National CineMedia, Inc. Reports Results for Fiscal Second Quarter 2015
~ Announces Quarterly Cash Dividend ~
~ Provides Third Quarter and Updates Full Year 2015 Outlook ~
Total revenue for the quarter ended
Total revenue for the six months ended
The Company announced today that its Board of Directors has authorized
the Company's regular quarterly cash dividend of
Commenting on the Company's second quarter operating results,
Supplemental Information
Integration payments due from Cinemark and AMC associated with
2015 Outlook
For the third quarter of 2015, the Company expects total revenue to be
up 8% to 13% and Adjusted OIBDA is expected to be up 7% to 17% from the
third quarter of 2014. The Company expects total revenue in the range of
For full year 2015, the Company updates its outlook and expects total
revenue to be up 8% to 10% and Adjusted OIBDA to be up 8% to 12% from
the full year 2014. The Company expects total revenue in the range of
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 and projections for
third quarter and full year 2015, the dividend policy, network
expansion, competition in the broader advertising marketplace and
technology improvements. 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 theatre attendance; 2) increased competition for
advertising expenditures; 3) technological changes and innovations; 4)
economic conditions, including the level of expenditures on cinema
advertising; 5) our ability to renew or replace expiring advertising and
content contracts; 6) our need for additional funding, risks and
uncertainties relating to our significant indebtedness; 7) fluctuations
in operating costs; 8) changes in interest rates; and 9) 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.
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
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| Quarter Ended | Six Months Ended | ||||||||||||||||
|
2015 |
2014 |
2015 |
2014 |
||||||||||||||
| REVENUE: | |||||||||||||||||
|
Advertising (including revenue from founding members of |
$ | 121.5 | $ | 99.9 | $ | 198.4 | $ | 170.1 | |||||||||
| OPERATING EXPENSES: | |||||||||||||||||
| Advertising operating costs | 8.3 | 6.6 | 14.1 | 11.6 | |||||||||||||
| Network costs | 4.2 | 4.4 | 8.7 | 9.0 | |||||||||||||
| Theatre access fees—founding members | 19.2 | 17.9 | 36.4 | 35.3 | |||||||||||||
| Selling and marketing costs | 17.0 | 14.1 | 33.0 | 29.1 | |||||||||||||
| Merger-related costs | 0.9 | 1.7 | 34.3 | 1.7 | |||||||||||||
| Administrative and other costs | 8.3 | 7.1 | 17.0 | 14.7 | |||||||||||||
| Depreciation and amortization | 8.2 | 7.8 | 16.2 | 15.6 | |||||||||||||
| Total | 66.1 | 59.6 | 159.7 | 117.0 | |||||||||||||
| OPERATING INCOME | 55.4 | 40.3 | 38.7 | 53.1 | |||||||||||||
| NON-OPERATING EXPENSES: | |||||||||||||||||
| Interest on borrowings | 13.1 | 13.0 | 26.2 | 26.1 | |||||||||||||
| Interest income | (0.3 | ) | (0.5 | ) | (0.9 | ) | (0.9 | ) | |||||||||
| Accretion of interest on the discounted payable to founding members under tax receivable agreement | 3.5 | 3.5 | 7.1 | 7.3 | |||||||||||||
| Amortization of terminated derivatives | - | 2.5 | 1.6 | 5.0 | |||||||||||||
| Other non-operating expense | - | 0.1 | 0.1 | 0.2 | |||||||||||||
| Total | 16.3 | 18.6 | 34.1 | 37.7 | |||||||||||||
| INCOME BEFORE INCOME TAXES | 39.1 | 21.7 | 4.6 | 15.4 | |||||||||||||
| Income tax expense | 5.8 | 3.8 | 1.5 | 2.1 | |||||||||||||
| CONSOLIDATED NET INCOME | 33.3 | 17.9 | 3.1 | 13.3 | |||||||||||||
|
Less: Net income attributable to noncontrolling interests |
23.2 | 14.3 | 2.0 | 12.8 | |||||||||||||
| NET INCOME ATTRIBUTABLE TO NCM, INC. | $ | 10.1 | $ | 3.6 | $ | 1.1 | $ | 0.5 | |||||||||
| NET INCOME PER NCM, INC. COMMON SHARE: | |||||||||||||||||
| Basic | $ | 0.17 | $ | 0.06 | $ | 0.02 | $ | 0.01 | |||||||||
| Diluted | $ | 0.17 | $ | 0.06 | $ | 0.02 | $ | 0.01 | |||||||||
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| As of | |||||||||
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2015 |
2015 |
||||||||
| Cash, cash equivalents and marketable securities | $ | 69.4 | $ | 80.6 | |||||
| Receivables, net | 126.9 | 116.5 | |||||||
| Property and equipment, net | 21.9 | 22.4 | |||||||
| Total assets | 1,010.5 | 991.4 | |||||||
| Borrowings | 935.0 | 892.0 | |||||||
| Total equity/(deficit) | (221.6 | ) | (208.7 | ) | |||||
| Total liabilities and equity | 1,010.5 | 991.4 | |||||||
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| Quarter and Six Months Ended | ||||||||
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2015 |
2014 |
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| Total Screens (100% Digital) at Period End (1)(6) | 20,150 | 19,886 | ||||||
| Founding Member Screens at Period End (2)(6) | 16,471 | 16,451 | ||||||
| DCN (Digital Content Network) Screens at Period End (3)(6) | 19,396 | 19,022 | ||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||
| (in millions) |
2015 |
2014 |
2015 |
2014 |
||||||||||||||||||
| Total Attendance for Period (4)(6) | 191.8 | 175.4 | 353.2 | 341.9 | ||||||||||||||||||
| Founding Member Attendance for Period (5)(6) | 161.8 | 150.4 | 297.9 | 294.4 | ||||||||||||||||||
| Capital Expenditures | $ | 2.9 | $ | 3.1 | $ | 5.0 | $ | 5.3 | ||||||||||||||
(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 Digital Content
Network.
(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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| Quarter Ended | Six Months Ended | ||||||||||||||||
|
2015 |
2014 |
2015 |
2014 |
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| Revenue breakout: | |||||||||||||||||
| National advertising revenue | $ | 89.2 | $ | 68.4 | $ | 140.1 | $ | 111.1 | |||||||||
| Local advertising revenue | 23.3 | 21.7 | 41.7 | 39.8 | |||||||||||||
| Total advertising revenue (excluding beverage) | $ | 112.5 | $ | 90.1 | $ | 181.8 | $ | 150.9 | |||||||||
| Total revenue | $ | 121.5 | $ | 99.9 | $ | 198.4 | $ | 170.1 | |||||||||
| Per attendee data: | |||||||||||||||||
| National advertising revenue per attendee | $ | 0.465 | $ | 0.390 | $ | 0.397 | $ | 0.325 | |||||||||
| Local advertising revenue per attendee | $ | 0.121 | $ | 0.124 | $ | 0.118 | $ | 0.116 | |||||||||
| Total advertising revenue (excluding beverage) per attendee | $ | 0.587 | $ | 0.514 | $ | 0.515 | $ | 0.441 | |||||||||
| Total advertising revenue per attendee | $ | 0.633 | $ | 0.570 | $ | 0.562 | $ | 0.498 | |||||||||
| Total attendance (1) | 191.8 | 175.4 | 353.2 | 341.9 | |||||||||||||
| Other operating data: | |||||||||||||||||
| Operating income | $ | 55.4 | $ | 40.3 | $ | 38.7 | $ | 53.1 | |||||||||
| OIBDA (2) | $ | 63.6 | $ | 48.1 | $ | 54.9 | $ | 68.7 | |||||||||
| Adjusted OIBDA (2) | $ | 67.4 | $ | 52.0 | $ | 95.1 | $ | 74.6 | |||||||||
| Adjusted OIBDA margin (2) | 55.5 | % | 52.1 | % | 47.9 | % | 43.9 | % | |||||||||
| Income per share - basic | $ | 0.17 | $ | 0.06 | $ | 0.02 | $ | 0.01 | |||||||||
| Income per share - diluted | $ | 0.17 | $ | 0.06 | $ | 0.02 | $ | 0.01 | |||||||||
| Adjusted income per share - basic (2) | $ | 0.17 | $ | 0.08 | $ | 0.19 | $ | 0.04 | |||||||||
| Adjusted income per share - diluted (2) | $ | 0.17 | $ | 0.08 | $ | 0.19 | $ | 0.04 | |||||||||
(1) Represents the total attendance within NCM LLC's advertising
network. Excludes screens and attendance associated with certain AMC
Rave and Cinemark Rave theatres for all periods presented.
(2)
OIBDA, Adjusted OIBDA, Adjusted OIBDA margin and adjusted income per
share are not financial measures calculated in accordance with GAAP in
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 GAAP in
The following tables reconcile consolidated net income to OIBDA and Adjusted OIBDA for the periods presented (dollars in millions):
| Quarter Ended | Six Months Ended | ||||||||||||||||
|
2015 |
2014 |
2015 |
2014 |
||||||||||||||
| Consolidated net income | $ | 33.3 | $ | 17.9 | $ | 3.1 | $ | 13.3 | |||||||||
| Income tax expense | 5.8 | 3.8 | 1.5 | 2.1 | |||||||||||||
| Interest and other non-operating costs | 16.3 | 18.6 | 34.1 | 37.7 | |||||||||||||
| Depreciation and amortization | 8.2 | 7.8 | 16.2 | 15.6 | |||||||||||||
| OIBDA | $ | 63.6 | $ | 48.1 | $ | 54.9 | $ | 68.7 | |||||||||
| Share-based compensation costs (1) | 2.9 | 2.2 | 5.9 | 4.2 | |||||||||||||
| Merger-related costs (2) | 0.9 | 1.7 | 34.3 | 1.7 | |||||||||||||
| Adjusted OIBDA | $ | 67.4 | $ | 52.0 | $ | 95.1 | $ | 74.6 | |||||||||
| Total revenue | $ | 121.5 | $ | 99.9 | $ | 198.4 | $ | 170.1 | |||||||||
| Adjusted OIBDA margin | 55.5 | % | 52.1 | % | 47.9 | % | 43.9 | % | |||||||||
| Adjusted OIBDA | $ | 67.4 | $ | 52.0 | $ | 95.1 | $ | 74.6 | |||||||||
| Rave theatres integration payments | 0.8 | 0.6 | 1.1 | 0.8 | |||||||||||||
|
Adjusted OIBDA after integration payments |
$ | 68.2 | $ | 52.6 | $ | 96.2 | $ | 75.4 | |||||||||
(1) Share-based compensation costs are included in network operations,
selling and marketing and administrative expense in the accompanying
financial statements.
(2) Merger-related costs primarily include
the merger termination fee and legal, accounting, advisory and other
professional fees associated with the terminated merger with
Screenvision.
Outlook (in millions)
|
Quarter Ending
|
Year Ending
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| Low | High | Low | High | |||||||||||||
| Consolidated net income | $ | 24.8 | $ | 27.9 | $ | 61.3 | $ | 65.7 | ||||||||
| Income tax expense | 4.4 | 5.0 | 9.6 | 10.4 | ||||||||||||
| Interest and other non-operating costs | 16.0 | 16.5 | 66.1 | 67.1 | ||||||||||||
| Depreciation and amortization | 8.0 | 8.4 | 32.2 | 33.0 | ||||||||||||
| OIBDA | 53.2 | 57.8 | 169.2 | 176.2 | ||||||||||||
| Share-based compensation costs (1) | 2.8 | 3.2 | 11.5 | 12.5 | ||||||||||||
| Merger-related costs (2) | - | - | 34.3 | 34.3 | ||||||||||||
| Adjusted OIBDA | $ | 56.0 | $ | 61.0 | $ | 215.0 | $ | 223.0 | ||||||||
| Total revenue | $ | 109.0 | $ | 114.0 | $ | 425.0 | $ | 433.0 | ||||||||
(1) Share-based compensation costs are included in network operations,
selling and marketing and administrative expense in the accompanying
financial statements.
