National CineMedia, Inc. Reports Results for Fiscal First Quarter 2013

  National CineMedia, Inc. Reports Results for Fiscal First Quarter 2013

       ~ Provides Second Quarter and Reaffirms Full Year 2013 Outlook ~

                    ~ Announces Quarterly Cash Dividend ~

Business Wire

CENTENNIAL, Colo. -- May 2, 2013

National CineMedia, Inc. (NASDAQ: NCMI) (the Company), the managing member and
owner of 46.9% of National CineMedia, LLC (NCM LLC), the operator of the
largest digital in-theatre network in North America, today announced
consolidated results for the fiscal first quarter ended March 28, 2013.

Total revenue for the first quarter 2013 increased 3.9% to $82.2 million from
$79.1 million for the comparable quarter last year. Advertising revenue for
the first quarter 2013 was $73.7 million, an increase of 11.2% from $66.3
million for the comparable quarter last year. Fathom Events revenue decreased
33.6% to $8.5 million for the first quarter 2013 from $12.8 million for the
comparable quarter last year due primarily to the wind-down of the Fathom
Business Events division. Adjusted OIBDA increased 17.3% to $29.1 million for
the first quarter 2013 from $24.8 million for the comparable quarter last
year. Net loss for the first quarter of 2013 was $1.0 million, or $0.02 per
diluted share, compared to a net loss of $0.9 million, or $0.02 per diluted
share for the first quarter of 2012. Excluding the non-cash charges for
derivative related items, net loss for the first quarter of 2013 would have
been $0.2 million, or $0.00 per diluted share, compared to net loss of $1.0
million, or $0.02 per diluted share for the first quarter of 2012.

The Company announced today that its Board of Directors has authorized the
Company’s first quarter cash dividend of $0.22 per share of common stock. The
dividend will be paid on May 30, 2013, to stockholders of record on May 16,
2013. The Company plans to pay a regular quarterly dividend for the
foreseeable future at the discretion of the Board of Directors dependent on
available cash, anticipated cash needs, overall financial condition, future
prospects for earnings and cash flows as well as other relevant factors.

“Our strong Q1 results reflected our continued focus on expanding our network
geographic reach, our strategy to secure more content partner and other client
commitments upfront and a great effort by our media sales teams”, said Kurt
Hall National CineMedia’s Chairman and CEO. Mr. Hall continued, “With the
strength of our Q1 and Q2 local and regional business and strong late Q2
national scatter activity, we appear to also be benefiting from the steady
economic recovery and the impact of time shifting and programming
fragmentation in the media marketplace. These macro trends also appear to be
helping online and mobile video which has further expanded the video
advertising marketplace in which we compete.”

2013 Outlook

For the second quarter of 2013, the Company expects total revenue to be in the
range of $117.0 million to $122.0 million, or an increase of 6% to 11%
compared to the total revenue for the second quarter of 2012 of $110.1
million, and Adjusted OIBDA to be in the range of $58.0 million to $63.0
million, or an increase of 9% to 19% compared to the Adjusted OIBDA for the
second quarter of 2012 of $53.0 million.

The Company reaffirms its outlook of total revenue in the range of $455.0
million to $465.0 million, or an increase of 1% to 4% compared to total
revenue for the full year of 2012 of $448.8 million, and Adjusted OIBDA in the
range of $225.0 million to $235.0 million, or an increase of 2% to 6% compared
to Adjusted OIBDA for the full year of 2012 of $221.2 million.

Conference Call

The Company will host a conference call and audio webcast with investors,
analysts and other interested parties Thursday, May 2, 2013 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 16, 2013, by dialing 1-877-870-5176 or for international
participants 1-858-384-5517, and conference ID 412698.

About National CineMedia, Inc.

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 AMC Entertainment Inc., Cinemark Holdings, Inc. (NYSE: CNK), Regal
Entertainment Group (NYSE: RGC) and other leading regional theater circuits.
NCM’s theater advertising network covers 183 Designated Market Areas^® (49 of
the top 50) and includes approximately 19,300 screens (over 18,400 digital).
During 2012, approximately 710 million patrons (on an annualized basis)
attended movies shown in theaters in which NCM currently has exclusive cinema
advertising agreements in place. The NCM Fathom Events live digital broadcast
network (“DBN”) is comprised of over 740 locations in 172 Designated Market
Areas^® (including all of the top 50). The NCM Interactive Network offers
360-degree integrated marketing opportunities in combination with cinema,
encompassing 41 entertainment-related websites, online widgets and mobile
applications. National CineMedia, Inc. (NASDAQ: NCMI) owns a 46.9% 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 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 Securities and
Exchange Commission filings for further information about these and other
risks.

                                                             
NATIONAL CINEMEDIA, INC.
Condensed Consolidated Statements of Income
Unaudited
($ in millions, except per share data)
                                                                
                                                                
                                               Quarter Ended   Quarter Ended
                                               March 28, 2013   March 29, 2012
REVENUE:
Advertising (including revenue from founding
members of $8.9 and $9.8 million              $   73.7         $   66.3
respectively)
Fathom Events                                     8.5           12.8    
Total                                             82.2          79.1    
                                                                
OPERATING EXPENSES:
Advertising operating costs                        5.7              4.7
Fathom Events operating costs                      5.8              9.0
Network costs                                      5.0              5.1
Theatre access fees—founding members               15.6             15.7
Selling and marketing costs                        15.4             14.5
Administrative and other costs                     7.7              8.2
Depreciation and amortization                     5.4           4.9     
Total                                             60.6          62.1    
                                                                
OPERATING INCOME                                  21.6          17.0    
                                                                
NON-OPERATING EXPENSES:
Interest on borrowings                             13.3             14.1
Interest income                                    (0.1    )        (0.1    )
Accretion of interest on the discounted
income taxes
payable to founding members under tax             3.4              3.0
sharing
agreement
Change in derivative fair value                    -                (0.7    )
Amortization of terminated derivatives            2.5           0.3     
Total                                             19.1          16.6    
                                                                
INCOME BEFORE INCOME TAXES                        2.5           0.4     
                                                                
Expense (Benefit) for Income Taxes                0.6           (0.3    )
                                                                
CONSOLIDATED NET INCOME                            1.9              0.7
Less: Net Income Attributable to
Noncontrolling                                    2.9           1.6     
Interests
NET LOSS ATTRIBUTABLE TO NCM, INC.             $   (1.0    )   $   (0.9    )
                                                                
LOSS PER SHARE:
Basic                                          $   (0.02   )    $   (0.02   )
Diluted                                        $   (0.02   )    $   (0.02   )
                                                                

NATIONAL CINEMEDIA, INC.
Selected Balance Sheet Data
Unaudited ($ in millions)
                                                 
                                   March 28, 2013   December 27, 2012
Cash and cash equivalents          $   73.8         $    72.4
Short-term marketable securities       25.0              34.2
Receivables, net                       63.8              98.5
Property and equipment, net            26.0              25.7
Total Assets                           831.0             810.5
Long-term borrowings                   879.0             879.0
Total equity/(deficit)                 (428.4  )         (439.1   )
Total Liabilities and Equity           831.0             810.5
                                                                  

NATIONAL CINEMEDIA, INC.
Operating Data
Unaudited
                                                             
                                              Quarter          Quarter
                                               Ended            Ended
                                               March 28, 2013   March 29, 2012
Total Screens at Period End (1) (6)            19,292           19,073
                                                                
Founding Member Screens at Period End (2)      15,478           15,259
(6)
                                                                
Total Digital Screens at Period End (3)        18,444           17,840
                                                                
Total Attendance for Period (4) (6) (in        154.6            169.0
millions)
                                                                
Founding Member Attendance for Period (5)      128.8            142.6
(6) (in millions)
                                                                
Capital Expenditures (in millions)             $2.7             $2.4
                                                                

(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.
      

NATIONAL CINEMEDIA, INC.
Operating Data
Unaudited
(In millions, except advertising revenue per attendee and per share data)
                                                    
                                   Quarter              Quarter
                                   Ended                Ended
                                   March 28, 2013       March 29, 2012
                                                        
Advertising Revenue                $    73.7            $    66.3
Total Revenue                           82.2                 79.1
Operating Income                        21.6                 17.0
                                                        
Total Attendance (1)                    154.6                169.0
Advertising Revenue / Attendee     $    0.477           $    0.392
                                                        
OIBDA                              $    27.0            $    21.9
Adjusted OIBDA                          29.1                 24.8
Adjusted OIBDA Margin                   35.4     %           31.4     %
                                                        
Loss Per Share – Basic             $    (0.02    )      $    (0.02    )
Loss Per Share – Diluted           $    (0.02    )      $    (0.02    )
                                                                      

(1)  Represents the total attendance within NCM LLC’s advertising network.
      
(See attached tables for the non-GAAP reconciliation)


NATIONAL CINEMEDIA, INC.
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 United
States. OIBDA represents consolidated net income (loss) plus income tax
expense, interest and other costs and depreciation and amortization expense.
Adjusted OIBDA excludes from OIBDA non-cash share based payment 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 and non-cash share based compensation
programs, or different 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. OIBDA or
Adjusted OIBDA should not be regarded as an alternative to operating income,
net income 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 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 table reconciles consolidated net income to OIBDA and Adjusted
OIBDA for the periods presented (dollars in millions):

                                    Quarter         Quarter
                                     Ended            Ended
                                     March 28, 2013  March 29, 2012
Consolidated net income              $   1.9          $   0.7
Income tax expense (benefit)             0.6              (0.3   )
Interest and other costs                 19.1             16.6
Depreciation and amortization           5.4           4.9    
OIBDA                                    27.0             21.9
Share-based compensation costs (1)      2.1           2.9    
Adjusted OIBDA                       $   29.1       $   24.8   
Total Revenue                        $   82.2       $   79.1   
Adjusted OIBDA margin                   35.4   %       31.4   %

      Share-based payment costs are included in network operations, selling
(1)  and marketing and administrative expense in the accompanying financial
      statements.
      

Outlook (in millions)

                                    Quarter Ending     Year Ending
                                     June 27, 2013       December 26, 2013
                                     Low      High     Low      High
Consolidated net income              $ 28.0    $ 28.5    $ 101.5   $ 103.5
Income tax expense                     5.0       6.0       18.0      20.0
Interest and other                     18.0      20.0      74.0      78.0
Depreciation and amortization         5.0     6.0     22.5    23.5
OIBDA                                  56.0      60.5      216.0     225.0
Share-based compensation costs (1)    2.0     2.5     9.0     10.0
Adjusted OIBDA                       $ 58.0   $ 63.0   $ 225.0  $ 235.0
Total Revenue                        $ 117.0  $ 122.0  $ 455.0  $ 465.0

      Share-based compensation costs are included in network operations,
(1)  selling and marketing and administrative expense in the accompanying
      financial statements.
      

Net Loss and Loss Per Share Excluding Derivative Related Items

Net loss excluding derivative related items and loss per share excluding
derivative related items are not financial measures calculated in accordance
with generally accepted accounting principles (GAAP) in the United States. Net
loss excluding derivative related items and loss per share excluding
derivative related items are calculated using reported net loss and loss per
share and adding back the charge related to the change in derivative fair
value and amortization of terminated derivatives. 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 loss excluding
derivative related items should not be regarded as an alternative to net loss
and loss per share excluding derivative related items should not be regarded
as an alternative to loss 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 loss
and loss 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
loss excluding derivative related items and loss per share excluding
derivative related items for the periods presented (dollars in millions):

                                              Three Months    Three Months
                                               Ended            Ended
                                               March 28,        March 29,
                                               2013             2012
Net loss as reported                           $ (1.0       )   $ (0.9       )
                                                                             
                                                                             
Change in derivative fair value                  -                (0.7       )
Amortization of terminated derivatives           2.5              0.3
Effect of noncontrolling interest (53.1% and     (1.3       )     0.2
51.4%, respectively)
Effect of provision for income taxes (38%       (0.4       )   0.1        
effective rate)
Net effect of derivative related items           0.8              (0.1       )
                                                              
Net loss excluding derivative related items    $ (0.2       )  $ (1.0       )
                                                                
Weighted Average Shares Outstanding as
reported
Basic                                            54,611,614       54,141,234
Diluted                                          54,611,614       54,141,234
                                                                
Weighted Average Shares Outstanding as
adjusted
Basic                                            54,611,614       54,141,234
Diluted                                          55,201,670       54,141,234
                                                                
Basic loss per share as reported               $ (0.02      )   $ (0.02      )
Net effect of derivative related items          0.02          -          
Basic loss per share excluding derivative      $ 0.00         $ (0.02      )
related items
                                                                
Diluted loss per share as reported             $ (0.02      )   $ (0.02      )
Net effect of derivative related items          0.02          -          
Diluted loss per share excluding derivative    $ 0.00         $ (0.02      )
related items
                                                                             

Contact:

National CineMedia, Inc.
INVESTOR CONTACT:
David Oddo, 800-844-0935
investors@ncm.com
or
MEDIA CONTACT:
Amy Jane Finnerty, 212-931-8177
amy.finnerty@ncm.com
 
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