Announces Quarterly Cash Dividend of $0.22 per Share Provides Full Year 2017 Outlook
National CineMedia, Inc., the managing member and owner of 43.7% of National CineMedia, LLC (NCM LLC), the operator of the largest in-theater digital media network in North America, today announced consolidated results for the fiscal fourth quarter and year ended December 29, 2016.
Total revenue for the fourth quarter ended December 29, 2016 increased 4.5% to a record $142.5 million from $136.4 million for the comparable quarter last year. Adjusted OIBDA increased 14.9% to a record $86.4 million for the fourth quarter of 2016 from $75.2 million for the fourth quarter of 2015. Net income for the fourth quarter of 2016 was $14.7 million, or income of $0.24 per diluted share, compared to net income of $6.6 million, or income of $0.11 per diluted share, for the fourth quarter of 2015. As adjusted to exclude the reserve for uncertain tax positions and CEO transition-related costs, net income for the fourth quarter of 2016 and fourth quarter of 2015, would have been $0.24 per diluted share and $0.20 per diluted share, respectively.
Total revenue for the year ended December 29, 2016 increased 0.2% to $447.6 million from $446.5 million for the comparable period last year. Adjusted OIBDA increased 0.3% to $230.7 million for the full year of 2016 from $229.9 million for the full year of 2015. Net income for the full year of 2016 was $25.4 million, or income of $0.42 per diluted share, compared to net income of $15.4 million, or income of $0.26 per diluted share for the full year of 2015. As adjusted to exclude a loss on early retirement of debt, the costs associated with the terminated merger with Screenvision and certain other non-recurring items set forth in the table at the end of this release, net income for the full year of 2016 would have been $0.44 per diluted share and net income for the full year of 2015 would have been $0.51 per diluted share. Adjusted OIBDA and adjusted earnings per share are non-GAAP measures. See the tables at the end of this release for the reconciliations to the closest GAAP basis measurement.
The Company announced today that its Board of Directors has authorized the Company’s regular quarterly cash dividend of $0.22 per share of common stock. The dividend will be paid on March 23, 2017 to stockholders of record on March 9, 2017. The Company intends to pay a regular quarterly dividend for the foreseeable future at the discretion of the Board of Directors consistent with the Company’s intention to distribute over time a substantial portion of its free cash flow. The declaration, payment, timing and amount of any future dividends payable will be at the sole discretion of the Board of Directors who will take into account general economic and advertising market business conditions, the Company’s financial condition, available cash, current and anticipated cash needs, and any other factors that the Board of Directors considers relevant.
Commenting on the Company’s fourth quarter and full year 2016 operating results, Andy England, NCM’s CEO, said, “As you know, 2016 was my first year as CEO of National CineMedia, and I am happy to say that it was a good one. NCM had a record Q4 and full year 2016 for both revenue and Adjusted OIBDA derived from advertising, against record comps from 2015. But this year was about more than just the numbers. We also established a new leadership team, presented some truly groundbreaking cinema campaigns in theaters, and created a company vision, values and plan that will allow us to pursue a strategy that includes growing our network affiliate partnerships, growing on-screen revenue, expanding our digital product offerings, ensuring that we are the first choice for our customers, developing our people and capabilities, and allocating resources to strategy. It is an exciting time to be at NCM, and I am optimistic about our future and the future of cinema advertising.”
For the full year 2017, the Company expects total revenue to be down 0.5% to up 4% and Adjusted OIBDA is expected to be down 2% to up 4% from the full year 2016. The Company expects total revenue in the range of$445.0 million to $465.0 million for the full year 2017, compared to total revenue for the full year 2016 of $447.6 million and Adjusted OIBDA in the range of $225.0 million to $240.0 million for the full year 2017 compared to Adjusted OIBDA for the full year 2016 of $230.7 million. This outlook includes the impact of an 8% increase in the theater access fee paid to the founding members that occurs every five years.
Integration payments due from Cinemark and AMC associated with Rave Theatres for the quarter ended December 29, 2016 and December 31, 2015 and the full year ended December 29, 2016 and December 31, 2015were $1.1 million, $0.9 million, $2.6 million and $2.7 million, respectively. The integration payments were recorded as a reduction of an intangible asset.
The Company will host a conference call and audio webcast with investors, analysts and other interested parties February 23, 2017 at 5:00 P.M. Eastern time. The live call can be accessed by dialing 1-877-407-9039 or for international participants 1-201-689-8470. Participants should register at least 15 minutes prior to the commencement of the call. Additionally, a live audio webcast will be available to interested parties at www.ncm.com under the Investor Relations section. Participants should allow at least 15 minutes prior to the commencement of the call to register, download and install necessary audio software.
The replay of the conference call will be available until midnight Eastern Time, March 9, 2017, by dialing 1-844-512-2921 or for international participants 1-412-317-6671, and entering conference ID 13654646.
About National CineMedia, Inc.
National CineMedia (NCM) is America’s Movie Network. As the #1 Millennial weekend network in the U.S., NCM is the connector between brands and movie audiences. More than 700 million moviegoers annually attend theaters that are currently under contract to present NCM’s FirstLook pre-show in over 40 leading national and regional theater circuits including AMC Entertainment Inc. (NYSE:AMC), Cinemark Holdings, Inc. (NYSE:CNK) and Regal Entertainment Group (NYSE: RGC). NCM’s cinema advertising network offers broad reach and unparalleled audience engagement with over 20,500 screens in over 1,600 theaters in 189 Designated Market Areas® (all of the top 50). NCM Digital goes beyond the big screen, extending in-theater campaigns into online and mobile marketing programs to reach entertainment audiences. National CineMedia, Inc. (NASDAQ:NCMI) owns a 43.7% interest in, and is the managing member of, National CineMedia, LLC. For more information, visit www.ncm.com.
This press release contains various forward-looking statements that reflect management’s current expectations or beliefs regarding future events, including statements providing guidance and projections for the full year 2017, the dividend policy, and our beliefs about our business position as we enter 2017. Investors are cautioned that reliance on these forward-looking statements involves risks and uncertainties. Although the Company believes that the assumptions used in the forward looking statements are reasonable, any of these assumptions could prove to be inaccurate and, as a result, actual results could differ materially from those expressed or implied in the forward looking statements. The factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are, among others, 1) level of theater attendance; 2) increased competition for advertising expenditures; 3) technological changes and innovations; 4) economic conditions, including the level of expenditures on cinema advertising; 5) our ability to renew or replace expiring advertising and content contracts; 6) our need for additional funding, risks and uncertainties relating to our significant indebtedness; 7) fluctuations in operating costs; 8) changes in interest rates; and 9) changes in accounting principles. In addition, the outlook provided does not include the impact of any future unusual or infrequent transactions; sales and acquisitions of operating assets and investments; any future noncash impairments of intangible and fixed assets; amounts related to litigation or the related impact of taxes that may occur from time to time due to management decisions and changing business circumstances. The Company is currently unable to forecast precisely the timing and/or magnitude of any such amounts or events. Please refer to the Company’s Securities and Exchange Commission filings, including the “Risk Factor” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, for further information about these and other risks.