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Share Name | Share Symbol | Market | Type |
---|---|---|---|
National CineMedia Inc | NASDAQ:NCMI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.235 | 5.14% | 4.805 | 4.80 | 4.81 | 4.85 | 4.57 | 4.57 | 428,011 | 20:28:42 |
Delaware
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20-5665602
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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6300 S. Syracuse Way, Suite 300
Centennial, Colorado
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80111
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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☐
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Accelerated filer
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x
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Non-accelerated filer
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☐
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(Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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September 27,
2018 |
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December 28,
2017 |
||||
ASSETS
|
|
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|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
27.3
|
|
|
$
|
30.2
|
|
Short-term marketable securities
|
29.2
|
|
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13.1
|
|
||
Receivables, net of allowance of $5.8 and $6.0, respectively
|
114.1
|
|
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160.6
|
|
||
Prepaid expenses
|
4.0
|
|
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4.2
|
|
||
Income tax receivable
|
0.5
|
|
|
0.2
|
|
||
Amounts due from founding members, net
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3.6
|
|
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—
|
|
||
Current portion of notes receivable - founding members (including receivables from related parties
of $2.8 and $4.2, respectively)
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4.2
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4.2
|
|
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Other current assets
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0.4
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|
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0.1
|
|
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Total current assets
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183.3
|
|
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212.6
|
|
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NON-CURRENT ASSETS:
|
|
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||||
Property and equipment, net of accumulated depreciation of $68.7 and $70.4, respectively
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32.8
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|
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30.7
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Intangible assets, net of accumulated amortization of $165.8 and $145.4, respectively
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699.5
|
|
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717.2
|
|
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Deferred tax assets, net of valuation allowance of $77.9 and $98.1, respectively
|
180.7
|
|
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186.0
|
|
||
Long-term notes receivable, net of current portion - founding members (including receivables from
related parties of $2.7 and $4.1, respectively)
|
4.1
|
|
|
4.1
|
|
||
Other investments
|
3.2
|
|
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3.5
|
|
||
Long-term marketable securities
|
10.2
|
|
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16.2
|
|
||
Debt issuance costs, net
|
5.3
|
|
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1.3
|
|
||
Other assets
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0.9
|
|
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1.5
|
|
||
Total non-current assets
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936.7
|
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960.5
|
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TOTAL ASSETS
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$
|
1,120.0
|
|
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$
|
1,173.1
|
|
LIABILITIES AND EQUITY/(DEFICIT)
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Amounts due to founding members, net
|
$
|
21.1
|
|
|
$
|
32.7
|
|
Payable to founding members under tax receivable agreement (including payables to related
parties of $10.1 and $19.6, respectively)
|
13.7
|
|
|
19.6
|
|
||
Accrued expenses
|
19.8
|
|
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19.9
|
|
||
Accrued payroll and related expenses
|
12.5
|
|
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11.1
|
|
||
Accounts payable
|
17.6
|
|
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19.3
|
|
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Deferred revenue
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6.5
|
|
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7.1
|
|
||
Short-term debt
|
2.7
|
|
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—
|
|
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Total current liabilities
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93.9
|
|
|
109.7
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|
||
NON-CURRENT LIABILITIES:
|
|
|
|
||||
Long-term debt, net of debt issuance costs of $8.2 and $8.7, respectively
|
914.8
|
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923.3
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|
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Income tax payable
|
—
|
|
|
0.3
|
|
||
Payable to founding members under tax receivable agreement (including payables to related
parties of $143.6 and $212.6, respectively)
|
197.6
|
|
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212.6
|
|
||
Other liabilities
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4.1
|
|
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2.0
|
|
||
Total non-current liabilities
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1,116.5
|
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1,138.2
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Total liabilities
|
1,210.4
|
|
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1,247.9
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|
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COMMITMENTS AND CONTINGENCIES (NOTE 8)
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EQUITY/(DEFICIT):
|
|
|
|
||||
NCM, Inc. Stockholders’ Equity/(Deficit):
|
|
|
|
||||
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding,
respectively
|
—
|
|
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—
|
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Common stock, $0.01 par value; 175,000,000 shares authorized, 76,932,494 and 76,242,222 issued
and outstanding, respectively
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0.8
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0.8
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|
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Additional paid in capital/(deficit)
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(216.2
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)
|
|
(233.1
|
)
|
||
Retained earnings (distributions in excess of earnings)
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(156.8
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)
|
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(130.2
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)
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Total NCM, Inc. stockholders’ equity/(deficit)
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(372.2
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)
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(362.5
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)
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Noncontrolling interests
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281.8
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287.7
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|
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Total equity/(deficit)
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(90.4
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)
|
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(74.8
|
)
|
||
TOTAL LIABILITIES AND EQUITY/(DEFICIT)
|
$
|
1,120.0
|
|
|
$
|
1,173.1
|
|
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 27,
2018 |
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September 28,
2017 |
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September 27,
2018 |
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September 28,
2017 |
||||||||
REVENUE (including revenue from related parties of $5.8, $6.7, $21.8 and
$22.7, respectively)
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$
|
110.1
|
|
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$
|
116.4
|
|
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$
|
304.0
|
|
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$
|
285.4
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OPERATING EXPENSES:
|
|
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|
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||||||||
Advertising operating costs
|
10.3
|
|
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8.9
|
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26.5
|
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21.4
|
|
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Network costs
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3.2
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3.7
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10.0
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11.9
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|
||||
Theater access fees—founding members (including fees to related
parties of $13.4, $18.1, $55.5 and $57.4, respectively)
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19.7
|
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18.1
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61.8
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57.4
|
|
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Selling and marketing costs
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15.3
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17.2
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48.0
|
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54.2
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|
||||
Administrative and other costs
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9.3
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8.8
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34.7
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28.6
|
|
||||
Depreciation and amortization
|
10.0
|
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9.4
|
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29.5
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|
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28.2
|
|
||||
Total
|
67.8
|
|
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66.1
|
|
|
210.5
|
|
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201.7
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|
||||
OPERATING INCOME
|
42.3
|
|
|
50.3
|
|
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93.5
|
|
|
83.7
|
|
||||
NON-OPERATING EXPENSES:
|
|
|
|
|
|
|
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||||||||
Interest on borrowings
|
14.4
|
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13.1
|
|
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42.3
|
|
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39.4
|
|
||||
Interest income
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(1.0
|
)
|
|
(1.0
|
)
|
||||
Loss (gain) on re-measurement of the payable to founding members under
the tax receivable agreement
|
3.2
|
|
|
—
|
|
|
(4.6
|
)
|
|
(0.6
|
)
|
||||
Other non-operating (income) expense
|
(0.4
|
)
|
|
—
|
|
|
0.8
|
|
|
(0.1
|
)
|
||||
Total
|
16.9
|
|
|
12.9
|
|
|
37.5
|
|
|
37.7
|
|
||||
INCOME BEFORE INCOME TAXES
|
25.4
|
|
|
37.4
|
|
|
56.0
|
|
|
46.0
|
|
||||
Income tax (benefit) expense
|
(0.3
|
)
|
|
1.2
|
|
|
16.7
|
|
|
1.0
|
|
||||
CONSOLIDATED NET INCOME
|
25.7
|
|
|
36.2
|
|
|
39.3
|
|
|
45.0
|
|
||||
Less: Net income attributable to noncontrolling interests
|
14.5
|
|
|
22.5
|
|
|
25.8
|
|
|
27.4
|
|
||||
NET INCOME ATTRIBUTABLE TO NCM, INC.
|
11.2
|
|
|
13.7
|
|
|
13.5
|
|
|
17.6
|
|
||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO NCM, INC.
|
$
|
11.2
|
|
|
$
|
13.7
|
|
|
$
|
13.5
|
|
|
$
|
17.6
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME PER NCM, INC. COMMON SHARE:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.15
|
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
|
$
|
0.29
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
0.21
|
|
|
$
|
0.16
|
|
|
$
|
0.28
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
||||||||
Basic
|
76,924,983
|
|
|
63,993,273
|
|
|
76,825,828
|
|
|
61,637,445
|
|
||||
Diluted
|
77,485,561
|
|
|
64,281,581
|
|
|
156,987,736
|
|
|
62,074,577
|
|
||||
Dividends declared per common share
|
$
|
0.17
|
|
|
$
|
0.22
|
|
|
$
|
0.51
|
|
|
$
|
0.66
|
|
|
Nine Months Ended
|
||||||
|
September 27, 2018
|
|
September 28, 2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Consolidated net income
|
$
|
39.3
|
|
|
$
|
45.0
|
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
|
|
|
|
||||
Deferred income tax expense
|
16.6
|
|
|
2.5
|
|
||
Depreciation and amortization
|
29.5
|
|
|
28.2
|
|
||
Non-cash share-based compensation
|
6.2
|
|
|
8.3
|
|
||
Impairment on investment
|
0.4
|
|
|
3.1
|
|
||
Amortization of debt issuance costs
|
2.0
|
|
|
2.0
|
|
||
Non-cash gain on re-measurement of the payable to founding members under the tax
receivable agreement
|
(4.6
|
)
|
|
(0.6
|
)
|
||
Write-off of debt issuance costs
|
0.9
|
|
|
—
|
|
||
Reversal of tax contingency reserve
|
(0.4
|
)
|
|
(1.7
|
)
|
||
Other
|
(0.5
|
)
|
|
(0.2
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables, net
|
46.5
|
|
|
42.1
|
|
||
Accounts payable and accrued expenses
|
(0.4
|
)
|
|
(1.7
|
)
|
||
Amounts due to/from founding members, net
|
(0.5
|
)
|
|
(0.4
|
)
|
||
Payment to the founding members under tax receivable agreement (including payments to related parties of $17.6 and $17.3, respectively)
|
(17.6
|
)
|
|
(17.3
|
)
|
||
Deferred revenue
|
(0.6
|
)
|
|
(4.6
|
)
|
||
Income taxes and other
|
2.0
|
|
|
(0.7
|
)
|
||
Net cash provided by operating activities
|
118.8
|
|
|
104.0
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of property and equipment
|
(10.0
|
)
|
|
(7.7
|
)
|
||
Acquisition of a business
|
—
|
|
|
(0.2
|
)
|
||
Purchases of marketable securities
|
(30.9
|
)
|
|
(21.7
|
)
|
||
Proceeds from sale and maturities of marketable securities
|
20.9
|
|
|
48.4
|
|
||
Purchases of intangible assets from network affiliates
|
—
|
|
|
(1.7
|
)
|
||
Proceeds from notes receivable - founding members (including payments from related parties of $0.0 and $1.4, respectively)
|
—
|
|
|
1.4
|
|
||
Net cash (used in) provided by investing activities
|
(20.0
|
)
|
|
18.5
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Payment of dividends
|
(41.2
|
)
|
|
(42.1
|
)
|
||
Proceeds from revolving credit facility
|
139.2
|
|
|
60.0
|
|
||
Repayments of revolving credit facility
|
(137.2
|
)
|
|
(75.0
|
)
|
||
Repayments of Notes due 2026
|
(7.2
|
)
|
|
—
|
|
||
Proceeds from term loan facility
|
270.0
|
|
|
—
|
|
||
Repayment of term loan facility
|
(270.7
|
)
|
|
—
|
|
||
Payment of debt issuance costs
|
(6.6
|
)
|
|
—
|
|
||
Founding member integration and other encumbered theater payments (including payments from related parties of $12.1 and $6.1, respectively)
|
17.2
|
|
|
6.1
|
|
||
Distributions to founding members
|
(63.0
|
)
|
|
(60.1
|
)
|
||
Proceeds from stock option exercises
|
—
|
|
|
0.6
|
|
||
Repurchase of stock for restricted stock tax withholding
|
(2.2
|
)
|
|
(4.6
|
)
|
||
Net cash used in financing activities
|
(101.7
|
)
|
|
(115.1
|
)
|
||
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
|
(2.9
|
)
|
|
7.4
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
30.2
|
|
|
23.0
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
27.3
|
|
|
$
|
30.4
|
|
|
Nine Months Ended
|
||||||
|
September 27,
2018 |
|
September 28,
2017 |
||||
Supplemental disclosure of non-cash financing and investing activity:
|
|
|
|
||||
Purchase of an intangible asset with NCM LLC equity
|
$
|
15.9
|
|
|
$
|
201.8
|
|
Accrued distributions to founding members
|
$
|
19.1
|
|
|
$
|
27.2
|
|
Purchase of subsidiary equity with NCM, Inc. equity
|
$
|
—
|
|
|
$
|
77.8
|
|
Accrued purchases of property and equipment
|
$
|
1.0
|
|
|
$
|
—
|
|
Accrued integration and other encumbered theater payments due from founding members (including
accrued payments due from related parties of $0.3 and $0.0, respectively)
|
$
|
5.1
|
|
|
$
|
—
|
|
Decrease in dividend equivalent accrual not requiring cash in the period
|
$
|
(1.3
|
)
|
|
$
|
(1.3
|
)
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
38.2
|
|
|
$
|
34.9
|
|
Cash paid for income taxes, net of refunds
|
$
|
0.3
|
|
|
$
|
1.5
|
|
|
|
|
NCM, Inc.
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
Additional
Paid in Capital (Deficit) |
|
Retained
Earnings (Distribution in Excess of Earnings) |
|
Noncontrolling Interest
|
|||||||||||
|
|
|
Common Stock
|
|
|
|
||||||||||||||||
|
Consolidated
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||||
Balance-December 29, 2016
|
$
|
(232.2
|
)
|
|
59,874,412
|
|
|
$
|
0.6
|
|
|
$
|
(343.6
|
)
|
|
$
|
(130.7
|
)
|
|
$
|
241.5
|
|
Distributions to founding members
|
(47.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47.4
|
)
|
|||||
NCM LLC equity issued for purchase of intangible asset
|
201.8
|
|
|
—
|
|
|
—
|
|
|
78.8
|
|
|
—
|
|
|
123.0
|
|
|||||
Income tax and other impacts of NCM LLC ownership changes
|
(42.3
|
)
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|
—
|
|
|
(48.4
|
)
|
|||||
Issuance of shares
|
77.8
|
|
|
14,600,000
|
|
|
0.2
|
|
|
77.6
|
|
|
—
|
|
|
—
|
|
|||||
NCM, Inc. investment in NCM LLC
|
(77.8
|
)
|
|
—
|
|
|
—
|
|
|
(77.8
|
)
|
|
—
|
|
|
—
|
|
|||||
Comprehensive income, net of tax
|
45.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.6
|
|
|
27.4
|
|
|||||
Share-based compensation issued
|
(4.0
|
)
|
|
755,886
|
|
|
—
|
|
|
(4.0
|
)
|
|
—
|
|
|
—
|
|
|||||
Share-based compensation expense/capitalized
|
8.6
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
3.3
|
|
|||||
Cash dividends declared $0.66 per share
|
(40.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40.8
|
)
|
|
—
|
|
|||||
Balance-September 28, 2017
|
$
|
(111.3
|
)
|
|
75,230,298
|
|
|
$
|
0.8
|
|
|
$
|
(257.6
|
)
|
|
$
|
(153.9
|
)
|
|
$
|
299.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance December 28, 2017
|
$
|
(74.8
|
)
|
|
76,242,222
|
|
|
$
|
0.8
|
|
|
(233.1
|
)
|
|
$
|
(130.2
|
)
|
|
$
|
287.7
|
|
|
Cumulative-effect adjustment for adoption of ASU 2014-09
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|||||
Distributions to founding members
|
(44.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44.5
|
)
|
|||||
NCM LLC equity issued for purchase of intangible asset
|
15.9
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|
8.2
|
|
|||||
Income tax and other impacts of NCM LLC ownership changes
|
9.6
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
|
2.7
|
|
|||||
Comprehensive income, net of tax
|
39.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.5
|
|
|
25.8
|
|
|||||
Share-based compensation issued
|
(2.1
|
)
|
|
690,272
|
|
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|||||
Share-based compensation expense/capitalized
|
6.3
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
|
1.9
|
|
|||||
Cash dividends declared $0.51 per share
|
(39.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39.9
|
)
|
|
—
|
|
|||||
Balance-September 27, 2018
|
$
|
(90.4
|
)
|
|
76,932,494
|
|
|
$
|
0.8
|
|
|
$
|
(216.2
|
)
|
|
$
|
(156.8
|
)
|
|
$
|
281.8
|
|
|
Nine Months Ended
|
||||||
|
September 27,
2018 |
|
September 28,
2017 |
||||
Net income attributable to NCM, Inc.
|
$
|
13.5
|
|
|
$
|
17.6
|
|
NCM LLC equity issued for purchase of intangible asset
|
7.7
|
|
|
78.8
|
|
||
Income tax and other impacts of subsidiary ownership changes
|
6.9
|
|
|
6.1
|
|
||
NCM, Inc. investment in NCM LLC
|
—
|
|
|
(77.8
|
)
|
||
Issuance of shares
|
—
|
|
|
77.6
|
|
||
Change from net income attributable to NCM, Inc. and transfers from noncontrolling interests
|
$
|
28.1
|
|
|
$
|
102.3
|
|
Beginning retained earnings (distributions in excess of earnings), as of December 29, 2016 – as
previously reported
|
$
|
(248.3
|
)
|
Cumulative effect for change in accounting principle
|
$
|
117.6
|
|
Beginning retained earnings (distributions in excess of earnings), as of December 29, 2016 – as adjusted
|
$
|
(130.7
|
)
|
Beginning additional paid in capital (deficit), as of December 29, 2016 – as previously reported
|
$
|
(110.5
|
)
|
Cumulative effect for change in accounting principle
|
$
|
(233.1
|
)
|
Beginning additional paid in capital (deficit), as of December 29, 2016 – as adjusted
|
$
|
(343.6
|
)
|
|
As of December 28, 2017
|
||||||||||
|
As Reported
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||
Long-term deferred tax assets, net of valuation allowance of $98.1
|
$
|
161.0
|
|
|
$
|
25.0
|
|
|
$
|
186.0
|
|
TOTAL ASSETS
|
1,148.1
|
|
|
25.0
|
|
|
1,173.1
|
|
|||
Long-term payable to founding members under tax receivable agreement
|
114.0
|
|
|
98.6
|
|
|
212.6
|
|
|||
Total liabilities
|
1,149.3
|
|
|
98.6
|
|
|
1,247.9
|
|
|||
Additional paid in capital (deficit)
|
13.8
|
|
|
(246.9
|
)
|
|
(233.1
|
)
|
|||
Retained earnings (distributions in excess of earnings)
|
(303.5
|
)
|
|
173.3
|
|
|
(130.2
|
)
|
|||
Total equity/(deficit)
|
(1.2
|
)
|
|
(73.6
|
)
|
|
(74.8
|
)
|
|||
TOTAL LIABILITIES AND EQUITY/DEFICIT
|
1,148.1
|
|
|
25.0
|
|
|
1,173.1
|
|
|
Three Months Ended
|
||||||||||||||||||
|
September 28, 2017
|
||||||||||||||||||
|
As Reported
|
|
Correction of an Error
|
|
As Corrected
|
|
Change in Accounting Principle
|
|
As Corrected and Adjusted
|
||||||||||
Accretion of interest on the discounted payable to founding
members under tax receivable agreement
|
$
|
3.2
|
|
|
$
|
1.4
|
|
|
$
|
4.6
|
|
|
$
|
(4.6
|
)
|
|
$
|
—
|
|
Total non-operating expenses
|
$
|
16.1
|
|
|
$
|
1.4
|
|
|
$
|
17.5
|
|
|
$
|
(4.6
|
)
|
|
$
|
12.9
|
|
INCOME BEFORE INCOME TAXES
|
$
|
34.2
|
|
|
$
|
(1.4
|
)
|
|
$
|
32.8
|
|
|
$
|
4.6
|
|
|
$
|
37.4
|
|
Income tax expense
|
$
|
2.3
|
|
|
$
|
1.0
|
|
|
$
|
3.3
|
|
|
$
|
(2.1
|
)
|
|
$
|
1.2
|
|
CONSOLIDATED NET INCOME
|
$
|
31.9
|
|
|
$
|
(2.4
|
)
|
|
$
|
29.5
|
|
|
$
|
6.7
|
|
|
$
|
36.2
|
|
NET INCOME ATTRIBUTABLE TO NCM, INC.
|
$
|
9.4
|
|
|
$
|
(2.4
|
)
|
|
$
|
7.0
|
|
|
$
|
6.7
|
|
|
$
|
13.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME PER NCM, INC. COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.15
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.11
|
|
|
$
|
0.10
|
|
|
$
|
0.21
|
|
Diluted
|
$
|
0.15
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.11
|
|
|
$
|
0.10
|
|
|
$
|
0.21
|
|
|
Nine Months Ended
|
||||||||||||||||||
|
September 28, 2017
|
||||||||||||||||||
|
As Reported
|
|
Correction of an Error
|
|
As Corrected
|
|
Change in Accounting Principle
|
|
As Corrected and Adjusted
|
||||||||||
Accretion of interest on the discounted payable to founding
members under tax receivable agreement
|
$
|
9.5
|
|
|
$
|
4.2
|
|
|
$
|
13.7
|
|
|
$
|
(13.7
|
)
|
|
$
|
—
|
|
Gain on re-measurement of the payable to founding members
under the tax receivable agreement
|
$
|
—
|
|
|
$
|
(5.6
|
)
|
|
$
|
(5.6
|
)
|
|
$
|
5.0
|
|
|
$
|
(0.6
|
)
|
Total non-operating expenses
|
$
|
47.8
|
|
|
$
|
(1.4
|
)
|
|
$
|
46.4
|
|
|
$
|
(8.7
|
)
|
|
$
|
37.7
|
|
INCOME BEFORE INCOME TAXES
|
$
|
35.9
|
|
|
$
|
1.4
|
|
|
$
|
37.3
|
|
|
$
|
8.7
|
|
|
$
|
46.0
|
|
Income tax expense (benefit)
|
$
|
2.6
|
|
|
$
|
3.1
|
|
|
$
|
5.7
|
|
|
$
|
(4.7
|
)
|
|
$
|
1.0
|
|
CONSOLIDATED NET INCOME
|
$
|
33.3
|
|
|
$
|
(1.7
|
)
|
|
$
|
31.6
|
|
|
$
|
13.4
|
|
|
$
|
45.0
|
|
NET INCOME ATTRIBUTABLE TO NCM, INC.
