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

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

                     ~ Reaffirms Full Year 2013 Outlook ~

                    ~ Announces Quarterly Cash Dividend ~

Business Wire

CENTENNIAL, Colo. -- October 30, 2013

National CineMedia, Inc. (NASDAQ: NCMI) (the Company), the managing member and
owner of 47.2% 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 third quarter ended September 26, 2013.

Total revenue for the third quarter 2013 decreased 6.0% to $135.1 million from
$143.7 million for the comparable quarter last year. Advertising revenue for
the third quarter 2013 was $127.6 million, a decrease of 7.5% from $138.0
million for the comparable quarter last year. Fathom Events revenue increased
31.6% to $7.5 million for the third quarter 2013 from $5.7 million for the
comparable quarter last year. Adjusted OIBDA decreased 9.9% to $76.7 million
for the third quarter 2013 from $85.1 million for the comparable quarter last
year. Net income for the third quarter of 2013 was $13.7 million, or $0.24 per
diluted share, compared to net income of $16.7 million, or $0.30 per diluted
share for the third quarter of 2012. Excluding the charges for derivative
related items, swap terminations and write-off of debt issuance costs, net
income for the third quarter of 2013 would have been $14.4 million, or $0.25
per diluted share, compared to $16.9 million, or $0.31 per diluted share for
the third quarter of 2012.

For the nine months ended September 26, 2013, total revenue increased 2.2% to
$340.1 million compared to $332.9 million for the nine months ended September
27, 2012. Advertising revenue for the nine months ended September 26, 2013 was
$318.2 million, an increase of 4.1% from $305.6 million for the comparable
period last year. Fathom Events revenue decreased 19.8% to $21.9 million for
the nine months ended September 26, 2013 from $27.3 million for the comparable
period last year. For the nine months ended September 26, 2013, Adjusted OIBDA
increased 5.6% to $172.0 million from $162.9 million for the comparable period
in 2012. Net income for the nine months ended September 26, 2013 was $22.2
million, or $0.40 per diluted share, compared to net income of $13.9 million,
or $0.25 per diluted share for the comparable nine month period of 2012.
Excluding the charges for derivative related items, swap terminations and
write-off of debt issuance costs, net income for the first nine months of 2013
would have been $24.7 million, or $0.44 per diluted share, compared to $22.8
million, or $0.42 per diluted share for the first nine months of 2012.

The Company announced today that its Board of Directors has authorized the
Company’s third quarter cash dividend of $0.22 per share of common stock. The
dividend will be paid on November 27, 2013 to stockholders of record on
November 13, 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.

“As expected, current quarter revenue was lower than 2012, as higher Q3 2013
local and Fathom revenue could not offset the record national campaign of one
of our clients that represented 19% of our Q3 2012 national revenue," said
Kurt Hall, National CineMedia’s Chairman and CEO. Mr. Hall continued, “Despite
the lower Q3 national revenue, it was more than offset by our strong first
half revenue growth that resulted in record nine month revenue and Adjusted
OIBDA for our Company.”

Mr. Hall concluded, “This nine month growth reflected the broadening and
diversification of our client base, that while negatively impacting our
national CPMs, created a broader base of clients that will use our network for
more than product launches. We also benefited from the continued expansion of
our network reach that is improving our competitive positioning against other
local and national advertising networks.”

Supplemental Information

Integration payments due from Cinemark and AMC associated with Rave Theatres
for the quarter and nine months ended September 26, 2013 were $1.0 million and
$2.1 million. There were no integration payments during the comparable periods
in 2012. The integration payments were recorded as a reduction of an
intangible asset.

2013 Outlook

For the fourth quarter of 2013, the Company expects total revenue to be in the
range of $115.0 million to $125.0 million, or a decrease of 1% to an increase
of 8% compared to the total revenue for the fourth quarter of 2012 of $115.9
million, and Adjusted OIBDA to be in the range of $58.0 million to $68.0
million, or a decrease of 1% to an increase of 17% compared to the Adjusted
OIBDA for the fourth quarter of 2012 of $58.3 million. The Company expects to
be at the lower end of this revenue and Adjusted OIBDA range for the fourth
quarter of 2013.

For the full year 2013, 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
reaffirms its outlook of Adjusted OIBDA in the range of $230.0 million to
$240.0 million, or an increase of 4% to 8% compared to Adjusted OIBDA for the
full year of 2012 of $221.2 million. The Company expects to be at the lower
end of this revenue and Adjusted OIBDA range for the full year 2013.

Conference Call

The Company will host a conference call and audio webcast with investors,
analysts and other interested parties Wednesday, October 30, 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, November 13, 2013, by dialing 1-877-870-5176 or for international
participants 1-858-384-5517, and conference ID 10000638.

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 19,700 screens (approximately 18,900
digital). During 2012, over 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 approximately 750 locations in 171 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 47.2%
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)
                                                             
                                                                     
                     Three Months   Three Months   Nine Months    Nine Months
                     Ended          Ended          Ended          Ended
                     September      September      September      September
                     26,            27,            26,            27,
                     2013           2012           2013           2012
REVENUE:
Advertising
(including revenue
from founding
members of $11.5,    $  127.6       $  138.0       $  318.2       $  305.6
$10.0, $31.6 and
$30.0,
respectively)
Fathom Events          7.5          5.7          21.9         27.3   
Total                  135.1        143.7        340.1        332.9  
OPERATING
EXPENSES:
Advertising
operating costs
(including $1.1,
$1.4, $2.6 and          7.9            11.0           21.7           23.7
$3.1 to related
party affiliates,
respectively)
Fathom Events
operating costs
(including $1.3,
$1.0, $3.3 and          5.4            4.5            15.4           20.0
$4.2 to founding
members,
respectively)
Network costs           5.1            5.1            15.2           15.3
Theatre access
fees—founding           18.7           16.3           52.4           48.3
members
Selling and
marketing costs
(including $0.3,
$0.4, $1.0 and          15.6           15.7           46.7           45.7
$0.8 to founding
members,
respectively)
Administrative and      7.8            8.0            22.9           24.6
other costs
Depreciation and       7.2          5.0          18.8         14.9   
amortization
Total                  67.7         65.6         193.1        192.5  
OPERATING INCOME       67.4         78.1         147.0        140.4  
NON-OPERATING
EXPENSES:
Interest on             12.8           14.3           38.9           42.7
borrowings
Interest income         (0.1   )       (0.1   )       (0.3   )       (0.3   )
Accretion of
interest on the
discounted payable      3.4            4.1            10.2           11.1
to founding
members under tax
sharing agreement
Change in
derivative fair         -              (0.7   )       -              (2.2   )
value
Amortization of
terminated              2.6            1.3            7.8            2.4
derivatives
Loss on swap            -              -              -              26.7
terminations
Other
non-operating          -            -            1.2          2.4    
expense
Total                  18.7         18.9         57.8         82.8   
INCOME BEFORE           48.7           59.2           89.2           57.6
INCOME TAXES
Income tax expense     6.4          10.2         13.0         8.8    
CONSOLIDATED NET        42.3           49.0           76.2           48.8
INCOME
Less: Net income
attributable to        28.6         32.3         54.0         34.9   
noncontrolling
interests
NET INCOME
ATTRIBUTABLE TO      $  13.7       $  16.7       $  22.2       $  13.9   
NCM, INC.
                                                                     
NET INCOME PER
NCM, INC. COMMON
SHARE:
Basic                $  0.24        $  0.31        $  0.40        $  0.26
Diluted              $  0.24        $  0.30        $  0.40        $  0.25
                                                                            


NATIONAL CINEMEDIA, INC.
Selected Balance Sheet Data
Unaudited ($ in millions)
                                                     
