Earnings Call Transcript - AMC Q1 2022

Operator, Operator

Good day, and welcome to the AMC Entertainment's First Quarter 2022 Earnings Webcast. Please note that this event is being recorded. I would now like to turn the conference over to John Merriwether, Vice President of Capital Markets and Investor Relations. Please go ahead.

John Merriwether, Vice President of Capital Markets and Investor Relations

Thank you, Cerra. Good afternoon. I'd like to welcome everyone to AMC's first quarter 2022 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, and 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 to not place undue reliance 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, operating 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. After our prepared remarks, there will be a Q&A Session. This afternoon's webcast is being recorded, and a replay will be available in the Investor Relations section of our website at amctheatres.com later today. With that, I'll turn the call over to Adam.

Adam Aron, Chairman and CEO

Thank you, John. Good afternoon, everyone, and thank you for joining us today. Following on the heels of our progress throughout 2021, AMC's first quarter of 2022 marked yet another milestone. Thanks in part to Sony's UNCHARTED and Warner Brothers, The Batman, it was our best first quarter in two years. And we exceeded market expectations with a more than fivefold, or $637 million improvement in revenue. And an almost 80% or $233 million improvement in adjusted EBITDA compared to the same quarter of a year ago. What a difference a year makes. We are especially encouraged that when they did come to our theaters, our guests have been spending like never before, with revenues per patron through the roof at AMC up 34% above pre-pandemic norms and meaningfully higher than was seen at our largest competitors. During our last earnings webcast, we noted the timing of when big movies would release this year, not because of streaming and not because of COVID fears among patrons, but rather solely because of what titles would open when. We told you in our last call that the first quarter of 2022 would be the softest quarter of this year, and that box office numbers would improve sequentially as the year progressed. This view remains exactly how we see this year unfolding, with an improving box office and improving financial performance at AMC each and every successive quarter. But the real news of the day is the $187.4 million domestic opening, and the $450 million global opening of Disney's Doctor Strange. This one was the biggest movie opening of 2022 and the second biggest opening of the pandemic era, second only to Spider Man: No Way Home. Let me say it again. To all those who doubted the consumer appeal of movie theaters. Doctor Strange, Doctor Strange, Doctor Strange, Doctor Strange. And not only is the movie clearly a big hit. I'm also absolutely pleased to report to you that AMC overperformed for this movie at opening weekend with a 26% domestic market share which is considerably higher than our historic 22% domestic market share norms. Given that AMC is the largest movie theater company in the world, we can say to our shareholders with some glee and delight that the resilience of movie theaters is right now on clear display and that the future of cinema is bright. Indeed, we've already kicked off the second quarter with Sonic who raced his way to the highest domestic opening weekend of all time for a video game adaptation and has thus far generated nearly $350 million worldwide box office revenue. And as I said just a moment ago, this past weekend, Doctor Strange, Doctor Strange, Doctor Strange, Doctor Strange. But we believe this is just the tip of the iceberg for what's to come this summer and the balance of 2022. What an array of compelling and exciting film titles lies ahead for the rest of the year. We're just 2.5 weeks away from the premiere of my personal favorite, Paramount and Tom Cruise's long awaited and highly anticipated Top Gun: Maverick. I saw the movie in a private screening for exhibitors a few weeks ago. It is just stunning. In my view, it's a cinematic masterpiece, and oh my, are we going to sell tickets for Top Gun: Maverick at AMC. The second quarter will also include such crowd pleasers as Universal's Jurassic World Dominion and for audiences young and old, Back from Infinity and Beyond, Pixar's Lightyear. Later in the year, in the second half, we have one amazing title after another, especially including Baz Luhrmann's brilliant biopic of Elvis, starring Tom Hanks as Colonel Parker. Along with Illumination's Minions: The Rise of Gru, Marvel's Thor: Love and Thunder, Jordan Peele's latest original edge of your seat horror flick, Nope. And Brad Pitt's action-packed thriller, Bullet Train. The movies keep coming in 2022. We'll finish the year with Warner Brothers, DC Comics based Black Adam starring Dwayne The Rock Johnson, and three more Disney films, which are sure to be monstrous hits, including the animated Strange World, and two highly anticipated tentpole Disney sequels. Marvel's Black Panther: Wakanda Forever, and James Cameron's Avatar 2, the sequel to Avatar at the time of its original release, the highest worldwide grossing movie of all time. I've had the privilege of spending some time with the brilliant James Cameron and his producing partner John Landau, and I've seen actual footage from Avatar 2 which is just glorious. I can tell you with certainty that movie audiences are going to be mesmerized by their return to Pandora. As a result, the entire movie industry is going to end 2022 in grand style. It's just so very clear in our eyes. Just as Nicole Kidman proclaimed in our ever so successful television advertising, which has attained a cult-like status moviegoers are so eager to return to the magic offered at AMC theaters. They want dazzling images on a huge silver screen. They want to immerse themselves in stories that are perfect and powerful. They want to enjoy comfortable recliner seating, a bucket of buttered popcorn and a coke. They want more IMAX and Dolby cinema screens at AMC than are offered by any other movie exhibitor. And for just a few hours, they want to escape, they want to escape the news, the internet, war, politics, inflation, interest rate hikes, their phone, and the interruptions that inevitably come when at home. So there is no confusion. At AMC, we are very optimistic about the outlook for the 2022 box office that we believe to be close to double that of 2021 and 4x that of 2020. No one has a perfect crystal ball. But our hope and current expectations is that the fourth quarter of 2022 will finally reach or will get close to pre-pandemic levels of revenue. Some on Wall Street and some in the press have been filling our heads for two years now about the rise of streaming and the corresponding end of theaters. This won't be the first time or the last time that conventional wisdom will be proven to be filled with so much folly and so very wrong. Movie theaters have been central to the cultural fabric of America and the world for more than a century. And their promise and potential remains resilient and real. Many of us on this call can remember the revealing and clarifying language that came out of the 1992 presidential campaign when James Carville said, it's the economy, stupid. Well, for the movie theater business, it's the movies, stupid. And oh, do we have hit movies now coming to an AMC theater near you. I'll be back in a few minutes to provide some strategic updates and take your questions. But now I'll turn the call over to our CFO, Sean Goodman.

Sean Goodman, Chief Financial Officer

Thank you, Adam, and thanks everyone for joining us this afternoon. During the first quarter, we welcomed 39 million guests to our theaters around the world. That's a very significant increase from the 7 million guests that we entertained in the same period last year. Our Q1 2022 attendance generated revenue of $785.7 million. This is more than five times the $148.3 million of revenue that we had in Q1 of 2021. In addition, our Q1 '22 adjusted EBITDA improved by $233 million to a loss of $61.7 million. This compares to a loss of $294.7 million in Q1 of 2021. Clearly, we are making meaningful progress along our recovery path. While Q1 revenue and attendance were well below pre-pandemic levels, this is precisely as we predicted in our most recent quarterly earnings call. Knowing that the timing of when the big movies would be released this year we said then that the industry box office would rise markedly in calendar year 2022 but that most of the strength would occur in the second half of 2022. In Q1, we saw that the box office momentum built as the quarter progressed. And Q2 has started off strong. Just as fast we can look at the robust Doctor Strange opening. Indeed, consumers are flocking to the theaters once again. We are very encouraged by the compelling upcoming film slate and are consistently very strong post-pandemic operating performance. That reflects our laser focused on both the guest experience and profit improvement initiatives to grow and enhance the business. First quarter consolidated revenue per patron was $20.11, 33.7% higher than pre-pandemic Q1 of 2019. Consolidated admissions revenue per patron was up 23.9% and consolidated food and beverage revenue per patron was up 40%, both of this compared to the first quarter of 2019. In our domestic business, admissions revenue per patron increased by 28.5% compared to pre-pandemic Q1 2019 and our international business achieved a 15% increase. The admissions revenue per patron growth was driven by increasingly choosing to upgrade to the very best possible site and sound experiences that could only be found at our premium large format offerings such as IMAX, Dolby Cinema, and AMC Prime. PLF, or premium large format attendance, represented 16% of our domestic attendance in Q1 of 2022 compared to 13% in the first quarter of 2019. In our international markets, Q1 2022 PLF tenants represented 9.5% compared to 8.1% in the first quarter of 2019. In addition, we also benefited from an overall favorable Showtime mix, coupled with pricing adjustments, including blockbuster and opening weekend pricing. From a food and beverage perspective, we continue to enjoy exceptionally strong food and beverage revenue per patron as our guests enjoy the full outside-the-home entertainment experience that is offered at AMC. In our domestic markets, food and beverage spend per patron in the first quarter was $7.52. That is 43.7% higher than the average spend in pre-pandemic Q1 2019. And in the international business, food and beverage spend per patron was $4.40, and that is 35% higher than pre-pandemic Q1 of 2019. Our significant food and beverage outperformance continues to be primarily driven by an increase in the proportion of guests choosing to enjoy our industry-leading food and beverage offerings that are made easy and convenient to purchase through the AMC app. Consolidated other revenue per patron in Q1 2022 increased by 82.4% compared to the same period in 2019, with domestic other revenue per patron increasing 93.5% and international other revenue per patron increasing by 61.9%. These statistics reflect an increasingly higher percentage of guests that are choosing to reserve their seats and to order their food and beverage in advance using our industry-leading website and app, together with the benefit of diversification initiatives that we've deployed such as renting our theaters during off-peak times to businesses and government organizations for meetings or other events. In an ongoing effort to enhance efficiency, we continue to be extremely agile in adjusting payroll hours and flexing showtimes to reflect the market demand and to optimize our efficiency. For example, our Q1 domestic attendance of 25.8 million guests represented 46.9% of Q1 2019 attendance, but it