To The Moon

AMC shares fell 4.6% in morning trading. AMC Entertainment Holdings Inc. reported a loss for a 14th consecutive quarter and fourth consecutive year Tuesday.

The movie-theater chain and meme-stock phenomenon topped Wall Street's reduced targets for the holiday quarter, reporting a net loss of $287.7 million, or 26 cents a share, compared with a net loss of 13 cents a share in the same period last year. On an adjusted basis, AMC $(AMC)$ reported a net loss of 14 cents a share, worse than a loss of 6 cents a share last year. The company has not reported a profitable quarter on a GAAP basis since nearly a year before the pandemic, in the second quarter of 2019, and has not been profitable for a full year since 2018.

AMC reported fourth-quarter sales of $990.9 million, compared with $1.18 billion in the same period last year. Analysts surveyed by FactSet were looking for sales of $978 million and a net loss of 19 cents a share on an adjusted basis, after reducing those targets repeatedly -- revenue was expected to be $1.11 billion as of the end of January, and more than $1.3 billion as recently as last August. For the full year, AMC recorded a loss of $973.6 million, or 93 cents a share, on sales of $3.91 billion.

"With more major movies coming in 2023, we are highly confident that our multiyear recovery will continue to show considerable progress this year," Chief Executive Adam Aron said in a statement. "But we cannot stress enough how crucial it is that for AMC to remain viable, we must continue to be agile and nimble not only in running our business day to day, but also in our continued raising of cash and decreasing the debt load on AMC Entertainment."

AMC executives did not provide a financial forecast, though Aron noted that "the first-quarter domestic box office already has posted an impressive 44% increase over 2022," while admitting again that "the industrywide box office will not return to prepandemic norms before 2024 or 2025 at the earliest."

"At AMC, we're all smiles today, but by no means are we out of the woods yet," said Aron, during a conference call to discuss the results. "We will need to remain smart and action-oriented to successfully chart our way through what are still COVID-impacted waters."

Aron said that AMC has been "masterful" in raising equity as needed. The company ended the quarter with $842.7 million of liquidity.

AMC has also been strengthening its liquidity profile and balance sheet, according to Aron. Over the past 12 months, AMC has raised approximately $314 million in gross cash proceeds and has also reduced the aggregate principal balance of its debt by approximately $390 million since the beginning of 2022, he said.

"2022 was a year of growth and recovery for AMC," said the company's CFO, Sean Goodman, during the conference call. The company welcomed 201 million guests to its theaters around the world in 2022, a 56% increase from 2021, he added.

The movie-theater chain has had a busy few months. December saw the eagerly-anticipated opening of Walt Disney Co.'s $(DIS)$ "Avatar: The Way of Water," which has become one of the five highest-grossing movies of all time at the box office

Related: AMC highlights strong opening weekend for 'Avatar: The Way of Water', raises $162 mln through APEs

AMC announced in January a special meeting of shareholders on March 14 to increase the number of AMC authorized shares from just over 524 million to 550 million and authorize a 1-for-10 reverse split of the company's common stock, converting AMC Preferred Equity units into shares of common stock. The move is part of the company's ongoing battle to eliminate debt, but now faces court proceedings that contributed to a big swing in AMC and APE stocks Monday. The APEs fell 4.1% in extended trading Tuesday.

"We believe such litigation is without merit," Aron said, during the conference call to discuss the results. "We will vigorously defend our position in this matter."

"The court has ordered that the March 14 vote shall take place on schedule, but that any implementation action resulting from the vote be held in abeyance until the court rules on the substance of the claims being made," he added. "So, the vote is on."

The company's APEs made their trading debut in August. With its APE equity unit, AMC created something like a 2-for-1 stock split, marking the company's latest effort in a fight over stock issuances. The name is a nod to the investors who turned the company into a meme stock, who often refer to themselves as "apes" or "ape nation."

This month, AMC announced that it has repurchased $365 million of debt since the beginning of 2022 and rolled out movie-ticket pricing determined by seat location. "We are charging a slight premium for the most popular seats in an auditorium, but discounting the prices of less popular seats closer to the screen up front," Aron said during the conference call. "This is in line with how other sellers price their seats -- for live theater, for concerts, for sporting events."

The CEO acknowledged that this is a substantial change to the status quo for U.S. moviegoers. "We will be watching very closely how moviegoers react to the changes that are being tested right now," he added.

Before market open Tuesday AMC announced a popcorn collaboration with Walmart Inc. $(WMT)$. The movie-theater chain said the microwave and ready-to-eat popcorn will be available at hundreds of Walmart locations starting March 11. Speaking during the conference call to discuss the results, Aron said that the company's Perfectly Popcorn will be available at more than 2,600 U.S. Walmart stores. "Once again, AMC is demonstrating unmistakable progress along our multiyear pandemic recovery glidepath," he said. "What an enormous vote of confidence that is coming to AMC from the largest retailer in the United States."

Over the past two years, AMC has been on a roller-coaster ride that took it from beleaguered pandemic victim to meme-stock phenomenon. AMC used the steep rise in its share price to tap into equity and debt markets, raising $917 million in January 2021.