Correspondence 0001411579-24-000069 from AMC ENTERTAINMENT HOLDINGS, INC. (AMC) (CIK 0001411579) (AMC)
AMC ENTERTAINMENT HOLDINGS, INC. (AMC) (CIK 0001411579)
Date: Oct. 9, 2024 · CIK: 0001411579 · Accession: 0001411579-24-000069
AI Filing Summary & Sentiment
File numbers found in text: 001-33892
Referenced dates: September 25, 2024
Letter
October 9, 2024
VIA EDGAR TRANSMISSION
Securities and Exchange Commission
Division of Corporation Finance
100 F Street NE
Washington, D.C. 20549-3561
Attention: Valeria Franks
Suying Li
Re: AMC Entertainment Holdings, Inc.
Form 10-K for Year Ended December 31, 2023
Item 2.02 Form 8-K filed August 2, 2024
(File No. 001-33892)
To the addressees set forth above:
AMC Entertainment Holdings, Inc. (the “Company, “we, “us,” and “our”) respectfully submits this response to the comments set forth in the comment letter of the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission dated September 25, 2024. For your convenience, we have repeated your comments below in bold and italics before each of our responses.
Form 10-K for the Fiscal Year Ended December 31, 2023
Management's Discussion and Analysis of Financial Condition and Results of Operations Adjusted EBITDA, page 52
1. Your non-GAAP adjustments for “cash distributions from non-consolidated entities” and “other non-cash rent benefit” in the Adjusted EBITDA reconciliation appear to change the recognition and measurement principles required to be applied in accordance with GAAP. Please provide us with additional detail explaining how you considered Question 100.04 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations, or alternatively, remove the Adjusted EBITDA and Total Adjusted EBITDA measures from your disclosures outside of your segment note disclosure. This comment also applies to other filings in which Adjusted EBITDA is presented.
The Company respectfully acknowledges the Staff’s comment and in response to the comment the Company will exclude the adjustments for “cash distributions from non-consolidated entities” and “other non-cash rent benefit” from the Adjusted EBITDA and Total Adjusted EBITDA measures in future filings with conforming changes made to the prior year comparative information. The Company will make the changes described above in all instances where Adjusted EBITDA or Total Adjusted EBITDA are presented such that Adjusted EBITDA and Total Adjusted EBITDA measures are consistent between the segment note and disclosures outside of the segment note and to be consistent with the measure of segment profit and loss used by the chief operating decision maker to evaluate performance and allocate its resources. The Company will change
the measure of segment profit and loss used by the chief operating decision maker to evaluate performance and allocate resources by excluding the adjustments for “cash distributions from non-consolidated entities” and “other non-cash rent benefit” from the Adjusted EBITDA and Total Adjusted EBITDA measures on a prospective basis. The Company will disclose conforming changes made to the prior year comparative information following the guidance in ASC 280-10-50-36.
Item 2.02 Form 8-K filed August 2, 2024
Exhibit 99.1
Reconciliation of Contribution Margin Per Patron
2. Your presentation of "contribution margin" and “contribution margin per patron” appear to be non-GAAP measures and should be reconciled to their most directly comparable GAAP measure which is a fully-loaded GAAP gross profit that must be presented even if one is not depicted on your statements of operations. Please revise to provide the disclosures required in Item 10(e) of Regulation S-K.
The Company respectfully acknowledges the Staff’s comment. In response thereto, the Company will include in future filings and other public disclosures in which “contribution margin” or “contribution margin per patron” are presented, a reconciliation to the GAAP measures of fully loaded gross profit and fully loaded gross profit per patron, respectively. Please see the below example disclosure for the three and nine months ended September 30, 2024:
Reconciliation of GAAP Gross Profit and Contribution Margin
(dollars in millions)
(Unaudited)
U.S. Markets
International Markets
Consolidated
Three Months Ended
Three Months Ended
Three Months Ended
September 30,
September 30,
September 30,
GAAP gross profit reconciliation
Total revenues
$
XX
$
1,063.9
$
XX
$
342.0
$
XX
$
1,405.9
Less:
Film exhibition costs, cost of revenues
XX
(309.2)
XX
(89.3)
XX
(398.5)
Food and beverage costs, cost of revenues
XX
(65.1)
XX
(25.0)
XX
(90.1)
Operating expense, excluding depreciation and amortization expense, cost of revenues
XX
(339.5)
XX
(110.3)
XX
(449.8)
Rent, cost of revenues
XX
(166.4)
XX
(57.9)
XX
(224.3)
Depreciation and amortization expense, cost of revenues (2)
XX
(63.2)
XX
(17.2)
XX
(80.4)
GAAP gross profit
$
XX
$
120.5
$
XX
$
42.3
$
XX
$
162.8
Attendance (in thousands)
XX
51,524
XX
22,052
XX
73,576
GAAP gross profit per patron
$
XX
$
2.34
$
XX
$
1.92
$
XX
$
2.21
Contribution margin reconciliation
GAAP gross profit
$
XX
$
120.5
$
XX
$
42.3
$
XX
$
162.8
Operating expense, excluding depreciation and amortization expense, cost of revenues
XX
339.5
XX
110.3
XX
449.8
Rent, cost of revenues
XX
166.4
XX
57.9
XX
224.3
Depreciation and amortization expense, cost of revenues (2)
XX
63.2
XX
17.2
XX
80.4
Contribution margin (1)
$
XX
$
689.6
$
XX
$
227.7
$
XX
$
917.3
Attendance (in thousands)
XX
51,524
XX
22,052
XX
73,576
Contribution margin per patron (1)
$
XX
$
13.38
$
XX
$
10.33
$
XX
$
12.47
Constant currency contribution margin (3)
$
XX
$
689.6
$
XX
$
227.7
$
XX
$
917.3
Constant currency contribution margin per patron (3)
$
XX
$
13.38
$
XX
$
10.33
$
XX
$
12.47
U.S. Markets
International Markets
Consolidated
Nine Months Ended
Nine Months Ended
Nine Months Ended
September 30,
September 30,
September 30,
GAAP gross profit reconciliation
Total revenues
$
XX
$
2,855.8
$
XX
$
852.4
$
XX
$
3,708.2
Less:
Film exhibition costs, cost of revenues
XX
(817.7)
XX
(210.1)
XX
(1,027.8)
Food and beverage costs, cost of revenues
XX
(181.2)
XX
(62.0)
XX
(243.2)
Operating expense, excluding depreciation and amortization expense, cost of revenues
XX
(930.4)
XX
(314.6)
XX
(1,245.0)
Rent, cost of revenues
XX
(485.0)
XX
(165.8)
XX
(650.8)
Depreciation and amortization expense, cost of revenues (2)
XX
(200.7)
XX
(53.1)
XX
(253.8)
GAAP gross profit
$
XX
$
240.8
$
XX
$
46.8
$
XX
$
287.6
Attendance (in thousands)
XX
133,909
XX
53,656
XX
187,565
GAAP gross profit per patron
$
XX
$
1.80
$
XX
$
0.87
$
XX
$
1.53
Contribution margin reconciliation
GAAP gross profit
$
XX
$
240.8
$
XX
$
46.8
$
XX
$
287.6
Operating expense, excluding depreciation and amortization expense, cost of revenues
XX
930.4
XX
314.6
XX
1,245.0
Rent, cost of revenues
XX
485.0
XX
165.8
XX
650.8
Depreciation and amortization expense, cost of revenues (2)
XX
200.7
XX
53.1
XX
253.8
Contribution margin (1)
$
XX
$
1,856.9
$
XX
$
580.3
$
XX
$
2,437.2
Constant currency contribution margin (3)
Attendance (in thousands)
XX
133,909
XX
53,656
XX
187,565
Contribution margin per patron (1)
$
XX
$
13.87
$
XX
$
10.82
$
XX
$
12.99
Constant currency contribution margin (3)
$
XX
$
1,856.9
$
XX
$
580.3
$
XX
$
2,437.2
Constant currency contribution margin per patron (3)
$
XX
$
13.87
$
XX
$
10.82
$
XX
$
12.99
(1) We present “contribution margin” and “contribution margin per patron” as a supplemental measure of our performance. We define “contribution margin” as GAAP gross profit plus operating expense, rent, and depreciation and amortization. We believe that “contribution margin per patron” provides investors with useful information about the incremental profit generated per guest at our theatres.
(2) Depreciation and amortization expense directly related to theatre operations.
(3) The International segment information for the three and nine months ended September 30, 2024, has been adjusted for constant currency. Constant currency amounts, which are non-GAAP measurements were calculated using the average exchange rate for the corresponding period for 2023. We translate the results of our International operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our International operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.
