Are there questions or comments on this proposal? Seeing none, we will proceed with the agenda. The next item of business is an amendment of the company's certificate of the corporation to eliminate the prohibition against stockholders acting by written consent. The amendment, along with the reasoning, therefore, is set forth in the proxy statement, and the Board of Directors recommends approval. Any questions or comments on this proposal? Seeing none, we will proceed. Fourth proposal is an amendment to the company's certificate of incorporation to remove the limitation of stockholders' ability at all special meetings. The amendment, along with the reason, therefore, is set forth in the proxy statement, and the Board of Directors recommends approval. Any questions or comments on this proposal? Seeing none, we will proceed. Next item of business is an amendment to the company's 2024 equity incentive plan to increase the total number of shares of common stock subject to the plan. The amendment, along with the reasoning is set forth in the proxy statement and the Board of Directors recommends approval of this proposal. Any questions or comments on this proposal? Seeing none, we will proceed. Our next item of business is to ratify the appointment of Ernst & Young LLP as the company's independent public accounting firm for 2026. We'd like to recognize Ernst & Young, Kim Rock and Andy Gig Dad who are with us today. and thank you for joining us. Board of Directors recommends approval of this proposal. Are there any questions or comments? Seeing none, we will proceed. Next item of business is to approve the compensation of the company's named executive officers on an advisory basis. The proposal is a nonbinding stockholder advisory vote. The company's executive compensation is discussed in the proxy statement and the Board of Directors recommends approval. Are there any questions or comments? Seeing none, we will proceed. The next item of business is to approve the frequency of the nonbinding advisory vote to approve compensation of the company's named executive officers. The proposal is nonbinding and the Board of Directors recommend a vote of 1 year on this proposal. Are there any questions or comments proceed. The next item of business is a proposal to approve adjournment of the meeting, if necessary to permit further solicitation proxies in the event there are insufficient votes to adopt the foregoing proposals. Board of Directors recommends approval. Any questions or comments on this one? Seeing none, we now declare the polls closed. If you have not voted or wish to change your vote, please do so now by marking your ballot. And if you have a ballot to be collected, please raise your hand and the inspectors will collect it from you. We will now briefly recess the meeting. While we're recessed, we would like to invite Sean Goodman, the company's Executive Vice President, International Operations Chief Financial Officer and Treasurer, to join Adam to address any questions stockholders may have relative to the company's operating results or business. We would remind everyone that some of the comments 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 public filings, including our most recently filed 10-K. 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 forward-looking statements. You are cautioned not to place undue reliance on these statements. AMC undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events. If you have a question relating to the company, but not to matters already voted on at the meeting, you may raise them now. Only matters that concern all stockholders should be raised. Any matter of individual concern to a stockholder should be raised after the meeting with representatives of the company. To allow all stockholders an opportunity to participate, each stockholder will be limited to one question along with one follow-up. To ensure all questions can be answered in the individual speaker will be limited to a maximum of 2 minutes. Please raise your hand to be recognized and approach the microphone to ask your question. With that, I'll turn it back over to Adam and Sean.

Thank you, Eddie. Hello, everybody. Before Sean Goodman and I answer any questions that come before this meeting here in the room. I would like to make the following comment that as we announced yesterday, AMC priced a refinancing transaction consisting of $3.97 billion of new term loans and bonds in a private offering that is expected to close on or around October 5, subject to customary closing conditions. We expect to use the proceeds from the transaction to refinance our existing term loan, Odeon term loan and certain other outstanding indebtedness. This is the only comment that we can make publicly adopt this transaction prior to the actual closing of the refinancing, which is expected in early October. With that, I'm happy to take shareholder questions. There are some shareholders in the room. I would ask as you ask your question to give me your name. And for some reason, you're shy about giving me your whole name that at least give me your first name, so I can respond to you curiously who's first -- it's good to see you again.

Good to see you again.

[indiscernible] button in the green.

It's on. Good.

Yes. Great. My name is Lawrence Batch. I'm a shareholder, and I plan to be a long-term shareholder. My question really was it -- I was going to ask my question after bit. First, I just want to commend you guys for the job you've done in the last 4 or 5 years, balancing trying to make the debt go further out the positive reviews that you just got in the last few months are tremendous. But yet we still see the price, share price go down even though we have heard the brokers, they set the share price where they think that should be, and we know you don't handle cultural that. So First of all, I just want to cap you guys because that's what it really deserves. This is not easy to come out of a place where almost bankruptcy is and progress like you have. Any other company have seen in the last few years, gone bankrupt and then brought back under an equity name and all that stuff. And I'm thankful that this company didn't do that. So -- that was trust, all I want to say, you look great from the last 10 months that I saw you I hope you're feeling good.

I am.

And how do you -- how is the next 10 months look? That's what I want to know.

