National CineMedia(US:NCMI)2019-11-04 22:03Revenue and Income - National advertising revenue for the three months ended September 26, 2019, was $82.3 million, compared to $80.8 million for the same period in 2018, reflecting a growth of 1.9%[51] - Total revenue for the three months ended September 26, 2019, was $110.5 million, slightly up from $110.1 million in the same period of 2018, indicating a marginal increase of 0.4%[51] - Net income attributable to NCM, Inc. for the three months ended September 26, 2019, was $9.2 million, down from $11.2 million in the same period of 2018, a decline of 17.9%[54] - Basic earnings per share for the three months ended September 26, 2019, was $0.12, compared to $0.15 for the same period in 2018, representing a decrease of 20%[54] Future Revenue and Obligations - The estimated revenue expected to be recognized in the future related to unsatisfied performance obligations as of September 26, 2019, was $25.5 million, anticipated to be recognized in 2019[50] - The make-good provision for undelivered impressions was recorded at $4.8 million as of September 26, 2019, down from $8.0 million as of December 27, 2018[49] Assets and Receivables - As of September 26, 2019, the Company had $11.6 million in unbilled accounts receivable, an increase from $6.0 million as of December 27, 2018[53] - The balance of deferred revenue at the end of the nine months ended September 26, 2019, was $10.4 million, up from $7.3 million at the beginning of the period[53] - The company has common unit adjustments, net of amortization and integration payments, totaling $633.2 million as of September 26, 2019[73] - As of September 26, 2019, total amounts due to founding members were $24.8 million, compared to $30.0 million as of December 27, 2018, reflecting a decrease of 17.3%[76] - As of September 26, 2019, total assets amounted to $53.5 million, with cash equivalents at $36.9 million, short-term marketable securities at $8.1 million, and long-term marketable securities at $8.5 million[115] Debt and Financing - NCM LLC's total outstanding debt as of September 26, 2019, was $903.3 million, down from $931.4 million as of December 27, 2018, representing a reduction of 3.0%[81] - The company's consolidated net senior secured leverage ratio was 3.11 times as of September 26, 2019, well below the covenant limit of 4.50 times[86] - The carrying value of the term loan was $267.3 million, with a fair value of $267.5 million as of September 26, 2019[114] - The term loan's interest rate was 5.19% as of September 26, 2019, with an outstanding balance of $267.3 million[85] - The weighted average interest rate on the revolving credit facility as of September 26, 2019, was 6.00%[83] - The company has a $175.0 million revolving credit facility and a term loan, with a potential cash interest expense fluctuation of approximately $2.7 million for a 100-basis point change in market interest rates[122] Lease Obligations - The company has right-of-use assets of $21.9 million related to operating lease agreements as of September 26, 2019[91] - The company has a weighted average remaining lease term of 10.25 years on its leases as of September 26, 2019[93] - Future minimum lease payments under noncancelable operating leases total $39.1 million, with $3.5 million due in 2019 and $22.1 million due thereafter[96] - The total lease liability as of September 26, 2019, was $26.0 million, after accounting for imputed interest of $11.5 million on future lease payments[97] - Total lease payments made by the company were $0.9 million for the three months and $2.5 million for the nine months ended September 26, 2019[95] Impairments and Charges - The company recorded impairment charges of $2.0 million during the three months ended September 26, 2019, bringing the total remaining value of impaired investments to $0.0 million[111] Tax and Distributions - The effective tax rate increased from (2.8)% for the three months ended September 27, 2018, to 33.4% for the three months ended September 26, 2019[89] - A cash dividend of $0.17 per share, totaling approximately $13.2 million, was declared on November 4, 2019, to be paid on November 29, 2019[121] Related Party Transactions - Total mandatory distributions to related parties for the three months ended September 26, 2019 amounted to $22.4 million, compared to $19.1 million for the same period in 2018[75] - The long-term payable to founding members under the tax receivable agreement was $133.2 million as of September 26, 2019[73] - AMC is no longer considered a related party as of July 5, 2018, impacting future related party transactions[64] Investments and Joint Ventures - NCM LLC's investment in AC JV, LLC was $1.0 million as of September 26, 2019, an increase from $0.9 million as of December 27, 2018[80] - The company received cash distributions from AC JV, LLC of $0.1 million for the three months ended September 26, 2019, compared to $0.0 million for the same period in 2018[80] Marketable Securities - The total marketable securities held as of September 26, 2019, were valued at $16.6 million, with short-term marketable securities at $8.1 million and long-term marketable securities at $8.5 million[118] - The amortized cost basis of total marketable securities was $16.5 million as of September 26, 2019[118] - The company has not recorded an impairment on securities with gross unrealized losses of $0.2 million, indicating the intention and ability to hold these securities to maturity[117] Advertising Agreements - The theater access fee for the three months ended September 26, 2019 was $13.5 million, slightly up from $13.4 million in the prior year[67] - The theater access fee paid to founding members is at least 12% of the company's aggregate advertising revenue, with fixed payments per patron increasing by 8% every five years[100] - The company has entered into long-term ESAs with founding members, granting exclusive rights to sell advertising in their theaters[99] - Integration payments will continue until either the theaters are transferred to NCM LLC's network or the expiration of the existing advertising agreements[61]