Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 27, 2024 | Aug. 01, 2024 | |
Document Information [Line Items] | ||
Document Transition Report | false | |
Document Quarterly Report | true | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-5665602 | |
Entity Address, Address Description | 6300 S. Syracuse Way, Suite 300 | |
Entity Address, City or Town | Centennial | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80111 | |
City Area Code | 303 | |
Local Phone Number | 792-3600 | |
Trading Symbol | NCMI | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Document Period End Date | Jun. 27, 2024 | |
Entity Registrant Name | NATIONAL CINEMEDIA, INC. | |
Amendment Flag | false | |
Entity Central Index Key | 0001377630 | |
Document Type | 10-Q | |
Entity File Number | 001-33296 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-26 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 95,321,639 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 27, 2024 | Dec. 28, 2023 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 53.8 | $ 34.6 |
Restricted Cash | 3 | 3 |
Receivables, net of allowance of $1.0 and $1.4, respectively | 50.7 | 96.6 |
Prepaid Expense and Other Assets, Current | 8.9 | 9.6 |
Total current assets | 116.4 | 143.8 |
NON-CURRENT ASSETS: | ||
Property and equipment, net of accumulated depreciation of $3.5 and $1.6, respectively | 15.8 | 15.8 |
Intangible assets, net of accumulated amortization of $34.0 and $15.0, respectively | 375 | 394.3 |
Other Investments | 1 | 0.7 |
Debt issuance costs, net | 1.7 | 2.2 |
Other assets | 17.3 | 10.9 |
Total non-current assets | 410.8 | 423.9 |
TOTAL ASSETS | 527.2 | 567.7 |
CURRENT LIABILITIES: | ||
Amounts due to ESA Parties, net | 3.9 | 6.6 |
Accrued expenses | 1.7 | 1.6 |
Accrued payroll and related expenses | 10.1 | 17.7 |
Accounts payable | 16.3 | 21.7 |
Deferred revenue | 12.6 | 9.8 |
Other current liabilities | 2.9 | 1 |
Total current liabilities | 47.5 | 58.4 |
NON-CURRENT LIABILITIES: | ||
Long-term debt | 10 | 10 |
Payable under the TRA | 70.3 | 59.8 |
Other liabilities | 11.5 | 5 |
Total non-current liabilities | 91.8 | 74.8 |
Total liabilities | 139.3 | 133.2 |
COMMITMENTS AND CONTINGENCIES (NOTE 9) | ||
EQUITY: | ||
Preferred stock, $0.01 par value; 10,000,000 shares authorized, 50 issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 260,000,000 shares authorized, 95,238,849 and 96,837,039 issued and outstanding, respectively | 2.5 | 2.6 |
Additional paid in capital | 121.6 | 115.3 |
Retained earnings | 263.8 | 316.6 |
Total NCM, Inc. stockholders’ equity | 387.9 | 434.5 |
Noncontrolling interests | 0 | 0 |
Total equity | 387.9 | 434.5 |
TOTAL LIABILITIES AND EQUITY | $ 527.2 | $ 567.7 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Jun. 27, 2024 | Dec. 28, 2023 |
Allowance for doubtful accounts receivable | $ 1 | $ 1.4 |
Accumulated depreciation, property and equipment | 3.5 | 1.6 |
Accumulated amortization, intangible assets | $ 34 | $ 15 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 50 | 50 |
Preferred stock, shares outstanding | 50 | 50 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 260,000,000 | 260,000,000 |
Common stock, shares issued (in shares) | 95,238,849 | 96,837,039 |
Common stock, shares outstanding (in shares) | 95,238,849 | 96,837,039 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | |
REVENUE (including revenue from related parties of $0.0, $8.5, $0.0 and $11.8, respectively) | $ 54.7 | $ 14.8 | $ 92.1 | $ 49.7 |
OPERATING EXPENSES: | ||||
Network operating costs | 3.7 | 0.5 | 7.3 | 4.4 |
ESA Parties and network affiliate fees (including fees to related parties of $0.0, $2.7, $0.0 and $16.5, respectively) | 26.7 | 4.5 | 49.2 | 28.3 |
Selling and marketing costs | 9.6 | 1.1 | 19.6 | 10.6 |
Administrative and other costs | 13.4 | 12.5 | 26.9 | 33.3 |
Depreciation expense | 1.1 | 0.2 | 2.2 | 1.5 |
Amortization expense | 9.5 | 0.9 | 18.9 | 7.1 |
Total | 64 | 19.7 | 124.1 | 85.2 |
OPERATING LOSS | (9.3) | (4.9) | (32) | (35.5) |
NON-OPERATING (INCOME) EXPENSE: | ||||
Interest on borrowings | 0.4 | 3.1 | 0.9 | 27.1 |
Interest income | (0.7) | 0 | (1.1) | 0 |
Loss on re-measurement of the payable under the tax receivable agreement | 0 | 4 | 12.2 | 3.4 |
Gain on deconsolidation of NCM LLC | 0 | (557.7) | 0 | (557.7) |
Other non-operating (income) expense, net | (0.3) | 0.4 | (0.6) | 0.4 |
Total | (0.6) | (550.2) | 11.4 | (526.8) |
(LOSS) INCOME BEFORE INCOME TAXES | (8.7) | 545.3 | (43.4) | 491.3 |
Income tax expense | 0 | 0 | 0 | 0 |
CONSOLIDATED NET (LOSS) INCOME | (8.7) | 545.3 | (43.4) | 491.3 |
Less: Net loss attributable to noncontrolling interests | 0 | 0 | 0 | (8.5) |
NET (LOSS) INCOME ATTRIBUTABLE TO NCM, INC. | (8.7) | 545.3 | (43.4) | 499.8 |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NCM, INC. | $ (8.7) | $ 545.3 | $ (43.4) | $ 499.8 |
NET (LOSS) INCOME PER NCM, INC. COMMON SHARE: | ||||
Basic (in usd per share) | $ (0.09) | $ 31.33 | $ (0.45) | $ 31.28 |
Diluted (in usd per share) | $ (0.09) | $ 31.33 | $ (0.45) | $ 28.32 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
Basic (in shares) | 96,409,830 | 17,405,864 | 96,664,241 | 15,978,331 |
Diluted (in shares) | 96,409,830 | 17,405,864 | 96,664,241 | 17,349,139 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (PARENTHETICAL) (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | |
Revenue | $ 54.7 | $ 14.8 | $ 92.1 | $ 49.7 |
ESA Parties and network affiliate fees | 26.7 | 4.5 | 49.2 | 28.3 |
Founding Members | ||||
Revenue | 0 | 8.5 | 0 | 11.8 |
ESA Parties and network affiliate fees | $ 0 | $ 2.7 | $ 0 | $ 16.5 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 27, 2024 | Jun. 29, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Consolidated net (loss) income | $ (43.4) | $ 491.3 |
Adjustments to reconcile consolidated net loss to net cash used in operating activities: | ||
Depreciation expense | 2.2 | 1.5 |
Amortization expense | 18.9 | 7.1 |
Non-cash share-based compensation | 6.1 | 2 |
Amortization of debt issuance costs | 0.4 | 3.1 |
Gain on deconsolidation | 0 | (557.7) |
Non-cash loss on re-measurement of the payable under the tax receivable agreement | 12.2 | 3.4 |
Other | (0.3) | (0.1) |
ESA integration and other encumbered theater payments | 0.5 | 3.9 |
Other cash flows from operating activities | 0 | (0.1) |
Changes in operating assets and liabilities: | ||
Receivables, net | 45.6 | 57.8 |
Accounts payable and accrued expenses | (12) | 6.8 |
ESA amounts due to/from, net | (2) | (1) |
Amounts due to/from unconsolidated affiliate, net | 0 | (1.1) |
Prepaid expenses | 0.6 | (15.7) |
Deferred revenue | 2.8 | (0.3) |
Other, net | 0.2 | 3.6 |
Net cash provided by operating activities | 31.8 | 4.5 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (2.8) | (1.1) |
Proceeds received from equity method investment | 0.4 | 0 |
Proceeds from the sale of assets | 0 | 0.3 |
Net cash used in investing activities | (2.4) | (0.8) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of dividends | (0.3) | (0.4) |
Purchases of NCM, Inc.'s common stock | (9.2) | 0 |
Cash redemption of NCM LLC common membership units | (0.7) | 0 |
Removal of cash, cash equivalents and restricted cash of unconsolidated affiliate | 0 | (49.6) |
Repayment of term loan facility | 0 | (0.8) |
Payment of debt issuance costs | 0 | (1.2) |
Net cash used in financing activities | (10.2) | (52) |
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 19.2 | (48.3) |
Cash, cash equivalents and restricted cash at beginning of period | 37.6 | 63.8 |
Cash, cash equivalents and restricted cash at end of period | 56.8 | 15.5 |
Supplemental disclosure of non-cash financing and investing activity: | ||
Purchase of an intangible asset with NCM LLC equity | 0.7 | 0 |
Exchange of subsidiary equity with NCM, Inc. equity | 0 | 10.3 |
Right of use assets obtained in exchange for lease liabilities | 7.2 | 0 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | (0.5) | (12.2) |
Cash (paid) refunded for income taxes | $ (0.1) | $ 0.1 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY/(DEFICIT) - USD ($) $ in Millions | Total | Common Stock | Preferred Stock | Additional Paid in Capital (Deficit) | Retained Earnings (Accumulated Deficit) | Noncontrolling Interest |
Balance at Dec. 29, 2022 | $ (464) | $ 1.2 | $ 0 | $ (146.2) | $ (370.4) | $ 51.4 |
Balance (in shares) at Dec. 29, 2022 | 12,840,264 | 0 | ||||
Deconsolidation, Equity Effect, Amount | (33.3) | (15.2) | (18.1) | |||
Income tax and other impacts of NCM LLC ownership changes | (15.4) | 27.6 | (43) | |||
Issuance of shares to founding members | 10.3 | $ 0.4 | 9.9 | |||
Issuance of shares, shares | 4,369,080 | |||||
Cash redemption of NCM LLC common membership units | (10.3) | $ (10.3) | (10.3) | |||
Comprehensive income (loss), net of tax | 491.3 | 499.8 | (8.5) | |||
Share-based compensation issued, net of tax | 0.1 | $ 0.1 | ||||
Share-based compensation issued, net of tax (in shares) | 196,634 | |||||
Share-based compensation expense/capitalized | 2 | 1.9 | 0.1 | |||
Balance at Jun. 29, 2023 | (19.3) | $ 1.7 | $ 0 | (132.3) | 111.3 | 0 |
Balance (in shares) at Jun. 29, 2023 | 17,405,978 | 0 | ||||
Balance at Mar. 30, 2023 | (531.8) | $ 1.7 | $ 0 | (117.6) | (415.9) | 0 |
Balance (in shares) at Mar. 30, 2023 | 17,405,412 | 0 | ||||
Deconsolidation, Equity Effect, Amount | (33.3) | (15.2) | (18.1) | |||
Issuance of shares to founding members | 0 | |||||
Cash redemption of NCM LLC common membership units | $ 0 | |||||
Comprehensive income (loss), net of tax | 545.3 | 545.3 | ||||
Share-based compensation issued, net of tax | 0 | |||||
Share-based compensation issued, net of tax (in shares) | 566 | |||||
Share-based compensation expense/capitalized | 0.5 | 0.5 | ||||
Balance at Jun. 29, 2023 | (19.3) | $ 1.7 | $ 0 | (132.3) | 111.3 | 0 |
Balance (in shares) at Jun. 29, 2023 | 17,405,978 | 0 | ||||
Balance at Dec. 28, 2023 | 434.5 | $ 2.6 | $ 0 | 115.3 | 316.6 | 0 |
Balance (in shares) at Dec. 28, 2023 | 96,837,039 | 50 | ||||
Income tax and other impacts of NCM LLC ownership changes | 0.1 | 0.1 | ||||
NCM LLC equity issued for purchase of intangible asset | 0.7 | 0.7 | ||||
Issuance of shares to founding members | 0 | |||||
Cash redemption of NCM LLC common membership units | (0.7) | $ 0 | (0.7) | |||
Purchases of NCM, Inc.'s common stock | (9.5) | $ (0.1) | (9.4) | |||
Purchases of NCM, Inc.'s common stock, shares | (1,919,587) | |||||
Comprehensive income (loss), net of tax | (43.4) | (43.4) | ||||
Share-based compensation issued, net of tax | 0.1 | 0.1 | ||||
Share-based compensation issued, net of tax (in shares) | 321,397 | |||||
Share-based compensation expense/capitalized | 6.1 | 6.1 | ||||
Balance at Jun. 27, 2024 | 387.9 | $ 2.5 | $ 0 | 121.6 | 263.8 | 0 |
Balance (in shares) at Jun. 27, 2024 | 95,238,849 | 50 | ||||
Balance at Mar. 28, 2024 | 402.3 | $ 2.5 | $ 0 | 118 | 281.8 | 0 |
Balance (in shares) at Mar. 28, 2024 | 97,082,436 | 50 | ||||
Income tax and other impacts of NCM LLC ownership changes | 0.1 | 0.1 | ||||
NCM LLC equity issued for purchase of intangible asset | 0.7 | 0.7 | ||||
Issuance of shares to founding members | 0 | |||||
Cash redemption of NCM LLC common membership units | (0.7) | $ 0 | (0.7) | |||
Purchases of NCM, Inc.'s common stock | (9.3) | (9.3) | ||||
Purchases of NCM, Inc.'s common stock, shares | (1,911,587) | |||||
Comprehensive income (loss), net of tax | (8.7) | (8.7) | ||||
Share-based compensation issued, net of tax | 0 | |||||
Share-based compensation issued, net of tax (in shares) | 68,000 | |||||
Share-based compensation expense/capitalized | 3.5 | 3.5 | ||||
Balance at Jun. 27, 2024 | $ 387.9 | $ 2.5 | $ 0 | $ 121.6 | $ 263.8 | $ 0 |
Balance (in shares) at Jun. 27, 2024 | 95,238,849 | 50 |
The Company
The Company | 6 Months Ended |
Jun. 27, 2024 | |
Accounting Policies [Abstract] | |
The Company | 1. THE COM PANY Description of Business National CineMedia, Inc., a Delaware corporation (“NCM, Inc.”), is a holding company with the sole purpose of becoming a member and sole manager of National CineMedia, LLC (“NCM LLC”), a Delaware limited liability company. NCM, Inc. currently owns approximately 100.0 % of NCM LLC. The terms “NCM”, “the Company” or “we” shall, unless the context otherwise requires, be deemed to include the consolidated entity. The Company operates the largest cinema advertising network reaching movie audiences in the U.S. and sells advertising under long-term exhibitor service agreements (“ESAs”) with Cinemark USA, Inc., a wholly owned subsidiary of Cinemark Holdings, Inc. (“Cinemark”), and American Multi-Cinema, Inc., a wholly owned subsidiary of AMC Entertainment, Inc. (“AMC”) and with certain network affiliates under long-term network affiliates agreements, including Regal Cinemas, Inc., a wholly owned subsidiary of Cineworld Group plc and Regal Entertainment Group (“Regal”). As of June 27, 2024, the weighted average remaining term of the ESAs with Cinemark and AMC was approximately 14.6 years. The network affiliate agreements expire at various dates between January 2025 and July 2033. The weighted average remaining term of the ESAs and the network affiliate agreements together is 10.6 years as of June 27, 2024. Bankruptcy Filing, Deconsolidation and Reconsolidation of NCM LLC On April 11, 2023, NCM LLC filed a voluntary petition for reorganization (the “Chapter 11 Case”) with a prearranged Chapter 11 plan under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (“Bankruptcy Court”). During the Chapter 11 Case, the Company was deemed to no longer control NCM LLC for accounting purposes and NCM LLC was deconsolidated from the Company’s financial statements prospectively as of April 11, 2023 and the Company recorded a gain on deconsolidation of $ 557.7 million within the second quarter of 2023. NCM, Inc. continued to operate as the manager of the debtor-in-possession pursuant to the authority granted under Chapter 11 of the Bankruptcy Code throughout the Chapter 11 Case. On June 27, 2023, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming NCM LLC’s Modified First Amended Plan of Reorganization of National CineMedia, LLC Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 428] (as may be amended, modified, or supplemented form time to time, the “Plan”) and approving the Amended Disclosure Statement for First Amended Chapter 11 Plan of Reorganization of National CineMedia, LLC [Docket No. 250] (the “Disclosure Statement”) on a final basis. Following confirmation of the Plan on August 7, 2023 (the “Effective Date”), all the conditions to effectiveness of the Plan were satisfied or waived, the Restructuring Transactions (as defined in the “Plan”) were substantially consummated and NCM LLC emerged from bankruptcy. Among other things, on the Effective Date, in accordance with the Plan, all common units under the NCM LLC’s Third Amended and Restated Limited Liability Company Operating Agreement (the “NCM LLC Operating Agreement”) were canceled and extinguished, NCM, Inc. received NCM LLC common units and transferred the NCM Capital Contribution (as defined in the Plan) of approximately $ 15.5 million to NCM LLC, NCM LLC assumed certain unexpired Executory Contracts and Unexpired Leases (each, as defined in the Plan), including AMC’s and Cinemark’s ESAs, NCM LLC transferred $ 8.8 million of cash to a professional fees escrow account and $ 15.0 million to an unsecured creditor settlements escrow account for the General Unsecured Claim Pool (as defined in the Plan). NCM LLC commenced distributions to creditors, including the issuance of shares of NCM, Inc. common stock to holders of Secured Debt Claims (as defined in the Plan) and NCM LLC entered into an Exit Facility (as defined in the Plan) to support operations upon emergence. As a result of the Plan, all historical debt of NCM LLC was discharged and NCM LLC recorded a gain on bankruptcy of $ 916.4 million for the year ended December 28, 2023. Additionally, upon emergence from bankruptcy, NCM, Inc., regained control and retained 100.0 % ownership of NCM LLC, after taking into account elections by the holders of Secured Debt Claims to receive NCM, Inc. common stock in lieu of NCM LLC common units and was therefore reconsolidated into the Company’s financial statements prospectively as of August 7, 2023 akin to an acquisition under Accounting Standards Codification (" ASC") 805 – Business Combinations . In accordance with