National CineMedia, Inc. (NCMI) Q2 2019 Earnings Report, Transcript and Summary

Greetings. Welcome to National CineMedia, Inc. Q2 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I would now like to turn the conference over to your host, Katie Scherping, Chief Financial Officer. Please proceed.

Thanks Kevin. Good afternoon, everyone. I am joined today here in Denver by our CEO, Tom Lesinski; and our Chairman of the Board, Mark Segall. 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 Exchange Act of 1934, as amended. All statements other than statements of historical facts communicated during this conference call may constitute forward-looking statements. These forward-looking statements involve risks and uncertainties. Important factors that can cause actual results to differ materially from the company's expectations are disclosed 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 Mark.

Thank you. Good afternoon, and welcome, everyone. As NCM's new Chairman, I am joining the earnings call this quarter on behalf of the Board of Directors to introduce Tom for the first time as NCM's CEO. As you know, with the help of on Korn Ferry, the Board recently completed an extensive search involving dozens of highly qualified candidates to identify a new CEO to lead NCM into the future. We were looking for an innovative seasoned executive with the leadership skills and vision to unlock NCM's full value potential. It was the Board's belief that this potential could only be achieved by strengthening our position as the cinema industry leader and a stronger player in the overall video industry. After a very extensive search and interview process, in which the Board met with many candidates, we realized that our own Chairman, Tom Lesinski, had the best combination of a deep understanding of our business, a strong working relationship with our founding member circuits, and the wide-ranging industry expertise necessary to lead NCM. As a long-time Director, who spent the last year as Chairman, Tom brings both continuity and the unique firsthand understanding of the value of our core business. Tom also brings the energy and experience needed to drive product innovation to keep improving NCM's competitive position in the ever-changing media landscape. Both his experience with NCM and a number of large and smaller media companies has given Tom a deep appreciation for our strong management team and staff and NCM's high-quality unique media assets as well as an understanding of the need to innovate to continue to grow the business. Tom has also proven that he has a talent for listening to all NCM stakeholders, including our public stockholders, exhibitor partners, advertising clients and NCM team members and making smart tactical and longer-term strategic decisions that are best for all concerns. As I mentioned, Tom is a highly accomplished executive with a carrier spanning the entertainment, digital, media, sales, marketing, and advertising industries. He was first appointed as Director of NCMI in December 2014 and served as Chairman of the Board of NCM, Inc. since August 2018. Since 2015, he also served as the CEO of Sonar Entertainment, a leading independent TV production company, after serving as its lead Board Director since 2013. His extensive 25-year Hollywood career also includes prior leadership roles as CEO and founder of Energi Entertainment, a multimedia content production company; President of Paramount Pictures Digital Entertainment; and President of Worldwide Home Entertainment for Paramount; and both Executive Vice President and General Manager of Home Entertainment; and Executive Vice President, Worldwide Marketing and Development at Warner Bros. He began his career in advertising, working at industry leaders: BBDO, Foote, Cone & Belding, and Procter & Gamble's Clairol Inc. I am now pleased to introduce Tom, for the first time, as NCM's new CEO. Tom?

