• by Wayne Friedman , May 11, 2021

As more theatergoers return to cinemas this year, in-theater advertising company National CineMedia will see revenues recover slowly -- but not fully until next year, according to one analyst.

For this year, Eric Wold, media analyst at B. Riley Securities, expects the company will not participate fully in this year’s TV-related upfront marketplace. Instead, he says, NCMI will “hold back a fair amount of inventory for advertisers scrambling to get in front of audiences with higher CPM scatter options.”

The company’s optimism is building for the big, more complete theatrical re-opening in the fourth quarter. Wold expects positive cash flow to return to NCMI in that quarter.

In response to new competitors from subscription VOD platforms, he says the theater advertising company sees “a growing number of new advertisers/brands seeking ways to reach the key 18-to-49 demographic” — especially with an end-of-the-year blockbuster-predicted film slate.

Wold expects quarterly revenues to climb to $27.6 million in the second quarter of this year, $66.3 million in the third quarter, and $110.4 million in the fourth quarter. He expects revenue for all of 2021 to be $209.7 million; then $405.5 million (2022); and $457.7 million (2023).

First-quarter advertising revenues at NCM were at $5.4 million -- missing the consensus of analysts, who estimated they would hit $13.5 million. This was also down significantly from pre-pandemic period a year ago -- $64.7 million, according to the company.

In the first quarter, “advertising demand was adversely impacted by closed theaters (especially the Regal circuit), capacity restrictions and film slate delays.” says Wold.

National CineMedia reported first-quarter results after the close on Monday.

It posted a first-quarter operating loss of $28.3 million versus operating income of $4.9 million. In mid-Tuesday trading, its stock was down 4.2% to $4.20.