National CineMedia’s Q2, 2014, Results
Gail Chiasson, North American Editor
National CineMedia Inc., Centennial, Colorado, the managing member and owner of 45.8% of National CineMedia LLC, operator of the largest in-theatre digital media network in North America, in announcing consolidated results for the fiscal second quarter ended June 26, 2014, showed that total revenue for the second quarter of 2014 decreased 18.6% to $99.9 million from $122.8 million for the comparable quarter last year.
Excluding revenue from the Fathom Events division that was sold in December 2013, revenue decreased 14.5% from $116.9 million for the second quarter of 2013.
Net income for the second quarter of 2014 was $3.6 million compared to net income of $9.5 million for the second quarter of 2013. Excluding $1.7 million in pre-tax costs associated with the proposed merger with Screenvision, net income for the second quarter of 2014 would have been $4.7 million.
For the six months ended June 26, 2014, total revenue decreased 17.0% to $170.1 million from $205.0 million for the six months ended June 27, 2013. Excluding revenue from the Fathom Events division that was sold in December, 2013, revenue decreased 10.8% from $190.6 million for the six months ended June 27, 2013.
Net income for the six months ended June 26, 2014 was $0.5 million compared to net income of$8.5 million for the first half of 2013. Excluding $1.7 million in pre-tax costs associated with the proposed merger with Screenvision, net income for the first half of 2014 would have been $1.6 million.
The Company announced 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 September 5, 2014, to stockholders of record on August 21, 2014.
Kurt Hall, chairman and CEO, says, “While our projected results for the first nine months are expected to be below last year, we are experiencing strong Q4 bookings and a significant increase in the number of upfront discussions for the TV upfront year beginning this October.
“The shifts we are making in pricing strategy continue to help broaden our client base and inventory utilization. This combined with the expected competitive benefits associated with the Screenvision merger will position us very well to reestablish revenue and Adjusted OIBDA growth in the future.”
“The Screenvision merger comes at a very important time for us as the video advertising marketplace becomes more competitive, demanding increased scope and near ubiquitous geographic coverage and better audience targeting capabilities. These strategic benefits and the expected operating expense synergies of $30 million resulting from the merger will allow us to invest to create more efficient and effective marketing products for advertisers that will ultimately result in higher advertising revenue for us and our theatre circuit partners.”
Integration payments due from Cinemark and AMC associated with Rave Theatres for the quarter ended June 26, 2014 and June 27, 2013 and six months ended June 26, 2014 and June 27, 2013, respectively, were $0.6 million, $0.9 million,$0.8 million and $1.1 million. The integration payments were recorded as a reduction of an intangible asset.
For the third quarter of 2014, the Company expects total revenue to be down 15% to 23% (total revenue in the range of $98.0 million to $108.0 million) compared to total revenue excluding Fathom for the third quarter of 2013 of $127.6 million.
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