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AMC Networks Inc. Reports First Quarter 2016 Results

First Quarter 2016 Highlights:

  • Net revenues increased 5.7% to $707 million
  • AOCF [1] increased 10.6% to $287 million
  • Operating income increased 12.2% to $259 million
  • Diluted EPS of $1.55. Excluding debt refinancing charges, Diluted EPS of $1.99, an increase of 20.2%

NEW YORK, May 05, 2016 (GLOBE NEWSWIRE) -- AMC Networks Inc. ("AMC Networks" or the "Company") AMCX, -0.17% today reported financial results for the first quarter ended March 31, 2016.

President and Chief Executive Officer Josh Sapan said: "AMC Networks is continuing to build on the momentum and strength of 2015 with a strong start to 2016. First quarter 2016 revenues, AOCF and operating income were healthy and growing. Our performance continues to be driven by the strength of our brands and the popularity of our original programming, particularly The Walking Dead, Better Call Saul and Fear the Walking Dead, with viewers and advertisers. With the refinancing of our debt on favorable terms and the authorization of a $500 million share repurchase program, our Company remains focused on creating and delivering value for shareholders."

First quarter net revenues increased $38 million, or 5.7%, to $707 million over the first quarter of 2015, led by 6.4% growth at National Networks and 2.5% growth at International and Other versus the prior year period. Adjusted Operating Cash Flow ("AOCF") [1] totaled $287 million, an increase of 10.6%, or $27 million, versus the prior year period. National Networks AOCF increased 10.9%, or $28 million, and International and Other AOCF decreased $1 million versus the prior year period. Operating income was $259 million, an increase of 12.2%, or $28 million, versus the prior year period. The operating income increase resulted from 10.9% growth at National Networks and a decrease of $2 million in operating loss at International and Other.

First quarter net income was $113 million ($1.55 per diluted share), compared with $121 million ($1.66 per diluted share) in the first quarter of 2015. As discussed in the "Other Matters" section of this release, net income included charges of $48 million ($0.44 per diluted share) incurred in connection with the refinancing of debt in the quarter. Excluding the impact of the refinancing charges, net income was $146 million ($1.99 per diluted share), an increase of $25 million, or 20.2% per diluted share, as compared to the prior year period. The increase resulted primarily from the growth in operating income.

For the three months ended March 31, 2016, net cash provided by operating activities was $167 million and Free Cash Flow [1] was $146 million. These amounts represent an increase of $87 million and $84 million, respectively, compared to the prior year period. The increase in Free Cash Flow was primarily related to the improved operating performance and decreased working capital.

  • See definition of Adjusted Operating Cash Flow ("AOCF") and Free Cash Flow included in the discussion of non-GAAP financial measures on page 3 of this earnings release.

Segment Results

(dollars in thousands) Three Months Ended March 31,
2016 2015 Change
Net revenues:
National Networks $ 598,635 $ 562,848 6.4 %
International and Other 109,048 106,355 2.5 %
Inter-segment eliminations (1,104 ) (521 ) (111.9 %)
Total net revenues $ 706,579 $ 668,682 5.7 %
National Networks $ 280,952 $ 253,258 10.9 %
International and Other 5,106 5,679 (10.1 %)
Inter-segment eliminations 511 281 81.9 %
Total AOCF $ 286,569 $ 259,218 10.6 %

National Networks
National Networks principally consists of the Company's five nationally distributed programming networks, AMC, WE tv, BBC AMERICA, IFC and SundanceTV.

National Networks revenues for the first quarter 2016 increased 6.4% to $599 million, AOCF grew 10.9% to $281 million, and operating income rose 10.9% to $267 million, all compared to the prior year period.

Growth in revenues was primarily led by a 10.7% increase in distribution revenues to $335 million. The growth in distribution revenues was primarily attributable to increases in digital distribution and licensing revenues as well as increases in affiliate fees. Advertising revenues increased 1.3% to $264 million. The increase in advertising revenues was due to strong growth at WE tv, SundanceTV, BBC AMERICA and IFC, which was partially offset by a decrease at AMC due to the timing of the airing of original programming.

First quarter AOCF increased 10.9% to $281 million reflecting the increase in revenues partially offset by an increase in operating expenses. The increase in operating expenses was primarily attributable to higher programming related expenses in the current year period. The increase in operating income primarily reflected the growth in AOCF.

International and Other
International and Other principally consists of AMC Networks International, the Company's international programming business; IFC Films, the Company's independent film distribution business; and various developing digital content distribution...