also represented 71% of Q1 2019's attendance per showing. Moving to cash and liquidity. We ended the quarter with liquidity of approximately $1.4 billion comprised of $1.165 billion of cash and cash equivalents and $211 million of undrawn credit facilities. As anticipated and as discussed during last quarter's webcast, cash burn this quarter was adversely impacted by normal seasonal Q1 working capital needs. Our working capital almost always comes under pressure during Q1 following a strong Q4 holiday box office, and this year was no exception. Operating cash burn representing cash burn before debt servicing costs and before deferred rent payback was $223.9 million, and this compares to $321.6 million in Q1 of 2021. Looking ahead, we expect our cash burn to improve sequentially through the year, with Q2 being better than Q1, but still relatively weak. But with the second half of 2022 being substantially better than the first half with positive operating cash generation expected by the fourth quarter. Regarding capital allocation, we continue to pursue a balanced and very disciplined approach. Our priorities remain unchanged: One, ensuring that we have sufficient liquidity to manage through the recovery phase; two, strengthen our balance sheet by reducing our debt and associated interest costs; three, invest in our business to enhance the guest experience; and four, opportunistically pursue value-enhancing initiatives, including diversification. So far this year, we have been very active in allocating capital to enhance shareholder value. As we previously reported, earlier this year, we completed a highly successful capital raising, issuing $950 million of 7.5% first lien notes. As a result of this transaction, we were able to repay high interest debt raised at the height of the pandemic, reducing our annual interest expense. At the same time, we extended our debt maturities by between 3 and 4 years. During the first quarter of 2022, we also repaid approximately $45 million of deferred rent, reducing our deferred rent balance to approximately $272 million. We expect to further reduce this deferred rent balance during 2022 by another approximately $125 million. We continue to work on other attractive opportunities to strengthen our balance sheet and enhance our financial flexibility. Actively managing our theater portfolio is ongoing at AMC as we add new high-performing locations and eliminate low-performance ones, all with the goal of improving guest satisfaction and optimizing overall profitability. During the quarter, we added 3 new theaters and we closed 12. This brings the total number of locations closed since the pandemic began to 95 and the total number of new locations opened to 33 for a net reduction of 62 locations through Q1 2022. In addition, in early April, we announced the acquisition of 7 formerly Bow Tie cinema locations in Connecticut, Upstate New York and Annapolis, Maryland. And last month, we announced a significant investment to dramatically upgrade the sight and sound experience at AMC through the installation of laser projection equipment at 3,500 auditoriums in the U.S. through 2026. This equipment has a value of approximately $0.25 billion, although our upfront capital investment is minimal based on our agreement with our partner. And this new projection equipment is also environmentally friendly and comes along with meaningful operating cost benefits. net CapEx, including landlord contributions, in Q1 was $34.2 million. And for 2022, separate and apart from any M&A activity, we're expecting net CapEx to be in the range of $150 million to $200 million. Finally, in mid-March, we announced our investment in Hycroft Mining. As a result of this investment of $27.9 million, we recorded a mark-to-market gain of $63.9 million in the first quarter of 2022. This is based on the share price of Hycroft as of March 31. The third operating enhancements and efficiency optimization initiatives implemented over the last two years have positioned us very well, and we continue to focus on initiatives to grow revenue, increase efficiency, enhance the guest experience, and diversify our business, all with the goal of growing shareholder value and ensuring our success in a post-COVID environment. And with that, I'll pass the call back over to Adam.