|
$
|
5.9
|
|
|
$
|
(1.7
|
)
|
|
$
|
4.2
|
|
|
$
|
13.4
|
|
|
$
|
17.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME PER NCM, INC. COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.10
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.07
|
|
|
$
|
0.22
|
|
|
$
|
0.29
|
|
Diluted
|
$
|
0.10
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.07
|
|
|
$
|
0.21
|
|
|
$
|
0.28
|
|
|
Nine Months Ended
|
||||||||||||||||||
|
September 28, 2017
|
||||||||||||||||||
|
As Reported
|
|
Correction of an Error
|
|
As Corrected
|
|
Change in Accounting Principle
|
|
As Corrected and Adjusted
|
||||||||||
Consolidated net income
|
$
|
33.3
|
|
|
$
|
(1.7
|
)
|
|
$
|
31.6
|
|
|
$
|
13.4
|
|
|
$
|
45.0
|
|
Adjustments to reconcile consolidated net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred income tax expense
|
$
|
4.1
|
|
|
$
|
3.0
|
|
|
$
|
7.1
|
|
|
$
|
(4.6
|
)
|
|
$
|
2.5
|
|
Accretion of interest on the discounted payable to founding
members under tax receivable agreement
|
$
|
9.5
|
|
|
$
|
4.2
|
|
|
$
|
13.7
|
|
|
$
|
(13.7
|
)
|
|
$
|
—
|
|
Non-cash gain on re-measurement of the payable to
founding members under tax receivable agreement
|
$
|
—
|
|
|
$
|
(5.6
|
)
|
|
$
|
(5.6
|
)
|
|
$
|
5.0
|
|
|
$
|
(0.6
|
)
|
Net cash provided by operating activities
|
$
|
104.0
|
|
|
$
|
—
|
|
|
$
|
104.0
|
|
|
$
|
—
|
|
|
$
|
104.0
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 27,
2018 |
|
September 28,
2017 |
|
September 27,
2018 |
|
September 28,
2017 |
||||||||
National advertising revenue
|
$
|
80.8
|
|
|
$
|
84.5
|
|
|
$
|
214.4
|
|
|
$
|
194.9
|
|
Local and regional advertising revenue
|
21.9
|
|
|
25.2
|
|
|
65.6
|
|
|
67.8
|
|
||||
Founding member advertising revenue from beverage concessionaire agreements
|
7.4
|
|
|
6.7
|
|
|
24.0
|
|
|
22.7
|
|
||||
Total revenue
|
$
|
110.1
|
|
|
$
|
116.4
|
|
|
$
|
304.0
|
|
|
$
|
285.4
|
|
|
Nine Months Ended
|
||
|
September 27,
2018 |
||
Balance at beginning of period
|
$
|
(7.1
|
)
|
Performance obligations satisfied
|
7.1
|
|
|
New contract liabilities
|
(6.5
|
)
|
|
Balance at end of period
|
$
|
(6.5
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 27,
2018 |
|
September 28,
2017 |
|
September 27,
2018 |
|
September 28,
2017 |
||||||||
Net income attributable to NCM, Inc. (in millions)
|
$
|
11.2
|
|
|
$
|
13.7
|
|
|
$
|
13.5
|
|
|
$
|
17.6
|
|
Net income attributable to NCM, Inc. following
conversion of dilutive membership units (net of
estimated taxes of $0.0, $0.0, $14.7, $0.0)
|
$
|
11.2
|
|
|
$
|
13.7
|
|
|
$
|
24.6
|
|
|
$
|
17.6
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
76,924,983
|
|
|
63,993,273
|
|
|
76,825,828
|
|
|
61,637,445
|
|
||||
Add: Dilutive effect of stock options and restricted stock
|
560,578
|
|
|
288,308
|
|
|
80,161,908
|
|
|
437,132
|
|
||||
Diluted
|
77,485,561
|
|
|
64,281,581
|
|
|
156,987,736
|
|
|
62,074,577
|
|
||||
Income per NCM, Inc. share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.15
|
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
|
$
|
0.29
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
0.21
|
|
|
$
|
0.16
|
|
|
$
|
0.28
|
|
•
|
ESAs.
Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising services in the founding members’ theaters (subject to pre-existing contractual obligations and other limited exceptions for
|
•
|
Common Unit Adjustment Agreement.
The Common Unit Adjustment Agreement provides a mechanism for increasing or decreasing the membership units held by the founding members based on the acquisition or construction of new theaters or sale or closure of theaters that are operated by each founding member and included in NCM LLC’s network.
|
•
|
Tax Receivable Agreement.
The tax receivable agreement provides for the effective payment by NCM, Inc. to the founding members of
90%
of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that is actually realized as a result of certain increases in NCM, Inc.’s proportionate share of tax basis in NCM LLC’s tangible and intangible assets resulting from the IPO and related transactions.
|
•
|
Software License Agreement.
At the date of the Company’s IPO, NCM LLC was granted a perpetual, royalty-free license from NCM LLC’s founding members to use certain proprietary software that existed at the time for the delivery of digital advertising and other content through the DCN to screens in the U.S. NCM LLC has made improvements to this software since the IPO date and NCM LLC owns those improvements, except for improvements that were developed jointly by NCM LLC and NCM LLC’s founding members, if any.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Included in the Condensed Consolidated Statements of Income:
(1)
|
September 27,
2018 |
|
September 28,
2017 |
|
September 27,
2018 |
|
September 28,
2017 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Beverage concessionaire revenue (included in advertising revenue)
(2)
|
$
|
5.8
|
|
|
$
|
6.7
|
|
|
$
|
21.8
|
|
|
$
|
22.7
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Theater access fee
(3)
|
13.4
|
|
|
18.1
|
|
|
55.5
|
|
|
57.4
|
|
||||
Purchase of movie tickets and concession products and rental of theater space (included in selling and marketing costs)
(4)
|
0.2
|
|
|
0.4
|
|
|
0.9
|
|
|
1.2
|
|
||||
Purchase of movie tickets and concession products and rental of theater space (included in advertising operating costs)
(4)
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
||||
Non-operating expenses:
|
|
|
|
|
|
|
|
||||||||
Interest income from notes receivable (included in interest
income)
(5)
|
0.1
|
|
|
0.2
|
|
|
0.3
|
|
|
0.5
|
|
(1)
|
AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures within the table above only include related party activity with AMC for the first six months of 2018.
|
(2)
|
For the
three and nine
months ended
September 27, 2018
and
September 28, 2017
, two of the founding members purchased
60 seconds
of on-screen advertising time and one founding member purchased
30 seconds
(with all three founding members having a right to purchase up to
90 seconds
) from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a
30
seconds equivalent CPM rate specified by the ESA.
|
(3)
|
Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment.
|
(4)
|
Used primarily for marketing to NCM LLC’s advertising clients.
|
|
As of
|
||||||
Included in the Condensed Consolidated Balance Sheets:
|
September 27,
2018 |
|
December 28,
2017 |
||||
Purchase of movie tickets and concession products (included in prepaid expenses)
(1)
|
$
|
0.1
|
|
|
$
|
—
|
|
Current portion of notes receivable - related parties
(1) (2)
|
2.8
|
|
|
4.2
|
|
||
Long-term portion of notes receivable - related parties
(1) (2)
|
2.7
|
|
|
4.1
|
|
||
Interest receivable on notes receivable (included in other current assets)
(1) (2)
|
0.3
|
|
|
—
|
|
||
Common unit adjustments, net of amortization and integration payments (included in intangible assets)
(3)
|
671.7
|
|
|
687.1
|
|
||
Current payable to founding members under tax receivable agreement
(1)(4)(5)
|
10.1
|
|
|
19.6
|
|
||
Long-term payable to founding members under tax receivable agreement
(1)(4)(5)
|
143.6
|
|
|
212.6
|
|
(1)
|
AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures as of September 27, 2018 do not include AMC and the figures as of December 28, 2017 do include AMC.
|
(2)
|
Refer to the discussion of notes receivable from the founding members above.
|
(3)
|
Refer to Note 4—
Intangible Assets
for further information on common unit adjustments and integration payments.
|
(4)
|
The Company paid the founding members $
17.6
million in payments pursuant to the TRA during the second quarter of 2018 which was for the 2017 tax year. The Company paid the founding members
$18.8 million
in 2017 which was for the 2016 tax year.
|
(5)
|
These balances have been recast following the adoption of the change in accounting principle discussed within Note 1—
The Company
.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 27,
2018 |
|
September 28,
2017 |
|
September 27,
2018 |
|
September 28,
2017 |
||||||||
AMC
|
$
|
—
|
|
|
$
|
8.1
|
|
|
$
|
2.2
|
|
|
$
|
16.3
|
|
Cinemark
|
9.4
|
|
|
9.6
|
|
|
20.7
|
|
|
15.6
|
|
||||
Regal
|
9.7
|
|
|
9.5
|
|
|
21.5
|
|
|
15.5
|
|
||||
Total founding members
|
19.1
|
|
|
27.2
|
|
|
44.4
|
|
|
47.4
|
|
||||
NCM, Inc.
|
18.2
|
|
|
25.9
|
|
|
42.5
|
|
|
39.0
|
|
||||
Total
|
$
|
37.3
|
|
|
$
|
53.1
|
|
|
$
|
86.9
|
|
|
$
|
86.4
|
|
|
AMC
|
|
Cinemark
|
|
Regal
|
|
Total
|
||||||||
Theater access fees, net of beverage revenues and other encumbered theater payments
|
$
|
1.3
|
|
|
$
|
0.9
|
|
|
$
|
1.4
|
|
|
$
|
3.6
|
|
Distributions payable to founding members
|
—
|
|
|
9.4
|
|
|
9.7
|
|
|
19.1
|
|
||||
Integration payments due from founding members
|
(4.8
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(5.1
|
)
|
||||
Cost and other reimbursement
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Total amounts due (from) to founding members, net
|
$
|
(3.6
|
)
|
|
$
|
10.0
|
|
|
$
|
11.1
|
|
|
$
|
17.5
|
|
|
AMC
|
|
Cinemark
|
|
Regal
|
|
Total
|
||||||||
Theater access fees, net of beverage revenues and other encumbered theater payments
|
$
|
1.5
|
|
|
$
|
1.0
|
|
|
$
|
1.5
|
|
|
$
|
4.0
|
|
Distributions payable to founding members
|
10.8
|
|
|
13.5
|
|
|
13.3
|
|
|
37.6
|
|
||||
Integration payments due from founding members
|
(8.5
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(8.9
|
)
|
||||
Total amounts due to founding members, net
|
$
|
3.8
|
|
|
$
|
14.1
|
|
|
$
|
14.8
|
|
|
$
|
32.7
|
|
|
|
Outstanding Balance as of
|
|
|
|
|
|||||||
Borrowings
|
|
September 27,
2018 |
|
December 28,
2017 |
|
Maturity
Date
|
|
Interest
Rate
|
|||||
Senior secured notes due 2022
|
|
$
|
400.0
|
|
|
$
|
400.0
|
|
|
April 15, 2022
|
|
6.000
|
%
|
Revolving credit facility
|
|
14.0
|
|
|
12.0
|
|
|
June 20, 2023
(1)
|
|
(2
|
)
|
||
Term loans
|
|
269.4
|
|
|
270.0
|
|
|
June 20, 2025
(1)
|
|
(2
|
)
|
||
Senior unsecured notes due 2026
|
|
242.3
|
|
|
250.0
|
|
|
August 15, 2026
|
|
5.750
|
%
|
||
Total borrowings
|
|
925.7
|
|
|
932.0
|
|
|
|
|
|
|||
Less: debt issuance costs related to term loans and senior notes
|
|
(8.2
|
)
|
|
(8.7
|
)
|
|
|
|
|
|||
Total borrowings, net
|
|
917.5
|
|
|
923.3
|
|
|
|
|
|
|||
Less: current portion of debt
|
|
(2.7
|
)
|
|
—
|
|
|
|
|
|
|||
Carrying value of long-term debt
|
|
$
|
914.8
|
|
|
$
|
923.3
|
|
|
|
|
|
(1)
|
The maturity dates for the revolving credit facility and term loan are contingent upon the refinancing of the senior secured notes due in 2022 on or prior to October 30, 2021. If the Senior Secured Notes are not refinanced on or prior to October 30, 2021, then the revolving credit facility and term loan will instead mature on December 30, 2021. The maturity dates for the revolving credit facility and term loan as of December 28, 2017 are described below.
|
(2)
|
The interest rates on the revolving credit facility and term loans are described below.
|
|
As of
|
||||||
|
September 27,
2018 |
|
December 28,
2017 |
||||
Investment in AC JV, LLC
(1)
|
$
|
1.1
|
|
|
$
|
1.0
|
|
Other investments
(2)
|
2.1
|
|
|
2.5
|
|
||
Total
|
$
|
3.2
|
|
|
$
|
3.5
|
|
(1)
|
Refer to Note 5—
Related Party Transactions
. This investment is accounted for utilizing the equity method.
|
(2)
|
The Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities are accounted for at adjusted cost in accordance with the practicability exception under ASU 2016-1 and represent an ownership of less than
20%
. The Company does not exert significant influence on these companies’ operating or financial activities.
|
|
As of September 27,
2018 |
|
As of December 28,
2017 |
||||||||||||
|
Carrying Value
|
|
Fair Value (1)
|
|
Carrying Value
|
|
Fair Value
(1)
|
||||||||
Term loan
|
$
|
269.4
|
|
|
$
|
270.2
|
|
|
$
|
270.0
|
|
|
$
|
270.8
|
|
Notes due 2022
|
400.0
|
|
|
406.5
|
|
|
400.0
|
|
|
407.3
|
|
||||
Notes due 2026
|
242.3
|
|
|
239.0
|
|
|
250.0
|
|
|
235.0
|
|
(1)
|
If the Company were to measure the borrowings in the above table at fair value on the balance sheet they would be classified as Level 2 based upon the inputs utilized.
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
Fair Value as of September 27,
2018 |
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
ASSETS:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
(1)
|
$
|
12.7
|
|
|
$
|
10.2
|
|
|
$
|
2.5
|
|
|
$
|
—
|
|
Short-term marketable securities
(2)
|
29.2
|
|
|
—
|
|
|
29.2
|
|
|
—
|
|
||||
Long-term marketable securities
(2)
|
10.2
|
|
|
—
|
|
|
10.2
|
|
|
—
|
|
||||
Total assets
|
$
|
52.1
|
|
|
$
|
10.2
|
|
|
$
|
41.9
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
Fair Value as of December 28,
2017 |
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
ASSETS:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
(1)
|
$
|
12.2
|
|
|
$
|
8.2
|
|
|
$
|
4.0
|
|
|
$
|
—
|
|
Short-term marketable securities
(2)
|
13.1
|
|
|
—
|
|
|
13.1
|
|
|
—
|
|
||||
Long-term marketable securities
(2)
|
16.2
|
|
|
—
|
|
|
16.2
|
|
|
—
|
|
||||
Total assets
|
$
|
41.5
|
|
|
$
|
8.2
|
|
|
$
|
33.3
|
|
|
$
|
—
|
|
(1)
|
Cash Equivalents
—The Company’s cash equivalents are carried at estimated fair value. Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts and commercial paper with original maturities of three months or less, which are classified as Level 2 and are valued as described below.
