Revenue of $54.7 million exceeds guidance
Advertising revenue per attendee reaches $0.56,
surpassing 2019 levels
National advertising revenue per attendee up
37% year-over-year
National CineMedia, Inc. (NASDAQ: NCMI) (“the Company” or
“NCM”), the managing member and owner of approximately 100%
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 second
quarter ended June 27, 2024.
“The second quarter of 2024 highlighted our continued strong
performance across the key metrics of inventory utilization and
monetization, with advertising revenue per attendee reaching $0.56,
marking the highest second quarter advertising revenue per attendee
since 2017,” said Tom Lesinski, CEO of NCM. “NCM’s industry-leading
platform continues to outperform the box office recovery, as
category-leading advertisers turn to NCM to reach young, diverse
audiences at an unmatched scale. As we look toward the strong slate
ahead in the second half of the year and into 2025, we are
confident in the box office’s resurgence and in NCM’s ability to
capitalize on this momentum.”
Q2 2024 NCM LLC Results1
Total revenue for the second quarter ended June 27, 2024
decreased 15.1% to $54.7 million as compared to $64.4 million for
the second quarter of 2023. Operating loss increased to $9.3
million for the second quarter of 2024 from $2.2 million for the
second quarter of 2023. Adjusted OIBDA, a non-GAAP measure,
decreased to $7.6 million for the second quarter of 2024 from $12.5
million for the second quarter of 2023, as adjusted to exclude
workforce reorganization costs, satellite transition costs and
legal and advisor fees related to the Cineworld proceeding and NCM
LLC’s Chapter 11 case, each as previously reported and described in
the Company’s public filings made with the U.S. Securities and
Exchange Commission. See the table at the end of this release for
the reconciliation to the closest GAAP basis measurement.
Total revenue for the six months ended June 27, 2024 decreased
7.3% to $92.1 million as compared to $99.3 million for the six
months ended June 29, 2023. Operating loss decreased to $32.0
million for the six months ended June 27, 2024 from $32.8 million
for the six months ended June 29, 2023. Adjusted OIBDA, a non-GAAP
measure, increased to $1.9 million for six months ended June 27,
2024 from $1.6 million for the six months ended June 29, 2023 as
adjusted to exclude workforce reorganization costs, satellite
transition costs and legal and advisor fees related to the
Cineworld proceeding and NCM LLC’s Chapter 11 case, each as
previously reported and described in the Company’s public filings
made with the U.S. Securities and Exchange Commission. See the
table at the end of this release for the reconciliation to the
closest GAAP basis measurement.
________________________________
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.
Q2 2024 Consolidated Results
Total revenue for the second quarter ended June 27, 2024
increased 269.6% to $54.7 million as compared to $14.8 million for
the second quarter of 2023. Operating loss increased to $9.3
million for the second quarter of 2024 from $4.9 million for the
second quarter of 2023. Net loss for the second quarter of 2024 was
$8.7 million, or negative $0.09 per diluted share, compared to net
income of $545.3 million, or $31.33 per diluted share, for the
second quarter of 2023.
Total revenue for the six months ended June 27, 2024 increased
85.3% to $92.1 million as compared to $49.7 million for the six
months ended June 29, 2023. Operating loss decreased to $32.0
million for the six months ended June 27, 2024 from $35.5 million
for the six months ended June 29, 2023. Net loss for the six months
ended June 27, 2024 was $43.4 million, or negative $0.45 per
diluted share, compared to net income of $499.8 million, or $28.32
per diluted share, for the six months ended June 29, 2023.
Q3 2024 Outlook
For the third quarter of 2024, NCM LLC expects to earn total
revenue of $56.0 million to $58.0 million, compared to NCM LLC’s
total revenue for the third quarter 2023 of $69.6 million, and
Adjusted OIBDA in the range of $6.0 million to $8.0 million for the
third quarter of 2024, compared to NCM LLC’s Adjusted OIBDA for the
third quarter 2023 of $11.3 million.
Supplemental Information
Integration and other encumbered theater payments due primarily
from AMC associated with Carmike Theaters for NCM LLC for the
quarter ended June 27, 2024 and June 29, 2023 and the six months
ended June 27, 2024 and June 29, 2023 were $0.8 million, $0.9
million, $1.0 million and $1.2 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, August 5, 2024
at 5:00 P.M. Eastern Time. The live call can be accessed by dialing
1-877-300-8521 or, for international participants, 1-412-317-6026.
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, August 19, 2024 by dialing 1-844-512-2921
or, for international participants, 1-412-317-6671, and entering
conference ID 10191034.
About National CineMedia, Inc.
National CineMedia, Inc. (NCM, NASDAQ:NCMI) is America’s Movie Network. As the
largest cinema advertising network in the U.S., we unite brands
with young, diverse audiences through the power of movies and
popular culture. NCM’s Noovie® pre-show is presented exclusively in
42 leading national and regional theater circuits including AMC
Entertainment Inc. (NYSE:AMC), Cinemark Holdings, Inc. (NYSE:CNK)
and Regal Entertainment Group (a subsidiary of Cineworld Group PLC,
LON: CINE). NCM’s cinema advertising network offers broad reach and
unparalleled audience engagement with over 18,200 screens in over
1,400 theaters in 195 Designated Market Areas® (all of the top 50).
NCM Digital and Digital-Out-Of-Home (DOOH) go beyond the big
screen, extending in-theater campaigns into online, mobile, and
place-based marketing programs to reach entertainment audiences.
NCM is the managing member and owner of approximately 100% of and
is the managing member 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 recent 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 payment costs, workforce reorganization costs,
satellite transition 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
Six Months Ended
June 27, 2024
June 29, 2023
June 27, 2024
June 29, 2023
REVENUE
$
54.7
$
14.8
$
92.1
$
49.7
OPERATING EXPENSES:
Network operating costs
3.7
0.5
7.3
4.4
ESA Parties and network affiliate fees
26.7
4.5
49.2
28.3
Selling and marketing costs
9.6
1.1
19.6
10.6
Administrative and other costs
13.4
12.5
26.9
33.3
Depreciation expense
1.1
0.2
2.2
1.5
Amortization expense
9.5
0.9
18.9
7.1
Total
64.0
19.7
124.1
85.2
OPERATING LOSS
(9.3
)
(4.9
)
(32.0
)
(35.5
)
NON-OPERATING EXPENSE (INCOME):
Interest on borrowings
0.4
3.1
0.9
27.1
Interest income
(0.7
)
—
(1.1
)
—
Loss on re-measurement of the payable
under the tax receivable agreement
—
4.0
12.2
3.4
Gain on deconsolidation of NCM LLC
—
(557.7
)
—
(557.7
)
Other non-operating (income) expense,
net
(0.3
)
0.4
(0.6
)
0.4
Total
(0.6
)
(550.2
)
11.4
(526.8
)
(LOSS) INCOME BEFORE INCOME TAXES
(8.7
)
545.3
(43.4
)
491.3
Income tax expense
—
—
—
—
CONSOLIDATED NET (LOSS) INCOME
(8.7
)
545.3
(43.4
)
491.3
Less: Net loss attributable to
noncontrolling interests
—
—
—
(8.5
)
NET (LOSS) INCOME ATTRIBUTABLE TO NCM,
INC.
$
(8.7
)
$
545.3
$
(43.4
)
$
499.8
NET (LOSS) INCOME PER NCM, INC. COMMON
SHARE
Basic
$
(0.09
)
$
31.33
$
(0.45
)
$
31.28
Diluted
$
(0.09
)
$
31.33
$
(0.45
)
$
28.32
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
96,409,830
17,405,864
96,664,241
15,978,331
Diluted
96,409,830
17,405,864
96,664,241
17,349,139
NATIONAL CINEMEDIA,
INC.
Selected Condensed Balance
Sheet Data
Unaudited
($ in millions)
As of
June 27, 2024
December 28, 2023
Cash, cash equivalents and restricted
cash
$
56.8
$
37.6
Receivables, net
$
50.7
$
96.6
Property and equipment, net
$
15.8
$
15.8
Total assets
$
527.2
$
567.7
Borrowings, gross
$
10.0
$
10.0
Total equity
$
387.9
$
434.5
Total liabilities and equity
$
527.2
$
567.7
NATIONAL CINEMEDIA,
LLC
Operating Data
Unaudited
Three Months Ended
June 27, 2024
June 29, 2023
Total Screens (100% Digital) at Period End
(1)(5)
18,279
19,462
ESA Party Screens at Period End (2)(5)
9,552
9,533
Three Months Ended
Six Months Ended
June 27, 2024
June 29, 2023
June 27, 2024
June 29, 2023
Total Attendance for Period (3)(5) (in
millions)
92.8
134.9
168.6
224.9
ESA Party Attendance for Period (4)(5) (in
millions)
57.6
78.1
104.7
129.6
Capital Expenditures (6) (in millions)
$
1.0
$
1.0
$
2.3
$
1.7
(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
Six Months Ended
June 27, 2024
June 29, 2023
June 27, 2024
June 29, 2023
Revenue breakout:
National advertising revenue
$
41.7
$
44.3
$
71.2
$
66.8
Local and regional advertising revenue
9.8
13.4
15.0
21.4
ESA Party advertising revenue from
beverage concessionaire agreements
3.2
6.7
5.9
11.1
Total advertising revenue (excluding
beverage)
$
54.7
$
64.4
$
92.1
$
99.3
Other operating data:
Operating loss
$
(9.3
)
$
(2.2
)
$
(32.0
)
$
(32.8
)
Adjusted OIBDA (1)
$
7.6
$
12.5
$
1.9
$
1.6
Adjusted OIBDA margin (1)
13.9
%
19.4
%
2.1
%
1.6
%
(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 amortization of
intangibles, non-cash share-based payment costs, workforce
reorganization costs, satellite transition 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, amounts of amortization of intangibles,
non-cash share-based compensation programs, impairment of
long-lived assets, workforce reorganization costs, satellite
transition 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, amounts of amortization of intangibles,
non-cash share-based compensation programs, workforce
reorganization costs, satellite transition 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 of intangibles, non-cash share-based
payment costs, workforce reorganization costs, satellite transition
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
Six Months Ended
June 27, 2024
June 29, 2023
June 27, 2024
June 29, 2023
Operating loss
$
(9.3
)
$
(2.2
)
$
(32.0
)
$
(32.8
)
Depreciation expense
1.1
1.3
2.2
2.5
Amortization expense
9.5
6.2
18.9
12.5
Share-based compensation costs (1)
3.5
1.2
6.1
2.7
Workforce reorganization costs (2)
1.4
—
2.9
—
Satellite transition costs (3)
0.3
—
0.3
—
Fees and expenses related to the Cineworld
proceeding and Chapter 11 case (4)
1.1
6.0
3.5
16.7
Adjusted OIBDA
$
7.6
$
12.5
$
1.9
$
1.6
Total revenue
$
54.7
$
64.4
$
92.1
$
99.3
Adjusted OIBDA margin
13.9
%
19.4
%
2.1
%
1.6
%
Adjusted OIBDA
$
7.6
$
12.5
$
1.9
$
1.6
Integration and encumbered theater
payments
0.8
0.9
1.0
1.2
Adjusted OIBDA after integration and
encumbered theater payments
$
8.4
$
13.4
$
2.9
$
2.8
(1)
Share-based compensation costs are
included in network operations, selling and marketing and
administrative expense in the accompanying financial tables as
shown in the following table (dollars in millions).
Three Months Ended
Six Months Ended
June 27, 2024
June 29, 2023
June 27, 2024
June 29, 2023
Share-based compensation costs included in
network costs
$
0.2
$
0.1
$
0.3
$
0.3
Share-based compensation costs included in
selling and marketing costs
0.4
0.3
0.8
0.6
Share-based compensation costs included in
administrative and other costs
2.9
0.8
5.0
1.8
Total share-based compensation costs
$
3.5
$
1.2
$
6.1
$
2.7
(2)
Workforce reorganization costs represents
redundancy costs associated with changes to the Company’s workforce
primarily implemented during the first quarter of 2024.
(3)
One time costs of transitioning satellite
providers in the second quarter of 2024.
(4)
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 and second 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240805938240/en/
INVESTOR CONTACT: Chan Park investors@ncm.com
MEDIA CONTACT: Amy Tunick press@ncm.com
National CineMedia (NASDAQ:NCMI)
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De Jul 2024 a Ago 2024
National CineMedia (NASDAQ:NCMI)
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