National CineMedia, Inc. Reports Results for Fiscal Fourth Quarter and Full Year 2014
Announces Quarterly Cash Dividend; Provides 2015 Outlook
Total revenue for the fourth quarter of 2014 increased 0.3% to
For the year 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 2014 results,
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
First Quarter and Full Year 2015 Outlook
For the first quarter of 2015, the Company expects total revenue to be
up 7% to 11% and Adjusted OIBDA is expected to be up 11% to 24% from the
first quarter of 2014. The Company expects total revenue in the range of
For the full year 2015, the Company expects total revenue to be up 7% to
10% and Adjusted OIBDA is expected to be up 5% to 10% from the full year
2014. The Company expects total revenue in the range of
The above outlook does not include any impact from the proposed merger
with Screenvision and any legal expenses that may be incurred associated
with the antitrust lawsuit by the
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
first quarter and full year 2015, the dividend policy, network
expansion, competition in the broader advertising marketplace and the
merger with 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) economic conditions, including the level of expenditures on
cinema advertising; 2) increased competition for advertising
expenditures; 3) technological changes and innovations; 4) level of
theatre attendance; 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; 9)
changes in accounting principles; and 10) the outcome of our defense of
the Screenvision merger with the
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Quarter Ended | Year Ended | |||||||||||||||||||||||
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REVENUE: | ||||||||||||||||||||||||
Advertising (including revenue from founding members of |
$ | 123.1 | $ | 108.1 | $ | 394.0 | $ | 426.3 | ||||||||||||||||
Fathom Events | - | 14.6 | - | 36.5 | ||||||||||||||||||||
Total | 123.1 | 122.7 | 394.0 | 462.8 | ||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||
Advertising operating costs | 8.3 | 7.3 | 26.4 | 29.0 | ||||||||||||||||||||
Fathom Events operating costs | - | 10.1 | - | 25.5 | ||||||||||||||||||||
Network costs | 4.9 | 4.2 | 18.3 | 19.4 | ||||||||||||||||||||
Theatre access fees—founding members | 18.3 | 17.0 | 70.6 | 69.4 | ||||||||||||||||||||
Selling and marketing costs | 13.8 | 14.8 | 57.6 | 61.5 | ||||||||||||||||||||
Merger-related administrative costs | 3.8 | - | 7.5 | - | ||||||||||||||||||||
Other administrative and other costs | 7.9 | 6.5 | 29.5 | 29.4 | ||||||||||||||||||||
Depreciation and amortization | 8.2 | 7.8 | 32.4 | 26.6 | ||||||||||||||||||||
Total | 65.2 | 67.7 | 242.3 | 260.8 | ||||||||||||||||||||
OPERATING INCOME | 57.9 | 55.0 | 151.7 | 202.0 | ||||||||||||||||||||
NON-OPERATING EXPENSES: | ||||||||||||||||||||||||
Interest on borrowings | 13.8 | 12.7 | 52.6 | 51.6 | ||||||||||||||||||||
Interest income | (0.6 | ) | (0.1 | ) | (1.8 | ) | (0.4 | ) | ||||||||||||||||
Accretion of interest on the discounted payable to founding members under tax receivable agreement | 3.8 | 3.7 | 14.6 | 13.9 | ||||||||||||||||||||
Amortization of terminated derivatives | 2.4 | 2.5 | 10.0 | 10.3 | ||||||||||||||||||||
Impairment of investment | - | 0.8 | - | 0.8 | ||||||||||||||||||||
Gain on sale of Fathom Events | - | (25.4 | ) | - | (25.4 | ) | ||||||||||||||||||
Other non-operating expense | (0.1 | ) | - | 0.8 | 1.2 | |||||||||||||||||||
Total | 19.3 | (5.8 | ) | 76.2 | 52.0 | |||||||||||||||||||
