New Threads Only:  Add to Google Reader or Homepage
New Threads & Replies:  Add to Google Reader or Homepage
Forums are for serious investors only. GuruFocus Forum Rules.

Forum List » Business News and Headlines
SEC Filings, Earing Reports, Press Releases
New Topic Search
Goto Thread: PreviousNext
Goto: Forum ListMessage ListNew TopicSearchLog In
National CineMedia Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 4, 2011 04:36PM

National CineMedia Inc. (NCMI) filed Quarterly Report for the period ended 2011-06-30. National Cinemedia Inc. has a market cap of $795.6 million; its shares were traded at around $14.43 with a P/E ratio of 24.1 and P/S ratio of 1.8. The dividend yield of National Cinemedia Inc. stocks is 5.6%.



Highlight of Business Operations:

Revenue. Total revenue of the Company for the quarter ended June 30, 2011 was $114.0 million compared to $99.1 million for the quarter ended July 1, 2010, an increase of $14.9 million, or 15.0%. The increase in total revenue was primarily the result of an increase in total advertising revenue of $8.5 million or 9.4% (including revenue from our founding member beverage concessionaire agreements, or “beverage revenue”), in addition to the 73.0% increase in Fathom Events revenue from $8.9 million in 2010 to $15.4 million in the current quarter.

National advertising revenues of $78.4 million (including $10.7 million of beverage revenue) for the quarter ended June 30, 2011 increased 6.4% from $73.7 million (including $9.6 million of beverage revenue) for the quarter ended July 1, 2010. National advertising revenue (excluding beverage revenue) for the quarter ended June 30, 2011 increased $3.6 million or 5.6% to $67.7 million compared to $64.1 million for the quarter ended July 1, 2010. This increase was due to the continued expansion of our overall client base and an increase in the allocation to the current quarter of the annual content partner spending as compared to the second quarter of 2010. In addition, the higher content partner allocation and a favorable TV advertising scatter market contributed to an increase of 2.9% in national advertising CPMs (excluding beverage revenue). There was also a 6.4% increase in national advertising impressions sold that contributed to a slight decrease versus the second quarter of 2010 in the national inventory utilization to 91.5%. This increase in impressions related to a strong theatrical box office and the addition of network affiliates. The 11.5% increase in payments from the founding members for their beverage concessionaire agreements was due primarily to a combination of the impact of the annual contractual 6% beverage revenue CPM increase and a 5.7% increase in founding member attendance due to a strong theatrical box office and the AMC Kerasotes Acquisition completed in the second quarter of 2010. Our make-good reserve balance decreased to $2.0 million at June 30, 2011 from $4.6 million at July 1, 2010 due to strong theatre attendance at the end of the current quarter. The Company anticipates this reserve will be recognized as revenue in the third quarter of 2011.

Net income. Net income generated for the quarter ended June 30, 2011 was $9.0 million, an increase of 95.7% over the $4.6 million for the quarter ended July 1, 2010. The increase was due primarily to the 15.9% increase in operating income and a $2.5 million decrease in the charge related to the change in derivative fair value offset by an increase in the provision for income taxes and net income attributable to noncontrolling interests. The change in derivative fair value resulted in a pre-tax non-cash charge of $2.0 million for the quarter ended June 30, 2011 compared to a pre-tax non-cash charge of $4.5 million for the quarter ended July 1, 2010, due to the change in the fair value of an interest rate hedge associated with our senior secured credit facility from decreases in market interest rates. The increase in the provision for income taxes of $2.7 million to $5.4 million for the second quarter of 2011 is due primarily to higher taxable income. Noncontrolling interest expense increased $2.0 million to $19.3 million for the quarter ended June 30, 2011 due to higher NCM LLC net income.

National advertising revenues of $124.9 million (including $18.9 million of beverage revenue) for the six months ended June 30, 2011 decreased 3.4% from $129.3 million (including $18.8 million of beverage revenue) for the 2010 period. National advertising revenue (excluding beverage revenue) for the six months ended June 30, 2011 decreased 4.1% to $106.0 million compared to $110.5 million for the six months ended July 1, 2010. This decrease was primarily due to the first quarter of 2010 having included a significant advertising contract from one client in the military category that was not repeated in the first quarter of 2011. Content partner commitment spending for the six months ended June 30, 2011 increased $3.0 million as compared to 2010. The decrease in national inventory utilization (excluding beverage revenue) to 82.8% for the six months ended June 30, 2011 from 85.4% for the six months ended July 1, 2010 was due to the decrease in national advertising revenue during the first half of 2011 as compared to the first half of 2010, offset by a 5.6% decrease in theatre attendance compared to the prior year period. The lower national inventory utilization related to the impact of the decrease in military spending, partially offset by continued expansion of our overall client base and a favorable TV advertising scatter market that contributed to a 4.0% increase in national advertising CPMs (excluding beverage revenue). The 0.5% decrease in payments from the founding members for their beverage concessionaire agreements was due primarily to a 4.7% decrease in founding member attendance due to a weaker box office during the first quarter of 2011, offset by the impact of the annual contractual 6% beverage revenue CPM increase.

Net income. Net income generated for the six months ended June 30, 2011 increased 37.9% to $8.0 million compared to net income for the six months ended July 1, 2010 of $5.8 million. The increase was due primarily to a $5.4 million decrease in the charge related to the change in derivative fair value and a $2.9 million decrease in the net income attributable to noncontrolling interests, offset by a $4.5 million decrease in operating income. The change in derivative fair value resulted in a pre-tax non-cash charge of $0.8 million for the six months ended June 30, 2011 compared to a pre-tax non-cash charge of $6.2 million for the six months ended July 1, 2010, due to the change in the fair value of an interest rate hedge associated with our senior secured credit facility from decreases in market interest rates. The increase of $1.1 million to $4.7 million for the six months ended June 30, 2011 in the provision for income taxes is due primarily to higher pretax income. Noncontrolling interest expense decreased $2.9 million for the six months ended June 30, 2011 due to the impact of the redemption of common membership units during the second quarter of 2010 impacting the allocation of overall higher net income to NCM, LLC (see Note 6 to the unaudited condensed consolidated financial statements included elsewhere in this document).

As of June 30, 2011, our cash, cash equivalents and short-term investments balance was $64.4 million, a decrease of $18.5 million compared to the balance of $82.9 million as of December 30, 2010. Compared to the balance at July 1, 2010 of $55.9 million, the balance at June 30, 2011 increased $8.5 million. At June 30, 2011, we had an additional $45.0 million of borrowing availability on our revolving credit facility for total liquidity availability of $109.4 million compared to $112.9 million at December 30, 2010. At July 1, 2010, our total liquidity availability was $83.9 million. Our cash balances will fluctuate due to the seasonality of our business and related timing of collections of accounts receivable balances and operating expenditure payments, as well as available cash payments (as defined) to NCM LLC’s founding members, interest payments on our term loan and principal payments on debt, income tax payments, tax sharing payments to our founding members and quarterly dividends to NCM, Inc’s common shareholders. Our net debt balances (debt balance net of cash, cash equivalents and short-term investments balance) decreased $25.5 million compared to the balance at July 1, 2010.

Read the The complete Report



Stocks Discussed: NCMI,
Rate this post:




Sorry, only registered users may post in this forum.

Please Login if you have an account or Create a Free Account if you don't




Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial