Q2 2021 National Cinemedia Inc Earnings Call

August 9, 2021

[music].

Good evening and welcome to the National and Media, Inc. Q2, 2021earnings conference call.

All participants are in listen only line.

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After todays presentation and that'll be an opportunity to ask questions.

Ask the question in my price with Darcie, followed by the number 1 on your telephone keypad withdraw. Your question. Please press Star then 2.

This event is being recorded I would now like to turn the conference over to Ted Watson Senior Vice President Finance. Please go ahead.

Thank you Kate and good afternoon, I am joined today by our CEO Tom Lesinski.

And I would like to remind our listeners that this conference call contains forward looking statements within the meaning of section 27, a of the Securities Act of 1933 as amended and section 21 E of the Securities Exchange Act of $19.30 for as amended.

All statements, including our discussion about the future impacts of COVID-19, other than statements of historical facts communicated during this conference call may constitute forward looking statements.

These forward looking statements involve risks and uncertainties and important factors that can cause actual results to differ materially from the company's expectations are disclosed and the risk factors contained in the company's filings with the SEC.

All forward looking statements are expressly qualified in their entirety by such factors.

Further our discussion today includes some non-GAAP measures in accordance with regulation G. We have reconciled these amounts back to the closest GAAP basis measurement. These reconciliations can be found at the end of today's earnings release or on the Investor Relations page of our website and see them Dot com.

And now I'll turn the call over to Tom.

Thank you Ted and good afternoon, everyone.

To our second quarter 2021 earnings call.

I hope that you're all continuing to stay safe and are having a happy and healthy summer.

During the call today, I'm going to provide a high level update on a recovering and cinema advertising business.

And the ongoing steps, we've continued to take to balance cost containment with the need to quickly and we start our business.

And I'll also provide and update on our strategy to diversify and strengthen our marketing product offerings by expanding our online presence and consumer database and analytics and increasing our reach and impression space from other out of home venues total.

And then provide more details about how we are managing our operating costs and our overall liquidity and.

And then as always we'll be open for questions.

Summer Moviegoing season is in full swing.

And we've been very encouraged by the way Advertiser demand has picked up with the box office success of several new releases.

The strong openings of a quiet place fast and furious 9 black widow and space Jam have all demonstrated that there's a significant pent up demand to return to the communal big screen experience of the movie theater.

Even at films like Black widow that have open day and date with the streaming service have attracted large cinema audiences.

It's a very crowded film release schedule for the remainder of the year.

The highest percentage of movie theater locations opened since the pandemic began in March 22, and our AD commitment book building.

We are very optimistic about the rest of 'twenty 1 and.

'twenty 2.

While the various release strategy experience of traditional Hollywood Studios and new Tech for video content produced continues to play out there are strong signs emerging that lead us to believe that and exclusive theatrical window remains the best approach for content producers.

And with the highest domestic grossing movie set for here.

Quiet place 2 and F..9 were released exclusively on the big screen.

Positive press and other PR about the successor for several things cost to produce and stuffing. It has created a huge incremental awareness is also expected to provide meaningful marketing benefit and.

And the upcoming streaming and other release Windows.

Combined with consumer awareness benefits and the significant loss revenue due to streaming related piracy, we believe that is becoming increasingly clear.

And that students are leaving money on the table for the day and day streaming strategy.

But reality may underlie and recent announcements by many studios, including Warner brothers, and they'll maintain or reconsider and exclusive cinema release window for all or some other films in 2022.

There's also been a recent experimentation with and exclusive cinema release window by Netflix for certain of their feature length films.

And this could be a trend that expands to other companies that have recently and with the stream business.

But the first time since the COVID-19 pandemic began in March of 2020, some release schedules have begun to normalize.

All movie theaters have reopened and cinema audience and have begun to return and.

Most importantly, so too have our advertising clients.

At the end of Q2, and 97 per cent of the theaters within our network for open and a robust motion picture for at least schedule was and placed a stark contrast to the bleak conditions at the end of Q2 of 2020.

As U S movie theaters begin to reopen and capacity restrictions begin to be lifted and all major metropolitan areas. During Q2, the number of AD impressions available to sell to our clients began to increase.

<unk> and a small amount of and theater revenues versus none in Q2 last year with EBIT flows.

While our Q2 revenue was still significantly below pre pandemic levels and trends are encouraging as future marketing budgets are starting to be allocated to cinema and other clients can see for themselves that are valuable young engaged movie audience has been trending towards critical mass and once again.

The sales momentum reflects all the hard work of our sales team over the past year as debt.

Cinema advertising and MCM and particular top of mind with advertisers, even though we've had very few high quality cinema AD impressions to sell.

Maintaining these client and agency relationships during the pay down of cash paid significant dividends. During this years TV network upfront that are and their final stages.

Already completed numerous upfront commitments and are actively engaged and finalizing many other negotiation with major advertisers for marketing campaign that will cover the broadcast here beginning this October.

Approximately half of our top 20 up from partners from 2019 are back and have closed deals with us for 2021.

And another 25% expected to return to our screens by the end of Q3.

And also can continue our proud off to a promising discussions with many other new and existing clients across a wide array of key categories.

Including <unk> Telecom Auto entertainment.

CPG technology finance insurance retail and others.

The upfront and market demand that we're seeing may also be related to some changes and consumer TV viewing.

Have you bought caused by the pandemic.

High quality video <unk> are becoming harder for marketers to find as TV consumers begin to favor as spot versus AD supported television.

This reduced AD supported TV viewership volume.

And the continued aging of the traditional TV audience is forcing AD supported television networks to increase pricing to secure the same level of upfront commitment.

This creates a real opportunity for us as marketers and must find their premium video and <unk> elsewhere, and our CPM is aren't in fact more competitive.

There also appears to be less excitement about the new fall TV programming schedule from the media buying for me as Covid related production issues and reduce the number of new shows premiering on linear AD supported TV and they also have begun to put more of their program and message <unk> series that will help them grow the subscription base of their emerging streaming networks. This put cinema.

And a very strong position with a crowded film slate for the rest of this year and well into 2020.

While the recent news of the increase and new Covid cases, including the spread of the Delta variant recent news regarding vaccine mandate youre working on the potential market potentially stricter COVID-19 protections and the future may impact box office attendance and advertiser sentiment, but we remain excited for the box office later in the year and box up assessments for Q3.

And Q4 'twenty, 1 continue to be very positive for the major upcoming film set for release <unk>.

Including Shang Chi and diligence 10 rings.

And next James Bond movie No time to die Halloween kills June those clusters afterlife top gun Maverick.

Ryder man.

No way home seem too and of course the matrix for.

In addition to the recovery of our core cinema AD business. We're also making good progress on our strategy to create more robust consumer analytics data base and unique ways to bundle our highly coveted theater audiences with online impressions from our new and expanding digital platforms and other consumers that visit our other digital out of home partner locations.

These new integrated marketing offerings will allow advertisers to engage movie fans anytime and anywhere.

The Covid pandemic, our newly digital AD offerings continued to attract new advertisers and <unk>.

And to our owned and operated digital products and apps, we're continuing to execute on our plan to integrate with world class consumer tech platforms, including Youtube and Tictoc exclusive.

<unk> that allow us to sell advertising alongside the compelling entertainment content that our gen Z and millennial audience as well.

Our advertising on Youtube and ideal for example of the complementary digital expansion.

As we are now working with brands like farm and <unk> categories to run their ads alongside premium brand safe moving content like trailers and fan favorite movie club online across the top social video platforms, which included a 7 figure deal in particular and Q2.

And just also started a new tictoc customs social inputs for offering that we've developed and a unique partnership for the digital specialty group had intelligence and.

Anticipating this new operating will particularly will be particularly successful on the local side as it gives our local team and easy and affordable way for small business advertisers participate and 1 of the world's biggest social platforms through N cen and to bundle with around screen yet.

Powerful marketing bundle can reach young consumers.

Our digital offerings also provide valuable consumer data or.

Our ultimate goal is to become the premier source of movie related consumer day.

As such we have increased our focus on the aggravation of highly valuable consumer data.

Both from our consumer facing apps, such as movie trivia and Israel.

And also for movie ticketing data and partnership.

For our exhibitor.

These important movie ticket audience data sources are expected to grow our datasets to $300 million a year and will.

Will greatly expand our ability for a more robust targeting solutions for advertisers and to create custom closed loop attribution measurement for brands.

Your line.

Our growing industry position and movie audiences experts will put us in an ever stronger competitive position.

And larger digital advertising platform and is an important part of our supporting our premium <unk>.

<unk> value proposition.

We're also continuing to expand our new digital out of home growth, which was created to allow brands to access a unique combination of theater audiences and consumers and a variety of venues like supermarkets convenience stores restaurants and office buildings.

Although this has slipped very much and emerging business for us, we're seeing a growing pipeline of commitments from brands and categories, including CPP Health care education professional and financial services government travel and tourism and insurance. We also recently expanded our digital out of home network to include some exciting new vendors and putting our.

New Newbie on campus network powered by true, which offers brands and uniquely to reach young Gen Z movie fans and point of market entry consumers and college and University campus locations, where they spend the most time, including high traffic and.

And academic and commercial spaces, such as campus retail bookstores student centers, and cafeterias and athletics and recreation areas.

Also exploring new entertainment marketing arenas with and exclusive esports advertising and content monetization agreement.

And sports community aggregate or to create new ways for brands to capitalize on that cultural phenomenon.

As we mentioned during our Q1 call our new digital out of home and digital social and video platform inventories also provides us with 2 initial entry for us.

And to the programmatic buying and marketplace, which is an important step and our strategy to make all our and TMR easier to buy.

Our capital investments and our new cinema advertising management system that was launched in Q1 is laying the foundation for programmatic access for.

Our onscreen inventory as well, which we expect will create higher inventory utilization and other monetization opportunities for our NFC or inventory and future.

And while we're still near line use of this recovery.

As local multiplex just begin to sell out auditoriums showing the news from opening it's clear that consumer demand for the cinema experience.

<unk>.

And as previously described there are also signs that market or demand for our high quality video Trp's may and beyond the rise to as TV clients.

Your line.

While our business for probably is clearly underway and revenue levels and related accounts receivable balances are beginning to build.

Our monthly cash flow burn rates remain elevated and and.

There will be working capital timing differences associated with the payment of operating and debt service costs and collection of AD sales accounts receivable.

Thus it gets implemented and implemented initiatives to manage our liquidity, including approval from our board and founding members of a short term revolving debt facility.

And CN, Inc, and MCM LLC Woodbridge short term working capital deficits and Ted will get into more detail shortly.

We're also continuing to balance the need to continue for certain cost reduction measurement with the need to keep our talented and team in place and motivated to put the ramp up of our business as advertiser demand increase.

Our sales teams are now back to full strength and we brought back some furloughed staff that are needed to support the increased contract volume levels have begun to reinstate some of the company some of the temporary pandemic shallow reduction.

We also expect to implement.

Ill return to office plan for our Denver, Corporate office and regional offices in Los Angeles, Chicago, and New York City shortly.

I know that these staffing plans may not be happening as quickly as all of us would like so I remain very grateful to our entire and TM team for their incredible resilience dedication and support.

And Tim has not only survived the worst of the pandemic because of everyone's hard work.

Company is very well positioned for success and a post pandemic world.

And also relate to acknowledge the support of our board or.

For our exhibitor partners and our advertising clients and their agents and.

And again sincerely thank them for their continued support.

Begin to emerge from this historic time together stronger than ever.

While uncertainty related to COVID-19 pandemic remains we believe that we're well positioned to reestablish the growth momentum that we had created before the pandemic started.

We look forward to a continued recovery through the remainder of the year and to a much better times ahead.

So with that I'll now turn the call over to Ted to discuss more teeth more details about our financials and cost saving measures liquidity position and outlook.

Ed.

Thanks, Tom.

While the second quarter saw the industry begin to emerge from the pandemic with many seeding restrictions lifted.

And I ask mandates removed and the release of multiple successful movie titles for.

Our network was still significantly impacted during the second quarter with attendance down 75% compared to 2019.

But up meaningfully compared to almost no attendance from Q2 of 2020.

And as a result, we recorded $14 million of Q2 revenue of 250% versus Q2, 2020, but still well below a more normalized 2019 level. When Q2 revenue was $110.2 million.

Given the continued significant impact of the COVID-19 pandemic on our business throughout the current quarter and and.

Analysis of our revenue and adjusted OIBDA and Q2 versus prior periods, it's not meaningful.

Therefore, I will continue to focus much of my comments today on our current liquidity position for <unk>.

<unk> success, and limiting our monthly cash flow burn rate and thoughts and how we see our business recovering and the back half of 2021.

Total Q2, adjusted OIBDA was negative $18.7 million compared to negative $12.7 million and Q2 of 2020.

This lowered Q2, adjusted OIBDA and reflects higher founding member theater access fees associated with the significant increase in theater attendance during the quarter.

This lag between the increase and theater attendance and increases and AD revenue was related to media buyers wanting to confirm a critical mass of AD impressions.

They made meaningful ad commitments.

Yes attendance levels did not begin to build until late in Q2, we were only able to compete for scatter budgets late in the quarter and we were unable to secure any material 2021 upfront commitments made last summer while movie theaters were closed.

As Tom mentioned, we expect that this lag will start to improve in Q3, because we begin to secure more scatter budgets and will improve even more meaningfully in Q4 as we benefit from the 2021 and 2022 upfront that is just ramping up.

Our Q2 average cash burn rate was approximately $13.7 million per month during the quarter, which we expect to be the high watermark for the cash burn rate before decreasing in Q3, 2 and average of 11% to $12 million per month and <unk>.

Continued towards the positive cash flow and Q4.

During Q2 as the theatre attendants begin to increase we started to bring staff back and restore compensation and some staff members to pre pandemic levels.

As of today, 44% of our employee base continues to be furloughed or have salary reductions of up to 40%.

And these continued cost reduction measures reduced our core operating expense in Q2 to $5.7 million per month compared to our pre COVID-19 run rate of $95 million per month per month, whereas savings of 40%.

As we have discussed in the past due to our high growth operating margins, we will achieve operating cash flow breakeven after debt service on an accrual basis, 1 of our quarterly revenue reaches approximately 50% of 2019 levels, which.

Which we continue to believe will be achieved as we exited Q3 of this year.

For the first 6 months, our total 2021 revenue was $19.4 million versus $68.7.002 million 20 a.

A decline of $49.3 million driven by the COVID-19 pandemic impacting all of 2021.

Versus only impacting the 2026 month period beginning in mid March.

Adjusted OIBDA decreased to a negative $34.9 million from $1.7 million and 2020 again, driven primarily by the timing of the COVID-19 pandemic beginning in mid March 2020 versus all of 2021.

For the second quarter, we reported a GAAP loss per diluted share of <unk> 28.

Versus a loss per diluted share of <unk> 18, and Q2 of 2020.

As adjusted to exclude the impairment of long lived assets net loss per share for the second quarter 2021 would have remained the same and the net loss per share for the second quarter 2020 would have decreased to 17.

The net loss per share and 2021 and 2020 was again the result of significant network attendance declines, resulting from the impact of the COVID-19 pandemic on the cinema business.

For the 6 months of 2021, we reported a GAAP diluted loss per share of <unk> 53.

Compared to an earnings per diluted share of <unk> 22 from the first 6 months of 2020.

For the first 6 months of 2021 capital expenditures were $3.4 million versus $5.5 million invested in 2020.

This decrease is related to the halt of all non essential capital spending once the pandemic started.

Total capital expenditures are expected to be approximately 7% to $7.5 million and 2021.

And the second quarter and for the first 6 months of 2021, we recorded $200000 of integration and other encumbered theater payments, primarily from AMC, carmike theaters versus $0 and $1.4 million respectively last year.

The AMC integration payments are based on what and see them could have earned and paid advertising been sold on those theaters by our sales teams.

As a reminder, these integration and other encumbered theater payments are added to adjusted OIBDA for debt compliance and partnership test distribution purposes, but are not included in reported revenue or adjusted OIBDA and they are recorded as a reduction to net intangible assets on the balance sheet.

Moving to our balance sheet, our total debt net of cash at MCM LLC at the end of Q2.2021 increased to $116 million to 1.01 billion versus 894 million at the end of Q2.2020.

Our average interest rate and all debt was approximately 5.6% at the end of Q2 compared to 4.9% at the end of Q2.2020, including our $479 million floating rate term loan bank debt and revolving credit facility that had a rate of approximately 5.2%.

Excluding revolver balances, 67% of our total debt outstanding at the end of Q2.2021 had a fixed interest rate.

And <unk> Llc's current cash balances are $89.3 million versus our liquidity covenant that requires a minimum cash balance of $55 million.

Due to the timing difference between the collection of MCM, LLC, increasing accounts receivable and payment of various expenses, including debt service.

As Tom mentioned, we have received board approval and required founding member approval to enter into a short term revolving debt facility and the amount of $20 million between and <unk>, Inc, and MCM LLC.

This will bridge working capital deficits and provide short term working capital loans is MCM LLC rebuilds, its advertising revenue base and <unk>.

Collect related accounts receivable to ensure MCM LLC maintains compliance with the financial covenants required by its debt obligations.

Our board of Directors has authorized and MCM, Inc, quarterly cash dividend and the <unk> per share of common stock from the dividend will be paid on September 6.2021 to stockholders of record on August 23.2001.

This quarterly dividend will result in a current yield of 6.5% based on today's closing share price of $3 and cents a share.

The <unk>, Inc. Cash balance will be $46.3 million after payment of the most recent dividend and thus our <unk> dividend can be paid for the next 2 and a half years with no additional MCM LLC distributions to <unk>, Inc.

This is well beyond the MCM LLC distribution restrictions contained and the recent bank debt amendment that terminate at the end of Q3 dollars 22 subject to certain limitations.

This is also not expected to be impacted by our planned short term revolving debt facility between and <unk>, Inc. And <unk> LLC that will be used to fund short term working capital needs through its March 31, 2022 maturity date.

And CME contends to pay a regular quarterly dividend for the foreseeable future at the discretion of the board of directors.

For 2 and a half years of dividend cushion is considerably longer than we have historically targeted.

We will continue to monitor this cushion and related dividend level consistent with our intention to distribute over time substantially all our free cash flow, resulting from distributions from <unk> LLC once they resume.

And as always the declaration and payment timing and amount of future dividends payable will be at the sole discretion for the board of directors, who will consider general economic and advertising market business conditions, the company's financial condition available cash current and anticipated cash needs and any other factors that the.

Lord of directors considered relevant.

This includes the impacts the MCM LLC related to the COVID-19, pandemic and restrictions under the MCM LLC credit agreement.

And the current and availability and funding of the unsecured revolving loan agreement between <unk> and <unk>, Inc, and MCM LLC.

Finally, while market conditions are improving there continues to be a number of uncertainties related to the impact of the COVID-19 pandemic on our business, making it difficult to provide a reliable future revenue and adjusted OIBDA guidance.

With that said I will conclude my comments with a few general observations regarding our financial condition and expected business performance for the back half of the year.

Based on our current financial projections I would expect our revenue exiting Q3 to be on a run rate of approximately 50% compared to 2019 levels and beyond breakeven on a cash flow basis from an accrual standpoint.

As mentioned in Q3 revenue will be almost half.

As mentioned Q3 revenue will be almost all scatter market driven given our limited Q3 upfront commitments due to our inability to participate and last year's upfront marketplace.

Because of the theater closures and uncertainty about the film release schedule.

Beginning in Q4, we expect increasing network attendance.

And a return to more normalized scatter sales.

This combined with the Q4 upfront commitments that were and the process of securing will be a significant driver of higher Q4 revenue and positive Q4 adjusted their web after debt service.

By the end of 2021, we expect revenue to be trending back towards pre pandemic revenue levels, assuming the theatrical release schedule remains firm box office attendance continues to rebound and the upfront is consistent with the company's expectations.

This concludes our prepared remarks, and we'll now open up the lines for questions operator.

Okay.

We will now begin the question and answer session ask a question you May Press Star then 1 on your telephone keypad.

If youre using a speakerphone, please pick up and.

Okay.

That's my personal Inc. To withdraw your question Please press star and.

At this time, we will pause for the carriage for from Blackrock.

Your first question comes from Eric Wold with B Riley.

Great. Thank you. Thank you and good afternoon everybody.

Your question and just kind of on what Youre seeing out there I guess I guess, starting with the scatter market. Maybe you can talk about any any patterns or.

For trends Youre seeing and that starts to come back in terms of the type of businesses that kind of are coming back faster than others.

Maybe some types of business that debt.

And getting involved get regional strengths around the country.

And that kind of gives you.

Optimism from the underlying trends and potential even you and pause.

On the strength and that recovery et cetera.

Yes. So this is Tom so that the scatter market has actually been good obviously, its very competitive given what's going on and all the optionality. There is there's been a tremendous amount of focus.

From agencies and clients on digital and Avon.

The biggest players as you know all the big media companies have opened up and <unk> services. They are selling those impressions.

Impressions.

Aggressively.

I'm really happy with how far we've come on the scatter side historically, we've sold about 60% of our business and the upfront market.

But scatter is coming along nicely I can't say that any particular category.

<unk> is doing any less than it normally what I will tell you that the traditional.

And all advertisers, particularly the entertainment.

Clients that we support on the streaming side.

Insurance companies.

CPG all of those companies are.

Coming back, including our biggest advertisers and I'm quite happy about that the way I measure. This is to look at our future pipeline.

And while we have building up in Q3, and Q4 and handicapping that against the.

And the number of actual data points that are leading to contracts versus and contract discussion so as I see that scale up.

Which I'm quite happy about so far and Q3 and Q4.

It leads me to feel there is a lot of strength.

Across really all of our customer base I would say there is really only a handful of clients that are still and defense.

And we're really feeling good about our current relationship with brands and agencies.

Thank you.

And then your comment obviously.

<unk>.

Okay.

And we expect the exit Q3, and a 50% run rate and ramping into Q4 and assuming a lot of that is driven by.

And the contracts you're putting in place now the visibility from the upfront and the.

A willingness and downsize the commits from out there I guess.

Can you give us a sense for just the time youre.

Sure.

During the upfront the tone, you're hearing from the arbitrage in terms of.

Where their budgets are.

And what they might look like versus 19, and kind of and general and how they're feeling about and Peter has done and segments and then lastly, you kind of.

Price sensitivity you mentioned that linear is taking up price in China.

And so their loss of business.

How does that reflect your and your pricing and what have you been doing that and furniture and CPM.

There's a lot of questions built into that.

And so on the CPM upfront on the upfront side I would say, we're holding our own versus historical upfront levels.

Scatter, where we have to be a little more competitive and.

And and that's just part of the business right now so as we recover.

Being a little more aggressive on.

Case by case basis, but for the most part I look forward to really Q4, and 'twenty 2 as having CPM levels at a relatively comparable to where we've been.

No.

I honestly it hasnt really been an issue about having to discount our inventory it's much more just making sure we can deliver the impressions reliably to the agencies into the brands and making sure that they are continuing to build our confidence levels with us and we're seeing that every week every month.

Especially going in towards the back half of Q3 into Q4.

Yeah, and Eric I would just add to that debt as Tom said, the discussions really arent around price.

As any point that the advertisers want to focus on its flexibility.

Again, just given the uncertainty with the pandemic that that if things were to go sell for that they have the ability to shift their advertising dollars, that's probably where the bigger focus of conversations been.

And just to clarify that.

And Ted when you say shift of advertising dollars shifting.

Shifting to other period or potentially shifting out of their contracted amounts.

Either or price.

And they think they can shifted further and further down for cinema, they would do that but if they need to be able to pull it out that they could do that as well.

Got it thank you Bob.

Okay.

Again, if you have a question. Please press Star then 1 your net.

Next question is from Jim Goss from Barrington.

Hi.

And Pat on for Jim.

Just a couple of other questions on.

And what Youre seeing upfront and the.

Yeah, and I'm just wondering.

On.

Selling the platinum spot, what you're sort of seeing there in terms of industries that are.

And maybe good partners with that and the upfront or.

Ones that arent and any sort of commentary on your.

Your first upfront being able to actually sell.

We had our very first.

Platinum engagement and <unk> in 2019 and Q4.

Which to me seems like a long time ago.

I can tell you that the interest and platinum is still very strong we are optimistic about the fourth quarter.

It's still obviously very expensive units.

But we're having very good conversations.

With many advertisers about their interest and platinum.

As part of our post show package I can't give any specifics.

Hopefully when we get out our call next quarter will.

And we will be able to talk to you more specifically about that particular product.

But it's definitely <unk>.

Free resonating with the AD community.

And we're thankful for that because it was a key part of our Q4.2019 record quarter.

Okay.

Okay. Thanks, and then.

So a question on flexibility.

I guess to what extent do.

Advertisers have and interest and maybe focusing on.

Vic subset of screens butter and.

Premium format screens and.

And of that nature to sort of maybe.

And that seems.

Seems to be a particularly.

That particular area of focus for consumers going back to cinemas.

And most part our advertisers and agencies brands by the full National network. That's our core National business. Obviously, we have a separate local and regional business, where people can be more selective on the city.

But there's not any kind of a trend towards people buying a select group of premium.

National.

Screens, so that that trend that you're talking about is we're not seeing that now.

Okay. Thank you.

Your next question comes from Ben price Basket price.

Mr. Bruce Your line is open.

Hey, guys. Thanks for taking my question I wanted to ask about how per day to see Peter and attendance as a property for advertiser confidence and what I mean by that and you look at 9 or Black widow pipeline to all of those seem to have pretty good turnout 50, 60, $70.80 million is it going to take a several hundred million dollars.

And like a top and actually and we've got that critical mass you talked about and be opening remarks and just.

Here you can commentary on that would be great. Thanks again.

So I think it would be helpful to have some real blockbuster movies, but it's more important that we have consistent movie attendance debt.

<unk> is reliable.

And when a brand wants to.

Commit.

<unk> 2 impressions and they want to make sure. They are really going to be there and they are really going to run.

We've done a pretty good job I think so far this summer having a relatively consistent theatrical schedule.

But people like buying our platform knowing that debt depressions youre going to get delivered and there's going to be really larger reach so yes, yes of course top gun and the new Marvel movie will help achieve that but the more critical thing as debt weekend and week out slide and in flight out that we have enough scale to actually meet the marketing needs of clients.

So it won't just be 1 movie.

It will be great news, if top gun as a home loan, which everyone seems to think and will be but it's much more reported that we had consistent week to week month to month compression delivery.

It's really the strength of the whole schedule and the attendant.

To answer your question.

Thank you.

Yeah.

This concludes our question and answer session I would like to turn the conference back over to Thomas for any closing remarks, okay. Great. Thank you for your questions.

And as I mentioned previously, we're very well positioned for the future as audiences and advertisers return for the movies.

Projects for making to execute all of our business strategies combined with an incredibly strong slate for the remainder of Q of 'twenty, 1 and into 'twenty and will ensure a really continued recovery and growth of our business and.

And once again want to thank all of Mtm's team's hard work.

To reunite brands for the power cinema and expand our cinema network strengthen our digital offerings and of course, diversify our advertising inventory beyond the big screen.

And I'd also like to thank all of our cinema and advertising client partners, our shareholders and lenders for their continued support and patients and of course, our founding members.

Truly appreciate you joining this call to help that everyone continues to stay safe and healthy and we look forward to seeing you again at the book.

Thank you.

Conference call has now concluded. Thank you for attending today's presentation you may now disconnect.

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Good evening and welcome to the National and Media, Inc. Q2, 2021earnings conference call.

Participants are in listen only mode.

And you've acquired.

And the conference that's right.

Okay Alright.

Alright, Thank you Matt.

After todays presentation and that'll be an opportunity to ask questions.

A question you May press the Star can you comment by the number 1 on your Clark on for Scott.

Withdraw your question. Please press Star then.

Please note this event is being recorded.

I'd now like to turn the conference over to Paul Black.

Senior Vice President Finance. Please go ahead.

Thank you Kate and good afternoon, I'm joined today by our CEO Tom Lesinski.

I'd like to remind our listeners that this conference call contains forward looking statements within the meaning of section 27, a of the Securities Act of $19.33, as amended and section 20 <unk> of the Securities Exchange Act of $19.30 for as amended.

All forward looking statements are expressly qualified in their entirety by such factors.

And now I'll turn the call over to Tom.

Thank you Ted and good afternoon, everyone.

Welcome to our second quarter 2021 earnings call.

Hope that you are all continuing to stay safe and are having a happy and healthy summer.

During the call today Im going to provide a high level update on a recovery and the cinema advertising business.

And the ongoing steps, we've continued to take to balance cost containment with the need to quickly restart our business.

And I will also provide and update on our strategy to diversify and strengthen our marketing and product offerings by expanding our online presence and consumer database and analytics and increasing our reach and impression space from other out of home venues total.

And then provide more details about how we are managing our operating costs and our overall liquidity and.

And then as always we'll be open for questions.

Some are moviegoing season is in full swing.

And we've been very encouraged by the way Advertiser demand has picked up with the box office success of several new releases.

The strong openings of a quiet place fast and furious 9 black widow and space Jam have all demonstrated and Theres a significant pent up demand to return to the communal big screen experience of the movie theater.

Given and films like Black widow that have open day and date with the streaming service have attracted large cinema audiences.

It's a very crowded film release schedule for the remainder of the year.

The highest percentage of movie theater locations opened since the pandemic began in March 22, and our AD commitment book building.

We are very optimistic about the rest of 21 and.

'twenty 2.

2 of the highest domestic grossing movie set for a year.

Quiet place 2 and F..9 were released exclusively on the big screen.

Positive press and other PR about the success of the central cost to produce and stuffing. It has created a huge incremental awareness is also expected to provide meaningful marketing benefit and.

And the upcoming streaming and other release Windows.

Combined with consumer awareness benefits and the significant loss revenue due to streaming related piracy. We believe that is becoming an increasingly clear.

That students are leaving money on the table for the day and date streaming strategy.

But reality may underlie and recent announcements by many studios, including Warner Brothers, and they will maintain or reconsider and exclusive cinema release window for all or some other films in 2022.

And this has also been a recent experimentation with and exclusive cinema release window by Netflix for <unk>.

Certain of their feet drilling sales this could be a trend that expands to other companies that have recently and the stream business.

But the first time since the COVID-19 pandemic began in March of 2020, some release schedules have begun to normalize nearly all movie theaters have reopened and cinema audience and have begun to return and <unk>.

Most importantly, so 2 of our advertising clients.

At the end of Q2, and 97 percentage of theaters within our network for open and a robust motion picture for at least schedule was and placed a stark contrast to the bleak conditions at the end of Q2 and 2020.

<unk> and a small amount of and theater revenues versus none in Q2 last year with EBIT flows.

While our Q2 revenue was still significantly below pre pandemic levels and trends are encouraging as future marketing budgets are starting to be allocated for cinema and other clients can see for themselves that are valuable young engaged movie audience has been trending towards critical mass and once again.

The sales momentum reflects all the hard work for our sales team over the past year as debt kept cinema advertising and MCM and particular top of mind with advertisers, even though we've had very few high quality cinema AD impressions to sell.

Maintaining these client and agency relationships during the pandemic cash paid significant dividends. During this year's television network upfront that are and their final stages.

Already completed numerous upfront commitments and are actively engaged and finalizing many other negotiation.

With major advertisers for marketing campaign that will cover the broadcast share beginning this October.

Approximately half of our top 20 upper and partners from 2019, our back and have closed deals with us for 2020 what.

It was another 25% expected to return to our screens by the end of Q3.

And also can continue our profit to a promising discussions with many other new and existing clients across a wide array of key categories.

Including <unk> Telecom Auto entertainment.

CPG technology, finance insurance and retail and others.

The upfront market demand that we're seeing may also be related to some changes and consumer TV viewing.

Hey have you bought caused by the pandemic.

High quality video <unk> are becoming harder for marketers to find as TV consumers became to favor <unk> versus AD supported television.

This reduced AD supported TV viewership volume and.

And continued aging of the traditional TV audience is forcing AD supported television networks to increase pricing to secure the same level of upfront commitment.

This creates a real opportunity for us as marketers and must find their premium video and <unk> elsewhere, and our CPM is aren't in fact more competitive.

And a very strong position with a crowded film slate for the rest of this year and well into 2020.

While the recent news of the increase and new Covid cases, including the spread of the Delta variant recent news regarding vaccine mandated work.

And other potential market essentially stricter COVID-19 protections and the future may impact box office attendance and advertiser sentiment, but we remain excited for the box office later in the year and box up assessments for Q3, and Q4 'twenty..1 continued to be very positive for the major upcoming film set for release <unk>.

Including Shang Chi and diligence 10 rings.

And next James Bond movie No time to Die Halloween kills June Ghostbusters afterlife top gun Maverick.

<unk>.

No way home sing too and of course for matrix for.

These new integrated marketing offerings will allow advertisers to engage for movie fans anytime and anywhere.

The Covid pandemic, our newly digital AD offerings continued to attract new advertisers and addition to our owned and operated digital products and apps for continuing to execute on our plan to integrate with world class consumer tech platforms, including Youtube and ticked off the exclusive partnerships that allow us to sell advertising alongside the compelling entertain.

And the content that our Gen Z and millennial audience as well.

Our advertising on Youtube and ideal for example of a complementary digital expansion.

As we are now working with brands like farm and <unk> categories to run their ads alongside premium brand safe moving content like trailers and fan favorite moving online across the top social video platforms, which included a 7 figure deal in particular and Q2.

Just also started a new tictoc custom social and political offerings that we've developed and a unique partnership for the digital specialty group had intelligence. We anticipate that this new operating will particularly will be particularly successful on the local side as it gives our local team and easy and affordable way for small business advertisers participate and 1.

And the world's biggest social platforms U N cen and to bundle with our onscreen ads credit powerful marketing bundle can reach out and consumers.

Our digital offerings also provide valuable consumer data are.

Ultimate goal is to become the premier source of movie related consumer day.

And as such we have increased our focus on the aggravation of highly valuable consumer data.

And we collect both from our consumer facing apps, such as movie trivia and Newfield.

And also for movie ticketing data and partnership.

For our exhibitor these.

These important movie ticket audience data sources are expected to for our datasets to $300 million by year and will greatly expand our ability for a more robust targeting solutions for advertisers and to create custom closed loop attribution measurement for plan.

Your line.

Our growing industry position and <unk>.

And the audience experts will put us in an ever stronger competitive position.

And larger digital advertising for the platform and is an important part of our supporting our premium tier.

<unk> value proposition.

We're also continuing to expand our new digital out of home growth, which was created to allow brands to access a unique combination of theater audiences and consumers and a variety of vendors like supermarkets convenience stores restaurants and office buildings.

Though this is split very much and emerging business for us, we're seeing a growing pipeline and the commitments from brands and categories, including CPP.

<unk> care education professional and financial services government travel and tourism and insurance. We also recently expanded our digital out of home network to include some exciting new venues, including our new newly on campus network powered by true, which offers brands and uniquely to reach young Gen Z movie fans and point.

From a market entry consumers and college and University campus locations, where they spend the most time, including high traffic.

And academic and commercial spaces, such as campus retail bookstores student centers, and cafeterias and athletics and recreation areas.

We're also exploring new entertainment marketing arenas with and exclusive esports advertising and content monetization agreement.

E Sports community Aggregators.

<unk> new ways for brands to capitalize on that cultural phenomenon.

As we mentioned during our Q1 call our new digital out of home and digital social and video platform inventories also provides us with 2 initial entry for us into the programmatic buying and marketplace, which is an important step and our strategy to make all our MTM offerings and easier to buy our.

Our capital investments and our new cinema advertising management system that was launched in Q1 is laying the foundation for programmatic access for.

Onscreen inventory as well.

We expect will create higher inventory utilization and other monetization opportunities for our <unk> inventory and future.

And while we are still nearly <unk> of this recovery.

And as local multiplexers begin to sell out auditoriums, showing the news from opening it's clear that consumer demand for the cinema experience.

Sure.

And as previously described there are also signs that market or demand for our high quality video trp's and beyond the rise to as TV line.

Your line.

While our business for probably is clearly underway and revenue levels and related accounts receivable balances are beginning to build.

Our monthly cash flow burn rates remain elevated and and.

There will be working capital timing differences associated with the payment of operating and debt service costs and collection of AD sales accounts receivable.

Thus these implemented and implemented initiatives to manage our liquidity, including approval from our board and founding members of a short term revolving debt facility.

And <unk>, Inc, and MCM LLC to bridge short term working capital deficit and Ted will get into more detail shortly.

We're also continuing to balance the need to continue for certain cost reduction measurements with and need to keep our talented and team in place and motivated to quickly ramp up our business debt advertiser demand increase.

We also expect to implement.

Ill return to office plan for our Denver, Corporate office and regional offices in Los Angeles, Chicago, and New York City shortly.

I know that these staffing plans may not be happening as quickly as all of us would like so I remain very grateful to our entire and TM team for their incredible resilience dedication and support.

And Tim has not only survived the worst of the pandemic because of everyone's hard work.

Company is very well positioned for success and a post pandemic world.

And also like to acknowledge the support of our board or.

For our exhibitor partners and our advertising clients and their agents and.

And again sincerely thank them for their continued support.

Begin to emerge from this historic time together stronger than ever.

While uncertainty related to the COVID-19 pandemic remains we believe that we're well positioned to reestablish the growth momentum that we had created before the pandemic started.

We look forward to a continued recovery through the remainder of the year, that's a much better times ahead.

So with that I'll now turn the call over to Ted to discuss more teeth more details about our financials and cost saving measures liquidity position and outlook.

Ed.

Thanks, Tom.

While the second quarter saw the industry begin to emerge from the pandemic with many seeding restrictions lifted.

And I ask mandates removed and the release of multiple successful movie titles.

Our network was still significantly impacted during the second quarter with attendance down 75% compared to 2019.

But up meaningfully compared to almost no attendance from Q2 of 2020.

And as a result, we recorded $14 million of Q2 revenue of 250% versus Q2, 2020, but still well below a more normalized 2019 level. When Q2 revenue was $110.2 million.

Given the continued significant impact of the COVID-19 pandemic on our business throughout the current quarter and analysis of our revenue and adjusted OIBDA and Q2 versus prior periods is not meaningful.

Therefore, I will continue to focus much of my comments today on our current liquidity position for <unk>.

<unk> success, and limiting our monthly cash flow burn rate and thoughts and how we see our business recovering and the back half of 2021.

Total Q2, adjusted OIBDA was negative $18.7 million compared to negative $12.7 million and Q2 of 2020.

This lowered Q2, adjusted OIBDA and reflects higher founding member theater access fees associated with the significant increase in theater attendance during the quarter.

This lag between the increase and theater attendance and increases and AD revenue was related to media buyers wanting to confirm the critical mass of AD impressions.

For they made meaningful ad commitments.

As Tom mentioned, we expect that this lag will start to improve in Q3 as we begin to secure more scatter budgets and will improve even more meaningfully in Q4 as we benefit from the 2021 and 2022 upfront that is just ramping up.

Continued towards positive cash flow and Q4.

During Q2 as the theatre attendants begin to increase we started to bring staff back and restore compensation of some staff members to pre pandemic levels.

As of today, 44% of our employee base continues to be furloughed or have salary reductions of up to 40%.

These continued cost reduction measures reduced our core operating expense in Q2 to $5.7 million per month compared to our pre COVID-19 run rate of $95 million per month per month, whereas savings of 40%.

As we have discussed in the past due to our high growth operating margins, we will achieve operating cash flow breakeven after debt service on an accrual basis, when our quarterly revenue reaches approximately 50% of 2019 levels.

And which we continue to believe will be achieved as we exited Q3 of this year.

For the first 6 months, our total 2021 revenue was $19.4 million versus $68.7.002 million 20 a.

A decline of $49.3 million driven by the COVID-19 pandemic impacting all of 2021 versus.

First is only impacting the 2026 month period beginning in mid March.

Adjusted OIBDA decreased to a negative $34.9 million from $1.7 million and 2020 again, driven primarily by the timing of the COVID-19 pandemic beginning in mid March 2020 versus all of 2021.

For the second quarter, we reported a GAAP loss per diluted share of <unk> 28.

Versus a loss per diluted share of <unk> and Q2 of 2020.

The net loss per share and 2021 and 2020 was again the result of significant network attendance declines, resulting from the impact of the COVID-19 pandemic on the cinema business.

For the 6 months of 2021, we reported a GAAP diluted loss per share of <unk> 53.

Compared to an earnings per diluted share of <unk> 22 from the first 6 months of 2020.

For the first 6 months of 2021 capital expenditures were $3.4 million versus $5.5 million invested in 2020.

This decrease is related to the halt of all non essential capital spending once the pandemic started.

Total capital expenditures are expected to be approximately 7% to $7.5 million and 2021.

The AMC integration payments are based on what and see them could ever and had advertising been sold on those theaters by our sales teams.

As a reminder, these integration and other encumbered theater payments are added to adjusted OIBDA for debt compliance and partnership test distribution purposes, but are not included in reported revenue or adjusted OIBDA as they are recorded as a reduction to net intangible assets on the balance sheet.

Moving to our balance sheet, our total debt net of cash at MCM LLC at the end of Q2.2021 increased to $116 million to 1.01 billion versus 894 million at the end of Q2.2020.

Our average interest rate and all debt was approximately 5.6% at the end of Q2 compared to 4.9% at the end of Q2.2020, including our 479 million and floating rate term loan bank debt and revolving credit facility that had a rate of approximately 5.2%.

Excluding revolver balances, 67% of our total debt outstanding at the end of Q2.2021 had a fixed interest rate.

And Sam Llc's current cash balances are $89.3 million versus our liquidity covenant that requires a minimum cash balance of $55 million.

Due to the timing difference between the collection of MCM LLC, increasing accounts receivable and payment of various expenses, including debt service is.

And as Tom mentioned, we have received board approval and required founding member approval to enter into a short term revolving debt facility and the amount of $20 million between and <unk>, Inc, and MCM LLC.

This will bridge working capital deficits and provide short term working capital loans is MCM LLC rebuilds its advertising revenue base and collect related accounts receivable to ensure MCM LLC maintains compliance with the financial covenants required by its debt obligations.

Our board of Directors has authorized and MCM, Inc, quarterly cash dividend and the <unk> per share of common stock from the <unk>.

Dividend will be paid on September 6.2021 to stockholders of record on August 23.2001.

This quarterly dividend will result in a current yield of 6.5% based on today's closing share price of $3 and cents a share.

<unk>, Inc. Cash balance will be $46.3 million after payment of the most recent dividend and thus our <unk> dividend can be paid for the next 2 and a half years with no additional MCM LLC distributions to <unk>, Inc.

This is well beyond the MCM LLC distribution restrictions contained and the recent bank debt amendment that terminate at the end of Q3 dollars 22 subject to certain limitations.

This is also not expected to be impacted by our planned short term revolving debt facility between and see them, Inc. And <unk> LLC that will be used to fund short term working capital needs through its March 31, 2022 maturity date.

And see I mean contends to pay a regular quarterly dividend for the foreseeable future at the discretion of the board of directors.

The 2 and a half years of dividend cushion is considerably longer than we have historically targeted.

And as always the declaration payment timing and amount of future dividends payable will be at the sole discretion of the board of directors, who will consider general economic and advertising market business conditions, the company's financial condition available cash current and anticipated cash needs and any other factors that the.

Lord of directors considered relevant.

This includes the impacts the MCM LLC related to the COVID-19, pandemic and restrictions under the MCM LLC credit agreement.

And the current and availability and funding of the unsecured revolving loan agreement between and <unk>, Inc, and MCM LLC.

With that said I will conclude my comments with a few general observations regarding our financial condition and expected business performance for the back half of the year.

As mentioned in Q3 revenue will be almost half.

As mentioned Q3 revenue will be almost all scatter market driven given our limited Q3 upfront commitments due to our inability to participate and last year's upfront marketplace.

Because of the theater closures and uncertainty about the film release schedule.

Beginning in Q4, we expect increasing network attendance.

And a return to more normalized scatter sales.

This combined with the Q4 upfront commitments that were and the process of securing will be a significant driver of higher Q4 revenue and positive Q4, adjusted their whipped up after debt service.

By the end of 2021, we expect revenue to be trending back towards pre pandemic revenue levels, assuming the theatrical release schedule remains firm.

And our fifth attendance continues to rebound and the upfront is consistent with the company's expectations.

This concludes our prepared remarks, and we'll now open up the lines for questions operator.

We will now begin the question and answer the question and ask your question you May Press Star then 1 on your telephone keypad.

If youre using a speakerphone, please pick up and ask your question.

That's my personal Inc. To withdraw your question, Please press star and <unk>.

This time, we will pause for carriage with from Blackrock.

Your first question comes from Eric Wold with B Riley for Cat.

Please go ahead. Thank you. Thank you and good afternoon everybody.

Your question and just kind of on what Youre seeing out there I guess I guess, starting with the scatter market. Maybe you can talk about any patterns.

For trends Youre seeing as that starts to come back in terms of the type of businesses that kind of are coming back faster than others.

And as a business that debt.

Getting involved get regional strengths around the country.

And again it gives you.

Optimism in terms of the underlying trends and potential even you and pause.

On the strength of that recovery et cetera.

From agencies and clients on digital and Avon for.

The biggest players as you know all the big media companies have opened up a board services they are selling those <unk>.

Impressions.

Aggressively.

I'm really happy with how far we've come on the scatter side historically, we've sold about 60% of our business and the upfront market.

But scatter is coming along and lastly, I can't say that any particular category.

And is doing any less than it normally what I will tell you that the traditional advertisers, particularly the entertainment.

And that we support on the streaming side the insurance companies.

CPG all those companies are.

Coming back, including our biggest advertisers so I'm quite happy about that the way I measure. This is to look at our future pipeline.

And while we have building up in Q3, and Q4 and handicapping that against the.

And the number of actual data points that are leading to contracts versus and contract discussion so as I see that fill up.

Which I'm quite happy about so far and Q3 and Q4 and.

It leads me to feel Theres a lot of strength.

Across really all of our customer base I would say there is really only a handful of clients that are still and defense.

And we're really feeling good about our current relationship with brands and agencies.

Thank you.

And then your comment obviously.

<unk>.

Okay.

We expect to exit Q3, and a 50% run rate and ramping into Q4, I'm, assuming a lot of that is driven by.

And the contracts you're putting in place now the visibility from the ups Brian Willey.

A willingness from Dan because the commits from out there I guess.

Can you give us a sense for just the time youre.

And.

During the upfront the tone, you're hearing from the arbitrage in terms of.

Where their budgets are.

And what they might look like versus 19, and kind of in general and how they're feeling about it in theaters as other segments and then lastly, you kind of.

Price sensitivity you mentioned that linear is taking a price and try to offset the loss of business.

How is that reflecting on your pricing and what have you been doing that from James EPS.

There's a lot of questions built into that.

So and <unk>.

CPM front and on the upfront side I would say, we're holding our own versus historical upfront levels.

Scatter, where we have to be a little more competitive and.

And Thats just part of the business right now so as we recover.

Being a little more aggressive on.

Case by case basis, but for the most part I look forward to really Q4, and 'twenty 2 as having CPM levels at a relatively comparable to where we've been.

No.

Honestly it hasnt really been an issue about having to discount our inventory it's much more just making sure we can deliver the impressions reliably to the agencies into the brands and making sure that they are continuing to build their confidence levels with us and we're seeing that every week every month.

Especially going in towards the back half of Q3 into Q4.

Yeah, and Eric I would just add to that debt as Tom said, the discussions really arent around price.

As any point that the advertisers want to focus on its flexibility.

And just to clarify that.

And Ted when you say shift of advertising dollars shifting.

Shifting out of period or potentially shift out of their contracted and now.

Either or price.

And they think they can shifted further and further down and with cinema. They would do that but if they need to be able to pull it out that they could do that as well.

Got it thank you Bob.

Okay.

Again, if you have a question. Please press Star then 1 your net.

Next question is from Jim Goss from Barrington.

Hi.

And Pat on for Jim.

And just a couple of other questions on.

And what Youre seeing upfront and the.

Yeah, and just wondering.

On.

Selling the platinum spot, what you're sort of seeing there in terms of industries that are.

And maybe good partners with that and the upfront or.

And once that arent any sort of commentary on Calgary.

First upfront being able to actually sell.

Well as you know.

And yet our very first.

Platinum engagement and.

And keep in 2019 and Q4.

Which to me seems like a long time ago.

I can tell you that the interest and platinum is still very strong for optimistic about the fourth quarter.

And it's still obviously very expensive and unit.

But we're having very good conversations.

With many advertisers about their interest and platinum.

As part of our post show package I can't give any specifics.

Hopefully when we get out our call next quarter will.

And we will be able to talk to you more specifically about that particular product.

But it's definitely <unk>.

Free resonating with the AD community.

And we're thankful for that because it was a key part of our Q4.2019 record quarter.

Yeah.

Okay. Thanks, and then.

So a question on flexibility.

I guess to what extent do.

Advertisers have and interest and maybe focusing on.

And a subset of screens butter at.

Premium format screens things.

Of that nature to sort of maybe.

And then there.

And that seems to be a particularly.

Particular area of focus for consumers going back to cinemas.

For most part our advertisers and agency brands by the full National network. That's our core National business. Obviously, we have a separate local and regional business, where people can be more selective other city.

But there's not any kind of a trend towards people buying a select group of premium.

National.

Screens, so that that trend that youre talking about and we're not seeing that now.

Okay.

Yes.

Your next question comes from Ben price Basket.

Capital.

Mr. Bruce talked your line is open.

Hey, guys. Thanks for taking my question I wanted to ask about how parent and can see theater attendance as a proxy for advertiser confidence and what I mean by that is you look at F 9 or black widow pipeline to all of those seem to have pretty good turnout 50, 60, $70.80 million is it going to take a several hundred million dollars.

Like a top and actually we've got that critical mass you talked about in the opening remarks and just.

And here you can commentary that and that would be great. Thanks again.

So I think it would be helpful to have some real blockbuster movies, but it's more important that we have consistent movie attendance.

That is reliable.

And then when a brand wants to.

Commit.

Money to impressions and they want to make sure. They are really going to be there and they are really going to run.

We've done a pretty good job I think so far this summer and having a relatively consistent theatrical schedule, but people like buying our platform knowing that debt depressions are going to get delivered and there's going to be really larger reach so yes, yes of course top gun and the new Marvel movie will help achieve that but the more critical thing as debt weekend and week.

Flight and flight out that we have enough scale to actually meet the marketing needs of clients.

And it won't just be 1 movie.

It will be great news, if top gun and as a whole loan, which everyone seems to think and will be but it's much more important that we have consistent week to week month to month.

And delivery so it's really the strength of the whole schedule and the attendant.

To answer your questions.

Thank you Sir.

This concludes our question and answer session I would like to turn the conference back over to Thomas for any closing remarks, okay. Great. Thank you for your question.

And I mentioned previously, we're very well positioned for the future as audiences and advertisers return for the movies.

5 years from making to execute all of our business strategies combined with an incredibly strong slate for the remainder of Q of 'twenty, 1 and into 'twenty and will ensure a really continued recovery and growth of our business.

And once again want to thank all of Mcm's team's hard work.

To reunite brands for the power set of and expand our cinema network strengthen our digital offerings and of course, diversify our advertising inventory beyond the big screen and.

Also like to thank all of our cinema and advertising client partners, our shareholders and lenders for their continued support and patients and of course, our founding members.

Really appreciate you joining this call to help that everyone continues to stay safe and healthy and we look forward to seeing you again at the book.

Thank you.

Conference call has now concluded. Thank you for attending today's presentation you may now disconnect.

Q2 2021 National Cinemedia Inc Earnings Call

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