~ Announces Quarterly Cash Dividend
~~ Provides Second Quarter and Reaffirms Full Year 2015
Outlook ~
National CineMedia, Inc. (NASDAQ: NCMI) (the Company), the
managing member and owner of 45.1% of National CineMedia, LLC (NCM
LLC), the operator of the largest in-theatre digital media network
in North America, today announced consolidated results for the
fiscal first quarter ended April 2, 2015.
Total revenue for the quarter ended April 2, 2015 increased 9.5%
to $76.9 million from $70.2 million for the comparable quarter last
year. Adjusted OIBDA before Screenvision merger-related costs
increased 22.6% to $27.7 million from $22.6 million for the first
quarter of 2014. Net loss for the first quarter of 2015 including
Screenvision merger-related costs was $9.0 million, or a loss of
$0.15 per diluted share compared to net loss of $3.1 million, or a
loss of $0.05 per diluted share for the first quarter of 2014.
Excluding pre-tax amortization expense of terminated derivatives
from 2015 and 2014 and $33.4 million in pre-tax costs associated
with the terminated merger with Screenvision (including the $26.8
million termination payment) in the first quarter of 2015, net
income for the first quarter of 2015 would have been $0.01 per
diluted share and net loss for the first quarter of 2014 would have
been $0.04 per diluted share. Adjusted OIBDA and earnings per share
excluding the amortization of terminated derivatives and
merger-related costs are non-GAAP measures. See the tables at the
end of this release for the reconciliations to the closest GAAP
basis measurement.
The Company announced today that its Board of Directors has
authorized the Company’s regular quarterly cash dividend of $0.22
per share of common stock. The dividend will be paid on June 9,
2015 to stockholders of record on May 26, 2015. The Company intends
to pay a regular quarterly dividend for the foreseeable future at
the discretion of the Board of Directors consistent with the
Company’s intention to distribute over time a substantial portion
of its free cash flow in the form of dividends to its stockholders.
The declaration, payment, timing and amount of any future dividends
payable will be at the sole discretion of the Board of Directors
who will take into account general economic and advertising market
business conditions, the Company’s financial condition, available
cash, current and anticipated cash needs, and any other factors
that the Board of Directors considers relevant.
Commenting on the Company’s first quarter 2015 results, Kurt
Hall, NCM’s Chairman and CEO said, “Our first quarter growth and
strong guidance for the second quarter of 2015 reflect our
successful 2014/2015 national upfront campaign and media buying
shifts in response to changes in consumer viewing habits.” Mr. Hall
concluded, “As consumers become harder to reach, I am encouraged
that more national brands and local businesses are recognizing the
value of our broad national reach, reliable impressions, engaged
audience and high quality event programming.”
Supplemental Information
Integration payments due from Cinemark and AMC associated with
Rave Theatres for the first quarter of 2015 and 2014 were $0.3
million and $0.2 million, respectively. The integration payments
were recorded as a reduction of an intangible asset.
2015 Outlook
For the second quarter of 2015, the Company expects total
revenue to be up 16% to 22% and Adjusted OIBDA is expected to be up
17% to 29% from the second quarter of 2014. The Company expects
total revenue in the range of $116.0 million to $122.0 million
during the second quarter of 2015, compared to total revenue for
the second quarter of 2014 of $99.9 million and Adjusted OIBDA in
the range of $61.0 million to $67.0 million during the second
quarter of 2015 compared to Adjusted OIBDA for the second quarter
of 2014 of $52.0 million.
The Company reaffirms its outlook of total revenue to be up 7%
to 10% and Adjusted OIBDA to be up 5% to 10% from the full year
2014. The Company expects total revenue in the range of $422.0
million to $432.0 million for the full year 2015, compared to total
revenue for the full year 2014 of $394.0 million and Adjusted OIBDA
in the range of $210.0 million to $220.0 million for the full year
2015 compared to Adjusted OIBDA for the full year 2014 of $199.3
million.
Conference Call
The Company will host a conference call and audio webcast with
investors, analysts and other interested parties May 11, 2015 at
5:00 P.M. Eastern time. The live call can be accessed by dialing
1-877-407-9039 or for international participants 1-201-689-8470.
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, May 25, 2015, by dialing 1-877-870-5176 or
for international participants 1-858-384-5517, and entering
conference ID 13607947.
About National CineMedia, Inc.
National CineMedia (NCM) is the #1 weekend network in America
and the largest cinema advertising network reaching moviegoers
on-screen, on-site, online and on mobile devices. NCM offers
captivating entertainment content, national reach and unparalleled
audience engagement across its digital in-theater network of
approximately 20,100 screens in approximately 1,600 theaters in 183
Designated Market Areas® (49 of the top 50). During 2014, over 700
million moviegoers attended theaters that exclusively present NCM's
FirstLook pre-show program, including AMC Entertainment Inc.
(NYSE:AMC), Cinemark Holdings, Inc. (NYSE:CNK), Regal Entertainment
Group (NYSE: RGC), and over 40 other leading regional theater
circuit affiliates. National CineMedia, Inc. (NASDAQ:NCMI) owns a
45.1% interest in, and is the managing member of, National
CineMedia, LLC. For more information, visit www.ncm.com.
(NCMI-F)
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 second 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
Securities and Exchange Commission filings, including the “Risk
Factor” section of the Company’s Annual Report on Form 10-K for the
year ended January 1, 2015, for further information about these and
other risks.
NATIONAL CINEMEDIA,
INC.Condensed Consolidated Statements of
IncomeUnaudited($ in millions, except per share
data)
Quarter Ended April 2, 2015 March 27,
2014 REVENUE:
Advertising (including revenue from
founding members of $7.7 and 9.5, respectively)
$ 76.9 $ 70.2 OPERATING EXPENSES: Advertising operating costs 5.8
5.0 Network costs 4.5 4.6 Theatre access fees—founding members 17.2
17.4 Selling and marketing costs 16.0 15.0 Merger-related costs
33.4 - Administrative and other costs 8.7 7.6 Depreciation and
amortization 8.0 7.8 Total 93.6
57.4 OPERATING (LOSS) INCOME (16.7 )
12.8 NON-OPERATING EXPENSES: Interest on borrowings
13.1 13.1 Interest income (0.6 ) (0.4 )
Accretion of interest on the discounted
payable to founding members under tax receivable
agreement
3.6 3.8 Amortization of terminated derivatives 1.6 2.5 Other
non-operating expense 0.1 0.1 Total
17.8 19.1 LOSS BEFORE INCOME TAXES
(34.5 ) (6.3 ) Income tax benefit (4.3 )
(1.7 ) CONSOLIDATED NET LOSS (30.2 ) (4.6 ) Less: Net loss
attributable to noncontrolling interests (21.2 ) (1.5
) NET LOSS ATTRIBUTABLE TO NCM, INC. $ (9.0 ) $ (3.1 ) NET
LOSS PER NCM, INC. COMMON SHARE: Basic $ (0.15 ) $ (0.05 ) Diluted
$ (0.15 ) $ (0.05 )
NATIONAL CINEMEDIA, INC.Selected
Condensed Balance Sheet DataUnaudited ($ in
millions)
As of April 2, 2015 January 1,
2015 Cash, cash equivalents and marketable securities $ 77.5 $
80.6 Receivables, net 79.6 116.5 Property and equipment, net 21.6
22.4 Total assets 985.6 991.4 Borrowings 938.0 892.0 Total
equity/(deficit) (219.8 ) (208.7 ) Total liabilities and equity
985.6 991.4
NATIONAL CINEMEDIA,
INC.Operating DataUnaudited
Quarter Ended April 2, 2015 March
27, 2014 Total Screens (100% Digital) at Period End (1)(6)
20,080 19,850 Founding Member Screens at Period End (2)(6) 16,443
16,472 DCN (Digital Content Network) Screens at Period End (3)(6)
19,225 19,020
Quarter Ended (in millions)
April 2, 2015 March 27, 2014 Total Attendance for
Period (4)(6) 161.4 166.5 Founding Member Attendance for Period
(5)(6) 136.1 144.0 Capital Expenditures $ 2.1 $ 2.2
(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.