|
(2)
|
Short-Term and Long-Term Marketable Securities
—The carrying amount and fair value of the marketable securities are equivalent since the Company accounts for these instruments at fair value. The Company’s government agency bonds, commercial paper and certificates of deposit are valued using third party broker quotes. The value of the Company’s government agency bonds is derived from quoted market information. The inputs in the valuation are classified as Level 1 if there is an active market for these securities; however, if an active market does not exist, the inputs are recorded at a lower level in the fair value hierarchy. The value of commercial paper and certificates of deposit is derived from pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The inputs to the valuation pricing models are observable in the market, and as such are generally classified as Level 2 in the fair value hierarchy. For the
three and nine
months ended
September 27, 2018
and
September 28, 2017
, there was an inconsequential amount of net realized gains (losses) recognized in interest income and an inconsequential amount of net unrealized holding gains (losses) included in other comprehensive income. Original cost of short-term marketable securities is based on the specific identification method. As of
|
|
As of September 27, 2018
|
||||||||
|
Amortized Cost
Basis (in millions) |
|
Aggregate Fair
Value (in millions) |
|
Maturities (1)
(in years) |
||||
MARKETABLE SECURITIES:
|
|
|
|
|
|
||||
Short-term municipal bonds
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
0.4
|
Short-term U.S. government agency bonds
|
5.4
|
|
|
5.4
|
|
|
0.6
|
||
Short-term commercial paper:
|
|
|
|
|
|
||||
Financial
|
5.8
|
|
|
5.8
|
|
|
0.2
|
||
Industrial
|
15.0
|
|
|
14.9
|
|
|
0.2
|
||
Short-term certificates of deposit
|
2.6
|
|
|
2.6
|
|
|
0.5
|
||
Total short-term marketable securities
|
$
|
29.3
|
|
|
$
|
29.2
|
|
|
|
|
|
|
|
|
|
||||
Long-term municipal bonds
|
1.2
|
|
|
1.3
|
|
|
1.8
|
||
Long-term U.S. government agency bonds
|
6.5
|
|
|
6.3
|
|
|
2.3
|
||
Long-term certificates of deposit
|
2.7
|
|
|
2.6
|
|
|
1.6
|
||
Total long-term marketable securities
|
$
|
10.4
|
|
|
$
|
10.2
|
|
|
|
Total marketable securities
|
$
|
39.7
|
|
|
$
|
39.4
|
|
|
|
|
As of December 28, 2017
|
||||||||
|
Amortized Cost
Basis (in millions) |
|
Aggregate Fair
Value (in millions) |
|
Maturities (1)
(in years) |
||||
MARKETABLE SECURITIES:
|
|
|
|
|
|
||||
Short-term U.S. government agency bonds
|
2.3
|
|
|
2.2
|
|
|
0.9
|
||
Short-term certificates of deposit
|
0.9
|
|
|
0.9
|
|
|
0.8
|
||
Short-term commercial paper:
|
|
|
|
|
|
||||
Financial
|
6.0
|
|
|
6.0
|
|
|
0.3
|
||
Industrial
|
4.0
|
|
|
4.0
|
|
|
0.3
|
||
Total short-term marketable securities
|
13.2
|
|
|
13.1
|
|
|
|
||
|
|
|
|
|
|
||||
Long-term municipal bonds
|
1.9
|
|
|
1.9
|
|
|
2.1
|
||
Long-term U.S. government agency bonds
|
10.4
|
|
|
10.2
|
|
|
2.5
|
||
Long-term certificates of deposit
|
4.1
|
|
|
4.1
|
|
|
1.8
|
||
Total long-term marketable securities
|
16.4
|
|
|
16.2
|
|
|
|
||
Total marketable securities
|
$
|
29.6
|
|
|
$
|
29.3
|
|
|
|
(1)
|
Maturities
—Securities available for sale include obligations with various contractual maturity dates some of which are greater than one year. The Company considers the securities to be liquid and convertible to cash within
30
days.
|
|
|
|
|
|
|
|
% Change
|
||||||||||||||
|
Q3 2018
|
|
Q3 2017
|
|
YTD 2018
|
|
YTD 2017
|
|
Q3 2018 to Q3 2017
|
|
YTD 2018 to YTD 2017
|
||||||||||
Revenue
|
$
|
110.1
|
|
|
$
|
116.4
|
|
|
$
|
304.0
|
|
|
$
|
285.4
|
|
|
(5.4
|
)%
|
|
6.5
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advertising
|
44.2
|
|
|
43.3
|
|
|
133.4
|
|
|
130.8
|
|
|
2.1
|
%
|
|
2.0
|
%
|
||||
Network, administrative and unallocated costs
|
23.6
|
|
|
22.8
|
|
|
77.1
|
|
|
70.9
|
|
|
3.5
|
%
|
|
8.7
|
%
|
||||
Total operating expenses
|
67.8
|
|
|
66.1
|
|
|
210.5
|
|
|
201.7
|
|
|
2.6
|
%
|
|
4.4
|
%
|
||||
Operating income
|
42.3
|
|
|
50.3
|
|
|
93.5
|
|
|
83.7
|
|
|
(15.9
|
)%
|
|
11.7
|
%
|
||||
Non-operating expenses
|
16.9
|
|
|
12.9
|
|
|
37.5
|
|
|
37.7
|
|
|
31.0
|
%
|
|
(0.5
|
)%
|
||||
Income tax expense
|
(0.3
|
)
|
|
1.2
|
|
|
16.7
|
|
|
1.0
|
|
|
NM
|
|
|
NM
|
|
||||
Net income attributable to noncontrolling interests
|
14.5
|
|
|
22.5
|
|
|
25.8
|
|
|
27.4
|
|
|
(35.6
|
)%
|
|
(5.8
|
)%
|
||||
Net income attributable to NCM, Inc.
|
$
|
11.2
|
|
|
$
|
13.7
|
|
|
$
|
13.5
|
|
|
$
|
17.6
|
|
|
(18.2
|
)%
|
|
(23.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per NCM, Inc. basic share
|
$
|
0.15
|
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
|
$
|
0.29
|
|
|
(28.6
|
)%
|
|
(37.9
|
)%
|
Net income per NCM, Inc. diluted share
|
$
|
0.14
|
|
|
$
|
0.21
|
|
|
$
|
0.16
|
|
|
$
|
0.28
|
|
|
(33.3
|
)%
|
|
(42.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OIBDA
|
$
|
52.3
|
|
|
$
|
59.7
|
|
|
$
|
123.0
|
|
|
$
|
111.9
|
|
|
(12.4
|
)%
|
|
9.9
|
%
|
Adjusted OIBDA
|
$
|
53.6
|
|
|
$
|
62.6
|
|
|
$
|
129.2
|
|
|
$
|
122.5
|
|
|
(14.4
|
)%
|
|
5.5
|
%
|
Adjusted OIBDA margin
|
48.7
|
%
|
|
53.8
|
%
|
|
42.5
|
%
|
|
42.9
|
%
|
|
(5.1
|
)%
|
|
(0.4
|
)%
|
||||
Total theater attendance (in millions)
(1)
|
164.7
|
|
|
150.6
|
|
|
535.8
|
|
|
492.1
|
|
|
9.4
|
%
|
|
8.9
|
%
|
(1)
|
Represents the total attendance within our advertising network, excluding screens and attendance associated with certain AMC Carmike, AMC Rave and Cinemark Rave theaters that are currently part of another cinema advertising network for all periods presented.