ASC 805 – Business Combinations , the assets and liabilities of NCM LLC were adjusted to their estimated fair value as of the Effective Date. As of June 27, 2024, the Company had not completed all agreed upon payments to the General Unsecured Claim Pool and held a total of $ 3.0 million within the escrow accounts and accruals, presented within ‘Restricted cash’ and ‘Accounts payable’ on the unaudited Consolidated Balance Sheet as of June 27, 2024, respectively. Other Developments In December 2022, AMC and Regal each redeemed all of their outstanding membership units, 595,465 and 4,068,380 , respectively, in exchange for shares of NCM, Inc. common stock, reducing AMC’s and Regal’s ownership to 0.0 % in NCM LLC as of December 28, 2023. On February 23, 2023 and March 23, 2023, Cinemark redeemed 4,196,987 and 172,094 , respectively, of its outstanding common membership units in exchange for shares of NCM, Inc. common stock. On April 1, 2024, in accordance with the Common Unit Adjustment Agreement, NCM LLC issued 135,473 common membership units to AMC and Cinemark. On April 16, 2024, the Company elected to satisfy a redemption request from Cinemark for all of their outstanding common membership units through a cash settlement as provided in NCM LLC’s Operating Agreement. This redemption reduced Cinemark’s ownership interest in NCM LLC to 0.0 % as of April 16, 2024 while AMC’s ownership interest is de minimis. AMC and Cinemark and their affiliates are referred to in this document as “ESA Parties”. On June 3, 2023, NCM LLC, entered into a Network Affiliate Transaction Agreement (the “Regal Advertising Agreement”) with Regal. The Regal Advertising Agreement became effective on July 14, 2023. Pursuant to a separate termination agreement (the “Regal Termination Agreement”), effective on July 14, 2023, Regal rejected and terminated its ESA. Additionally Regal and Regal’s affiliates’ waived all rights and interests as to the Tax Receivable Agreement (“TRA”), the Common Unit Adjustment Agreement, the Software License Agreement, the Director Designation Agreement, the Registration Rights Agreement and all the other joint venture agreements described in the NCM LLC Operating Agreement. The Company and NCM LLC and Regal and Regal’s affiliates waived and released claims against the other party. Regal also agreed to support NCM LLC’s Plan and surrendered all shares of NCM, Inc. common stock upon the Effective Date. In connection with the Regal Advertising Agreement, NCM LLC and Regal also agreed to dismiss with prejudice the ongoing litigation between the parties related to NCM LLC’s request to enforce certain provisions of the ESA, including the exclusivity provision. Beginning on July 14, 2023, Regal is no longer an ESA Party of NCM, Inc. or NCM LLC. Basis of Presentation The Company has prepared the unaudited Condensed Consolidated Financial Statements and related notes of NCM, Inc. in accordance with GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures typically included in an annual report have been condensed or omitted for this quarterly report. The balance sheet as of December 28, 2023 is derived from the audited financial statements of NCM, Inc. Therefore, the unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s annual report on Form 10-K filed for the fiscal year ended December 28, 2023. In the opinion of management, all adjustments necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods presented have been made and all intercompany accounts have been eliminated in consolidation. The Company has reclassified certain historical amounts on the unaudited Condensed Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flows to conform to current period presentation. In the three months and six months ended June 27, 2024, the Company reclassified certain historical expenses on the unaudited Condensed Consolidated Statements of Operations from ‘Advertising operating costs’ and ‘Network costs’ to ‘Network operating costs’ and certain historical expenses from ‘Advertising operating costs’ and ‘ESA theater access fees and revenue shares’ to ‘ESA Parties and network affiliate fees’ to conform to current period presentation. Historically, the Company’s business has been seasonal and for this and other reasons operating results for interim periods have not been indicative of the Company’s full year results or future performance. As a result of the various related party agreements discussed in Note 6— Related Party Transactions , the operating results as presented are not necessarily indicative of the results that might have occurred if all agreements were with non-related third parties. The Company manages its business under one operating and reportable segment of advertising. Estimates —The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to the reserve for uncollectible accounts receivable, share-based compensation and income taxes. Actual results could differ from estimates. Reverse Stock Split —On August 3, 2023, the Company effected a one-for-ten ( 1:10 ) reverse stock split of its common stock, par value $ 0.01 per share. The reverse stock split, which was authorized by its Board of Directors, was approved by the Company’s stockholders on August 2, 2023. The reverse stock split reduced the number of outstanding shares of the Company’s common stock from 174,112,385 shares as of August 3, 2023, to 17,411,323 shares outstanding post-reverse stock split. The primary purpose of the reverse stock split was to comply with the Company’s obligations under a settlement reached between the Company, NCM LLC and certain lender parties thereto in connection with the Chapter 11 Case (the “NCMI 9019 Settlement”), and so that the Plan may become effective as well as to increase the per share market price of the Company’s common stock in an effort to maintain compliance with applicable Nasdaq continued listing standards with respect to the closing price of the Company’s common stock. The number of shares of common stock issued and outstanding for the three and six months ended June 29, 2023 prior to the reverse stock split have been retroactively adjusted by the one-for-ten reverse stock split. Significant Accounting Policies The Company’s annual financial statements included in its Form 10-K filed for the fiscal year ended December 28, 2023 contain a complete discussion of the Company’s significant accounting policies. Following is additional information related to the Company’s accounting policies. Revenue Recognition —The Company derives revenue principally from the advertising business, which includes advertising through its on-screen cinema network, lobby network ("LEN") and lobby promotions in theaters, and on websites, mobile applications and out-of-home locations owned by NCM LLC and other companies. Revenue is recognized over time as the customer receives the benefits provided by NCM LLC’s advertising services and the Company has the right to payment for performance to date. The Company considers the terms of each arrangement to determine the appropriate accounting treatment. Concentration of Credit Risk and Significant Customers —The risk of credit loss related to the Company’s trade receivables and unbilled receivables balances is accounted for through the allowance for doubtful accounts, a contra asset account which reduces the net receivables balance. The allowance for doubtful accounts balance is determined by pooling the Company’s receivables with similar risk characteristics, specifically by type of customer (national or local/regional) and then age of receivable and applying historical write off percentages to these pools in order to determine the amount of expected credit losses as of the balance sheet date. National receivables are with large advertising agencies with strong reputations in the advertising industry and clients with stable financial positions and good credit ratings, represent larger receivables balances per customer and have significantly lower historical and expected credit loss patterns. Local and regional receivables are with smaller companies, sometimes with less credit history, represent smaller receivable balances per customer and have higher historical and expected credit loss patterns. The Company has smaller contracts with many local clients that are not individually significant. The Company also considers current economic conditions and trends to determine whether adjustments to historical loss rates are necessary. The Company also reserves for specific receivable balances that it expects to write off based on known concerns regarding the financial health of the customer. Receivables are written off when management determines amounts are uncollectible. The Company had one agency through which it sourced advertising revenue that accounted for 14.9 % of the Company’s gross outstanding receivable balance as of June 27, 2024 and had no customers through which it sourced advertising revenue that accounted for more than 10.0 % of the Company's gross outstanding receivable balance as of December 28, 2023. During the three and six months ended June 27, 2024 , the Company had no customers that accounted for more than 10.0 % of the Company's revenue. During the three and six months ended June 29, 2023 , the Company had one customer that accounted for 51.8 % and 15.4 % of the Company’s revenue, respectively. Long-lived Assets —The Company assesses impairment of long-lived assets pursuant to ASC 360— Property, Plant and Equipment . This includes determining whether certain triggering events have occurred that could affect the value of an asset. The Company did not record any losses related to the write-off of certain internally developed software during the three months ended June 27, 2024 and June 29, 2023, and the six months ended June 27, 2024 and June 29, 2023 , respectively. Share-Based Compensation —The Company has issued stock options and restricted stock units to certain employees and its independent directors. The restricted stock unit grants for Company management vest upon the achievement of Company performance measures, market conditions and/or service conditions, while non-management grants vest only upon the achievement of service conditions. Compensation expense of restricted stock units that vest upon the achievement of Company performance measures is based on management’s financial projections and the probability of achieving the projections, which require considerable judgment. A cumulative adjustment is recorded to share-based compensation expense in periods that management changes its estimate of the number of shares of restricted stock units expected to vest. Ultimately, the Company adjusts the expense recognized to reflect the actual vested shares following the resolution of the performance conditions. Compensation expense of restricted stock units that vest upon achievement of certain market conditions is based on an estimate of the fair value of the granted restricted stock units on the grant date, which requires considerable judgment. The fair value of the granted restricted stock units is expensed over an estimated derived service period, which also requires considerable judgment. In accordance with ASC 718 — Stock Compensation , the Company does not adjust the expense recognized to reflect the actual vested shares following the resolution of the market condition. Dividends are accrued when declared on unvested restricted stock units that are expected to vest and are only paid with respect to shares that actually vest. During the three and six months ended June 27, 2024, 127,236 and 6,447,791 shares, respectively, of restricted stock units were granted. During the three and six months ended June 29, 2023 , no shares of restricted stock units were granted. During the three months ended June 27, 2024 and June 29, 2023 and six months ended June 27, 2024 and June 29, 2023, 68,000 , 566 , 321,397 , and 196,634 shares of restricted stock units vested, respectively. Additionally, the Company recorded $ 3.5 million , $ 0.5 million , $ 6.1 million and $ 2.0 million in share-based compensation expense during the three months ended June 27, 2024 and June 29, 2023, and six months ended June 27, 2024 and June 29, 2023 , respectively, within ‘Network operating costs’, ‘Selling and marketing costs’ and ‘Administrative and other costs’ within the unaudited Condensed Consolidated Statements of Operations. Share Repurchase Program —On March 18, 2024, the Board of Directors of the Company approved a stock repurchase program under which the Company is authorized to use assets of the Company to repurchase up to $ 100.0 million of shares of the Company’s Common Stock, exclusive of any fees, commissions or other expenses related to such repurchases, from time to time over a period of three years . Shares may be repurchased under the program through open market purchases, block trades, or accelerated or other structured share repurchase programs. During the three and six months ended June 27, 2024, 1,911,587 and 1,919,587 shares, respectively, were repurchased on the open market. In accordance with Accounting Standards Codification ("ASC") 505 —Equity , the Company elected to retire the shares. Upon the retirement of these shares, any excess over par value paid, inclusive of direct costs, was recorded as a reduction to retained earnings of $ 9.3 million and $ 9.5 million for the three and six months ended June 27, 2024, respectively. Consolidation —NCM, Inc. consolidates the accounts of NCM LLC, a variable interest entity wherein NCM, Inc. is the primary beneficiary, under the provisions of ASC 810 — Consolidation . Upon NCM LLC’s emergence from bankruptcy, it was determined that NCM, Inc. holds the current rights that give it power to direct activities of NCM LLC that most significantly impact NCM LLC’s economic performance and that NCM, Inc. has the rights to receive the significant benefits or the obligations to absorb potentially significant losses, resulting in NCM, Inc. having a controlling financial interest in NCM LLC. As a result, NCM LLC was deemed to be the primary beneficiary of NCM LLC and the Company has consolidated NCM LLC under the variable interest entity provisions of ASC 810 — Consolidation. The following table presents the changes in NCM, Inc.’s equity resulting from net income attributable to NCM, Inc. and transfers to or from noncontrolling interests (in millions): Three Months Ended Six Months Ended June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 Net (loss) income attributable to NCM, Inc. $ ( 8.7 ) $ 545.3 $ ( 43.4 ) $ 499.8 NCM LLC equity issued for purchase of intangible asset 0.7 — 0.7 — Income tax and other impacts of subsidiary ownership changes 0.1 — 0.1 ( 15.4 ) Cash redemption of NCM LLC common membership units ( 0.7 ) — ( 0.7 ) — NCM LLC common membership unit redemption for — — — ( 10.3 ) Issuance of shares to founding members — — — 9.9 Change from net (loss) income attributable to NCM, Inc. and $ ( 8.6 ) $ 545.3 $ ( 43.3 ) $ 484.0 Recently Adopted Accounting Pronouncements The Company did not adopt any accounting pronouncements during the six months ended June 27, 2024 . Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which establishes segment disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must disclose incremental segment information on an annual and interim basis to enable investors to develop more decision-useful financial analyses. This guidance is effective for issuances on and after December 15, 2024. The Company does not believe this will have a material impact on the Company’s Consolidated Financial Statements. In January 2024, the FASB issued Accounting Standards Update No. 2023-09, Income Tax Disclosures (“ASU 2023-09”), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. This guidance is effective for issuances on and after December 15, 2024. The Company does not believe this will have a material impact on the Company’s Consolidated Financial Statements. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its Consolidated Financial Statements or notes thereto. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 27, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 2. REVENUE FROM CONTRACTS WITH CUSTOMERS AND ACCOUNTS RECEIVABLE Revenue Recognition The Company derives revenue principally from the sale of advertising to national, regional and local businesses in the Noovie® show, the Company’s cinema advertising and entertainment pre-show. The Company also sells advertising through the LEN, a series of strategically placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theater lobbies. In addition, the Company sells online and mobile advertising, including through Noovie Audience Accelerator, and through the Company’s digital gaming products . Further the Company sells advertising in a variety of complementary out of home venues, including restaurants, convenience stores and college campuses. The Company also has a long-term agreement to exhibit the advertising of the ESA Parties’ beverage suppliers. The Company makes contractual guarantees to deliver a specified number of impressions to view the customers’ advertising. If the contracted number of impressions are not delivered, the Company will run additional advertising to deliver the contracted impressions at a later date. The deferred portion of the revenue associated with undelivered impressions is referred to as a make-good provision. The Company defers the revenue associated with the make-good provision until the advertising airs to the audience specified in the advertising contract or the make-good period expires. The Company does not have any significant contracts with customers with terms in excess of one year that are noncancellable as of June 27, 2024. Agreements with a duration less than one year are not considered within unsatisfied performance obligations as the Company elected to use the practical expedient in ASC 606-10-50-14 for those contracts. In addition, the Company’s other contracts longer than one year that are cancellable are not included within this disclosure. Disaggregation of Revenue The Company disaggregates revenue based upon the type of customer: national; local and regional; beverage concessionaire; and management fee reimbursement revenue related to NCM LLC, in periods where NCM LLC was deconsolidated. This method of disaggregation is in alignment with how revenue is reviewed by management and discussed with and historically disclosed to investors. The following table summarizes revenue from contracts with customers for the three and six months ended June 27, 2024 and June 29, 2023 (in millions): Three Months Ended Six Months Ended June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 National advertising revenue $ 41.7 $ 5.0 $ 71.2 $ 27.5 Local and regional advertising revenue 9.8 1.1 15.0 9.1 ESA advertising revenue from beverage concessionaire 3.2 1.0 5.9 5.4 Management fee reimbursement — 7.7 — 7.7 Total revenue $ 54.7 $ 14.8 $ 92.1 $ 49.7 Deferred Revenue and Unbilled Accounts Receivable Revenue recognized in the six months ended June 27, 2024 that was included within the ‘Deferred revenue’ balance as of December 28, 2023 was $ 9.5 million . As of June 27, 2024 and December 28, 2023, the Company had $ 1.5 million and $ 0.8 million in unbilled accounts receivable, respectively. Allowance for Doubtful Accounts The allowance for doubtful accounts balance is determined separately for each pool of the Company’s receivables with similar risk characteristics. The Company has determined that two pools, national customers and local/regional customers, is appropriate. The changes within the allowance for doubtful accounts balances for the six months ended June 27, 2024 and June 29, 2023, respectively, were as follows (in millions): Six Months Ended June 27, 2024 June 29, 2023 Allowance for National Customer Receivables Allowance for Local/ Regional Customer Receivables Allowance for National Customer Receivables Allowance for Local/ Regional Customer Receivables Balance at beginning of period $ 0.1 $ 1.3 $ 0.3 $ 1.4 Provision for bad debt 0.4 ( 0.2 ) — — Write-offs, net ( 0.4 ) ( 0.2 ) — — Deconsolidation of NCM LLC — — ( 0.3 ) ( 1.4 ) Balance at end of period $ 0.1 $ 0.9 $ 0.0 $ 0.0 |
Loss Per Share
Loss Per Share | 6 Months Ended |
Jun. 27, 2024 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 3 . LOSS PER SHARE Basic loss per share is computed on the basis of the weighted average number of shares of common stock outstanding. Diluted loss per share is computed on the basis of the weighted average number of shares of common stock outstanding plus the effect of potentially dilutive common stock options, restricted stock and restricted stock units using the treasury stock method. The components of basic and diluted loss per NCM, Inc. share are as follows: Three Months Ended Six Months Ended June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 Net (loss) income attributable to NCM, Inc. (in millions) $ ( 8.7 ) $ 545.3 $ ( 43.4 ) $ 499.8 Weighted average shares outstanding: Basic 96,409,830 17,405,864 96,664,241 15,978,331 Add: Dilutive effect of stock options, restricted stock and — — — 1,370,808 Diluted 96,409,830 17,405,864 96,664,241 17,349,139 (Loss) income per NCM, Inc. share: Basic $ ( 0.09 ) $ 31.33 $ ( 0.45 ) $ 31.28 Diluted $ ( 0.09 ) $ 31.33 $ ( 0.45 ) $ 28.32 The effect of the 16,500 , 0 , 8,250 , and 1,370,808 weighted average exchangeable NCM LLC common units held by AMC, Cinemark, and Regal for the three and six months ended June 27, 2024 and June 29, 2023, respectively, have been excluded from the calculation of diluted weighted average shares and loss per NCM, Inc. share as they were anti-dilutive. The NCM LLC common units held by NCM LLC’s other members for the three and six months ended June 27, 2024 do not participate in dividends paid on NCM, Inc.’s common stock. In addition, there were 7,001,408 , 491,517 , 7,001,408 , and 491,517 stock options and non-vested (restricted) shares for the three months ended June 27, 2024 and June 29, 2023 and six months ended June 27, 2024 and June 29, 2023, respectively, excluded from the calculation as they were anti-dilutive. The Company’s non-vested (restricted) shares do not meet the definition of a participating security as the dividends will not be paid if the shares do not vest. On August 3, 2023, the Company effected a one-for-ten ( 1:10 ) reverse stock split of its common stock, par value $ 0.01 per share. The reverse stock split, which was authorized by its Board of Directors, was approved by the Company’s stockholders on August 2, 2023. The reverse stock split reduced the number of outstanding shares of the Company’s common stock from 174,112,385 shares as of August 3, 2023 to 17,411,323 shares outstanding post-reverse stock split. In accordance with ASC 260—Earnings Per Share , income per share for the three and six months ended June 29, 2023 were retrospectively adjusted for the reverse stock split. |
Reconsolidation of NCM LLC
Reconsolidation of NCM LLC | 6 Months Ended |
Jun. 27, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Reconsolidation of NCM LLC | 4. RECONSOLIDATION OF NCM LLC On April 11, 2023, NCM LLC filed the Chapter 11 Case. Upon filing the Chapter 11 Case and in accordance with applicable GAAP, the Company concluded that NCM, Inc. no longer controlled NCM LLC for accounting purposes as of April 11, 2023 (the “Petition Date”), the date on which NCM LLC filed its Chapter 11 petition, as NCM LLC was under the control of the Bankruptcy Court, and therefore, NCM LLC was deconsolidated from the Company’s consolidated financial statements prospectively, resulting in a $ 557.7 million gain recorded in ‘Gain on deconsolidation of affiliate’ in the Consolidated Statements of Operations for the three and six months ended June 29, 2023. The recorded gain was measured as the excess of the estimated fair value of the investment in NCM LLC retained over the net liabilities of NCM LLC as of April 11, 2023. The investment of NCM LLC was measured at cost minus any impairment in accordance with the measurement alternative outlined in ASC 321 — Investments—Equity Securities . While NCM LLC remained in bankruptcy, NCM, Inc. accounted for the retained equity interest in NCM LLC at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly market transactions. Upon the deconsolidation of NCM LLC, the original cost of the investment was valued based upon NCM, Inc.'s ownership of the secured debt of NCM LLC and an estimation of the enterprise value of NCM LLC developed utilizing discounted cash flows and comparable company analysis as of the Petition Date. Significant assumptions utilized within these analyses included the weighted average cost of capital and NCM LLC’s forecasted cash flows. On August 7, 2023, NCM LLC emerged from bankruptcy and NCM, Inc. contributed $ 15.0 million in cash to NCM LLC in exchange for 2.8 % of additional ownership of NCM LLC in accordance with the NCMI Capital Contribution and $ 0.5 million to assist with payments to unsecured creditors in accordance with the settlement with the unsecured creditors. NCM, Inc. also issued 83,421,135 shares to the secured creditors in accordance with the NCMI 9019 Settlement and terms of the Plan with a fair value of $ 245.3 million based on the closing stock price of $ 2.94 . Upon NCM LLC’s emergence from bankruptcy, NCM, Inc. retained 100.0 % of, regained control of and reconsolidated NCM LLC. The Company accounted for the NCM LLC reconsolidation as a business combination under ASC 805 — Business Combinations and accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of reconsolidation, the Effective Date. The determination of fair values required management to make significant estimates and assumptions. The estimated fair values of the assets acquired and liabilities assumed are considered provisional and are based on currently available information. The Company believes that the information available provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, these provisional estimates may be adjusted upon the availability of new information regarding facts and circumstances which existed at the reconsolidation date. The Company expects to finalize the valuation of assets and liabilities as soon as practicable, but not later than one year from the reconsolidation date. The following table summarizes the fair value of NCM LLC and provisional fair values of the assets acquired and liabilities assumed as of the reconsolidation date (in millions): Fair value of assets acquired: Cash, cash equivalents and restricted cash $ 49.6 Receivables, net 74.8 Prepaid expenses and other current assets 7.2 Property and equipment, net 14.8 Other investments 0.9 Debt issuance costs, net 2.4 Fair value of intangible assets 415.0 Other assets 10.0 Total assets acquired 574.7 Fair value of liabilities assumed: Amounts due to members, net ( 15.3 ) Accrued expenses ( 0.7 ) Accrued payroll and related expenses ( 9.9 ) Accounts payable ( 37.3 ) Deferred revenue ( 11.1 ) Other current liabilities ( 1.5 ) Long-term debt ( 10.0 ) Other liabilities ( 5.5 ) Total liabilities assumed ( 91.3 ) Fair value of NCM LLC $ 483.4 There have been no adjustments to the provisional purchase price and fair value estimates presented in Note 5 of the Company’s Form 10-K for the year ended December 28, 2023. The provisional identifiable intangible assets of $ 415.0 million are subject to amortization. The following table summarizes the major classes of intangible assets acquired and their respective weighted-average estimated useful lives. Estimated Fair Useful Life Exhibitor service agreements $ 250.0 13.0 Network affiliates agreements 75.0 16.0 Customer relationships 75.0 6.0 Trademarks 15.0 8.0 Total intangible assets $ 415.0 The estimated fair values of the ESAs, network affiliate agreements and trademarks were estimated using the income approach. The multi-period excess earnings method starts with a forecast of all of the expected future net cash flows associated with the asset. The forecasts are then adjusted to present value by applying an appropriate discount rate that reflects the risks associated with the company specific cash flow streams. Significant assumptions utilized within the income approach include the weighted average cost of capital and forecasted cash flows. The estimated fair values of the customer relationships were estimated using the cost approach. The cost approach included estimating the investment required to replace the contracts with customers, with significant assumptions including the replacement cost. The Company elected the practical expedients allowed in ASC 805-20-30-29a in estimating the fair value of the contract liabilities assumed. Upon NCM LLC’s emergence from the Chapter 11 Case, NCM, Inc. remeasured the value of the investment in NCM LLC to the estimated fair value calculated as NCM, Inc.’s percentage ownership of NCM LLC, due to NCM, Inc.’s ownership of the secured debt of NCM LLC and the NCMI Capital Contribution, multiplied by the fair value of NCM LLC as of the Effective Date of $ 483.4 million. The value of the cost investment of NCM LLC immediately prior to the Effective Date was $ 11.9 million based upon NCM, Inc.’s ownership of the secured debt of NCM LLC and an estimation of the enterprise value of NCM LLC developed utilizing discounted cash flows and comparable company analysis as of the Petition Date. The increase in the fair value resulted in a ‘Gain on re-measurement of the investment in NCM LLC’ of $ 35.5 million in the Consolidated Statements of Operations for the year ended December 28, 2023. Upon reconsolidation, NCM, Inc. recorded the provisional fair values of the assets acquired and liabilities assumed as of the reconsolidation date and the investment in NCM LLC was further adjusted to the full purchase price value of $ 483.4 million. The difference between the purchase price of NCM LLC and the fair value of NCM, Inc.’s investment in NCM LLC as calculated above, the $ 15.5 million of cash contributed by NCM, Inc. (consisting of $ 0.5 million related to the General Unsecured Claim Pool and $ 15.0 million under the NCMI Capital Contribution) and the shares issued to NCM LLC’s secured lenders of $ 245.3 million resulted in a gain of $ 167.8 million upon the reconsolidation of NCM LLC. The Company recognized a gain due to the variance between the fair value of NCM LLC’s assets and liabilities and NCM, Inc.’s depressed stock price on the Effective Date and the NCM, Inc. shares retained by the existing shareholders as part of the NCMI 9019 Settlement. NCM, Inc.’s stock price had been negatively impacted beginning with the COVID-19 pandemic followed by Cineworld’s bankruptcy proceeding and NCM LLC’s Chapter 11 Case, as well as by other socioeconomic factors. Pro Forma Financial Information (Unaudited) The following table presents unaudited pro forma financial information as if the NCM LLC reconsolidation had occurred on December 31, 2021. The unaudited pro forma results reflect adjustments for depreciation of acquired property and equipment, amortization of acquired intangible assets and amortization of acquired debt issuance costs. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of future operations or results had the NCM LLC reconsolidation been completed as of December 31, 2021. Three Months Ended Six Months Ended June 29, 2023 June 29, 2023 Revenue $ 64.4 $ 99.3 Net Loss $ ( 29.0 ) $ ( 63.0 ) |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 27, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. INTANGIBLE ASSETS The Company’s intangible assets consist of contractual rights to provide its services within the theaters under the ESAs and the network affiliate agreements, as well as for customer relationships developed and maintained by the Company’s sales force and trademarks held and used by the Company. The intangible assets are stated at their estimated fair values upon the reconsolidation of NCM LLC on August 7, 2023 , net of accumulated amortization. The Company records amortization using the straight-line method over the estimated useful life of the intangibles. For the contractual rights to provide its service within the theaters under the ESA and network affiliate agreements, the estimated useful life corresponds to the term of the ESAs and the average renewable term of the contracts with the network affiliates. For the customer relationships developed and maintained by the Company’s sales force and trademarks held and used by the Company, the estimated useful life corresponds to industry standard lives for customer relationships and trademarks. In accordance with ASC 360 — Property, Plant and Equipment, the Company continuously monitors the performance of the underlying assets for potential triggering events suggesting an impairment review should be performed. No such triggering events were identified in the three and six months ended June 27, 2024 and June 29, 2023. Common Unit Adjustments —In accordance with NCM LLC’s Common Unit Adjustment Agreement, on an annual basis NCM LLC determines the amount of common membership units to be issued to or returned by AMC and Cinemark based on theater additions, new builds or dispositions during the previous year. In the event that either AMC or Cinemark does not have sufficient common membership units to return, the adjustment is satisfied in cash in an amount calculated pursuant to NCM LLC’s Common Unit Adjustment Agreement. In addition, NCM LLC’s Common Unit Adjustment Agreement requires that a Common Unit Adjustment occur for either AMC or Cinemark if its acquisition or disposition of theaters, in a single transaction or cumulatively since the most recent Common Unit Adjustment, results in an attendance increase or decrease in excess of two percent of the annual total attendance at the prior adjustment date. Upon the issuance of common membership units, the Company records an addition to the intangible asset related to AMC and Cinemark’s respective ESAs equal to the fair market value of NCM, Inc.’s publicly traded stock as of the date on which the common membership units were issued. The NCM LLC common membership units are fully convertible into NCM, Inc.’s common stock. During the quarter ended June 27, 2024, in accordance with the Common Unit Adjustment Agreement, NCM LLC issued 135,473 common membership units to AMC and Cinemark, with a net impac t of $ 0.7 million to th e intangible asset. On April 16, 2024, the Company elected to satisfy a redemption request from Cinemark for all of their outstanding common membership units through a cash settlement as provided in NCM LLC’s Operating Agreement. This redemption reduced Cinemark’s ownership interest in NCM LLC to 0.0 % as of April 16, 2024 while AMC’s ownership interest is de minimis. Pursuant to and in connection with the Chapter 11 Case during the year ended December 28, 2023 , NCM LLC did not issue common membership units to Cinemark for the rights to exclusive access to the theater screens and attendees added, net of dispositions, to NCM LLC’s network for the 2022 fiscal year and the 16,581,829 units issued to AMC were issued and cancelled on the Effective Date. Integration Payments and Other Encumbered Theater Payments —If an existing on-screen advertising agreement with an alternative provider is in place with respect to any acquired theaters (“Encumbered Theaters”), the applicable ESA Party may elect to receive common membership units related to those Encumbered Theaters in connection with the Common Unit Adjustment. If the ESA Party makes this election, then they are required to make payments on a quarterly basis in arrears in accordance with certain run-out provisions pursuant to the ESAs (“integration payments”). Because the Carmike Cinemas, Inc. (“Carmike”) theaters acquired by AMC are subject to an existing on-screen advertising agreement with an alternative provider, AMC makes integration payments to NCM LLC. The integration payments will continue until the earlier of (i) the date the theaters are transferred to NCM LLC’s network or (ii) the expiration of the ESA. Integration payments are calculated based upon the advertising cash flow that the Company would have generated if it had exclusive access to sell advertising in the theaters with pre-existing advertising agreements. The ESAs additionally entitle NCM LLC to payments related to the ESA Parties’ on-screen advertising commitments under their beverage concessionaire agreements for Encumbered Theaters. These payments are also accounted for as a reduction to the intangible asset related to the ESAs. During the three and six months ended June 27, 2024 and June 29, 2023, the Company recorded a reduction to net intangible assets of $ 0.8 million , $ 0.0 million , $ 1.0 million and $ 0.0 million , respectively, related to other Encumbered Theater payments. During the three months ended June 27, 2024 and June 29, 2023 and six months ended June 27, 2024 and June 29, 2023, AMC and Cinemark paid a total of $ 0.2 million , $ 0.3 million , $ 0.5 million and $ 3.9 million , respectively, in integration and Encumbered Theater payments (contractually payments are to be made one quarter and one month in arrears, respectively). If common membership units are issued to an ESA Party for newly acquired theaters that are subject to an existing on-screen advertising agreement with an alternative provider, the amortization of the intangible asset commences after the existing agreement expires and NCM LLC can utilize the theaters for all of its services. As of June 27, 2024 and December 28, 2023, the Company’s intangible assets related to the ESA Party agreements were $ 227.1 million , net of accumulated amortization of $ 16.9 million , and $ 236.7 million , net of accumulated amortization of $ 7.6 million , respectively, with weighted average remaining lives of 12.1 years and 12.6 years, respectively. As of June 27, 2024 and December 28, 2023, the Company’s intangible assets related to the network affiliate agreements were $ 70.8 million , net of accumulated amortization of $ 4.2 million , and $ 73.2 million , net of accumulated amortization of $ 1.8 million , respectively, with weighted average remaining lives of 15.1 years and 15.6 years, respectively. As of June 27, 2024 and December 28, 2023, the Company’s intangible assets related to customer relationships, were $ 63.8 million , net of accumulated amortization of $ 11.2 million , and $ 70.1 million , net of accumulated amortization of $ 4.9 million , respectively, with weighted average remaining lives of 5.1 years and 5.6 years, respectively. As of June 27, 2024 and December 28, 2023, the Company’s intangible asset related to the trademark, was $ 13.3 million , net of accumulated amortization of $ 1.7 million , and $ 14.3 million , net of accumulated amortization of $ 0.7 million , respectively, with weighted average remaining lives of 7.1 years and 7.6 years, respectively. The estimated aggregate amortization expense for the remainder of fiscal 2024 is $ 18.9 million and $ 37.8 million eac h for fiscal years 2025 and 2028. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 27, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. RELATED PARTY TRANSACTIONS ESA Party and Managing Member Transactions — In connection with NCM, Inc.’s initial public offering (“IPO”), the Company entered into several agreements to define and regulate the relationships among NCM LLC, NCM, Inc. and AMC, Cinemark, and Regal which are outlined below. AMC has owned less than 5 % of NCM LLC, on an as converted basis, since July 2018 and is no longer a related party. AMC remains a party to the ESA, Common Unit Adjustment Agreement, Tax Receivable Agreement (“TRA”) and certain other original agreements and is a member under the terms of the NCM LLC Operating Agreement, subject to fulfilling the requirements of Section 3.1 of the NCM LLC Operating Agreement. AMC will continue to participate in the annual Common Unit Adjustment and receive available cash distributions or allocation of earnings and losses in NCM LLC (as long as its ownership in NCM LLC is greater than zero), TRA payments and theater access fees. Further, AMC will continue to pay beverage revenue, among other things, to NCM LLC. AMC’s ownership percentage does not impact future integration payments and other encumbered theater payments owed to NCM LLC by AMC. On April 1, 2024, in accordance with the Common Unit Adjustment Agreement, NCM LLC issued 3,377 common membership units to AMC. As of June 27, 2024, AMC’s ownership was approximately 0.0 % of NCM LLC and 0.0 % of NCM, Inc. Cinemark has owned less than 5 % of NCM LLC, on an as converted basis, since NCM LLC emerged from bankruptcy on August 7, 2023 and is no longer a related party. Cinemark remains a party to the ESA, Common Unit Adjustment Agreement, TRA and certain other original agreements and is a member under the terms of the NCM LLC Operating Agreement, subject to fulfilling the requirements of Section 3.1 of the NCM LLC Operating Agreement. Cinemark will continue to participate in the annual Common Unit Adjustment and receive available cash distributions or allocation of earnings and losses in NCM LLC (as long as its ownership in NCM LLC is greater than zero), TRA payments and theater access fees. Further, Cinemark will continue to pay beverage revenue, among other things, to NCM LLC. Cinemark’s ownership percentage does not impact future integration payments and other encumbered theater payments owed to NCM LLC by Cinemark. On April 1, 2024, in accordance with the Common Unit Adjustment Agreement, NCM LLC issued 132,096 common membership units to Cinemark. On April 16, 2024, the Company elected to satisfy a redemption request from Cinemark for all of their outstanding common membership units through a cash settlement as provided in NCM LLC’s Operating Agreement. This redemption reduced Cinemark’s ownership interest in NCM LLC to 0.0 % as of April 16, 2024. As of June 27, 2024, Cinemark’s ownership was 0.0 % of NCM LLC and 4.6 % of NCM, Inc. On June 3, 2023, NCM LLC entered into the Regal Advertising Agreement and Regal Termination Agreement which became effective on July 14, 2023. Pursuant to the Regal Termination Agreement, Regal rejected and terminated its ESA with NCM LLC. Additionally Regal and Regal’s affiliates’ waived all rights and interests as to the TRA, the Common Unit Adjustment Agreement, the Software License Agreement, the Director Designation Agreement, the Registration Rights Agreement and all the other joint venture agreements described in the NCM LLC Operating Agreement and the Company and NCM LLC, and Regal and Regal’s affiliates waived and released claims against the other party. Regal also agreed to support NCM LLC’s Plan and surrendered all 4,068,350 shares in the Company, totaling $ 13.0 million, upon the effective date of the Plan. In connection with the Regal Advertising Agreement, NCM LLC and Regal also agreed to dismiss with prejudice the ongoing litigation between the parties related to NCM LLC’s request to enforce certain provisions of the ESA, including the exclusivity provision. From and after July 14, 2023, Regal is no longer an ESA Party or related party to NCM, Inc. or NCM LLC. The material agreements with the ESA Parties are as follows: • ESAs. Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising services in the ESA Parties’ theaters (subject to pre-existing contractual obligations and other limited exceptions for the benefit of the ESA Parties). The advertising services include the use of the digital content network (“DCN”) equipment required to deliver the on-screen advertising and other content included in the Noovie ® show, use of the LEN and rights to sell and display certain lobby promotions. Further, 30 to 60 seconds of advertising included in the Noovie show is sold to the ESA Parties to satisfy the ESA Parties’ on-screen advertising commitments under their beverage concessionaire agreements. In consideration for access to the ESA Parties’ theaters, theater patrons, the network equipment required to display on-screen and LEN video advertising and the use of theaters for lobby promotions, the ESA Parties receive a monthly theater access fee. In conjunction with the 2019 ESA Amendments, NCM LLC also pays Cinemark and paid Regal (through July 14, 2023) incremental monthly theater access fees and, subject to NCM LLC’s use of specified inventory, a revenue share in consideration for NCM LLC’s access to certain on-screen advertising inventory after the advertised showtime of a feature film beginning November 1, 2019 and the underlying term of the Cinemark ESA was extended until 2041. The ESAs and 2019 ESA Amendments were considered leases with related parties under ASC 842. As described above, the Regal ESA was rejected by Regal in connection with Regal’s Chapter 11 case and terminated by the Regal Termination Agreement. • Common Unit Adjustment Agreement. The common unit adjustment agreement provides a mechanism for increasing or decreasing the membership units held by the ESA Parties based on the acquisition or construction of new theaters or sale of theaters that are operated by each ESA Party and included in NCM LLC’s network. • Tax Receivable Agreement. The TRA provides for the effective payment by NCM, Inc. to AMC and Cinemark of 90 % of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that is actually realized as a result of certain increases in NCM, Inc.’s proportionate share of tax basis in NCM LLC’s tangible and intangible assets resulting from the IPO and related transactions that is related to AMC and Cinemark’s share in the effect at the time the TRA was signed. • Software License Agreement. At the date of the Company’s IPO, NCM LLC was granted a perpetual, royalty-free license from AMC, Cinemark, and Regal to use certain proprietary software that existed at the time for the delivery of digital advertising and other content through the DCN to screens in the U.S. NCM LLC has made improvements to this software since the IPO date and NCM LLC owns those improvements, except for improvements that were developed jointly by NCM LLC and AMC, Cinemark, and Regal, if any. The following tables provide summaries of the transactions between NCM, Inc. and AMC, Cinemark, and Regal when designated related parties (in millions): Three Months Ended Six Months Ended Included in the unaudited Condensed Consolidated Statements of Operations: June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 Revenue: (1) (1) ESA advertising revenue from beverage concessionaire (2) $ — $ 0.8 $ — $ 4.1 Management fee reimbursement (3) $ — $ 7.7 $ — $ 7.7 Operating expenses: ESA Parties and network affiliate fees (4) $ — $ 2.7 $ — $ 16.5 (1) For the three and six months ended June 27, 2024, AMC, Cinemark and Regal were not related parties. (2) For the three and six months ended June 29, 2023 , Cinemark and Regal purchased 60 seconds of on-screen advertising time from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 seconds equivalent cost per thousand impressions (“CPM”) rate specified by the ESA. Beverage revenue above is only reflective of periods where Cinemark and Regal were related parties. (3) Comprised of fees owed by NCM LLC to NCM, Inc. for managing NCM LLC during the period where NCM LLC was deconsolidated of April 11, 2023 through August 7, 2023. (4) Comprised of payments per theater attendee, payments per digital screen with respect to Cinemark and Regal theaters included in the Company’s network and payments for access to higher quality digital cinema equipment. Following the 2019 ESA Amendments this also includes payments to Cinemark and Regal (through July 14, 2023) for their share of the revenue from the sale of an additional single unit that is either 30 or 60 seconds of the Noovie pre-show in the trailer position directly prior to the “attached” trailers preceding the feature film (the “Platinum Spot”). Theater access fees and revenue share expenses above are only reflective of periods where Cinemark and Regal were related parties. AC JV, LLC Transactions —In December 2013, NCM LLC sold its Fathom Events business to a newly formed limited liability company, AC JV, LLC, owned 32 % by each of the founding members and 4 % by NCM LLC. The Company accounts for its investment in AC JV, LLC under the equity method of accounting in accordance with ASC 323-30, Investments—Equity Method and Joint Ventures (“ASC 323-30”) because AC JV, LLC is a limited liability company with the characteristics of a limited partnership and ASC 323-30 requires the use of equity method accounting unless the Company’s interest is so minor that it would have virtually no influence over partnership operating and financial policies. Although NCM LLC does not have a representative on AC JV, LLC’s Board of Directors or any voting, consent or blocking rights with respect to the governance or operations of AC JV, LLC, the Company concluded that its interest was more than minor under the accounting guidance. The Company’s investment in AC JV, LLC was $ 1.0 million and $ 0.7 million as of June 27, 2024 and December 28, 2023, respectively. During the three and six months ended June 27, 2024 and June 29, 2023, NCM LLC received cash distributions from AC JV, LLC of $ 0.2 million, $ 0.4 million, $ 0.2 million, and $ 0.2 million, respectively. Equity in earnings from AC JV, LLC of $ 0.2 million, $ 0.7 million, $ 0.0 million and $ 0.1 million, for the three and six months ended June 27, 2024 and June 29, 2023, respectively, are included in “Other non-operating (income) expense, net” in the unaudited Condensed Consolidated Statements of Operations. |