Adam Aron, Chairman and CEO

Thank you, Sean. Before we begin the question and answer session, I want to provide an update on some important strategic initiatives aimed at enhancing value for AMC and our shareholders. Our strategy at AMC can be summed up with three clear words: recovery, agility, transformation. You'll hear us emphasize this as we move forward. Regarding recovery, our financial performance over the last five quarters shows that AMC is steadily recovering from the effects of COVID-19. In 2020, COVID brought us to our knees, but in 2021, we got back up, dusted ourselves off, and began to move forward. We are getting stronger every day, and we can see a return to normalcy in our future. While we are not yet where we want to be, we are heading in the right direction. Each year since 2020 has shown improvement, and we anticipate that 2023 will continue this trend based on the upcoming movie slate. Our attention remains focused on guiding AMC toward a successful and sustainable recovery from the pandemic's impacts, while also recognizing the need to be agile in the face of industry changes. The past two years have demonstrated that AMC's management team is adept at navigating challenging situations. We have faced many obstacles and emerged stronger each time. As we look to the future, I am confident that AMC will continue to adapt successfully to whatever changes arise. Our agility is a fundamental strength that supports our stability and success. Overall, AMC has proven its remarkable ability to navigate change successfully. Additionally, with the support of our shareholders and over $1 billion in capital, we are not just looking to bring back the pre-pandemic AMC, but to evolve into a more robust and ambitious organization. Our investments, such as in Hycroft Mining, illustrate our commitment to seeking out exciting new opportunities. Although some were surprised by our venture into Hycroft, it reflects our understanding of how companies can overcome liquidity challenges. So far, our investment in Hycroft has yielded positive results, with significant appreciation even amid broader market declines. Those who view AMC only through the lens of our past do not fully grasp our forward-looking vision. We are committed to building a new AMC and embracing value-creating initiatives. There will be more opportunities like Hycroft ahead, as we look for investments that utilize our skills in innovation and capital raising to unlock value for AMC and our shareholders. Turning to a few updates on initiatives we previously announced: First, we're progressing in entering the lucrative retail popcorn market, with plans to launch later this year. We are currently focused on research and product testing. Later this year, we will offer delivery of AMC menu items, including our signature popcorn, to homes in key markets, expanding nationwide by the fourth quarter. We are also developing microwave and ready-to-eat popcorn products for grocery stores. Second, we are in talks with banking partners about launching a co-branded credit card aimed at our shareholders and moviegoers, with plans to introduce a significant number of cards within the next year. Third, we have eight NFT programs either launched or in development, and they have successfully driven movie ticket sales for major releases. We are exploring how NFTs can enhance AMC's profitability in the future. As for cryptocurrency, we now accept a variety of cryptocurrencies for online payments at AMC, which have recently accounted for around 35% of our total online transactions. Fourth, AMC has made smart and innovative decisions regarding ticket and food pricing, adjusting based on demand, which has positively impacted our revenues per patron. Lastly, we've acquired portions of both the former Arclight Pacific theater circuit and Bow Tie cinemas, enhancing our presence in major markets, and we are committed to upgrading our theaters with more IMAX and Dolby Cinema locations. We're also introducing new laser projection technology across many of our auditoriums, promising an improved viewing experience. In closing, I want to express my gratitude to our dedicated retail investors who have supported AMC in the last year and a half. I appreciate all the ideas and feedback that I receive from our shareholders, which I actively engage with. I understand your concerns about market dynamics and conflicts you see within AMC’s shareholder base. We are continuously assessing the best strategies and will take action when the timing is appropriate. I remain a committed shareholder, holding nearly 3 million shares of AMC, and I share your goal of maximizing long-term shareholder value. In summary, our first quarter of 2022 has been promising, our liquidity remains strong, and we are optimistic about the future. We encourage you to see Doctor Strange this weekend, which we believe marks the beginning of an exciting movie slate this year, highlighted by upcoming releases like Top Gun: Maverick and Jurassic World Dominion. Now, Sean, let's start the questions from our shareholders.

Sean Goodman, Chief Financial Officer

Thanks, Adam. So we have a few questions to start relating to the upcoming shareholder meeting. Specifically, there's questions about people's voting materials, when they will be received, what is on the docket for voting at the shareholder meeting. And there's a question about will international shareholders be allowed to vote at this meeting.

Adam Aron, Chairman and CEO

Thank you for the question. Our shareholder meeting is scheduled for June 16 at 2:00 p.m. Central Time. It will be held here in our offices in Leawood, Kansas, a suburb of Kansas City. You are all invited, those of you who are shareholders anyway. Those of you who are shareholders are invited to attend in person if you wish. We filed all the proxy papers with the SEC on April 29. You can access those proxy papers if you haven't already seen them by going to the Investor Relations section of the amctheatres.com website. Look at the Financial Performance tab, it's all there. As for voting materials, you should usually allow about 2 weeks or so for brokerage firms to get the proxy materials to you as a shareholder at AMC. If you do not receive proxy materials by mid-May, you definitely should contact your broker or our proxy solicitor, DFK, who has a special toll-free number for AMC shareholders at 1-888-625-2588. That number again is 1-888-625-2588. There are three issues up for a vote at the annual meeting. One is the election of directors of some members of our Board who are up for reelection. Another is a nonbinding advisory vote on say-on-pay, and the third is the ratification of our external auditors, Ernst & Young. As for our international shareholders, many of whom will be listening to this call today, we have a particular appreciation for those of you around the world who still follow AMC. This is a matter of some consternation for us. Whether you can vote at our shareholder meeting is entirely based on your brokerage firm. So I would encourage you to check with your broker internationally. Hopefully, you're with one of the brokerage firms that will allow you to vote your shares at our annual meeting. If not, change brokers.

Sean Goodman, Chief Financial Officer

Thanks, Adam. So the next question is about our entry into the retail popcorn business. The specific question is when is popcorn likely to be available in stores?

Adam Aron, Chairman and CEO

As I said in my prepared remarks, our hope is that we can be there in the fourth quarter of this year, 2022. There's a lot of action behind the scenes, including discussions with various major retailers. And the one thing I know is that our microwave and ready popcorn is going to be a strong competitor. Our brand resonates with consumers. We are known for popcorn. I've had lots of ideas submitted by shareholders that we should include something called a golden ticket with our packaging. That's a great idea. And I'm sure that we will, sort of like Cracker Jack has a gift in every box, I wouldn't be surprised if we have some benefit relating to AMC Theatre moviegoing in every box of our perfectly popcorn. Let's hope we can get there in the last trimester of 2022.

Sean Goodman, Chief Financial Officer

One of the many suggestions we've received is regarding AMC merchandise, and there is a question about when people can expect to purchase it.

Adam Aron, Chairman and CEO

The suggestion of AMC merchandise is a good idea. We've tested some either at our theaters or online. For example, we had a Ghostbusters Ambulance that sold out and Batman popcorn holders that also sold out. It’s clear to us that merchandise will be beneficial. We are currently figuring out how to make AMC-branded merchandise and movie-themed items available to our guests, either at theaters or online. Expect to see this launch for consumers sometime in the second half of 2022.

Sean Goodman, Chief Financial Officer

So people are asking what sort of marketing and initiatives are being done when we acquire new theater locations.

Adam Aron, Chairman and CEO

I will address what we are doing in a moment, but first, I want to emphasize that it's clearly working. Just look at the success of The Grove and The Americana brand in Los Angeles. These were already strong theaters for Arclight, which is why we added them to our network. Their performance has improved significantly under our management. Out of roughly 5,000 movie theaters in the country, these two have consistently ranked in the top 30 since we took over. To explain our approach, the first step we take is to enhance the product by incorporating AMC service levels and amenities into the theaters we acquire. We plan to implement the same improvements at the Bow Tie theaters in Connecticut, Upstate New York, and Annapolis as we did out West. Some of our theaters will feature new IMAX or Dolby Cinema locations, or both. In addition to product upgrades, we are also introducing our loyalty programs to these theaters. This includes AMC Stubs, our frequent moviegoing program, and AMC Stubs A-List, our monthly subscription service. As we transition customers from these theaters into our loyalty program, we communicate with them frequently, typically on a weekly basis, to keep them updated on what's happening at AMC. We're also enhancing our local marketing efforts through social media and paid advertising, and I can confidently say that everything is performing very well so far. Furthermore, we are not finished yet; we plan to add even more high-quality theaters to our network throughout 2022. Some questions about dividends. When will AMC pay a dividend?

