Total revenue per attendee up 26%
year-over-year
Upfront revenue up 16% and scatter revenue
doubled year-over-year
National CineMedia, Inc. (NASDAQ: NCMI) (“the Company” or
“NCM”), the managing member and owner of 100.0% of National
CineMedia, LLC (NCM LLC), the operator of the largest cinema
advertising network reaching movie audiences in the U.S., today
announced its consolidated results for the fiscal first quarter
ended March 28, 2024.
“The first quarter of 2024 yet again proved the resilience of
our industry-leading platform with strong performance across both
the upfront and scatter marketplaces,” said Tom Lesinski, CEO of
NCM. “Our revenue increased 7.2% compared to the prior period,
representing the highest first quarter since the pandemic and
demonstrating the continued appeal of our premium video advertising
solutions. We generated our highest free cash flow in the last 15
quarters which, combined with our previously announced $100 million
share repurchase program, provides us with several pathways to
create value for our shareholders.”
Q1 2024 Results
Total revenue for the first quarter, ended March 28, 2024,
increased 7.2% to $37.4 million as compared to $34.9 million for
the comparable quarter last year. Operating loss improved to $22.7
million for the first quarter of 2024 from operating loss of $30.6
million for the first quarter of 2023. Adjusted OIBDA, a non-GAAP
measure, improved to negative $5.7 million for the first quarter of
2024 from negative $10.9 million for the first quarter of 2023. Net
loss for the first quarter of 2024 was $34.7 million, or negative
$0.36 per diluted share, compared to net loss of $45.5 million, or
negative $3.13 per diluted share, for the first quarter of 2023. As
adjusted to exclude the loss on the re-measurement of the payable
to ESA Parties under the tax receivable agreement, workforce
reorganization costs and legal and advisor fees related to the
Cineworld proceeding and NCM LLC’s Chapter 11 case, each as
previously reported and described in the Company’s public filings
made with the U.S. Securities and Exchange Commission, net loss per
diluted share for the quarter, ended March 28, 2024, would have
decreased to negative $0.19 per diluted share and net loss per
diluted share for the quarter, ended March 30, 2023, would have
decreased to negative $2.55 per diluted share. Adjusted OIBDA,
adjusted net loss, and adjusted loss per share are non-GAAP
measures. See the tables at the end of this release for the
reconciliations to the closest GAAP basis measurements.
Q2 2024 Outlook
For the second quarter of 2024, the Company expects to earn
total revenue of $49.5 million to $51.5 million, compared to NCM
LLC’s total revenue for the second quarter 2023 of $64.4 million,
and Adjusted OIBDA in the range of $3.5 million to $4.5 million for
the second quarter of 2024, compared to NCM LLC’s Adjusted OIBDA
for the second quarter 2023 of $12.5 million.
Supplemental Information
Integration and other encumbered theater payments due primarily
from AMC associated with Carmike Theaters for the three months,
ended March 28, 2024 and March 30, 2023, were $0.2 million and $0.3
million, respectively. These payments were recorded as a reduction
of an intangible asset on the Balance Sheet and are not included in
operating results or Adjusted OIBDA.
Conference Call
The Company will host a conference call and audio webcast with
investors, analysts, and other interested parties May 6, 2024, at
5:00 P.M. Eastern Time. The live call can be accessed by dialing
1-877-300-8521 or, for international participants, 1-412-317-6026.
Participants should register at least 15 minutes prior to the
commencement of the call. Additionally, a live audio webcast will
be available to interested parties at www.ncm.com under the
Investor Relations section. Participants should allow at least 15
minutes prior to the commencement of the call to register,
download, and install necessary audio software.
The replay of the conference call will be available until
midnight Eastern Time, May 20, 2024, by dialing 1-844-512-2921 or,
for international participants, 1-412-317-6671, and entering
conference ID 10188922.
About National CineMedia, Inc.
National CineMedia (NCM) is America’s Movie Network. As the
largest cinema advertising network in the U.S., we unite brands
with young, diverse audiences through the power of movies and
popular culture. NCM’s Noovie® pre-show is presented exclusively in
47 leading national and regional theater circuits including AMC
Entertainment Inc. (NYSE:AMC), Cinemark Holdings, Inc. (NYSE:CNK)
and Regal Entertainment Group (a subsidiary of Cineworld Group PLC,
LON: CINE). NCM’s cinema advertising network offers broad reach and
unparalleled audience engagement with over 18,200 screens in over
1,400 theaters in 195 Designated Market Areas® (all of the top 50).
