Exceeds guidance with revenue of $62.4
million
Scatter revenue up 35% year-over-year
National CineMedia, Inc. (NASDAQ: NCMI) (“the Company” or
“NCM”), the managing member and owner of approximately 100% 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 third
quarter ended September 26, 2024.
“NCM delivered its fourth consecutive quarter of consistent
results, achieving $62.4 million in revenue, and demonstrating our
strength as the box office continues to accelerate,” said Tom
Lesinski, CEO of NCM. “We continue to drive meaningful growth in
our premium Platinum offering, which has more than doubled since
last year, while attracting new, category-leading advertisers
across our platform as brands increasingly turn to NCM for
incremental reach of highly valuable audiences at scale. We are
confident in NCM’s ability to capitalize on this momentum as we
continue to focus on improving monetization and productivity.
Looking ahead to 2025, there is a lot to be excited about with a
highly anticipated film slate appealing to a diverse demographic of
moviegoers.”
Q3 2024 NCM LLC Results1
Total revenue for the third quarter ended September 26, 2024
decreased 10.3% to $62.4 million as compared to $69.6 million for
the third quarter of 2023. Operating loss decreased to $7.5 million
for the third quarter of 2024 from $150.7 million for the third
quarter of 2023. Adjusted OIBDA, a non-GAAP measure, decreased to
$8.8 million for the third quarter of 2024 from $11.3 million for
the third quarter of 2023, as adjusted to exclude depreciation,
amortization, share-based compensation costs, impairment of
long-lived assets, workforce reorganization costs, loss on
termination of Regal ESA, satellite transition costs, system
optimization costs and fees and expenses related to involvement in
the Cineworld proceeding and Chapter 11 case, each as previously
reported and described in the Company’s public filings made with
the U.S. Securities and Exchange Commission (the “SEC”).
Total revenue for the nine months ended September 26, 2024
decreased 8.5% to $154.5 million as compared to $168.9 million for
the nine months ended September 28, 2023. Operating loss decreased
to $39.4 million for the nine months ended September 26, 2024 from
$202.2 million for the nine months ended September 28, 2023.
Adjusted OIBDA decreased to $10.7 million for the nine months ended
September 26, 2024 from $12.9 million for the nine months ended
September 28, 2023, as adjusted to exclude depreciation,
amortization, share-based compensation costs, impairment of
long-lived assets, workforce reorganization costs, loss on
termination of Regal ESA, satellite transition costs, system
optimization costs and fees and expenses related to involvement in
the Cineworld proceeding and Chapter 11 case, each as previously
reported and described in the Company’s public filings made with
the SEC.
____________________
1With respect to operating data, all
activity during NCM LLC’s financial restructuring from April 11,
2023, to August 7, 2023, when NCM LLC was deconsolidated from NCM,
Inc., represents activity and balances for NCM, Inc. standalone.
All activity and balances prior to the deconsolidation of NCM LLC
on April 11, 2023, and after the reconsolidation of NCM LLC on
August 7, 2023, represent NCM, Inc. consolidated, inclusive of NCM
LLC. The operating results for NCM LLC, which management believes
better represent the Company's historical consolidated performance,
are presented within the body of this release.
Q3 2024 Consolidated Results
Total revenue for the third quarter ended September 26, 2024
increased 152.6% to $62.4 million as compared to $24.7 million for
the third quarter of 2023. Operating loss decreased to $7.5 million
for the third quarter of 2024 from $12.3 million for the third
quarter of 2023. Net loss for the third quarter of 2024 was $3.6
million, or negative $0.04 per diluted share, compared to net
income of $181.8 million, or $2.89 per diluted share, for the third
quarter of 2023.
Total revenue for the nine months ended September 26, 2024
increased 107.7% to $154.5 million as compared to $74.4 million for
the nine months ended September 28, 2023. Operating loss decreased
to $39.4 million for the nine months ended September 26, 2024 from
$47.7 million for the nine months ended September 28, 2023. Net
loss for the nine months ended September 26, 2024 was $47.0
million, or negative $0.49 per diluted share, compared to net
income of $681.5 million, or $20.72 per diluted share, for the nine
months ended September 28, 2023.
Q4 2024 Outlook
For the fourth quarter of 2024, NCM LLC expects to earn total
revenue of $82.0 million to $86.0 million, and Adjusted OIBDA in
the range of $28.0 million to $30.0 million for the fourth quarter
of 2024.
Supplemental Information
Integration and other encumbered theater payments due primarily
from AMC associated with Carmike Theaters for NCM LLC for the
quarter ended September 26, 2024 and September 28, 2023, and the
nine months ended September 26, 2024 and September 28, 2023, were
$1.2 million, $0.9 million, $2.2 million and $2.1 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, November 5,
2024, at 5:00 P.M. Eastern Time. The live call can be accessed by
dialing 1-844-481-2522 or, for international participants,
1-412-317-0550. 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, November 19, 2024, by dialing 1-844-512-2921
or, for international participants, 1-412-317-6671 and entering
conference ID 10194114.
