National CineMedia, Inc. Reports Results for Fiscal First Quarter 2014
~ Announces Quarterly Cash Dividend ~
~ Provides Second Quarter 2014 Outlook ~
Total revenue for the first quarter of 2014 decreased 14.6% to
The Company announced today that its Board of Directors has authorized
the Company's regular quarterly cash dividend of
National CineMedia's Chairman and CEO
Revenue excluding Fathom Events, Adjusted OIBDA and Adjusted OIBDA excluding Fathom Events are non-GAAP measures. See the tables at the end of this release for the reconciliations to the closest GAAP basis measurements.
Supplemental Information
Integration payments due from Cinemark and AMC associated with
2014 Outlook
For the second quarter of 2014, the Company expects total revenue to be
down 14% to 21% and Adjusted OIBDA is expected to be down 24% to 36%
from the second quarter of 2013 (excluding the results of Fathom Events
from 2013). The Company expects total revenue in the range of
The Company is withdrawing prior financial guidance for the full year 2014 while it assesses the impact of the planned merger with Screenvision that was announced earlier today.
Conference Call
The Company will host a conference call and audio webcast with
investors, analysts and other interested parties
The replay of the conference call will be available until
About
Forward Looking Statements
This press release contains various forward-looking statements that
reflect management's current expectations or beliefs regarding future
events, including statements providing guidance for second quarter, the
dividend policy and the acquisition of Screenvision. 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) the level of
expenditures on cinema advertising; 2) increased competition for
advertising expenditures; 3) technological changes and innovations; 4)
popularity of major motion picture releases and level of theatre
attendance; 5) shifts in population and other demographics that affect
theatre attendance; 6) our ability to renew or replace expiring
advertising and content contracts; 7) our need for additional funding,
risks and uncertainties relating to our significant indebtedness; 8)
fluctuations in operating costs; 9) changes in interest rates, 10)
changes in accounting principles. 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
noncash 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,
and 11) receipt of regulatory approval and satisfaction of other
conditions for the acquisition of Screenvision to close and the
Company's ability to timely and successfully integrate Screenvision's
operations into those of
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| Condensed Consolidated Statements of Income | ||||||||
| Unaudited | ||||||||
| ($ in millions, except per share data) | ||||||||
| Quarter Ended | ||||||||
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| 2014 | 2013 | |||||||
| REVENUE: | ||||||||
|
Advertising (including revenue from founding members of |
$ | 70.2 | $ | 73.7 | ||||
| Fathom Events |
- |
8.5 | ||||||
| Total | 70.2 | 82.2 | ||||||
| OPERATING EXPENSES: |
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Advertising operating costs (including |
5.0 | 5.7 | ||||||
|
Fathom Events operating costs (including |
- | 5.8 | ||||||
| Network costs | 4.6 | 5.0 | ||||||
| Theatre access fees—founding members | 17.4 | 15.6 | ||||||
|
Selling and marketing costs (including |
15.0 | 15.4 | ||||||
| Administrative and other costs | 7.6 | 7.7 | ||||||
| Depreciation and amortization | 7.8 | 5.4 | ||||||
| Total | 57.4 | 60.6 | ||||||
| OPERATING INCOME | 12.8 | 21.6 | ||||||
| NON-OPERATING EXPENSES: |
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|||||||
| Interest on borrowings | 13.1 | 13.3 | ||||||
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Interest income (including |
(0.4 | ) | (0.1 | ) | ||||
| Accretion of interest on the discounted payable to founding members under tax receivable agreement | 3.8 | 3.4 | ||||||
| Amortization of terminated derivatives | 2.5 | 2.5 | ||||||
| Other non-operating expense | 0.1 | - | ||||||
| Total | 19.1 | 19.1 | ||||||
| (LOSS) INCOME BEFORE INCOME TAXES | (6.3 | ) | 2.5 | |||||
| Income tax (benefit) expense | (1.7 | ) | 0.6 | |||||
| CONSOLIDATED NET (LOSS) INCOME | (4.6 | ) | 1.9 | |||||
| Less: Net (loss) income attributable to noncontrolling interests | (1.5 | ) | 2.9 | |||||
| NET LOSS ATTRIBUTABLE TO NCM, INC. | $ | (3.1 | ) | $ | (1.0 | ) | ||
| EARNINGS/(LOSS) PER SHARE: | ||||||||
| Basic | $ | (0.05 | ) | $ | (0.02 | ) | ||
| Diluted | $ | (0.05 | ) | $ | (0.02 | ) | ||
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| Selected Condensed Balance Sheet Data | ||||||||
| Unaudited ($ in millions) | ||||||||
| As of | ||||||||
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| 2014 | 2013 | |||||||
| Cash, cash equivalents and marketable securities | $ | 78.8 | $ | 126.0 | ||||
| Receivables, net | 85.4 | 120.4 | ||||||
| Property and equipment, net | 24.9 | 25.6 | ||||||
| Total assets | 998.4 | 1,067.3 | ||||||
| Borrowings | 907.0 | 890.0 | ||||||
| Total equity/(deficit) | (179.2 | ) | (146.1 | ) | ||||
| Total liabilities and equity | 998.4 | 1,067.3 | ||||||
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| Operating Data | ||||
| Unaudited | ||||
| Quarter Ended | ||||
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| 2014 | 2013 | |||
| Total Screens (100% Digital) at Period End (1)(6) | 19,850 | 19,292 | ||
| Founding Member Screens at Period End (2)(6) | 16,472 | 15,478 | ||
| DCN (Digital Content Network) Screens at Period End (3)(6) | 19,020 | 18,444 | ||
| Quarter Ended | ||||||
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| (in millions) | 2014 | 2013 | ||||
| Total Attendance for Period (4)(6) | 166.5 | 154.6 | ||||
| Founding Member Attendance for Period (5)(6) | 144.0 | 128.8 | ||||
| Capital Expenditures | $ | 2.2 | $ | 2.7 | ||
| (1) Represents the total screens within NCM LLC's advertising network. |
| (2) Represents the total founding member screens. |
| (3) Represents the total number of screens that are connected to the DCN. |
| (4) Represents the total attendance within NCM LLC's advertising network. |
| (5) Represents the total attendance within NCM LLC's advertising network in theatres operated by the founding members. |
| (6) Excludes screens and attendance associated with certain AMC Rave and Cinemark Rave theatres for all periods presented. |
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| Operating Data | ||||||||
| Unaudited | ||||||||
| (In millions, except advertising revenue per attendee, margin and per share data) | ||||||||
| Quarter Ended | ||||||||
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| 2014 | 2013 | |||||||
| Advertising Revenue | $ | 70.2 | $ | 73.7 | ||||
| Total Revenue | $ | 70.2 | $ | 82.2 | ||||
| Operating Income | $ | 12.8 | $ | 21.6 | ||||
| Total Attendance (1) | 166.5 | 154.6 | ||||||
| Advertising Revenue / Attendee | 0.422 | 0.477 | ||||||
| OIBDA | $ | 20.6 | $ | 27.0 | ||||
| Adjusted OIBDA | $ | 22.6 | $ | 29.1 | ||||
| Adjusted OIBDA Margin | 32.2 | % | 35.4 | % | ||||
| Loss Per Share - Basic | $ | (0.05 | ) | $ | (0.02 | ) | ||
| Loss Per Share - Diluted | $ | (0.05 | ) | $ | (0.02 | ) | ||
| (1) Represents the total attendance within NCM LLC's advertising network. Excludes attendance associated with certain AMC Rave and Cinemark Rave theatres for all periods presented. |
(See attached tables for the non-GAAP reconciliation)
Non-GAAP Reconciliations
Unaudited
