National CineMedia, Inc. (NCMI) Q2 2018 Earnings Report, Transcript and Summary

Greetings and welcome to the National CineMedia Inc., Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Katie Scherping, Chief Financial Officer for National CineMedia. Thank you, Ms. Scherping. You may begin.

Thank you, Doug, and good afternoon, everyone. I'd like to remind our listeners that this conference call contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Act of 1934 as amended. All statements, other than statements of historical fact communicated during this conference call, may constitute forward-looking statements. These forward-looking statements involve risks and uncertainties. Important factors that can cause actual results to differ materially from the Company's expectations are disclosed in the risk factors contained in the Company's filings with the SEC. All forward-looking statements are expressly qualified in their entirety by such factors. Further, our discussion today includes some non-GAAP measures. In accordance with Regulation G, we have reconciled these amounts back to the closest GAAP basis measurement. These reconciliations can be found at the end of today's earnings release, which may be found on the Investor Page of our website at www.ncm.com. Now, I'll turn the call over to Andy England, CEO of National CineMedia.

Thanks, Katie. Good afternoon, everyone. Welcome and thank you for joining us on our second quarter 2018 earnings call. I will begin today's call by reviewing the Company's second quarter and first half of 2018 results and highlights. Katie will then provide a more detailed discussion of our financial performance and our guidance. As always, we will leave time for questions. I am very pleased to report that we have kept the momentum going from our great start to the year and continued the revenue and adjusted OIBDA growth into second quarter for a solid first half of 2018. Total revenue for the second quarter ended June 28, 2018 increased 17.1% to $113.7 million from $97.1 million for the comparable quarter last year. Adjusted OIBDA increased 23.6% to $52.3 million for the second quarter of 2018 from $42.3 million for the second quarter of 2017. As we look back on the first half of the year, total revenue for the first six months ended June 28, 2018, increased 14.7% to $193.9 million from $169 million for the comparable period last year. Adjusted OIBDA increased 26.2% to $75.6 million for the first six months of 2018 from $59.9 million for the first six months of 2017. Both our national and local and regional sales teams performed well in the second quarter. National advertising revenue was up 19.4% to $78.8 million in the second quarter of 2018 versus $66 million in the second quarter of 2017, excluding beverage revenue from the founding members. As in the first quarter, this $12.8 million increase was largely driven by scatter, as advertisers are trending more towards spending their money much closer to campaign air dates. And network attendance was up 21.3% in Q2, thanks to the highest quarterly box office on record. We saw a 9.9% increase in impressions sold and a 13.4% increase in national advertising CPMs, excluding beverage. We also brought several new national clients to the big screen in Q2 2018 from [cash groups] including oil and pharmaceuticals, and our top growth categories for the quarter included communications, Internet and media, video games, apparel and alcoholic beverages. For the full first half of the year, our national ad revenue was up 21% or $23.2 million to $133.6 million for the six months ending June 28, 2018, compared to $110.4 million for the comparable period in 2017. As we noted on our last call, the 2018 upfront dollars that we currently have contracted will primarily hit in the second half of the year, and we are continuing to aggressively participate in the 2018/2019 upfront marketplace, with client meetings and the agency presentations across the country to show them the best and newest ways to connect their brands with our valuable NCM movie audiences. On the local and regional side, we began to reap the benefits of realigning that sales team to streamline operations and better match sales responsibilities and accountability with specific revenue types, such as local sales, local digital sales and regional sales, which is where STRATA, Mediaocean and National Spot sales interact with larger, multi-market media buyers. All we had an 8.4% decrease in the total volume of local and regional contracts compared to the prior year, we had a 23.6% increase in the dollar value of those contracts, resulting in a $2.8 million or 11.9% increase in local and regional advertising revenue from $23.5 million in Q2 of 2017 to $26.3 million in Q2 of 2017. With the local and regional team coming off a transitional first quarter, revenue from this group for the first six months of the year, ending June 28, 2018, still increased 2.6% or $1.1 million to $43.7 million in the first half of 2018, up from $42.6 million for the same period