Borrowings
Borrowings | 6 Months Ended |
Jun. 27, 2024 | |
Debt Disclosure [Abstract] | |
Borrowings | 7. BORROWINGS The following table summarizes total outstanding debt as of June 27, 2024 and December 28, 2023 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings June 27, 2024 December 28, 2023 Maturity Date Interest Rate Revolving Credit Facility 2023 $ 10.0 $ 10.0 August 7, 2026 (1 ) Total borrowings 10.0 10.0 Less: debt issuance costs and debt discounts related to — — Total borrowings, net 10.0 10.0 Less: current portion of debt — — Carrying value of long-term debt $ 10.0 $ 10.0 (1) The interest rates on the Revolving Credit Facility 2023 is described below. Loan, Security and Guarantee Agreement — On August 7, 2023, NCM LLC entered into a Loan, Security and Guarantee Agreement (the “Revolving Credit Facility 2023”) with CIT Northbridge Credit LLC as agent. The Revolving Credit Facility 2023 is an asset backed line facility where the capacity depends upon NCM LLC’s trade accounts receivable balance, as adjusted for aged balances and other considerations. The maximum availability NCM LLC has access to under the Revolving Credit Facility 2023 is $ 55,000,000 . The proceeds of the Revolving Credit Facility 2023 may be used for, inter alia, working capital and capital expenditures. The Revolving Credit Facility 2023 will mature on August 7, 2026. The interest rate under the Revolving Credit Facility 2023 is a base rate of SOFR benchmark plus (i) 3.75 % if less than 50 % of revolving commitments are utilized or (ii) 4.50 % if 50 % or more of revolving commitments are utilized (utilizing the average revolver usage for the prior calendar month as a benchmark for this determination). The Revolving Credit Facility 2023 also contains a financial maintenance covenant requiring that the fixed charge coverage ratio ending on the last day of each fiscal month is at least 1.1 to 1.0 during a “Trigger Period.” A Trigger Period begins upon (i) an event of default or (ii) if availability is less than the greater of (a) $ 5,000,000 and (b) 10 % of aggregate revolving commitments. A Trigger Period ends only if (i) no event of default existed for the preceding thirty (30) consecutive days and (ii) availability is greater than both (a) $ 5,000,000 and (b) 10 % of aggregate revolving commitments. Upon the effectiveness of the Revolving Credit Facility 2023, NCM LLC immediately drew $ 10.0 million from the facility, which represents the only amount currently outstanding under the Revolving Credit Facility 2023, as of June 27, 2024. The Revolving Credit Facility 2023 also contains customary representations, warranties, covenants, events of default, terms and conditions, including limitations on liens, incurrence of debt, mergers and significant asset dispositions. As of June 27, 2024 , NCM LLC’s maximum availability under the $ 55.0 million Revolving Credit Facility 2023 w as $ 44.4 million , net of $ 10.0 million outstanding and net of letters of credit of $ 0.6 million . The weighted-average interest rate on the Revolving Credit Facility 2023 as of June 27, 2024 was 9.19 % . Upon execution of the Revolving Credit Facility 2023, NCM LLC recorded $ 2.4 million as debt issuance costs and received $ 9.1 million in proceeds. The Revolving Credit Facility 2023 contains a number of covenants and financial ratio requirements, with which NCM LLC was in compliance at June 27, 2024, including maintaining a fixed charge coverage ratio in excess of 1.1 to 1.0 on a monthly basis while maintaining availability in excess of either (i) $ 8.25 million or (ii) 15.0 % of the aggregate revolver commitments (the “availability thresholds”). NCM LLC is permitted to make quarterly dividend payments and other payments based on the fixed charge coverage ratio and availability thresholds so long as no default or event of default has occurred and continues to occur. Dividend payments and other distributions are made if the fixed charge coverage ratio is in excess of 1.1 to 1.0 and availability, after the distribution, is in compliance with the availability thresholds. There are no borrower distribution restrictions as long as NCM LLC’s fixed coverage ratio is 1.1 to 1.0 , NCM LLC maintains availability under the availability thresholds and NCM LLC is in compliance with its debt covenants. If there are borrower distribution restrictions on the payments, NCM LLC may not declare or pay any dividends, or make any payments on account of NCM LLC or make any other distribution for obligations of NCM LLC. When these restrictions are effective, NCM LLC may still pay the services fee and reimbursable costs pursuant to terms of a management services agreement, between NCM, Inc. and NCM LLC, in exchange for NCM, Inc. providing specified management services to NCM LLC. NCM LLC can also make payments pursuant to the Common Unit Adjustment Agreement and Tax Receivable Agreement in the amount, and at the time necessary to satisfy the contractual obligations with respect to the actual cash tax benefits payable to NCM LLC’s ESA Parties. As of June 27, 2024, the NCM LLC’s fixed charge coverage ratio was 2.7 to 1.0 (ve rsus the required ratio of 1.1 to 1.0 ) and had maximum availability under the Revolving Credit Facility 2023 o f $ 44.4 million (v ersus the applicable availability threshold of $ 8.25 million). |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 27, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES Changes in the Company’s Effective Tax Rate —The Company recorded income tax expense of $ 0.0 million for the three and six months ended June 27, 2024 and for the three and six months ended June 29, 2023 resulting in an effective tax rate of 0.0 % for these periods. The Company held a full valuation allowance on its net deferred tax assets as of December 28, 2023 following the determination it was more-likely-than-not that the Company will not be able to realize the benefit of those assets. The Company maintained a full valuation allowance as of June 27, 2024, resulting in deferred tax expense of $ 0.0 million for the three and six months ended June 27, 2024 and the Company’s effective tax rate of 0.0 % . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 27, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES Legal Actions —The Company is subject to claims and legal actions in the ordinary course of business. The Company believes such claims will not have a material adverse effect individually or in the aggregate on its financial position, results of operations or cash flows. Operating Commitments - Facilities —The Company has entered into operating lease agreements for its corporate headquarters and other regional offices. The Company has right-of-use (“ROU”) assets of $ 11.0 million and short-term and long-term lease liabilities of $ 1.2 million and $ 11.5 million , respectively, on the balance sheet as of June 27, 2024 for all material leases with terms longer than twelve months. These balances are included within ‘Other assets’, ‘Other current liabilities’ and ‘Other liabilities’, respectively, on the unaudited Condensed Consolidated Balance Sheets. As of June 27, 2024, the Company had a weighted average remaining lease term of 7.6 years on these leases. When measuring the ROU assets and lease liabilities recorded, the Company utilized its incremental borrowing rate in order to determine the present value of the lease payments as the leases do not provide an implicit rate. The Company used the rate of interest that it would have paid to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. As of June 27, 2024, the Company’s weighted average annual discount rate used to establish the ROU assets and lease liabilities was 7.4 % . During the three and six months ended June 27, 2024 and June 29, 2023 , the Company recognized the following components of total lease cost (in millions). These costs are presented within ‘Selling and marketing costs’ and ‘Administrative and other costs’ within the unaudited Condensed Consolidated Statements of Operations depending upon the nature of the use of the facility. Three Months Ended Six Months Ended June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 Operating lease cost $ 0.5 $ 0.1 $ 1.3 $ 1.0 Variable lease cost 0.1 — 0.2 0.1 Total lease cost $ 0.6 $ 0.1 $ 1.5 $ 1.1 The Company made total lease payments o f $ 0.4 million , $ 0.0 million , $ 1.2 million and $ 1.0 million during the three months ended June 27, 2024 and June 29, 2023 and six months ended June 27, 2024 and June 29, 2023, respectively. These payments are included within cash flows from operating activities within the unaudited Condensed Consolidated Statement of Cash Flows. Operating Commitments — ESAs and Affiliate Agreements —The Company has entered into long-term ESAs and multi-year agreements with third-party theater circuits. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. The Company recognizes intangible assets upon issuance of membership units to the ESA Parties in accordance with NCM LLC’s Common Unit Adjustment Agreement and upfront cash payments to the affiliates for the contractual rights to provide the Company’s services within their theaters as further discussed within Note 5— Intangible Assets . These ESAs and network affiliate agreements are considered leases under ASC 842 — Leases ("ASC 842") once the asset is identified and the period of control is determined upon the scheduling of the showtimes by the exhibitors, typically one week prior to the showtime. As such, the leases are considered short-term in nature, specifically less than one month. Within ASC 842, leases with terms of less than one month are exempt from the majority of the accounting and disclosure requirements, including disclosure of short-term lease expense. No ROU assets or lease liabilities were recognized for these agreements and no change to the balance sheet presentation of the intangible assets was necessary. However, the amortization of these intangible assets is considered lease expense and is presented within ‘Amortization expense’ within the unaudited Condensed Consolidated Statement of Operations. The company recorded $ 5.9 million , $ 0.9 million , $ 11.7 million and $ 7.1 million in amortization of these intangible assets in the three and six months ended June 27, 2024 and June 29, 2023, respectively. In consideration for NCM LLC’s access to the ESA Parties’ theater attendees for on-screen advertising and use of lobbies and other space within the ESA Parties’ theaters for the LEN and lobby promotions, the ESA Parties receive a monthly theater access fee under the ESAs. The theater access fee is composed of a fixed payment per patron, a fixed payment per digital screen (connected to the DCN) and a fee for access to higher quality digital cinema equipment. The payment per theater patron increases by 8 % every five years . The payment per theater patron increased in 2022 and will again in fiscal year 2027, and the payment per digital screen and for digital cinema equipment increases annually by 5 %. The theater access fee paid in the aggregate cannot be less than 12 % of NCM LLC’s aggregate advertising revenue (as defined in the ESA), or it will be adjusted upward to reach this minimum payment. As of June 27, 2024 and December 28, 2023, the Company had no liabilities recorded for the minimum payment, as the theater access fee was in excess of the minimum. Following the 2019 ESA Amendments, Cinemark receives an additional monthly theater access fee that began on November 1, 2019 in consideration for NCM LLC's access to certain on-screen advertising inventory after the advertised showtime of a feature film. These fees are also based upon a fixed payment per patron: (i) $ 0.0375 per patron beginning on November 1, 2020, (ii) $ 0.05 per patron beginning on November 1, 2021, (iii) $ 0.052 per patron beginning on November 1, 2022 and (iv) increase 8 % every five years beginning November 1, 2027. Additionally, following the 2019 ESA Amendments, beginning on November 1, 2019, NCM LLC is entitled to display the Platinum Spot, an additional single unit that is either 30 or 60 seconds of the Noovie® pre-show in the trailer position directly prior to the “attached” trailers preceding the feature film. The “attached” trailers are those provided by studios to Cinemark that are with the feature film, which is at least one trailer, but sometimes two or more trailers. In consideration for the utilization of the theaters for the Platinum Spots, Cinemark is entitled to receive a percentage of all revenue generated for the actual display of Platinum Spots in their applicable theaters, subject to a specified minimum. If NCM LLC runs advertising in more than one concurrent advertisers’ Platinum Spot for any portion of the network over a period of time, then NCM LLC will be required to satisfy a minimum average CPM for that period of time. The Company does not owe any theater access fees or any Platinum Spot revenue share when the theaters are not displaying the Company's pre-show or when the Company does not have access to the theaters. The digital screen fee is calculated based upon average screens in use during each month. The network affiliates compensation is considered variable lease expense and varies by circuit depending upon the agreed upon terms of the network affiliate agreement. The majority of agreements are centered around a revenue share where an agreed upon percentage of the advertising revenue received from a theater’s attendance is paid to the circuit. As part of the network affiliate agreements entered into in the ordinary course of business under which the Company sells advertising for display in various network affiliate theater chains, the Company has agreed to certain minimum revenue guarantees on a per attendee basis. If a network affiliate achieves the attendance set forth in their respective agreement, the Company has guaranteed minimum revenue for the network affiliate per attendee if such amount paid under the revenue share arrangement is less than its guaranteed amount. As of June 27, 2024, the maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is $ 247.7 million over the remaining terms of the network affiliate agreements. These minimum guarantees relate to various affiliate agreements ranging in term from two years to nine years , prior to any renewal periods of which some are at the option of the Company. The Company accrue d $ 0.2 million and $ 0.0 million related to affiliate agreements with guaranteed minimums in excess of the revenue share agreement as of June 27, 2024 and December 28, 2023 , respectively, within ‘Accounts payable’ in the Unaudited Condensed Consolidated Balance Sheet. As the guaranteed minimums are based upon agreed upon minimum attendance or affiliate revenue levels, the Company will not incur minimum revenue share fees during a period of time the minimum theater attendance or revenue levels are not met by the affiliate. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 27, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 10. FAIR VALUE MEASUREMENTS All current assets and liabilities are estimated to approximate their fair value due to the short-term nature of these balances. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 —Quoted prices in active markets for identical assets or liabilities. Level 2 —Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 —Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Non-Recurring Measurements —Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. These assets include long-lived assets, intangible assets, other investments, notes receivable and borrowings. Long-Lived Assets, Intangible Assets and Other Investments —The Company regularly reviews long-lived assets (primarily property, plant and equipment), intangible assets and investments accounted for under the cost or equity method for impairment whenever certain qualitative factors, events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When the estimated fair value is determined to be lower than the carrying value of the asset, an impairment charge is recorded to write the asset down to its estimated fair value. Other investments consisted of the following (in millions): As of June 27, 2024 December 28, 2023 Investment in AC JV, LLC $ 1.0 $ 0.7 Total $ 1.0 $ 0.7 As of June 27, 2024, no observable price changes or impairments have been recorded as a result of the Company’s qualitative assessment of identified events or changes in the circumstances of the remaining investments. The investment in AC JV, LLC was initially valued using comparative market multiples. The other investments were recorded based upon the fair value of the services provided in exchange for the investment. As the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs, they have been classified as Level 3 in the fair value hierarchy. Borrowings —The carrying amount of the Revolving Credit Facility 2023 is considered a reasonable estimate of fair value due to its floating-rate terms. Recurring Measurements —All current assets and liabilities are estimated to approximate their fair value due to the short-term nature of these balances. The fair values of the Company’s assets and liabilities measured on a recurring basis pursuant to ASC 820-10 Fair Value Measurements and Disclosures are as follows (in millions): Fair Value Measurements at Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 40.2 $ 40.2 $ — $ — Total assets $ 40.2 $ 40.2 $ — $ — (1) Cash Equivalents —The Company’s cash equivalents are carried at estimated fair value. Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts. |