Sure. So first of all, [indiscernible]. Thank you for the next comments. This company, AMC Entertainment has been through quite the roller coaster. I don't -- I joined the company as its CEO in early 2016. And I don't think any of us, I certainly did not anticipate that in 2020, we were going to be asked as the people to relive the Spanish flu epidemic of 1918, which wiped out all the company's revenues in the span of a week. And you are correct that many of our competitors failed financially. AMC was, I think, quite smart. -- in navigating our way through very turbulent waters. And one way or another, A lot of us inside the company referred to these as pulling Roberts out of the hat. We pulled 1 rabbit out of hat after another and fast forward to where we are in 2026. If you look at the last 3 years, I know there are a lot of theories out there amongst our retail shareholder base as to why the AMC share price fell and sell market. I too am a long-term shareholder. I've owned stock in this company since 2016. I think that most observers have it long. The fundamental most important reason while the AMC share price has been declining, is that if you look at calendar year 2023, 2024 and 2025, the size of our industry as measured by the basic price over of size, the so-called domestic industry box office. This is all movies, all movie theaters in the United States and Canada. Taken as a whole, we're flat as a pancake at between $8.7 billion and $9.0 billion in that 3-year period. And that -- those numbers $8.7 billion to $9 billion or 20% below where the industry was for the 5 years prior to COVID hitting in 2020. And if you think about it, so much of the company's profitability occurs in the last 20% of its revenue because you -- first, you got to cover the fixed cost and then you make profit. The fact that our industry recovered so slowly from COVID, that the box office in 2023 and 4 and '25, '23, '24 and '25 full years after covered was still down 20% below pre-COVID levels. That explains the pessimism that's been surrounding the movie business. And that explains the company delivering earnings that were far less than the earnings that we delivered in 2017, '18 and '19 prior to code. The reason I'm sharing with you this history is because so much has changed in this current year 2026. as opposed to the box office being flat for 3 years, since March of this year, the box office has been roaring hot. And if you look at our share price, we got down to as low as $0.93 a share in March of 2026, where we are still living off of the industry numbers from calendar year '25, but then came a movie called Project Hail Mary in March of '26. And it was followed by movemoving-after movie that were coming out month after month after month. And our industry as an industry has strong together as sort of spectacular improvement in our industry-wide box office in 2026. And that has caused our share price to approximately triple where it was in March of 2026. So when you make the comment that not your words necessarily, but I'm paraphrasing the long time suffering of our shareholder base something that I'm very sympathetic to because I am the largest retail individual shareholders of this company and have an economic interest in significant amount of my net worth is still tied to the AMC. What I see is that the recovery has started to happen. The box office is up Our earnings have been up. Our share price has climbed. And as I said, the share price is approximately triple where it was just 6 months ago. So that's all very encouraging news and a marked change from what we've seen since March of 2020 when COVID shut all of our theaters. I know that some people on Twitter, I'm quite active on Twitter. So I can't believe that 6 years later, and you're still talking about COVID because COVID seemed so long ago. Yes, that's true. But if you -- again, if you look at the size of the box office in the movie industry, we have not yet returned to pre covered levels, and that's affected our profitability. But that takes us to this year and the recovery is now. The recovery is at hand. And we've reported earnings through the second quarter of this year. The obvious are very good. and way up over a year ago, they were up for the first 6 months of the year, our EBITDA was up $228 million above where it was in the first 6 months of last year. We haven't made any comment about third quarter EBITDA yet, but we did make a public comment as part of our debt refinancing announcements, that the industry revenues and the company revenues were quite robust in July and August. And normally, not making any comments as where EBITDA will be for the quarter. But normally, this company has a lot of what's called operating leverage. We just say that when revenues grow, EBITDA can grow even faster. And shortly in July and August, our revenues have been quite good. Now that that covers the history of the last 11 years, the last 3 years and this year, and U.S. how over the next 10 months will be. And the right answer to your question is we're all going to find out together. But having said that, I can tell you that we have looked at the movie industry slate that's coming out very carefully through the remainder of this year and the first quarter of next year, the next 6 months, the movie slate looks to be compelling, attractive and one would think that AMC ought to deliver good revenues into our system from moviegoers going back to theaters. That's what they have been doing since March of 2026. And fast forward to March of 2027, I think we're going to continue to see very strong industry numbers. And one thing I'm particularly proud of, I don't see whenever the industry has done well, AMC as a company has done very well. We've -- our marketing programs are very powerful in commanding BrandLoyalty, DMC. Our expense management has been very tight, and those are reasons why in 2026 so far, our earnings announcements have been very positive. As we look further than that, we are very bullish about the movie industry. We've looked at the -- this is -- this is going to -- this year, 2026 is going to be a particularly strong year compared to the last 3 years or for that matter, in the last 6 years. We've looked at the movie slate for '27 and '28 and especially looking in 2028. I think the movie slate has a potential to be even bigger than the movie slate is in 2026. And I think people would say that 2026, relatively speaking, has been a better year against recent performance. So we're optimistic, we're bullish, but some of you know that I ran an NBA team for a couple of years in my home town. I mean it was a wonderful saying in the NBA because you would marry a really strong team against a really weak team. And you would just think that all the time, the strong team will win the game and the weak team would loose the game. And there was many a game where the weak team would actually beat the strong team. And they all saying around the league was that's why they make you play the games because based on what you think that's interesting, but you have to play the game. And I can tell you what I think is going to happen that I'm very bullish about [indiscernible] in '26 and in '28, but we're really only going to find out as movie after movie comes out, gets released into our theaters, and we gave the reaction of the movie going public. But I could not be more optimistic about our prospects if you look out for the remainder of this year and the remainder of the next 2 years, which is where we really have good visibility as of the movies that are coming up. Thank you for the question. You have got a follow-up , go ahead.

[indiscernible] you guys have done a great job because it takes everyone everybody in building everybody in the theater business, the movie makers that takes all of them. It also takes the investors. The investors are the ones that are going out buying those tickets buying a popcorn, buying the candy. So it's not just one of us, it's all of us together to make this work. So that's my statement.

Thank you for that.

My name is Tomas Marina, and I'm going to talk to you on the tokenization. What change that allows AMC to speak about it now. Why focus on bladtenib? Has AMC investigated the roles of market makers, clearing firms and custodians, including Citadel Securities, what is AMC doing about products using its name or logo without authorization of AMC.