last year. We are also seeing traction from our National Spot strategy, with revenue from the STRATA and Mediaocean buying systems up 189% in the first half of 2018. On the digital front, our investment in our complementary Noovie digital product ecosystem continues to be validated by the positive response we are getting from both advertisers and movie audiences. Over 850,000 moviegoers have already enjoyed playing fun, interactive augmented reality games like Cinevaders and Emoji Escape on the big screen since the launch of our groundbreaking Noovie ARcade app in April, and our Fantasy Movie League player ranks have grown tenfold in the last six months, since we begin executing on our strategy to use our new Noovie pre-show inventory to promote our own digital products. And brands are beginning to take note. In the second quarter 2018, we achieved a 19.9% increase in digital revenue, not included in the inventory measured by impressions sold or CPMs, and although digital remains a small part of our overall revenue, it is augmenting our core on-screen business by increasing new, integrated marketing capabilities, digital ad inventory and first-party data, things that we believe will be key to, and a meaningful part of our growth and profitability in the future. Speaking of which, I'd like to welcome our new Vice President of Digital Ad Sales, Jerry Canning to the team. A digital industry thought leader and a veteran of both Facebook and Google, Jerry will be leading our digital advertising sales efforts across NCM's growing suite of digital products, including Cinema Accelerator, Noovie ARcade, Fantasy Movie League, and coming soon, noovie.com. As you can see, it was a very eventful second quarter for NCM, and while our financial results were certainly notable, it was a significant quarter for us on several other fronts as well. First, we reached an agreement with our largest stockholder, Standard General, on June 1, that allows them to appoint up to two new independent directors to our board, the first being Andrew P. Glaze, who joined us on July 1, and will serve on the Compensation Committee and nominating and Governance Committee of the board. He replaced Paula Williams Madison, a Director since 2014, and I would like to take a moment to thank Paula for her four years of service to NCM. We are pleased to welcome Andrew to the board, as we continue to focus on driving value, execute our strategic plan for future growth and building on NCM's unique position as the largest cinema advertising network in America. In other board related news, as disclosed in our announcement on July 23, Chairman of the Board, Scott N. Schneider, retired as of July 31, 2018. Scott has served as an independent Director of National CineMedia Inc. since February 2007, with the majority of that time as lead director and had served as Chairman of the Board since January 2016. He led the Board during a time of extraordinary success with NCM, and I thank him for his service and wish him all the best in the future. The Board is currently working to replace Scott as a Director and will announce a new Chair at the future date yet to be determined. Second quarter also brought a change in ownership for National CineMedia LLC and saw the clearing of the AMC stock overhang when Cineworld Group, plc. and Cinemark Holdings, Inc. announced its agreement to acquire the remaining units of National CineMedia LLC, owned by AMC Entertainment Holdings Inc. The transaction closed in early July and fulfills AMC's requirement to sell its interest in NCM under the consent decree with the U.S. Department of Justice in connection with AMC's acquisition of Carmike Cinemas Inc. However, more importantly, it signals a further investment in the strategic asset by our other two founding members. It also gives us the opportunity to deepen our collaboration with Cineworld and Cinemark on our future business plans and growth strategies, while continuing to work closely with AMC to service their cinema advertising needs under our exhibitor service agreement, which has approximately 19 years remaining. While AMC no longer has it current ownership interest and NCM LLC, AMC's fit its representing approximately 70% of AMC’s U.S. attendance will still be an important part of our network, the largest cinema advertising network in the U.S, along with our 50 other great exhibitor partners for many years to come. Finally, we've refinanced our senior secured credit facility in June, including our term loan and revolving credit facility, allowing us to extend our debt maturity and provide additional financial flexibility, which Katie will go into more detail on shortly. It is been an exciting year too far, and I look forward to continuing to work together with our board and everyone on our NCM team in 2018 toward our vision to be the connector between brands and movie audiences. And with that, I'll now turn the call over to Katie to give you more details about our Q2 and first half of 2018 operating performance and guidance estimates. Katie?

Thanks, Andy. I'll walk through our results that Andy highlighted in further detail and discuss our thoughts on the quarter and our outlook for the rest of the year. Then we’ll open the call to your questions. But before I get into the numbers, I'll refer you to the supplemental presentation on our Investor Relations section of ncm.com. For the second quarter, our total revenue increased 17.1% or $16.6 million to $113.7 million versus $97.1 million in Q2 2017, driven by a 19.4% or $12.8 million increase in national advertising revenue and 11.9% or $2.8 million increase in local and regional advertising revenue and a 13.2% or $1 million increase in beverage revenue. Total Q2 2018 adjusted OIBDA increased 23.6% or $10 million to $52.3 million from $42.3 million in the second quarter of 2017 and adjusted OIBDA margin increased to 46% from 43.6% in Q2 2017. It's worth pointing out that the adjusted OIBDA growth generated in the second quarter includes the impact of almost $1 million of non-recurring legal and professional fees related to our settlement with Standard General this year, a 15% or $2.8 million increase in theater access fees related to the record Q2 box office, and our continued investment in the Noovie digital ecosystem. For the first six months of 2018, total revenue increased 14.7% or $24.9 million to $193.9 million from $169 million in the first six months of 2017. Adjusted OIBDA increased $15.7 million or 26.2% to $75.6 million from $59.9 million in the first six months of 2017, and adjusted OIBDA margin increased to 39% from 35.4% versus six months of 2017. The Q2 and year-to-date increases are driven by an increase in high margin national advertising revenue due to a significantly stronger scatter market in 2018 compared to last year. In the second quarter, we recorded $5.6 million of integration and other encumbered theater payments from Cinemark and AMC associated with the Rave Theatres and Carmike Theatres versus $4.3 million in Q2 2017. As a reminder, note that these integration and other encumbered theater payments are added to adjusted OIBDA for debt compliance and partnership cash distribution purposes that are not included in reported revenue or adjusted OIBDA as they are recorded as a reduction to net intangible assets on the balance sheet. We expect to record approximately $21 million to $23 million of these payments from our founding members during 2018. Our Q2 2018 advertising revenue mix was 69% national, 23% local and 8% beverage versus Q2 2017 that was 68%, 24% and 8% respectively. Q2 national ad revenue increased 19.4% versus Q2 2017 and was driven by a 9.9% increase in impressions sold and a 13.4% increase in CPMs. The increase in impressions sold was driven by a 21.3% increase in network attendance, partially offset by a decrease in inventory utilization to 101.5% from 112.1% in Q2 2017. For the first six months of 2018, national ad revenue increased 21% driven by an 8.3% increase in CPMs and an increase in utilization to 98.5% from 93% on network attendance that increased 8.7% versus the first six months of 2017. Finally, our quarter end [make good] balance was $2.5 million at the end of Q2 2018 versus $4.2 million at the end of Q2 2017. Q2 local and regional ad revenue increased 11.9% or $2.8 million versus the second quarter in 2017, and was driven by an increase in revenue due to a 23.6% increase in average contract value, partially offset by an 8.4% decrease in the total number of contracts. For the first six months of 2018, local and regional ad revenue increased 2.6% or $1.1 million versus the first half of 2017. The increase in advertising revenue was driven by a 12.4% increase in average contract value, partially offset by a 9.1% decrease in contract volume. Q2 beverage revenue increased 13.2% or $1 million versus Q2 2017 driven by an increase in founding member attendance and 1.1% increase in beverage CPM. For the first six months of 2018, beverage revenue increased 3.8% or $600,000 versus the first six months of 2017 was driven by an increase in founding member attendance and a 1.1% increase in beverage CPMs. Looking briefly at diluted earnings per share for the second quarter, we reported GAAP diluted EPS of $0.05 versus EPS of $0.09 in Q2 2017. As adjusted for CEO transition costs and early lease termination expense, net income for the second quarter of 2017 and 2018 would have remained the same per diluted share. For the first six months of 2018, we reported GAAP diluted EPS of $0.03 versus EPS of $0.06 for the first six months of 2017. As adjusted to exclude CEO transition related costs and early lease termination expense, diluted EPS for the first six months of 2018 would have remained $0.03 versus EPS of $0.07 for the first six months of 2017. Note that our weighted average shares outstanding and our net income attributable to NCM Inc., for the quarter and year-to-date include the additional shares of NCM Inc., sold by AMC in the second half of 2017. For the first six months of 2018 capital expenditures were $7.2 million versus $6 million for the first six months of 2017 driven by a $2.8 million investment in our digital ecosystem. We are estimating that full-year 2018 capital expenditures will be in the $17 million to $19 million range or approximately 4% of revenue, including $8 million to $9 million of digital investment. Now moving on to our balance sheet. In the second quarter, we refinanced our $270 million senior secured term loan and our $175 million revolving credit facility, with a new senior secured credit agreement that consists of a $270 million term loan and $175 million revolving credit