|
|
Q3 2018
|
|
Q3 2017
|
|
YTD 2018
|
|
YTD 2017
|
||||||||
Operating income
|
$
|
42.3
|
|
|
$
|
50.3
|
|
|
$
|
93.5
|
|
|
$
|
83.7
|
|
Depreciation and amortization
|
10.0
|
|
|
9.4
|
|
|
29.5
|
|
|
28.2
|
|
||||
OIBDA
|
$
|
52.3
|
|
|
$
|
59.7
|
|
|
$
|
123.0
|
|
|
$
|
111.9
|
|
Share-based compensation costs
(1)
|
1.3
|
|
|
2.8
|
|
|
6.2
|
|
|
8.3
|
|
||||
CEO transition costs
(2)
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.5
|
|
||||
Early lease termination expense
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
||||
Adjusted OIBDA
|
$
|
53.6
|
|
|
$
|
62.6
|
|
|
$
|
129.2
|
|
|
$
|
122.5
|
|
Total revenue
|
$
|
110.1
|
|
|
$
|
116.4
|
|
|
$
|
304.0
|
|
|
$
|
285.4
|
|
Adjusted OIBDA margin
|
48.7
|
%
|
|
53.8
|
%
|
|
42.5
|
%
|
|
42.9
|
%
|
(1)
|
Share-based compensation costs are included in network operations, selling and marketing and administrative expense in the accompanying unaudited Condensed Consolidated Financial Statements.
|
(2)
|
Chief Executive Officer transition costs represent consulting, relocation and other costs.
|
(3)
|
Early lease termination expense represents an expense recorded upon the early termination of the lease of our previous corporate headquarters because the early termination payment made by the Company was reimbursed by the landlord of the new building.
|
|
|
|
$ Change
|
|
% Change
|
|||||||||
|
Q3 2018
|
|
Q3 2017
|
|
Q3 2018 to Q3 2017
|
|
Q3 2018 to Q3 2017
|
|||||||
National advertising revenue
|
$
|
80.8
|
|
|
$
|
84.5
|
|
|
$
|
(3.7
|
)
|
|
(4.4
|
)%
|
Local and regional advertising revenue
|
21.9
|
|
|
25.2
|
|
|
(3.3
|
)
|
|
(13.1
|
)%
|
|||
Founding member advertising revenue from
beverage concessionaire agreements
|
7.4
|
|
|
6.7
|
|
|
0.7
|
|
|
10.4
|
%
|
|||
Total revenue
|
$
|
110.1
|
|
|
$
|
116.4
|
|
|
$
|
(6.3
|
)
|
|
(5.4
|
)%
|
|
|
|
% Change
|
|||||||
|
Q3 2018
|
|
Q3 2017
|
|
Q3 2018 to Q3 2017
|
|||||
National advertising revenue per attendee
|
$
|
0.491
|
|
|
$
|
0.561
|
|
|
(12.5
|
)%
|
Local and regional advertising revenue per attendee
|
$
|
0.133
|
|
|
$
|
0.167
|
|
|
(20.4
|
)%
|
Total advertising revenue (excluding founding
member beverage revenue) per attendee
|
$
|
0.624
|
|
|
$
|
0.728
|
|
|
(14.3
|
)%
|
Total advertising revenue per attendee
|
$
|
0.668
|
|
|
$
|
0.773
|
|
|
(13.6
|
)%
|
Total theater attendance (in millions)
(1)
|
164.7
|
|
|
150.6
|
|
|
9.4
|
%
|
(1)
|
Represents the total attendance within our advertising network, excluding screens and attendance associated with certain AMC Carmike, AMC Rave and Cinemark Rave theaters that are currently part of another cinema advertising network for all periods presented.
|
|
|
|
$ Change
|
|
% Change
|
|||||||||
|
Q3 2018
|
|
Q3 2017
|
|
Q3 2018 to Q3 2017
|
|
Q3 2018 to Q3 2017
|
|||||||
Advertising operating costs
|
$
|
10.3
|
|
|
$
|
8.9
|
|
|
$
|
1.4
|
|
|
15.7
|
%
|
Network costs
|
3.2
|
|
|
3.7
|
|
|
(0.5
|
)
|
|
(13.5
|
)%
|
|||
Theater access fees—founding members
|
19.7
|
|
|
18.1
|
|
|
1.6
|
|
|
8.8
|
%
|
|||
Selling and marketing costs
|
15.3
|
|
|
17.2
|
|
|
(1.9
|
)
|
|
(11.0
|
)%
|
|||
Administrative and other costs
|
9.3
|
|
|
8.8
|
|
|
0.5
|
|
|
5.7
|
%
|
|||
Depreciation and amortization
|
10.0
|
|
|
9.4
|
|
|
0.6
|
|
|
6.4
|
%
|
|||
Total operating expenses
|
$
|
67.8
|
|
|
$
|
66.1
|
|
|
$
|
1.7
|
|
|
2.6
|
%
|
|
|
|
$ Change
|
|
% Change
|
|||||||||
|
Q3 2018
|
|
Q3 2017
|
|
Q3 2018 to Q3 2017
|
|
Q3 2018 to Q3 2017
|
|||||||
Interest on borrowings
|
$
|
14.4
|
|
|
$
|
13.1
|
|
|
$
|
1.3
|
|
|
9.9
|
%
|
Interest income
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
50.0
|
%
|
|||
Loss on the re-measurement of the payable to
founding members under the tax receivable
agreement
|
3.2
|
|
|
—
|
|
|
3.2
|
|
|
100.0
|
%
|
|||
Other non-operating income
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(100.0
|
)%
|
|||
Total non-operating expenses
|
$
|
16.9
|
|
|
$
|
12.9
|
|
|
$
|
4.0
|
|
|
31.0
|
%
|
|
Nine Months Ended
|
|
$ Change
|
|
% Change
|
|||||||||
|
September 27, 2018
|
|
September 28, 2017
|
|
YTD 2018 to YTD 2017
|
|
YTD 2018 to YTD 2017
|
|||||||
National advertising revenue
|
$
|
214.4
|
|
|
$
|
194.9
|
|
|
$
|
19.5
|
|
|
10.0
|
%
|
Local and regional advertising revenue
|
65.6
|
|
|
67.8
|
|
|
(2.2
|
)
|
|
(3.2
|
)%
|
|||
Founding member advertising revenue from
beverage concessionaire agreements
|
24.0
|
|
|
22.7
|
|
|
1.3
|
|
|
5.7
|
%
|
|||
Total revenue
|
$
|
304.0
|
|
|
$
|
285.4
|
|
|
$
|
18.6
|
|
|
6.5
|
%
|
|
Nine Months Ended
|
|
% Change
|
|||||||
|
September 27, 2018
|
|
September 28, 2017
|
|
YTD 2018 to YTD 2017
|
|||||
National advertising revenue per attendee
|
$
|
0.400
|
|
|
$
|
0.396
|
|
|
1.0
|
%
|
Local and regional advertising revenue per attendee
|
$
|
0.122
|
|
|
$
|
0.138
|
|
|
(11.6
|
)%
|
Total advertising revenue (excluding founding
member beverage revenue) per attendee
|
$
|
0.523
|
|
|
$
|
0.534
|
|
|
(2.1
|
)%
|
Total advertising revenue per attendee
|
$
|
0.567
|
|
|
$
|
0.580
|
|
|
(2.2
|
)%
|
Total theater attendance (in millions)
(1)
|
535.8
|
|
|
492.1
|
|
|
8.9
|
%
|
(1)
|
Represents the total attendance within our advertising network, excluding screens and attendance associated with certain AMC Carmike, AMC Rave and Cinemark Rave theaters that are currently part of another cinema advertising network for all periods presented.
