Q1 2024 National CineMedia Inc Earnings Call

Operator: Good day, and welcome to the National CineMedia Inc. Q1 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on the touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Chan Park, VP of Finance. Please go ahead.

Good day and welcome to the National Cinema Media, Inc. Q1, 'twenty 'twenty four earnings conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.

After todays presentation, there will be an opportunity to ask questions.

To ask a question you May press Star then one on a touchtone phone to withdraw your question. Please press Star then two.

Please note this event is being recorded.

I would now like to turn the conference over to Chen Park VP of Finance. Please go ahead.

Chan Park: Good afternoon. I'm joined today by our Chief Executive Officer, Tom Lesinski, and our Chief Financial Officer, Ronnie Ng.

Chan Park: Good afternoon, I'm joined today by our Chief Executive Officer, Tom Lesinski and art.

Ronnie: <unk> financial Officer Ronnie.

Chan Park: I'd like to remind our listeners that this conference call contains forward-looking statements within the meaning of 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. All statements 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, and the risk factors contained in the company's filings with the FDA. All forward-looking statements are expressly qualified in their entirety by such factors.

Chan Park: I'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 934 as amended.

Chan Park: All statements other than statements of historical facts communicated during this conference call may constitute forward looking statements.

Chan Park: These forward looking statements involve risks and uncertainties imports.

Chan Park: 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.

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

Chan Park: Further, our discussion today includes some non-GET measures. In accordance with Regulation G, we have reconciled these amounts back to the closest gap 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 ncm.com. Now, I'll turn the call over to...

Chan Park: Further our discussion today includes some non-GAAP measures.

Chan Park: With regulation G. We have reconciled these amounts back to the closest GAAP basis measurement.

Chan Park: These reconciliations can be found at the end of today's earnings release.

Chan Park: Or on the Investor Relations page of our website at <unk> com.

Now I'll turn the call over to Tom.

Thomas F. Lesinski: Thank you, Chan, and good afternoon, everyone. Welcome to our first quarter 2024 innings call. The first quarter of 24 once again demonstrated that consumer demand for the movies is strong. The Domestic Box Office. It brought in $1.6 billion this quarter, exceeding expectations and ending with great momentum, showing areas of strong performance and enduring interest in cinema. Films such as Dune Part 2 and Kung Fu Panda 4 led the box office during the quarter, bringing in $400 million collectively.

Thomas F. Lesinski: Thank you Chad and good afternoon, everyone welcome to our first quarter 2024 earnings call.

Thomas F. Lesinski: The first quarter of 'twenty four once again demonstrated that consumer demand for the movies is strong.

Thomas F. Lesinski: The domestic box office.

Thomas F. Lesinski: But in one 6 billion this quarter exceeding expectations and any with great momentum showing here is a strong performance and enduring interest in cinema.

Thomas F. Lesinski: Such as June part, two and Kung Fu Panda four led to box office during the quarter, bringing in 400 million collectively.

Thomas F. Lesinski: Dune 2's opening of $82.5 million was more than double the box office opening of the original Dune film. Additionally, several titles performed better than estimates, including Mean Girls and Bob Marley One Love. Mean Girls eclipsed studio projections by 40% in its opening weekend, while Bob Marley One Love finished nearly 70% above its first-week projections.

Thomas F. Lesinski: During June.

Thomas F. Lesinski: Due to the opening of $82 5 million was more than double the box office opening of the original June film.

Additionally, several titles performed better than estimates, including mean girls and Bob Marley, One law mean girls eclipse studio projections by 40% in its opening weekend well Bob Marley one loved finished nearly 70% above its first week projections.

Thomas F. Lesinski: Additionally, this quarter, we saw continued consumer interest in non-traditional content, including Cabrini and the fourth season of The Chosen series. Meanwhile, other titles were very successful in reaching targeted demographics, including Kung Fu Panda, where 56% of the audience was comprised of families, and the Demon Slayer sequel, which attracted an audience where 77% of the moviegoers were of diverse ethnicities. Although the first quarter reflected the lingering effects of the industry strikes, including limited product availability and postponed releases, a wide range of films delivered outsized results.

Thomas F. Lesinski: Additionally, this quarter, we saw continued consumer interest in non traditional content, including cabrini in the fourth season of the chosen series.

Thomas F. Lesinski: Meanwhile, other titles were very successful in reaching targeted demographics, including Kung Fu Panda, where 56% of the audience was comprised of families and the demons layer sequel, which attracted into audience, where 77% of the movie goers wherever diverse ethnicities.

Thomas F. Lesinski: Although the first quarter reflected the lingering effects of the industry strikes, including limited product availability and postpone releases.

Thomas F. Lesinski: Wide range of films delivered outsized results Phil.

Thomas F. Lesinski: Film production is up and running again, and we are optimistic about the growth of film volume in the coming years. While it is typical for the first quarter to be seasonally low for advertising, we are encouraged that NCM experienced strong revenue as the box office continues to recover. We have consistently proven that, as a result of our differentiated offering and higher ROI for advertisers, our revenues are more resilient despite the overall advertising climate being slower as a whole.

Thomas F. Lesinski: Silver production is up and running again.

Thomas F. Lesinski: We are optimistic about the growth of film volume in the coming years.

Thomas F. Lesinski: While this is typical for the first quarter to be seasonally low for advertising. We are encouraged that NCR experienced strong revenue as the box office continues to recover.

Thomas F. Lesinski: We have consistently proven that as a result of our differentiated or excuse me, a differentiated offering and her ohio or life, where advertisers that our revenues are more resilient. Despite the overall advertising climate being slower as a whole.

Thomas F. Lesinski: Additionally, as we look across the advertising industry, we have continued to see spending bounce back across several categories, and coupled with the resilience of consumer spending, we expect a more significant rebound in the coming quarters. In the first quarter, NCM attendance was 75.8 million. As previously mentioned, the first quarter attendance levels were largely impacted by strike-related delays, which pushed titles like The Fall Guy and It Ends With Us and others out of the first quarter. These changes to the slate negatively impacted attendance by approximately 11 million.

Thomas F. Lesinski: Additionally, as we look across the advertising industry, we have continued to see speeding bounce back across several categories.

Thomas F. Lesinski: Coupled with the resilience of consumer spending we expect a more significant rebound in the coming quarters.

Thomas F. Lesinski: In the first quarter and see them attendance was 75.8 million.

Thomas F. Lesinski: As previously mentioned the first quarter attendance levels were largely impacted by strike related delays, which push titles like the fall Guy and it ends with us and others out of the first quarter.

Thomas F. Lesinski: These changes to the slate negatively impacted attendance by approximately $11 million.

Thomas F. Lesinski: If these films had not been postponed, we estimated that our total first quarter evidence would have been on par to 23 levels. As we've noted on prior calls, when the movies are there, audiences consistently show up to the cinema due to its diverse range and wide array of highly anticipated releases. U.S. box office hits catered to all demographics and movie lovers in the quarter. Our core demographic, Gen Z Millennials, represented 76% of our viewership in the first quarter, with a cumulative reach of approximately 35 million individuals.

Thomas F. Lesinski: If these films had not been postponed we estimated that our total first quarter evidence would have been on par to 'twenty three levels.

Thomas F. Lesinski: As we've noted on prior calls when the movies are there audience just consistently show up to the cinema did which diverse range and wide array of highly anticipated releases.

Thomas F. Lesinski: U S box office hits cater to all demographics and movie lovers in the quarter, our core demographic Gen Z and millennials represented 76% of our viewership in the first quarter with a cumulative reach of approximately 35 million individuals. During this period of Gen Z compromised, 44% of our audience demos.

Thomas F. Lesinski: During this period, Gen Z comprised 44% of our audience, demonstrating a robust average weekly rating of 5.5, up 8% year over year. This rating continues to surpass other premium video offerings, including the current NBA playoffs, which draw an average of around 1.0.

Thomas F. Lesinski: Creating a robust average we'd be waiting a 5.5 up 8% year over year.

Thomas F. Lesinski: This range continues to surpass other premium video offering.

Thomas F. Lesinski: Including the current NBA playoffs, which draw on average of around 1.0.

Thomas F. Lesinski: These engagement levels demonstrate Gen Z's interest in the theater experience and reinforce why the biggest brands continue to turn to NCM to engage these hard-to-reach, young, diverse audiences. Turning to our results. NCM's first quarter, 24, total revenue was $37.4 million, up 7.2% year-over-year, representing the highest first quarter revenue NCM has reported since before the COVID-19 pandemic. We are particularly pleased with these results given that the box office was actually down 9, nearly 7% compared to the same period last year, reaffirming the appeal of our offerings and proving our ability to perform through different market conditions. More specifically, national revenue for the first quarter was up 31% compared to the same period in the prior year.

Thomas F. Lesinski: These engagement levels demonstrate gen Z is interested in the theater experience and reinforced by the biggest brands continue to turn to NCR to engage these hard to reach young diverse audiences.

Thomas F. Lesinski: Turning to our results.

Thomas F. Lesinski: Approximately 70% of the first quarter's national revenue was attributable to longer-term upfront commitments, up nearly 16% compared to the same period in 2023. Success in the scatter market continued to drive revenue growth, utilization, and pricing in the first quarter, with scatter revenue of $8.8 million doubling year over year. Further, additional scattering material helped drive incremental revenue as movie attendance began to surpass expectations. Advertisers in the travel industry, in particular, continue to recognize the value of the moviegoing audience, as travel advertisers comprised approximately 24% of total NCM national ad spending this quarter, up 41% year-over-year. Government spending also demonstrated strength, both nationally and locally, almost double compared to the prior year.

<unk> first quarter 'twenty four total revenue was $37 4 million.

Thomas F. Lesinski: Up seven 2% year over year, representing the highest first quarter revenue and CMS reported since before the COVID-19 pandemic.

Thomas F. Lesinski: We are particularly pleased with these results given that the box office was actually down nine nearly 7% compared to the same period a 23.

Thomas F. Lesinski: Reaffirming the appeal of our offerings, improving our ability to perform through different market conditions.

Thomas F. Lesinski: More specifically national revenue for the fourth quarter was up 31% compared to the same period in the prior year.

Thomas F. Lesinski: Approximately 70% of the first quarter's national revenue was attributable to longer term upfront commitments up nearly 16% compared to the same period in 2023.

Thomas F. Lesinski: Success in the scatter market continued to drive revenue growth utilization and pricing in the first quarter with scatter revenue of $8 8 million doubling year over year.

Thomas F. Lesinski: Further additional scattered which really helped drive incremental revenue as movie attendants began to surpass expectations.

Thomas F. Lesinski: Advertisers in the travel industry in particular continued to recognize the value of the movie going audience as travel advertisers compromised approximately 24% of total MCM national AD spending this quarter up 41% year over year.

Thomas F. Lesinski: Government spending also demonstrated strength, both nationally and locally almost double compared to the prior year. Additionally.

Thomas F. Lesinski: Additionally, business outcome and attention metric measure deals continue to drive growth in historically underrepresented cinema ad corps categories, including pharma up 142% year over year and CPG up 165% year over year. Our Platinum advertising offering experienced growth as well this quarter. For those unfamiliar with Platinum ads, they play after the announced showtime, ahead of the movie, right before the last two trailers, typically, and have a longer run time than a conventional 30-second TV screen. With more than $2.5 million in Platinum commitments, this was the best first quarter performance since we introduced Platinum back in 2019, up more than 130% compared to the first quarter of 2023.

Thomas F. Lesinski: Additionally, business outcome and attention metric measured deals continue to drive growth and historically underrepresented cinema AD core categories, including pharma up 142% year over year, and CPG up 165% year over year.

Thomas F. Lesinski: Our platinum advertising offering experienced growth as well this quarter for those unfamiliar with platinum ads. They play after the announced Showtime has the movie right before the last two trailers typically and have a longer run time than a conventional 32nd TV spot.

Thomas F. Lesinski: With more than two and a half million dollars a platinum commitments. This was the best first quarter performance since we introduced platinum back in 2019.

Thomas F. Lesinski: More than 130% compared to the first quarter of 2023.

Thomas F. Lesinski: Longer-form branded content in the first quarter also opened up additional avenues for advertisers to tell their brand stories, including the 15-minute short film from a leading cosmetics company that debuted ahead of the Mean Girls movie on January 12. We are seeing these success metrics lead to greater appetites for advertisers to go beyond the traditional 30-second unit in future quarters. Additionally, we welcome our latest courtesy partners who sponsored the Silence Your Cell Phone messaging prior to the trailer package.

Thomas F. Lesinski: Longer form branded content in the first quarter also opened up additional avenues for advertisers to tell their friends stories, including the 15 minutes short fail from a leading cosmetics company that debate that debuted ahead of the mean girls movie on January 12.

Thomas F. Lesinski: We are seeing the success metrics lead to greater appetite from advertisers to go beyond the traditional 32nd units in future quarters. Additionally, we welcomed our latest courtesy partners, who sponsored the silence yourself with messaging prior to the trailer back.

Thomas F. Lesinski: This quarter, we made significant progress with data-driven, advanced targeted campaigns, resulting in wins across various categories, including retail, auto, and pharma. The positive impact our advertising has on brands demonstrates why they continue to turn to NCM. One example is a leading auto brand that saw a 22% lift in foot traffic to dealerships during a campaign, with 69% of visits occurring within five days of seeing the ad in a theater, and 53% of the visits occurring within five miles of the theater.

Thomas F. Lesinski: This quarter, we made significant progress with data driven advanced targeted campaigns, resulting in wins across various categories, including retail auto and pharma.

Thomas F. Lesinski: The positive impact our advertising has on brands demonstrates why they continued to turn to NCR.

Thomas F. Lesinski: One example is a leading auto brand that saw 22% lift in foot traffic to dealerships during a campaign.

Thomas F. Lesinski: With 69% of visits occurring within five days of C&D and theater and 53% of the visits within five miles of the theater.

Thomas F. Lesinski: On a different note, for the past nine years, NCM has served as the U.S. representative of the Cannes Lions International Festival of Creativity, the most prestigious advertising award show in the world. This year, we announced that we are launching an official network with the U.S. Lions community, which will offer ongoing value as a vital hub of collaboration, thought leadership, and career growth opportunities for U.S. brands, agencies, media companies, and other organizations within the advertising industry.

Thomas F. Lesinski: On a different note for the past nine years and see them has served as the U S represented up the can line International festival of creativity. The most prestigious advertising award show in the World. This year, we announced that we are launching an official network because the U S lines community, which will offer ongoing value.

Thomas F. Lesinski: Vital public collaboration thought leadership and career growth opportunities to use brands agencies media companies and other organizations within the advertising industry.

Thomas F. Lesinski: We also kicked off Startup24 with NCM's new tagline, We Get Audiences, to better align with our evolution as a premium video advertising platform that reaches young, diverse audiences at scale. As you may know, NCM has been at the forefront of revolutionizing cinema measurement through our data intelligence platform, NCMx.

Thomas F. Lesinski: We also kicked off the start up 24 with Ncr's, new tagline, we get audiences to better align with our evolution as a premium video advertising platform that reaches young diverse audiences at scale.

Thomas F. Lesinski: As you May know and CMS has been at the forefront of revolutionizing cinema measurement through our data intelligence platform N C. M X today and that's just the most powerful data platform in cinema with heightened data intelligence driving strong business outcomes and we're continuing to enhance its capabilities.

Thomas F. Lesinski: Today NCMX is the most powerful data platform in cinema with heightened data intelligence driving strong business outcomes, and we are continuing to enhance its capabilities. Our new brand encompasses how we are transforming cinema into a modern full funnel media initiative that delivers brand building and performance marketing solutions and signals our continued commitment to innovation. As we look ahead, we're continuing to focus on our expanded solutions for our clients. February 24 marked the official launch of NCM's on-screen programmatic offering.

Our new brand encompasses how we chart transforming cinema into a modern full funnel media initiatives that delivers brand building and performance marketing solutions and signals our continued commitment to innovation.

Thomas F. Lesinski: As we look ahead, we're continuing to focus on our expanded solutions for our clients.

Thomas F. Lesinski: February 24 marked the official launch events HIMSS onscreen programmatic offering.

Thomas F. Lesinski: Our programmatic platform provides additional opportunities for current NCM customers to seamlessly purchase incremental cinema audience on an as-needed basis. The new offering has now positioned cinema to serve as an attractive option for advertisers who have not historically purchased cinema on a direct basis, enabling NCM to access different agency buyers and parts of client budgets that were previously unavailable. We're seeing strong momentum with these offerings and have successfully secured programmatic guarantee deals that include business outcome measurements. During the first quarter, a total of 15 advertisers purchased programmatic offerings ranging from small local government bonds to well-known national advertising.

Thomas F. Lesinski: Our programmatic platform provides additional opportunities for current MTM customers to seamlessly purchase incremental cinema audience on an as needed basis.

Thomas F. Lesinski: The new offering is now positioned sitting about just serve as an attractive option for advertisers who have not historically purchased cinema on a direct basis.

Thomas F. Lesinski: Enabling them to access different agency buyers and parts of client budgets that were previously unavailable.

Thomas F. Lesinski: We're seeing strong momentum with these offerings and have successfully secured programmatic guaranteed deals that include business outcome measurements.

Thomas F. Lesinski: During the first quarter, a total of 15 advertisers purchased programmatic offerings ranging from small local government bonds, two well known national advertisers.

Thomas F. Lesinski: As we look to the remainder of the year, we have nine programmatic deals in the pipeline and two deals that have already closed in the second quarter of twenty-four. We are continuing to build on our programmatic pipeline and actively looking at integrating with additional supply-side platforms to further increase our coverage. We are also seeing positive results with our new self-serve offering and are continuing to redefine the movie experience for advertisers everywhere through sponsored content, alternative distributions, and experiential activation.

Thomas F. Lesinski: As we look to the remainder of the year, we have nine programmatic deals in the pipeline with two deals that have already closed in the second quarter of 'twenty four.

Thomas F. Lesinski: We are continuing to build on our programmatic pipeline and actively looking at integrating with additional supply side platforms to further increase our coverage.

Thomas F. Lesinski: We're also seeing positive results with our new self serve offering.

Thomas F. Lesinski: And we're continuing to redefine the movie experience for advertisers throughout through sponsored content alternative distributions and experiential activations.

Thomas F. Lesinski: According to research conducted by the Video Advertising Bureau, 89% of moviegoers eagerly anticipate a new movie, and 95% of moviegoers recommend seeing a movie in theaters to friends and families based on these experiences, proving consumers are looking for a way to connect, participate, and share these experiences with others. Experiences remain the most prized possessions, and no industry better exemplifies this phenomenon than the theater. NCM has seen firsthand the positive impact of the rise of the experience economy, amplifying the opportunity for brands to reach highly sought-after audiences. Now, let's move on to the guide for the second quarter of 2020. NCM expects to earn total revenue of between $49.5 million and $51.5 million.

Thomas F. Lesinski: According to research conducted by the video advertising Bureau, 89% of meat moviegoers eagerly anticipated new movie and 95% of movie club is to recommend single movie theaters to friends and families based on these experiences to the consumers are looking for a way to connect participate in share these experiences with others.

Thomas F. Lesinski: Experiences remain the most prized possessions and no industry better exemplifies this phenomenon in the theater and CMA has been firsthand. The pause has seen firsthand the positive impact of the rise of the experienced economy amplifying the opportunity for brands to reach highly sought after audiences.

Thomas F. Lesinski: Let's move on to guidance for the second quarter of 2024.

Thomas F. Lesinski: N C M expects to earn total revenue of $49 5 million to 51 5 million.

Thomas F. Lesinski: We have already seen strong performances from Godzilla vs. Kong, The New Empire, and Civil War and look forward to several upcoming major releases, based on our firsthand experience at screenings at CinemaCon last month in Las Vegas. There's a lot to be excited about with the diverse 2021 movies, both original content and sequels such as Deadpool 3, Inside Out, Gladiator 2, Joker 2, Mustafa the Lion King, Despicable Me 4, Venom, Mad Max, the list goes on and on, including prequels such as Twister and Kingdom of the Planet of the Apes, Wicked, and If.

Thomas F. Lesinski: If you have already seen strong performance from Godzilla vs Kong, the new Empire, and Civil War and look forward to several upcoming major releases.

Thomas F. Lesinski: Based on our first experience.

Thomas F. Lesinski: First hand experience at screenings at Semicon last month in Las Vegas, There was a lot to be excited about what the diverse 2021 movie slate, both original content and sequels, such as Deadpool three inside out Gladiator two Joker to Luke.

Thomas F. Lesinski: Lucas shop at a lion King to stick with me for Venom Mad Max The list goes on and on including Prequels, let them Twister and kingdom of the planet of the Apes wickedness looked.

Thomas F. Lesinski: Looking to 25, we expect the box office to pick up where 23 left off, given the number of high-profile films that have been pushed into that year, including Avatar 3, Superman, Mission Impossible VIII, Wicked Part II, Captain America, Brave New World, Snow White, Jurassic World IV, and many, many more.

Looking to 'twenty five we expect the box office will pick up were twenty-three left off given the number of high profile films that have been pushed into that year, including avatar three <unk>.

Thomas F. Lesinski: Superman mission impossible eight Wicked part to Captain America, Brave New World Snow like Jurassic World for in many many more.

Thomas F. Lesinski: Last quarter, importantly, we announced a new $100 million share repurchase program, which runs through 2027, representing our confidence in our business now and into the future. Since then, our business has continued to perform. In fact, we reported free cash flow of $22.6 million, marking the highest figure in the past 15 quarters. Given these results, we initiated share repurchases in the first quarter following the announcement. Ronnie will discuss this in greater detail later in the call.

Thomas F. Lesinski: Last quarter importantly, we announced a new $100 million share repurchase program, which runs through 2027, representing our confidence in our business now and into the future.

Thomas F. Lesinski: Since then our business has continued to perform in fact, we reported free cash flow of $22 6 million, marking the highest figure in the past 15 quarters.

Given these results we initiated share repurchases in the first quarter following the announcements.

Thomas F. Lesinski: Ronnie will discuss this in greater detail later in the call.

Thomas F. Lesinski: NCM continues to lead the cinema advertising business, launching impactful offerings to its advertisers, including business guarantees, programmatic, and AI, which transform cinema advertising into a modern, full-funnel media solution. There's no doubt that consumers are enthusiastic about experiencing films in an elevated cinematic setting, and cinema continues to be the premium video platform for consumer attention. We are encouraged by our momentum as we look ahead to the remainder of 24 and into 25. With that, I'll turn the call over to Ronnie to provide you with more details on our operating results and future outlook.

Ronnie: And see them continues to lead the cinema advertising business watching impactful offerings to its advertisers, including business guarantees programmatic.

Ronnie: AI transforming cinema advertising into a modern full funnel media solution.

Ronnie: There's no doubt that consumers are enthusiastic about experiencing films and elevated cinematic setting and cinema continues to be the premium video platform for consumer attention.

Ronnie: We are encouraged by our momentum as we look ahead to the remainder of 'twenty four and into 25.

Ronnie: With that I'll turn the call over to Bonnie to provide you with more details on our operating results and future outlook.

Ronnie: Yeah.

Ronnie Y. Ng: Thank you, Tom, and good afternoon, everyone.

Bonnie: Thank you Tom and good afternoon, everyone.

Ronnie Y. Ng: The first quarter was a solid start to the year, exceeding our expectations with improved revenue and profitability. Despite the first quarter being seasonally slow for both advertising and movie attendance, we are pleased that our key fundamentals continue to improve as revenue per attendee reached 95% of 2019 in inventory utilization. [inaudible] These improving fundamentals led to national advertising being up 31% and advertising revenue per attendee up 35% when compared to the same period the prior year.

Bonnie: The first quarter was a solid start to the year exceeding our expectations with improved revenue and profitability.

Bonnie: Despite the first quarter being seasonally slow for both advertising and movie attendance.

Bonnie: We are pleased that our key fundamentals continue to improve as revenue per attendee reached 95% of 2019 and inventory utilization surpassed 2019.

Bonnie: These improving fundamentals led to national advertising being up 31% and advertising revenue per attendee up 35% when compared to the same period the prior year.

Ronnie Y. Ng: Our ability to capture additional revenue per attendee and discipline expense management resulted in another quarter of stronger than expected adjusted OIBDA. First quarter 2024 total attendance also surpassed our expectations, largely due to the late additions of 17 titles with an opening weekend box office greater than $1 million. We were also able to drive higher monetization of impressions as a result of stronger demand in both the upfront and scatter market. Utilize Impressions per attendee increased 62% in the first quarter when compared to the same period the prior year, despite lower year-over-year attendance in the first quarter due to the writers' and actors' strikes.

Bonnie: Our ability to capture additional revenue per attendee and disciplined expense management resulted in another quarter of stronger than expected adjusted OIBDA.

Bonnie: First quarter 2024 total attendance also surpassed our expectations largely due to the additions of 17 titles with an opening weekend box office greater than $1 million.

Bonnie: We were also able to drive higher monetization of impressions as a result of stronger demand in both the upfront and scatter markets.

Bonnie: Utilized impressions per attendee increased 62%.

Bonnie: In the first quarter when compared to the same period.

Prior year.

Bonnie: Despite lower year over year attendance in the first quarter due to the writers and actors strikes.

Ronnie Y. Ng: We were able to significantly increase total advertising spend from certain key advertisers. The top 10 national advertisers from this quarter increased their spend by over 28% collectively, compared to the first quarter of 2023. We saw strong growth across a number of traditional categories, such as wireless, insurance, Consumer Packaged Goods, and Pharmaceuticals.

Bonnie: We're able to significantly increase total advertising spend from certain key advertisers.

Bonnie: The top 10 national advertisers from this quarter increased their spend by over 28% collectively compared to the first quarter of 2023.

Bonnie: We saw strong growth across a number of traditional categories such as wireless.

Insurance consumer packaged goods and pharmaceuticals.

Ronnie Y. Ng: Although we continue to navigate through a choppy advertising market, we experienced growth in both the upfront and scatter markets due to improved utilization and firm pricing discipline throughout the quarter. In fact, utilization for the quarter was 12% above 2019, while maintaining a similar price. NCN's total revenue for the first quarter was $37.4 million, up 7% year-over-year and exceeding our revenue guidance of $34.5 million to $35.5 million. National advertising revenue increased to $29.5 million compared to $22.5 million in the first quarter of 2023, driven by a 62% increase in national advertising utilization year over year, as well as a slight increase in national CPM.

Bonnie: Although we continue to navigate through a choppy advertising market, we experienced growth in both the upfront and scatter market due to improved utilization.

Bonnie: Firm pricing discipline throughout the quarter in fact.

Bonnie: Utilization for the quarter was 12% above 2019.

Bonnie: While maintaining similar pricing levels.

Bonnie: <unk> total revenue for the first quarter was $37 4 million.

Bonnie: Up 7% year over year, and exceeding our revenue guidance of 34, and a half million to 35 and a half million dollars.

National advertising revenue increased to 29, and a half million compared to 22 and a half no one in the first quarter of 2023.

Bonnie: By 62% increase.

Bonnie: National advertising utilization year over year as well as a slight increase in national C. P M.

Ronnie Y. Ng: Local and regional advertising revenue was $5.3 million, down 34% compared to $8 million in the first quarter of 2023. This was driven primarily by a 16% decrease in attendance due to a reduced movie slate as a result of the writer and actor strikes in 2023 and certain prior sales in government and travel categories not returning in the first quarter of 2024. Beverage revenue derived from the ESA party's beverage agreement decreased $1.8 million to $2.6 million, or 41% compared to the prior year. This decrease was due to the termination of the Rego ESA in 2023 and the resulting discontinuation of their beverage revenue, combined with a 9% decrease in the remaining ESA parties' attendance year over year.

Bonnie: Local and regional advertising revenue was $5 3 million down 34% compared to eight mill in the first quarter of 2023.

Bonnie: This was driven primarily by a 16% decrease in attendance due to reduced movie slate as a result of the writer and actor strikes in 2023 and certain prior sales in government and travel travel categories not returning in the first quarter of 2024.

Bonnie: Beverage revenue derived from the ESA parties beverage agreement decreased 1.8 million to $2 6 million or 41% compared to the prior year.

Bonnie: This decrease was due to the termination of the Regal USA in 2023, and the resulting discontinuation of your beverage revenue combined with a 9% decrease in the remaining yesterday parties attendance year over year.

Ronnie Y. Ng: Turning to our expenses, first quarter operating expenses were $60.1 million, compared to $65.5 million in the prior year. Operating expenses in the first quarter included one-time charges, such as $1.5 million related to our previously announced cost savings initiatives and 2.3 million related to fees and expenses from the company's financial restructuring in 2023. Excluding one-time items, depreciation, amortization, and non-cash share-based compensation, our adjusted operating expenses for the first quarter of 2024 were $43.1 million, 6.6% lower compared to 45.8 million during the The decrease in adjusted operating expenses was primarily driven by lower network costs, leading to decreased fees due to the ESA parties and network affiliates, coupled with lower personnel and overhead expenses from our cost savings.

Bonnie: Turning to our expenses.

Bonnie: First quarter operating expenses were $60 1 million compared to 65, and a half Maryland in the prior year.

Bonnie: Operating expenses in the first quarter included one time charges, such as one and a half million related to our previously announced cost savings initiatives.

Bonnie: $2 3 million related to fees and expenses from the company's financial restructuring in 2023.

Excluding one time items depreciation amortization and noncash share based compensation or adjusted operating expenses for the first quarter of 2024 were $43 1 million, 6% lower compared to $45 eight.

Bonnie: 8 million during the same period last year.

The decrease in adjusted operating expenses was primarily driven by lower network attendants, leading to decreased fees due to the Esa parties in network affiliates, coupled with lower personnel and overhead expenses from our cost savings initiatives.

Ronnie Y. Ng: First quarter adjusted OIDA, excluding non-cash charges and one-time items, was negative $5.7 million, up 48 percent compared to negative $10.9 million in the prior year. This result exceeded our guidance range of negative 7.5 million to negative 6.5 million. Turning to our consolidated balance sheet, At the end of the first quarter, 2024, the company had $60.1 million of cash, cash equivalents, restricted cash, and marketable securities, compared to $37.6 million at the end of 2023, while our total debt balance remained unchanged at $10 million. As Tom mentioned, we reported our highest free cash flow in the last 15 quarters. Total free cash flow for the quarter was $22.6 million, compared to $9.4 million in the same quarter of the prior year.

Bonnie: First quarter adjusted OIBDA, excluding noncash charges and one time items was negative $5 7 million up 48% compared to negative $10 9 million in the prior year.

Bonnie: This result exceeded our guidance range of negative seven and a half million to negative six and a half million dollars.

Bonnie: Turning to our consolidated balance sheet.

Bonnie: At the end of the first quarter 2024, the company had $60 1 million of cash cash equivalents restricted cash and marketable securities compared to $37 6 million at the end of 2023 or.

Bonnie: While our total debt balance remained unchanged at $10 million.

Bonnie: As Tom mentioned, we reported our highest free cash flow in the last 15 quarters.

Bonnie: Total free cash flow for the quarter was $22 6 million compared to $9 4 million.

Bonnie: Same quarter the prior year.

Ronnie Y. Ng: Last quarter, as Tom discussed, we announced that our board approved a new share repurchase program authorizing the company to purchase up to $100 million of shares of our common stock, demonstrating our confidence in the long-term strength of our business and our commitment to deploying capital in a disciplined manner to maximize shareholder value. Since the launch of this program, we have repurchased 649,164 shares for $3.2 million at an average share price of $5. This included the redemption of Cinemark's LLC units of 131,816 units.

Bonnie: Last quarter as Tom discussed, we announced that our board approved a new share repurchase program authorizing the company to purchase up to $100 million of shares of our common stock demonstrating our confidence in the long term strength of our business and our commitment to.

Bonnie: Deploying capital in a disciplined manner to maximize shareholder value.

Since the launch of this program we have.

Bonnie: Have repurchased 649164 shares for $3 $2 million on an average share price of $5.

Bonnie: This included the redemption of Cinemark LLC units or 131816 units.

Ronnie Y. Ng: We plan to continue to opportunistically repurchase shares at prevailing market prices over the next three years while also continuing to invest capital in growing our advertising network through new innovations such as programmatic and self-serve. Turning to guidance, we expect revenue to be between $49.5 million and $51.5 million for the second quarter of 2024. In addition, we expect adjusted OEVD for the second quarter of 2024 to be between $3.5 million and $4.5 million, with a strong financial foundation and unparalleled product lineup.

Bonnie: We plan to continue to Opportunistically repurchase shares at prevailing market prices over the next three years, while also continuing to invest capital in growing our advertising network.

Bonnie: New innovations such as programmatic and self serve.

Speaker Change: Turning to guidance.

Speaker Change: For the second quarter of 2024, we expect revenue to be between 49, and a half Midland and 51 and a half million dollars.

Speaker Change: In addition, we expect adjusted OIBDA for the second quarter of 2024 to be between three and a half mellon and four and a half million.

Speaker Change: With a strong financial foundation and unparalleled product lineup.

Ronnie Y. Ng: NCM stands poised for future growth. Thanks to minimal capital expenditures, the company is primed to yield substantial free cash flow. With the combination of the share repurchase program and improved attendance monetization, NCM presents numerous avenues to create value for its shareholders. Operator, please open the line for questions.

Speaker Change: <unk> stands poised for future growth.

Speaker Change: Thanks to minimal cap, but all expenditures the company is trying to yield substantial free cash flow.

Speaker Change: With the combination of the share repurchase program and improve attendance monetization N sand presents numerous avenues to create value for its shareholders.

Speaker Change: Operator, please open the line for questions.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star and then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Eric Wold of B. Riley Securities. Please go ahead.

Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.

Speaker Change: Anytime Youre question has been addressed and you would like to withdraw your question. Please press Star then two.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Speaker Change: The first question comes from Eric Wold of B Riley Securities. Please go ahead.

Eric Christian Wold: Thanks. Good afternoon, Tom and Ronnie.

Speaker Change: Thanks.

Eric Christian Wold: Good afternoon.