About National CineMedia, Inc.
National CineMedia, Inc. (NCM, NASDAQ:NCMI) is the largest
cinema advertising platform in the US. With unparalleled reach and
scale, NCM connects brands to sought-after young, diverse audiences
through the power of movies and pop culture. A premium video,
full-funnel marketing solution for advertisers, NCM enhances
marketers' ability to measure and drive results. NCM’s Noovie® Show
is presented exclusively in 41 leading national and regional
theater circuits including the only three national chains, AMC
Entertainment Inc. (NYSE:AMC), Cinemark Holdings, Inc. (NYSE:CNK)
and Regal Entertainment Group (a subsidiary of Cineworld Group
PLC). NCM’s cinema advertising platform consists of more than
18,100 screens in over 1,400 theaters in 195 Designated Market
Areas® (all of the top 50). NCM is the managing member and owner of
approximately 100% 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) changes to the ESAs or
network affiliate agreements and the relationships with NCM LLC’s
ESA Parties and network affiliates; 5)inability to implement or
achieve new revenue opportunities; 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 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, 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 compensation costs, impairment of long-lived assets,
workforce reorganization costs, loss on termination of Regal ESA,
satellite transition costs, system optimization 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)
Three Months Ended
Nine Months Ended
September 26, 2024
September 28, 2023
September 26, 2024
September 28, 2023
REVENUE
$
62.4
$
24.7
$
154.5
$
74.4
OPERATING EXPENSES:
Network operating costs
3.3
2.6
10.6
6.9
ESA Parties and network affiliate fees
32.9
14.5
82.1
42.8
Selling and marketing costs
10.1
6.3
29.6
16.9
Administrative and other costs
12.9
7.3
39.8
40.6
Depreciation expense
1.2
0.6
3.4
2.1
Amortization expense
9.5
5.7
28.4
12.8
Total
69.9
37.0
193.9
122.1
OPERATING LOSS
(7.5
)
(12.3
)
(39.4
)
(47.7
)
NON-OPERATING EXPENSE (INCOME):
Interest on borrowings
0.4
0.3
1.3
27.5
Interest income
(0.7
)
—
(1.7
)
—
Loss on modification and retirement of
debt, net
—
—
—
0.4
(Gain) loss on re-measurement of the
payable under the tax receivable agreement
(3.0
)
9.3
9.3
12.7
Gain on sale of asset
—
—
—
(0.3
)
Gain on deconsolidation of NCM LLC
—
—
—
(557.7
)
Gain on re-measurement of investment in
NCM LLC
—
(35.3
)
—
(35.5
)
Gain on reconsolidation of NCM LLC
—
(168.0
)
—
(168.0
)
Other non-operating (income) expense,
net
(0.6
)
(0.4
)
(1.3
)
0.2
Total
(3.9
)
(194.1
)
7.6
(720.7
)
(LOSS) INCOME BEFORE INCOME TAXES
(3.6
)
181.8
(47.0
)
673.0
Income tax expense
—
—
—
—
CONSOLIDATED NET (LOSS) INCOME
(3.6
)
181.8
(47.0
)
673.0
Less: Net loss attributable to
noncontrolling interests
—
—
—
(8.5
)
NET (LOSS) INCOME ATTRIBUTABLE TO NCM,
INC.
$
(3.6
)
$
181.8
$
(47.0
)
$
681.5
NET (LOSS) INCOME PER NCM, INC. COMMON
SHARE
Basic
$
(0.04
)
$
2.89
$
(0.49
)
$
21.58
Diluted
$
(0.04
)
$
2.89
$
(0.49
)
$
20.72
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
95,221,502
62,765,418
96,183,328
31,574,026
Diluted
95,221,502
62,804,688
96,183,328
32,487,898
NATIONAL CINEMEDIA,
INC.
