National CineMedia, Inc. Reports Results for Fiscal Third Quarter
~ Updates Full Year 2012 Outlook and Provides Fourth Quarter
Outlook ~
~ Announces Quarterly Cash Dividend ~
Total revenue for the third quarter 2012 increased 5.7% to
For the nine months ended
The Company announced today that its Board of Directors has authorized
the Company's third quarter cash dividend of
"Once again Q3 marked another record quarter for us with revenue of
2012 Outlook
For the fourth quarter of 2012, the Company expects total revenue to be
in the range of
For the full year 2012, 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
NCM operates NCM Media Networks, a leading integrated media company
reaching U.S. consumers in movie theaters, online and through mobile
technology. The NCM Cinema Network and NCM Fathom present cinema
advertising and events across the nation's largest digital in-theater
network, comprised of theaters owned by
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 guidance and the dividend policy.
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, and 10)
changes in accounting principles. In addition, the outlook provided does
not include the impact of any future unusual or infrequent transactions;
unidentified restructuring charges; sales and acquisitions of operating
assets and investments; any future noncash impairments of goodwill,
intangible and fixed assets; amounts related to securities 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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Condensed Consolidated Statements of Income Unaudited ($ in millions, except per share data) |
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Quarter |
Quarter |
Nine Months |
Nine Months |
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| REVENUE: | |||||||||||||||||
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Advertising (including revenue from founding |
$ | 138.0 | $ | 127.2 | $ | 305.6 | $ | 284.9 | |||||||||
| Fathom Events | 5.7 | 8.8 | 27.3 | 35.9 | |||||||||||||
| Total | 143.7 | 136.0 | 332.9 | 320.8 | |||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||
| Advertising operating costs | 11.0 | 8.4 | 23.7 | 17.8 | |||||||||||||
| Fathom Events operating costs | 4.5 | 6.4 | 20.0 | 24.7 | |||||||||||||
| Network costs | 5.1 | 4.6 | 15.3 | 14.3 | |||||||||||||
| Theatre access fees—founding members | 16.3 | 15.2 | 48.3 | 42.1 | |||||||||||||
| Selling and marketing costs | 15.7 | 15.6 | 45.7 | 45.1 | |||||||||||||
| Administrative and other costs | 8.0 | 6.7 | 24.6 | 23.6 | |||||||||||||
| Depreciation and amortization | 5.0 | 5.1 | 14.9 | 14.0 | |||||||||||||
| Total | 65.6 | 62.0 | 192.5 | 181.6 | |||||||||||||
| OPERATING INCOME | 78.1 | 74.0 | 140.4 | 139.2 | |||||||||||||
| NON-OPERATING EXPENSES: | |||||||||||||||||
| Interest on borrowings | 14.3 | 13.9 | 42.7 | 35.3 | |||||||||||||
| Interest income | (0.1) | (0.1) | (0.3) | (0.2) | |||||||||||||
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Accretion of interest on the discounted payable to |
4.1 | 2.4 | 11.1 | 10.9 | |||||||||||||
| Change in derivative fair value | 0.6 | 1.9 | 0.2 | 2.7 | |||||||||||||
| Loss on swap terminations | − | − | 26.7 | − | |||||||||||||
| Other non-operating expense | − | 1.5 | 2.4 | 1.5 | |||||||||||||
| Total | 18.9 | 19.6 | 82.8 | 50.2 | |||||||||||||
| INCOME BEFORE INCOME TAXES | 59.2 | 54.4 | 57.6 | 89.0 | |||||||||||||
| Income tax expense | 10.2 | 8.5 | 8.8 | 13.2 | |||||||||||||
| CONSOLIDATED NET INCOME | 49.0 | 45.9 | 48.8 | 75.8 | |||||||||||||
| Less: Net income attributable to noncontrolling interests | 32.3 | 29.1 | 34.9 | 51.0 | |||||||||||||
| NET INCOME ATTRIBUTABLE TO NCM, INC. | $ | 16.7 | $ | 16.8 | $ | 13.9 | 24.8 | ||||||||||
| EARNINGS PER SHARE: | |||||||||||||||||
| Basic | $ | 0.31 | $ | 0.31 | $ | 0.26 | $ | 0.46 | |||||||||
| Diluted | $ | 0.30 | $ | 0.31 | $ | 0.25 | $ | 0.45 | |||||||||
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Selected Balance Sheet Data Unaudited ($ in millions) |
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| Cash and cash equivalents | $ | 60.2 | $ | 65.9 | ||||||
| Short and long-term marketable securities | 22.2 | 32.2 | ||||||||
| Receivables, net | 126.0 | 98.6 | ||||||||
| Property and equipment, net | 26.1 | 24.6 | ||||||||
| Total Assets | 828.0 | 820.2 | ||||||||
| Long-term borrowings | 850.0 | 794.0 | ||||||||
| Total equity/(deficit) | (347.7 | ) | (346.8 | ) | ||||||
| Total Liabilities and Equity | 828.0 | 820.2 | ||||||||
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Operating Data Unaudited |
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Quarter and |
Quarter and |
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| Ended | Ended | ||||||||||||
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| Total Screens at Period End (1) | 19,328 | 18,365 | |||||||||||
| Founding Member Screens at Period End (2) | 15,238 | 15,241 | |||||||||||
| Total Digital Screens at Period End (3) | 18,431 | 17,349 | |||||||||||
| Quarter | Quarter | Nine Months | Nine Months | ||||||||||
| Ended | Ended | Ended | Ended | ||||||||||
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Total Attendance for Period (4)
(in millions) |
175.2 | 180.3 | 519.2 | 489.1 | |||||||||
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Founding Member Attendance for Period (5)
(in millions) |
145.1 | 154.7 | 434.4 | 427.4 | |||||||||
| Capital Expenditures (in millions) |
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(1) Represents the total screens within NCM LLC's advertising network.
(2) Represents the sum of 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.
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Operating Data Unaudited (In millions, except advertising revenue per attendee and per share data) |
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| Quarter | Quarter | Nine Months | Nine Months | ||||||||||
| Ended | Ended | Ended | Ended | ||||||||||
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| Advertising Revenue |
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| Total Revenue | 143.7 | 136.0 | 332.9 | 320.8 | |||||||||
| Operating Income | 78.1 | 74.0 | 140.4 | 139.2 | |||||||||
| Total Attendance | 175.2 | 180.3 | 519.2 | 489.1 | |||||||||
| Advertising Revenue / Attendee |
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| OIBDA |
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| Adjusted OIBDA | 85.1 | 80.0 | 162.9 | 161.3 | |||||||||
| Adjusted OIBDA Margin | 59.2% | 58.8% | 48.9% | 50.3% | |||||||||
| Earnings Per Share — Basic |
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| Earnings Per Share — Diluted |
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(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 table reconciles operating income to OIBDA and Adjusted OIBDA for the periods presented (dollars in millions):
| Quarter | Quarter | Nine Months | Nine Months | ||||||||||||||||||
| Ended | Ended | Ended | Ended | ||||||||||||||||||
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| Operating income | $ | 78.1 | $ | 74.0 | $ | 140.4 | $ | 139.2 | |||||||||||||
| Depreciation and amortization | 5.0 | 5.1 | 14.9 | 14.0 | |||||||||||||||||
| OIBDA | 83.1 | 79.1 | 155.3 | 153.2 | |||||||||||||||||
| Share-based compensation costs (1) | 2.0 | 0.9 | 7.6 | 8.1 | |||||||||||||||||
| Adjusted OIBDA | $ | 85.1 | $ | 80.0 | $ | 162.9 | $ | 161.3 | |||||||||||||
| Total Revenue | $ | 143.7 | $ | 136.0 | $ | 332.9 | $ | 320.8 | |||||||||||||
| Adjusted OIBDA margin | 59.2 | % | 58.8 | % | 48.9 | % | 50.3 | % | |||||||||||||
| Adjusted OIBDA | $ | 85.1 | $ | 80.0 | $ | 162.9 | $ | 161.3 | |||||||||||||
| Consolidated Theatres Payments | − | − | − | 0.8 | |||||||||||||||||
| Adjusted OIBDA after Consolidated Theatres Payments | $ | 85.1 | $ | 80.0 | $ | 162.9 | $ | 162.1 | |||||||||||||
| (1) | Share-based compensation costs are included in network operations, selling and marketing and administrative expense in the accompanying financial statements. | |
Outlook (in millions)
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Quarter Ending
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Year Ending
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| Low | High | Low | High | ||||||||||||||
| Operating Income | $ | 45.3 | $ | 54.6 | $ | 185.8 | $ | 195.1 | |||||||||
| Depreciation and amortization | 4.9 | 5.1 | 19.8 | 20.0 | |||||||||||||
| OIBDA | 50.2 | 59.7 | 205.6 | 215.1 | |||||||||||||
| Share-based compensation costs (1) | 1.8 | 2.3 | 9.4 | 9.9 | |||||||||||||
| Adjusted OIBDA | $ | 52.0 | $ | 62.0 | $ | 215.0 | $ | 225.0 | |||||||||
| Total Revenue | $ | 112.0 | $ | 122.0 | $ | 445.0 | $ | 455.0 | |||||||||
| (1) | Share-based compensation costs are included in network operations, selling and marketing and administrative expense in the accompanying financial statements. | |
Net Income and Earnings Per Share Excluding the Loss on Swap Terminations and the Write-off of Debt Issuance Costs
Net income excluding the loss on swap terminations and the write-off of
debt issuance costs and earnings per share excluding the loss on swap
terminations and the write-off of debt issuance costs are not financial
measures calculated in accordance with generally accepted accounting
principles (GAAP) in
The following table reconciles net income and earnings per share as reported to net income excluding the loss on swap terminations and the write-off of debt issuance costs and earnings per share excluding the loss on swap terminations and the write-off of debt issuance costs for the periods presented (dollars in millions):
| Nine Months | Nine Months | |||||||||
| Ended | Ended | |||||||||
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| Net income as reported | $ | 13.9 | $ | 24.8 | ||||||
| Loss on swap terminations | 26.7 | - | ||||||||
| Write-off of debt issuance costs | 2.5 | - | ||||||||
| Effect of noncontrolling interest (51.4% and 51.3%, respectively) | (15.0 | ) | - | |||||||
| Effect of provision for income taxes (38% effective rate) | (5.4 | ) | - | |||||||
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Net effect of loss on swap terminations and write-off of |
8.8 | - | ||||||||
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Net income excluding loss on swap terminations and |
$ | 22.7 | $ | 24.8 | ||||||
| Weighted Average Shares Outstanding as reported | ||||||||||
| Basic | 54,344,944 | 53,842,731 | ||||||||
| Diluted | 55,005,678 | 54,644,814 | ||||||||
| Weighted Average Shares Outstanding as adjusted | ||||||||||
| Basic | 54,344,944 | 53,842,731 | ||||||||
| Diluted | 55,005,678 | 54,644,814 | ||||||||
| Basic earnings per share as reported | $ | 0.26 | $ | 0.46 | ||||||
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Net effect of loss on swap terminations and write-off |
0.16 | - | ||||||||
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Basic earnings per share excluding loss on swap |
$ | 0.42 | $ | 0.46 | ||||||
| Diluted earnings per share as reported | $ | 0.25 | $ | 0.45 | ||||||
| Net effect of loss on swap terminations and write-off of debt issuance costs | 0.16 | - | ||||||||
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Diluted earnings per share excluding loss on swap |
$ | 0.41 | $ | 0.45 | ||||||
Investor Contact:
investors@ncm.com
or
Media
Contact:
lauren.leff@ncm.com
Source:
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