Eric Christian Wold: I guess, first off, um... I guess maybe excluding kind of the ebbs and flows of the film slate and any impact that may have on decisions. Maybe talk a little bit about the visibility you're seeing with your advertising partners. You know, any shifts forward or back in terms of how far out they're willing to book and kind of how confident they are in kind of putting budget to work, you know, a quarter or two kind of down the road versus maybe where you stood a year ago.

Eric Christian Wold: I guess first of all.

Eric Christian Wold: I guess, maybe excluding kind of the ebbs and flows of the film slate and any impact that may have.

Eric Christian Wold: On the children, maybe talk a little bit of the visibility you're seeing with your advertising partners.

Eric Christian Wold: Any.

Eric Christian Wold: Shift forward or back in terms of how far out there willing to book and tell them you know kind of how confident you are in kind of putting your budget to work you know a quarter or two kind of down the road versus maybe where you stood.

Eric Christian Wold: A year ago.

Thomas F. Lesinski: I guess I would look at it this way, Eric. First of all, thanks for the question.

Speaker Change: I guess I would look at it this way Eric first of all thanks for the question on the scatter market is definitely been picking up and we're seeing good visibility on that.

Thomas F. Lesinski: The scanner market has definitely been picking up, and we're seeing good visibility on that, looking ahead to the next couple quarters. But what I would say is that the upfront is really just starting to take off right now, these past couple weeks, and over the next two months or so, we'll get a true indication of the market's bullishness on cinema, which we expect to be really good. It's really the first upfront that we've had since early 2019 that will actually have an unencumbered, non-threat-strettened, non-pandemic-affected outlook on the industry. And I think based on how the last couple quarters have gone, we're really optimistic about the commitments that we see people making in the long run against the movie cinemathesis.

Speaker Change: Looking ahead in the next couple of quarters, but what I would say is that the upfront is really just starting to take off right. Now these past couple of weeks.

Speaker Change: And over the next two months or so we.

Speaker Change: We will get a true indication of.

Speaker Change: The market's bullishness on cinema, which we expect to be really good.

Speaker Change: It's really the first upfront that we've had.

Since really 2019.

Speaker Change: That will actually have a unencumbered.

Speaker Change: Non REIT stretton non pandemic affected outlook on the industry.

Speaker Change: And I think based on how the last couple of quarters have gone, we're really optimistic about the commitments that we see people making.

Speaker Change: In the long run against the movie cinema business.

Eric Christian Wold: Got it. And then I'm going to follow up. Maybe you could talk about the philosophy behind your quarterly guidance. I know you're focused on quarterly guidance right now as opposed to annual, given the uncertain environment we're in. Maybe frame up how you kind of build up to that guidance. You know, dynamic, including what's included in there around. You contractual upfront, scatter, you know, do you try to guess how many, what kind of assumptions are you trying to make over the next two months in terms of kind of the real-time demand that comes in versus kind of what's already been booked at this point?

Speaker Change: Got it and then.

Speaker Change: If you have a follow up.

Speaker Change: Maybe can you talk about the philosophy behind.

Speaker Change: Quarterly guide I know you're focused on quarterly guidance right now as opposed to annual give me kind of the uncertain environment.

Speaker Change: Biomarin, but maybe kind of what were you maybe frame up how you're how you're kind of buildup to that guidance as you know dynamic.

Speaker Change: What are your what's included in there around.

Speaker Change: We have contractual upfront scatter.

Speaker Change: Yeah.

Speaker Change: How many how much what kind of assumptions are you trying to make over the next two months in terms of kind of a real time demand that comes in versus kind of what's what's already been booked at this point.

Ronnie Y. Ng: Yeah, so that's a good question, Eric. So like Tom said before, the upfront doesn't, you know, we don't really start getting confirmation on the upfront market for another couple of months. And although the scatter market is improving, this year was really difficult for us to kind of get back to annual guidance, just given the unknown of the movie slate while it's still moving around. Obviously, that's a big piece of providing guidance, not in terms of just the revenue, but also our operating expenses as well.

Speaker Change: Yeah, that's a good question Eric.

Speaker Change: Like Tom said before a D. B upfront doesn't you know, we don't really start getting in some confirmation of the upfront money market for for another couple of months and although the scatter market is improving.

Speaker Change: This year was really difficult for us to kind of get back to annual guidance just given the unknown of the movie slate, while still moving around obviously, that's that's a big piece of providing guidance not in terms of just the revenue.

Speaker Change: Also our operating expenses as well so we're really looking for a little bit more stabilization there and we believe in 2020 fived out that'll be the case, so I think that coupled with the improved scatter market.

Ronnie Y. Ng: So we're really looking for a little bit more stabilization there, and we believe in 2025, that'll be the case. So I think that, coupled with the improved scatter market, you know, kind of tracks well to eventually getting back to giving annually.

Speaker Change: You know kind of tracks well too to eventually getting back to giving annual guidance.

Eric Christian Wold: Okay, I apologize, the question is more kind of on the Q2 guys, you know, the quarterly frame of how you're kind of building up that, I guess, with one month in the bag for this quarter, kind of how do you kind of build up the next two months in terms of... You know, what's already been booked for those two months versus, you know, what may be kind of on the come, kind of how much you would kind of Yeah, that's definitely a yes, that's a good question. Sorry Um, so. Quite frankly, we have pretty good confidence right now.

Speaker Change: Okay.

Speaker Change: My question was more kind of on the on the Q2 guidance quarterly kind of.

Speaker Change: Frame up how you're kind of building up that I guess with one month in the bag.

For this quarter kind of how do you kind of build up the next two months in terms of.

Speaker Change: You know what's already been booked for those two months versus what may be kind of on the come and go how much you would put into that.

Speaker Change: Yeah that's.

Speaker Change: Yeah, that's a very good question sorry so.

Ronnie Y. Ng: Quite frankly, we have pretty good confidence right now for the remainder of the second quarter. A lot of that is already booked and in place. I think the trajectory and momentum we're getting in the scatter market obviously gives us a little bit more confidence about what we still need to book. And so we believe most of that is baked into our gut.

Speaker Change: Frankly, we have pretty good confidence right now in for the remainder of the second quarter a lot of that is already booked and in place.

Speaker Change: I think did trigger actor and momentum we're getting in the scatter market, obviously gives us a little bit more confidence about what what we still need to book and so we believe most most of that is is baked into our guidance.

Speaker Change: Okay.

Speaker Change: Helpful. Thanks, Ryan.

Speaker Change: Sure.

Operator: The next question comes from Jim Goss with Barrington Research. Please go ahead.

The next question comes from Jim Goss with Barrington Research. Please go ahead.

Speaker Change: Okay.

James Charles Goss: I was wondering about the national-local mix shift in favor of national. How much of the did the beverage contract have an impact on that? Can you talk about what... if you think there will be more of a national flavor going forward.

Speaker Change: Okay.

James Charles Goss: I was wondering about the national local mix shift in favor of national how much of the.

James Charles Goss: How much to the beverage contract have an impact on that can you talk about what.

James Charles Goss: If if you think there'll be more of a national flavor going forward.

Ronnie Y. Ng: Yeah, so, again, just to be clear, the beverage piece is, you know, separate from national and local. So beverages are, obviously, just tied to attendance and our contracted CPMs with our ESA partners.

Speaker Change: Yeah. So the again just to be clear the beverage piece as you know.

Speaker Change: Separate from National and local so beverages, obviously, just tied to the attendance.

Ronnie Y. Ng: In terms of the mix shift that we've seen here in the first quarter, I think, frankly, you know, one, we're seeing a better marketplace for national, again, just scattered doing much better. So I think that's why you're seeing, you know, call it, the increased pace of national. And in terms of local, as we said at the start of the call, it's really kind of two things that happened in the first quarter.

Speaker Change: And our contracted C. P M with our ESA partners in terms of the mix shift that we've seen here in the first quarter I think frankly, you know one we're seeing a better marketplace for for National again, just scattered doing much better. So I think that's why you're seeing.

Speaker Change: As you know call it the increased pace of national and in terms of local it's really as we said in the in the.

Speaker Change: <unk> is a call it's really kind of two things that's happened in the first quarter.

Speaker Change: One is it.

Ronnie Y. Ng: One is really the lower attendance on a year-on-year basis for the first quarter did negatively affect local sales, quite frankly. And then, secondly, there were two notable contracts, mostly from the government space, that did not return. However, with that said, we do expect more of a mixed shift, shifting at least for this year a little bit more towards the national, just given the confidence that we have in the schedule.

Speaker Change: Is really the attendance did the lower attendance on a year on year basis for first quarter. It did negatively affect our local sales quite frankly, and then and then secondly, there were.

Speaker Change: Two notable contracts, mostly from the government space that did not return.

Speaker Change: However, with that said, we do expect more of a mix shift shifting at least for this year a little bit more towards national just given the confidence that we have in the scatter market.

James Charles Goss: Okay, and I know one of your aspirations has been expansion beyond the cinema walls. I wonder if you could talk a bit about what you might expect, what you think might be most exciting, you know, how and where that would develop.

Speaker Change: Okay, and I know one of your aspiration has been expansion beyond the cinema walls.

Speaker Change: I Wonder if you could talk a bit about.

Speaker Change: You know what you might expect.

Speaker Change: What do you think might be most exciting.

Speaker Change:

Speaker Change: And how and where that would develop.

James Charles Goss: Jim, I missed the first part of your question. Can you repeat the first part of it?

Speaker Change: Jim can you I missed the first part of your question can you repeat the first part of it.

James Charles Goss: Well, I think one of the things you have aspired to is to go beyond just advertising within the cinema, to be in some related areas, and I'm wondering what you... You know, if any plans are underway to do something like that. I think part of it is you have an ability to track who is where and where they're headed, but perhaps there are other things that might be in your plans. And I'm just wondering if you might share any of that.

Jim: Well I think I think one of the things you are.

Jim: The spire two is to go beyond just advertising within the cinema.

Jim: To be and some related areas and I'm wondering what you.

You know, it's funny plans are underway to.

Jim: To do something like that I think a part of it is you have an ability to track, who is where and where they're headed.

Jim: Uh huh.

Jim: Perhaps there are other things that that might be in your plans and I'm just wondering if it's too much or any of that.

Thomas F. Lesinski: We haven't given a lot of specificity around what we might do outside the cinema. We have been in the digital home space for a couple of years now. We're currently active in convenience stores, as well as in other digital out-of-home venues, including college campuses, and we've learned a lot about those businesses. We find them very perfectly corollary to what we're doing. At this point, though, we're really focusing the lion's share of our attention really on the cinema business. You know, it's only been a little over half a year since we came out.

Jim: So we haven't given a lot of specificity around what we might do outside the sentiment you know we have been in the digital out of home space for a couple of years now.

Jim: We're currently active in convenience stores.

Jim: As well as in other digital out of home venues, including college campuses and.

Jim: We've learned a lot about those businesses, we find them as very perfectly corollary to what we're doing.

Jim: At this point, though where we're focusing the lion's share of our attention really on the cinema business. You know, it's only been a little over half year. Since we came out so we want to optimize really where we are with our existing cinema business.

Thomas F. Lesinski: So we want to optimize where we are with our existing cinema business, and then as we get through this next upfront, I think we can really focus a little more potentially on diversifying the business more. But right now, our core focus is really on taking advantage of the momentum we have right now, particularly going into the critical upfront period over the next couple of months.

Jim: And as we get through this next upfront.

Jim: I think we can really focus a little more potentially on diversifying the business more but right now our core focus is really.

Jim: On taking advantage of the momentum we have right now, particularly going into the critical upfront period over the next couple of months.

Thomas F. Lesinski: Okay, thank you very much. You're welcome.

Jim: Okay.

Speaker Change: Thank you very much.

Speaker Change: Youre welcome.

Operator: Again, if you have a question, please press star, then 1. The next question comes from Mike Hickey with The Benchmark Company.

Speaker Change: Again, if you have a question. Please press Star then one.

Speaker Change: The next question comes from Mike Hickey with the Benchmark company. Please go ahead.

Michael Joseph Hickey: Hey Tom, hey Ronnie, great core guys, taking our questions here. I guess the first one, Tom, just curious about the kind of two X factors this year.

Michael Joseph Hickey: Hey, Tom you Ronny great quarter guys. Thanks.

Michael Joseph Hickey: One is some of the inventory and traditional ad networks. And if you think that you're sort of in a position to benefit from that push out, And I think you're also doing no political ads, so does that sort of give you more of a clean, call it a clean medium? For your media buyers, and the second piece on that, the economy. You know, it looks like the consumer is showing a little bit of headwinds here in certain categories. Just curious how resilient you think your top categories are to pull back. Let me nail the first question, and then I'll have Ronnie respond on the segmentation of the categories.

Michael Joseph Hickey: Taking my questions here I guess, the first one Tom just curious kind of two X factors since you want us to.

Michael Joseph Hickey: Political AD environment, which obviously is going to get Nazi here.

Here soon who hasn't already and you kind of wonder if the students come out push out.

Some of the inventory and nurture and traditional AD networks, and if you think that you're sort of in a position.

Michael Joseph Hickey: To benefit from that push out and I think you're also doing the whole political AD. So does that sort of give you more of a clean call it clean medium.

Michael Joseph Hickey: For your media buyers and then the second piece on that the economy yeah.

Michael Joseph Hickey: Looks like the consumer.

Michael Joseph Hickey: It's showing a little bit of headwinds here in certain categories. Just curious how resilient you think your top categories are to pull back in.

Speaker Change: Zoom or spend in terms of impacting but let me let me handle the first question and then I'll, let Ronnie respond on the segmentation on the categories. So political has always been an opportunity for us but not in the way you would think what.

Michael Joseph Hickey: So politics has always been an opportunity for us, but not in the way you would think. What typically happens in swing states, in particular, is local inventory gets sold out. So we have a team of people that are focusing on all of those states and cities and major ADIs, knowing that there are advertisers who will be blocked out of local advertising. And since we don't offer any political advertising options, we are always looking at how we can take advantage of SoDot inventory.

Speaker Change: What typically happens in swing states.

Speaker Change: In particular is local inventory gets sold out.

Ronnie: So we have a team of people that are focusing on all of those states and cities and major adi's, knowing that there are advertisers who will be blocked out of local advertising.

Ronnie: <unk>.

Speaker Change: And it's just we don't offer any political advertising option.

Speaker Change: We're always looking at how we can take advantage of so about inventory.

Thomas F. Lesinski: So, we're actually pretty optimistic that come November, and even before November, that much of that availability, which will be gone, will benefit us. And, in fact, over the last couple of elections, we've seen that effect. And it's real, and we know exactly where to go to those states and those ADIs where there are going to be sellout situations.

Speaker Change: So we're actually pretty optimistic that come November but.

Speaker Change: But even before November that much and data availability.

Speaker Change: What you'll be gone will benefit us and in fact over the last couple of elections, we have seen that effect.

Speaker Change: And it's real and we know exactly where to go.

Speaker Change: To those states in those areas, where there are going to be sell out situations.

Ronnie Y. Ng: As it relates to the economy and categories that are growing, I think, or declining, it's really tricky to look at a quarter to quarter because it isn't necessarily indicative of a trend. But, Ronnie, you can talk about the various categories and what's growing and what... Yeah, so I would say just one, in terms of any pullback from consumer spend, I think the last time we had a major recession, call it back in 2008, the company actually fared fairly well through that recessionary period and was fairly resilient, especially compared to the rest of the media landscape.

Speaker Change: As it relates to the economy and categories that are growing I think or declining its really tricky to look at it quarter to quarter.

Speaker Change: Because it isn't necessarily indicative of a trend.

Speaker Change: But around that you can talk about the various categories and what's growing and what yeah. So I would say just just one.

Speaker Change: In terms of any any pullback from consumer spend I think the last time, we've seen a major recession call. It was back in 2008, the company actually fared fairly well through that do that recessionary period and was fairly resilient, especially compared to the rest of the media landscape. If we look at.

Ronnie Y. Ng: If we look at kind of our exposures and our typical top 10 advertisers, most of our advertisers are guys that are advertisers, sorry, that are more stable to consumers that consumers always tend to spend money on. So we feel we have an advertiser group, especially the top 10, top 15 advertisers, that are pretty resilient in and of themselves in terms of their business models. So in some of those categories, quite frankly, government is a good one where we're just spending very, very stable.

Speaker Change: Kind of our exposures.

Typical top 10 advertisers most of them most of our advertisers are our guys that are advertisers sorry that are our or stables too to consumers that consumers always are tend to spend money towards so so we feel we have.

Speaker Change: And the Advertiser group, especially the top 10 top 10 top 15 advertisers are pretty pretty resilient in and of themselves in terms of their business model. So then some of those categories quite frankly government is a good one where where the spend is typically a very stable the insurance category.

Speaker Change: The only one that's not that's also very stay stable as well. So we feel we feel we have a a stable core of advertisers frankly that should be able to weather any type of consumer slowdown.

Speaker Change: Yeah.

Ronnie Y. Ng: The insurance category is another one that's also very stable, as well. So we feel we have a stable core of advertisers, frankly, that should be able to weather any type of consumer slowdown. Nice guys. Then, Ronnie, I'm your 2Q guy. Can you give us a little bit more color? I guess the top line's fine. In terms of quarter over quarter, if Q2 last year is a fair comparable, or if it needs to be adjusted in terms of understanding your growth outlook, and is this primarily just the presumed weakness in attendance given the slight decline in 2Q, is that the major impact?

Speaker Change: Nice guys and then Rami on your <unk> Guide can you give us a little bit more color on.

Rami: The decline in revenue.

Rami: I guess topline is fine.

Rami: In terms of quarter over quarter of Q2 last year was a fair comparable Oregon, it's needs to be adjusted in terms of understanding your growth outlook.

Rami: Is this primarily just.

Rami: But some weakness in attendance given the slate into Qs that means that the major impact.

Michael Joseph Hickey: That's, you know... driving your guidance to be down your rear or any color. Yeah, that's, you're, you're really

Rami: That's you know.

Rami: Driving your guidance would be down year over year.

Any color there would be great. Thanks.

Ronnie Y. Ng: Yeah, that's, you're really spot on there. It's really, the second quarter guide is more of a reflection of our current expectations of the overall attendance for the second quarter versus the prior year. Again, the slate's meaningfully down. And I think if you actually compare the second quarter slate of this year versus last year, you'll see that. So if the attendance were to come in a little bit stronger than our expectations, then there's a chance for our, you know, for the actual revenue to maybe, you know, come in above that. But frankly, the reflection of our guidance is really driven by the event itself.

Speaker Change: Yeah, that's you're you're really are spot on there. It's really the second quarter guide is more of a reflection of our current expectations.

Speaker Change: The overall tenants versus <unk> for the second quarter versus <unk> versus the prior year.

Speaker Change: Again, the slate meaningfully down and I think he actually compared to the second quarter slate this year versus last year, you'll you'll see that so yes.

Speaker Change: The attendance were to come in all the stronger than our expectation then you know there's a chance for where are you now for the actual revenue to maybe you know come in above that but frankly, the reflection of our guidance is really driven by the attendance level.

Speaker Change: Thanks, guys.

Speaker Change: Youre welcome.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Tom Lesinski for any closing remarks.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Tom Lesinski for any closing remarks.

Thomas F. Lesinski: Well, thank you for your questions and your ongoing support of National CineMedia. Leveraging our unparalleled scale within the industry, NCM maintains its position as a frontrunner in the premium video ad space. And with its highest free cash flow in the last 15 quarters and its best first quarter since 2019, NCM demonstrated its perseverance in a down market and its ability to continue delivering sought-after audiences, driving new brands to our platform, and, of course, existing ones to return.

Thomas F. Lesinski: Well. Thank you for your questions and your ongoing support of National Cinema media.

Leveraging our unparalleled scale within the industry and see it maintains its position as a front runner in their premium video ad space.

Thomas F. Lesinski: And with our highest free cash over the last 15 quarters and our best first quarter since 2019, MCM demonstrated its perseverance in a down market and its ability to continue delivering solid after audiences driving new brands to our platform and of course existing ones to return.

Thomas F. Lesinski: So I want to again thank the entire NCM team and board for their hard work. Thank you to our shareholders for their ongoing support. And we appreciate you all joining this call and look forward to seeing you all again at the movies. Thank you.

Again, thank the entire N C M team and board for their hard work. Thank you to our shareholders for their ongoing support.

And we appreciate you all joining this call and look forward to seeing you all again at the movies.

Speaker Change: Thank you.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Unnamed: Eric Wold, Michael Hickey, Ronnie Ng, Chan Park, Dan Dorenkamp, National CineMedia Inc.

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