Thank you, Mark, for that kind introduction, and welcome, everyone. It's great to be here speaking to you for the first time in my new role as CEO. Before I get started, I'd like to take a minute to thank Cliff Marks, who has worked tirelessly and closely with me, and the rest of the NCM team, over the past several months as our interim CEO. Cliff has done an excellent job, while continuing to spearhead our media sales strategy, call on clients, and otherwise manage our overall media sales team. I was and am very fortunate to have such a seasoned executive with deep experience within both NCM and the advertising industry as my partner and I'm grateful that Cliff will continue to play a crucial role for our company as he returns to his day-to-day media sales responsibilities as our President to continue to drive advertising sales growth. Thank you, Cliff, for everything that you do for the company, including fulfilling two critical roles over these last several months. To the hard work of Cliff and the rest of the NCM team over the last several months and with the support of our founding member partners, I believe now more than ever that NCM is poised to deliver on our promise to shareholders of providing a growth stock with a unique combination of high tax-deferred cash returns and capital appreciation for public stockholders. The combination of the largest cinema network in the U.S. and the evolution in improvement of our core advertising product to our expanding digital strategy will allow us to deliver a unique product that can expanse to desirable young, cord-cutting moviegoers throughout their entire online and in-theater experience. I look forward to completing this unique advertising product vision that will accelerate NCM's growth and increase the value for our stockholders, employees, exhibitor partners, and advertising clients alike. With that, I'd like to provide a few observations and highlights of our second quarter 2019 operating results before Katie provides more detail about our results and guidance. And then, as always, we will take questions. When we spoke on our Q1 earnings call, we said that we expected the second half of the year to be stronger than the first half due primarily to year-over-year film release timing. That remains the case as a strong start to Q3 and solid pacing so far for Q4 has the second half trending ahead of last year. Even though the second quarter started out strong with the Avengers, June ended up softer than we had expected. Consistent with Q1, we experienced strong national sales demand in Q2 that fell slightly short of prior year revenue and adjusted OIBDA because of lower industry attendance that resulted in higher quarter end make-goods. Our Q2 revenue was generally in line with our expectations, except for the higher Q2 make-good. The start of Q3 has been strong, with a record July opening for the Lion King. And while it is still early in the quarter, revenue is pacing ahead of last year. Our national advertising sales team continue to experience strong demand from marketers in Q2, driven by a good mix of existing and new advertisers in categories, including hotels and resorts, apparel footwear accessories, Internet sites, auto parts and services, and video games. Q2 national revenue was only $1.2 million lower than prior year quarter. Accordingly, we have exceeded last year's strong second quarter national performance, had not been -- excuse me, second quarter national performance results not been adversely impacted by the softer late Q2 film mix, which resulted in the $3.2 million higher Q2 ending make-good. So, far in 2019, we have seen national clients trend towards spending less in scatter, but committing more dollars upfront. Our national sales team has done a great job of capitalizing on the strong TV upfront marketplace and convincing brands to shift spending away from TV and other media platforms. Although still early in the process, our upfront commitments for 2019 and 2020 have so far been strong as our national sales team has successfully sold advertisers on the value of cinema versus TV and other video media platforms. While our national sales strategy continues to be successful, we are always looking for new ways to provide a more effective targeted product for advertisers that will result in higher sell-through, higher CPMs, and ultimately, higher revenue growth. In July, we launched our NCM LuxeNet network to connect luxury brands with our more affluent movie audiences. NCM LuxeNet is carefully selected subset of 130 NCM network theaters, spending with country in the top 25 DMAs that have a higher household income index. In most cases, these theaters feature state-of-the-art auditoriums, luxury seating, and expanded amenities, including borrow and dine-in options. In many cases, these theaters also have a movie slide that is consistent with the higher income market areas ranging from the best independent and Oscar-nominated films to Hollywood's biggest blockbusters. In the growing luxury goods market, brands are now targeting a rising younger consumer class known as HENRYs, which stands for, High earners, not yet rich. The