Impact of COVID-19
|12 Months Ended|
Dec. 31, 2020
|Extraordinary And Unusual Items [Abstract]|
|Impact of COVID-19||
The outbreak of the COVID-19 pandemic has had an unprecedented impact on the world and the movie exhibition industry. As a movie exhibitor that operates spaces where patrons gather in close proximity, the Company has been, and continues to be, significantly impacted. At the initial outbreak of the COVID-19 pandemic, to comply with government mandates, the Company temporarily closed all of its theatres in the U.S. and Latin America effective March 17, 2020 and March 18, 2020, respectively. In conjunction with the temporary closure of its theatres in March 2020, the Company implemented temporary personnel and salary reductions, limited non-essential operating and capital expenditures, and negotiated modified timing and/or abatement of contractual payments with landlords and other major suppliers until its theatres reopened. In addition, the Company suspended its quarterly dividend.
As of December 31, 2020, the Company had reopened 217 of its domestic theatres and 129 of its international theatres showing limited volume of new releases along with library content during reduced operating hours with limited capacities. While some staffing has been brought back to pre-COVID-19 pandemic levels given the theatre reopenings, the Company continues to maintain a temporary reduction in staffing while limiting capital expenditures to essential activities and projects. Government restrictions also continue to fluctuate with the state of the virus, impacting the Company’s reopening plans. The Company continues to work with landlords and other vendors on modified contractual payment terms while it continues to navigate through the impact of the COVID-19 pandemic and seek to recover a routine level of operations. .
Based on its current estimates of recovery, the Company believes it has and will generate sufficient cash to sustain operations. Nonetheless, the COVID-19 pandemic has had, and continues to have, adverse effects on the Company’s business, results of operations, cash flows and financial condition.
Some of the health and safety protocols that the Company has implemented in its theatres for the safety of its employees, guests and surrounding communities include the following:
With these comprehensive health and safety protocols in place, the Company believes it can more safely operate theaters while prioritizing the health of employees, guests and communities. The Company will continue to evolve these protocols based on changes to recommendations by local authorities throughout the region, as well as based on the Company’s experience as it reopens theatres domestically and throughout Latin America.
In addition to the Company’s initial actions in response to the COVID-19 pandemic discussed above, during June 2020, Company management approved and announced a restructuring plan to realign its operations creating a more efficient cost structure (referred to herein as the “2020 Restructuring Plan”). The 2020 Restructuring Plan primarily includes a permanent headcount reduction at its domestic corporate office and the permanent closure of 15
domestic and 9 international theatres. The Company recorded $20,369 in restructuring costs on the consolidated statement of income for the year ended December 31, 2020. The following table summarizes the costs of the 2020 Restructuring Plan, payments and write-offs and the remaining liability at December 31, 2020:
The unpaid and accrued restructuring costs of $6,741 are reflected in accrued other current liabilities on the consolidated balance sheet as of December 31, 2020.
The entire disclosure for an event or transaction that is unusual in nature or infrequent in occurrence, or both.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef