Q1 2024 Dolphin Entertainment Earnings Call
Operator: Good morning, ladies and gentlemen, and welcome to the Dolphin Entertainment first quarter 2024 earnings call. At this time, all participants are in a listen-only mode, and the floor will be open for questions and comments following the presentation. Please note, this call is being recorded. It is now my pleasure to turn the floor over to your host, Mr. James Carbonara, Investor Elite. Mr. Carbonara, the floor is yours.
Good day, ladies and gentlemen, and welcome to Dolphin Entertainment's first quarter 2024 earnings call.
Speaker Change: At this time all participants are in a listen only mode and the floor will be opened for questions and comments following the presentation.
Speaker Change: Please note this call is being recorded.
Speaker Change: It is now my pleasure to turn the floor over to your host Mr. James Carbonara Investor Relations, Sir the floor is yours.
James Carbonara: Thank you.
James Carbonara: Later.
James Carbonara: Good afternoon, everyone, and thank you for joining us today for Dolphin Entertainment's first quarter 2024 earnings call. Before we begin, I'd like to remind everyone that during the course of this conference call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could differ materially from actual events. Please refer to the cautionary text regarding forward-looking statements contained in the earnings release published earlier today, as well as the most recent SEC filings and reports.
James Carbonara: Good afternoon, everyone and thank you for joining us today for Dolphin Entertainment's first quarter 2024 earnings call.
James Carbonara: During the call today, management will also discuss non-GAAP financial measures, including adjusted operating income or loss. The company believes these will provide helpful information for investors. Reconciliations to the most comparable GAAP measures are provided in the earnings release. Now, I would like to turn the call over to Bill O'Dowd, Chief Executive Officer of Dolphin Entertainment.
Management: Before we begin I'd like to remind everyone that during the course of this conference call management May make forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Management: These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could differ materially from actual events.
Management: Please refer to the cautionary text regarding forward looking statements contained in the earnings release published earlier today as well as the most recent SEC filings and reports.
Management: During the call today management will also discuss non-GAAP financial measures.
The company: Including adjusted operating income or loss. The company believes these will provide helpful information for investors reconciliations to the most comparable GAAP measures are provided in the earnings release.
Bill: Now I would like to turn the call over to below doubt Chief Executive Officer of Dolphin Entertainment Bill.
Bill O'dowd: Thanks, James, and welcome, everyone. I'll start by reviewing some of the key financial and operating highlights from our record-setting first quarter of 2024, and then Mirta will provide a more detailed financial overview before we open it up for Q&A. Starting with the headlines, well, as you may have seen in our earnings release a few minutes ago, total revenue for Q1 was $15.2 million, increasing 54 percent compared to Q1 last year, which was also a significant increase of 27 percent over our previous quarterly revenue record of $12 million, established one quarter earlier in Q4 of 2023.
Bill O'dowd: Thanks, James and welcome everyone.
Speaker Change: I'll start by reviewing some of the key financial and operating highlights from our record setting first quarter of 2024, and then <unk> will provide a more detailed financial overview before we open it up for Q&A.
James: Starting with the headlines well she.
Bill: As you may have seen in our earnings release are a few minutes ago total revenue for Q1 was 15.2 million, increasing 54% compared to Q1 last year, and which was also a significant increase of 27% over our previous quarterly revenue record of 12 million established one quarter early.
Bill: We are in Q4 of 2023.
Bill O'dowd: On the bottom line, we delivered positive adjusted operating income of $1 million. For those unfamiliar, Adjusted Operating Income strips out non-cash and non-recurring items and is the primary metric we use to evaluate our performance. Reporting positive adjusted operating income is tremendously gratifying and validates the success of our strategy, especially compared to the $1.9 million adjusted operating loss in Q1 of 2023.
Speaker Change: On the bottom line, we delivered positive adjusted operating income.
Speaker Change: $1 million for.
Speaker Change: For those unfamiliar adjusted operating income strips out noncash and nonrecurring items and is the primary metric we use to evaluate our performance.
Speaker Change: Reporting positive adjusted operating income is tremendously gratifying and validates the success of our strategy.
Speaker Change: Especially compared to the $1 9 million adjusted operating loss in Q1 of 2023 or.
Bill O'dowd: Our positive adjusted operating income of $1 million also represents another significant sequential increase of 236% over the positive operating income of $0.3 million we reported for Q4 of 2023. By concentrating on organic expansion among our top-tier marketing entities and launching complementary ventures at a steady pace, we believe we are strategically positioned for sustained growth in both revenue generation and adjusted operating income, the crucial financial metric against which we gauge our performance, as I said earlier.
Speaker Change: Positive adjusted operating income of $1 million also represents another significant sequential increase of 236% over the positive operating income of $23 million, we reported for Q4 of 2023.
Speaker Change: By concentrating on organic expansion, among our top tier marketing entities and launching complementary ventures at a steady pace. We believe we are strategically positioned for sustained growth.
Speaker Change: Both revenue generation and adjusted operating income to crucial financial metric against which we gauge our performance as I said earlier, we believe that this accelerating growth. We've reported today highlights the powerful combo of our industry, leading marketing and publicity services firms firing on all cylinders, coupled with tangible pay off as we begin to it.
Bill O'dowd: We believe that this accelerating growth we've reported today highlights the powerful combo of our industry-leading marketing and publicity services firms firing on all cylinders, coupled with tangible payoff as we begin to commercialize our premium content ventures, with Blue Angels simply being the first venture to monetize and have an exponential impact on our financial results. Now that our full group of marketing companies has been assembled with the acquisition of special projects last October, and we are developing venture opportunities in earnest, we expect the amplifying impact to grow significantly as the Dolphin Ventures portfolio expands.
unknown: Commercialize our premium content ventures, with Blue Angel simply being the first venture to monetize and have an exponential impact on our financial results.
Speaker Change: Now that our full group of marketing companies Thats been assembled with the acquisition of special projects last October and we are developing ventures opportunities in earnest, we expect the amplifying impact will grow significantly as the dolphin ventures portfolio expands we believe this strategy will unlock compounding returns and continuous value creation.
Bill O'dowd: We believe this strategy will unlock compounding returns and continuous value creation by sustainably getting paid for services while accumulating equity stakes, many times without any capital required from Dolphin. But before getting into ventures, we'll start with some subsidiary highlights. At 42 West, the movie promotion teams helped secure four Oscar wins for clients, including Best Animated Film for The Boy and the Heron and Best Visual Effects for Godzilla minus one. They drove massive buzz and box office returns throughout the Valuable Awards season quarter.
Dolphin Ventures: By sustainably getting paid for services, while accumulating equity Stakes many times without any capital required from dolphin.
Bill O'dowd: Meanwhile, Surefire Media continued its Grammy dominance, representing clients who won a collective nine Grammys and over two dozen total nominations, spanning genres like pop, R&B, jazz, and more. Both firms played pivotal roles supporting marquee clients at leading film festivals like South by Southwest and event shows like the Golden Globes. The Door also supported clients at South by Southwest, including Giada De Laurentiis, the Emmy award-winning television personality, New York Times best-selling cookbook author, restaurateur, and entrepreneur, and the promotion of her Italian lifestyle brand, Giotto. The digital department, our specialized influencer marketing division, made two strategic moves to expand its capability. First, they aim to work with Glow Lab and founder, Susan Yara, to create a new skincare and dermatology influencer practice.
Speaker Change: But before getting into ventures will start with some subsidiary highlights at.
42 West: At 42 West the movie promotion teams helped secure for Oscar wins for clients, including best animated film for the boy in the Heron, and best visual effects, where Godzilla minus one day drove massive buzz in box office returns throughout the valuable awards season corridor.
Speaker Change: Meanwhile, shore fire media continued its Grammy dominance, representing clients, who want a collective nine grammys in over two dozen total nominations spanning genres like pop RMB jazz and more <unk>.
Speaker Change: Both firms play a pivotal role supporting marquee clients and leading film festivals like south by southwest and.
Speaker Change: And event shows like the Golden Globes.
Speaker Change: The door also supported clients at south by southwest, including Giada de Lorenzo's. The Emmy Award, winning TV personality, New York Times, Best selling cookbook, author restaurant tour and entrepreneur and promotion of our Italian lifestyle brands Yahtzee.
Speaker Change: The digital department, our specialized Influencer marketing division, a two strategic moves to expand their capabilities first they inked a deal with glow lab and founder Susan you are to create a new skin care and dermatology Influencer practice.
Bill O'dowd: Secondly, they partnered with legendary youth talent agency Osbrink to establish a young adult division focused on Gen Z and Gen Alpha influencers across TikTok and YouTube. Finally, special projects continue to gain strong momentum, collaborating with luxury brands like Chanel, Gucci, and Valentino on product launches and fashion week activations. Also, they had another extremely busy Oscar season, running five significant events during Oscar Week, including separate events for such blue chip clients as Apple, Versace, and W Magazine. Shifting gears, I'll now provide updates on some of our events.
Speaker Change: They partner with legendary <unk> talent agency Osborn.
Tablets: Tablets are young adult division focused on Gen Z and Gen Alpha influencers across tick tock.
Speaker Change: Finally special projects continued its strong momentum collaborating with luxury brands like Chanel, Gucci pin Valentino on product launches and fashion week Activations.
Speaker Change: Also they had another extremely busy Oscar season, running five significant events during the Oscars week, including separate events, where such blue chip clients as Apple Versace and W magazine.
Speaker Change: Shifting gears I will now provide updates on some of our ventures as a reminder, for those new to the Dolphin story ventures will provide his ownership stakes in assets, where in our form of marketing can provide the greatest influence on the likelihood of success.
Bill O'dowd: As a reminder for those new to the Dolphin story, ventures will provide us ownership stakes and assets wherein our form of marketing can provide the greatest influence on the likelihood of success, namely content creation, consumer products, and live experiences. Notably, it's worth repeating that we anticipate Dolphin securing ownership stakes in many of these endeavors without the necessity of a cash outlet. Okay, it's a big week at Dolphin on the multiple ventures front. Let's start with our flagship Blue Angels documentary.
Dolphin: <unk> content creation consumer products and live experiences.
Dolphin: Notably it's worth repeating that we anticipate dolphin securing ownership stakes in many of these endeavors without the necessity of a cash outlet.
Dolphin: Okay. Its a big week at Dolphin on multiple ventures fronts, let's start with our flagship Blue Angels documentary.
Bill O'dowd: We are incredibly excited for the film's upcoming theatrical debut in IMAX theaters this weekend. The marketing campaign is in full swing with the exclusive trailer premiere on The Today Show, generating massive buzz and whetting audience appetite. Blue Angels has already delivered a substantial financial contribution in Q1. During the quarter, we monetized a significant portion of the streaming distribution rights, generating $3.4 million in revenue. The film will become available for streaming on Amazon Prime starting May 23rd, perfectly timed to capitalize on the Memorial Day viewing period, which, by the way, is the same weekend that Top Gun Maverick was released two years ago, starring our client Tom Cruise. And there's another tie between the two films.
Dolphin: We are incredibly excited for the films upcoming TX will debut in IMAX theaters. This weekend. The marketing campaign is in full swing with the exclusive trailer premiere on the today show generating massive buzz and wedding audience appetite blue.
Dolphin: Blue Angels has already delivered a substantial financial contribution in Q1 during the quarter, we monetized a significant portion of the streaming distribution rates generating $3 $4 million in revenue.
Dolphin: The film will become available for streaming on Amazon Prime starting may 23rd perfectly time to capitalize on the memorial day viewing period, which by the way is the same weekend. The top gun Maverick was released two years ago, starring our client Tom cruise and Theres. Another tie between the two films Glen Paul who is about as hot as any.
Bill O'dowd: Glenn Powell, who's about as hot as any actor in Hollywood right now, is playing Hangman in Top Gun Maverick and is also a producer with us on Blue Angels, which certainly helps with the promotion. Oh, and by the way, Blue Angels is a perfect example of a venture driving business back to our super group since 42S is handling the PR for the movie. Importantly, in addition to the traditional theatrical window, Blue Angels represents an annuity revenue stream from its extended run in institutional IMAX theaters at museums, science centers, and other educational venues around the globe.
Glen Paul: In Hollywood right now.
Glen Paul: The truth played hangman and top gun Maverick and is also a producer with us on Blue Angels, which certainly helps with the promotion.
Glen Paul: By the way Blue Angels is a perfect example of the venture driving business back to our Super group since 40 to US is handling the PR for the movie.
unknown: Importantly in addition to the traditional theatrical window Blue Angels represents an annuity revenue stream from its extended run and institutional IMAX theatres that museums science centers and other educational venues around the globe. This institutional theater distribution channel provides a lucrative multi year box office.
Bill O'dowd: This institutional theater distribution channel provides a lucrative multi-year box office tail. So that's coming this Friday. What's that? This Friday is too far away for some of you on this call. You can't wait three days for a catalyst at Dolphin? What are you, James Carbonara, the week of his birthday? Okay, okay.
unknown: Tail.
Glen Paul: So thats coming Thats right.
unknown: What's that this Friday is too far away for some of you on this call you can't wait three days for a catalyst at dolphin.
unknown: James Carbonara the week of his birthday.
Bill O'dowd: Well today, like right now, fast enough for you because consumers can now place pre-orders for Staple Gen on the official website, and shipments are available starting, you guessed it, right now, today, to 43 states. In addition to the online launch, Staple Gin is making its way across the state of New York, being introduced in retail stores, bars, and restaurants. As a matter of fact, Charlie Dugiello, who's leading the charge for Dolphin in this venture, just spotted Staple Gin at Union Square Wine and Spirits not even two hours ago.
unknown: Okay, well today like right now fast enough for Ya. Good consumers can now place preorders for staple Jen on the official website and shipments are available starting you guessed it right now today to 43 states.
James Carbonara: In addition to the online launch stapled units, making its way across the state of New York being introduced in our retail stores bars and restaurants.
Speaker Change: As a matter of fact, Charlie Doug yellow who's leading the charge for dolphin and this venture just spotted stapled unit Union square wine and spirits, not even two hours ago.
Bill O'dowd: And again, for those new to the Dolphin story, Staple Gin is a new spirit developed by the team at The Door and our client, Rachel Ray, and crafted in New York's Catskills region by Do Good Spirits. Dolphin is a partner with Rachel Ray and Do Good Spirits, whereby Dolphin is the official creative marketing partner. And let me just say, Rachel has really knocked this one out of the park.
Speaker Change: And again for those new to the Dolphin story staple June as a new spirit developed by the team at the door and our client Rachael Ray and crafted in New York's Catskills region by do good spirits.
Speaker Change: Often as partner with Rachael Ray and do good spirits, whereby dolphin has the official creative marketing partner and let me just say.
Rachel Ray: Rachel has really knocked this one out of the park.
Bill O'dowd: Staple gin has already gained recognition, being ranked as the highest-rated American gin in VinePair's 30 Best Gins for 2024 guide with an impressive rating of 94 points. Please remember, folks, this gin was rated before going to market, and it received the highest score given by an industry heavyweight publication. That is an incredible result. Oh, and that's all with its retail price point suggested as only $3
Rachel Ray: <unk> has already gained recognition being ranked as the highest rated American Jen and vine pairs 30, best Jens for 2020 four guide with an impressive rating of 94 points.
Rachael Ray: Please remember folks this gen was rated.
Speaker Change: For going to market.
Speaker Change: And it received the highest score given by an industry heavyweight publication that has an incredible results.
Speaker Change: And Thats all with its retail price points suggested is only 39 99.
Bill O'dowd: Needless to say, this gin has caught the attention of gin enthusiasts and has been praised for its clarity of aromas and flavors. The partnership between Dolphin and Staple Gin signifies a strong alliance between the entertainment marketing industry and the world of spirits. We believe that our collaboration will elevate the brand and bring Staple Gin to a wider audience through innovative and creative marketing strategies. The enthusiasm for monetization in the liquor space has been palpable, driven by the remarkable success stories of celebrity-backed spirit brands like Ryan Reynolds' Aviation Gin and George Clooney's Tequila Casamigos.
June enthusiasts: Needless to say this Jim has caught the attention of June enthusiasts and has been praised for its clarity of our roma's and flavors the.
Speaker Change: The partnership between Dolphin and staple Jin signifies a strong alliance between the entertainment marketing industry in the world of spirits.
Speaker Change: We believe that our collaboration will elevate the brand and bring staples into a wider audience through innovative and creative marketing strategies.
Speaker Change: Uzi adds per.
Uzi: Monetization in the liquor space has been palpable driven by the remarkable success stories of celebrity back Spirit brands like Ryan Reynolds Aviation jet and George Clooney Tequila cost somebody goes these high profile exits have demonstrated the immense potential for substantial returns on investment and have fueled excitement and interest in the industry investors in.
Bill O'dowd: These high-profile exits have demonstrated the immense potential for substantial returns on investment and have fueled excitement and interest in the industry. Investors and entrepreneurs are eager to capitalize on the growing demand for unique and premium spirits, making the liquor space an enticing landscape for lucrative activities. We believe this is an exciting new area of growth for Dolphin, and we are well positioned to create significant value for our shareholders through our marketing expertise and innovative deal structure. We have incredibly high hopes for Staple Gen, as you can imagine. Fingers crossed that we've got a hit on our hands.
Dolphin: Printers are eager to capitalize on the growing demand for unique and premium spirits, making the liquor space and enticing landscape for lucrative exits. We believe this is an exciting new area of growth for dolphin, and we are well positioned to create significant value for our shareholders through our marketing expertise and innovative deal structure.
Dolphin: We are incredibly high hopes for staple gin as you can imagine fingers crossed that we've got a hit on our hands.
Bill O'dowd: And finally, in talking about our ventures, I would like to say a few brief words about MasterCard Midnight Theater. As you heard me say on our Q4 earnings call just a few weeks ago, we have narrowed down all of our choices for a new operating partner for the restaurant and theater to a favorite group. We are in the final stages of working on that deal and anticipate we can make an announcement within the month of May. That will be an equally exciting piece of news for us.
Dolphin: And finally in talking about our ventures I would like to say a few brief words about Mastercard Midnight theater as you heard me say on our Q4 earnings call. Just a few weeks ago, we have narrowed down all of our choices for a new operating partner for the restaurant in theater.
Dolphin: Favorite group.
Dolphin: We are in the final stages of working on that deal and anticipate we can make an announcement within the month of May.
Dolphin: That will be an equally exciting piece of news for us.
Bill O'dowd: So how's that for the anticipation of three major venture milestones all in one month? To recap, Q1 2024 achieved record-setting financial results while making meaningful strides in monetizing our equity venture. Moreover, those results are just beginning.
Dolphin: So how is that for the anticipation of three major ventures milestones all in one month.
Dolphin: To recap Q1, 2024 achieved record setting financial results, while making meaningful strides in monetizing our equity ventures Mauro.
Dolphin: Moreover, those results are just beginning going forward as we secure equity ownership in an increasing number of new ventures, we believe the growth potential becomes exponential.
Bill O'dowd: Going forward, as we secure equity ownership and an increasing number of new ventures, we believe the growth potential becomes exponential. As we seek to enter multiple venture opportunities in the next two to three years, this unique model allows us to rapidly scale a portfolio of equity-owned opportunities with minimal cash investments required, which is to say that while we believe that today's results validate our strategy, we are really just getting started. Envision the amplifying impact on our top and bottom lines as our venture portfolio expands to include a dozen or more ownership stakes using this low-cost approach.
Speaker Change: As we seek to enter multiple ventures opportunities in the next two to three years. This unique model allows us to rapidly scale, our portfolio of equity owned opportunities with minimal cash investments required which is to say that while we believe that today's results validate our strategy. We are really just getting started.
Speaker Change: Envision the amplified impact on our top and bottom lines as our ventures portfolio expands to include a dozen or more ownership stakes using this low cost approach simply put and then one sentence, we believe that our ability to sustainably replicate this strategy unlocks a future.
Bill O'dowd: Simply put, and in one sentence, we believe that our ability to sustainably replicate this strategy unlocks a future of compounding returns and value creation. With that said, let me turn it over to Mirta to review the quarter's financial details. Mirta?
Speaker Change: Of compounding returns and value creation.
Merida: With that said, let me turn it over to <unk> to review the quarter's financial details Merida.
Mirta A. Negrini: Thank you, Bill. And good afternoon, everyone.
Merida: Thank you Bill and good afternoon, everyone I'll start by echoing Bill's comments, we are extremely pleased with our record first quarter financial performance.
Mirta A. Negrini: I'll start by echoing Bill's comments. We're extremely pleased with our record first quarter financial performance. I'll now dive into our Q1 2024 financial results in more detail. Total revenue of $15.2 million represents a 54% increase from $9.9 million of revenue in Q1 2023. During the first quarter of 2024, we generated $3.4 million in revenue from the Blue Angels. Operating expenses for the three months ended March 31st, 2024 were $15.1 million, including approximately $600,000 of depreciation and amortization and $1.8 million of amortization of capitalized production costs related to the Blue Angels, compared to $12.5 million of operating expenses for the three months ended March 31st, 2023, including approximately $500,000 of depreciation and amortization.
Merida: I'll now dive into Q1 2024 financial results in more detail total revenue of $15 $2 million represents a 54% increase from $9 9 million of revenue in Q1 2023.
Mirta A. Negrini: The net loss for the quarter ended March 31st, 2024 was approximately $300,000 and included approximately $600,000 of depreciation and amortization and $1.8 million of amortization of capitalized production costs related to the Blue Angels and $500,000 of interest expense. This compares to a net loss of $3 million for the same period in 2023, which included approximately $500,000 of depreciation and amortization. $400,000 of interest expense and $100,000 of equity losses and unconsolidated affiliates. Loss per share was 2 cents per share based on 18,477,825 weighted average shares outstanding for basic loss per share and 18,605,702 weighted average shares for fully diluted loss per share for the three months ended March 31st, 2024.
Speaker Change: During the first quarter of 2024, we generated $3 $4 million of revenue from the Blue Angel.
Speaker Change: Operating expenses for the three months ended March 31st 2024 hour $15 $1 million, including approximately $600000 depreciation and amortization and $1 8 million of amortization of capitalized production costs related to the Blue Angels.
Speaker Change: <unk> to $12 $5 million of operating expenses for the three months ended March 31, 2023, including approximately $500000 of depreciation and amortization.
Speaker Change: Net loss for the quarter ended March 31, 2024, with approximately $300000 and includes approximately $600000 depreciation and amortization and one 8 million of amortization of capitalized production costs related to the Blue Angel and 500000.
Speaker Change: Dollars of interest expense.
Speaker Change: This compares to the net loss of $3 million for the same period in 2023, which includes approximately $500000 depreciation and amortization.
Speaker Change: $100000 in interest expense.
Speaker Change: <unk> hundred thousand dollars in equity losses in unconsolidated affiliates.
Speaker Change: Loss per share was <unk> <unk> per share based on $18 million 477825 weighted average shares outstanding from basic loss per share and $18 million 605700 to weighted average shares per fully diluted loss per share for the three months ended March 31.
Speaker Change: 2024.
Speaker Change: For the three months ended March 31, 2023 loss per share was 23%.
Speaker Change: Just on $12 million 640285 weighted average shares outstanding for both basic and fully diluted loss per share.
Speaker Change: Cash and cash equivalents were $7 5 million as of March 31, 2024, compared to $7 $6 million as of September 31st 2023.
Mirta A. Negrini: For the three months ended March 31st, 2023, the loss per share was 23 cents based on 12,640,285 weighted average shares outstanding for both basic and fully diluted loss per share. Cash and cash equivalents were $7.5 million as of March 31, 2024, compared to $7.6 million as of December 31, 2021. That concludes my financial remarks. I will now ask the operator to open the phone lines at your request. Operator, would you please call me with questions?
Operator: That concludes my financial remarks, I will now ask the operator to open the phone lines for questions. Operator would you. Please poll for questions.
Operator: Thank you.
Operator: Thank you. Ladies and gentlemen, the floor is now open to questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while asking your question, you please pick up your handset, if on speakerphone, to provide optimum sound quality. Once again, if you have a question, please press star 1. Thank you. We have a question from Alan Klee with Maxim Group. Your line is live.
Operator: Ladies and gentlemen, the floor is now open for questions.
Operator: You have any questions or comments. Please press star one on your phone at this time.
Operator: We ask that while posing your question you. Please pickup your handset if on speaker phone to provide optimum sound policy.
Operator: Once again, if you have a question please press star one.
Operator: Thank you.
Operator: We have a question from Allen Klee with Maxim Group Your line is life.
Allen Robert Klee: Yes, hi, congratulations on a very strong quarter that handily beat my estimate. A couple of questions. Starting with Blue Angels, you said that it added $3.4 million in revenues. I missed what you said about what the production costs were, but could you give me... But just based on the contractual amount that you're expected to get. What's the incremental amount that you can get and the cost that you would expect in the next quarter or two?
Allen Robert Klee: Yes, hi, congratulations on a very strong quarter that handily beat my estimates.
Allen Robert Klee: Couple of questions on.
Allen Robert Klee: Starting with Blue Angels, you said that it added $3 4 million of revenues I missed what you said about what the push outs production costs were but could you give.
Allen Robert Klee: Participating on the contractual amount that you expect it to get it.
Speaker Change: What's the incremental amount that.
Speaker Change: That you can get and the costs that you would expect in the next quarter or two.
Bill O'dowd: Sure. Sure. And thank you, Alan. Thank you for the kind words at the start of this. Yeah, we're very proud of this quarter. It feels great, right?
Speaker Change: Sure sure.
Speaker Change: Thank you for the kind words at the start of this year, where.
Speaker Change: We're very proud of this quarter it feels great right in terms of Blue Angels.
Bill O'dowd: In terms of Blue Angels, I think the next couple of quarters, we may not add revenue or much revenue and much expenses, but where we'll really kick in is when we can put the film in theaters, in IMAX institutional theaters, which we can contractually do six months after it premieres on Amazon Prime. Then we'll get more revenue and allocate more of the production costs against that revenue in a bigger way. Obviously, we still have revenue from, there will be revenue generated from theaters this weekend and next week, but we see the big value in the additional revenue for years to come, hopefully two decades to come, from having this movie play in IMAX theaters around the globe in science museums and aviation museums and the Smithsonian and other institutional theaters like And we'll continue to recognize that revenue each quarter as that money comes in.
Blue Angels: I think the next couple of quarters, we may not add revenue or much revenue and much expenses, but where we're really kick in is when we can put their film in theaters.
Bill O'dowd: Are you able to say how many? Institutional Theatres, Europe, you're hoping or you are contracted with INEX for?
IMAX representative: IMAX institutional theaters, which we can contractually due six months afterwards.
Speaker Change: Amir on Amazon Prime then we will get more revenue.
Amir: Allocate more of the production costs against that revenue in a bigger way.
Amir: Obviously, we still have revenue from there will be revenue generated.
Amir: From.
Amir: Theaters this weekend and next week, but.
Amir: We see the big value.
Speaker Change: Additional revenue for years to come hopefully two decades to come from having this movie.
Speaker Change: Play in the IMAX theaters.
Speaker Change: Around the around the globe.
IMAX representative: Science museums in aviation museums in the Smithsonian and other other institutional theaters like that.
Speaker Change: And we will continue to recognize that revenue each quarter as that money comes in.
Speaker Change: Are you able to say how many.
Speaker Change: Institutional theaters here.
Speaker Change: Youre, hoping or you are contracted with the IMAX format.
Bill O'dowd: Sure, yeah. We think this film will play in 150 to 200 of those theaters and, hopefully, in perpetuity. Of course, we're prejudiced, Alan, but this is a major motion picture and documentary, right? It's going to be in the big IMAX theaters, you know, going into Memorial Day. It looks great.
IMAX representative: Sure, Yes, we think there'll be some will play in 150 to 200 of those theaters.
IMAX representative: And.
Speaker Change: Hopefully in perpetuity.
Alan: Well of course, we're prejudice Alan but this is a major motion picture.
Alan Turing: Documentary right, it's going in Big IMAX.
Alan Turing: Going into Memorial day, it looks great I have seen it of course, a few times down.
Bill O'dowd: I've seen it, of course, a few times now, and it's just a stunning documentary. So... If it's already best-in-class, we feel, for a theatrical experience, you can imagine how it compares to the average science documentary in a museum. It's night and day. And it's very contemporary. It's very current. So, shot with IMAX cameras of today and not cameras of 20 years ago, so that weren't IMAX.
Speaker Change: It's just a stunning documentary so.
Speaker Change: If it's already.
Alan Turing: Best in class, we feel for theatrical experience you can imagine how it compares to the average science documentary in a museum.
Speaker Change: It's night and day and that's very contemporary it's very now so.
Speaker Change: Shot with IMAX cameras.
Speaker Change: Today, and not cameras of 20 years ago. So.
Speaker Change: That werent IMAX cameras. So we think it's going to have a very very very long tail is my point.
Alan Turing: That's great.
Bill O'dowd: That's great. So if I do,
Speaker Change: So if I.
Bill O'dowd: You, your revenue was. If I take your revenue, which is $15.2 million, and if I take out... Blue Angels. Blue Angels, yeah, you were still you. It was still like 11.8 million, which was, Yeah, versus 9.9 the year before, right, yeah, we almost went to 4. Where, where else would you highlight was outperformance? And maybe following up on this is a quarter where, Oh, go ahead, sorry.
Speaker Change: Your revenue was.
Speaker Change: If I take your revenue was $15 2 million.
Speaker Change: And if I take out.
Speaker Change:
Angels: Hello Angels.
Blue Angels: Blue Angels Yeah.
Blue Angels: <unk>.
Blue Angels: You were still it was still like $11 8 million, which was.
Angels: Yes.
Angels: Hi.
Speaker Change: Before I congratulate we'd obviously look forward where warehouse.
Angels: <unk>.
warehouse: You highlighted was outperformance.
Speaker Change: And maybe what you're saying versus your estimate.
Speaker Change: Hum.
Speaker Change: Oh go ahead sorry.
Bill O'dowd: No, my apologies. I didn't mean to be speaking over you. Yeah, year over year, we'd still be up over 20% or about 20%, I should say.
Speaker Change: No my apologies I don't mean to be speaking.
Speaker Change: Yes year over year, we'd still be up over 20% or about 20% I should say so yes.
Bill O'dowd: So yeah, it's all starting to come together, my friend, right? We got a full group. They're cross-selling. I will point out in Q1, I'd give a special shout out to Amanda Lumberg and 42 West, the movie division of that company, had a very strong first quarter with all the Oscar awards and campaigns they were running. You know, that can be a lucrative business.
My friend: We are all starting to come together and my friend right. We've got a full group. They are cross selling I will point out in Q1, I would give a special shout out.
Speaker Change: To Amanda Lundberg in 42 US the movie Division.
Speaker Change: Of that of that.
Amanda Lundberg: The company had a very strong first quarter with all the <unk>.
Amanda Lundberg: Oscar Awards and campaigns that we're running.
Bill O'dowd: We were proud to have Martin Scorsese's film, Killers of the Flower Moon, which obviously did not win the Oscar but was nominated in a lot of categories. And then the team at Fandoms & Franchises and the movie division team there, again, did a great job with Point and the Heron, which won Best Animated Film. You heard that in my prepared remarks. That was an upset over the Spider-Man animation movie. And then Godzilla Minus One.
Amanda Lundberg: That can be a lucrative business.
Amanda Lundberg: We are proud to have Martin Scorsese, our clients' film killers of flower mound.
Martin Scorsese: We did not win the Oscar but it was nominated a lot of categories and then the team that's Adams and franchises in the movie Division team. There again did a great job with growing the Heron, which won best animated film you heard that in my prepared remarks that that was an upset over the Spider man animated movie and.
Bill O'dowd: I mean, I think I pointed that out on the 10K call. I mean, that was just an unbelievable campaign they ran, which won for Best Visual Effects, considering that the entire budget of that movie was $15 million. In Japanese, a movie, and it won the best VFX Oscar over competition where the VFX budget alone was more than the entire movie for Godzilla minus one so they just had a tremendous quarter but you know great work is done across all these firms you know they're market leaders for a reason you also heard me highlight special projects I mean, They're running events at New York Fashion Week, the five, six events in a week with blue chip clients.
Speaker Change: And then Godzilla minus one.
Speaker Change: I think I pointed that out on the.
Speaker Change: On the 10-K call I mean that was just an unbelievable campaign they ran.
Beth: Which one for Beth.
Speaker Change: Visual effects considering that the entire budget of that movie was $15 million.
Speaker Change: In Japanese.
Speaker Change: <unk>.
Beth: And it won the best VFX Oscar over competition, where the <unk> budget alone was more than the entire movie forgot the dolomite as well and so they just had a tremendous quarter, but great work's done across all these firms they're market leaders for a reason you also heard me highlight special projects I mean.
unknown: Theyre running events at New York Fashion week, five six events in a week with Blue chip clients, they're doing the same thing Oscars week.
Bill O'dowd: They're doing the same thing, Oscar Week. You know, when you've got clients like Apple and Versace, you know, W Magazine, and other times of the year, they've got the Motion Picture Academy and the Wall Street Journal and Condé Nast. I mean, these are very much blue chip clients, and you're bringing the biggest celebrities in the world to these events, so they had a very strong first quarter, especially during those two weeks.
Speaker Change: Clients like Apple and Versace.
Speaker Change: W magazine in other times of the year, They got the motion picture Academy.
Speaker Change: And Wall Street Journal content AST I mean these are these are very much blue chip clients and you're bringing.
W magazine: The biggest celebrities in the world to these events so.
Speaker Change: They had a very strong.
unknown: First quarter, especially during those two weeks.
unknown: Yeah.
Bill O'dowd: Thank you. So, the digital department, which is social influencing, I think 4Q is the strongest, but then maybe it usually drops off in 1Q. But you've added these two new verticals, skin care, and young adults. And I'm wondering, maybe how you think about those two new areas of how meaningful they could potentially be.
unknown: Thank you so <unk>.
Speaker Change: The digital Department, which is social influence thing is.
Speaker Change: I think <unk> is the strongest but then maybe it usually drops off in <unk>.
Speaker Change: But but you've added these two new verticals skincare and young adults and I'm wondering.
Interviewer: Maybe how that how you think about those as two new areas of how meaningful they are they could potentially be.
Bill O'dowd: Sure, yeah. We chose those two, and we've got a third one coming, Alan. I know you believe we would, right? But because they can have a big impact, right? I'll give Susan Yara and Olivia, who run that division for us now, a lot of credit because that was an existing business. So they kind of plug and play into our platform, and immediately, they want creative revenue and profit. And it really was, you know, kind of brand adjacent.
Alan Turing: Sure Yeah, I mean, we chose those two and we've got a third one comment Alan.
Alan: I know you believe we would right but.
Alan: Because they can have big impact right.
Alan: I'll give Susan you are and Olivia.
Alan: Runs that division for Us now.
Susan: A lot of credit because.
Susan: That was an existing business, so they kind of plug and play into our platform and immediately they want created revenue and profit and it really was.
Susan: Kind of branded Jason you know, we're very strong in female Instagram.
Bill O'dowd: You know, we're very strong on female Instagram, a full roster of influencers there. You know, skincare tends to skew female, both in the influencers themselves and their followers. You know, Instagram heavy content along with some YouTube and some TikTok, but they could just go right in and play well because they were an existing group of 15 influencers already that were being managed. And we just brought in the manager and the influencer
Susan: A full roster of Influencers there.
Alan: Skin care.
Jason: Tend to skew female both in the Influencers themselves.
Jason: And the followers.
Jason: Instagram heavy content, along with some Youtube and so it takes time, but they could just go right in and.
Manager: Play well because they were an existing group of 15 Influencers already that were being managed and we just brought in the manager and the Influencers.
Bill O'dowd: So they had an immediate impact and in time. They will, that group is nearing the biggest vertical we have anyway, but there's very large room for expansion because you know we could probably double the size of the skincare group by itself, but then you can get into the other verticals of beauty, right? So big, the hundred billion dollar plus beauty market out there now that includes cosmetics, and that includes hair care, which might be the biggest category of all, Alan. Why did I just blank on the other one?
Manager: So they had an immediate impact and in time.
Manager: They will that group is nearing the biggest vertical we have anyway, but there is.
Speaker Change: Very large room for expansion because we're talking about we can probably double the size of the skincare group by itself, but then you can get into the other verticals of beauty right. So big.
Speaker Change #103: $100 billion, plus beauty market out there that includes cosmetics.
Speaker Change: That includes hair care, which might be the biggest category at all.
Speaker Change:
Speaker Change #105: Why did I just blanked on the other one.
Bill O'dowd: But it'll come back to me in a second. So each of those verticals is as big as skin care. So, you know, this has a lot of room to run, and bringing in a premier group like that establishes us as a major player right away. And then, in the young adult business, why we partnered with Osbrink is because it probably... shaved half the time off what it would take us to build it by ourselves. I mean, Ospring's just the biggest group in young talent, and while we're building So, you know, Glow Lab came in with their own brands.
Speaker Change #106: It will come back to me in a second but the.
Speaker Change #101: So each of those verticals is as big as skincare. So.
Speaker Change #100: This is this has a lot of room to run and bringing in a premier group like that.
Speaker Change #102: Tablets as us as a major player right away.
Speaker Change #108: And then in the young adult business, why we partner with <unk> because it probably.
unknown: Save half the time off what it would take us to build it by ourselves.
Speaker Change #102: Springs.
unknown: The biggest group in young young talent and.
unknown: While we're building the relationship with brands that want to work with young talent, we have a great roster of young talent to work with so.
Glo lab: Glo lab came in with their own brands that are already doing business with them and they are in their dermatologists were built in that in the young adult space, but when we do.
Bill O'dowd: They're already doing business with them and their dermatologists. We're building that in the young adult space. But when we do, then I think... probably everyone on the call has heard of influencers that are teenagers that have been wildly successful, like Kylie Jenner being the youngest billionaire listed on Forbes because of her cosmetics line. You know, and Kylie Jenner's an influencer, right? She's not an actress. She's not a singer. She's an influencer. And down to college athletes or, you know, stars from the Disney Channel. So that segment has tremendous potential as we build our relationship with BRAMS.
Glo lab: Then I think.
Glo lab: Everyone on the call has heard of Influencers that are teenagers that I've done have been wildly successful from Kylie Jenner being the youngest billionaire listen on Forbes because of her cosmetics line and Kylie Jenner is an influencer right.
Glo lab: <unk>.
Kylie Jenner: She is not an actress she's not a thing or she is an influencer.
Speaker Change #107: And in down to college athletes.
Speaker Change #107: Or stars from the Disney Channel So.
Speaker Change #107: That debt.
unknown: This segment has tremendous potential as we build a relationship with brands.
Bill O'dowd: That's great. Could you, for Staple Gin, talk a little about what you said you were partnered with The Door, and they have their own. And there's another partner, just kind of what's going on on the marketing side and how you feel about that.
Speaker Change #110: That's great could you.
Speaker Change #109: For staple Chin can you talk a little you said you've partnered with the door.
Speaker Change #109:
Speaker Change #111: And they have their own and there's another partner just kind of what's going on on the marketing side and how you feel about that.
Bill O'dowd: Sure, yeah, and what happened there, you know, Charlie D'Aguiello and the team at the door really developed this product with Rachel. I think I may have shared it in previous quarters, and if I haven't, please forgive me, but I've learned a lot in this process.
Speaker Change #119: Sure Yeah, and what happened there you know Charlie Doug yellow and the team at the door or they really developed this product with Rachel I think I may have shared.
Rachel: In previous quarters.
Speaker Change #111: I haven't.
Rachel: Please forgive me, but.
Rachel: I've learned a lot in this process.
Bill O'dowd: And I learned that gin is made from a recipe, for example. And what better liquor to start a consumer products category for us than one in which we have, we think, the most popular chef in America, Rachel Ray? She's beloved by tens of millions of Americans, right?
Jen: And I learned that Jen has made from a recipe for example.
Jen: What better liquor to start.
Speaker Change #121: Consumer products category for US and then one in which we have we think the most popular chef in America, Rachel rash is beloved by tens of millions of Americans rights, but on daytime talk shows and.
Bill O'dowd: She's been on daytime talk shows and, you know, 30-minute meals for going on 20 years, I guess, and just signed a huge deal with A&E Networks for hundreds of hours of programming a year. So if you talk about somebody that's authentic when it comes to writing a recipe, Rachel Ray is it. So she wrote the recipe for Staple Gin and then is writing recipes to cook with Staple Gin, right? But
Jen: 30 minute meals for going on 20 years I guess.
Jen: We just signed a huge deal with any networks for hundreds of hours of programming here. So if you're talking about somebody that's authentic to writing a recipe.
Jen: Rachael Ray is it so she wrote the recipe for.
Doug lessors: Staple gin and then as writing recipes to Cook with Staples, Henrik, but Doug lessors kind of crushed it.
Bill O'dowd: She kind of crushed it, you know, coming out of the gate because, you know, those rankings from VinePear, again, I... Charlie was very bold to submit it. You know, you're submitting a gin that isn't in the market, and for it to, you know, get the highest score, and, in fairness, there were a couple other gins that tied it for the highest score, but that's just incredible, and it's a tribute to Rachel really took her time and worked to get the flavor exactly she wanted it in a really cool twist.
Doug lessors: Coming out of the gate, because those rankings from volume per again.
Speaker Change #117: Charlie It was very bold to submit it.
Speaker Change #122: Youre submitting adjourn that isn't in the market.
Speaker Change #117: And for it to.
Speaker Change #116: Get the highest score.
Speaker Change #116: And in fairness, there were a couple of other gyms that tied for the highest score.
Speaker Change #116: But that's just incredible.
Speaker Change #116: Attribute to Rachel really took our time and worked to get the flavor exactly she wanted it and a really cool twist.
Bill O'dowd: You know, many people know Rachel lives in upstate New York. She also has a home she spends virtually as much time in Italy, and she married because the ingredients for her staple gin come from those two regions. So.
Speaker Change #116: Many people know Rachel.
Rachel: <unk> lives in upstate New York. She also has a home she spent virtually as much time in.
Rachel: Italy.
Rachel: Mary.
Rachel: The ingredients for Staples income from those two regions.
Rachel: So.
Bill O'dowd: When the team was looking for the right distillery, they picked Do Good, which is a distillery in upstate New York where Rachel lives when she's in America. And, you know, that local distillery took the recipe and ran with it. And, you know, here we are. Now you can go buy yourself a bottle, Alan, up there in Manhattan.
Mary: When the team was looking for the right distillery they picked do good.
Rachel: Which is a distillery in upstate New York, where Rachel lives.
Rachel: When she's in America and.
Rachel: That that local distillery took the recipe and ran with it.
Rachel: And here we are now you can.
Speaker Change #123: Go buy yourself, a bottle Alan up there in Manhattan.