new NCM LuxeNet is specifically designed to reach these HENRY's giving upscale brands the premiere advertising medium to connect with our most affluent moviegoers. Q2 regional revenue decreased 18.3% versus prior year, as we've continued to see some reallocation in spending from some of our larger regional clients, including autos over to national. While this ship has helped our national business as is often accompanied by an increase in the dollar's value spent by those clients, our regional sales focus has shifted to increasing the number of client relationships and number of buyers in the spot market versus focusing on large brands that buy occasionally. While this change in regional sales focus makes for a headwind in the short run, it will allow for more consistency in our regional revenue trends and ultimately, a recurring growth trend as we establish an increasingly diverse base of client relationships. Our local revenue started to show progress in Q2, as local revenue was down a little over 2% from prior year due to lower contract volume and slightly lower value per contract. I'm very pleased to note that this somewhat-better local performance was driven by the bundling of our digital inventory into the local offering. The addition of a digital extension for our local clients appears to be a major driver in attracting local businesses who are actively looking to enhance the reach of their on-screen campaigns both online and on mobile device just through our Cinema Accelerator product. This improvement of our local product definition is just one example of how our digital strategy and the growth of our newly digital ecosystem continues to help us enhance our core onscreen business. It allows us to attract advertisers who want to reach our young, engaged and valuable movie audiences in an innovative new ways with multiple, digital and in-theater touch points. Disney continue to be a digital cinema advertising innovator in Q2, working with us on the first studio collaboration for creating our new Noovie Shuffle movie trivia mobile game based on the entire Pixar featured film universe as a fun part of the marketing campaign for Disney and Pixar's film; Toy Story 4. So, excited to be premiering this Friday, our very first custom-branded and sponsored Noovie big screen augmented reality game for Tyson Foods called Ballpark hot dog derby. The brand was looking for a unique AR activation for their campaign and they had never run in cinema before. So with our NCM digital business -- our NCM digital capabilities that helped us with this on-screen business. These are only a few of the examples of how our digital strategy is reshaping our core product definition. Over the last 12-month period, we had an 8.4% increase in the number of customers who had a digital component integrated into their contract. Also on a trailing 12-month basis, over 43% of our national and 32% of our local and regional ad revenue had an integrated digital component. Based on our growing success in our digital strategy, we're going to continue to invest in various digital products and properties to drive a higher level of audience engagement with our Noovie pre-show wherever movies audiences are, in theaters, on their phones, on their computers or on social media. This not only gives us more digital inventory to pack it with our core in-theater inventory, it also allows us to capture exclusive and valuable first-party movie audience data that will help us deliver the kind of enhanced targeting and ROI that advertisers demand in today's increasingly integrated media landscape. Looking ahead, as I mentioned earlier, I am very optimistic about NCM's future business prospects. The movie slate for the rest of the year looks strong with several proven tent-pole movies. Our newly digital products are resonating with both brands and consumers, and we have the support of our exhibitor partners. I'm pleased that Cinemark and Regal have been more engaged than ever since they increased their investment in NCM last year. Although the first half box office was down 9% from last year, it's important to realize that Q2 2019 was the second highest Q2 box office in history next to Q2 last year, which followed a record Q1 of 2018 illustrating that cinema continues to thrive. As demonstrated by the strong opening of the Lion King, there was a lot of excitement about the many tent-pole franchise films that are set to release later this summer and for the remainder of the year, including the Fast and Furious: Hobb's & Shaw, IT2, Frozen and of course, Star Wars Episode 9. These films, along with several upcoming releases, are expected to drive a strong finish for the 2019 box office. As I mentioned, the upfront ad market has been strong, and we are seeing healthy demand from advertisers as we head into the key back-to-school and holiday seasons as brands continue to view cinema and our digital offerings as a powerful captive environment to reach cinema's valuable young engaged audiences. I'll now turn the call over to Katie to give you more details about our Q2 2019 operating performance and to reaffirm our 2019 guidance estimates. Katie?