INCOME BEFORE INCOME TAXES | 38.6 | 60.8 | 75.5 | 150.0 | ||||||||||||||||||||
Income tax expense | 5.7 | 7.2 | 9.9 | 20.2 | ||||||||||||||||||||
CONSOLIDATED NET INCOME | 32.9 | 53.6 | 65.6 | 129.8 | ||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 24.8 | 34.6 | 52.2 | 88.6 | ||||||||||||||||||||
NET INCOME ATTRIBUTABLE TO NCM, INC. | $ | 8.1 | $ | 19.0 | $ | 13.4 | $ | 41.2 | ||||||||||||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||||||||||||
Basic | $ | 0.14 | $ | 0.33 | $ | 0.23 | $ | 0.74 | ||||||||||||||||
Diluted | $ | 0.14 | $ | 0.32 | $ | 0.23 | $ | 0.73 | ||||||||||||||||
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As of | |||||||||||
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Cash, cash equivalents and marketable securities | $ | 80.6 | $ | 126.0 | |||||||
Receivables, net | 116.5 | 120.4 | |||||||||
Property and equipment, net | 22.4 | 25.6 | |||||||||
Total assets | 991.4 | 1,067.3 | |||||||||
Borrowings | 892.0 | 890.0 | |||||||||
Total equity/(deficit) | (208.7 | ) | (146.1 | ) | |||||||
Total liabilities and equity | 991.4 | 1,067.3 | |||||||||
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Quarter and Year Ended | |||||||
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Total Screens (100% Digital) at Period End (1)(6) | 20,109 | 19,878 | |||||
Founding Member Screens at Period End (2)(6) | 16,497 | 16,562 | |||||
DCN (Digital Content Network) Screens at Period End (3)(6) | 19,251 | 19,054 | |||||
Quarter Ended | Year Ended | |||||||||||||||||
(in millions) |
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Total Attendance for Period (4)(6) | 182.8 | 165.5 | 688.2 | 699.2 | ||||||||||||||
Founding Member Attendance for Period (5)(6) | 155.6 | 142.9 | 588.7 | 598.4 | ||||||||||||||
Capital Expenditures | $ | 1.8 | $ | 2.4 | $ | 8.8 | $ | 10.6 | ||||||||||
(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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Quarter Ended | Year Ended | ||||||||||||||||
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Revenue breakout: | |||||||||||||||||
National advertising revenue | $ | 84.8 | $ | 69.0 | $ | 258.8 | $ | 295.0 | |||||||||
Local advertising revenue | $ | 28.1 | $ | 29.2 | $ | 96.8 | $ | 89.9 | |||||||||
Total advertising revenue (excluding beverage) | $ | 112.9 | $ | 98.2 | $ | 355.6 | $ | 384.9 | |||||||||
Total advertising revenue | $ | 123.1 | $ | 108.1 | $ | 394.0 | $ | 426.3 | |||||||||
Total revenue | $ | 123.1 | $ | 122.7 | $ | 394.0 | $ | 462.8 | |||||||||
Per attendee data: | |||||||||||||||||
National advertising revenue per attendee | $ | 0.464 | $ | 0.417 | $ | 0.376 | $ | 0.422 | |||||||||
Local advertising revenue per attendee | $ | 0.154 | $ | 0.176 | $ | 0.141 | $ | 0.129 | |||||||||
Total advertising revenue (excluding beverage) per attendee | $ | 0.618 | $ | 0.593 | $ | 0.517 | $ | 0.550 | |||||||||
Total advertising revenue per attendee | $ | 0.673 | $ | 0.653 | $ | 0.573 | $ | 0.610 | |||||||||
Total attendance (1) | 182.8 | 165.5 | 688.2 | 699.2 | |||||||||||||
Other operating data: | |||||||||||||||||
Operating income | $ | 57.9 | $ | 55.0 | $ | 151.7 | $ | 202.0 | |||||||||
OIBDA | $ | 66.1 | $ | 62.8 | $ | 184.1 | $ | 228.6 | |||||||||
Adjusted OIBDA | $ | 72.5 | $ | 62.5 | $ | 199.3 | $ | 234.5 | |||||||||
Adjusted OIBDA margin | 58.9% | 50.9% | 50.6% | 50.7% | |||||||||||||
Income per share - basic | $ | 0.14 | $ | 0.33 | $ | 0.23 | $ | 0.74 | |||||||||
Income per share - diluted | $ | 0.14 | $ | 0.32 | $ | 0.23 | $ | 0.73 |
(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.
