Q2 2022 National Cinemedia Inc Earnings Call
Please standby.
Good day and welcome to the National Centre Media, Inc. Q2, 2022 earnings Conference call Today's conference is being recorded.
At this time I'd like to turn the conference over to Mr. Dan door and campus director of Finance. Please go ahead Sir.
Good afternoon, I'm joined today by our CEO , Tom Lesinski, and our CFO , Randy 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.
In 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 <unk> Dot Com now I will turn the call.
Tom.
Thank you Dan and good afternoon, everyone welcome to our second quarter 'twenty 2022 earnings call. The second quarter was our fifth straight quarter of year over year revenue growth continuing our trajectory of positive momentum.
Americans are all demographics have returned to theaters.
For the action Tentpoles, but also for the family mid size and lower budget films.
In a recent article from variety.
Quote movie Theater, Indiana analysts believe the attendant surge is a combination of two factors people are feeling more comfortable returning to the movies and the films being released are worthy of shelling out harder in cash just sitting on the big screen.
Separately. According to a recent Fandango study, 93% of ticket buyers are satisfied.
With their return to the theaters and 87% said multiplex has made them feel comfortable being back at a darkening close space.
This demonstrates that consumers are once again ready to share with the magic of the film on the big screen with others.
Rather than a homeowner television.
The second quarter began began with the blockbuster success of Doctor Strange in the multi verse of madness.
Since its opening weekend of 187 million the film window to reach over $411 million domestically on this 13 week run.
Significantly longer than a typical 45 day theatrical window.
On Memorial Day weekend, the much anticipated top gun was released the film has outperformed expectations, reaching nearly 663 billion as of this past weekend, becoming what appear much highest grossing films of all time.
Recently, the Wall Street Journal noted that Paramount strategy with Taco was to allow a longer theatrical run up an unspecified length of time before moving to its paramount streaming service.
Warner Brothers noted that in the year.
They're HBO streaming service benefited from the theatrical release of the Batman their first exclusive release since the start of the pandemic.
These extended exclusive release policies have demonstrated the marketing and PR value of cinema as the primary marketing and distribution platform for feature films.
Top gun was filed by Jurassic World Dominion, another massive opening weekend 145 million.
Families also showed up in the second quarter with Sonic the Hedgehog to crossing $100 million in the second week and minions. The rise of grew exceeding $100 million on opening weekend.
In fact in the second quarter of 'twenty to the box office broke the $100 million barrier for five straight weekends.
The last time that happened was during the holiday season of 2019.
This may box office revenue hit $786 million, that's 73% of the same month of 2019.
Then for the first time since the pandemic began monthly revenue at the box office hit almost $1 billion in June approximately 85% of box office in 2019, and 76% per film higher than June 2019.
John It was also very strong driving box office to over a $1 1 billion or 88% of 2019 levels.
This demonstrates the strong consumer demand for the cinema experience has returned and is the film release schedule expanse industry attendance will continue to trend back towards historical levels.
While production in AD link delays will continue to constrain the number of film releases over the next few months. Several tentpoles are scheduled for release in the fourth quarter, starting with the highly anticipated Black Panther what cargo forever.
Well opening on November 11th and followed by Avatar, the wastewater and Shazam Nacho mentioned Iraq in blackout.
Theatrical release will also benefit from the fact that many of the streaming companies have begun to use cinema as the exclusive launching pad for their films.
As we anticipated the second quarter demonstrated that when the film slate is their audience you show up in big numbers and marketers bring cinema back into their media plans.
Turning to our clients to cinema combined with strong attendance resulted in our second quarter revenue and adjusted OIBDA exceeding the midpoint of our guidance.
The story that <unk> is not just coming from our sales teams, it's being reported on a regular basis by key media outlets and analyst.
The positive media coverage is reinforcing our marketing efforts in providing a great lead in for our conversation with advertisers during the upturn.
Excuse me during the ongoing upfront buying season.
For context prior to the pandemic.
On average of approximately 65% of our annual National revenue was secured during this TV and calendar upfront selling process.
Our inability to compete aggressively in the upfront selling season during the extended pandemic period combined with the very limited amount of upfront commitments in 'twenty to 'twenty, one excuse me in 2020, and 21 had a significant impact on our business. Today. We're pleased to report that MTM is making great progress in the 2022 and <unk>.
<unk> three upfront marketplace.