NATIONAL CINEMEDIA,
INC.Operating DataUnaudited(In millions,
except advertising revenue per attendee, margin and per share
data)
Quarter Ended April 2, 2015 March
27, 2014 Revenue breakout: National advertising revenue
$ 50.9 $ 42.7 Local advertising revenue $ 18.4 $ 18.1
Total advertising revenue (excluding beverage) $ 69.3 $ 60.8
Total revenue $ 76.9 $ 70.2
Per attendee
data: National advertising revenue per attendee $ 0.315 $ 0.256
Local advertising revenue per attendee $ 0.114 $ 0.109 Total
advertising revenue (excluding beverage) per attendee $ 0.429 $
0.365 Total advertising revenue per attendee $ 0.476 $ 0.422 Total
attendance (1) 161.4 166.5
Other operating data:
Operating (loss) income $ (16.7 ) $ 12.8 OIBDA (2) $ (8.7 ) $ 20.6
Adjusted OIBDA (2) $ 27.7 $ 22.6 Adjusted OIBDA margin (2) 36.0 %
32.2 % Loss per share – basic $ (0.15 ) $ (0.05 ) Loss per
share – diluted $ (0.15 ) $ (0.05 ) Adjusted income (loss)
per share – basic (2) $ 0.01 $ (0.04 ) Adjusted income (loss) per
share – diluted (2) $ 0.01 $ (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
(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, INC.Non-GAAP
ReconciliationsUnaudited
OIBDA, Adjusted OIBDA and Adjusted OIBDA Margin
Operating Income (Loss) Before Depreciation and Amortization
(“OIBDA”), Adjusted OIBDA and Adjusted OIBDA margin are not
financial measures calculated in accordance with GAAP in the United
States. OIBDA represents consolidated net income (loss) plus income
tax expense (benefit), interest and other costs and depreciation
and amortization expense. Adjusted OIBDA excludes from OIBDA
non-cash share based compensation costs and merger-related costs.
Adjusted OIBDA margin is calculated by dividing Adjusted OIBDA by
total revenue. These non-GAAP financial measures are used by
management to evaluate operating performance, to forecast future
results and as a basis for compensation. The Company believes these
are important supplemental measures of operating performance
because they eliminate items that have less bearing on its
operating performance and so 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 these
measures 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, non-cash share based
compensation programs, levels of mergers and acquisitions, interest
rates or debt levels or income tax rates. A limitation 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 the Company’s business. In addition,
Adjusted OIBDA has the limitation of not reflecting the effect of
the Company’s share based payment costs or costs associated with
the proposed Screenvision merger. OIBDA or Adjusted OIBDA should
not be regarded as an alternative to operating income (loss), net
income (loss) or as indicators of operating performance, nor should
they be considered in isolation of, or as substitutes for financial
measures prepared in accordance with GAAP. The Company believes
that consolidated net income (loss) is the most directly comparable
GAAP financial measure to OIBDA. 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 the Company’s debt agreement.
The following tables reconcile consolidated net loss to OIBDA
and Adjusted OIBDA for the periods presented (dollars in
millions):
Quarter Ended April 2, 2015 March
27, 2014 Consolidated net loss $ (30.2 ) $ (4.6 ) Income tax
benefit (4.3 ) (1.7 ) Interest and other non-operating costs 17.8
19.1 Depreciation and amortization 8.0 7.8
OIBDA $ (8.7 ) $ 20.6 Share-based compensation costs (1) 3.0
2.0 Merger-related costs (2) 33.4 -
Adjusted OIBDA $ 27.7 $ 22.6 Total revenue $ 76.9
$ 70.2 Adjusted OIBDA margin 36.0 %
32.2 % Adjusted OIBDA $ 27.7 $ 22.6 Rave theatres
integration payments 0.3 0.2 Adjusted
OIBDA after integration payments $ 28.0 $ 22.8
(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 EndingJuly 2, 2015 Year Ending
December 31, 2015 NCM, Inc. NCM, Inc.