Thanks Tom. I will walk through the operating results that Tom highlighted in further detail; discuss our thoughts on the quarter as well as our full year outlook. Then, we'll open the call to your questions. We will be providing a supplemental presentation of these results on our website for your future reference. For the second quarter, our total revenue was $110.2 million compared to $113.7 million in Q2 2018, a decrease of 3.1%. This $3.5 million change was driven by a $1.2 million decrease in national advertising revenue, $1.5 million decrease in regional revenue, a $400,000 decrease in local revenue, and a $400,000 decrease in beverage revenue. Total Q2 adjusted OIBDA was $50.2 million, a decrease of $2.1 million or 4% versus Q2 2018. The adjusted OIBDA margin for the quarter was 45.6% compared to 46% during the same period last year, primarily due to a decrease in revenue, partially offset by $1 million in lower operating expenses, driven by a decrease in legal and professional fees, which were incurred last year related to negotiation of a settlement agreement with our largest stockholder. Our theater access fees were flat compared to last year, but we had a decrease in the attendance portion of the fees related to lower box office attendance compared to a year ago, which were offset by an increase in digital screen fees, which increased 5% annually. The Q2 and year-to-date decrease in national revenue was driven by a weaker scatter market compared to a strong scatter market last year. In addition, as Tom mentioned earlier, the weaker-than-expected June box office continue attendance contributed a record second quarter make-good ending balance of $5.7 million compared to $2.5 million a year ago, a swing of $3.2 million at quarter end and compared to $4.7 million Q1 2019 ending make-good. For the second quarter 2019, national ad revenue was $77.6 million, a $1.2 million or 1.5% decrease versus Q2 2018. The change was driven by a $3.2 million increase in the quarter end make-good balance, a 10.4% decrease in CPMs, partially offset by a 4.3% increase in impressions sold and higher branded content revenue. The increase in impressions sold was driven by a 9.3% increase in inventory utilization to 110.8% from 101.5% in Q2 2018, as we delivered impressions from the first quarter end make-good balance during the quarter, partially offset by a 4.5% decrease in attendance versus prior year. The decrease in CPMs is driven by a shift to higher Q2 2019 upfront spending versus higher scatter a year ago. Also recall, last quarter, we had some high CPM upfront clients run campaigns, resulting in almost a 10% CPM increase in Q1. Looking forward, we expect CPM to normalize resulting in low single-digit growth in 2019. Q2 regional ad revenue decreased 18.3% or $1.5 million from $8.2 million to $6.7 million versus the second quarter of 2018 and was primarily due to a $1 million shift in spend within the automotive category, as one client shifted their spending from regional advertising to national advertising. That said, Q3 is trending up year-over-year, and we expect regional revenue to bounce back in the second half of 2019 as our shift in sales strategy, Tom mentioned earlier, is gaining traction. Q2 local ad revenue slightly decreased 2.2% or $400,000 from $18.1 million to $17.7 million compared to last year. The decrease in local advertising revenue was due to a 7.7% decrease in the volume of local contracts and a 2.1% decrease in average contract value. This was partially offset by strength in our local digital sales revenue that Tom mentioned earlier. Q2 beverage revenue decreased 4.7% or $400,000 from $8.6 million to $8.2 million versus Q2 2018, driven by a decrease in founding member attendance, partially offset by a slight increase in beverage CPMs year-over-year. Our Q2 2019 advertising revenue mix was 71% national, 6% regional, 16% local, and 7% beverage versus Q2 2018 that was 69%, 7%, 15%, and 8%, respectively. For the first six months of 2019, total revenue decreased 3.5% or $6.8 million to $187.1 million from $193.9 million in the first six months of 2018. Adjusted OIBDA decreased $3.3 million or 4.4% to $72.3 million from $75.6 million in the first six months of 2018, and adjusted OIBDA margin decreased to 38.6% from 39% versus the first six months of 2018. For the first six months of 2019, national ad revenue was $131.6 million, a $2 million or 1.5% decrease versus the first 6 months of 2018. The decrease was driven by 2.2% decrease from CPM, a 1.4% decrease in impressions sold, partially offset by an increase in branded content. The decrease in impressions sold was the result of an increasing utilization to 107.8% from 98.4% as we continue to deliver impressions this year to satisfy the record $8 million year end 2018 make-good as well as from network attendance that decreased 10% versus the first six months of 2018. As mentioned earlier, on a year-over-year basis, we expect a stronger performance in the second half of this year for our national advertising business. For the first six months of 2019, regional ad revenue decreased 16.5% or $2 million from $12.1 million to $10.1 million versus the first half of 2018. Half of this decrease is driven by the shift from regional advertising to national advertising by a major automotive client. As our new regional sales strategy begins to take hold, we expect a stronger second half of 2019 resulting in year-over-year increase in our regional ad business. For the six months of 2019, local ad revenue decreased 3.5% or $1.1 million from $31.6 million to $30.5 million compared to last year. The decrease in advertising revenue was due to a 10.2% decrease in the volume of local contract, partially offset by 2.3% increase in average contract value combined with the higher local digital sales revenue. For the first six months of 2019, beverage revenue decreased 10.2% or $1.7 million from $16.6 million to $14.9 million versus the first six months of 2018, and was driven by a 9.6% decrease in founding member attendance, partially offset by a slight increase in beverage CPMs. For the second quarter, we reported GAAP diluted earnings per share of $0.11 versus an earnings per diluted share of $0.05 in Q2 2018. For the six months of 2019, we reported GAAP diluted earnings per share of $0.10 compared to earnings per diluted share of $0.03 in the first six