Sean Goodman, Chief Financial Officer

Well, I have seen suggestion after suggestion that you'd like to see us pay a dividend. I think we've announced publicly previously that our current debt documents prevent us from paying a cash dividend prior to June of 2023. So this is not really a decision for today. This is a decision for a year down the road. Another one of the many suggestions, will AMC make its own movies?

Adam Aron, Chairman and CEO

This one is a particularly interesting topic. Several years ago, AMC owned 50% of Open Road Films, where we did make our own movies and, in fact, got the Oscar in 2016 for the Best Picture of the Year with Spotlight. And I have to say that there are a lot of conversations that are underway now with various movie makers about whether we should repeat our activity in prior years of making our own content. It is something that's on the list. We're thinking very hard about it. We've had very serious conversations with some very well-known movie studio executives and major movie directors, and it is something that has our attention.

Sean Goodman, Chief Financial Officer

With our recent …

Adam Aron, Chairman and CEO

Can I just add while we are on the subject? Even if we were to create our own movies, now is a good time to reach out to our long-standing studio partners. Hollywood is producing great content again, and it's finally being released exclusively in theaters for exclusive theatrical windows. I want to express our gratitude to the likes of Disney, Universal, Warner Bros., Sony, Paramount, and Lions Gate, all of whom create amazing films. This does raise the question of whether we can convince some of the streamers to release their movies in theaters as well. We have had discussions over the years with Netflix, Amazon, and Apple, and we have made it clear that we would be very happy to showcase some of their more significant films. However, we need to respect our long-standing industry partners, the major studios, and cannot have different rules for major studios and streamers. If we can persuade the streamers that it is in their best interest to show movies in theaters, that could be another way to bring more films to our theaters.

Sean Goodman, Chief Financial Officer

So with our recent acceptance of cryptocurrencies and other forms of payment, people want to know, to what extent are these new forms of payment being accepted, including Dogecoin, Bitcoin, etc.?

Adam Aron, Chairman and CEO

So this was only put on our radar screen by our shareholders. And there was just enormous interest in it. And so we went down the path of doing the programming required to accept cryptocurrency. And what we found is that the same programming that was needed to accept cryptocurrency is the exact same programming that we needed to accept Apple Pay and Google Pay, PayPal, and a whole bunch of other payment types. And it's been a massive home run for us. While crypto itself has modest usage, when you take all of those new payment types that we introduced for AMC as a result of our exploring crypto, again, it's in the neighborhood of one-third of our total online ticketing is now being paid for in all these various alternate payment methods. So I would say this whole endeavor has been a massive success for us. And of course, the Holy Grail is do we actually ever consider launching a cryptocurrency of our own? We've said publicly that we're intrigued by that notion. We are studying that notion. The biggest issue that we want to make sure that we get exactly right is that we believe the regulatory environment around cryptocurrency will radically change during 2022 and in 2023. And we want to make sure that if we do embrace issuing cryptocurrency rather than just accepting it, that we anticipate the new regulatory climb as well, and we stay on the right side of the law.

Sean Goodman, Chief Financial Officer

People are interested in our plans with respect to NFTs. Up until now, we've been largely using them for promotional purposes. There's questions as to whether AMC would look to sell NFTs in the future?

Adam Aron, Chairman and CEO

That's an interesting question, and it's one that has come up from our shareholders. As I mentioned earlier, we have eight NFT programs either launched or in development. Historically, we have only four of these programs so far, and we've been giving away the NFTs. We conducted a poll on Twitter asking whether we should continue giving them away for free or sell them. The results showed that about two-thirds voted to keep them free, while a notable percentage suggested that selling some could help generate funds. So, it's uncertain what our future approach will be. We may adopt a mix of both strategies, giving some NFTs away while selling others. We are carefully exploring how to maximize potential profits from our NFT venture. In terms of competition, we are significantly ahead of any other movie theater exhibitor globally, having issued hundreds of thousands more NFTs than anyone else.