facility. The new agreement allows us to extend the maturity date of the revolver to June 2023 and the term loan to June 2025. Although, in both cases, the majority is contingent upon the refinancing of NCM LLC's notes due 2022 on or prior to October 30, 2021. The interest rate under the term loan at our option is LIBOR plus 3% or the base rate plus 2% and the rate under the revolver is LIBOR plus a range from 1.75% to 2.25% or the base rate plus an applicable margin, ranging from 0.75% to 1.25%, depending on our consolidated net senior secured leverage ratio. The terms of the new facility also include a 1% annual amortization of principles equating to $675,000 payable quarterly. The new credit facility contains covenants for a consolidated net total leverage ratio not to exceed 6.25 times and a consolidated net senior secured leverage ratio, not to exceed 4.5 times when there is a balance outstanding on the revolver. In addition, NCM LLC is permitted to make restricted payments, including distributions to owners, with its available cash if NCM LLC’s consolidated net senior secured leverage, after giving effect to any such payment is below 5.5 times. We increased our investment basket to $100 million from the previous $25 million, which will allow us additional flexibility to invest in the business as needed. Our total debt outstanding at NCM LLC at the end of Q2 2018 was $950 million versus $930 million at the end of Q2 2017. Our revolver balance at the end of the second quarter in 2018 was $30 million, which included about $7 million drawn down at the end of the quarter for the payment of fees for the refinancing our debt compared to $10 million at the end of Q2 2017. Our average interest rate on all debt was approximately 5.6% at the end of Q2, including our $270 million floating-rate term loan bank debt, the revolving credit facility that had a rate of approximately 4.5%. Excluding revolver balances, 68% of our total debt outstanding at the end of Q2 2018 had a fixed interest rate. Our total net leverage at NCM LLC as of the end of Q2 2018 was approximately four times trailing four-quarter adjusted OIBDA versus 4.5 times in Q2 2017, which is well below our consolidated net total leverage maintenance covenant of 6.25 times. Our consolidated net senior secured leverage ratio was 2.9 times versus the covenant of 4.5 times. Our consolidated cash and investment balances as of Q2 2018 increased by approximately $14 million to $66 million from the end of Q2 2017 with $57 million of this balance at NCM Inc. We announced today that the Board of Directors have authorized the Company's regular quarterly cash dividend of $0.17 per share of common stock. The dividend will be paid on August 31, 2018 to stockholders of record on August 16, 2018. The dividend level was determined based on our plan to invest in the business over the next few years, while providing financial flexibility. We intend to pay a regular quarterly dividend for the foreseeable future at the discretion of the Board of Directors consistent with our intention to distribute over time a substantial portion of our free cash flow. The declaration, payment, timing and amount of any future dividends payable will be at the sole discretion of the Board of Directors who will consider general economic and advertising market condition, the Company's financial condition, available cash, current and anticipated cash needs and any other factors that the Board of Directors considers relevant. Our annual dividend yield is currently 8% based on today’s closing share price of $8.46. Now turning to our guidance for the full-year 2018. As Andy noted earlier, we had a strong first half 2018, though we still face a tougher comparison and a weaker film slate in the second half of the year. Taking this into account, we are modestly increasing our guidance. We are expecting total revenue to be up between 1% and 5.6% versus 2017 or in a range of $430 million to $450 million and adjusted OIBDA is expected to be flat to up 4.8% or in a range of $205 million to $215 million. Turning now to our available cash calculation for 2018, starting with our adjusted OIBDA guidance of $205 million to $215 million, you'll add the following as a build to available cash. One, integration payments of $21 million to $23 million, and two, cash payments from the Fathom note receivable of $4.5 million. As a reduction to available cash, you will subtract the following. One, cash interest expense of approximately $56 million to $57 million; debt principal amortization of $1.4 million; three, capital expenditures of $17 million to $19 million, net of $1.1 million to be reimbursed for tenant improvement allowances. And four, non-cash stock comp for Inc. employees of approximately $4 million to $5 million. These are the components that will allow you to arrive at a projection for available cash at NCM LLC in 2018, which is paid to the three members of the partnership, Cineworld, Cinemark, and NCM Inc, quarterly based on their ownership at the end of the quarter. Finally, I would like to celebrate our successful move into our new, more modern Denver headquarters during the second quarter. It is more reflective of our company culture and of our values of accountability and collaboration. We downsized from 82,000 square feet as 63,000 square feet and more accessible to light rail, which appeals to millennial professionals to be desired to attract and retain. That concludes our prepared remarks, and now we will open the line for questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Eric Handler with MKM Partners. Please proceed with your question.

Yes, thanks for taking my question. Good afternoon. Just wondering if you could dig in a little bit on revenue, particularly on the national side, your utilization went down on a year-over-year basis, but CPM shot up to 13.4%. We haven’t had a double-digit quarter in about six quarters. And so I’m just curious how you balanced a lot of excess impressions that you had to sell versus CPMs and sort of what – is there anything in particular that made scatter so strong?

Well, thanks for the question Eric. A couple of thoughts, as I mentioned, Q2 box office was a – was actually a record. It was a record for the U.S. box office, not just for a second quarter, but for any quarter. And so obviously that was partly driven by attendance. So if you look at the attendance across our network, it was up slightly over 21%. So right there, you'll see, we grew revenue just over 17% when attendance was up just over 21% and that’s fundamentally, why utilization is down a little bit. The CPM piece to your exact point was very much driven by scatter and we had a very successful scatter quarter. I think we feel good about the economy. We feel good about the advertising economy. What I will say is that we increasingly have advertisers who wish – who are willing to pay more to buy late. So much as we continue to push the upfront, and we feel good about our efforts in the upfront, what's interesting is we do see scatter dollars getting placed later, and we've seen them placed at CPMs by buyers who are keen to place, but not concerned about the savings that come with booking much earlier. So that's kind of the overall context, I think.

Was there any one advertise of maybe a couple advertisers that help drive it up or was this – what were you seeing was pretty fluid throughout the quarter?

I think it was fairly fluid, and then we clearly have – as you know, as a medium, we’re relatively high churn. We have advertisers who didn't return. We had advertisers who came in, and in some cases, came in having not been with us for a while. So, I think, we have a – even though we have a relatively high level of churn. We also have a high level of interest. So there are certainly similar important advertisers, as we mentioned in [indiscernible] like Telco who came in with Gusto if you like. But it’s difficult to point to any one particular advertiser that was just I think a healthy level of movement and people who are looking to reach millennials found us.

Okay. And then just one last question. Last quarter, I mean, you guys said that 2Q was off to a very good start, and obviously, that flowed through the rest of the quarter. I'm curious to see how – or curious to know what commentary you can give us about 3Q, especially, as comparisons start to become a little bit more difficult?

Yes. So here's what I would say, Eric. I mean, what we know today has been factored into our expectations or guidance for the year. And I'd say, if the business momentum remains as strong as it has been, then it would certainly be reasonable to expect guidance to be raised further, as we progress throughout the year. But in an effort to be somewhat conservative, this is where we feel comfortable raising the guidance today.

Got it. Thank you very much.

You’re welcome. Thank you, Eric.

Our next question comes from the line of Jim Goss with Barrington Research. Please proceed with your question.

Thanks. A couple of questions about the way you’re branding yourself somewhat. You note that you're the biggest millennial we can network, which used to be the biggest network, aside from bigger than broadcasting, in general. Is this shift in language meant to change the thrust of your business or is there – should anything be read into that or is it – how would that go?

To answer your question, Jim, I think, it's certainly not an intent to downsize the impact of that story. I think, it's more of an attempt to focus on just how important we are with millennials, and we certainly do very well with advertisers who are looking at millennials, so that's really very much our focus. But no, it's not intended to be another filter in order to position us as the largest. I think, we are the largest without that word millennial attached.

Okay. And maybe in a related vein. You mentioned the new focus on some of the pre-show games you might play with the apps and the stream. Have the efforts to do that sort of thing affected the rest of the audience at all that might not be so anxious to play or does it? I think it's been intended to go quite a bit before when the first of the ads would be shown, so it would be something even earlier yet. But does that make a difference to the rest of the audience?

Here's what I'll tell you about it, Jim. I think, firstly, we think gaming is a huge idea for us related to your first question, because millennials love gaming. And so, we think it's a very fertile territory for us, and I would tell you that we have very positive feedback on it. We also have – once in a while, we had feedback that people don't appreciate it, but for the most part, I would say that the feedback is overwhelmingly positive. To your point, we put those games, at least right now pretty early in the show, and the reason we do is because that's frankly, where we have inventory that is available to be used for such things. But we also – it's very much our intention, as we get sponsorships, for example, to potentially push it later in the show. So we happen to sell our first sponsorship of Noovie ARcade, it's going to happen in the fourth quarter, I obviously, can't tell you who the advertiser is, but we saw the sponsorship of it, which give us an opportunity to move it later in the show. So we'll certainly learn. We get feedback the whole time direct from consumers, and we think, overall, this is very positive thing would be our interpretation of the feedback.