                                                        
                                   September 26, 2013   December 27, 2012
Cash and cash equivalents          $    69.8            $    72.4
Short-term marketable securities        57.4                 34.2
Receivables, net                        108.3                98.5
Property and equipment, net             26.0                 25.7
Total Assets                            982.5                810.5
Long-term borrowings                    884.0                879.0
Total equity/(deficit)                  (217.5    )          (356.4   )
Total Liabilities and Equity            982.5                810.5
                                                                      


NATIONAL CINEMEDIA, INC.
Operating Data
Unaudited
                                                              
                                                                   
                        Quarter and   Quarter and
                        Nine Months   Nine Months
                        Ended         Ended
                        September     September
                        26,           27,
                        2013          2012
Total Screens at        19,671        19,328
Period End (1) (6)
                                                                   
Founding Member
Screens at Period End   16,423        15,238
(2) (6)
                                                                   
Total Digital Screens   18,863        18,431
at Period End (3)
                                                                   
                        Quarter       Quarter       Nine Months    Nine Months
                        Ended         Ended         Ended          Ended
                        September     September     September      September
                        26,           27,           26,            27,
                        2013          2012          2013           2012
Total Attendance for
Period (4) (in          192.0         175.2         533.7          519.2
millions)
                                                                   
Founding Member
Attendance for Period   165.9         145.1         455.4          434.4
(5) (6) (in millions)
                                                                   
Capital Expenditures    $2.0          $2.9          $8.2           $7.8
(in millions)
                                                                   

         
(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.
           
(6)   Excludes screens and attendance associated with certain Cinemark
           Rave and AMC Rave theatres for all periods presented.
           


NATIONAL CINEMEDIA, INC.
Operating Data
Unaudited
(In millions, except advertising revenue per attendee and per share data)
                                                             
                                                                  
                       Quarter         Quarter     Nine Months    Nine Months
                       Ended           Ended       Ended          Ended
                       September 26,   September   September      September
                       2013            27,         26,            27,
                                       2012        2013           2012
                                                                  
Advertising Revenue    $127.6          $138.0      $318.2         $305.6
Total Revenue          135.1           143.7       340.1          332.9
Operating Income       67.4            78.1        147.0          140.4
                                                                  
Total Attendance (1)   192.0           175.2       533.7          519.2
Advertising Revenue    $0.665          $0.788      $0.596         $0.589
/ Attendee
                                                                  
OIBDA                  $74.6           $83.1       $165.8         $155.3
Adjusted OIBDA         76.7            85.1        172.0          162.9
Adjusted OIBDA         56.8%           59.2%       50.6%          48.9%
Margin
                                                                  
Earnings Per Share –   $0.24           $0.31       $0.40          $0.26
Basic
Earnings Per Share –   $0.24           $0.30       $0.40          $0.25
Diluted
                                                                  

           Represents the total attendance within NCM LLC’s advertising
(1)  network. Excludes attendance associated with certain Cinemark Rave
           and AMC Rave theatres for all periods presented.
           

            (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         Nine Months    Nine Months
                    Ended           Ended           Ended          Ended
                    September 26,   September 27,   September      September
                    2013            2012            26,            27,
                                                    2013           2012
Consolidated net    $   42.3        $   49.0        $   76.2       $  48.8
income
Income tax              6.4             10.2            13.0          8.8
expense
Interest and
other                   18.7            18.9            57.8          82.8
non-operating
costs
Depreciation and       7.2          5.0          18.8       14.9   
amortization
OIBDA                   74.6            83.1            165.8         155.3
Share-based
compensation           2.1          2.0          6.2        7.6    
costs (1)
Adjusted OIBDA      $   76.7      $   85.1      $   172.0    $  162.9  
Total revenue       $   135.1     $   143.7     $   340.1    $  332.9  
Adjusted OIBDA         56.8   %      59.2   %      50.6   %    48.9   %
margin
                                                             
Adjusted OIBDA      $   76.7      $   85.1      $   172.0    $  162.9  
Rave Theatres       $   1.0       $   -         $   2.1      $  -      
Payments
Adjusted OIBDA
after Rave          $   77.7      $   85.1      $   174.1    $  162.9  
Theatres Payments
                                                                   

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

Outlook (in millions)

                                                      
                                     Quarter Ending     Year Ending
                                     December 26, 2013   December 26, 2013
                                     Low      High      Low      High
Consolidated net income              $ 25.7    $ 32.8    $ 100.6   $ 107.7
Income tax expense                     4.8       6.3       19.1      20.6
Interest and other                     18.5      19.0      76.3      76.8
Depreciation and amortization         7.0     7.5     25.8    26.3
OIBDA                                  56.0      65.6      221.8     231.4
Share-based compensation costs (1)    2.0     2.4     8.2     8.6
Adjusted OIBDA                       $ 58.0   $ 68.0   $ 230.0  $ 240.0
Total Revenue                        $ 115.0  $ 125.0  $ 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 Income and Earnings Per Share Excluding Derivative Related Items, Swap
Terminations and Debt Issuance Costs

Net income excluding derivative related items, swap terminations and debt
issuance costs and earnings per share excluding derivative related items, swap
terminations and debt issuance costs are not financial measures calculated in
accordance with generally accepted accounting principles (GAAP) in the United
States. Net income excluding derivative related items, swap terminations and
debt issuance costs and earnings per share excluding derivative related items,
swap terminations and debt issuance costs are calculated using reported net
income and earnings per share and adding back the charge related to the change
in derivative fair value, amortization of terminated derivatives, loss on swap
terminations and other non-operating expense. 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 excluding
derivative related items, swap terminations and debt issuance costs should not
be regarded as an alternative to net income and earnings per share excluding
derivative related items, swap terminations and debt issuance costs 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 income and earnings per share as reported
to net income excluding derivative related items, swap terminations and debt
issuance costs and income per share excluding derivative related items, swap
terminations and debt issuance costs for the periods presented (dollars in
millions):

                                                               
                 Three Months     Three Months     Nine Months      Nine Months
                 Ended            Ended            Ended            Ended
                 September 26,    September 27,    September 26,    September 27,
                 2013             2012             2013             2012
Net income as    $ 13.7           $ 16.7           $ 22.2           $ 13.9
reported
                                                                                 
Change in
derivative         −                (0.7       )     −                (2.2       )
fair value
Amortization
of terminated      2.6              1.3              7.8              2.4
derivatives
Loss on swap       −                −                −                26.7
terminations
Write-off of
debt issuance      −                −                1.2              2.5
costs
                                                                    
Effect of
noncontrolling
interest
(54.8%, 51.4%,     (1.4       )     (0.3       )     (4.9       )     (15.1      )
54.3% and
51.4%,
respectively)
Effect of
provision for
income taxes      (0.5       )   (0.1       )   (1.6       )   (5.4       )
(38% effective
rate)
Net effect of
adjusting          0.7              0.2              2.5              8.9
items
                                                              
Net income
excluding        $ 14.4         $ 16.9         $ 24.7         $ 22.8       
adjusting
items
                                                                    
Weighted
Average Shares
Outstanding as
reported
Basic              56,027,288       54,451,200       55,233,875       54,344,944
Diluted            56,875,241       55,179,666       55,864,471       55,005,678
                                                                    
Weighted
Average Shares
Outstanding as
adjusted
Basic              56,027,288       54,451,200       55,233,875       54,344,944
Diluted            56,875,241       55,179,666       55,864,471       55,005,678
                                                                    
Basic earnings
per share as     $ 0.24           $ 0.31           $ 0.40           $ 0.26
reported
Net effect of
adjusting         0.02          0.00          0.05          0.16       
items
Basic earnings
per share
excluding        $ 0.26         $ 0.31         $ 0.45         $ 0.42       
adjusting
items
                                                                    
Diluted
earnings per     $ 0.24           $ 0.30           $ 0.40           $ 0.25
share as
reported
Net effect of
adjusting         0.01          0.01          0.04          0.17       
items
Diluted
earnings per
share            $ 0.25         $ 0.31         $ 0.44         $ 0.42       
excluding
adjusting
items
                                                                                 

Contact:

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