The Company (Policies)
The Company (Policies) | 6 Months Ended |
Jun. 27, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company has prepared the unaudited Condensed Consolidated Financial Statements and related notes of NCM, Inc. in accordance with GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures typically included in an annual report have been condensed or omitted for this quarterly report. The balance sheet as of December 28, 2023 is derived from the audited financial statements of NCM, Inc. Therefore, the unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s annual report on Form 10-K filed for the fiscal year ended December 28, 2023. In the opinion of management, all adjustments necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods presented have been made and all intercompany accounts have been eliminated in consolidation. The Company has reclassified certain historical amounts on the unaudited Condensed Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flows to conform to current period presentation. In the three months and six months ended June 27, 2024, the Company reclassified certain historical expenses on the unaudited Condensed Consolidated Statements of Operations from ‘Advertising operating costs’ and ‘Network costs’ to ‘Network operating costs’ and certain historical expenses from ‘Advertising operating costs’ and ‘ESA theater access fees and revenue shares’ to ‘ESA Parties and network affiliate fees’ to conform to current period presentation. Historically, the Company’s business has been seasonal and for this and other reasons operating results for interim periods have not been indicative of the Company’s full year results or future performance. As a result of the various related party agreements discussed in Note 6— Related Party Transactions , the operating results as presented are not necessarily indicative of the results that might have occurred if all agreements were with non-related third parties. The Company manages its business under one operating and reportable segment of advertising. |
Estimates | Estimates —The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to the reserve for uncollectible accounts receivable, share-based compensation and income taxes. Actual results could differ from estimates. |
Revenue Recognition | Revenue Recognition —The Company derives revenue principally from the advertising business, which includes advertising through its on-screen cinema network, lobby network ("LEN") and lobby promotions in theaters, and on websites, mobile applications and out-of-home locations owned by NCM LLC and other companies. Revenue is recognized over time as the customer receives the benefits provided by NCM LLC’s advertising services and the Company has the right to payment for performance to date. The Company considers the terms of each arrangement to determine the appropriate accounting treatment. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers —The risk of credit loss related to the Company’s trade receivables and unbilled receivables balances is accounted for through the allowance for doubtful accounts, a contra asset account which reduces the net receivables balance. The allowance for doubtful accounts balance is determined by pooling the Company’s receivables with similar risk characteristics, specifically by type of customer (national or local/regional) and then age of receivable and applying historical write off percentages to these pools in order to determine the amount of expected credit losses as of the balance sheet date. National receivables are with large advertising agencies with strong reputations in the advertising industry and clients with stable financial positions and good credit ratings, represent larger receivables balances per customer and have significantly lower historical and expected credit loss patterns. Local and regional receivables are with smaller companies, sometimes with less credit history, represent smaller receivable balances per customer and have higher historical and expected credit loss patterns. The Company has smaller contracts with many local clients that are not individually significant. The Company also considers current economic conditions and trends to determine whether adjustments to historical loss rates are necessary. The Company also reserves for specific receivable balances that it expects to write off based on known concerns regarding the financial health of the customer. Receivables are written off when management determines amounts are uncollectible. The Company had one agency through which it sourced advertising revenue that accounted for 14.9 % of the Company’s gross outstanding receivable balance as of June 27, 2024 and had no customers through which it sourced advertising revenue that accounted for more than 10.0 % of the Company's gross outstanding receivable balance as of December 28, 2023. During the three and six months ended June 27, 2024 , the Company had no customers that accounted for more than 10.0 % of the Company's revenue. During the three and six months ended June 29, 2023 , the Company had one customer that accounted for 51.8 % and 15.4 % of the Company’s revenue, respectively. |
Long-lived Assets | Long-lived Assets —The Company assesses impairment of long-lived assets pursuant to ASC 360— Property, Plant and Equipment . This includes determining whether certain triggering events have occurred that could affect the value of an asset. The Company did not record any losses related to the write-off of certain internally developed software during the three months ended June 27, 2024 and June 29, 2023, and the six months ended June 27, 2024 and June 29, 2023 , respectively. |
Share-Based Compensation | Share-Based Compensation —The Company has issued stock options and restricted stock units to certain employees and its independent directors. The restricted stock unit grants for Company management vest upon the achievement of Company performance measures, market conditions and/or service conditions, while non-management grants vest only upon the achievement of service conditions. Compensation expense of restricted stock units that vest upon the achievement of Company performance measures is based on management’s financial projections and the probability of achieving the projections, which require considerable judgment. A cumulative adjustment is recorded to share-based compensation expense in periods that management changes its estimate of the number of shares of restricted stock units expected to vest. Ultimately, the Company adjusts the expense recognized to reflect the actual vested shares following the resolution of the performance conditions. Compensation expense of restricted stock units that vest upon achievement of certain market conditions is based on an estimate of the fair value of the granted restricted stock units on the grant date, which requires considerable judgment. The fair value of the granted restricted stock units is expensed over an estimated derived service period, which also requires considerable judgment. In accordance with ASC 718 — Stock Compensation , the Company does not adjust the expense recognized to reflect the actual vested shares following the resolution of the market condition. Dividends are accrued when declared on unvested restricted stock units that are expected to vest and are only paid with respect to shares that actually vest. During the three and six months ended June 27, 2024, 127,236 and 6,447,791 shares, respectively, of restricted stock units were granted. During the three and six months ended June 29, 2023 , no shares of restricted stock units were granted. During the three months ended June 27, 2024 and June 29, 2023 and six months ended June 27, 2024 and June 29, 2023, 68,000 , 566 , 321,397 , and 196,634 shares of restricted stock units vested, respectively. Additionally, the Company recorded $ 3.5 million , $ 0.5 million , $ 6.1 million and $ 2.0 million in share-based compensation expense during the three months ended June 27, 2024 and June 29, 2023, and six months ended June 27, 2024 and June 29, 2023 , respectively, within ‘Network operating costs’, ‘Selling and marketing costs’ and ‘Administrative and other costs’ within the unaudited Condensed Consolidated Statements of Operations. |
Share Repurchase Program | Share Repurchase Program —On March 18, 2024, the Board of Directors of the Company approved a stock repurchase program under which the Company is authorized to use assets of the Company to repurchase up to $ 100.0 million of shares of the Company’s Common Stock, exclusive of any fees, commissions or other expenses related to such repurchases, from time to time over a period of three years . Shares may be repurchased under the program through open market purchases, block trades, or accelerated or other structured share repurchase programs. During the three and six months ended June 27, 2024, 1,911,587 and 1,919,587 shares, respectively, were repurchased on the open market. In accordance with Accounting Standards Codification ("ASC") 505 —Equity , the Company elected to retire the shares. Upon the retirement of these shares, any excess over par value paid, inclusive of direct costs, was recorded as a reduction to retained earnings of $ 9.3 million and $ 9.5 million for the three and six months ended June 27, 2024, respectively. |
Consolidation | Consolidation —NCM, Inc. consolidates the accounts of NCM LLC, a variable interest entity wherein NCM, Inc. is the primary beneficiary, under the provisions of ASC 810 — Consolidation . Upon NCM LLC’s emergence from bankruptcy, it was determined that NCM, Inc. holds the current rights that give it power to direct activities of NCM LLC that most significantly impact NCM LLC’s economic performance and that NCM, Inc. has the rights to receive the significant benefits or the obligations to absorb potentially significant losses, resulting in NCM, Inc. having a controlling financial interest in NCM LLC. As a result, NCM LLC was deemed to be the primary beneficiary of NCM LLC and the Company has consolidated NCM LLC under the variable interest entity provisions of ASC 810 — Consolidation. The following table presents the changes in NCM, Inc.’s equity resulting from net income attributable to NCM, Inc. and transfers to or from noncontrolling interests (in millions): Three Months Ended Six Months Ended June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 Net (loss) income attributable to NCM, Inc. $ ( 8.7 ) $ 545.3 $ ( 43.4 ) $ 499.8 NCM LLC equity issued for purchase of intangible asset 0.7 — 0.7 — Income tax and other impacts of subsidiary ownership changes 0.1 — 0.1 ( 15.4 ) Cash redemption of NCM LLC common membership units ( 0.7 ) — ( 0.7 ) — NCM LLC common membership unit redemption for — — — ( 10.3 ) Issuance of shares to founding members — — — 9.9 Change from net (loss) income attributable to NCM, Inc. and $ ( 8.6 ) $ 545.3 $ ( 43.3 ) $ 484.0 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company did not adopt any accounting pronouncements during the six months ended June 27, 2024 . |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which establishes segment disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must disclose incremental segment information on an annual and interim basis to enable investors to develop more decision-useful financial analyses. This guidance is effective for issuances on and after December 15, 2024. The Company does not believe this will have a material impact on the Company’s Consolidated Financial Statements. In January 2024, the FASB issued Accounting Standards Update No. 2023-09, Income Tax Disclosures (“ASU 2023-09”), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. This guidance is effective for issuances on and after December 15, 2024. The Company does not believe this will have a material impact on the Company’s Consolidated Financial Statements. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its Consolidated Financial Statements or notes thereto. |
The Company (Tables)
The Company (Tables) | 6 Months Ended |
Jun. 27, 2024 | |
Accounting Policies [Abstract] | |
Changes In Equity | The following table presents the changes in NCM, Inc.’s equity resulting from net income attributable to NCM, Inc. and transfers to or from noncontrolling interests (in millions): Three Months Ended Six Months Ended June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 Net (loss) income attributable to NCM, Inc. $ ( 8.7 ) $ 545.3 $ ( 43.4 ) $ 499.8 NCM LLC equity issued for purchase of intangible asset 0.7 — 0.7 — Income tax and other impacts of subsidiary ownership changes 0.1 — 0.1 ( 15.4 ) Cash redemption of NCM LLC common membership units ( 0.7 ) — ( 0.7 ) — NCM LLC common membership unit redemption for — — — ( 10.3 ) Issuance of shares to founding members — — — 9.9 Change from net (loss) income attributable to NCM, Inc. and $ ( 8.6 ) $ 545.3 $ ( 43.3 ) $ 484.0 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 27, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue from Contracts with Customers | The following table summarizes revenue from contracts with customers for the three and six months ended June 27, 2024 and June 29, 2023 (in millions): Three Months Ended Six Months Ended June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 National advertising revenue $ 41.7 $ 5.0 $ 71.2 $ 27.5 Local and regional advertising revenue 9.8 1.1 15.0 9.1 ESA advertising revenue from beverage concessionaire 3.2 1.0 5.9 5.4 Management fee reimbursement — 7.7 — 7.7 Total revenue $ 54.7 $ 14.8 $ 92.1 $ 49.7 |
Schedule of Allowance for Doubtful Accounts | The changes within the allowance for doubtful accounts balances for the six months ended June 27, 2024 and June 29, 2023, respectively, were as follows (in millions): Six Months Ended June 27, 2024 June 29, 2023 Allowance for National Customer Receivables Allowance for Local/ Regional Customer Receivables Allowance for National Customer Receivables Allowance for Local/ Regional Customer Receivables Balance at beginning of period $ 0.1 $ 1.3 $ 0.3 $ 1.4 Provision for bad debt 0.4 ( 0.2 ) — — Write-offs, net ( 0.4 ) ( 0.2 ) — — Deconsolidation of NCM LLC — — ( 0.3 ) ( 1.4 ) Balance at end of period $ 0.1 $ 0.9 $ 0.0 $ 0.0 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 6 Months Ended |
Jun. 27, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Loss Per Share, Basic and Diluted | The components of basic and diluted loss per NCM, Inc. share are as follows: Three Months Ended Six Months Ended June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 Net (loss) income attributable to NCM, Inc. (in millions) $ ( 8.7 ) $ 545.3 $ ( 43.4 ) $ 499.8 Weighted average shares outstanding: Basic 96,409,830 17,405,864 96,664,241 15,978,331 Add: Dilutive effect of stock options, restricted stock and — — — 1,370,808 Diluted 96,409,830 17,405,864 96,664,241 17,349,139 (Loss) income per NCM, Inc. share: Basic $ ( 0.09 ) $ 31.33 $ ( 0.45 ) $ 31.28 Diluted $ ( 0.09 ) $ 31.33 $ ( 0.45 ) $ 28.32 |
Reconsolidation of NCM LLC (Tab
Reconsolidation of NCM LLC (Tables) | 6 Months Ended |
Jun. 27, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Summary of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of NCM LLC and provisional fair values of the assets acquired and liabilities assumed as of the reconsolidation date (in millions): Fair value of assets acquired: Cash, cash equivalents and restricted cash $ 49.6 Receivables, net 74.8 Prepaid expenses and other current assets 7.2 Property and equipment, net 14.8 Other investments 0.9 Debt issuance costs, net 2.4 Fair value of intangible assets 415.0 Other assets 10.0 Total assets acquired 574.7 Fair value of liabilities assumed: Amounts due to members, net ( 15.3 ) Accrued expenses ( 0.7 ) Accrued payroll and related expenses ( 9.9 ) Accounts payable ( 37.3 ) Deferred revenue ( 11.1 ) Other current liabilities ( 1.5 ) Long-term debt ( 10.0 ) Other liabilities ( 5.5 ) Total liabilities assumed ( 91.3 ) Fair value of NCM LLC $ 483.4 |
Summary of Intangible Assets Acquired | The following table summarizes the major classes of intangible assets acquired and their respective weighted-average estimated useful lives. Estimated Fair Useful Life Exhibitor service agreements $ 250.0 13.0 Network affiliates agreements 75.0 16.0 Customer relationships 75.0 6.0 Trademarks 15.0 8.0 Total intangible assets $ 415.0 |
Summary of Pro Forma Financial Information | The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of future operations or results had the NCM LLC reconsolidation been completed as of December 31, 2021. Three Months Ended Six Months Ended June 29, 2023 June 29, 2023 Revenue $ 64.4 $ 99.3 Net Loss $ ( 29.0 ) $ ( 63.0 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 27, 2024 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following tables provide summaries of the transactions between NCM, Inc. and AMC, Cinemark, and Regal when designated related parties (in millions): Three Months Ended Six Months Ended Included in the unaudited Condensed Consolidated Statements of Operations: June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 Revenue: (1) (1) ESA advertising revenue from beverage concessionaire (2) $ — $ 0.8 $ — $ 4.1 Management fee reimbursement (3) $ — $ 7.7 $ — $ 7.7 Operating expenses: ESA Parties and network affiliate fees (4) $ — $ 2.7 $ — $ 16.5 (1) For the three and six months ended June 27, 2024, AMC, Cinemark and Regal were not related parties. (2) For the three and six months ended June 29, 2023 , Cinemark and Regal purchased 60 seconds of on-screen advertising time from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 seconds equivalent cost per thousand impressions (“CPM”) rate specified by the ESA. Beverage revenue above is only reflective of periods where Cinemark and Regal were related parties. (3) Comprised of fees owed by NCM LLC to NCM, Inc. for managing NCM LLC during the period where NCM LLC was deconsolidated of April 11, 2023 through August 7, 2023. (4) Comprised of payments per theater attendee, payments per digital screen with respect to Cinemark and Regal theaters included in the Company’s network and payments for access to higher quality digital cinema equipment. Following the 2019 ESA Amendments this also includes payments to Cinemark and Regal (through July 14, 2023) for their share of the revenue from the sale of an additional single unit that is either 30 or 60 seconds of the Noovie pre-show in the trailer position directly prior to the “attached” trailers preceding the feature film (the “Platinum Spot”). Theater access fees and revenue share expenses above are only reflective of periods where Cinemark and Regal were related parties. |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 27, 2024 | |
NCM, LLC. | |
Schedule of Outstanding Debt | The following table summarizes total outstanding debt as of June 27, 2024 and December 28, 2023 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings June 27, 2024 December 28, 2023 Maturity Date Interest Rate Revolving Credit Facility 2023 $ 10.0 $ 10.0 August 7, 2026 (1 ) Total borrowings 10.0 10.0 Less: debt issuance costs and debt discounts related to — — Total borrowings, net 10.0 10.0 Less: current portion of debt — — Carrying value of long-term debt $ 10.0 $ 10.0 (1) The interest rates on the Revolving Credit Facility 2023 is described below. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 27, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Cost | These costs are presented within ‘Selling and marketing costs’ and ‘Administrative and other costs’ within the unaudited Condensed Consolidated Statements of Operations depending upon the nature of the use of the facility. Three Months Ended Six Months Ended June 27, 2024 June 29, 2023 June 27, 2024 June 29, 2023 Operating lease cost $ 0.5 $ 0.1 $ 1.3 $ 1.0 Variable lease cost 0.1 — 0.2 0.1 Total lease cost $ 0.6 $ 0.1 $ 1.5 $ 1.1 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 27, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Other Investments | Other investments consisted of the following (in millions): As of June 27, 2024 December 28, 2023 Investment in AC JV, LLC $ 1.0 $ 0.7 Total $ 1.0 $ 0.7 |
Fair Values of the Company's Assets | The fair values of the Company’s assets and liabilities measured on a recurring basis pursuant to ASC 820-10 Fair Value Measurements and Disclosures are as follows (in millions): Fair Value Measurements at Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 40.2 $ 40.2 $ — $ — Total assets $ 40.2 $ 40.2 $ — $ — (1) Cash Equivalents —The Company’s cash equivalents are carried at estimated fair value. Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts. |
The Company - Additional Inform
The Company - Additional Information (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Apr. 16, 2024 | Apr. 01, 2024 shares | Aug. 07, 2023 USD ($) | Aug. 03, 2023 $ / shares shares | Jun. 27, 2024 USD ($) Customer $ / shares shares | Jun. 29, 2023 USD ($) Customer shares | Jun. 27, 2024 USD ($) Segnent Customer $ / shares shares | Jun. 29, 2023 USD ($) Customer shares | Dec. 28, 2023 USD ($) $ / shares shares | Mar. 18, 2024 USD ($) | Aug. 02, 2023 shares | Mar. 23, 2023 shares | Feb. 23, 2023 shares | Dec. 29, 2022 shares | |
General Company Information [Line Items] | ||||||||||||||
Remaining term (in years) | 14 years 7 months 6 days | |||||||||||||
Gain on deconsolidation | $ | $ 0 | $ 557.7 | $ 0 | $ 557.7 | ||||||||||
Number of reportable segment | Segnent | 1 | |||||||||||||
Number of operating segments | Segnent | 1 | |||||||||||||
Number of shares of restricted stock and stock units vested | 68,000 | 566 | 321,397 | 196,634 | ||||||||||
Number of customers more than ten percentage of revenue | Customer | 0 | 1 | 0 | 1 | ||||||||||
Customer Percentage of Accounts Receivable | 14.90% | 14.90% | 10% | |||||||||||
Customer with revenue in excess of ten percent of Accounts Payable | 1% | 1% | 0% | |||||||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Common stock, shares outstanding (in shares) | 17,411,323 | 95,238,849 | 95,238,849 | 96,837,039 | 174,112,385 | |||||||||
Stockholders' Equity, Reverse Stock Split | 1:10 | |||||||||||||
Restricted Cash | $ | $ 3 | $ 3 | $ 3 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Shares Issued in Period | 127,236 | 0 | 6,447,791 | 0 | ||||||||||
Share-based compensation expense/capitalized | $ | $ 3.5 | $ 0.5 | $ 6.1 | $ 2 | ||||||||||
Stock repurchase program, period | 3 years | |||||||||||||
Number of shares, repurchased | 1,911,587 | 1,919,587 | ||||||||||||
Reduction to retained earnings | $ | $ 9.3 | $ 9.5 | ||||||||||||
Share-based compensation expense/capitalized | $ | $ 3.5 | $ 0.5 | $ 6.1 | $ 2 | ||||||||||
Revenue | Customer Concentration Risk | Customer One | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Customer ten percent of revenue | 10% | 51.80% | 10% | 15.40% | ||||||||||
Transfers Related To Bankruptcy Settlement | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Related party transaction, amounts of transaction | $ | $ 15.5 | $ 15 | ||||||||||||
NCM, LLC. | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Weighted average term, ESA and affiliate (in years) | 10 years 7 months 6 days | |||||||||||||
Common membership units issued | 135,473 | 135,473 | ||||||||||||
Debtor reorganization items, legal and advisory professional fees | $ | $ 8.8 | |||||||||||||
Gain on bankruptcy | $ | $ 916.4 | |||||||||||||
Regal Entertainment Group [Member] | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Units of Partnership Interest, Amount - Regal | 4,068,380 | |||||||||||||
Minimum | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Affiliates Agreement, Term | 2 years | |||||||||||||
Maximum | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Affiliates Agreement, Term | 9 years | |||||||||||||
Stock repurchase program, authorized amount | $ | $ 100 | |||||||||||||
National Cine Media Inc [Member] | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Percentage of common membership units outstanding | 100% | 100% | ||||||||||||
American Multi Cinema Inc [Member] | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Percentage of common membership units outstanding | 0% | 0% | ||||||||||||
Units of Partnership Interest, Amount - AMC | 595,465 | |||||||||||||
American Multi Cinema Inc [Member] | NCM, LLC. | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Common membership units issued | 3,377 | |||||||||||||
Cinemark | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Common membership units outstanding | 172,094 | 4,196,987 | ||||||||||||
Percentage of common membership units outstanding | 0% | |||||||||||||
Cinemark | NCM, LLC. | ||||||||||||||
General Company Information [Line Items] | ||||||||||||||
Percentage of common membership units outstanding | 0% | |||||||||||||
Common membership units issued | 132,096 |
The Company - Changes In Equity
The Company - Changes In Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Net (loss) income attributable to NCM, Inc. | $ (8.7) | $ 545.3 | $ (43.4) | $ 499.8 |
NCM LLC equity issued for purchase of intangible asset | 0.7 | 0 | 0.7 | 0 |
Income tax and other impacts of subsidiary ownership changes | 0.1 | 0 | 0.1 | (15.4) |
NCM LLC common membership units redemption | (0.7) | (0.7) | (10.3) | |
Issued shares to secured creditors, value | 10.3 | |||
Change from net (loss) income attributable to NCM, Inc. and transfers from noncontrolling interests | (8.6) | 545.3 | (43.3) | 484 |
Cash [Member] | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
NCM LLC common membership units redemption | (0.7) | 0 | (0.7) | 0 |
Additional Paid-in Capital [Member] | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
NCM LLC common membership units redemption | (0.7) | (0.7) | (10.3) | |
Issued shares to secured creditors, value | 0 | 0 | 0 | 9.9 |
Common Stock [Member] | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
NCM LLC common membership units redemption | $ 0 | $ 0 | $ 0 | (10.3) |
Issued shares to secured creditors, value | $ 0.4 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 28, 2023 | Jun. 27, 2024 | |
Revenue from Contract with Customer [Abstract] | ||
Unbilled accounts receivable | $ 0.8 | $ 1.5 |
Contract with Customer, Liability, Change in Timeframe, Performance Obligation Satisfied, Revenue Recognized | $ 9.5 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Additional Information 1 (Details) | Jun. 27, 2024 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-06-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue from contract, payment due period from the customer | 6 months |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Summary of Revenue from Contracts with Customers (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 54.7 | $ 14.8 | $ 92.1 | $ 49.7 |
National advertising revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 41.7 | 5 | 71.2 | 27.5 |
Local and regional advertising revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9.8 | 1.1 | 15 | 9.1 |
ESA advertising revenue from beverage concessionaire agreements | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3.2 | 1 | 5.9 | 5.4 |
Management Fee Reimbursement | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 0 | $ 7.7 | $ 0 | $ 7.7 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 27, 2024 | Jun. 29, 2023 | |
National advertising revenue | ||
Schedule of Allowance for Doubtful Accounts [Line Items] | ||
Allowance for Customer Receivables, Beginning Balance | $ 0.1 | $ 0.3 |
Allowance for Customer Receivables, Provision for bad debt | 0.4 | 0 |
Allowance for Customer Receivables, Write-offs, net | (0.4) | 0 |
Allowance for Customer Receivables, Deconsolidation of NCM LLC | 0 | (0.3) |
Allowance for Customer Receivables, Ending Balance | 0.1 | 0 |
Local And Regional Advertising Revenue [Member] | ||
Schedule of Allowance for Doubtful Accounts [Line Items] | ||
Allowance for Customer Receivables, Beginning Balance | 1.3 | 1.4 |
Allowance for Customer Receivables, Provision for bad debt | (0.2) | 0 |
Allowance for Customer Receivables, Write-offs, net | (0.2) | 0 |
Allowance for Customer Receivables, Deconsolidation of NCM LLC | 0 | (1.4) |
Allowance for Customer Receivables, Ending Balance | $ 0.9 | $ 0 |
Loss Per Share - Schedule of Lo
Loss Per Share - Schedule of Loss Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income attributable to NCM, Inc. (in millions) | $ (8.7) | $ 545.3 | $ (43.4) | $ 499.8 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 96,409,830 | 17,405,864 | 96,664,241 | 15,978,331 |
Add: Dilutive effect of stock options and restricted stock (in shares) | 0 | 0 | 0 | 1,370,808 |
Diluted (in shares) | 96,409,830 | 17,405,864 | 96,664,241 | 17,349,139 |
(Loss) income per NCM, Inc. share: | ||||
Basic (in usd per share) | $ (0.09) | $ 31.33 | $ (0.45) | $ 31.28 |
Diluted (in usd per share) | $ (0.09) | $ 31.33 | $ (0.45) | $ 28.32 |
Loss Per Share - Additional Inf
Loss Per Share - Additional Information (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |||||
Aug. 03, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | Dec. 28, 2023 | Aug. 02, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common stock, shares outstanding (in shares) | 17,411,323 | 95,238,849 | 95,238,849 | 96,837,039 | 174,112,385 | ||
Basic (in shares) | 96,409,830 | 17,405,864 | 96,664,241 | 15,978,331 | |||
Stockholders' Equity, Reverse Stock Split | 1:10 | ||||||
Stock Options And Non-Vested Restricted Stock | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Shares excluded from the calculation of diluted weighted average shares | 7,001,408 | 491,517 | 7,001,408 | 491,517 | |||
Common Units | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Shares excluded from the calculation of diluted weighted average shares | 16,500 | 0 | 8,250 | 1,370,808 |
Reconsolidation of NCM LLC - Ad
Reconsolidation of NCM LLC - Additional Information (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Aug. 07, 2023 USD ($) $ / shares shares | Jun. 27, 2024 USD ($) | Jun. 29, 2023 USD ($) | Jun. 27, 2024 USD ($) Segnent | Jun. 29, 2023 USD ($) | Dec. 28, 2023 USD ($) | |
Business Acquisition | ||||||
Number of reportable segment | Segnent | 1 | |||||
Issued shares to secured creditors, value | $ 10.3 | |||||
Revenue | $ 54.7 | $ 14.8 | $ 92.1 | 49.7 | ||
Net (loss) income attributable to NCM, Inc. | (8.7) | 545.3 | (43.4) | 499.8 | ||
Gain on deconsolidation of affiliate | $ 0 | $ 557.7 | $ 0 | $ 557.7 | ||
Secured Creditors | ||||||
Business Acquisition | ||||||
Closing stock price | $ / shares | $ 2.94 | |||||
Issued shares to secured creditors, shares | shares | 83,421,135 | |||||
Stock issued | $ 245.3 | |||||
NCM, LLC. | ||||||
Business Acquisition | ||||||
Payments to acquire capital contributions | 15 | |||||
Repayments of unsecured debt | $ 0.5 | |||||
Equity interest acquired, percentage | 2.80% | |||||
Investment owned, at cost | $ 11.9 | |||||
