Q1 2022 National Cinemedia Inc Earnings Call
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Greetings and welcome to National Centimeter incorporated Q1, 2022 earnings conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Dan Doron can't Finance Director. Please proceed sir.
Good afternoon, I'm joined today by our CEO , Tom Lesinski, and our CFO Ron <unk>.
We'd like to remind our listeners that this conference call contains forward looking statements within the meaning of 27 a of the Securities Act of 1933 as amended and section 21 E of the Securities Exchange Act of 1934 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 important factors that can cause actual results to differ materially from the company's expectations are disclosed in 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 at N C. M. Dot com now I will turn the call over to Tom.
Thank you Dan and good afternoon, everyone.
Welcome to our first quarter 2022 earnings call.
Q1 was our fourth straight quarter of strong year over year revenue growth with a significant upswing in advertising sales as millions of Americans once again returned to the movies.
Advertisers are taking note of the Q4 'twenty, one and the Q1 'twenty two blockbuster success of Spiderman and Batman. In addition, this weekend smash opening up Disney Marvel's Doctor Strange in the multi versa madness opens up an explosive 187 million.
And N C. M had 24 of the top 25 theatres in our network.
The success of these films clearly demonstrates the continued strong demand for the out of home communal experience that cinema uniquely provides.
Our first quarter revenue exceeded NC them guidance, and we are gaining momentum as we move into the second quarter with the expectation of a strong summer film slate.
We're also seeing increased cinema advertising demand stemming from continued linear TV ratings declines and changes to privacy controls online and on cell phones that are raising questions about the future effectiveness of digital advertising.
All of this makes us even more optimistic about the future of National Center media.
During today's call, we will provide a high level update on our company's successes and continued momentum in the advertising marketplace.
I will also speak to how we are moving ahead to expand diversify and strengthen our business with new products services and offerings, enabling us to capitalize on our strong 2022 theatrical film slate.
We will also discuss the success of our in person upfront events held in Chicago, and New York in March and Los Angeles in early April where we presented four key messages to hundreds of media buyers and brands.
One was the return of the mass audience to the cinema.
Two the benefits of our new data intelligence platform.
Three the marketing power of our refreshed newbie pre show.
And most importantly for cinemas unique ability to reach a young diverse audience at scale.
Then we will open up the line for your questions.
Self send him a truly is back the box office momentum throughout the second half of 'twenty, one so moviegoers for training in droves and has continued into 'twenty two.
So success of Spider Man No way home continues to reverberate well into January of 'twenty two.
Spiderman reached their rare domestic box office milestone of 800 million on its 100th day release, becoming only one of three movies to do so in Hollywood history.
Followed by the first quarter blockbuster hit the Batman, which exceeded industry expectations. We saw cinema once again deliver at scale.
Specifically against that coveted diverse 18 to 34 year old demo.
Notably the Batman opening weekend had higher ratings than the top 16 broadcasting cable telecast combined.
And that's generated over 369 million domestically.
Uncharted also exceeded box office expectations, driven by midnight under age 35, and strong diversity demos.
But it's not just the younger audience, who have returned to the movies as films across all age and gender demos have performed above expectation.
The La city, starring Sandra Bullock Channing Tatum demonstrated that romantic companies or comedies are still a popular genre driving women back to the theater.
Females accounted for nearly 60% of the opening weekend audience overall with women, aged 35, plus compromising close to 50% and the film has generated over 94 million to date.
Most recently Sonic the Hedgehog to demonstrate that families are also back at the movies. The Kid friendly film earned an impressive 72 minutes first weekend with 32% of attendees under the age of 17, and a massive 70 per cent and diversity numbers to date Sonic has earned a 116 nine.
9 million at the box office.
We anticipate continued movie goer demand with a strong spring and summer slate of releases ahead.
We expect to see a reverse and impact of the pandemic on production and post production schedules as the number of releases increase and more importantly exclusive theatrical window policies of film producers and distributors may stabilize.
In this respect the recent decline in streaming subscription growth is expected to enhance cinema position as a primary release and marketing platform for feature films.
We saw a significant uptick in AD contract deal flow in Q1 across all areas of our business, including our on screen digital digital out of home and across both local and national advertisers. We are seeing more clients in categories, returning to cinema advertising, including automotive travel dining.
<unk> gaming wireless entertainment and consumer packaged goods.
Yeah.
Just a few weeks ago with the industry's annual convention cinema Khan, we saw firsthand, an incredibly compelling and diverse slate of films for the remaining for the remaining 22 and 2023 from all the major studios, where there's significant emphasis on exclusive theatrical windows as well as the importance and impact of the immersive shared experience of the cinema.
All the studios and movie stars Directors and producers echoed over and over again that not only are movie theaters back but that theatrical releases are the cornerstone of the entertainment business and nothing can compare to the unique impact of viewing a movie on the big screen and its ability to transcend movie goers into other magical world.
Just on the sneak peek that based on the sneak film previews and footage we could very well see some major movie blockbusters in the year ahead.
As I mentioned previously we recently completed three major in person upfront events in New York, Chicago, and Los Angeles targeting to the entire advertising and media planning and buying community.
Our goal was to generate excitement and interest about the return of movies and Ncr's unique market because like place position in advance of the television and digital 2022, 2023 upfront selling season.
Throw in these presentations, we made several important announcements first we officially launched our new data intelligence platform N C M X, which connects brands with custom audiences in theaters as well as on digital screens before and after attending movies.
But then see them ex cinema is now more targeted bull measurable and accountable than ever before offering brands highly customized hard to reach audience segments with the enhanced ability to measure clear business outcomes and return on marketing investment.
Marketers can leverage N C M to execute advanced audience matching against key demographic geographic behavioral and contextual targets on the big screen as well as use N C. M X capabilities to re target moviegoers with digital ads and mobile offers.
With nearly 300 million data records and see them provides marketers access to the benefits of one of the largest collections of deterministic moviegoer data, giving brands of 360 degree view of our recent consumer behavior with performance metrics to refine campaign plans and generate a better return on their advertising investment.
Response to this powerful new data driven offering has been extremely strong with health care <unk> and CPG brands already taking advantage of our new capabilities.
Yeah.
And I'll put events. We also focused on how advertisers can target are coveted Gen Z and millennial movie goer audience nearly one out of every two adults who visit a movie theater in the fourth quarter of 'twenty, one and the first quarter of 'twenty, two or 18 to 34 year olds and 79% of moviegoers attended an enzyme theater are under the age of 39.
Declining viewership on linear TV and extensive cord cutting, especially among AD skippers younger audiences has forced marketers to look for more compelling alternatives to reach these consumers.
Moving theaters continue to attract and capture the undivided attention this valuable and highly desirable demographic.
Not only did we deliver a hard to reach young audience at scale each weekend.
But they're also 59 per cent multicultural with Hispanics accounting for 22% of our audience.
We also launched a re imagined newly pre show featuring an array of new content series strategic partnerships and a diverse cross section of Tictoc, Instagram and Youtube stars and celebrity talent.
These programs embrace broader cultural themes causes and consumer passions engaging gen Z and younger millennials, while offering relevant ways for advertisers to forge to forge stronger connections with mcm's hard to reach audience.
Our new original series launched in second quarters, the newbie to trivia show inspired by our property our proprietary new via trivia App and starring Entertainment. It was revenue knows who engages film and online social celebrities with movie trivia.
Marketers can also in this newly studios and see them in house creative team as a partner to develop and produce original branded content cinematic stories experiential programs and Influencer Activations at best resonate with movie goers.
The service is especially valuable to local and regional clients, who may not have access to high quality creative and production capabilities.
The bus coming out of these three events was strong with significant media coverage in the major trade marketing platforms.
These newly launched offerings are also beginning to generate increased demand as we move into upcoming upfront negotiations with hundreds of clients in attendance. The best accomplished our goals of generating early interest and consideration into TV and digital prints seasons.
We're already seeing renewed activity from key categories, such as travel wireless restaurants gaming entertainment and package goods across our national local and digital out of home businesses.
We're also seeing a rebound in the automotive category as the supply chain issues begin to abate and car dealers begin to receive car deliveries. During our next earnings call in early August we'll be able to update you on our upfront marketplace success.
In our local markets government health care and education continue to hold as the top three categories.
In the first quarter, we also saw growth in regional automotive and in travel and tourism.
We also successfully completed a reorganization of local and regional teams to focus on higher contract value from larger clients and agencies. In addition to generating significant operating efficiencies.
We're very optimistic that the box office momentum will continue given the package the pact release schedule.
One of the most anticipated movies of 'twenty two Doctor Strange just reported the biggest weekend box office of box office of the year to date with $187 million a ticket sales surpassing the Batman is 134 million.
Following Doctor Strange comes to return a Tom cruise and top gun Maverick than Jurassic World Dominion and light year. This strong film slate for the spring and early summer is expected to draw large audiences across all demos, most notably younger families.
The improving cinema business outlook combined with the stronger market demand for our network. After a great series of upfront sales meeting sets us up well to continue to grow our revenue and cash flow and begin the process of Delevering the company.
I'll now turn the call over to Ronnie to discuss our Q1 financial results in more detail.
Thank you Tom and good afternoon, everyone.
First quarter marked a solid start to the year, which exceeded our expectations.
With the pent up demand for the Theatergoing experience plus enrolls in Oregon.
Theater tickets in a high inflationary environment attendance continues to build back towards normal levels.
The recovery in attendance strongly positions us to deliver high quality audiences to our advertising partners.
The first quarter being seasonally slow hormone advertising and theatergoing ourselves fundamentals further improved during the quarter with higher C. P. M comparable to the same period pre pandemic of our revenue per attendee continuing to close the gap in 2019 comparable.
Sure.
Before I discuss the financial highlights for the quarter.
To remind everyone that due to the realignment of our regional sales force at the start of the year local and regional sales will now be reported on a combined basis with local sales were.
Whereas in prior periods regional sales were reported as part of the national sales tons.
All prior parents have been adjusted with in the earnings release and 10-Q.
<unk> with this new strategy and thus are comparable.
Total revenue for the first quarter was $35 9 million, which exceeded the high end of our guidance and more than six times compared to the same period last year I went over 40% of the network was closed.
National revenue for the first quarter was $26 3 million.
With more than eight times in the prior year.
Revenue during the quarter, we like the return of upfront sales to the mix.
<unk> come in and enhance our ability to better monetize the box office is a Batman and Spider man.
During the quarter.
So saw some traditional sectors increased their spend on our platform such as travel and automotive.
Network attendance coming back we increased impression so a higher average C. P M driving revenue per attendee back towards the first quarter levels, we experienced pre pandemic.
Advertisers' interest in our new 62nd Platinum unit also continued to go off fourth quarter demand with units being sold in the first and second quarter and in fact, you saw platinum inventory multiple time.
Alone.
Looking at some of our key operating metrics network theater attendance for the first quarter.
$76 million exceeded our expectation.
As mentioned was negatively impacted by the fewer film releases.
Well first quarter attendance was just over 50% of 2019 first quarter pre pandemic attacks.
The antenna is personnel was up 20%.
<unk> very strong consumer demand.
And in my experience.
As Tom mentioned, we expect a number of pounds.
Can you to increase over time and impact on film production and post production Covid related disruptions subside filmmakers began to rethink.
Windowing and marketing strategies.
After the recess slowing streaming.
Streaming subscribers.
Cinema may once again start to be viewed more favorably as a primary screen release and marketing platform for feature films.
Our Q1 advertising pricing also improved with national CPM exceeding that on the first quarter of 2019 by two 4%.
This marks the second second quarter.
That Mac in which pricing exceeded 2019 levels.
National utilization rates for the first quarter also continued to further close the gap with that of 2019 as having more upfront dollars on the books.
<unk> 2021 have helped with the monetization so overall impressions.
As a result of all these improving metrics are revenue per attendee from the first quarter was 91% of 2019, a significant improvement over the last two quarters, which averaged 60% of 2019.
As the pace of recovery continues to accelerate we are continuing to monitor and manage expenses prudently, but in a way that promote sales growth.
As we have discussed prior we expect certain operating costs, particularly many variable costs to increase as our business activity continues to move back towards historical levels.
That said there are meaningful core operating efficiencies implemented in.
And cost savings recognized during the past two years that we expect to be permanent.
As the first quarter of 2021 was impacted by the closure of 40% of our network, we have compared operating expenses for the first quarter of 2022 to the fourth quarter of 2021 to provide more meaningful insight and our operating costs.
First quarter operating expenses, excluding depreciation and amortization and one time costs were.
Were $44 1 million.
Proximately, $2 7 million or almost 6% lower compared to the fourth quarter.
Reduction was primarily related to lower advertising operating costs.
<unk> decreased towing expense and lower theater access fees related to the seasonality of the business.
Partially offset by higher administrative expenses.
The increase in administrative expenses.
<unk> was due to slightly higher legal and professional expenses and the reversal of bonus accrual in the fourth quarter combine when they first quarter bonus accrual, which the fourth quarter did not have.
Also in Q1 for the first time since the pandemic started.
All of our full time employees back to full pay.
It should be noted that we are currently operating with 45% fewer employees than we had at the start of the pandemic.
The slight increase in selling and marketing costs from the fourth quarter to the first corner was related to a onetime reorganization of the sales force.
In the first quarter, our core operating expenses averaged approximately $6 6 million per month.
Turning to our pre Covid run rate at $9 5 million per month or savings of 31%.
First quarter adjusted OIBDA was negative $6 8 million.
Which was within our guidance range.
Also important to note that adjusted OIBDA improved each month throughout the first quarter.
With the month of March generating positive adjusted OIBDA.
First quarter of 2022 compares favorably to the negative $16 2 million of adjusted OIBDA during the first quarter of 2021.
Since the third quarter 2021, our results continued to show meaningful year over year improvement.
In fact.
We are expecting beginning with Q2 to generate consistent positive quarterly adjusted OIBDA into the future.
Positive adjusted OIBDA trends.
<unk> to reflect the revenue growth driven by our continued return of moviegoers and increasing advertiser demand combined with our prudent expense management.
Integration and other encumbered theater payments due from AMC for the first quarter.
<unk> 0.2 million compared to none for the same period during 2021.
As a reminder, integration payments are based on what <unk> could have earned had advertising and so those theatres by herself pumps.
These integration and other Humbert theater payments are added to enjoy adjusted OIBDA for debt compliance and partnership cash cash distribution purposes, but are not included in reported revenue or adjusted OIBDA.
They are recorded as a reduction to net intangible assets on the balance sheet.
For the first quarter GAAP loss per diluted share was <unk> 31.
Versus a loss per diluted share of <unk> 25.
First quarter 2021.
Included in the GAAP loss for the first quarter of 2022 was $5 8 million noncash impairment charge of long lived assets related to the write down of certain internally developed software no longer in use.
$6 4 million loss on Remeasurement of payable two founding members under the TRA and 0.4 mill and a sales force reorganization costs.
Gleaning the impairment.
Adjusted loss per share was 20 <unk>.
First quarter of 2022, representing a 20% improvement over 2007 times for the first quarter of 2021.
Turning to our balance sheet total debt net of cash at <unk> LLC at the end of the first quarter was 1.08, though.
Compared to 1.05 going.
Third at the end of the year in 2021.
Our average interest rate on all debt was approximately $5 seven 3% for the quarter compared to $5 one 8% for the first quarter of 2021.
This increase was primarily due to the higher rate underneath the female and dollar revolver that was funded in January 2022, and the $50 million term loan B that was funded at the end of the first quarter 2021.
Excluding MCM LLC revolver balances.
And at least 72% of our total debt outstanding.
Quarter end had a fixed interest rate.
And Sam Llc's cash balance at the end of the first quarter was $76 2 million.
And including the $6 8 million of availability on our revolver and Sam Llc's total liquidity at quarter end was approximately 83 million.
Which was in excess of our liquidity covenant that requires a minimum liquidity of 55 million.
Our consolidated quarter end cash balance, including $38 9 million of MCM, Inc. Was $115 1 million compared to $102 5 million at the end of 2021.
The board of directors declared.
And him Inc. Regular quarterly cash dividend of <unk> <unk> per share of common stock.
The dividend will be payable on June seven 2022 to stockholders of record on May 23rd 2022.
On an annualized basis.
Ordinary dividend results in a current yield of six 2% based.
Based on today's closing share price.
And 92%.
Ensign in cash balance after paying in this most recent.
Recent dividend will be approximately $36 3 million.
This quarterly dividend achieved two primary goals.
First it allows NCR Inc.
To pay a consistent dividend foreseeable future as we work through the deleveraging of our operating partnership and C. M. L. L C.
This is consistent with the company's intention to.
Distribute substantially all our free cash flow to stockholders through its quarterly dividend.
The slightly lower dividend will allow increased financial flexibility for MCM, Inc.
As always the declaration payment timing.
And amount of any future dividends will be at the sole discretion of the board of directors.
Company continues to prioritize financial flexibility and maintaining adequate liquidity.
The first quarter is another affirmation that business conditions continue to improve as our revenue continues to trend back towards historical levels.
That said there are still many uncertainties around the trajectory of a recovery.
This uncertainty continues to make it difficult to provide longer term annual revenue and adjusted OIBDA guidance.
Thus, we will continue to provide guidance simply for the next quarter.
We expect revenue for.
Q2, 2022 will be between $63 million and 70 million.
Which at the midpoint translates to 375% growth.
<unk> to the prior year.
We expect second quarter 2022, adjusted OIBDA to range between 12, and a half Mellon and 18 and a half now with cash interest expense of approximately $19 million.
And approximately $1 6 million of Capex during the second quarter.
For the full year, we continue to reaffirm our monthly core opex guidance of six and a half two seven and a half an hour.
So continue to expect capital expenditures for full year of 2022.
To range between six and a half to seven and a half Mellon as we continue to judiciously invest in management systems and other growth focused initiatives.
Yeah.
In summary, we continue to see the momentum build and are busy.
With a solid start to the year and a strong outlook for the remainder of the year.
As consumers return to leisure experiences.
Our National network number one place for marketers to find millennial and Gen Z movie cars.
This is evan.
This advantage is becoming even more important as television ratings decline and marketers looking for replacement to ERP.
We are also aggressively back in the upfront media sales marketplace, allowing us to once again begin building a strong book of longer term ad commitments.
As Tom mentioned.
We will provide you with more specific details about the success of our upfront strategy. During our next earnings call in August .
We have all these favorable AD market trends and a pack movie slate for the second quarter and the full year, our business is well position to monetize on these trends.
Operator, please open the line for questions.
Thank you we will now conduct a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue.
You May press star two if people would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, while we poll for our first question.
Our first question comes from Eric Wold with B Riley. Please proceed.
Thank you good afternoon.
Couple of questions I guess, one Ronny I guess first off on.
Can you help me reconcile revenues coming in above the high end of the guidance range, but adjusted OIBDA coming in at the low end of that respective range. What were the main drivers that kept the prevented more positive operating leverage from flowing through or maybe what what changed during the quarter on the cost side from when you first gave those guidance ranges.
Yeah. So the as you know spiderman actually lasted in the movie theaters a lot longer than I think we even anticipated. So does the attendance levels for the first quarter was a lot higher than where we thought it would come in so most of the so most of the expenses.
Difference call. It between what we were expecting was really driven by theater access fees.
Legal and professional fees also came in a little bit higher than what we originally thought.
Got it Okay and then.
Okay.
Second question kind of obviously, you're still in the early stages with this year's upfront and you talked about you know some some better moods.
Discussions during the kind of the meetings, you've had recently and we'll get more on that soon.
On the scatter side.
What are you seeing with the scatter market recently versus where it was on the last call. You know how competitive is that that's still in and how are you thinking about cpm's in that side of the business kind of looking to trend through the remainder of the year.
I would say generally the scatter market has stabilized I think it's still.
Market place, where it's relatively soft.
Not just for MCM, but also for all the players in the media space.
Having said that the CPM levels.
For us are in fact stable.
<unk>, improving a little bit across the board.
So there hasnt been.
And impact on CPM as any kind of negative way, but I think as certain AD categories start to get more online from a supply chain, including automotive, which we're doing well in <unk>.
That will help alleviate some of the softness in scatter.
Having said that you know the economy is in kind of an unusual place right now and I think theres some resistance from Cmos.
Allocate additional media.
Into their budgets so.
Each week and is a challenge in the scatter market, but were feeling actually pretty good about where we are and candidly the momentum we're getting from the upfront presentations is helping us in our scatter discussions as well.
Okay.
Got it thank you both.
Youre welcome.
Our next question comes from Mike Hickey with Benchmark Company. Please proceed.
Hey, Tom Ronnie.
Good afternoon, guys, a nice cliff.
Thanks for taking my question and.
Nice to see that guide for.
Positive adjusted OIBDA.
Thank you.
At the end of the tunnel so congratulations on that.
Thank you two questions the first one.
On the right.
It sounds like you're leaning forward here.
Proactive maybe being aggressive just curious sort of what.
You can.
Pretty view them as much as you can your efforts there are on the up.
Martin sort of.
Conversations with media buyers, what they're like versus.
What you're encountering sort of pre pandemic.
You have to cross to get back to.
Where are your business was in last part of that question sort of how.
Media buyers of balancing the excitement for the upcoming slate versus maybe some concerns.
On the economy.
It's actually my follow up question Okay.
Okay. So you know as you know we got ahead of the traditional upfront, which is really you know hitting.
Hitting New York now and next week and we visited the three major media centers, New York, Chicago and L. A over the past.
Month, or so and I think getting face to face with everybody you know.
Three or 400 people.
<unk> had a huge impact on creating even more significant interest and relevance and our business. Fortunately we had some really good messaging in those meetings around box office and around attendance I can tell you, there's no resistance or hesitancy anymore from advertisers and committing to the upfront.
Because of Covid or because of a lack of attendance there's enough data points out there right now.
And enough consistency in the box office.
We're anticipating a very healthy upfront.
We will start being able to really quantify that over the next two months.
And certainly by the time, we get together with you.
After our next earnings call.
We will be able to give you more specificity on the positive nature of those discussions so.
I mean this is the first upfront we've had in two years, where the theaters have been 100% open and that Covid is really no longer an issue. So.
Just this past weekend was obviously a good example of the 11th the biggest movie of all time opening.
So we are quite happy to have the past two years behind us.
And candidly the movie business went through a rough going there as did we for two years, but we see none of the remnants of that anymore.
But our expectation is that we'll have a very robust upfront.
Nice.
Tom.
Second question for me just curious.
You know with sort of a shift.
For a movie goers to buying tickets.
Online.
Sort of wondering how they're feeling the theaters.
Both are waiting fear is obviously the waiting longer to get there and they miss your ads. So just sort of curious what you see.
Today in terms of movie goers, and the time, they get to the year and of course, I know that a big portion of your ads in our post Showtime. So that's a plus in the second part.
That with Avatar.
To coming out.
The fourth quarter.
Are you planning three D.
I believe the last cycle, we had on three D. You experimented with three D ads with some success in the higher CPM. Thanks, guys.
Right.
Well on the three D Avatar question.
If there was an advertiser they run into run a three D add we would certainly find a way to.
Accommodate them I think what youre seeing with avatar already is a huge amount of pent up demand for one of the biggest franchises ever. So December you know with Avatar has just had a real win win for us.
And we're really really excited about not just the fourth quarter, but the upcoming summer releases are really substantial to everything from top gun to Jurassic.
So this next six seven months.
It's going to be you know a real showcase for not just the advertising part of our business, but just the attendants part because as people keep coming back they keep seeing theatre advertising for new movies, and it's going to hopefully get.
The whole consumer behavior back in sync because remember one of the best ways to reach people for.
Advertising of movies in a theater and we know it's a great way to reach 18 to 34 year olds.
Can you remind me of your first question again Eric.
Yes, Thanks, Jeff.
Mike Hickey here Tom.
Just curious on the how movie goers or.
Feeling the theater timing wise.
Whether they're coming late later this show start or we're not giving yes. So that's a good question. So as you know in 2019, we implemented.
Six minutes of post show advertising.
To make sure we had enough inventory to manage any sort of later arrivals and while reserve seating is obviously very commonplace, we haven't seen a big shift honestly in the last year in terms of our own surveys of when people arrive.
So while some people arrive early and summarize towards the start.
The actual shift in that butts in seats has not really changed much.
Over the last year or so, but obviously, we keep an eye on it we do surveys of regularly to look at it.
But right now we feel really good about the amount of advertising we have versus how many people are there and what the attendance looks like so that's I would say surprisingly stable and we're quite happy about that and we're certainly benefiting from.
The six minutes of advertising we have after Showtime.
Thanks, Thanks, Tom Thanks, Ronny buckets I take care of them Mike. Thank you.
Our next question comes from Jim Goss with Barrington Research. Please proceed.
Thanks.
Tom I was wondering the discussion you had I believe you called it NCR Max targeting data capabilities.
I Wonder if you could talk a little bit more about how you can sell that and execute on it.
And with that sort of thing extend to perhaps.
Mixing ads differently by the.
Our evaluation of the demos survey specific theaters or screens.
Theaters I guess in general.
Yeah. So that's a good question silver so NCR has been a.
Important initiative for US we know that mirroring.
The captive nature of our cinema AD with a powerful data story is hard to beat.
And as well as.
The digital media guys have done from Google and Facebook to others. We knew that that was a core thing for us to do and it's taken us a little while to do that.
But building a data centric business is critical to meeting the needs of todays modern advertising marketplace and we've been focusing on accelerating the growth of our data by building a really better product portfolio.
So NCO ex greatly expands our analytics.
And we can truly really collected data before during and after that experience.
Which really allows us to aggregate all of this highly valuable data.
And we collected both from consumer facing apps as well as from newly trivia as well as from movie ticketing data and our founding member relationships.
So we feel like we're going to have one of the great movie databases in place Mary too.
Say, an unrivaled captive audience.
We can do it both regionally and locally to answer the second half of your question.
And we can targeted across obviously any of the demos that our advertisers want but more importantly, we can track the behavior of those consumers.
What they do after they see our message and we can bring that back to the CMO is into our clients and let them get even more comfortable about the efficacy of our AD platform.
So this is a really big deal for us.
And it was something candidly we didn't have you know some time ago and I think now we have a very very compelling offering both from an immersion.
As well as from a data quantification and analytics platform. So.
We're excited many of our clients have already taken advantage of it but.
But now we've got a great experience with data steroid levels behind it.
And if you do something like this.
Some of your advertiser clients will.
Going to pay you a higher CPM for maybe fewer applications and are you better off better or worse off doing that.
Or is there just the right time.
Timeframe gap.
Between which you'll start to execute on that sort of thing.
And you.
When you get to the end game.
What I can say, what I can say it's.
It's a good question.
As you know we have some of the highest if not the highest C. P. EMS.
Not just in cinema advertising, but in the media marketplace in general and I think the data analytics package that NCS provides <unk> X provides allows us to maintain very high CPM. When you kind of look at our business. Besides the Super Bowl the NBA playoffs, the World series and the Academy Awards nothing.
Is priced is expensive.
For the most part is N CMS AD platform, so I think maintaining C. Pms.
Is actually an achievement and candidly this goes a long way to doing that it also I think more importantly, attracting new advertisers to our platform who may not have been as capable or may not have been as interested in being on the plate because they couldnt quantify the impact of it we did a big test with.
The pharmaceutical company.
They linked the behavior of the consumers who had been in theaters to an actual prescription that was filled.
And completed and that was an example of a category that we hadn't done a lot of business in before.
So I think a big benefit of NCI ex besides maintaining high prices is attracting new advertisers and I think that's probably the bigger and more important impact that it will have.
Okay, and one last thing I Wonder if you could frame out.
Price difference between them.
Pre and post Showtime.
Like how much.
Less expensive for the pre or how much more expensive than the pulse. However, you want to frame it.
Jim we haven't disclosed the specificity of that Directionally. There is no doubt that post show advertising, particularly at the platinum spot is significantly more expensive.
Let me try to get back to you and see if there's a way to give you a little more to quantify your modeling on that but we havent as far as I know disclose that so.
Hopefully, we'll be in a position to do that sometime in the future.
Okay well.
Thank you very much alright.
Alright take care, Jim good to hear your voice good to see in Las Vegas to.
Thank you at this time I would like to turn the floor back over to Tom Lesinski for closing comments.
Okay well. Thank you all for your questions. As we mentioned previously we are now well positioned for growth with the return of audiences to theatres, a growing slate of great films and sales momentum coming out of our print events.
Advertiser demand for hard to reach diverse 18 to 34 year old demo has never been stronger as linear TV ratings decline and N C. M X our expanded data analytic capabilities makes us even more competitive with digital platforms at a time when changes in online and cell phone privacy control raised questions about the future effects.
Mr Digital.
All of these positive market dynamics and progress we have made advancing our business strategy during some challenging times.
That position us well for success in 'twenty, two and beyond.
I'd like to once again, thank our senior management team and the staff for all the hard work to help us move beyond the challenges of the past few years and thank our shareholders and lenders for their support and patience. We truly appreciate you joining our call.
With that I'll, just continue to stay safe and look forward to seeing you all again.
At the movies.
Thank you. This does concludes today's teleconference. You may disconnect. Your lines at this time and thank you for your participation and have a great.