|
|
Nine Months Ended
|
|
$ Change
|
|
% Change
|
|||||||||
|
September 27, 2018
|
|
September 28, 2017
|
|
YTD 2018 to YTD 2017
|
|
YTD 2018 to YTD 2017
|
|||||||
Advertising operating costs
|
$
|
26.5
|
|
|
$
|
21.4
|
|
|
$
|
5.1
|
|
|
23.8
|
%
|
Network costs
|
10.0
|
|
|
11.9
|
|
|
(1.9
|
)
|
|
(16.0
|
)%
|
|||
Theater access fees—founding members
|
61.8
|
|
|
57.4
|
|
|
4.4
|
|
|
7.7
|
%
|
|||
Selling and marketing costs
|
48.0
|
|
|
54.2
|
|
|
(6.2
|
)
|
|
(11.4
|
)%
|
|||
Administrative and other costs
|
34.7
|
|
|
28.6
|
|
|
6.1
|
|
|
21.3
|
%
|
|||
Depreciation and amortization
|
29.5
|
|
|
28.2
|
|
|
1.3
|
|
|
4.6
|
%
|
|||
Total operating expenses
|
$
|
210.5
|
|
|
$
|
201.7
|
|
|
$
|
8.8
|
|
|
4.4
|
%
|
|
Nine Months Ended
|
|
$ Change
|
|
% Change
|
|||||||||
|
September 27, 2018
|
|
September 28, 2017
|
|
YTD 2018 to YTD 2017
|
|
YTD 2018 to YTD 2017
|
|||||||
Interest on borrowings
|
$
|
42.3
|
|
|
$
|
39.4
|
|
|
$
|
2.9
|
|
|
7.4
|
%
|
Interest income
|
(1.0
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
%
|
|||
Gain on re-measurement of the
payable to founding members under the
tax receivable agreement
|
(4.6
|
)
|
|
(0.6
|
)
|
|
(4.0
|
)
|
|
NM
|
|
|||
Other non-operating loss (income)
|
0.8
|
|
|
(0.1
|
)
|
|
0.9
|
|
|
NM
|
|
|||
Total non-operating expenses
|
$
|
37.5
|
|
|
$
|
37.7
|
|
|
$
|
(0.2
|
)
|
|
(0.5
|
)%
|
|
Number of screens
|
|||||||
|
Founding Members
|
|
Network Affiliates
|
|
Total
|
|||
Balance as of December 29, 2017
|
16,808
|
|
|
4,042
|
|
|
20,850
|
|
New affiliates
(1)
|
—
|
|
|
344
|
|
|
344
|
|
Closures, net of openings
|
(31
|
)
|
|
15
|
|
|
(16
|
)
|
Balance as of September 27, 2018
|
16,777
|
|
|
4,401
|
|
|
21,178
|
|
(1)
|
Represents six new affiliates added to our network during the first
nine
months of 2018.
|
|
As of
|
|
$ Change
|
|
$ Change
|
||||||||||
|
September 27, 2018
|
|
December 28, 2017
|
|
September 28, 2017
|
|
Q3 2018 to YE 2017
|
|
Q3 2018 to Q3 2017
|
||||||
Cash, cash equivalents and marketable securities
(1)
|
$
|
66.7
|
|
|
59.5
|
|
|
49.9
|
|
|
7.2
|
|
|
16.8
|
|
NCM LLC revolver availability
(2)
|
156.2
|
|
|
158.2
|
|
|
170.2
|
|
|
(2.0
|
)
|
|
(14.0
|
)
|
|
Total liquidity
|
222.9
|
|
|
217.7
|
|
|
220.1
|
|
|
5.2
|
|
|
2.8
|
|
(1)
|
Included in cash, cash equivalents and marketable securities as of
September 27, 2018
,
December 28, 2017
and
September 28, 2017
, was $4.4 million, $4.6 million and $2.6 million, respectively, of cash and marketable securities held
|
(2)
|
The revolving credit facility portion of NCM LLC’s total borrowings is available, subject to certain conditions, for general corporate purposes of NCM LLC in the ordinary course of business and for other transactions permitted under the senior secured credit facility, and a portion is available for letters of credit. NCM LLC’s total capacity under the revolving credit facility was $175.0 million as of
September 27, 2018
,
December 28, 2017
and
September 28, 2017
. As of
September 27, 2018
,
December 28, 2017
and
September 28, 2017
, the amount available under the NCM LLC revolving credit facility in the table above, was net of amount outstanding under the revolving credit facility of $14.0 million, $12.0 million and $0.0 million, respectively, and net letters of credit of $4.8 million in each respective period.
|
|
Nine Months Ended
|
||||
|
September 27, 2018
|
|
September 28, 2017
|
||
Operating cash flow
|
118.8
|
|
|
104.0
|
|
Investing cash flow
|
(20.0
|
)
|
|
18.5
|
|
Financing cash flow
|
(101.7
|
)
|
|
(115.1
|
)
|
•
|
Operating Activities.
The $14.8 million increase in cash provided by operating activities for the nine months ended September 27, 2018, compared to the nine months ended September 28, 2017 was due primarily to 1) an increase of $10.1 million in deferred income tax expense net of the increase in the non-cash gain on the re-measurement of the payable to founding members under the TRA driven by changes in the federal and state tax rates, 2) a $4.4 million increase in the change in accounts receivable primarily related to higher revenue, year over year, 3) a $4.0 million increase in the change in deferred revenue and 4) a $1.3 million decrease in the reversal of the tax contingency reserve, year over year. This increase was partially offset by a decrease of $5.7 million in consolidated net income, as described further above.
|
•
|
Investing Activities.
The $38.5 million increase in cash used in investing activities for the nine months ended September 27, 2018, compared to the nine months ended September 28, 2017 was due primarily to lower proceeds of marketable securities, net of purchases, of $36.7 million and a $2.3 million increase in purchases of property plant and equipment related to the relocation of our corporate headquarters and investments in our digital offerings.
|
•
|
Financing Activities.
The $13.4 million decrease in cash used in financing activities during the nine months ended September 27, 2018, compared to the nine months ended September 28, 2017 was primarily due to a $16.3 million increase in proceeds from borrowings, net of repayments, under our senior secured credit facility and an $11.1 million increase in founding member integration and other encumbered theater payments, partially offset by a $7.2 million increase in cash used in the repayment of our Notes due 2026 and an increase of $6.6 million in the payment of debt issuance costs related to the senior secured credit facility, as described within Note 6—
Borrowings
to the unaudited Condensed Consolidated Financial Statements in Item 1 of this Form 10-Q.
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||
FY 2015
|
17.2
|
%
|
|
27.2
|
%
|
|
25.0
|
%
|
|
30.6
|
%
|
FY 2016
|
17.0
|
%
|
|
25.8
|
%
|
|
25.4
|
%
|
|
31.8
|
%
|
FY 2017
|
16.9
|
%
|
|
22.8
|
%
|
|
27.3
|
%
|
|
33.0
|
%
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased under the Plans or Programs
|
||||
June 29, 2018 through July 26, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
N/A
|
July 27, 2018 through August 30, 2018
|
4,845
|
|
|
$
|
8.20
|
|
|
—
|
|
|
N/A
|
August 31, 2018 through September 27, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
Exhibit
|
Reference
|
Description
|
|
|
|
31.1
|
*
|
|
31.2
|
*
|
|
32.1
|
**
|
|
32.2
|
**
|
|
101.INS
|
*
|
XBRL Instance Document
|
101.SCH
|
*
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
*
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
|
|
NATIONAL CINEMEDIA, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
Date:
|
November 5, 2018
|
|
/s/ Clifford E. Marks
|
|
|
|
Clifford E. Marks
|
|
|
|
Interim Chief Executive Officer and President
|
|
|
|
(Principal Executive Officer)
|
Date:
|
November 5, 2018
|
|
/s/ Katherine L. Scherping
|
|
|
|
Katherine L. Scherping
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
1 Year National CineMedia Chart |
1 Month National CineMedia Chart |
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