And we expect to secure upward commitments of approximately 85% of the three year annual historical average prior to Covid.
Our successful 'twenty two 'twenty three upfront campaign has provided a strong base of national bookings beginning in Q4 of this year that will leave us much more reliant much that will leave us much less reliant on the scatter market than the past five years and EBIT less reliant.
That before the pandemic.
Our total revenue for the quarter second quarter.
2022 was $67 1 million, our highest quarter since the fourth quarter of 2019.
National sales revenue for the second quarter of 2002 was $50 7 million also the highest quarterly national performance since the pandemic began.
Our average per client revenue was nearly 15% higher than the average deal size in the second quarter of 2019.
As most of our pre pandemic clients are coming back and making meaningful commitments.
In fact, 37 clients, who had not advertised with us for the past five years have come back into our network.
And many of those clients are from the quote new economy, demonstrating our team's ability to pivot and develop new client verticals.
Half of NCL.
We're also seeing strong demand for our platinum inventory.
With entertainment travel social media and finance get voice, all securing platinum spots in the second quarter.
In addition, we have secured platinum advertising commitments in the third and fourth quarter, making five marking five consecutive quarters of sales with our most premium ad units.
On the local front, our business has experienced accelerating year over year growth with the government segment continues to be our top performing local category.
Growing 76% in the second quarter compared to the same quarter of 'twenty one.
Health care was up 107% education was up 209% compared to the second quarter of 'twenty one.
That being said the rebuilding of our local AD business to pre pandemic levels has been much slower than our national business. Many smaller local companies went out of business and those that survive have been more directly impacted by the ongoing supply chain issues and more recently by high inflation.
As we shared during our first quarter earnings call, our investment into developing and CMS with leading data driven media sales company is well underway.
While still a small percentage of our revenue our digital business continues to be an important diversification strategy.
Total digital revenue for the second quarter for the second half of 'twenty two excuse me for the first half of 2002 was 21% above the first half of 'twenty, one and 19% higher than the second quarter of 2019.
We also continued to expand our strategically important customer databases and data intelligence platform and CMS, making our onscreen product more measurable and attracted to marketers and <unk>, which we announced to the advertising market at our 'twenty. Two 'twenty three upward admits is already coming already proving to be an integral sales tool for <unk>.
New and existing clients.
To further strengthen our data capabilities, we recently integrated with new store.
We are now able to feed MCM cinema audience data into the new store marketing attribution solution, giving brands the ability to make critical real time optimizations to the campaigns to improve ROI.
We are also able to deliver <unk> ads for clients on the big screen through our partnership with elemental television.
Benton of our capabilities to MPLX is making our cinema advertising business more targeted more measurable and more meaningful for clients.
Through our own apps online properties and partnerships with our founding member exhibitors. We now have one of the largest deterministic datasets of moviegoers, allowing us to lead the industry in innovative and effective ad solutions.
These new capabilities that contributed to sales lifts of plus 29% for CPG and <unk>, our clients two categories, where cinema has historically underperformed.
Our new tools have helped our clients increased key business metrics, such as App downloads in app purchases and in store traffic all outperforming CTV norms.
Our digital strategy is also becoming increasingly important to our local AD business with a number of digital contracts of 13, 5% year over year and with the contract size increasing more than 20%.
For the first six months of 'twenty to our local digital business was up nearly 16% over the same period of 2019 based on the strength of government education and healthcare categories.
The return of movie audiences, our network represented 60% of the total market share for North American theatrical tenants just during Q2 with 75% of the opening weekend box us coming to NCI.
We now have 24 of the top 25 grossing theaters in the United States in our network.
According to Nielsen in epicenter, we are.
Outperformed all broadcast in the second quarter, surpassing the viewership at the NBA finals and playoffs against the 18 to 34 year old demo.
Additionally, in 2022 year to date, we tapped broadcast Prime every week against 18 to 34 year olds and 27 out of 28 weeks for 18 to 49.
During the first quarter of 'twenty, two MCM reached half of all 18 to 34 year olds.
In the second quarter of 2002 cinema top that by reaching nearly 60%.
Of all 800 to 30 for us.
Also according to epicenter cinema data in.
In addition cinema is proving to have the most engaged audience of any medium with three times better recall their broadcast.
<unk> recalled in social and two times more engagement the broadcast.
Our audience continues to be 50% diverse each week outperforming the largest black television network and the second largest Hispanic television network.
Drastic royalty opinion for example delivered one of the most diverse multi generational audiences with 41% Caucasian 25%. Hispanic and Latino.
16% Black, 15% Asia, and 5% others. We are now seeing 58% diversity demos on average for opening weekend.
Higher reached in the academic play players among the 18 to 34 year old demo.
There is simply no better medium to reach a young diverse audience.
Movies.
Multi generational audits also began to return in the second quarter for the great storytelling and the immersive experience that can only be provided at the movies.
With top gun to 87% of the audience was over 25% and with drastic world Dominion a majority of over 25.
We also saw several smaller and midsize releases deliver families. The bad guys to Sonic the Hedgehog and.
More recently minions the rise of group Elvis.
Elvis.
Also broadening to an older audience demo that usually only frequents the critically acclaimed films in the art House.
With 31% over age, 55% and 48% over age 45.
All of these data points have provided us with strong selling tools in the marketplace.
We're benefiting from the recent resurgence of other out of home marketing platforms marketers have begun to allocate more of their budgets to that sector to further differentiate their brands and an increasingly cluttered media marketplace.
This shift also appears to reflect the continued decline in TV ratings and declining effectiveness of social and other digital platforms due to increasing government regulation and new user privacy protection software available on Apple and other devices.
As out of home media platforms continue to strengthen their data and other digital capabilities. We expect this current trend to continue.
As you can tell im very excited about our future prospects with theater tenants trending back towards pre pandemic levels the value of Ncr's network with its broad reach coveted young diverse audience and ability to target consumers before during and after the cinema experience is once again being sought by advertisers in fab.
<unk> with the strengthening of our movie goer databases, and ROI measurement tools the value of our integrated media offering for marketers has never been greater.
While we still work to do we still have work to do to rebuild our revenue and cash flow base and rightsize our debt structure I am confident the building blocks are in place for a recovery.
With that I will now pass the call up to Ronnie to update you on the recent financial performance and provide some comments about our future outlook Ronnie.
Thank you Tom and good afternoon, everyone. Our recent quarter results continue to validate the momentum we are seeing independent as both advertisers and moving our contingency returned to the cinema for.
For the second corner, our revenue and adjusted OIBDA were slightly better than the midpoint of the guidance. We provided in May and also exceeded consensus estimate.
And compelling slate of movies led by Tom <unk>.
Drastic world.
And Doctor Strange drove strong box office results.
You also got off to a great start in the third quarter with a larger than expected opening of the door.
Industry wide the box office was up nearly three times from last year and the second quarter was the highest level of quarterly box office performance.
The pandemic began.
With a continued upturn ammonium tenants.
Seeing some very encouraging signals in our kpis that position us well for the future with our advertising partners.
As Tom mentioned.
Have begun once again to include cinema and their long term market.
Total revenue for the second quarter with $67 1 million.
More than four five times from last year and slightly above the middle of our guidance range.
National revenue for the second quarter was $15 7 million.
Nearly five times compared to the prior year and marked the highest quarter for national revenue in the last two years.
Local and regional revenue, our second quarter, and then a $5 million, which was up two times compared to the same period of the prior year.
Looking at our operating metrics second quarter demonstrated clearly to advertising partners, our ability to deliver art.
High quality captive.
Got it.
With a strong slate of releases during second quarter, our network attendance expanded with the box office.
For the second quarter, our network theaters had attendance.
$124 2 million.
The highest level, we recorded since the pandemic began.
And an improving 67%.
2019.
This also represents the second quarter in the last four quarters, where attendance exceeded a $100.
While this is still below where we think we will ultimately be it is a meaningful improvement in the first quarter, where our attendance.
Just over 50% of pre pandemic levels.
Representing continued progress of our business back to historical norms.
In addition, it is important to note that domestic box office per film so far this year was up 36%.
Once again, reflecting very strong consumer demand.
For the theater experience after a long two years of Covid Lockdown.
With the higher attendance, we had a significant increase in impressions, so which led to platinum sales in the second quarter that nearly equaled that of the fourth quarter of 2021.
In addition to improvement to the volume side of our business during the quarter, we continued to see accelerating trends.
With our pricing due primarily to a favorable client mix and higher platinum sale.
Our second quarter advertising pricing improve with national CPM exceeding that of the second quarter of 2019 by 18, 8%.
Making this the third consecutive quarter in which pricing exceeded 2019 levels.
The improvement in PFS compared to pre pandemic levels also accelerated substantially in this quarter.
Currency the improvement during first quarter 2022, those two 4% over 2019 levels.
As a result of the improving metrics our total revenue per attendee for the second quarter was again, 91% of <unk>.
19.
A level similar to the first quarter.
Our national advertising per attendee or the <unk>.
Second quarter.
97, 5% in 2019.
With an improvement to the first quarter of 95, 3%.
<unk> helped to offset the softness in our local app.
In fact for the last two months of the second quarter.
National advertising per attendee reached out to the same period in 2019.
Yes.
This improving trend clearly demonstrate that with consistent slight releases marketers, how strong demand to advertise across our platform.
Yeah.
Since the second quarter of 2021 was impacted by theater closures, we have compared our operating expenses for the second quarter of 2022 to the first quarter 2022 to provide meaningful insights and are operating cost.
Second quarter operating expenses, excluding depreciation and amortization were $53 7 million approximately a 7% increase compared to the first quarter. The increase was primarily related to higher affiliate expenses and higher theater access fees as a result of the seasonality of the business.
Selling and marketing cost increased approximately <unk> 2 million compared to the first quarter.
This was also related to increased revenue activity for the quarter.
Both network and administrative costs remained stable compared to the prior quarter, which reflects the effectiveness of our strict cost management despite increased global inflation.
In the second quarter, our core operating expenses averaged approximately $6 5 million per month.
<unk> to our pre Covid run rate of $9 5 million per month.
Our savings of 32%.
Second quarter, adjusted OIBDA was $15 1 million for a margin of 22, 5% compared to a negative $18 7 million last year.
This was a bit higher than the middle of our guidance range provided in may.
Looking at each month during the quarter adjusted OIBDA and margins improved meaningfully throughout the current three months.
This allowed to June achieving.
Highest monthly adjusted OIBDA.
The start of the pandemic. In addition, adjusted OIBDA margin for the month of June .
Also return to pre pandemic levels.
Which points to the scalability and high operating leverage of our business model.
This was great to see and reinforces our view.
That out of the theater traffic builds back to normal historical patterns and we saw our high margin platinum unit more effectively our business is well positioned to perform at historical margin levels.
Integration and other encumbered theater payments due from AMC for the second quarter were $1 1 million compared to 0.2 million for the same period during 2021.
As a reminder, integration payments are based on what MCM could have earned had advertising been sold until theaters by our sales teams.
These integration and other encumbered theater payments are added to adjusted OIBDA for debt compliance and partnership cash distribution purposes.
Are not included in reported or adjusted.
OIBDA as they are recorded as a reduction to net intangible assets on the balance sheet.
For the six month period, our total 2022 revenue was 103 million compared to $19 4 million from 2021, an increase of five five times due to theater closures in 2021 adjusted OIBDA for the six month period increased to $8 2 million from <unk>.
$34 9.002 million 12.
Second quarter GAAP loss per diluted share was.
<unk> versus a loss per diluted share of 2008 during the second quarter of 2021.
Our six months of 2022, we reported GAAP diluted loss per share of <unk> 32.
Compared to a loss per diluted share of <unk>.
In 2020.
Turning to our consolidated balance sheet total debt net of cash at MCM LLC at the end of the second quarter was $1 1 billion compared to 1.05 billion at the end of the year 2021.
The increase in debt was related to the $50 million revolver that was funded in June and January 2022.
Net.
<unk> $25 8 million of MCM Llc's, five and seven eight senior secured notes, which NCL Inc acquired.
Average price in the mid seventies.
The second quarter.
This opportunistic investment was made in order to increase the overall return on MCM Inc's cash balances.
Which could then be used to fund future <unk> in dividends and other corporate.
Priority.
Our average interest rate on all debt was approximately 6%.
Quarter compared to five 6% for the second quarter of 2021.
This increase was primarily due to the higher rate on the new.
New $50 million revolver that was funded in January 2022.
Excluding MCM LLC revolver balances.
Approximately 72% of our total debt outstanding.
Quarter end had a fixed interest rate.
MCM LLC cash balance at the end of the second quarter was 57 point something no one.
Including the $6 eight melanoma melanoma under revolver MCM LLC total liquidity.
Quarter end was approximately $64 5 million.
Which was in excess of our liquidity covenant that requires a minimum liquidity of $55 million.
Recently, our availability under our revolver increased to $7 2 million from $6 8 million due to the release of letters of credit secured by the revolver.
Our consolidated quarter end cash balance, including $16 million at MCM, Inc was $73 1 million and.
And including Llc's bonds recently purchased by in CMP total cash and equivalents.
$92 9 million.
The board of Directors declared a MCM, Inc. Regular quarterly cash dividend of <unk> <unk> per share of common stock.
The dividend will be payable on September six 2022 to stockholders of record on August August 22020.
On an annualized basis, the quarterly dividend results in a current yield of six 7% based on today's closing share price of $1 78.
The MCM, Inc, cash balance after payment of the dividend.
By the board of directors will be approximately $13 6 million.
Excluding the $25 8 million face value MCM LLC bonds currently empty.
The board continues to prioritize financial flexibility and liquidity.
We expect <unk> to continue to pay a consistent dividend into the foreseeable future as we work through the deleveraging of the operating partnership.
<unk> LLC.
This is consistent with the company's intention.
To distribute substantially all of our free cash flow to stockholders during the quarterly.
However, as always the declaration payment timing and amount of any future dividends will be at the sole discretion.
Discretion of the board of Directors, who will also consider general economic and advertising market business conditions and the company's financial condition.
We are very encouraged by the trajectory of our results and our ability to be the lever.
Lever of value to our advertising partners theatre attendants builds back.
That said.
Our recovery, we will continue to have some flat spot as a film production process fully recovers from COVID-19 related delays.
Releases release schedules built back to historical levels.
And we evaluate the impact of a potential economic slowdown.
With respect to the broader economy and its impact on our business.
It is important to note that historically the cinema business has done very well through recessionary periods.
Our cinema continues to be one of the lowest priced forms of out of home entertainment.
We expect that trend to continue.
And while certain client categories may cut short term marketing expenditures in fear of a recession.
Many important categories.
Such as auto have already been depressed over the last couple of years due to supply chain issues and.
As those issues abate in <unk>.
More of their products become available we may actually see an increase in those marketing budget.
While we expect a thinner film release schedule during the late summer and early fall due to production and editing delays during the Covid Lockdown that is only a timing difference.
We expect to quickly.
Quickly as the number of films is expected to again begin to increase in fourth quarter of 2022.
And into 2023.
Therefore, as we look toward the second half from a result standpoint, we expect a lighter third quarter to be offset by.
By a stronger fourth quarter, driven by the film release schedule and positive upfront.
Currently we expect revenue for third quarter 2022.
We will be between 53 and $57 million.
We expect third quarter 2020 adjusted OIBDA.
To range between three and $7 million with cash interest expense of approximately $16 million.
And approximately.
0.6 million on Capex during the third quarter.
With the positive impact of our successful upfront and strong film schedule.
We are expecting a strong.
Q4, resulting in full year revenue between 265 and $285 million of adjusted OIBDA to range between 58 and 75.
The annual revenue and adjusted OIBDA ranges reflect both our optimism about Q4 and some conservatism.
Back to the impact of the slowing economy on an overall advertising spend.
Despite our year to date monthly core opex being at the lower end of our expectations.
We are conservatively reaffirming our guidance for the full year of six five to $7 5 million per month.
We are also reducing our expected capital expenditures for the full year of 2022 from six five to seven though in two 5% to six number.
In summary, we continue to see the momentum build in our business a very positive outlook.
Out of home advertising business in general.
<unk> ratings, contented decline and social and other digital platforms face challenges with consumer privacy concerns.
As moviegoers returned to theaters there is no better place for marketers to find millennials and Gen <unk> and.
In our national and our media and digital networks.
Also as we continue to strengthen our movie your databases and AD campaign ROI tools, our network will become more and more valuable to our advertiser partners.
Given all of these favorable market trends.
Our business is well positioned to once again began to generate meaningful free cash flow and start the process of deleveraging our business and bring our equity value back to historical levels.
Operator, please open the line for questions.
Thank you.
I'd like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to Larry store to reach our equipment again press star one to ask a question.
Yes.
Yeah.
And we'll take our first question today from Eric Wold with B Riley Securities.
Thank you good afternoon guys.
A couple of questions I guess I guess one.
First off.
In the guidance, you're giving for the year and kind of implied guidance for Q4.
Can you maybe dive into that a little bit deeper in terms of what are you assuming in there in terms of.
