AMC Entertainment plans to upgrade its theaters as the box office recovers

Leading cinema operator AMC Entertainment unveiled its so-called “GO Plan” – short for “Go on Offense” – a series of major improvements to seating, projections and auditoriums over the next few years.

CEO Adam Aron laid out details of the initiative during a quarterly conference call with investors and analysts, adding that a news release Thursday aimed to fill in some gaps. He predicted the reinvestment would “generate attractive returns for shareholders” and help differentiate AMC in the theater sector.

Financial details were largely absent from Aron’s remarks, although he suggested the cost would likely run into the hundreds of millions depending on the pace of renovations. The plan will launch in the US but will also reach international markets operated by Odeon.

The company’s third-quarter numbers beat Wall Street expectations, with AMC reporting an adjusted loss per share of 4 cents compared to a profit of 8 cents in the year-ago period. Total revenue of $1.35 billion fell from $1.4 billion a year ago, although the July-September quarter saw hits like ” Deadpool and Wolverine.

Despite beating analysts’ forecasts, AMC’s shares fell 6% in after-hours trading.

New offices are already being set up in top-volume locations, including Burbank and the New York Empire at 42nd Street and Lincoln Square downtown. Additional legroom to a total of 4 feet between rows will be another result, and laser projection will replace traditional methods. A new cinema format called AMC XL will feature expanded screen sizes and aims to capture moviegoers’ current enthusiasm for Imax and other ultra-large screen experiences.

Citing “expected increasing box office returns over several years,” Aron said the company could choose “fast or slow” with the upgrades and complete them over a period of four to seven years. In addition to the benefits arising from the post-coronavirus box office recovery, Aron noted that some key debt repayments have been pushed further into the future, allowing the company to allocate resources to its core theatrical assets in the short to medium term to provide.

Increased capital expenditures are only recorded if other key metrics such as EBITDA, a measure of profitability, increase, Aron said.