National CineMedia(US:NCMI)2021-03-09 04:37Financial Data and Key Metrics Changes - In Q4 2020, the company recorded revenue of $15.7 million, a 162% increase compared to Q3 2020, despite 60% of theaters remaining closed due to COVID-19 restrictions [32] - Total revenue for 2020 was $90.4 million, down from $444.8 million in 2019, with adjusted OEBITDA decreasing to a negative $19.4 million from $207.5 million in 2019 [37] - The company reported a GAAP loss per diluted share of $0.45 in Q4 2020, compared to earnings of $0.24 per diluted share in Q4 2019 [37] Business Line Data and Key Metrics Changes - The company experienced a 92% decline in network attendance in Q4 2020 compared to the same period in 2019 [34] - Adjusted OEBITDA for Q4 was negative $9.9 million, showing improvements of 12% and 22% over Q3 and Q2 respectively [34] - Over 40% of the employee base was furloughed, eliminated, or had salary reductions of up to 50% during Q4 [35] Market Data and Key Metrics Changes - 60% of theaters in the national cinema advertising network remained closed as of December 2020, leading to significant declines in attendance and revenue [9] - The company noted that advertiser demand for cinema remains strong, with top brands continuing to run ads in areas where theaters are open [12] Company Strategy and Development Direction - The company is focused on enhancing liquidity and diversifying its business despite ongoing challenges from the pandemic, including a new $50 million debt facility [7] - A new cinema advertising management system was launched to improve efficiency and competitiveness against other ad platforms [19][20] - The company has expanded its cinema advertising network with a new long-term agreement with Harkins Theater Circuit, enhancing its national media network [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the return of moviegoers as vaccine rollouts progress, indicating a strong consumer desire to return to theaters [6][15] - The company is confident that once restrictions are lifted, audiences will return, benefiting from pent-up demand [12][13] - Management acknowledged the challenges posed by the pandemic but emphasized the importance of maintaining a high-quality team for a quick recovery [19] Other Important Information - The company trimmed its Q4 dividend from $0.07 to $0.05 per share to ensure adequate liquidity during the pandemic [29] - The total debt at the end of 2020 was $928 million, with an average interest rate of approximately 5% [40] Q&A Session Summary Question: What is the current advertising pipeline trend? - Management noted a significant increase in activity and quality of RFPs in recent weeks due to positive news on vaccinations and theater openings [49] Question: What is the status of the digital out-of-home business? - The company has started positioning the product in the marketplace and expects some revenue this year, with a focus on building out the business over the next six months [59] Question: Why was additional liquidity drawn down in Q4? - The company aimed to ensure sufficient liquidity to navigate working capital lags as sales ramp up, maintaining a minimum liquidity requirement [61]