Selected Condensed Balance
Sheet Data
Unaudited
($ in millions)
As of
September 26, 2024
December 28, 2023
Cash, cash equivalents, marketable
securities and restricted cash
$
52.5
$
37.6
Receivables, net
$
62.8
$
96.6
Property and equipment, net
$
15.3
$
15.8
Total assets
$
526.1
$
567.7
Borrowings, gross
$
10.0
$
10.0
Total equity
$
385.5
$
434.5
Total liabilities and equity
$
526.1
$
567.7
NATIONAL CINEMEDIA,
LLC
Operating Data
Unaudited
Three Months Ended
September 26, 2024
September 28, 2023
Total Screens (100% Digital) at Period End
(1)(5)
18,141
18,489
ESA Party Screens at Period End (2)(5)
9,492
9,604
Three Months Ended
Nine Months Ended
September 26, 2024
September 28, 2023
September 26, 2024
September 28, 2023
Total Attendance for Period (3)(5) (in
millions)
121.6
131.7
290.2
356.6
ESA Party Attendance for Period (4)(5) (in
millions)
74.3
77.8
179.0
207.4
Capital Expenditures (6) (in millions)
$
1.0
$
0.6
$
3.3
$
2.3
(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,
LLC
Operating Data
Unaudited
($ in millions)
Three Months Ended
Nine Months Ended
September 26, 2024
September 28, 2023
September 26, 2024
September 28, 2023
Revenue breakout:
National advertising revenue
$
46.8
$
52.0
$
117.9
$
118.2
Local and regional advertising revenue
11.4
12.9
26.5
34.9
ESA Party advertising revenue from
beverage concessionaire agreements
4.2
4.7
10.1
15.8
Total advertising revenue (excluding
beverage)
$
62.4
$
69.6
$
154.5
$
168.9
Other operating data:
Operating loss
$
(7.5
)
$
(150.7
)
$
(39.4
)
$
(202.2
)
Adjusted OIBDA (1)
$
8.8
$
11.3
$
10.7
$
12.9
Adjusted OIBDA margin (1)
14.1
%
16.2
%
6.9
%
7.6
%
(1)
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, LLC 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 non-cash
share-based compensation costs, impairment of long-lived assets,
workforce reorganization costs, loss on termination of Regal ESA,
satellite transition costs, system optimization 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, non-cash share-based compensation
programs, impairment of long-lived assets, workforce reorganization
costs, loss on termination of Regal ESA, satellite transition
costs, system optimization 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, non-cash share-based compensation
programs, impairment of long-lived assets, workforce reorganization
costs, loss on termination of Regal ESA, satellite transition
costs, system optimization 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, non-cash share-based compensation
costs, impairment of long-lived intangibles, workforce
reorganization costs, loss on termination of Regal ESA, satellite
transition costs, system optimization 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 NCM LLC's operating loss to
Adjusted OIBDA for the periods presented (dollars in millions):
Three Months Ended
Nine Months Ended
September 26, 2024
September 28, 2023
September 26, 2024
September 28, 2023
Operating loss
$
(7.5
)
$
(150.7
)
$
(39.4
)
$
(202.2
)
Depreciation expense
1.2
1.0
3.4
3.6
Amortization expense
9.5
7.8
28.4
20.3
Share-based compensation costs (1)
3.1
1.2
9.2
3.9
Impairment of long-lived assets (2)
—
9.6
—
9.6
Workforce reorganization costs (3)
0.2
—
3.1
—
Loss on termination of Regal ESA, net
(4)
—
125.6
—
125.6
Satellite transition costs (5)
0.2
—
0.5
—
System optimization costs (6)
0.1
—
0.1
—
Fees and expenses related to the Cineworld
proceeding and Chapter 11 case (7)
2.0
16.8
5.4
52.1
Adjusted OIBDA
$
8.8
$
11.3
$
10.7
$
12.9
Total revenue
$
62.4
$
69.6
$
154.5
$
168.9
Adjusted OIBDA margin
14.1
%
16.2
%
6.9
%
7.6
%
Adjusted OIBDA
$
8.8
$
11.3
$
10.7
$
12.9
Integration and encumbered theater
payments
1.2
0.9
2.2
2.1
Adjusted OIBDA after integration and
encumbered theater payments
$
10.0
$
12.2
$
12.9
$
15.0
(1)
Share-based compensation costs are
included in network operations, selling and marketing and
administrative expense in NCM LLC’s unaudited Condensed
Consolidated Financial Statements as shown in the following table
(dollars in millions).
Three Months Ended
Nine Months Ended
September 26, 2024
September 28, 2023
September 26, 2024
September 28, 2023
Share-based compensation costs included in
network costs
$
0.1
$
0.1
$
0.4
$
0.4
Share-based compensation costs included in
selling and marketing costs
0.5
0.2
1.3
0.8
Share-based compensation costs included in
administrative and other costs
2.5
0.9
7.5
2.7
Total share-based compensation costs
$
3.1
$
1.2
$
9.2
$
3.9
(2)
The impairment of long-lived assets
primarily relates to the write down of certain intangible assets
related to a purchased affiliate and leasehold improvements no
longer in use.
(3)
Workforce reorganization costs represents
redundancy costs associated with changes to the Company’s workforce
primarily implemented during the first quarter of 2024, as well as
related office relocations.
(4)
The net impact of Regal's termination of
the ESA resulting from the disposal of the intangible asset
partially offset by the surrender of Regal's ownership in the
Company and the forgiveness of prepetition claims.
(5)
One time costs of transitioning satellite
providers in the second and third quarter of 2024.
(6)
System optimization costs represents costs
incurred related to a one-time assessment of the technology
surrounding the Company's programmatic offerings incurred in the
third quarter of 2024.
(7)
Advisor and legal fees and expenses
incurred in connection with the Company’s involvement in the
Cineworld Proceeding and Chapter 11 Case and related litigation
during the first, second and third quarter of 2024, as well as
retention related expenses and retainers to the members of the
special and restructuring committees of the Company's Board of
Directors during the first, second and third quarter of 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241105634507/en/
INVESTOR CONTACT: Chan Park investors@ncm.com
MEDIA CONTACT: Amy Tunick press@ncm.com
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