National CineMedia Widens Losses as Movie Theaters Keep Doors Closed

Courtesy of National CineMedia
A National CineMedia auditorium showing its Noovie preshow

The in-theater advertising firm posted lower revenues after cinemas closed in mid-March due to the coronavirus pandemic.

In-theater advertising firm National CineMedia on Tuesday posted a widened first-quarter loss, on lower revenues, after major cinema chains in mid-March shuttered their theaters.

The company recorded a net loss of $3.7 million, or 5 cents per share, against a year-earlier loss of $1.1 million, or 1 cent per share. Revenue for the quarter fell 16 percent to $64.7 million, against a year-earlier $76.9 million, after theater circuits in mid-March began closing their venues, which remain shuttered across the U.S.

"While 2020 was off to a strong start, the COVID-19 pandemic and resulting temporary theater closures have placed unprecedented challenges on our business, and our cinema partners. The crisis has required us to adjust our business focus to both building liquidity and continuing to aggressively compete in the video advertising marketplace so we can hit the ground running when theaters reopen," National CineMedia CEO Tom Lesinski said in a statement.

To deal with its COVID-19 impact, National CineMedia has cut operating costs and drawn down $110 million on its revolving credit facility to get the company's cash balance to $132.2 million. "NCM believes it has sufficient liquidity to sustain its operations for 18 months (even with theaters in its network fully closed)," the company said.

Lesinski on an analyst call predicted theater attendance would "rebound" once major cinema chains reopened this summer and that National CineMedia advertising would return to theater screens. The first summer studio film currently on the books is Christopher Nolan's Tenet, set to bow July 17, followed by Disney's Mulan a week later on July 24.

"As the timing of theater reopenings becomes more clear and attendance levels begin to come back, it's likely that more films will be playing in the normally slower periods of September and October and early November, as well as the holiday periods," Lesinski said of the major studios bringing to the local multiplex tentpole titles whose releases were earlier delayed by the pandemic.