(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 | Year Ended | ||||||||||||||||
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Consolidated net income | $ | 32.9 | $ | 53.6 | $ | 65.6 | $ | 129.8 | |||||||||
Income tax expense | 5.7 | 7.2 | 9.9 | 20.2 | |||||||||||||
Interest and other non-operating costs | 19.3 | (5.8) | 76.2 | 52.0 | |||||||||||||
Depreciation and amortization | 8.2 | 7.8 | 32.4 | 26.6 | |||||||||||||
OIBDA | $ | 66.1 | $ | 62.8 | $ | 184.1 | $ | 228.6 | |||||||||
Share-based compensation costs (1) | 2.6 | (0.3) | 7.7 | 5.9 | |||||||||||||
Merger-related administrative costs (2) | 3.8 | - | 7.5 | - | |||||||||||||
Adjusted OIBDA | $ | 72.5 | $ | 62.5 | $ | 199.3 | $ | 234.5 | |||||||||
Total revenue | $ | 123.1 | $ | 122.7 | $ | 394.0 | $ | 462.8 | |||||||||
Adjusted OIBDA margin | 58.9% | 50.9% | 50.6% | 50.7% | |||||||||||||
Adjusted OIBDA | $ | 72.5 | $ | 62.5 | $ | 199.3 | $ | 234.5 | |||||||||
Rave theatres integration payments | 0.8 | 0.7 | 2.2 | 2.8 | |||||||||||||
Adjusted OIBDA after integration payments |
$ | 73.3 | $ | 63.2 | $ | 201.5 | $ | 237.3 | |||||||||
(1) Share-based compensation costs are included in network operations,
selling and marketing and administrative expense in the accompanying
financial statements.
(2) Merger-related administrative costs
represent legal, accounting, advisory and other professional fees
associated with the proposed merger with Screenvision and are included
in administrative expense in the accompanying financial statements.
Outlook (in millions) |
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Quarter Ending |
Year Ending |
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Low | High | Low | High | ||||||||||||||
Consolidated net income | $ | (4.8) | $ | (4.6) | $ | 78.6 | $ | 81.7 | |||||||||
Income tax expense | (1.7) | (1.9) | 13.4 | 13.8 | |||||||||||||
Interest and other non-operating costs | 17.5 | 18.5 | 66.0 | 68.0 | |||||||||||||
Depreciation and amortization | 8.0 | 8.5 | 34.5 | 35.5 | |||||||||||||
OIBDA | 19.0 | 20.5 | 192.5 | 199.0 | |||||||||||||
Share-based compensation costs (1) | 3.0 | 3.5 | 12.5 | 13.0 | |||||||||||||
Merger-related administrative costs (2) | 3.0 | 4.0 | 5.0 | 8.0 | |||||||||||||
Adjusted OIBDA | $ | 25.0 | $ | 28.0 | $ | 210.0 | $ | 220.0 | |||||||||
Total revenue | $ | 75.0 | $ | 78.0 | $ | 422.0 | $ | 432.0 | |||||||||
(1) Share-based compensation costs are included in network operations,
selling and marketing and administrative expense in the accompanying
financial statements.
(2) Merger-related administrative costs
represent legal, accounting, advisory and other professional fees
associated with the proposed merger with Screenvision and are included
in 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 | Year Ended | ||||||||||
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Revenue | $ | 122.7 | $ | 462.8 | |||||||
Fathom Events revenue | (14.6 | ) | (36.5 | ) | |||||||
Revenue excluding Fathom Events | $ | 108.1 | $ | 426.3 | |||||||
The following table reconciles consolidated net income to Adjusted OIBDA excluding Fathom Events for the periods presented (dollars in millions):
Quarter Ended | Year Ended | ||||||||||
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Consolidated net income | $ | 53.6 | $ | 129.8 | |||||||
Income tax expense | 7.2 | 20.2 | |||||||||
Interest and other non-operating costs | (5.8 | ) | 52.0 | ||||||||
Depreciation and amortization | 7.8 | 26.6 | |||||||||
Fathom operating income | (3.2 | ) | (6.5 | ) | |||||||
Share-based compensation costs (1) | (0.3 | ) | 5.9 | ||||||||
Adjusted OIBDA excluding Fathom Events | $ | 59.3 | $ | 228.0 | |||||||
(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 Merger-Related Administrative Costs, Fathom Events and Impairment Charges
Net income and earnings per share excluding merger-related
administrative costs, Fathom Events and impairment charges 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 and earnings per share excluding merger-related administrative costs, Fathom Events and impairment charges for the periods presented (dollars in millions):
Quarter Ended | Year Ended | ||||||||||||||||||||
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Net income as reported | $ | 8.1 | $ | 19.0 | $ | 13.4 | $ | 41.2 | |||||||||||||
Impairment of investment | - | 0.8 | - | 0.8 | |||||||||||||||||
Gain on sale of Fathom Events | - | (25.4 | ) | - | (25.4 | ) | |||||||||||||||
Merger-related administrative costs (1) | 3.8 | - | 7.5 | - | |||||||||||||||||
Fathom Events operating income | - | (3.2 | ) | - | (6.5 | ) | |||||||||||||||
Fathom Events non-operating expense | 0.7 | - | 0.7 | - | |||||||||||||||||
Effect of noncontrolling interests (54.2%, 53.9%, 54.2% and 53.7%, respectively) (2) | (0.4 | ) | 15.0 | (0.4 | ) | 16.7 | |||||||||||||||
Effect of provision for income taxes (38% effective rate) | (1.6 | ) | 4.9 | (3.0 | ) | 5.5 | |||||||||||||||
Net effect of adjusting items | 2.5 | (7.9 | ) | 4.8 | (8.9 | ) | |||||||||||||||
Net income excluding adjusting items | $ | 10.6 | $ | 11.1 | 18.2 | $ | 32.3 | ||||||||||||||
Weighted Average Shares Outstanding as reported | |||||||||||||||||||||
Basic | 58,749,819 | 58,355,989 | 58,709,534 | 56,014,404 | |||||||||||||||||
Diluted | 59,041,545 | 59,119,150 | 59,005,320 | 56,628,457 | |||||||||||||||||
Weighted Average Shares Outstanding as adjusted | |||||||||||||||||||||
Basic | 58,749,819 | 58,355,989 | 58,709,534 | 56,014,404 | |||||||||||||||||
Diluted | 59,041,545 | 59,119,150 | 59,005,320 | 56,628,457 | |||||||||||||||||
Basic income per share as reported | $ | 0.14 | $ | 0.33 | $ | 0.23 | $ | 0.74 | |||||||||||||
Net effect of adjusting items | 0.04 | (0.14 | ) | 0.08 | (0.16 | ) | |||||||||||||||
Basic income per share excluding adjusting items | $ | 0.18 | $ | 0.19 | $ | 0.31 | $ | 0.58 | |||||||||||||
Diluted income per share as reported | $ | 0.14 | $ | 0.32 | $ | 0.23 | $ | 0.73 | |||||||||||||
Net effect of adjusting items | 0.04 | (0.13 | ) | 0.08 | (0.16 | ) | |||||||||||||||
Diluted income per share excluding adjusting items | $ | 0.18 | $ | 0.19 | $ | 0.31 | $ | 0.57 | |||||||||||||
(1) Merger-related administrative costs represent legal, accounting,
advisory and other professional fees associated with the proposed merger
with Screenvision and are included in administrative expense in the
accompanying financial statements.
(2) The effect of noncontrolling
interests was not included for the merger related costs because they
were only recorded at
Investor Contact:
investors@ncm.com
or
Media
Contact:
amy.finnerty@ncm.com
Source:
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