The exhibition ad sales company liked the way 2013 ended up, but has reservations about 2014, according to its Q4 earnings release and forecast. The last three months of the year included a $25.4M gain from the sale of its Fathom Events business. With that factored in, reported net income leaped to $53.6M from $16.5M in the period last year on revenues of $122.7M, +5.9%. The top line figure beat analyst expectations for $117.6M. Factoring out one-time items, earnings came in at 21 cents a share, beating forecasts for 16 cents. Ad sales rose 4% to $108.1M, even though total attendance at theaters in National CineMedia’s network fell 3.3% to 165.2M. CEO Kurt Hall attributes the sales increase to the company’s “progress on our longer term strategy to broaden our client base, expand our network reach and improve our technology to make our marketing products more competitive.” It enabled NCM to authorize a special cash dividend of 50 cents a share on top of its 22 cent quarterly dividend. But the company seems concerned about 2014. It forecast as much as a 9% drop in Q1 revenues, even factoring out Fathom’s contribution in 2013. Cash flow could drop as much as 28%. The full year forecast is better, but still blah with revenues up as much as 3% and cash flow possibly +2%.
Last year Samsung spent more than $20M for movie theater ads, which accounted for 19% of National CineMedia‘s national Q3 revenue. But even with that expected decline, the cinema ad sales company’s results fell short of expectations. It reported net income of $13.7M, -18% vs the period last year, on revenues of $135.1M, -6%. Analysts thought the revenue number would be closer to $137.1M. Adjusted net income of 25 cents a share also missed the Street’s target of 29 cents. CEO Kurt Hall says that while local ad sales grew, as did revenue at the Fathom Events unit, it “could not offset the record national campaign of one of our clients.” (Samsung, still a client, made an unusually big buy to introduce the Samsung Galaxy phone.) National CineMedia also warned investors that revenue and cash flow in the current quarter likely will be “at the lower end” of its projections. It says revenues could go as low as $115M, a drop of 1% vs last year, with cash flow possibly hitting $58M, which also would represent a 1% decline. Still, Hall remains optimistic based on the company’s performance over the last nine months. It “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.”
The movie theater ad sales company gave the head nod this morning as it disclosed its plan to take advantage of today’s low interest rates by repricing its debt. The release adds that the company “is comfortable with the upper end” of its cash flow projections. Stifel analyst Benjamin Mogil seized the opportunity this morning to raise his Q1 revenue estimate 4% to $78M and cash flow projection 12% to $28M. Company execs did their best last week at the CinemaCon confab in Las Vegas to reassure the Street that trends look promising for theater ads. The company “continues to build on its momentum from last year’s upfront presentation and benefits from being a part of the conversation as advertisers and ad agencies plan their media budgets for the upcoming year,” says Barclays’ Anthony DiClemente. “We also think the company is well-positioned to continue to gain market share as contracts come up.”
The cinema ad sales company isn’t joining the exhibition industry’s celebration over the strong year-end box office. National CineMedia ended Q4 with a $0.5M net loss, down from a $6.7M profit in the period a year ago, on revenues of $115.9M, +1.1%. The sales figure is short of the $119.8M that analysts expected. The net loss of one cent a share contrasts with expectations for a 17 cent profit. Revenue from ad sales was up 2.6% to $103.9M. Growth in 2012 “could have been even stronger had the economy not sputtered during Q4, including the impact of [Superstorm] Sandy,” CEO Kurt Hall says. The company will repeat the effort it launched last year to sell theater ads during the television upfront season. The Fathom Events operation, which shows concerts and other alternative programming at theaters, was down 9.8% to $12M. That was due in part to the effort to wind down Fathom Business Events. National CineMedia says it expects revenue in the current quarter to go as high as $84M, which would be +6% vs early 2012; adjusted cash flow could range from a 3% decline to a 13% increase. For the full year revenue could hit $465M, +4%, while cash flow could rise as much as 6% to $235M. The company says that its reach should grow as its founders — AMC, Cinemark, and Regal — buy …
It’s a tough time for the company, which sells ads and produces special events for movie theaters. National CineMedia just reported consolidated net income for Q3 of $16.7M, -6% vs the period last year, on revenues of $143.7M, +5.7%. But the results fell short of the Street’s expectations. Analysts anticipated revenues of $145.2M. Earnings per share, at 30 cents, were two cents shy of projections. National CineMedia says that ad sales increased 8.5% to $138M, while revenue from its Fathom Events operation declined 35.2% to $5.7M as it wound down Fathom Business Events. More worrisome is CEO Kurt Hall’s warning that Q4 scatter market ad sales are “a bit more more challenging than we had originally anticipated” due to “inconsistent economic data and several uncertainties that could impact future economic activity.” The company lowered its revenue projection for 2012 to as much as $455M, down from $470M that it told investors to expect three months ago. “Even with this somewhat softer media marketplace, our national revenue growth for the year is still expected to be strong at 5% to 9%,” Hall says.
Movie theater ad sales were up, but the Fathom Events business — which offers concerts and other alternative programming for exhibition companies — took a breather in the quarter that ended in June. Due to its debt refinancing efforts, National CineMedia ended the period with a $1.9M net loss, down from a $9M profit last year, on revenues of $110.1M, -3.4%. That revenue figure is a little ahead of the $108.5M analysts expected. Without the costs from the debt restructuring, earnings would have come in at 13 cents a share, a penny ahead of projections. National CineMedia says that it sold $101.3M in ads, +2.7%. That includes $10.2M in advertising beverage revenue from the exhibition chains that back it including AMC Entertainment, Cinemark, and Regal. But the gain in ad sales was offset by Fathom Events’ 42.9% drop in revenues to $8.8M. Management reaffirmed its forecast that the company will end the year with as much as $470M in revenue. It also unveiled a 22 cents a share dividend which it says it intends to pay “for the foreseeable future.”
National CineMedia, operator of the nation’s largest in-theater ad network, reported today after the closing bell that it grew revenue by 8.2% year-over-year to $136 million during the third quarter. That’s a quarterly record for the company, which saw its ad revenue jump 8% to $127.1 million; ad revenue is up 3.3% year to date. Net income for the quarter was $16.8 million, or 31 cents a share, compared with $11.8 million and 24 cents a share in 2010. Income for the year is up 40.9%. The company also said that it has authorized a 3Q cash dividend of 22 cents per share of common stock to be paid on December 1 and intends to pay a regular quarterly dividend for the foreseeable future.
National CineMedia took it on the chin as investors reacted to its announcement late yesterday that the softening economy will cause the theater ad sales firm to fall short of its 2011 earnings projections. The stock closed at $12.01, down 18.6% for the day — and bringing its loss for 2011 to 39.7%. Lazard Capital Markets analyst Barton Crockett downgraded the stock to “neutral” from “buy,” saying that “NCM is proving less resilient than more diversified TV networks, and the economy looks like a growing drag” on scatter market advertising. Barclay’s Capital analyst Anthony DiClemente reduced his price target for the stock to $16 from $19 warning that there may be a “pull back on cinema advertising since it is the most premium priced ad medium.”
The numbers look bad. Instead of seeing 2011 revenues grow 8% to 10%, the projection in August, National CineMedia now says that it could end the year anywhere from -5.8% to +1.8%. Estimates for the key cash flow figure — Adjusted OIBDA (operating income before depreciation and amortization) — are even worse: It now is expected to come in from -5.6% to -1.1% as opposed to the August projection of +6% to +11%.
Centennial, CO – October 13, 2011 – National CineMedia, Inc. (NASDAQ: NCMI) (the Company), the managing member and owner of 48.7% of National CineMedia, LLC (NCM LLC), the operator of the largest digital in-theatre network in North America, today reaffirmed its third quarter outlook and lowered its fourth quarter and full year 2011 revenue and Adjusted OIBDA outlook. The prior outlook was provided on August 4, 2011.
The Company now expects full year 2011 revenue to be in the range of $425 million to $435 million, compared to the prior outlook of $460 million to $470 million and expects Adjusted OIBDA to be in the range of $210 million to $220 million, compared to the prior outlook of $236 million to $246 million.
“Our third quarter results are expected to fall within the original guidance provided on our second quarter conference call, reflecting an approximate 5% to 9% increase in Adjusted OIBDA over the third quarter of 2010, which had increased 43.6% over the third quarter of 2009. Despite this
National CineMedia’s 2Q results — basically in line with expectations — and the company’s decision to raise its dividend seemed to balance whatever disappointment investors may have felt about the slight trim executives made in their financial forecast for 2011. The share price for the No. 1 movie advertising and event company was unchanged in after-hours trading after it said that it expects to end the year with as much as $470M in revenue. In May the forecast went as high as $475M. But net income in 2Q of $9M was up 95.6% vs the same period last year on revenues of $114M, up 15%. Earnings at 16 cents a share matched the consensus estimate among analysts who follow the company. They also expected $109.7M in revenue. The company attributes its growth to higher ad rates as well as a 6.4% increase in attendance at theater chains — including AMC, Cinemark, and Regal — that show its ads and features. National CineMedia says that beginning in September its dividend will rise 10% to 22 cents a share. “With the progress we are making to expand our business we look forward to continuing to provide shareholders with a unique combination of growth and current income,” CEO Kurt Hall said. NCM’s stock price has dropped 31.3% in 2011 as investors became concerned about overall movie attendance and prospects for the ad market.