National CineMedia, Inc. Reports Results for Fiscal Third Quarter 2024
Exceeds guidance with revenue of
Scatter revenue up 35% year-over-year
“NCM delivered its fourth consecutive quarter of consistent results, achieving
Q3 2024
Total revenue for the third quarter ended
Total revenue for the nine months ended
____________________ |
1With respect to operating data, all activity during NCM LLC’s financial restructuring from |
Q3 2024 Consolidated Results
Total revenue for the third quarter ended
Total revenue for the nine months ended
Q4 2024 Outlook
For the fourth quarter of 2024,
Supplemental Information
Integration and other encumbered theater payments due primarily from AMC associated with
Conference Call
The Company will host a conference call and audio webcast with investors, analysts, and other interested parties,
The replay of the conference call will be available until
About
Forward-Looking Statements
This press release contains various forward-looking statements that reflect management’s current expectations or beliefs regarding future events, including statements 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 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
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 compensation costs, impairment of long-lived assets, workforce reorganization costs, loss on termination of Regal ESA, satellite transition costs, system optimization costs and fees and expenses related to involvement in the
Condensed Consolidated Statements of Income Unaudited ($ in millions, except per share data) |
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Three Months Ended |
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Nine Months Ended |
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REVENUE |
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$ |
62.4 |
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$ |
24.7 |
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$ |
154.5 |
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$ |
74.4 |
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OPERATING EXPENSES: |
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Network operating costs |
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3.3 |
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2.6 |
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10.6 |
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6.9 |
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ESA Parties and network affiliate fees |
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32.9 |
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14.5 |
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82.1 |
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42.8 |
|
Selling and marketing costs |
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10.1 |
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6.3 |
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29.6 |
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16.9 |
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Administrative and other costs |
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12.9 |
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7.3 |
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39.8 |
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40.6 |
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Depreciation expense |
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1.2 |
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0.6 |
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3.4 |
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2.1 |
|
Amortization expense |
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9.5 |
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5.7 |
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28.4 |
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12.8 |
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Total |
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69.9 |
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37.0 |
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193.9 |
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122.1 |
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OPERATING LOSS |
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(7.5 |
) |
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(12.3 |
) |
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(39.4 |
) |
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(47.7 |
) |
NON-OPERATING EXPENSE (INCOME): |
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Interest on borrowings |
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0.4 |
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0.3 |
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1.3 |
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27.5 |
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Interest income |
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(0.7 |
) |
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— |
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(1.7 |
) |
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— |
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Loss on modification and retirement of debt, net |
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— |
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— |
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— |
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0.4 |
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(Gain) loss on re-measurement of the payable under the tax receivable agreement |
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(3.0 |
) |
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9.3 |
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9.3 |
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12.7 |
|
Gain on sale of asset |
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— |
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— |
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|
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— |
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(0.3 |
) |
Gain on deconsolidation of |
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— |
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— |
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— |
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(557.7 |
) |
Gain on re-measurement of investment in |
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— |
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(35.3 |
) |
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— |
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(35.5 |
) |
Gain on reconsolidation of |
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— |
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(168.0 |
) |
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— |
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|
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(168.0 |
) |
Other non-operating (income) expense, net |
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(0.6 |
) |
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(0.4 |
) |
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(1.3 |
) |
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0.2 |
|
Total |
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|
(3.9 |
) |
|
|
(194.1 |
) |
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7.6 |
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|
(720.7 |
) |
(LOSS) INCOME BEFORE INCOME TAXES |
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(3.6 |
) |
|
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181.8 |
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(47.0 |
) |
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|
673.0 |
|
Income tax expense |
|
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— |
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|
|
— |
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|
|
— |
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|
— |
|
CONSOLIDATED NET (LOSS) INCOME |
|
|
(3.6 |
) |
|
|
181.8 |
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|
|
(47.0 |
) |
|
|
673.0 |
|
Less: Net loss attributable to noncontrolling interests |
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— |
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— |
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— |
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(8.5 |
) |
NET (LOSS) INCOME ATTRIBUTABLE TO NCM, INC. |
|
$ |
(3.6 |
) |
|
$ |
181.8 |
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$ |
(47.0 |
) |
|
$ |
681.5 |
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NET (LOSS) INCOME PER NCM, INC. COMMON SHARE |
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Basic |
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$ |
(0.04 |
) |
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$ |
2.89 |
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$ |
(0.49 |
) |
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$ |
21.58 |
|
Diluted |
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$ |
(0.04 |
) |
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$ |
2.89 |
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$ |
(0.49 |
) |
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$ |
20.72 |
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WEIGHTED AVERAGE SHARES OUTSTANDING: |
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Basic |
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95,221,502 |
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|
62,765,418 |
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|
96,183,328 |
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31,574,026 |
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Diluted |
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95,221,502 |
|
|
|
62,804,688 |
|
|
|
96,183,328 |
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|
|
32,487,898 |
|
Selected Condensed Balance Sheet Data Unaudited ($ in millions) |
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As of |
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Cash, cash equivalents, marketable securities and restricted cash |
|
$ |
52.5 |
|
|
$ |
37.6 |
|
Receivables, net |
|
$ |
62.8 |
|
|
$ |
96.6 |
|
Property and equipment, net |
|
$ |
15.3 |
|
|
$ |
15.8 |
|
Total assets |
|
$ |
526.1 |
|
|
$ |
567.7 |
|
Borrowings, gross |
|
$ |
10.0 |
|
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$ |
10.0 |
|
Total equity |
|
$ |
385.5 |
|
|
$ |
434.5 |
|
Total liabilities and equity |
|
$ |
526.1 |
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|
$ |
567.7 |
|
Operating Data Unaudited |
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Three Months Ended |
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Total Screens (100% Digital) at Period End (1)(5) |
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18,141 |
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18,489 |
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ESA Party Screens at Period End (2)(5) |
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9,492 |
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|
9,604 |
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Three Months Ended |
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Nine Months Ended |
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Total Attendance for Period (3)(5) (in millions) |
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121.6 |
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131.7 |
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290.2 |
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|
356.6 |
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ESA Party Attendance for Period (4)(5) (in millions) |
|
|
74.3 |
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|
|
77.8 |
|
|
|
179.0 |
|
|
|
207.4 |
|
Capital Expenditures (6) (in millions) |
|
$ |
1.0 |
|
|
$ |
0.6 |
|
|
$ |
3.3 |
|
|
$ |
2.3 |
|
(1) |
|
Represents the total screens within NCM LLC’s advertising network. |
(2) |
|
Represents the total |
(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. |
Operating Data Unaudited ($ in millions) |
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Three Months Ended |
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Nine Months Ended |
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Revenue breakout: |
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National advertising revenue |
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$ |
46.8 |
|
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$ |
52.0 |
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$ |
117.9 |
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$ |
118.2 |
|
Local and regional advertising revenue |
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|
11.4 |
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|
12.9 |
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|
26.5 |
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|
34.9 |
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4.2 |
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4.7 |
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|
|
10.1 |
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|
15.8 |
|
Total advertising revenue (excluding beverage) |
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$ |
62.4 |
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$ |
69.6 |
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$ |
154.5 |
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$ |
168.9 |
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Other operating data: |
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Operating loss |
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$ |
(7.5 |
) |
|
$ |
(150.7 |
) |
|
$ |
(39.4 |
) |
|
$ |
(202.2 |
) |
Adjusted OIBDA (1) |
|
$ |
8.8 |
|
|
$ |
11.3 |
|
|
$ |
10.7 |
|
|
$ |
12.9 |
|
Adjusted OIBDA margin (1) |
|
|
14.1 |
% |
|
|
16.2 |
% |
|
|
6.9 |
% |
|
|
7.6 |
% |
(1) |
|
Adjusted OIBDA, Adjusted OIBDA margin and adjusted loss per share are not financial measures calculated in accordance with GAAP in |
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
Adjusted OIBDA represents operating income before depreciation and amortization expense adjusted to also exclude non-cash share-based compensation costs, impairment of long-lived assets, workforce reorganization costs, loss on termination of Regal ESA, satellite transition costs, system optimization costs and fees and expenses related to involvement in the
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, non-cash share-based compensation programs, impairment of long-lived assets, workforce reorganization costs, loss on termination of Regal ESA, satellite transition costs, system optimization costs and fees and expenses related to involvement in the
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, non-cash share-based compensation costs, impairment of long-lived intangibles, workforce reorganization costs, loss on termination of Regal ESA, satellite transition costs, system optimization costs and fees and expenses related to involvement in the
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
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Three Months Ended |
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Nine Months Ended |
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Operating loss |
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$ |
(7.5 |
) |
|
$ |
(150.7 |
) |
|
$ |
(39.4 |
) |
|
$ |
(202.2 |
) |
Depreciation expense |
|
|
1.2 |
|
|
|
1.0 |
|
|
|
3.4 |
|
|
|
3.6 |
|
Amortization expense |
|
|
9.5 |
|
|
|
7.8 |
|
|
|
28.4 |
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|
20.3 |
|
Share-based compensation costs (1) |
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3.1 |
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1.2 |
|
|
|
9.2 |
|
|
|
3.9 |
|
Impairment of long-lived assets (2) |
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|
— |
|
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|
9.6 |
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|
— |
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|
9.6 |
|
Workforce reorganization costs (3) |
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0.2 |
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|
— |
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|
3.1 |
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|
— |
|
Loss on termination of Regal ESA, net (4) |
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— |
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|
125.6 |
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|
— |
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|
125.6 |
|
Satellite transition costs (5) |
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0.2 |
|
|
|
— |
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0.5 |
|
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|
— |
|
System optimization costs (6) |
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|
0.1 |
|
|
|
— |
|
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|
0.1 |
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|
|
— |
|
Fees and expenses related to the |
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2.0 |
|
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|
16.8 |
|
|
|
5.4 |
|
|
|
52.1 |
|
Adjusted OIBDA |
|
$ |
8.8 |
|
|
$ |
11.3 |
|
|
$ |
10.7 |
|
|
$ |
12.9 |
|
Total revenue |
|
$ |
62.4 |
|
|
$ |
69.6 |
|
|
$ |
154.5 |
|
|
$ |
168.9 |
|
Adjusted OIBDA margin |
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|
14.1 |
% |
|
|
16.2 |
% |
|
|
6.9 |
% |
|
|
7.6 |
% |
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Adjusted OIBDA |
|
$ |
8.8 |
|
|
$ |
11.3 |
|
|
$ |
10.7 |
|
|
$ |
12.9 |
|
Integration and encumbered theater payments |
|
|
1.2 |
|
|
|
0.9 |
|
|
|
2.2 |
|
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|
2.1 |
|
Adjusted OIBDA after integration and encumbered theater payments |
|
$ |
10.0 |
|
|
$ |
12.2 |
|
|
$ |
12.9 |
|
|
$ |
15.0 |
|
(1) |
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Share-based compensation costs are included in network operations, selling and marketing and administrative expense in NCM LLC’s unaudited Condensed Consolidated Financial Statements as shown in the following table (dollars in millions). |
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Three Months Ended |
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Nine Months Ended |
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Share-based compensation costs included in network costs |
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$ |
0.1 |
|
|
$ |
0.1 |
|
|
$ |
0.4 |
|
|
$ |
0.4 |
|
Share-based compensation costs included in selling and marketing costs |
|
|
0.5 |
|
|
|
0.2 |
|
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|
1.3 |
|
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|
0.8 |
|
Share-based compensation costs included in administrative and other costs |
|
|
2.5 |
|
|
|
0.9 |
|
|
|
7.5 |
|
|
|
2.7 |
|
Total share-based compensation costs |
|
$ |
3.1 |
|
|
$ |
1.2 |
|
|
$ |
9.2 |
|
|
$ |
3.9 |
|
(2) |
|
The impairment of long-lived assets primarily relates to the write down of certain intangible assets related to a purchased affiliate and leasehold improvements no longer in use. |
(3) |
|
Workforce reorganization costs represents redundancy costs associated with changes to the Company’s workforce primarily implemented during the first quarter of 2024, as well as related office relocations. |
(4) |
|
The net impact of Regal's termination of the |
(5) |
|
One time costs of transitioning satellite providers in the second and third quarter of 2024. |
(6) |
|
System optimization costs represents costs incurred related to a one-time assessment of the technology surrounding the Company's programmatic offerings incurred in the third quarter of 2024. |
(7) |
|
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, second and third 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 during the first, second and third quarter of 2023. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105634507/en/
INVESTOR CONTACT:
investors@ncm.com
MEDIA CONTACT:
press@ncm.com
Source: