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Box Office Recovery Helps Boost Post-Bankruptcy National CineMedia

National CineMedia grew its fourth quarter profit, despite overall revenues remaining virtually unchanged, the in-theater advertising company announced Monday.

The net income attributable to National CineMedia came to $23.7 million for the three months to Dec. 28, 2023, against net income of $6.1 million in the comparable year-ago period. Overall fourth quarter revenue was $90.9 million, a shade lower than $91.7 million in the same period of 2022.

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The revenue breakout showed national advertising revenue grew 2 percent to $71.9 million, which offset a slight decrease in local and regional ad revenue at $16.2 million, compared to a year-earlier $17.1 million.

“In 2023, National CineMedia successfully re-established the importance of cinema for best-in class advertisers, with movies driving the cultural conversation and the box office reaching its highest point since 2019,” Tom Lesinski, CEO of the company, said in a statement.

National CineMedia completed a financial restructuring in August 2023, which included court-directed Chapter 11 bankruptcy proceedings. National CineMedia CFO Ronnie Ng told analysts that the company went pre-restructuring from around a $1.1 billion debt load owed to bondholders to borrowings of around $10 million currently.

That was preceded by National CineMedia’s business being hit by the shutdown of cinemas due to the COVID pandemic, followed by the slow Hollywood industry recovery as the reopening of theaters and cinema screen advertising was impacted.

More recently, National CineMedia is navigating the major studios rearranging their production and release schedules for their movie slates in the wake of dual Hollywood strikes being settled. Company CEO Lesinski said fourth quarter attendance was negatively impacted by a number of Hollywood tentpole releases being pushed to 2024 and beyond to avoid disruption by the writers’ and actors’ labor actions.

“It is clear to us that consumer demand for the cinema remains strong, and audiences are excited to see the latest movies on the big screen first,” Lesinski told analysts during an after-market conference call as movie theater chains continue to face growing competition with streaming platforms to attract movie viewers.

The National CineMedia boss also pointed to a “slower ad market” for both linear and traditional media impacting the theater ad platform as it looks to drive more dollars from media buyers and brands. “That said, in the fourth quarter, we began to see an ad spending bounce across all channels, and expect a more significant rebound as the consumer environment improves and inflation continues to normalize over the coming quarters,” Lesinski told analysts.

Also Monday, the company also unveiled plans for a share repurchase program to buy back up to $100 million of company stock by April 1, 2027.

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