The nation’s biggest cinema advertising network National CineMedia saw revenue rise and losses narrow last quarter as executives cited brisk sales of movie theater ads and insisted that it’s business as usual fo now, even as part owner and major client Regal is swept up in bankruptcy.
“From our perspective, nothing has changed on a day-to-day basis with Regal. We are advertising in all of their theaters without disruption and our business remains unaffected,” said CFO Ronnie Ng. The giant cinema chain is looking to retool or exit a longstanding agreement with NCM as part of the bankruptcy proceedings of parent Cineworld. NCM has sued Regal for breach of contract.
NCM revenue grew 72% to $54.5 million for the three months ended Sept. Net losses narrowed to $8.9 million, or $0.11 per diluted share, from $15.2 million, or $0.19.
Shares closed up 4% at 43 cents. That’s another issue. The stock has been under $1 for so long that that the company risks delisting on the Nasdaq market if it can’t rise above that thresholder for ten consecutive trading days over the next six months. CEO Tom Lenski said the listing is important to the company’s future plans and that a reverse stock split could help get it over the hump. That’s when shares of a company are merged, ending up with a smaller number of more expensive shares.
He said business looks strong and NCM “just completed a highly successful” upfront sales campaign with the return of longtime clients across all key categories, and the “positive momentum is supported by a great slate of movies scheduled in the upcoming holiday season and throughout 2023.” As moviegoers return, he said, advertisers see the network as a way to reach young “captive” audiences that are hard to target via broadcast and even digital lately.