Business combination, gain on re-measurement of investment | $ 35.5 | |||||
Business combination, gain upon the reconsolidation | 167.8 | |||||
Intangible assets | 415 | |||||
Business combination, capital contribution recognized transactions | $ 483.4 | |||||
NCM Inc. | ||||||
Business Acquisition | ||||||
Percentage of common membership units outstanding | 100% | 100% | ||||
Transfers Related To Bankruptcy Settlement | ||||||
Business Acquisition | ||||||
Related party transaction, investment cash contributed | $ 15.5 | $ 15 |
Reconsolidation of NCM LLC - Su
Reconsolidation of NCM LLC - Summary of Assets Acquired and Liabilities Assumed (Details) - NCM, LLC. $ in Millions | Aug. 07, 2023 USD ($) |
Fair value of assets acquired: | |
Cash, cash equivalents and restricted cash | $ 49.6 |
Receivables, net | 74.8 |
Prepaid expenses and other current assets | 7.2 |
Property and equipment, net | 14.8 |
Other investments | 0.9 |
Debt issuance costs, net | 2.4 |
Fair value of intangible assets | 415 |
Other assets | 10 |
Total assets acquired | 574.7 |
Fair value of liabilities assumed: | |
Amounts due to members, net | (15.3) |
Accrued expenses | (0.7) |
Accrued payroll and related expenses | (9.9) |
Accounts payable | (37.3) |
Deferred revenue | (11.1) |
Other current liabilities | (1.5) |
Long-term debt | (10) |
Other liabilities | (5.5) |
Total liabilities assumed | (91.3) |
Fair value of NCM LLC | $ 483.4 |
Reconsolidation of NCM LLC - _2
Reconsolidation of NCM LLC - Summary of Intangible Assets Acquired (Details) - NCM, LLC. $ in Millions | Aug. 07, 2023 USD ($) |
Business Acquisition | |
Total intangible assets | $ 415 |
Intangible Assets ESA [Member] | |
Business Acquisition | |
Total intangible assets | $ 250 |
Useful Life (years) | 13 years |
Intangible Assets Affiliates [Member] | |
Business Acquisition | |
Total intangible assets | $ 75 |
Useful Life (years) | 16 years |
Customer Relationships [Member] | |
Business Acquisition | |
Total intangible assets | $ 75 |
Useful Life (years) | 6 years |
Trademarks [Member] | |
Business Acquisition | |
Total intangible assets | $ 15 |
Useful Life (years) | 8 years |
Reconsolidation of NCM LLC - _3
Reconsolidation of NCM LLC - Summary of Pro Forma Financial Information (Unaudited) (Details) - NCM, LLC. - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 29, 2023 | Jun. 29, 2023 | |
Business Acquisition | ||
Revenue | $ 64.4 | $ 99.3 |
Net Loss | $ (29) | $ (63) |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Apr. 16, 2024 | Apr. 01, 2024 | Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | Dec. 29, 2022 | Dec. 28, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||||||||
Integration and other encumbered payments, related parties - operating activities | $ 0.5 | $ 3.9 | ||||||
Intangible assets, net of accumulated amortization of $34.0 and $15.0, respectively | $ 375 | 375 | $ 394.3 | |||||
Accumulated amortization, intangible assets | 34 | 34 | 15 | |||||
Accumulated amortization, intangible assets, remainder of fiscal 2024 | 18.9 | 18.9 | ||||||
Accumulated amortization, intangible assets, 2025 | 37.8 | 37.8 | ||||||
Accumulated amortization, intangible assets, 2026 | 37.8 | 37.8 | ||||||
Accumulated amortization, intangible assets, 2027 | 37.8 | 37.8 | ||||||
Accumulated amortization, intangible assets, 2028 | 37.8 | 37.8 | ||||||
NCM, LLC. | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Increase (decrease) in intangible assets, net | $ 0.7 | |||||||
Common membership units issued | 135,473 | 135,473 | ||||||
NCM, LLC. | AMC and Cinemark | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Increase (decrease) in intangible assets, net | $ 0.8 | $ 0 | 1 | 0 | ||||
Integration and other encumbered payments, related parties - operating activities | 0.2 | $ 0.3 | 0.5 | $ 3.9 | ||||
NCM, LLC. | Founding Members | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Intangible assets, net of accumulated amortization of $34.0 and $15.0, respectively | $ 227.1 | $ 227.1 | $ 236.7 | |||||
Finite-lived intangible asset, useful life | 12 years 1 month 6 days | 12 years 1 month 6 days | 12 years 7 months 6 days | |||||
Accumulated amortization, intangible assets | $ 16.9 | $ 16.9 | $ 7.6 | |||||
NCM, LLC. | Network Affiliates | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Intangible assets, net of accumulated amortization of $34.0 and $15.0, respectively | $ 70.8 | $ 70.8 | $ 73.2 | |||||
Finite-lived intangible asset, useful life | 15 years 1 month 6 days | 15 years 1 month 6 days | 15 years 7 months 6 days | |||||
Accumulated amortization, intangible assets | $ 4.2 | $ 4.2 | $ 1.8 | |||||
NCM, LLC. | Customer Relations | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Intangible assets, net of accumulated amortization of $34.0 and $15.0, respectively | $ 63.8 | $ 63.8 | $ 70.1 | |||||
Finite-lived intangible asset, useful life | 5 years 1 month 6 days | 5 years 1 month 6 days | 5 years 7 months 6 days | |||||
Accumulated amortization, intangible assets | $ 11.2 | $ 11.2 | $ 4.9 | |||||
NCM, LLC. | Trademark | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Intangible assets, net of accumulated amortization of $34.0 and $15.0, respectively | $ 13.3 | $ 13.3 | $ 14.3 | |||||
Finite-lived intangible asset, useful life | 7 years 1 month 6 days | 7 years 1 month 6 days | 7 years 7 months 6 days | |||||
Accumulated amortization, intangible assets | $ 1.7 | $ 1.7 | $ 0.7 | |||||
AMC | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Common membership units issued and cancelled | 16,581,829 | |||||||
Cinemark | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Percentage of common membership units outstanding | 0% | |||||||
Cinemark | NCM, LLC. | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Percentage of common membership units outstanding | 0% | |||||||
Common membership units issued | 132,096 | |||||||
Minimum | NCM, LLC. | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Percentage increase (decrease) in theater attendance for Common Unit adjustment to occur | (2.00%) | |||||||
Maximum | NCM, LLC. | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Percentage increase (decrease) in theater attendance for Common Unit adjustment to occur | 2% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Apr. 16, 2024 | Apr. 01, 2024 | Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | Dec. 28, 2023 | Aug. 07, 2023 | Jul. 31, 2018 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ||||||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | 30 seconds | ||||||||
Percentage of cash savings related to taxes | 90% | |||||||||
ACJV Cash Distributions | $ 0.2 | $ 0.2 | $ 0.4 | $ 0.2 | ||||||
NCM, LLC. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Common membership units issued | 135,473 | 135,473 | ||||||||
Regal | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Units of Partnership Interest, Amount Surrendered | 4,068,350 | |||||||||
Units of Partnership Interest, Cash Surrender Value | $ 13 | |||||||||
AC JV, LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Investment in AC JV, LLC, Percentage | 32% | |||||||||
Investment in AC JV, LLC | $ 1 | 1 | $ 0.7 | |||||||
AC JV, LLC | NCM, LLC. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Investment in AC JV, LLC, Percentage | 4% | |||||||||
Investment in AC JV, LLC | 1 | 1 | $ 0.7 | |||||||
Equity in earnings of non-consolidated entities | $ 0.2 | $ 0 | $ 0.7 | $ 0.1 | ||||||
AMC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Percentage of common membership units outstanding | 0% | 0% | ||||||||
AMC | NCM, LLC. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 0% | 0% | 5% | |||||||
Common membership units issued | 3,377 | |||||||||
AMC | NCM Inc. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 0% | 0% | ||||||||
Cinemark Holdings In | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Percentage of common membership units outstanding | 0% | |||||||||
Cinemark Holdings In | NCM, LLC. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 0% | 0% | 5% | |||||||
Percentage of common membership units outstanding | 0% | |||||||||
Common membership units issued | 132,096 | |||||||||
Cinemark Holdings In | NCM Inc. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 4.60% | 4.60% | ||||||||
Minimum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | |||||||||
Maximum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | |
Related Party Transaction [Line Items] | ||||
ESA advertising revenue from beverage concessionaire agreements (included in revenue) | $ 54.7 | $ 14.8 | $ 92.1 | $ 49.7 |
ESA Parties and network affiliate fees | 26.7 | 4.5 | 49.2 | 28.3 |
Founding Members | ||||
Related Party Transaction [Line Items] | ||||
ESA advertising revenue from beverage concessionaire agreements (included in revenue) | 0 | 8.5 | 0 | 11.8 |
Management fee reimbursement | 0 | 7.7 | 0 | 7.7 |
ESA Parties and network affiliate fees | 0 | 2.7 | 0 | 16.5 |
Founding Members | Beverage Concessionaire | ||||
Related Party Transaction [Line Items] | ||||
ESA advertising revenue from beverage concessionaire agreements (included in revenue) | $ 0 | $ 0.8 | $ 0 | $ 4.1 |
Related Party Transactions - _2
Related Party Transactions - Schedule of Related Party Transactions (Parenthetical) (Details) | 3 Months Ended | 6 Months Ended | |
Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | |
Related Party Transaction [Line Items] | |||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | 30 seconds | |
Two Founding Members | |||
Related Party Transaction [Line Items] | |||
On-screen advertising time purchased, in seconds | 60 seconds | 60 seconds | |
Maximum | |||
Related Party Transaction [Line Items] | |||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds | ||
Minimum | |||
Related Party Transaction [Line Items] | |||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds |
Borrowings - Schedule of Outsta
Borrowings - Schedule of Outstanding Debt (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 27, 2024 | Dec. 28, 2023 | |
Debt Instrument [Line Items] | ||
Carrying value of long-term debt | $ 10 | $ 10 |
NCM, LLC. | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings | 10 | 10 |
Debt issuance costs, long-term | 0 | 0 |
Long-term Debt | 10 | 10 |
Carrying value of long-term debt | 10 | 10 |
Less: current portion of debt | 0 | 0 |
NCM, LLC. | Revolving Credit Facility 2023 | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings | 10 | $ 10 |
Long-term Debt | $ 10 | |
Debt Instrument, Maturity Date | Aug. 07, 2026 |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) | Aug. 07, 2023 USD ($) | Jun. 27, 2024 USD ($) | Dec. 28, 2023 USD ($) |
Revolving Credit Facility 2023 | |||
Debt Instrument [Line Items] | |||
Proceeds from lines of credit | $ 9,100,000 | ||
Debt issuance costs, gross | 2,400,000 | ||
NCM, LLC. | |||
Debt Instrument [Line Items] | |||
Debt instrument currently outstanding loan amount | $ 10,000,000 | $ 10,000,000 | |
NCM, LLC. | Revolving Credit Facility 2023 | |||
Debt Instrument [Line Items] | |||
Borrowing amount of credit facility | 55,000,000 | 55,000,000 | |
Debt instrument currently outstanding loan amount | $ 10,000,000 | ||
Weighted-average interest rate | 9.19% | ||
Debt instrument, trigger amount covenant | $ 5,000,000 | $ 8,250,000 | |
Debt intstrument, debt covenant aggregate revolving commitment trigger | 10% | 15% | |
Line Of credit facility, percentage of revolving commitment | 10% | ||
Line of credit facility, current borrowing capacity | $ 44,400,000 | ||
NCM, LLC. | Revolving Credit Facility 2023 | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, fixed coverage covenant | 1 | 1 | |
NCM, LLC. | Revolving Credit Facility 2023 | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, fixed coverage covenant | 1.1 | 2.7 | |
NCM, LLC. | Revolving Credit Facility 2023 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate, percent | 3.75% | ||
Line of credit facility, unused capacity, commitment fee percentage | 50% | ||
NCM, LLC. | Revolving Credit Facility 2023 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate, percent | 4.50% | ||
Line of credit facility, unused capacity, commitment fee percentage | 50% | ||
NCM, LLC. | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Line of credit facility, current borrowing capacity | $ 600,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | |
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 0% | 0% | 0% | 0% |
Income tax benefit | $ 0 | $ 0 | $ 0 | $ 0 |
Deferred income tax expense, net of valuation allowance | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 60 Months Ended | 160 Months Ended | ||||
Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2027 | Feb. 13, 2041 | Dec. 28, 2023 | |
Other Commitments [Line Items] | |||||||||
Operating lease, right-of-use asset | $ 11,000,000 | $ 11,000,000 | |||||||
Short-term lease liability | 1,200,000 | 1,200,000 | |||||||
Long-term lease liability | $ 11,500,000 | $ 11,500,000 | |||||||
Weighted average remaining lease term | 7 years 7 months 6 days | 7 years 7 months 6 days | |||||||
Weighted average discount rate | 7.40% | 7.40% | |||||||
Operating Lease, Lease Income, Lease Payments | $ 400,000 | $ 0 | $ 1,200,000 | $ 1,000,000 | |||||
Maximum potential payment | 247,700,000 | 247,700,000 | |||||||
Additional amount accrued related to minimum guarantees | 200,000 | 200,000 | $ 0 | ||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | 30 seconds | |||||||
Amortization of intangible assets | 9,500,000 | $ 900,000 | 18,900,000 | $ 7,100,000 | |||||
ESAs and Network Affiliate Agreements | |||||||||
Other Commitments [Line Items] | |||||||||
Amortization of intangible assets | 5,900,000 | $ 900,000 | 11,700,000 | $ 7,100,000 | |||||
Cinemark and Regal [Member] | |||||||||
Other Commitments [Line Items] | |||||||||
Amount Increase In Payment Per Theater Patron | $ 0.05 | $ 0.0375 | |||||||
NCM, LLC. | Founding Members | |||||||||
Other Commitments [Line Items] | |||||||||
Liabilities recorded for related party obligations | $ 0 | $ 0 | $ 0 | ||||||
Percentage of increase in payment per theatre patron | 8% | ||||||||
Term of increase in payment percentage per theater patron | 5 years | ||||||||
Percentage of increase in payment per digital screen and digital cinema equipment | 5% | ||||||||
Minimum | |||||||||
Other Commitments [Line Items] | |||||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | ||||||||
Minimum | NCM, LLC. | Founding Members | |||||||||
Other Commitments [Line Items] | |||||||||
Aggregate percentage of theater access fee paid | 12% | 12% | |||||||
Maximum | |||||||||
Other Commitments [Line Items] | |||||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds | ||||||||
Future patron payment | Cinemark | |||||||||
Other Commitments [Line Items] | |||||||||
Percentage of increase in payment per theatre patron | 8% | ||||||||
Term of increase in payment percentage per theater patron | 5 years | ||||||||
Future patron payment | Cinemark and Regal [Member] | |||||||||
Other Commitments [Line Items] | |||||||||
Amount Increase In Payment Per Theater Patron | $ 0.052 |
Commitments and Contingencies_2
Commitments and Contingencies - Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2024 | Jun. 29, 2023 | Jun. 27, 2024 | Jun. 29, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 0.5 | $ 0.1 | $ 1.3 | $ 1 |
Variable lease cost | 0.1 | 0 | 0.2 | 0.1 |
Total lease cost | $ 0.6 | $ 0.1 | $ 1.5 | $ 1.1 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Other Investments (Details) - USD ($) $ in Millions | Jun. 27, 2024 | Dec. 28, 2023 |
Fair Value, Separate Account Investment [Line Items] | ||
Total other investments | $ 1 | $ 0.7 |
AC JV, LLC | ||
Fair Value, Separate Account Investment [Line Items] | ||
Investment in AC JV, LLC | $ 1 | $ 0.7 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Values of the Company's Assets and Liabilities (Details) - Fair Value, Measurements, Recurring $ in Millions | Jun. 27, 2024 USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Cash equivalents | $ 40.2 |
Total assets | 40.2 |
Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Cash equivalents | 40.2 |
Total assets | 40.2 |
Fair Value, Inputs, Level 2 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Cash equivalents | 0 |
Total assets | 0 |
Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Cash equivalents | 0 |
Total assets | $ 0 |