(2) Merger-related costs primarily include
the merger termination fee and legal, accounting, advisory and other
professional fees associated with the terminated merger with
Screenvision.
Net Income and Earnings per Share Excluding the Amortization of
Terminated Derivatives and Merger-Related Costs
Net income and earnings per share excluding the amortization of
terminated derivatives and merger-related costs are not financial
measures calculated in accordance with GAAP in
The following table reconciles net income and income per share as reported to net income and earnings per share excluding the amortization of terminated derivatives and merger-related costs for the periods presented (dollars in millions):
| Quarter Ended | Six Months Ended | ||||||||||||||||
|
2015 |
2014 |
2015 |
2014 |
||||||||||||||
| Net income as reported | $ | 10.1 | $ | 3.6 | $ | 1.1 | $ | 0.5 | |||||||||
| Merger-related costs (1) | 0.9 | 1.7 | 34.3 | 1.7 | |||||||||||||
| Amortization of terminated derivatives | - | 2.5 | 1.6 | 5.0 | |||||||||||||
| Effect of noncontrolling interests (54.8%, 54.2%, 54.9% and 54.2%, respectively) | (0.5 | ) | (2.3 | ) | (19.7 | ) | (3.6 | ) | |||||||||
| Effect of provision for income taxes (38% effective rate) | (0.2 | ) | (0.7 | ) | (6.2 | ) | (1.2 | ) | |||||||||
| Net effect of adjusting items | 0.2 | 1.2 | 10.0 | 1.9 | |||||||||||||
| Net income excluding adjusting items | $ | 10.3 | $ | 4.8 | $ | 11.1 | $ | 2.4 | |||||||||
| Weighted Average Shares Outstanding as reported | |||||||||||||||||
| Basic | 58,974,581 | 58,722,025 | 58,931,628 | 58,670,412 | |||||||||||||
| Diluted | 59,595,019 | 59,000,127 | 59,360,245 | 59,006,383 | |||||||||||||
| Weighted Average Shares Outstanding as adjusted | |||||||||||||||||
| Basic | 58,974,581 | 58,722,025 | 58,931,628 | 58,670,412 | |||||||||||||
| Diluted | 59,595,019 | 59,000,127 | 59,360,245 | 59,006,383 | |||||||||||||
| Basic income per share as reported | $ | 0.17 | $ | 0.06 | $ | 0.02 | $ | 0.01 | |||||||||
| Net effect of adjusting items | - | 0.02 | 0.17 | 0.03 | |||||||||||||
| Basic income per share excluding adjusting items | $ | 0.17 | $ | 0.08 | $ | 0.19 | $ | 0.04 | |||||||||
| Diluted income per share as reported | $ | 0.17 | $ | 0.06 | $ | 0.02 | $ | 0.01 | |||||||||
| Net effect of adjusting items | - | 0.02 | 0.17 | 0.03 | |||||||||||||
| Diluted income per share excluding adjusting items | $ | 0.17 | $ | 0.08 | $ | 0.19 | $ | 0.04 | |||||||||
(1) Merger-related costs primarily include the merger termination payment and legal, accounting, advisory and other professional fees associated with the terminated merger with Screenvision.
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Investor Contact:
investors@ncm.com
or
Media
Contact:
amy.finnerty@ncm.com
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