National CineMedia CEO Tom Lesinski Says U.S. Exhibition Needs A Few Months Of Open Theaters “And Real Movies” To Assess Covid Impact

Advertising, Coinstar, Earnings, Exhibition, Movies, national cinemdia, Tom Lesinski

National CineMedia, operator of the nation’s largest cinema advertising network, saw sales plunge and it swung into the red last quarter as more than half of all theaters were shuttered. On a conference call, execs noted recent agreements to expand outside of cinemas and said the company will be announcing another, a big one, in few weeks.

Total revenue fell 90% to $15.7 million. The company swung to an operating loss of $21 million from a $73-million profit in the year-earlier quarter. A net loss of $35 million compared with a $19-million net income. National CineMedia stock dipped more than 5% in after-hours trading.

“Having now weathered the worst of the COVID-19 storm, I am confident that 2021 will be a year of rebirth for our cinema partners and NCM as we expect our high margin business model to once again begin to generate free cash flow growth and dividend appreciation for our stockholders,” said CEO Tom Lesinski.

Lesinksi, who has held top jobs at Paramount, Warner Bros. and Legendary Entertainment, said the company’s research indicates  pent-up theatrical demand but that it’s too soon to opine on the pace of recovery — even with higher-than-anticipated attendance in markets like Texas that are fully open or indications of sold-old, limited capacity shows in the newly reopened NYC market. “I think we really need a couple of months of opening of theaters on a national scale and real movies to draw conclusions,” he said during a conference call.

Studios for months have been shifting release dates and pushing big-ticket films back.

The company works with 57 national and regional circuits including AMC Entertainment, Cinemark and Regal and recently added Harkins Theatres. Almost all cinemas in its network were closed until late August and only 40% were open as of year-end. Giant Regal shut all U.S. theaters in October and they are still dark.

That said, conversations with advertisers have picked up significantly on the theatrical front, given positive vaccination news. “They see the light at the end of the tunnel, as do we,” Lesinski said. He expects the bulk of ad sales to be pushed to the second half of the year – in particular the fourth quarter but sees “a solid pipeline.”

Meanwhile, the company has been pushing beyond the big screen – a   move that started before the pandemic. In December, it hired sales and marketing executive Steve Sapp for a new role of senior VP, Digital Out-of-Home. Since then it’s inked deals with Coinstar to advertise on a new digital platform atop grocery store kiosks; Captivate, in elevators; and Ziosk, on tables at restaurants including Olive Garden, Yard House, Outback, Red Robin and Cheddar’s Scratch Kitchen.

Lesinki said the company will be announcing another deal — a big one with a major retail group — in the next couple of weeks. He expects the division to produce “meaningful” revenue in 2022. And he said expansion in the space could be fueled by additional firepower: earlier in March the company raised $50 million in an expanded credit facility.

It has $147 million in cash on hand and is going through that at the rate of about $11-$12 million a month – giving it a runway of at least 12 to 13 months, executives said. To further conserve cash, it trimmed is quarterly dividend to 5 cent a share from 7 cents. It ended the year with $928 million in debt.

Products You May Like

Articles You May Like

iLoveMakonnen Releases Surprise New Album My Parade: Listen
Mark Stephen Pooler Guests On Movie Reviews and More with Host Brian Sebastian
Phoebe Dynevor Dazzles in First Red Carpet Appearance Since Bridgerton Debut
Watch The Simpsons Online: Season 32 Episode 18
Following Rumors, See What Star Wars’ Daisy Ridley Could Look Like As Spider-Woman

Leave a Reply

Your email address will not be published. Required fields are marked *