Bill O'dowd: That's great. How do you feel about the ability of manufacturing and distribution? And where will it be in retail in New York? Sure.
Speaker Change #120: That's great.
Speaker Change #120: How do you feel about.
Rachel: The ability of.
Rachel: Manufacturing and our distribution and where will it be retail in New York.
Bill O'dowd: Sure, yeah. Well, we'll have a, you know, now, and I think a lot of investors are particularly excited about this because, quite frankly, you know, we, this isn't speculative. This isn't an industry where, Oh, if you do well, can you exit? Like these are products that are built to exit. Right.
Speaker Change #124: Sure Yeah, well, we'll have a.
Speaker Change #124: Now and I think a lot of investors are particularly excited about this because.
Speaker Change #124: Quite frankly.
Rachel: This isn't speculative.
Rachel: This isn't an industry, where like Oh, if you do well can you exit.
Investor: These are products that are built to exit.
Investor: So and we can there are dozens of examples in the last 10 years of successful exits so.
Bill O'dowd: So, and we can, there are dozens of examples in the last 10 years of successful exits. So, the door, quite frankly, has promoted their fair share of those products that were conceived while they were the marketing partner and sold while they were the marketing partner.
Rachel: And the door quite frankly is promoted.
Bill O'dowd: So, you know, it's a process that our team is familiar with. With that said, we will have a regular cadence of announcements because, you know, probably the next thing that you'll hear from us on this is the announcement of the National Distribution Partner. I think people that follow Rachel and follow the liquor industry probably have a very strong guess as to who that partner is based on previous relationships, but still, that'll be a nice big announcement for us. We think, in the near term, next few weeks, that'll be a partner that can put gin on a national scale right away.
Rachel: Their fair share of those.
Rachel: Products that were conceived while they were the marketing partner and sold while where they where the marketing partner.
Rachel: So.
Rachel: So it's a process that our team is familiar with.
Rachel: With that said.
Rachel: But we will have a regular cadence of announcements because.
Rachel: The next thing that Youll hear from US on this is the announcement of the national distribution partner.
Rachel: I think people that follow Rachel and follow.
Rachel: The liquor industry, probably have a very strong guests as to who that partner is.
Rachel: Based on previous relationships, but still it that'll be a nice big announcement for US we think of it.
Rachel: In the near term next few weeks.
Rachel: That'll be a partner that can put the gen on a national scale right away in New York at that part of the same partners putting it out.
Bill O'dowd: In New York, that same partner is putting it out, and, you know, that's the work that's happening now, putting it out in what will become hundreds of doors across the state of New York. As I was saying, Charlie was just down in Union Square, visited three stores, he told me earlier today, and two of them were already carrying staple gin, which is great. You know, it usually comes in cycles, right? Like some stores, you get the order to place the bottle on their shelves, but they don't swap out their shelves for four weeks or six weeks.
Rachel: You know that's what that's the work that's happening now putting it out in what will become hundreds of doors in the state of New York.
Rachel: As I was saying Charles just down in Union square visited three stores. He told me earlier today and two of them were already carrying staple Jim which is great now usually comes in cycles right like some stores.
Rachel: You get the order to place the bottle on their shelves, but they they don't swap out their shelves for four weeks or six weeks. So its kind of a rolling start if you will but we'll be announcing our distributor will be announcing the number of doors, probably in New York are certainly the widespread nature of New York and then with success, we'll be opening up other markets.
Bill O'dowd: So it's kind of a rolling start, if you will. But we'll be announcing our distributor, we'll be announcing the number of doors probably in New York, or certainly the, you know, the widespread nature of New York. And then, with success, we'll be opening up other markets around the country. And when people start seeing that, that's your clue that we're getting to a scale where, you know, interested parties want to buy the brand because it's already got traction in the marketplace.
Rachel: Around the country.
Rachel: And when people start seeing that that's your clue that we.
Rachel: We're getting to scale where.
Rachel: Interested parties want to buy the brand.
Rachel: Because it's already got traction in the marketplace.
Bill O'dowd: And these exits are not small, as you know, Ryan Reynolds sold his gin for $610 million, I believe, and we all know what Clooney did with Casamigos and his billion-dollar check. And The Rock is going to beat them both, by all accounts, with his tequila. And there are a lot of other examples that are, you know, between 100 million and 500 million. So, you know, we're excited about this, and it could be, it could be the start of a whole portfolio of these types of liquor brands for us, we think. So we're excited.
Rachel: And these exits are not small as you heard Ryan Reynolds sold his gen for $610 million I believe.
Rachel: And we all know, including do with costs and make us and hit $1 billion check and the rock is going to beat them both by all accounts.
Rachel: As tequila and there are a lot of other examples that are you know.
Rachel: Yeah.
Rachel: $100 million and $500 so.
Rachel: We're excited for this and it could be it's a start of a poll.
unknown: Portfolio of these types of liquor brands for US we think so.
unknown: We're excited.
unknown: Okay.
Bill O'dowd: That's great. If I look at your different companies that you own and the divisions, I think I heard you say that your movies and acting were strong, and you were strong within Blue Angels. Is there, as we think just seasonally, is there, um, Is there any reason to think that any of the segments might show some seasonality in the next two quarters compared to this quarter? Or do you think it is kind of like a steady type of growth?
Speaker Change #128: That's great if I look at your different companies that you own in the divisions.
Speaker Change #127: I think I heard you say.
unknown:
unknown: That youre movies enacting was strong and.
Speaker Change #126: And you were strong within <unk>.
Speaker Change #132: Blue Angels.
Speaker Change #126: <unk>.
Speaker Change #130: Is there any as we think just seasonally is there.
Speaker Change #126: Is there any reason to think that any of the segments my.
Speaker Change #126: Show some seasonality in the next two quarters compared to this quarter or do you think is kind of like.
Speaker Change #126: Steady steady type of hyper growth.
Bill O'dowd: Well, you know, the first half of the year is always, typically, as strong as the second half of the year for us across most of our companies. That's just a fact we'll live with for the next 20 years, probably, in our core business. Now, as we start doing these ventures, it's going to smooth that out a little bit, right? As we, you know, imagine if we had... half a dozen of these ventures.
Speaker Change #129: Well you know.
Speaker Change #129: The first half of the year as always never.
Speaker Change #129: Typically a strong.
Speaker Change #129: As the second half of the year for us across most of our companies.
Speaker Change #129: <unk>.
Speaker Change #131: That's just.
Speaker Change #131: In fact, we will live with for the next 20 years, probably of our core business now as we start doing these ventures, it's going to smooth that out a little bit right as we imagine if we have.
Bill O'dowd: Sure, you can have great exits like we just had tremendous success out of the gate with Blue Angels. You know, we've already made a handsome profit, and the film isn't even in theaters yet, so that's a good result. As we get steady income developing from the different ventures, and again, worth pointing out, as I think I said twice in my prepared remarks, many of those, we don't have to put up a penny.
Speaker Change #131: Half a dozen of these ventures sure you can have great exits like we just had a.
Speaker Change #131: Tremendous success out of the gate with Blue Angels.
Speaker Change #131: We've already made a handsome profit in the film isn't even in theater shift.
Speaker Change #133: So that's a good result, but.
Speaker Change #133: As we get steady income developing from the different ventures, and again worth pointing out as I think I said twice in my prepared remarks. Many of those we don't have to put up a penny.
Bill O'dowd: We received a ownership stake in our group marketing and typically also receive some form of cash retainer every month in addition to that, but as we have those ventures coming in, it'll smooth out our revenue a little bit, but that's going to take a couple of years.
Speaker Change #133: We received the ownership stake for our group marketing.
Speaker Change #134: Typically also receive some form of cash retainer every month in addition to that but.
Speaker Change #134: As we have those ventures coming in and and.
Speaker Change #134: It'll it'll smooth out our revenue a little bit, but that's going to take a couple of years, we typically see second half of the year stronger and an influencer marketing that's always going to be the case I don't know that we'll ever.
Bill O'dowd: We typically see the second half of the year stronger. And in influencer marketing, that's always going to be the case. But I don't know that we'll ever, is that what, you know, just because.
Speaker Change #135: Is that what.
Speaker Change #135: Just because it's.
Bill O'dowd: It's not that the rest of the year is weak, particularly Q1 a little bit. But it's the fact that Q4 is so strong because every brand wants to use influencers to drive holiday sales. So we will see some seasonality, you know, to that effect. But, you know, on an annual basis, which is also how we like to look at it, we feel very good about this year, both from a revenue standpoint and adjusted operating income, which is how we measure ourselves, as you heard me say, on that basis as well. And with Q1 off to such a strong start, it's hard to imagine that we won't have a good year.
Speaker Change #135: It's not that the rest of the year as weak.
Speaker Change #135: Particularly Q1, a little bit, but it's the fact that Q4 is so strong because every brand wants to use influencers to drive holiday sales.
Speaker Change #135: We will see some seasonality.
Speaker Change #135: No.
Speaker Change #135: To that effect, but.
Speaker Change #135: Annual basis, which is also how we.
Speaker Change #135: Like to look at it we feel very good about this year.
Speaker Change #135: Both from a revenue standpoint.
Speaker Change #135: Adjusted operating income, which is how we measure ourselves as you heard me say on that basis, as well and with Q1 after such a strong start it's hard to imagine.
Speaker Change #135: We won't have a good year.
Bill O'dowd: Thank you. I have a financial question. If I look at what you did for operating expenses in 1Q, are there any areas that, or overall, you think we should think about that might go up or down as we go out and go through the years?
Speaker Change #137: Thanks, Adam financial question.
Speaker Change #139: If I look at what you did for operating expenses in <unk> are there any areas that are overall you think.
Speaker Change #139: We should think about that might go up or down as we go out and go through the year.
Bill O'dowd: We were in the direct call.
Speaker Change #136: And most of the Red Cross Alright right.
Bill O'dowd: I would say it's the direct cost, yeah, because those correlate with the revenues of the film. So for instance, in this quarter, we've got $3.4 million in revenue for Blue Angels, and we have $1.8 million in amortization of the deferred production costs. So that number is going to vary depending on the revenues that we recognize.
Speaker Change #138: Direct costs, yes, because those correlate.
Speaker Change #138: With the with the revenues of the film.
Bill O'dowd: That amortization of the deferred, of the deferred, happens over what time period?
Speaker Change #138: So.
Speaker Change #138: For instance in this in this quarter.
Speaker Change #138: Quarter, we've got $3 four.
Speaker Change #138: $4 million in revenue for Blue Angels, and we have $1 8 million.
Speaker Change #138: The amortization of the deferred production cost.
Speaker Change #136: So that number is going to vary depending on the revenue that we recognized.
Speaker Change #136: Yeah.
Speaker Change #136: That amortization of deferred them.
Speaker Change #136: The deferred cost.
Speaker Change #144: Now that happens over what time period.
Speaker Change #136: Yeah.
Bill O'dowd: over the time period that we expect the revenues to be recorded. So it's based on a ratio of the revenue that you are reporting in this period over what you estimate the total revenues for the project are going to be. So whenever we report revenues, we apply that formula to what's left of the deferred production cost, and that's what gets expensed.
Speaker Change #136: Over the time period that we expect the revenues can be.
Speaker Change #143: With cornerstone.
Speaker Change #136: <unk>.
Speaker Change #136: Okay.
Speaker Change #142: It's based on a ratio of the revenue that you are reporting in this period, although what you estimate the total revenue for the project are going to be.
Speaker Change #142: So whenever we report.
Speaker Change #136: Revenues, we apply that formula to what's left of the deferred production costs and that's what gets expensed.
Bill O'dowd: Does this get added back to adjusted operating income? No.
Speaker Change #140: Does this get added back to them.
Speaker Change #140: Just.
Speaker Change #146: <unk> operating income.
Speaker Change #148: No we did not add that back.
Bill O'dowd: But it's a non-cash cost, or it's a cost to us... Correct, correct.
Speaker Change #145: But it's a noncash cost or it's a quota.
Speaker Change #145: Okay.
Speaker Change #140: Or I guess correct correct, we reported in the past that we that we had invested <unk> two.
Bill O'dowd: We've reported in the past that we have invested over two million dollars in the project. So that's already been paid for, and it's capitalized in our balance sheet under capitalized production costs. Okay, so you invested over two million, and you recognize 1.48 million of the amortization this quarter, and the rest of it will be over whatever the life is of the assumed life of the project. Correct.
Speaker Change #140: $2 million in the project. So that's already been paid for and its capitalized on our balance sheet under capitalized production costs.
Speaker Change #147: Okay. So you had invested over $2 million.
Speaker Change #150: And you recognized $1 four 8 million of amortization this quarter and the rest of it will be over whatever the life of the.
Speaker Change #153: The assumed life of the project.
Bill O'dowd: Correct, whenever we report, we reminisce.
Speaker Change #141: Correct whenever we report revenues.
Speaker Change #141: Okay.
Bill O'dowd: Got it. Okay, just so I can wrap up on a couple other things I'm thinking about. And just in terms of how you're thinking about maybe, do you think this year you might potentially identify, you know, the next Blue Angel type of partnership with IMAX and then, special projects, how, how do you think about how that business is going to go going forward and just how you feel generically about additional ventures that you could make investments in in 24.
Speaker Change #141: Got it.
Speaker Change #141: Okay.
Speaker Change #141: So just let me wrap up on a couple of other things I'm thinking about.
Speaker Change #141: Yeah.
Speaker Change #141: Just in terms of how Youre thinking about maybe do you think this year you might have.
Speaker Change #141: Potentially identify.
Speaker Change #141: Blue Angel type of partnership with IMAX and then.
Speaker Change #141: Special projects, how how do you think about like.
Speaker Change #141: How that business is going to go going forward.
Speaker Change #141: And.
Speaker Change #141: Just how you feel generically about additional.
Speaker Change #141: Ventures that that you could make investments in 'twenty four.
Speaker Change #141: Sure.
Speaker Change #141: Well.
Speaker Change #141:
Bill O'dowd: Taking the middle question, yeah, we love special projects. It's a beautiful little company.
Speaker Change #151: Taking the middle question, Yeah, we love the special projects.
Speaker Change #151: Yeah.
Bill O'dowd: I say little because it's... 11 people between New York and L.A., but they do the biggest events in our industry, right? They're the best at what they do in our entire industry. And I've said it before, but Nicole Vaccarelli and Andrea Oliveri are the model of the kind of executives that Weedle hopes to have within Dolphin. They're smart, they're strategic, they're good people, just a lot of good things to say. So they are also going to have an increased role within Dolphin because, you know, you heard me say that when we think about ventures... We think content, like Blue Angels. We think consumer products, like Staple Gin.
Speaker Change #151: It's a beautiful little company.
Speaker Change #149: I'd say little because it's.
Speaker Change #149: 11 people.
Speaker Change #149: Between New York and L. A but they do the biggest events in our industry right, they're the best at what they do and our entire industry.
Speaker Change #149: I've said, it before but Nicole back you rally and Andre library or the model.
Speaker Change #149: Of executives that.
Speaker Change #152: Uh huh.
Speaker Change #152: I hope to have within dolphin.
Speaker Change #152: They are smart they are strategic they are good people. There's a lot of good things to say so they also are going to have an increased role within dolphin because.
Speaker Change #152: <unk> heard me say that.
Speaker Change #152: When we think about ventures.
Speaker Change #152: We think content like Blue Angels, we think consumer products like staple gin and the third category is we think live events live experiences.
Bill O'dowd: And the third category is, we think, live events and live experiences. And while all of our marketing companies, all of our PR firms, and the digital department all have experience with live events, either promoting them or throwing them, like the digital department does. This is what Special Projects does day in, day out. The strategic acquisition of Special Projects back in October was because they complement our core offering, our 1.0, by cross-selling very nicely with our existing clients, but also because they can help us ideate, develop, and produce events that either we own or co-own.
Speaker Change #152: And while all of our marketing companies all of our PR firms. The digital apartment all have experience with live events, either promoting them or throwing them like the digital apartment dose.
Speaker Change #152: This is what special projects does day in day out so.
Speaker Change #152: The strategic acquisition of special projects back in October was because they complement our core offering our one point, though.
Speaker Change #152: By cross selling very nicely.
Speaker Change #152: With our existing clients, but also because they can help us ideate develop and produce events that either we own or Colo.
Bill O'dowd: So I'm on the record as saying we expect to be able to announce our first one before the end of the year or very early in the new year, but I feel pretty good about it before the end of the year, and special projects will be right there, as the reason why that happened, set special projects and why that was a strategic acquisition, of course. In terms of the next Blue Angels, well, you know, if I'm being honest, I wish I could announce it today. That would have been the right time to do it. The week you have this one going in the theaters, you want the next one out. You next one will be announced.
Speaker Change #152: I'm on the record as saying, we expect to be able to announce our first one.
Speaker Change #152: Before the end of the year.
Speaker Change #152: <unk> or very early in the new year, but I feel pretty good about toward the end of the year.
Speaker Change #156: Special projects will be right there.
Speaker Change #156: Is the reason why that happened.
Speaker Change #152: So.
Speaker Change #157: So that's special projects and why why that was the strategic acquisition of course.
Speaker Change #152: In terms of.
Speaker Change #152: Next blue Angel as well.
Speaker Change #152: If I'm being honest I wish I could announce it today.
Speaker Change #152: That would've been the right time to do it the week you have this one going in theaters you want the next one out.
Speaker Change #152: Next one.
Bill O'dowd: And it would have been great. You know, this is Cannes Film Festival week. We've had some pretty good years over the last couple of years. We have, you know, our client, Francis Ford Coppola, has got the Thursday night film in two nights over there. And, you know, one of our other clients, Studio Ghibli, is getting a career achievement award for an animation studio. People, that's tremendous, right?
Speaker Change #152: <unk>.
Speaker Change #152: And it wasn't great.
Speaker Change #160: Tom Film Festival week.
Speaker Change #159: We've had some pretty good years over the last couple of years, we have.
Speaker Change #159: Our client franchise for Copel has got the Thursday night film and two nights over there.
Speaker Change #152: And one of our other clients do studio Ghibli.
Speaker Change #152: Getting a career achievement award for an animation studio.
Speaker Change #154: That's tremendous right.
Bill O'dowd: With that said, it would be a great announcement in a week. We're just not prepared to do it yet. The one we most want, we can't talk about yet. And we have a default, like if it just doesn't work out, we're thinking of... Filming James Carbonara in a go-kart.
Speaker Change #154: With that said it would have been great announcement, a week, we're just not prepared to do it yet the one we most want.
Speaker Change #154: We can't talk about yet.
Speaker Change #154: And we have a default like if it if it just doesn't work out we're thinking about.
Speaker Change #154: So maybe James Carbonara in a go kart and we figured that might look good up an IMAX screen, but in all seriousness, we we obviously to our building our approach.
Bill O'dowd: We figured that might look good on an IMAX screen. But in all seriousness, we're obviously, too, building a production pipeline so we can have not just the next one, but hopefully the one right after it as well. We're very, very confident in the business plan because what Blue Angel showed us is that we can put a spectacle documentary in theaters. It has tremendous value for the streaming platform. It wasn't just like Amazon was the only one that wanted it. It's fair to say that the four streaming services were very aggressive. So, um, and that's something that just doesn't exist in the market. Um, there just aren't other people putting documentaries in theaters, let alone IMAX theaters.
Speaker Change #154: Our production pipeline. So we can have not just the next one but hopefully the one right after it as well.
Speaker Change #154: But.
Speaker Change #154: We're very very confident in the business plan, because what blue Angel showed US is if we can put a spectacle documentary in theaters that has tremendous value for the streaming platforms.
Speaker Change #154: It wasn't just like Amazon was the only one that wanted it.
Blue Angel: It's fair to say that for streaming services were very aggressive.
Blue Angel: So.
Blue Angel: And that's something that just doesn't exist in the market.
Blue Angel: There just arent other people, putting documentaries and theaters, let alone IMAX theaters. So we feel very good about what we got we just want that next one to be able to talk about as much as you do.
Bill O'dowd: So we feel very good about what we have. We just want that next one to be able to talk about as much as you do, in terms of your third question about the three other ventures as well. You know, Charlie, Doug yellow doesn't slow down the door.
Blue Angel: In terms of your third question of the three other venture as well.
Speaker Change #155: No Charlie Doug yellow doesn't slow down the door, we do have.
Bill O'dowd: We do have, We're evaluating opportunities, we have opportunities to evaluate, I should have said it, in the liquor space. [inaudible] I think it's, we feel very confident we can meet our stated goal of having one new venture in the liquor space every year, but there are going to be some years, and maybe even this year, where we can do two. That's exciting.
Speaker Change #155: We are evaluating opportunities we have opportunities to evaluate its always sort of said it.
Speaker Change #155: In the liquor space.
Speaker Change #155: I think we feel very confident we can.
Speaker Change #155: Meet our stated goal of having one.
Speaker Change #155: New venture in the liquor space every year, but they're going to be some years. It may be even this year, where we can do to.
Bill O'dowd: We are working hard to make sure we have a skincare product that we can put on the market in 2025. So we have one of those a year, or as close to it as we can, going forward, starting next year. And then, you know, we will announce that next live event, or first live event, excuse me, this year. I really believe that, and that'll be something like Liquor, where we have one a year, or some years, two.
Speaker Change #161: That's exciting.
Speaker Change #161: We are working hard to make sure we have a skin care product that we can put in market. In 2025. So we have one of those a year or close to it as we can.
Speaker Change #155: Going forward starting next year.
Speaker Change #155: And then we will announce that next wave of that our first first of all I've met excuse me. This.
Speaker Change #155: This year, I really believe that and that'll be something like liquor, where we will have one a year, but or some years too but.
Bill O'dowd: It's not like you do a live event and then it's over; we're trying to design live events where they become an annual tradition, and each of the, for each of those events. So once you get to, by the time you're doing your fourth or fifth live event with success, you've got, the next year you're starting with five events, if that makes sense, and you're adding a sixth event in a So, live events will be the last thing added to our portfolio of ventures, but they'll be, in my mind, equally important to the content strategy and the consumer product strategy.
Speaker Change #155: Is that like you do a lot of benefits over it we're.
Speaker Change #155: We're trying to design live events, where they become an annual tradition.
Speaker Change #155: And each of them for each of those events. So when do you get to by the time, you're doing your fourth or fifth live event and success you've got the next year Youre, starting with five events, if that makes sense and you're adding a sixth.
Speaker Change #155: In a different category so.
Speaker Change #155: Live events will.
Speaker Change #155: The last thing added to our portfolio of ventures.
Speaker Change #155:
Speaker Change #155: But there'll be equally important in my mind to the content strategy in the consumer product strategy.
Bill O'dowd: Okay, great. Well, thank you so much. No, thank you, Alan. You always ask the most insightful questions.
Speaker Change #164: Okay, great well. Thank you so much.
Speaker Change #166: No. Thank you Alan you always ask most insightful questions.
Bill O'dowd: and allow me to expand on our strategy.
Speaker Change #155: And allow me to expand on our strategy.
Alan: Thank you.
Speaker Change #155: Thank you.
Bill O'dowd: As we have no further questions on the lines at this time, I will hand it back to Mr. O'Dowd for any closing comments he may have. Well, thank you, everybody.
Speaker Change #162: As we have no further questions on the lines at this time I will hand, it back to Mr. <unk> for any closing comments you may have.
Bill O'dowd: Well, thank you everybody that's listening. We're very proud of this quarter. It is the first quarter of the year. It's the first quarter where we have had our whole group together. This is our first full quarter. We obviously had a blowout quarter, not going to happen very often where you set a revenue record by 25% over the previous record.
Speaker Change #167: Well, thank you everybody that's listening.
Speaker Change #167: Lee.
Speaker Change #155: Sure.
Speaker Change #163: We're very proud of this quarter.
Speaker Change #165: It is the first quarter of the year since the first quarter, where we've had our whole group together.
Speaker Change #155: This is our first full quarter, we obviously had a blowout quarter.
Speaker Change #155:
Speaker Change #155: <unk>.
Speaker Change #155: Not going to happen very often where he said that our revenue record by 25% over the previous record.
Bill O'dowd: So we know that. We will have a glass of staple gin in celebration and go right back to work, right? We're excited. As I said on the last couple of calls, we see ourselves at the starting line, and we're not even there yet. Honestly, we're building to get to the starting line in live events.
Speaker Change #168: We know that.
Speaker Change #168: We will have a glass of staple Gen in celebration and go right back to work right.
Speaker Change #155: We're excited as I said on the last couple of calls we see ourselves at the starting line.
Speaker Change #155: We're not even there yet honestly, where we're building to get to the starting line and live events and it's only going to get better from here and consumer products and content. So we know we've got with our company and we're very very proud of our company. We're excited for our company and in this quarter proved it.
Bill O'dowd: And it's only going to get better from here in consumer products and content, so we know what we have with our company. We're very, very proud of our company. We're excited about our company. And this quarter proved what we can do when we have the whole group together and we start monetizing some of these ventures. So, for a company of our size, we think we're as exciting an opportunity as there is in the market. So thank you all for your time and I appreciate it and look forward to speaking again with Q2 in August.
Speaker Change #155: What we can do.
Speaker Change #155: When we have the whole group together and we start monetizing some of these ventures.
Speaker Change #155: So for.
Speaker Change #155: For our company.
Speaker Change #155: <unk> of our size.
Speaker Change #155:
Speaker Change #155: We think we're as exciting and opportunity as there is in the market. So thank you all for the time and I appreciate it and look forward to speaking again with Q2 in August.
Speaker Change #155: Thank you everybody.
Speaker Change #155: Okay.
Operator: Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect your lines at this time and have a wonderful day, and we thank you for your participation.
Speaker Change #169: Thank you ladies and gentlemen, this does conclude todays event you may disconnect. Your lines at this time and have a wonderful thing and we thank you for your participation.
Speaker Change #155: I couldn't agree.