Okay. And last question. I know the PSA is not broken out the way beverage is, and I think it hasn't actually been. Is that of any greater or lesser relevance than it used to be and where are you just including that in your national ad revenues?

That’s just included, and I think, you're referring to the silence of your cell phones that we do get sponsored. That's just included in our national revenue. We certainly think it's important. We sell it for a considerable amount of money. I think there are too many advertisers who sponsor it, and we see it as being an important part of our offering. But it is bundled international.

Okay. Thank you.

Thank you, Jim.

Our next question comes from the line of Mike Hickey with The Benchmark Company. Please proceed with your question.

Hey Andy, Katie, Ted.

Hi Mike.

Hi Mike.

Thanks for taking my questions. Appreciate it. I guess the first one, you hit it on a little bit, but assuming the first half of the year, it looks like you're up $25 million in sales and $16 million in EBITDA compared to the prior year. So maybe just were just a deeper look at the guide, I'm curious [indiscernible] visibility and how your upfront money is attracting for the second half of the year because it sounds like content partner among its more weighted towards the second half of the year. So it seemed like you were less reliant sort of [indiscernible]. And then on the local side, obviously, since restructuring for our guidance [indiscernible] continued growth player in Q3? And I guess the last question on scatter, you mentioned – it sounds like potentially impactful to the second half, not being kind of strong – it’s doesn’t necessarily drive the national or foreign business, but curious with the success of scatter in the first half [indiscernible] those money more tied to a successful strong form scatter – strong box office?

There is a lot there Mike and I can’t really – we miss some of it, you are breaking up a little bit. To your point, we ended the first half, well ahead of last year, and frankly I wouldn’t want you to read too much into our guidance. You'll know, having followed us for quite a while, that we've been ahead of ourselves guidance in a couple of previous years, and we have don't plan to get ahead of ourselves on guidance, hence the point about the conservatism. I think you mentioned attendance. I think we are looking at the second half and trying to understand what attendance expectations are. There are quite a few analyst reports out there that have different – substantially different numbers, particularly around Q3. But so, we're literally trying to understand that. And, I think, also, I mentioned the scattered tends to be a book later and later, partly because of the advertisers who are booking it. So, I think, we found ourselves in previous quarters being concerned at the beginning of the quarter and found those concerns allayed as the later booking came in. So, all of which means that we feel very good about the cinema medium, we think we are a great place to in a market, where TV is really struggling. The main digital guys are offering you a box instead of humans, and we think Cinemark is a great place to be where excited about the 2019 slight as well by the way. We just want to make sure that we don't mislead our investors and stay appropriately conservative.

Okay, thank you. I guess the last question perhaps, on some of the new pricing models that are starting to, sort of, get some traction here. Obviously, AMC is looks to have a very successful subscriber plan and obviously, that is intended to drive attendance among so a lot of other things. But just curious, sort of how you see your business evolving, which greater adoption of subscription plans to move regards in the pickup of attendance that we expect we'll see over the next several years.

Well, as you know we don’t care about box office. We care about attendance. I mean we care about box office, because we want to add to circuits and other affiliates to be successful. But what we have fundamentally care about is attendance. And so the way I look at it is the subscription plans are a good thing. I think, if movie pass has proved anything, it's proved that the people like the idea. We can debate the price and the business model but certainly, people like the idea. It seems to drive greater usage, like any really good loyalty program. So we are encouraged and delighted to see how aggressive AMC was with their plan. But certainly, we are interested in Cinemark's plan as well. So overall, we see it as being a positive for the industry and certainly, a positive for us.

Okay, thanks guys. That’s enough.

Thank you, Mike. End of Q&A

[Operator Instructions] There are no further questions in a queue. I’d like to hand the call back to management for closing comments.

Thank you, Doug. It has been a very productive Q2, and a great first half of 2018. We achieved strong revenue and Adjusted OIBDA growth and continued to attract new and returning advertisers to cinema and to our new Noovie digital ecosystem, all while successfully launching Noovie ARcade, reaching an agreement with Standard General, refinancing our senior secured credit facility, eliminating the AMC stock overhang, and moving our corporate headquarters to a great new modern facility. This enables us to continue to focus on the strategy of growing our business, being the first choice for our customers, developing our people and capabilities and allocating resources to strategy. Thank you for participating in our Q2 2018 earnings call, and I'll see you at the Noovie’s.

Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.