National CineMedia(US:NCMI)2025-10-30 20:20Financial Performance - Total revenue for Q3 2025 increased by $1.0 million, or 1.6%, to $63.4 million compared to Q3 2024's $62.4 million[142]. - National advertising revenue rose by $3.1 million, or 6.6%, from $46.8 million in Q3 2024 to $49.9 million in Q3 2025, driven by a 41.9% increase in national advertising utilization[144]. - Local and regional advertising revenue decreased by $1.8 million, or 15.8%, from $11.4 million in Q3 2024 to $9.6 million in Q3 2025 due to reduced contract activity in several categories[145]. - Total theater attendance fell by 10.6% from 121.6 million in Q3 2024 to 108.7 million in Q3 2025[143]. - Adjusted OIBDA for Q3 2025 was $10.2 million, up from $8.8 million in Q3 2024, reflecting a 15.9% increase[140]. - Adjusted OIBDA margin improved to 16.1% in Q3 2025 from 14.1% in Q3 2024[140]. - Net income attributable to NCM, Inc. was $1.6 million in Q3 2025, a significant improvement from a net loss of $3.6 million in Q3 2024, representing a 144.4% increase[142]. - Operating loss decreased to $1.8 million in Q3 2025 from $7.5 million in Q3 2024, marking a 76.0% improvement[140]. - Total revenue per attendee increased by 13.7% from $0.513 in Q3 2024 to $0.583 in Q3 2025[143]. - Total revenue decreased by $4.5 million, or 2.9%, from $154.5 million for the nine months ended September 26, 2024 to $150.0 million for the nine months ended September 25, 2025[155]. - National advertising revenue increased by $0.6 million, or 0.5%, from $117.9 million to $118.5 million for the nine months ended September 25, 2025, driven by a 17.0% increase in national advertising utilization[157]. - Local and regional advertising revenue decreased by $5.7 million, or 21.5%, from $26.5 million to $20.8 million for the nine months ended September 25, 2025, primarily due to decreased contract activity[158]. Operating Expenses - Total operating expenses decreased by $4.7 million, or 6.7%, from $69.9 million in Q3 2024 to $65.2 million in Q3 2025[147]. - Theater exhibition fees decreased by $0.6 million, or 1.8%, from $32.9 million in Q3 2024 to $32.3 million in Q3 2025, primarily due to a 10.6% decrease in network attendance[148][149]. - Selling and marketing costs remained stable at $10.1 million for both Q3 2024 and Q3 2025, with a $0.5 million decrease in personnel-related costs offset by a $0.3 million increase in variable costs[150]. - Administrative and other costs decreased by $2.3 million, or 17.8%, from $12.9 million in Q3 2024 to $10.6 million in Q3 2025, mainly due to a reduction in legal and professional fees[151]. - Depreciation expense decreased by $0.1 million, or 8.3%, from $1.2 million in Q3 2024 to $1.1 million in Q3 2025[152]. - Amortization expense decreased by $1.6 million, or 16.8%, from $9.5 million in Q3 2024 to $7.9 million in Q3 2025[153]. - Total operating expenses for the nine months ended September 25, 2025 decreased by $6.2 million, or 3.2%, from $193.9 million to $187.7 million[160]. - Selling and marketing costs increased by $1.0 million, or 3.4%, from $29.6 million to $30.6 million for the nine months ended September 25, 2025[163]. - Administrative and other costs decreased by $5.8 million, or 14.6%, from $39.8 million to $34.0 million for the nine months ended September 25, 2025[164]. - Depreciation expense decreased by $0.1 million, or 2.9%, from $3.4 million to $3.3 million for the nine months ended September 25, 2025[165]. - Amortization expense decreased by $2.9 million, or 10.2%, from $28.4 million to $25.5 million for the nine months ended September 25, 2025[166]. - Total non-operating expense decreased by $5.4 million, or 71.1%, from $7.6 million to $2.2 million for the nine months ended September 25, 2025[167]. Cash Flow and Financing - Cash, cash equivalents, and marketable securities decreased by $45.3 million from $75.2 million to $29.9 million as of September 25, 2025[174]. - Operating cash flow significantly decreased to $0.1 million from $29.8 million for the nine months ended September 25, 2025[176]. - NCM LLC has no outstanding borrowings under the 2025 Credit Facility as of September 25, 2025, with a total capacity of $45.0 million[172]. - The available cash amount to NCM, Inc. for the three months ended September 25, 2025, was approximately positive $7.1 million[178]. - Cash provided by operating activities decreased by $29.7 million for the nine months ended September 25, 2025, compared to the same period in 2024, primarily due to an $18.7 million decrease in deferred revenue and a $7.3 million decrease in accounts receivable collections[180]. - Cash used by investing activities increased by $2.9 million for the nine months ended September 25, 2025, attributed to a $2.0 million increase in purchases of cost method investments and a $0.4 million increase in purchases of intangible assets[180]. - Cash used in financing activities increased by $27.4 million for the nine months ended September 25, 2025, mainly due to $10.0 million repayments of both the 2023 and 2025 Revolving Credit Facilities and an $8.2 million increase in dividend payments[180]. - As of September 25, 2025, NCM LLC owed NCM, Inc. $21.9 million in deferred available cash distributions[181]. - NCM, Inc. plans to utilize cash balances and future cash distributions to fund payments related to the TRA, stock repurchases, and future dividends, with the timing and amount at the discretion of the Board of Directors[182]. - The maximum capacity under the 2025 Credit Facility is $45.0 million, with a floating interest rate that could increase cash interest expense by approximately $0.5 million for a 100-basis point fluctuation if fully drawn[185]. - The company expects to make a TRA payment in 2026 for the 2025 tax year, following an estimated TRA payment in 2025 for the 2024 tax year[182]. Agreements and Ownership - The company has long-term exhibitor services agreements (ESAs) with a weighted average remaining term of 12.1 years as of September 25, 2025[125]. - On April 17, 2025, the company entered into a new agreement with AMC, extending the term of the ESA by five years and releasing $21.6 million of the 'Payable under the TRA'[128][129]. - Upon emerging from bankruptcy on August 7, 2023, NCM, Inc. regained 100.0% ownership of NCM LLC, which was reconsolidated into the financial statements[135]. - The company recorded a gain on bankruptcy of $916.4 million for the year ended December 26, 2024[134]. - NCM LLC recorded a gain on deconsolidation of $557.7 million during the second quarter of 2023 due to its Chapter 11 filing[132]. Accounting Policies - There were no significant changes in critical accounting policies as of September 25, 2025[183]. - The company does not anticipate that recent accounting pronouncements will have a material impact on its financial statements[184]. - The company will consider returning a portion of its free cash flow to stockholders, depending on various economic and financial factors[182].