Low High Low
High Consolidated net income $ 29.1 $ 32.6 $
56.2 $ 61.2 Income tax expense 5.3 6.0 8.4 9.4 Interest and other
non-operating costs 16.0 17.0 66.0 68.0 Depreciation and
amortization 7.8 8.2 34.5 35.5 OIBDA
58.2 63.8 165.1 174.1 Share-based compensation costs (1) 2.8 3.2
11.5 12.5 Merger-related costs (2) - - 33.4
33.4 Adjusted OIBDA $ 61.0 $ 67.0 $ 210.0 $ 220.0 Total
revenue $ 116.0 $ 122.0 $ 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 costs primarily include the merger termination fee
and legal, accounting, advisory and other professional fees
associated with the terminated merger with Screenvision.
Net Income (Loss) and Earnings (Loss) per Share Excluding the
Amortization of Terminated Derivatives and Merger-Related
Costs
Net income (loss) and earnings (loss) per share excluding the
amortization of terminated derivatives and merger-related costs are
not financial measures calculated in accordance with GAAP in the
United States. Net income (loss) and earnings (loss) per share
excluding the amortization of terminated derivatives and
merger-related costs are calculated using reported net loss and
loss per share and the amortization of terminated derivatives and
merger-related costs shown in the below table. These non-GAAP
financial measures are used by management as an additional tool to
evaluate operating performance. The Company believes these are
important supplemental measures of operating performance because
they eliminate items that have less bearing on its operating
performance and so 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 these measures
is relevant and useful for investors because it enables them to
view performance in a manner similar to a method used by the
Company’s management and helps improve their ability to understand
the Company’s operating performance. Net income (loss) excluding
the amortization of terminated derivatives and merger-related costs
should not be regarded as an alternative to net income and should
not be regarded as an alternative to earnings per share or as
indicators of operating performance, nor should they be considered
in isolation of, or as substitutes for financial measures prepared
in accordance with GAAP. The Company believes that net income and
earnings per share are the most directly comparable GAAP financial
measures. Because not all companies use identical calculations,
these presentations may not be comparable to other similarly titled
measures of other companies.
The following table reconciles net loss and loss per share as
reported to net income (loss) and earnings (loss) per share
excluding the amortization of terminated derivatives and
merger-related costs for the periods presented (dollars in
millions):
Quarter Ended April 2, 2015 March
27, 2014 Net loss as reported $ (9.0 ) $ (3.1 )
Merger-related costs (1) 33.4 - Amortization of terminated
derivatives 1.6 2.5 Effect of noncontrolling interests (54.9% and
54.2%, respectively) (19.2 ) (1.4 ) Effect of provision for income
taxes (38% effective rate) (6.0 ) (0.4 ) Net effect
of adjusting items 9.8 0.7 Net
income (loss) excluding adjusting items $ 0.8 $ (2.4 )
Weighted Average Shares Outstanding as reported Basic
58,888,674 58,618,800 Diluted 58,888,674 58,618,800 Weighted
Average Shares Outstanding as adjusted Basic 58,888,674 58,618,800
Diluted 59,224,785 58,618,800 Basic loss per share as
reported $ (0.15 ) $ (0.05 ) Net effect of adjusting items
0.16 0.01 Basic income (loss) per share
excluding adjusting items $ 0.01 $ (0.04 ) Diluted
loss per share as reported $ (0.15 ) $ (0.05 ) Net effect of
adjusting items 0.16 0.01 Diluted
income (loss) per share excluding adjusting items $ 0.01 $
(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.
National CineMedia, Inc.INVESTOR CONTACT:David
Oddo, 800-844-0935investors@ncm.comorMEDIA CONTACT:Amy Jane
Finnerty, 212-931-8117amy.finnerty@ncm.com
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