NCM Reports Q3 2014 Revenue Down 25.4%
Gail Chiasson, North American Editor
National CineMedia Inc., Centennial, Colorado-based managing member and owner of 45.8% of National CineMedia, LLC, operator of the largest in-theatre digital media network in North America, today announced consolidated results for the fiscal third quarter ended September 25, 2014.
The results were announced a day ahead of originally planned following the decision by the US Department of Justice to go against the planned merger of NCM and Screenvision.
NCM’s total revenue for the third quarter of 2014 decreased 25.4% to $100.8 million from $135.1 million for the comparable quarter last year. Excluding revenue from the Fathom Events division that was sold in December, 2013, revenue decreased 21.0% from $127.6 million for the third quarter of 2013.
Net income for Q3 of 2014 was $4.8 million, compared to net income of $13.7 million, for Q3, 2013. Excluding $2.0 million in pre-tax costs associated with the proposed merger with Screenvision in the third quarter of 2014 and excluding the impact of the Fathom business on the third quarter of 2013 and 2014, net income for the third quarter of 2014 would have been $6.2 million, or $0.11 per diluted share, and net income for the third quarter of 2013 would have been$13.4 million, or $0.24 per diluted share.
For the nine months ended September 25, 2014, total revenue decreased 20.3% to $270.9 million from $340.1 million for the nine months ended September 26, 2013. Excluding revenue from the Fathom Events division that was sold in December, 2013, revenue decreased 14.9% from $318.2 million for the nine months ended September 26, 2013.
Net income for the nine months ended September 25, 2014 was $5.3 million, or $0.09 per diluted share compared to net income of $22.2 million, or $0.40 per diluted share for the first nine months of 2013. Excluding $3.7 million in pre-tax costs associated with the proposed merger with Screenvision in 2014 and excluding the impact of the Fathom business on 2013 and 2014, net income for the first nine months of 2014 would have been $7.8 million, or $0.13 per diluted share, and net income for the first nine months of 2013 would have been $21.3 million, or $0.38 per diluted share.
The Company announced today that its Board of Directors has authorized the Company’s regular quarterly cash dividend of $0.22 per share of common stock.
Kurt Hall, chairman and CEO, said, “After weathering a tough Q2 and Q3 for our national advertising business as marketers sorted-out where to invest their video advertising budgets, our national business has made a meaningful recovery as Q4 2014 national advertising revenue is projected to increase approximately 20% versus Q4 2013.
“Most of this Q4 national revenue increase relates to commitments made during our recent participation in the TV upfront selling process where our overall upfront commitments more than doubled from last year. This turnaround reflects an increased focus by media planners on video platforms with higher quality event programming that delivers ubiquitous national coverage and enough impressions to positively impact their marketing campaigns.
“While this year’s upfront was a good start, our proposed merger with Screenvision will further enhance our ability to deliver what media planners want to buy.”
Basically repeating his statement earlier in the day on the earlier announced lawsuit by the Department of Justice seeking to block the Company’s proposed merger with Screenvision, Hall said, “I am obviously very disappointed that the DOJ did not see the benefits of the new combined company to our advertising clients and their agencies and our exhibitor partners. We look forward to demonstrating those benefits. Combining NCM and Screenvision will enable us to offer advertisers a better product with the broader reach, ubiquitous geographic coverage, more advertising impressions, enhanced targeting capability, and lower costs that advertising clients and their agencies seek. The combined company will provide long term additional advertising revenue to our theater circuit partners as we will be more competitive in the advertising marketplace.”
For the fourth quarter of 2014, the Company expects total revenue in the range of $118 million to $128 million during the fourth quarter of 2014, compared to total revenue excluding Fathom for the fourth quarter of 2013 of $108.1 million.
For the full year 2014, the Company expects total revenue to be down 6% to 9%. The Company expects total revenue in the range of $389 million to $399 million for the full year 2014, compared to total revenue excluding Fathom for the full year 2013 of $426.3 million.
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