Frankly, we had minutes versus scatter.
How much scope you are assuming in there maybe broadly or are you kind of led that represent more than ever.
Potential upside is going to get into the quarter and then.
What's the assumed CPM baked into that into that guidance.
Increase.
Sure.
So in the fourth quarter.
Again, we have said that that thus far R&D upfront, we are about 85% of what we've seen pre.
Pre COVID-19 on an average basis and historically.
In the fourth quarter the company in terms of upfront versus scatter mix has always been around the 60% 40% range. We're assuming here in the fourth quarter to be very similar levels.
To kind of get to that full year.
Full year revenue range of $2 65 to $2 85.
We do again like like we said on the call.
Or in your opening remarks, sorry that we do have a <unk>.
<unk>.
From 265 to 285, just given there are some.
Economic uncertainties out there. So we are accounting for a little of that I'll also say Eric on your pricing comment on the CPM front on the upfront we're holding very steady.
<unk> historical upfront levels.
And obviously scatter is more competitive.
But we're encouraged by the reaction we've been getting over the last several months from clients on the upfront.
And I think thats, probably the best critical metric.
Third quarter will be our last quarter, but we didn't have an upfront.
So we're really encouraged by what the market's telling us.
In terms of the Q4 piece of the upfront.
Obviously some of the fourth quarter is going to be predicated on how the economy.
Turns itself around.
And or the recession, if there really is what there isn't one.
So those are the key dynamics impacting scatter, but we're really comfortable based on our guidance that we're giving.
That the upfront is a really clear indicator of the strength of the AD market as it relates to cinema, but not just for the fourth quarter, but for the.
2023 outlook as well.
So you would expect if there was pressure from.
The economy or whatnot that would that would mostly manifest itself in the scatter you feel more comfortable about the.
The.
Solidity of the upfront.
Sure definitely definitely yes, okay.
And then last question.
Maybe you can just send your priorities around the upcoming debt maturities over the next three years and the first one in June next year or are you looking.
More to address just the June 'twenty, three maturities or charter work something out because it addresses.
A larger portion of the debt in future years.
So I'll take that one yes sure. So so again, we've been focused on the.
June 'twenty three maturities.
They are the <unk>.
Ones.
Deal with them within a year.
I think it really again this is a little bit fluid just given where the overall credit markets are but really it really depends on where it is that will kind of present, the options of kind of extending beyond that but but.
We are definitely.
Focused on the maturity in June .
Okay.
Thank you Bob.
Okay next we'll hear from.
Thank you next we'll hear from Jim Goss with Barrington Research.
Thanks.
Just curious as you mentioned the <unk>.
Platinum spots in somewhat greater usage.
Can you talk in terms of both the consistency.
Those spots and the creativity you might have in terms of.
Maybe using multiple.
Advertisers in various environments or will it be again the same the same advertisers across the entire platform.
So we have a really interesting platinum story.
Now, we will have sold platinum and the fifth straight quarter.
Many of the advertisers who were never on their platform to begin with including some of our travel clients as well as crypto.
So it's a nice mix, probably 50 50 between new advertisers and existing advertisers.
The response, we got from platinum so far in the principal very positive as well we.
We do believe given its location.
That it is probably the most valuable piece of inventory you can buy today, particularly to reach a large scalable young audience.
So the platinum story is a very positive on this.
This is the first time, we've been really back in the market with platinum with a full release schedule available to us and a reliable one thats scalable remember when we started platinum in the fourth quarter of 2019.
Three spots.
Right off the bat and that was a healthy environment and then of course during Covid, we ran into a little bit of a hiatus, but the fact that we've had a platinum AD for five straight quarters in a row.
I only see that number growing over time over the next year.
And given the high dollar cost of it as well as the high CPM.
It's a very positive sign.
What people want to want to do with our platform. So.
Between that and our post show inventory, we're quite happy with the response, we're getting from that.
Front.
Okay and with the guidance.
The third quarter obviously.
Being taken down a lot more than the fourth quarter or just the.
Recovery and I Wonder if.
With its entirely volume driven base.
The big pause it seems that were having movies over the next couple of months.
For mid August into.
Probably early October .
And that's really.
The same type of pricing.
All of the months, but.
Yes.
To price for the third quarter, and maybe a recovery in the fourth.
Here's what I would say about here's what I would say Jim let's go what's going on in the third quarter is a combination of a relatively light second half of the quarter release schedule.
Bullet train, which just opened is really the last big movie of the quarter, but I think it's also exacerbated both in scatter as well as in local as it relates to what's going on in the economy.
There's been a lot of documentation from other.
Media companies about how soft the scatter market is right now.
Hopefully that will turn itself around at the end of the quarter going into Q4.
But right now with the combination of the slate for the last.
Call it month or half of the quarter as well as the scatter market is.
Is two things that are definitely impacting our Q3 guidance and performance.
It's not so much a pricing issue Jim as it is available.
Availability of open to buy dollars in the marketplace in scatter.
And that's been echoed by several other Ceos in the media space as recently as last week and the week before.
Okay, and maybe one last thing attendance trends.
Two.
Somewhat slower as.
There was a focus on the premium experience.
A bigger gap between.
Box office dollars, which for recovering a bit of tenants maybe not quite as rapidly are you seeing a reversal in that and do you think you should expect that the numbers you really need which are the attendance figures.
Should should begin to accelerate.
Or is that more.
A wish and a hope and.
And expectation.
I think there is definitely a high correlation between attendance and box office, what you know from the box office.
Recently as the flight to more expensive larger screens.
Which is driving higher <unk> higher prices on the ticketing side.
So theres always going to be a spread of low to mid single digits between box office and pricing.
But we're actually feeling pretty good about the attendance levels year to date and for the full year.
And we're confident that next year is going to look a lot more similar to.
Prior years. So obviously, we still have to keep track of all of this.
But I think the attendance numbers, particularly when you look at June and July .
Very good.
And we believe that thats going to carry into the fourth quarter over the fourth quarter release schedule is excellent and as you know fourth quarter is always our biggest quarter.
No.
We're feeling pretty good about the fourth quarter right now as it relates to attendance and the attendants forecast for 'twenty three.
But you don't get a higher CPM.
Premium.
Auditorium.
Sure Dan.
Than you do in the other.
Okay.
But.
No everything is based on attendance not not on the ticket price.
Okay.
Alright. Thank you Sir Thank you Kevin.
Sure Thanks take care.
Our final question will come from Mike Hickey with benchmark.
Hi, Mike. Thanks for taking my question. This is actually Joe <unk> on for Mike Hickey.
Just one for me.
If you could just talk about the 25 million bond buyback, which is great, but given some concerns about liquidity what gives you confidence to buyback 2020 maturities now, especially maybe with the 2026 bonds trading at lower prices.
Yes, so we.
We looked at all of the normal auction quite frankly.
Within the capital structure.
And really.
The secured bonds, given where it was training and really quite frankly.
The size of the dollars that we want to put to work was really the only place that we can do it very efficiently.
And so we thought at kind of that mid <unk> range.
We've put about $20 million.
Two to invest in that was the right thing to do and quite frankly in a way that.
That didn't really.
You know that the market actually allowed us to do it really quickly so.
And we felt confident about the.
The future of business.
Do that at MCM, Inc.
Awesome, great. Thank you guys.
Thank you.
That will come.
Yes.
Go ahead I got it so from from here I'll, let you just to make a few closing comments since those are the questions. We got so we are very encouraged about our continued positive trajectory.
Some of the business the recent robust <unk> of upward performance is particularly.
A focused piece of our business that we're really really excited about.
It's a real time indication of what's going on in the marketplace in terms of the Reengagement on cinema media.
We're also really encouraged by the return of a strong film slate appealing to this very wide cross section of audiences.
Large audiences are returning to cinemas every weekend to watch the big movies.
They're big screens.
So theres much optimistic about when it comes to cinema advertising.
We're also seeing returns on investment into <unk> X or digital.
Any data intelligence and analytics platform, Thats, performing and transforming <unk> into one of the leading performance media companies.
But to deliver really meaningful business outcomes for clients tied really to the world's best content on the larger screens.
So the story of cinema in cinema advertising will only continue to strengthen.
With a more robust film release schedule planned for the fourth quarter of 'twenty, two as well as 23.
So I really do want to thank the entire <unk> team for their hard work to help us move beyond the challenges of the past couple of years.
And thank our shareholders and lenders.
Their support and patience.
We truly appreciate you joining us on our call and look forward to seeing you soon again at the movies. Thank you.
This concludes today's call. Thank you for your participation you may now disconnect.
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