National CineMedia today announced consolidated results for the fiscal first quarter ended April 1. During the first quarter the company continued to manage its liquidity position through various cost-control measures and the issuance of a new $50 million term loan in March. With the funding of this additional debt, NCM’s cash balance as of April 1 was $139.4 million, an increase of $15.5 million as compared to the balance as of December 31. Including the $52.8 million, the company had $192.2 million of cash, cash equivalents and investments as of April 1.
The company's in-theatre advertising revenue continued to be adversely impacted during the first quarter by closures and COVID-19 related government mandated capacity limitations and a continued lack of new major motion picture releases. Given these lower revenue levels, the company continued to control its operating and capital expenditures, with total operating expenses more than 40 percent lower in the first quarter of 2021, as compared to the first quarter of 2020.
Since the beginning of the COVID-19 pandemic, the company has significantly reduced payroll related costs through a combination of temporary furloughs, permanent layoffs, and salary reductions. In total, the company’s headcount has been reduced by almost 30 percent as compared to headcount levels prior to the COVID-19 pandemic.
As of May 7, approximately 77 percent of the theatres within the company's network are now open, as compared to 60 percent as of April 1.
It is expected that its operating and staffing costs will begin to increase with further theatre openings and additional in-theatre revenue that NCM expects to start building beginning in June 2021 assuming the continued successful rollout of the COVID-19 vaccines and corresponding decreased COVID-19 cases and the currently planned film slate remains firm.
NCM CEO Tom Lesinski said, “Our company and our world are continuing to slowly but steadily recover from the effects of the COVID-19 pandemic, and there are many positive signs that we’re on our way to a revival of the cinema industry and our business. More than half of all adults in the U.S. have had their first vaccine shot, movie theaters and audience capacities continue to open across the country, and Godzilla vs. Kong, Mortal Kombat, and Demon Slayer have proven what we’ve been saying all along — that there is strong pent-up audience demand to get back to the unique experience of the big screen, even when that same film is available to watch at home.”
Lesinski concluded, “We are excited for a strong summer movie season and second half of 2021 as there is an incredible film slate in store for cinema audiences, and for our advertising clients that want to reach them at a time when ad-supported television audiences are declining. This provides a great opportunity for our company over the near and long term. While there are still many challenges ahead, the steps we have taken to expand, diversify and improve our business give me increased confidence for the remainder of 2021 and beyond.”
National CineMedia www.ncm.com