NCM Digital and Digital-Out-Of-Home (DOOH) go beyond the big
screen, extending in-theater campaigns into online, mobile, and
place-based marketing programs to reach entertainment audiences.
National CineMedia, Inc. (NASDAQ:NCMI) owns a 100.0% interest in,
and is the managing member of, National CineMedia, LLC. For more
information, visit www.ncm.com and www.noovie.com.
Forward-Looking Statements
This press release contains various forward-looking statements
that reflect management’s current expectations or beliefs regarding
future events, including statements regarding the Company’s
anticipated future financial performance. Investors are cautioned
that reliance on these forward-looking statements involves risks
and uncertainties. Although the Company believes that the
assumptions used in the forward-looking statements are reasonable,
any of these assumptions could prove to be inaccurate and, as a
result, actual results could differ materially from those expressed
or implied in the forward-looking statements. The factors that
could cause actual results to differ materially from those
expressed or implied in the forward-looking statements are, among
others, 1) level of theater attendance or viewership of the Noovie®
show; 2) the availability and predictability of major motion
pictures displayed in theaters, including as a result of strikes or
other production delays in the entertainment industry; 3) increased
competition for advertising expenditures; 4) inability to implement
or achieve new revenue opportunities; 5) changes to the ESAs or
network affiliate agreements and the relationships with NCM LLC’s
ESA Parties and network affiliates; 6) failure to realize the
anticipated benefits of the post-showtime inventory in our network;
7) technological changes and innovations; 8) economic conditions,
including the level of expenditures on and perception of cinema
advertising; 9) our ability to renew or replace expiring
advertising and content contracts; 10) the ongoing effects of NCM
LLC’s recent emergence from bankruptcy; 11) reinvestment in our
network and product offerings may require significant funding and
resulting reallocation of resources; and 12) fluctuations in and
timing of operating costs. In addition, the outlook provided does
not include the impact of any future unusual or infrequent
transactions; sales and acquisitions of operating assets and
investments; any future non-cash impairments of intangible and
fixed assets; amounts related to litigation or the related impact
of taxes that may occur from time to time due to management
decisions and changing business circumstances. The Company is
currently unable to forecast precisely the timing and/or magnitude
of any such amounts or events. Please refer to the Company’s
Securities and Exchange Commission filings, including the “Risk
Factor” section of the Company’s Annual Report on Form 10-K for the
year ended December 28, 2023 and subsequent Quarterly Reports on
Form 10-Q, for further information about these and other risks.
Investors are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date they
are made. The Company undertakes no obligation to update any
forward-looking statement, whether as a result, of new information,
future events or otherwise, except as required by law.
This press release contains references to Non-GAAP financial
measures including Adjusted OIBDA (Operating Income Before
Depreciation and Amortization expense, adjusted to exclude non-cash
share-based payment costs, impairment of long-lived assets,
workforce reorganization costs and fees and expenses related to
involvement in the Cineworld proceeding and Chapter 11 case). A
reconciliation of these measures is available in this press release
and on the investor page of the Company’s website at
www.ncm.com.
NATIONAL CINEMEDIA,
INC.
Condensed Consolidated
Statements of Income Unaudited
($ in millions, except per
share data)
Quarter Ended
March 28, 2024
March 30, 2023
REVENUE
$
37.4
$
34.9
OPERATING EXPENSES:
Network operating costs
3.6
3.9
ESA Parties and network affiliate fees
22.5
23.8
Selling and marketing costs
10.0
9.5
Administrative and other costs
13.5
20.8
Depreciation expense
1.0
1.3
Amortization expense
9.5
6.2
Total
60.1
65.5
OPERATING LOSS
(22.7
)
(30.6
)
NON-OPERATING EXPENSE (INCOME):
Interest on borrowings
0.4
24.0
Loss (gain) on re-measurement of the
payable under the tax receivable agreement
12.3
(0.6
)
Other non-operating income
(0.7
)
—
Total
12.0
23.4
LOSS BEFORE INCOME TAXES
(34.7
)
(54.0
)
Income tax expense
—
—
CONSOLIDATED NET LOSS
(34.7
)
(54.0
)
Less: Net loss attributable to
noncontrolling interests
—
(8.5
)
NET LOSS ATTRIBUTABLE TO NCM, INC.
$
(34.7
)
$
(45.5
)
NET LOSS PER NCM, INC. COMMON SHARE
Basic
$
(0.36
)
$
(3.13
)
Diluted
$
(0.36
)
$
(3.13
)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
96,918,564
14,550,799
Diluted
96,918,564
14,550,799
NATIONAL CINEMEDIA,
INC.
Selected Condensed Balance
Sheet Data
Unaudited ($ in
millions)
As of
March 28, 2024
December 28, 2023
Cash, cash equivalents and restricted
cash
$
60.1
$
37.6
Receivables, net
$
48.6
$
96.6
Property and equipment, net
$
15.9
$
15.8
Total assets
$
538.6
$
567.7
Borrowings, gross
$
10.0
$
10.0
Total equity
$
402.3
$
434.5
Total liabilities and equity
$
538.6
$
567.7
NATIONAL CINEMEDIA,
INC.
Operating Data
Unaudited
Quarter Ended
March 28, 2024
March 30, 2023
Total Screens (100% Digital) at Period End
(1)(5)
18,297
19,642
ESA Party Screens at Period End (2)(5)
9,552
9,575
Total Attendance for Period (3)(5) (in
millions)
75.8
90.0
ESA Party Attendance for Period (4)(5) (in
millions)
47.1
51.6
Capital Expenditures (6) (in millions)
$
1.3
$
0.8
(1)
Represents the total screens within NCM
LLC’s advertising network.
(2)
Represents the total ESA Party
screens.
(3)
Represents the total attendance within NCM
LLC’s advertising network.
(4)
Represents the total attendance within NCM
LLC’s advertising network in theaters operated by the ESA
Parties.
(5)
Excludes screens and attendance associated
with certain AMC Carmike theaters for each period presented.
(6)
Includes certain other implementation
costs associated with cloud computing arrangements.
NATIONAL CINEMEDIA,
INC.
Operating Data
Unaudited
(In millions, except
advertising revenue per attendee, margin and per share
data)
Quarter Ended
March 28, 2024
March 30, 2023
Revenue breakout:
National advertising revenue
$
29.5
$
22.5
Local and regional advertising revenue
5.3
8.0
Total advertising revenue (excluding
beverage)
$
34.8
$
30.5
Total revenue
$
37.4
$
34.9
Per attendee data:
National advertising revenue per
attendee
$
0.389
$
0.250
Local and regional advertising revenue per
attendee
$
0.070
$
0.089
Total advertising revenue (excluding
beverage)
per attendee
$
0.459
$
0.339
Total revenue per attendee
$
0.493
$
0.388
Total attendance (1)
75.8
90.0
Other operating data:
Operating loss
$
(22.7
)
$
(30.6
)
Adjusted OIBDA (2)
$
(5.7
)
$
(10.9
)
Adjusted OIBDA margin (2)
(15.2
)%
(31.2
)%
Loss per share - basic
$
(0.36
)
$
(3.13
)
Loss per share - diluted
$
(0.36
)
$
(3.13
)
Adjusted loss per share - diluted (2)
$
(0.19
)
$
(2.55
)
(1)
Represents the total attendance within NCM
LLC’s advertising network. Excludes screens and attendance
associated with certain AMC Carmike theaters for all periods
presented.
(2)
Adjusted OIBDA, Adjusted OIBDA margin and
adjusted loss per share are not financial measures calculated in
accordance with GAAP in the United States. See attached tables for
the non-GAAP reconciliations.
NATIONAL CINEMEDIA, INC. Non-GAAP
Reconciliations Unaudited
Adjusted OIBDA and Adjusted OIBDA Margin
Adjusted Operating Income Before Depreciation and Amortization
(“Adjusted OIBDA”) and Adjusted OIBDA margin are not financial
measures calculated in accordance with GAAP in the United
States.
Adjusted OIBDA represents operating income before depreciation
and amortization expense adjusted to also exclude amortization of
intangibles, non-cash share-based payment costs, impairment of
long-lived assets, workforce reorganization costs and fees and
expenses related to involvement in the Cineworld proceeding and
Chapter 11 case. Our management use this non-GAAP financial measure
to evaluate operating performance, to forecast future results and
as a basis for compensation. The Company believes this is an
important supplemental measure of operating performance because it
eliminates items that have less bearing on its operating
performance and highlight trends in its core business that may not
otherwise be apparent when relying solely on GAAP financial
measures. The Company believes the presentation of this measure is
relevant and useful for investors because it enables them to view
performance in a manner similar to the method used by the Company’s
management, helps improve their ability to understand the Company’s
operating performance and makes it easier to compare the Company’s
results with other companies that may have different depreciation
and amortization policies, amounts of amortization of intangibles,
non-cash share-based compensation programs, impairment of
long-lived assets, workforce reorganization costs and fees and
expenses related to involvement in the Cineworld proceeding and
Chapter 11 case, interest rates, debt levels or income tax
rates.
Adjusted OIBDA margin is calculated by dividing Adjusted OIBDA
by total revenue. Our management use this non-GAAP financial
measure to evaluate operating performance, to forecast future
results and as a basis for compensation. The Company believes this
is an important supplemental measure of operating performance
because it eliminates items that have less bearing on its operating
performance and highlight trends in its core business that may not
otherwise be apparent when relying solely on GAAP financial
measures. The Company believes the presentation of this measure is
relevant and useful for investors because it enables them to view
performance in a manner similar to the method used by the Company’s
management, helps improve their ability to understand the Company’s
operating performance and makes it easier to compare the Company’s
results with other companies that may have different depreciation
and amortization policies, amounts of amortization of intangibles,
non-cash share-based compensation programs, impairment of
long-lived assets, workforce reorganization costs and fees and
expenses related to involvement in the Cineworld proceeding and
Chapter 11 case, interest rates, debt levels or income tax
rates.
A limitation of both of these measures, however, is that they
exclude depreciation and amortization, which represent a proxy for
the periodic costs of certain capitalized tangible and intangible
assets used in generating revenues in NCM LLC’s business. In
addition, Adjusted OIBDA and Adjusted OIBDA margin have the
limitation of not reflecting the effect of the Company’s
depreciation, amortization of intangibles, non-cash share-based
payment costs, impairment of long-lived assets, workforce
reorganization costs and fees and expenses related to involvement
in the Cineworld proceeding and Chapter 11 case. Adjusted OIBDA
should not be regarded as an alternative to operating income, net
income or as indicators of operating performance, nor should it be
considered in isolation of, or as substitutes for financial
measures prepared in accordance with GAAP. The Company believes
that operating income is the most directly comparable GAAP
financial measure to Adjusted OIBDA, and operating margin is the
most directly comparable GAAP financial measure to Adjusted OIBDA
margin. Because not all companies use identical calculations, these
non-GAAP presentations may not be comparable to other similarly
titled measures of other companies, or calculations in NCM LLC’s
debt agreement.
The Company has not provided a reconciliation of the
forward-looking non-GAAP Adjusted OIBDA measure to forward-looking
GAAP operating income due to the inability to predict the amount
and timing of impacts outside of the Company’s control on certain
items, including the timing of revenue and charges reflected in our
reconciliation of historic numbers, the amount of which, based on
historical experience, could be significant and are difficult to
reasonably predict. Accordingly, a reconciliation of this non-GAAP
measure is not available without unreasonable effort.
The following table reconciles operating loss to Adjusted OIBDA
for the periods presented (dollars in millions):
Quarter Ended
March 28, 2024
March 30, 2023
Operating loss
$
(22.7
)
$
(30.6
)
Depreciation expense
1.0
1.3
Amortization expense
9.5
6.2
Share-based compensation costs (1)
2.6
1.6
Impairment of long-lived assets (2)
0.1
—
Workforce reorganization costs (3)
1.5
—
Fees and expenses related to the Cineworld
proceeding and Chapter 11 case (4)
2.3
10.6
Adjusted OIBDA
$
(5.7
)
$
(10.9
)
Total revenue
$
37.4
$
34.9
Adjusted OIBDA margin
(15.2
)%
(31.2
)%
Adjusted OIBDA
$
(5.7
)
$
(10.9
)
Integration and encumbered theater
payments
0.2
0.3
Adjusted OIBDA after integration and
encumbered theater payments
$
(5.5
)
$
(10.6
)
(1)
Share-based compensation costs are
included in network operations, selling and marketing and
administrative expense in the accompanying financial tables as
shown in the following table (dollars in millions).
Quarter Ended
March 28, 2024
March 30, 2023
Share-based compensation costs included in
network costs
$
0.1
$
0.2
Share-based compensation costs included in
selling and marketing costs
0.4
0.4
Share-based compensation costs included in
administrative and other costs
2.1
1.0
Total share-based compensation costs
$
2.6
$
1.6
(2)
The impairment of long-lived assets
primarily relates to the write down of certain property and
equipment no longer in use.
(3)
Workforce reorganization costs represents
redundancy costs associated with changes to the Company’s workforce
implemented during the first quarter of 2024.
(4)
Advisor and legal fees and expenses
incurred in connection with the Company’s involvement in the
Cineworld Proceeding and Chapter 11 Case during the first quarter
of 2024, as well as retention related expenses.
Adjusted Net Loss and Loss per Share
Adjusted net loss and loss per share are not financial measures
calculated in accordance with GAAP in the United States. Adjusted
net loss and loss per share are calculated using reported net loss
and loss per share and exclude the impairment of long-lived assets,
workforce reorganization costs, fees and expenses related to the
Cineworld proceeding and Chapter 11 case and loss on re-measurement
of the payable to ESA Parties under the tax receivable agreement.
Our management uses these non-GAAP financial measures as an
additional tool to evaluate operating performance. The Company
believes these are important supplemental measures of operating
performance because they eliminate items that have less bearing on
its operating performance and so highlight trends in its core
business that may not otherwise be apparent when relying solely on
GAAP financial measures. The Company believes the presentation of
these measures is relevant and useful for investors because it
enables them to view performance in a manner similar to a method
used by the Company’s management and helps improve their ability to
understand the Company’s operating performance. Adjusted net loss
and loss per share should not be regarded as alternatives to net
loss and loss per share or as indicators of operating performance,
nor should they be considered in isolation of, or as substitutes
for financial measures prepared in accordance with GAAP. The
Company believes that net loss and loss per share are the most
directly comparable GAAP financial measures. Because not all
companies use identical calculations, these presentations may not
be comparable to other similarly titled measures of other
companies.
The following table reconciles as reported net loss and loss per
share to adjusted net loss and loss per share excluding the
impairment of long-lived assets, workforce reorganization costs,
fees and expenses related to the Cineworld proceeding and Chapter
11 case and loss on re-measurement of the payable to ESA Parties
under the tax receivable agreement for the periods presented
(dollars in millions):
Quarter Ended
March 28, 2024
March 30, 2023
Net loss as reported
$
(34.7
)
$
(45.5
)
Impairment of long-lived assets (1)
0.1
—
Workforce reorganization costs (2)
1.5
—
Fees and expenses related to the Cineworld
proceeding and Chapter 11 case (3)
2.3
10.6
Effect of noncontrolling interests (0% and
15.3%, respectively)
—
(1.6
)
Effect of provision for income taxes (0.0%
and 0.0% blended rates, respectively) (4)
—
—
Loss (gain) on re-measurement of the
payable under the tax receivable agreement (5)
12.3
(0.6
)
Net effect of adjusting items
$
16.2
$
8.4
Net loss excluding adjusting items
$
(18.5
)
$
(37.1
)
Weighted Average Shares Outstanding as
reported
Diluted
96,918,564
14,550,799
Diluted loss per share as reported
$
(0.36
)
$
(3.13
)
Net effect of adjusting items
0.17
0.58
Diluted loss per share excluding adjusting
items
$
(0.19
)
$
(2.55
)
(1)
The impairment of long-lived assets
primarily relates to the write down of certain property and
equipment no longer in use.
(2)
Workforce reorganization costs represents
redundancy costs associated with changes to the Company’s workforce
implemented during the first quarter of 2024.
(3)
Advisor and legal fees and expenses
incurred in connection with the Company’s involvement in the
Cineworld Proceeding and Chapter 11 Case during the first quarter
of 2024, as well as retention related expenses.
(4)
The rates utilized to tax effect the
adjusting items represent the effective tax rates for the
respective periods.
(5)
The loss (gain) on the re-measurement of
the payable to the ESA Parties is related to the change in our
payable to the ESA Parties under the tax receivable agreement
resulting from a change in projected taxable income before TRA
deductions for the three months ended March 28, 2024 and March 30,
2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240506318522/en/
INVESTOR: Chan Park investors@ncm.com
MEDIA: Pam Workman press@ncm.com
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