Select Consolidated Constant Currency Financial Data
3. Your presentation of select consolidated constant currency financial data for the quarter and six months ended June 30, 2024 appear to be full non-GAAP income statements. Please revise to avoid giving non-GAAP measures undue prominence by presenting a full non-GAAP income statement. Refer to Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations.
The Company respectfully acknowledges the Staff’s comment. In response thereto, in future filings the Company proposes to provide constant currency financial data for only certain items rather than providing it for a full income statement. Please see the below example disclosure for the three and nine months ended September 30, 2024:
Key Financial Results (presented in millions, except operating data)
Three Months Ended September 30,
Nine Months Ended September 30,
Change
Change
GAAP Results
Total revenues
$
XX
$
1,405.9
XX
%
$
XX
$
3,708.2
XX
%
Net earnings (loss)
$
XX
$
12.3
$
XX
$
XX
$
(214.6)
$
XX
Net cash used in operating activities
$
XX
$
65.9
$
XX
$
XX
$
(137.4)
$
XX
Diluted earnings (loss) per share
$
XX
$
0.08
$
XX
$
XX
$
(1.43)
$
XX
Non-GAAP Results*
Adjusted EBITDA
$
XX
$
193.7
$
XX
$
XX
$
383.3
$
XX
Free cash flow
$
XX
$
8.4
$
XX
$
XX
$
(290.9)
$
XX
Adjusted net loss
$
XX
$
(13.9)
$
XX
$
XX
$
(200.2)
$
XX
Adjusted diluted loss per share
$
XX
$
(0.09)
$
XX
$
XX
$
(1.33)
$
XX
Constant Currency Results (1):
Total revenues
$
XX
$
1,405.9
XX
%
$
XX
$
3,708.2
XX
%
Contribution margin
$
XX
$
917.3
$
XX
$
XX
$
2,437.2
$
XX
Adjusted EBITDA
$
XX
$
199.9
$
XX
$
XX
$
406.4
$
XX
Operating Metrics
Attendance (in thousands)
XX
73,576
XX
%
XX
187,565
XX
%
U.S. markets attendance (in thousands)
XX
51,524
XX
%
XX
133,909
XX
%
International markets attendance (in thousands)
XX
22,052
XX
%
XX
53,656
XX
%
Average screens
XX
9,781
XX
%
XX
9,885
XX
%
(1) Constant currency amounts, which are non-GAAP measurements were calculated using the average exchange rate for the corresponding period for 2023. We translate the results of our International operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.
***
We further acknowledge that we are responsible for the adequacy and accuracy of the disclosures in our filings, not notwithstanding any review, comments, action or absence of action by the Staff.
Should any questions arise in connection with the filing or this response letter, please contact the undersigned at (913) 213-2191.
Sincerely yours,
/s/ Chris A. Cox
Show Raw Text
CORRESP 1 filename1.htm October 9, 2024 VIA EDGAR TRANSMISSION Securities and Exchange Commission Division of Corporation Finance 100 F Street NE Washington, D.C. 20549-3561 Attention: Valeria Franks Suying Li Re: AMC Entertainment Holdings, Inc. Form 10-K for Year Ended December 31, 2023 Item 2.02 Form 8-K filed August 2, 2024 (File No. 001-33892) To the addressees set forth above: AMC Entertainment Holdings, Inc. (the “Company, “we, “us,” and “our”) respectfully submits this response to the comments set forth in the comment letter of the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission dated September 25, 2024. For your convenience, we have repeated your comments below in bold and italics before each of our responses. Form 10-K for the Fiscal Year Ended December 31, 2023 Management's Discussion and Analysis of Financial Condition and Results of Operations Adjusted EBITDA, page 52 1. Your non-GAAP adjustments for “cash distributions from non-consolidated entities” and “other non-cash rent benefit” in the Adjusted EBITDA reconciliation appear to change the recognition and measurement principles required to be applied in accordance with GAAP. Please provide us with additional detail explaining how you considered Question 100.04 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations, or alternatively, remove the Adjusted EBITDA and Total Adjusted EBITDA measures from your disclosures outside of your segment note disclosure. This comment also applies to other filings in which Adjusted EBITDA is presented. The Company respectfully acknowledges the Staff’s comment and in response to the comment the Company will exclude the adjustments for “cash distributions from non-consolidated entities” and “other non-cash rent benefit” from the Adjusted EBITDA and Total Adjusted EBITDA measures in future filings with conforming changes made to the prior year comparative information. The Company will make the changes described above in all instances where Adjusted EBITDA or Total Adjusted EBITDA are presented such that Adjusted EBITDA and Total Adjusted EBITDA measures are consistent between the segment note and disclosures outside of the segment note and to be consistent with the measure of segment profit and loss used by the chief operating decision maker to evaluate performance and allocate its resources. The Company will change the measure of segment profit and loss used by the chief operating decision maker to evaluate performance and allocate resources by excluding the adjustments for “cash distributions from non-consolidated entities” and “other non-cash rent benefit” from the Adjusted EBITDA and Total Adjusted EBITDA measures on a prospective basis. The Company will disclose conforming changes made to the prior year comparative information following the guidance in ASC 280-10-50-36. Item 2.02 Form 8-K filed August 2, 2024 Exhibit 99.1 Reconciliation of Contribution Margin Per Patron 2. Your presentation of "contribution margin" and “contribution margin per patron” appear to be non-GAAP measures and should be reconciled to their most directly comparable GAAP measure which is a fully-loaded GAAP gross profit that must be presented even if one is not depicted on your statements of operations. Please revise to provide the disclosures required in Item 10(e) of Regulation S-K. The Company respectfully acknowledges the Staff’s comment. In response thereto, the Company will include in future filings and other public disclosures in which “contribution margin” or “contribution margin per patron” are presented, a reconciliation to the GAAP measures of fully loaded gross profit and fully loaded gross profit per patron, respectively. Please see the below example disclosure for the three and nine months ended September 30, 2024: Reconciliation of GAAP Gross Profit and Contribution Margin (dollars in millions) (Unaudited) U.S. Markets International Markets Consolidated Three Months Ended Three Months Ended Three Months Ended September 30, September 30, September 30, GAAP gross profit reconciliation 2024 2023 2024 2023 2024 2023 Total revenues $ XX $ 1,063.9 $ XX $ 342.0 $ XX $ 1,405.9 Less: Film exhibition costs, cost of revenues XX (309.2) XX (89.3) XX (398.5) Food and beverage costs, cost of revenues XX (65.1) XX (25.0) XX (90.1) Operating expense, excluding depreciation and amortization expense, cost of revenues XX (339.5) XX (110.3) XX (449.8) Rent, cost of revenues XX (166.4) XX (57.9) XX (224.3) Depreciation and amortization expense, cost of revenues (2) XX (63.2) XX (17.2) XX (80.4) GAAP gross profit $ XX $ 120.5 $ XX $ 42.3 $ XX $ 162.8 Attendance (in thousands) XX 51,524 XX 22,052 XX 73,576 GAAP gross profit per patron $ XX $ 2.34 $ XX $ 1.92 $ XX $ 2.21 Contribution margin reconciliation GAAP gross profit $ XX $ 120.5 $ XX $ 42.3 $ XX $ 162.8 Operating expense, excluding depreciation and amortization expense, cost of revenues XX 339.5 XX 110.3 XX 449.8 Rent, cost of revenues XX 166.4 XX 57.9 XX 224.3 Depreciation and amortization expense, cost of revenues (2) XX 63.2 XX 17.2 XX 80.4 Contribution margin (1) $ XX $ 689.6 $ XX $ 227.7 $ XX $ 917.3 Attendance (in thousands) XX 51,524 XX 22,052 XX 73,576 Contribution margin per patron (1) $ XX $ 13.38 $ XX $ 10.33 $ XX $ 12.47 Constant currency contribution margin (3) $ XX $ 689.6 $ XX $ 227.7 $ XX $ 917.3 Constant currency contribution margin per patron (3) $ XX $ 13.38 $ XX $ 10.33 $ XX $ 12.47 U.S. Markets International Markets Consolidated Nine Months Ended Nine Months Ended Nine Months Ended September 30, September 30, September 30, GAAP gross profit reconciliation 2024 2023 2024 2023 2024 2023 Total revenues $ XX $ 2,855.8 $ XX $ 852.4 $ XX $ 3,708.2 Less: Film exhibition costs, cost of revenues XX (817.7) XX (210.1) XX (1,027.8) Food and beverage costs, cost of revenues XX (181.2) XX (62.0) XX (243.2) Operating expense, excluding depreciation and amortization expense, cost of revenues XX (930.4) XX (314.6) XX (1,245.0) Rent, cost of revenues XX (485.0) XX (165.8) XX (650.8) Depreciation and amortization expense, cost of revenues (2) XX (200.7) XX (53.1) XX (253.8) GAAP gross profit $ XX $ 240.8 $ XX $ 46.8 $ XX $ 287.6 Attendance (in thousands) XX 133,909 XX 53,656 XX 187,565 GAAP gross profit per patron $ XX $ 1.80 $ XX $ 0.87 $ XX $ 1.53 Contribution margin reconciliation GAAP gross profit $ XX $ 240.8 $ XX $ 46.8 $ XX $ 287.6 Operating expense, excluding depreciation and amortization expense, cost of revenues XX 930.4 XX 314.6 XX 1,245.0 Rent, cost of revenues XX 485.0 XX 165.8 XX 650.8 Depreciation and amortization expense, cost of revenues (2) XX 200.7 XX 53.1 XX 253.8 Contribution margin (1) $ XX $ 1,856.9 $ XX $ 580.3 $ XX $ 2,437.2 Constant currency contribution margin (3) Attendance (in thousands) XX 133,909 XX 53,656 XX 187,565 Contribution margin per patron (1) $ XX $ 13.87 $ XX $ 10.82 $ XX $ 12.99 Constant currency contribution margin (3) $ XX $ 1,856.9 $ XX $ 580.3 $ XX $ 2,437.2 Constant currency contribution margin per patron (3) $ XX $ 13.87 $ XX $ 10.82 $ XX $ 12.99 (1) We present “contribution margin” and “contribution margin per patron” as a supplemental measure of our performance. We define “contribution margin” as GAAP gross profit plus operating expense, rent, and depreciation and amortization. We believe that “contribution margin per patron” provides investors with useful information about the incremental profit generated per guest at our theatres. (2) Depreciation and amortization expense directly related to theatre operations. (3) The International segment information for the three and nine months ended September 30, 2024, has been adjusted for constant currency. Constant currency amounts, which are non-GAAP measurements were calculated using the average exchange rate for the corresponding period for 2023. We translate the results of our International operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our International operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations. Select Consolidated Constant Currency Financial Data 3. Your presentation of select consolidated constant currency financial data for the quarter and six months ended June 30, 2024 appear to be full non-GAAP income statements. Please revise to avoid giving non-GAAP measures undue prominence by presenting a full non-GAAP income statement. Refer to Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations. The Company respectfully acknowledges the Staff’s comment. In response thereto, in future filings the Company proposes to provide constant currency financial data for only certain items rather than providing it for a full income statement. Please see the below example disclosure for the three and nine months ended September 30, 2024: Key Financial Results (presented in millions, except operating data) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 Change 2024 2023 Change GAAP Results Total revenues $ XX $ 1,405.9 XX % $ XX $ 3,708.2 XX % Net earnings (loss) $ XX $ 12.3 $ XX $ XX $ (214.6) $ XX Net cash used in operating activities $ XX $ 65.9 $ XX $ XX $ (137.4) $ XX Diluted earnings (loss) per share $ XX $ 0.08 $ XX $ XX $ (1.43) $ XX Non-GAAP Results* Adjusted EBITDA $ XX $ 193.7 $ XX $ XX $ 383.3 $ XX Free cash flow $ XX $ 8.4 $ XX $ XX $ (290.9) $ XX Adjusted net loss $ XX $ (13.9) $ XX $ XX $ (200.2) $ XX Adjusted diluted loss per share $ XX $ (0.09) $ XX $ XX $ (1.33) $ XX Constant Currency Results (1): Total revenues $ XX $ 1,405.9 XX % $ XX $ 3,708.2 XX % Contribution margin $ XX $ 917.3 $ XX $ XX $ 2,437.2 $ XX Adjusted EBITDA $ XX $ 199.9 $ XX $ XX $ 406.4 $ XX Operating Metrics Attendance (in thousands) XX 73,576 XX % XX 187,565 XX % U.S. markets attendance (in thousands) XX 51,524 XX % XX 133,909 XX % International markets attendance (in thousands) XX 22,052 XX % XX 53,656 XX % Average screens XX 9,781 XX % XX 9,885 XX % (1) Constant currency amounts, which are non-GAAP measurements were calculated using the average exchange rate for the corresponding period for 2023. We translate the results of our International operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations. *** We further acknowledge that we are responsible for the adequacy and accuracy of the disclosures in our filings, not notwithstanding any review, comments, action or absence of action by the Staff. Should any questions arise in connection with the filing or this response letter, please contact the undersigned at (913) 213-2191. Sincerely yours, /s/ Chris A. Cox Chris A. Cox Senior Vice President and Chief Accounting Officer