Sean Goodman, Chief Financial Officer

There's broad-ranging question here about how we keep AMC relevant with the strength of streaming.

Adam Aron, Chairman and CEO

Well, look, I do think that's playing out before our very eyes. If you look at the pandemic, the period when movie theaters were shut, studios played around with every possible variation of theatrical release, including taking some movies to the home simultaneous with that release. In other cases, just taking movies to the home and not releasing them in theaters overall. I think we've convinced Hollywood that the way to optimize their profitability is for them to support their streaming services, but also to support theatrical exhibition. The theatrical window has returned. That's good for the future and relevance of movie theaters. Beyond that, though, if you really look at the darker times for revenue generation over the past 24 months, it's been because there just wasn't a lot of good movies coming out. It wasn't so much that the quality of movies was bad; it was the quantity of movies that was depressed. What's happened of late that started in the fourth quarter of 2021, finishing up with huge hit in Spiderman: No Way Home, the third biggest movie of all time. Then we saw Uncharted and The Batman in the first quarter. Now we are seeing Doctor Strange in the Multiverse of Madness, Top Gun: Maverick is around the corner, Jurassic World Dominion is around the corner, the summer is filled with movies, and in the fall, Christmas brings Avatar 2. I really do think that among the biggest things we can do to ensure our relevance is to make sure that we have a steady parade and array of major movie titles with broad consumer appeal that are being released by studios. Beyond that, at AMC, we ourselves, we have a further obligation on top of just having good movies at our disposal. And we are absolutely committed to being innovators in theatrical exhibition, keeping the quality of our theaters high. As I said, we're investing sufficient funds to get $0.25 billion of laser projection equipment into our theaters coming down soon. We've got more IMAX locations coming, more Dolby Cinema locations coming. We are going to continue to make our food products more enticing at AMC as we look ahead. So take all that together, combine it with the fact that people have been going to movie theaters for a century, I'm just certain of one thing in life: The movie theater industry has an entry point at AMC as a company. We will be relevant, and we will take whatever actions we need to stay relevant as we look ahead.

Sean Goodman, Chief Financial Officer

And finally, a question about our partnership with Dreamscape and our plans with respect to that partnership. Will AMC consider more Dreamscape locations, for example?

Adam Aron, Chairman and CEO

Well, for those of you who don't know what Dreamscape is, it's a really innovative virtual reality product. We opened up three Dreamscape locations, one in New Jersey, one in Ohio, one in Texas, to test them. The product is spectacular. The economic returns are okay. They're not spectacular, but they're okay. We are told that there are changes in the technology coming with VR that will make it more affordable to introduce more Dreamscape locations. So with respect to Dreamscape specifically, we will see. But the fact that we are willing to embrace Dreamscape 3 or 4 years ago, I think is yet another signal of AMC's willingness to embrace alternate content. And this summer, we experimented with a variety of interesting concepts showing concert movies, some live, some on tape. We showed WWE and UFC events in our theaters. For two of the past three years, we showed NFL games on Sunday afternoons in our theaters. And I just have a strong view that if we can obtain the rights to show professional sporting events or collegiate sporting events in our theaters going forward, that would be very popular with our guests. So all of this is in the works. And the minute we strike a rights deal with a major league, we will put out a press release. With that, are there any other questions? Do we have time? It's already 59 minutes in. We kind of promised people an hour. So maybe, operator, we will take a question and then call it a day.

Operator, Operator

Thank you. It appears we have reached our time limit for the conference. This concludes our question-and-answer session. I would like to turn back to you for closing remarks.

Adam Aron, Chairman and CEO

All right, Operator, I guess we are done. We tried. Closing remarks. Very simple folks, we had a good quarter. We are on the march forward, we are in the middle of a long road to recovery. But if you ever want to get enthusiastic about where we are on that road, just look at the $187.4 million, 26% of it was ours, from the Doctor Strange in the Multiverse of Madness this weekend, go see it at an AMC theater near you. And I am telling you, whatever you do in life, do not miss Top Gun: Maverick. It is one spectacular movie. Thank you, operator. Thank you, one and all, for listening.

Operator, Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.