OIBDA, Adjusted OIBDA and Adjusted OIBDA Margin
Operating Income Before Depreciation and Amortization ("OIBDA"),
Adjusted OIBDA and Adjusted OIBDA margin are not financial measures
calculated in accordance with generally accepted accounting principles
(GAAP) in
The following tables reconcile consolidated net income to OIBDA and Adjusted OIBDA for the periods presented (dollars in millions):
| Quarter Ended | ||||||||
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| 2014 | 2013 | |||||||
| Consolidated net (loss) income | $ | (4.6 | ) | $ | 1.9 | |||
| Income tax (benefit) expense | (1.7 | ) | 0.6 | |||||
| Interest and other non-operating costs | 19.1 | 19.1 | ||||||
| Depreciation and amortization | 7.8 | 5.4 | ||||||
| OIBDA | 20.6 | 27.0 | ||||||
| Share-based compensation costs (1) | 2.0 | 2.1 | ||||||
| Adjusted OIBDA | $ | 22.6 | $ | 29.1 | ||||
| Total revenue | $ | 70.2 | $ | 82.2 | ||||
| Adjusted OIBDA margin | 32.2 | % | 35.4 | % | ||||
| Adjusted OIBDA | $ | 22.6 | $ | 29.1 | ||||
| Rave theatres integration payments | 0.2 | 0.2 | ||||||
| Adjusted OIBDA after integration payments | $ | 22.8 | $ | 29.3 | ||||
| (1) | Share-based compensation costs are included in network operations, selling and marketing and administrative expense in the accompanying financial statements. | |||||
Outlook (in millions)
| Quarter Ending | ||||||
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Low |
High |
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| Consolidated net income | $ | 11.9 | $ | 17.9 | ||
| Income tax expense | 1.6 | 2.9 | ||||
| Interest and other | 19.0 | 19.2 | ||||
| Depreciation and amortization | 7.6 | 7.9 | ||||
| OIBDA | 40.1 | 47.9 | ||||
| Share-based compensation costs (1) | 1.9 | 2.1 | ||||
| Adjusted OIBDA | 42.0 | 50.0 | ||||
| Total revenue | $ | 92.0 | $ | 100.0 | ||
| (1) | Share-based compensation costs are included in network operations, selling and marketing and administrative expense in the accompanying financial statements. |
Revenue and Adjusted OIBDA excluding Fathom Events
Revenue excluding Fathom Events and Adjusted OIBDA excluding Fathom
Events are not financial measures calculated in accordance with
generally accepted accounting principles (GAAP) in
The following table reconciles total revenue to revenue excluding Fathom Events for the periods presented (dollars in millions):
| Quarter Ended | Quarter Ended | Year Ended | ||||||||||
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| 2013 | 2013 | 2013 | ||||||||||
| Revenue | $ | 82.2 | $ | 122.8 | $ | 462.8 | ||||||
| Fathom Events revenue | (8.5 | ) | (5.9 | ) | (36.5 | ) | ||||||
| Revenue excluding Fathom Events | $ | 73.7 | $ | 116.9 | $ | 426.3 | ||||||
The following table reconciles consolidated net income to Adjusted OIBDA excluding Fathom Events for the periods presented (dollars in millions):
| Quarter Ended | Quarter Ended | Year Ended | ||||||||||
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| 2013 | 2013 | 2013 | ||||||||||
| Consolidated net income | $ | 1.9 | $ | 32.0 | $ | 129.8 | ||||||
| Income tax expense | 0.6 | 6.0 | 20.2 | |||||||||
| Interest and other non-operating costs | 19.1 | 20.0 | 52.0 | |||||||||
| Depreciation and amortization | 5.4 | 6.2 | 26.6 | |||||||||
| Fathom operating income | (1.4 | ) | (0.8 | ) | (6.5 | ) | ||||||
| Share-based compensation costs (1) | 2.1 | 2.0 | 5.9 | |||||||||
| Adjusted OIBDA excluding Fathom Events | $ | 27.7 | $ | 65.4 | $ | 228.0 | ||||||
| (1) | Share-based compensation costs are included in network operations, selling and marketing and administrative expense in the accompanying financial statements. |
Investor Contact:
investors@ncm.com
or
Media
Contact:
amy.finnerty@ncm.com
Source:
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