months of 2018. The increase in the EPS was related to lower tax expense in 2019 compared to 2018. In 2018, we recorded deferred tax expense related to revaluing deferred tax assets from decreases in state income tax rates. For the first six months of 2019, capital expenditures were $6.9 million versus $7.2 million spent in 2018 driven by the relocation of our corporate headquarters in 2018, partially offset by increased investments in our digital infrastructure. We are estimating that our full year 2019 capital expenditures will be in the $15 million to $16 million range or approximately 3% of revenue, including $7 million to $8 million of digital investment. In the second quarter, and for the first six months of 2019, we recorded $5.7 million and $8.1 million, respectively, of integration and other encumbered theater payments from Cinemark and AMC associated with Rave Theaters and Carmike Theaters versus $5.6 million and $7.8 million last year. As a reminder, note that these integration and other encumbered theater payments are added to adjusted EBITDA -- OIBDA for debt compliance and partnership cash distribution purposes, but 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 integration payments from our founding members during 2019. It should be noted that these integration payments for AMC's Carmike theaters will continue to the life of BSA or to 2037. Moving onto our balance sheet, our total debt outstanding at NCM LLC at the end of Q2 2019 was $925 million versus $950 million at the end of Q2 2018. Our revolver balance at the end of the second quarter 2019 was $27 million compared to $30 million at the end of Q2 2018. Our average interest rate on all debt was approximately 5.8% at the end of Q2 compared to 5.6% in Q2 2018, including our $268 million floating rate term loan bank debt and revolving credit facility that had a rate of approximately 5.4%. Excluding revolver balances, 68% of our total debt outstanding at the end of Q2 2019 had a fixed interest rate. Our way of reminder under our charter, we can pay down up to $15 million of our debt annually without founding member and Board approval. For the six months 2019, we have retired $5 million of our 2026 senior unsecured bonds for $4.6 million. We are going to continue to evaluate this discretionary use of cash based on future expected leverage levels, LLC investment opportunities, and our public company dividend policy. Our total net leverage at NCM LLC as of the end of Q2 2019 was approximately 4.2 times trailing four quarter adjusted OIBDA, which is well below our consolidated net total leverage maintenance covenant of 6.25 times. Our consolidated net senior secured leverage ratio was 3.1 times versus the covenant of 4.5 times. Our consolidated cash and investment balances as of Q2 2019 was $62 million, with $57 million of this balance at NCMI. We currently have enough net cash available to cover over four quarters of dividends at NCMI with approximately $0.75 per share of cash on hand at the end of Q2 2019. We announced today that the Board of Directors has authorized the company's regular quarterly cash dividend of $0.17 per common share of stock. The dividend will be paid on August 30th, 2019 to stockholders of record on August 15th, 2019. The dividend level was determined based on our plans to invest in the business, while providing financial flexibility and a sustainable dividend for our stockholders. The company intends to pay a regularly quarterly dividend for the foreseeable future at the discretion of the Board of Directors consistent with the company's intention to distribute over time a substantial portion of its free cash flow. The declaration payment timing amount of future dividends will be at the sole discussions of the Board of Directors who will consider general economic and advertising market business conditions, the company's financial conditions, available cash, current and anticipated cash needs, and any other factors that Board of Directors considers relevant. Our annual tax deferred dividend yield is currently 9.8% based on today's closing share price of $6.92. Now, turning to guidance, as we've noted earlier, we have a strong film slate that we are excited about in the back half of the year as well as easier quarterly comparisons. In addition, Q3 sales are trending ahead of last year. We are reiterating our revenue guidance of up 1.9% to up 5.3% versus 2018, or in the range of $450 million to $465 million, and adjusted OIBDA guidance of up 0.8% to up 5.6% or in the range of $207 million to $217 million. Looking ahead at NCM LLC's available cash calculation for 2019, starting with our adjusted OIBDA guidance of $207 million to $217 million, you will add the following as a build to available cash; one, integration payments of $21 million to $23 million; and two, cash payments from Fathom note receivable of $5.7 million. Note, this is the last year we will receive payment for this note receivable. As a reduction to available cash, you will subtract the followings; one, cash interest expense of approximately $53 million to $54 million; two, annual scheduled debt principal amortization of $2.7 million, plus any potential additional debt repurchases up to $15 million annually, of which we have already purchased $5 million; capital expenditures of $15 million to $16 million; and four, non-cash comp for Inc. employees of approximately $2.5 million to $3 million. These are the components that will allow you to arrive at a projection for available cash at NCM LLC at the end of 2019, which is paid to the 4 founding members of the partnership -- the four members of the partnership; Regal Cineworld, Cinemark, AMC and NCMI on a quarterly basis based on their ownership at the end of the quarter. In addition to the available cash distributed to NCMI from NCM LLC and consistent with prior year, we project approximately $5 million to be paid to NCMI from NCM LLC for management fees, plus $1 million of interest earned on NCMI cash balances reduced by the expected payout of $15 million to $16 million for payments under the tax receivable agreement to our founding member. This will allow you to arrive at net cash available to fund current annual dividend payments with the payout at the midpoint of that guidance of approximately 82%. This concludes our prepared remarks and we will now open the line for questions. Operator?

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Jim Goss with Barrington Research. Please proceed with your question.

Good afternoon. I'm wondering first, you had mentioned early on about an expectation for a more scatter and less upfront. I assume that will cut the make-goods issued down somewhat, is that a correct assumption?

Yes, make-good is really a function of attendance. Our demand, obviously, has been there even in the first couple of quarters, but the attendance just wasn't there to be able to deliver on that. So, as we move throughout the year and, hopefully, the attendance from these upcoming -- the upcoming film slate will hopefully meet or beat these expectations, so that will help us deliver on the outstanding make-good balances.

Okay. And I was wondering to the Noovie Pixar custom augmented reality you mentioned, are you in any of the efforts you're having or maybe it's premature yet? Are you drawing viewers earlier as you're hoping? And I'm wondering what sort of impact there might be or are you expecting on pricing demands? And is it helping local and regional ads in addition to the national?

Let me give that--

Yes, I am going to have our Cliff Marks, our President, respond to your question specifically.

Yes, just really started the Noovie program, we are measuring to see if it's going to get people there earlier. But -- that's clearly our intent, is to have people there playing games, so I can't really answer that question yet, but we are doing that research. Locally, our local ad sales team are not selling augmented reality programs, but it's primarily being sold by our national team. So--

But we know that digital -- this is Tom. We know that digital has been a useful tool for the local and regional salesforces and has contributed to some of the growth we've seen come back in the local business.

Yes, very strong sales digitally, but not the augmented reality part locally.

And maybe lastly, for now, I'm wondering if there is any linking of digital ads to the attendees following the movies? And does the relationship with the founding numbers loyalty program identification facilitate such a notion, where you might be able to follow sending them push ad or that sort of thing that might tie into the ad sales on screen?

We actually have a really clever product called Cinema Accelerator. And our Cinema Accelerator product is a retargeting product by design exactly as you noted. And when people come into our theater, we are actually able to track that phone and able to follow them when they leave on an optimum basis, of course. We are able to follow oneself. If a person leaves our theater and goes to a Walmart or goes to a McDonald's, we can actually measure that and then we could target them while they are in the McDonald's or while they're in the Walmart. So, Cinema Accelerator has been a very successful product, generates most of our digital revenue, and it's quite a good product.

And how do you monetize it, just lastly? Does that affect the rate you're able to charge upfront or--?

Yes, the way we monetize it is we actually -- we'll sell brands and as Tom noted about 40% of our national advertisers, about 30% of our regional advertisers actually do this. They will actually by schedule on-screen, and they know they've reached someone with their spot on-screen and then we target that same person over the next seven days in various places that, that person will be at. Whether be it a restaurant, whether it be in a big-box store, whether it be at home on the couch, we actually retarget them in seven days by actually going in and buying ads on sites that they use. That makes sense?

Yes, it does. Okay, thanks very much.

You're welcome.

Thanks Jim.

[Operator Instructions] As there are no further questions left in the queue, I would like to turn the call back over to Mr. Tom Lesinski for any closing remarks.

I am proud to have the opportunity to lead NCM and its talented and hard-working management team and staff into the future. With the leadership and Board changes now behind us, I am optimistic about the growth and stock price appreciation potential of our business. We are experiencing great demand from our advertisers, our audiences are excited about the future movie slate, and we have the strong support of our exhibitor partners. I would look forward to working very closely with our NCM management team, our exhibitors, Mark, and the rest of our Board, and our NCM team to continue to drive our strategic vision and leverage our unique position in the media marketplace as the leading company connecting brands to highly desirable movie audiences throughout their entire moviegoing experience. As Mark started this call, I will let him wrap it up as well.

Thanks Tom. But there is not much more for me to say. I know that I speak for our entire Board in saying that we are excited about the prospects of the company in your new leadership, and we get ready to support you and the company mission in any way that we can. Thanks for joining us today and for all your patience and support, as we work through our Board and leadership changes.

This does conclude today's teleconference. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.