National CineMedia, Inc. (NCMI) Q2 2021 Earnings Report, Transcript and Summary

Good evening and welcome to the National CineMedia, Inc. Q2 2021 Earnings Conference Call. All participants are in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Ted Watson, Senior Vice President, Finance. Please go ahead.

Thank you, Kaley. Good afternoon. I am joined today by our CEO, Tom Lesinski. I would 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, including our discussion about the future impacts of COVID-19 other than statements of historical facts communicated during this conference call may constitute forward-looking statements. These forward-looking statements involve risks and uncertainties. Important factors that can cause actual results to differ materially from the company's expectations are disclosed in the risk factors contained in the company's filings with the SEC. All forward-looking statements are expressly qualified in their entirety by such factors. Further, our discussion today includes some non-GAAP measures in accordance with Regulation G. We have reconciled these amounts back to the closest GAAP basis measurement. These reconciliations can be found at the end of today's earnings release or on the Investor Relations page of our website at ncm.com. And now I'll turn the call over to Tom.

Thank you, Ted, and good afternoon, everyone. Welcome to our second quarter 2021 earnings call. I hope that you're all continuing to stay safe and are having a happy and healthy summer. During the call today, I'm going to provide a high-level update on our recovering cinema advertising business and the ongoing steps we've continued to take to balance cost containment with the need to quickly restart our business. I will also provide an update on our strategy to diversify and strengthen in our marketing, product offerings by expanding our online presence and consumer databases and analytics and increasing our reach and impression base from other out-of-home venues. Ted will then provide more details about how we are managing our operating costs and our overall liquidity. And then as always, we'll be open for questions. Summer movie-going season is in full swing. And we've been very encouraged by the way advertiser demand has picked up with the box office success of several new releases. The strong openings of a Quiet Place, Fast and Furious 9, Black Widow and Space Jam have all demonstrated that there's a significant pent-up demand through a churn that the communal big screen experience of the movie theater. Even in films like Black Widow that have opened day and date where the streaming service have attracted large cinema audiences. With a very crowded film release schedule for the remainder of the year, the highest percentage of movie theater location to open as the pandemic began on March 22 and our ad commitment book building, we are very optimistic about the rest of '21 and '22. While the various release strategy experience of traditional Hollywood studios and new tech video content produced continues to play out, there are strong signs emerging that lead us to believe that an exclusive theatrical window remains the best approach for content producers. Two of the highest domestic grossing release of the year, A Quiet Place 2 and F9 were released exclusively on the big screen. Positive press and other PR about the success of the cinema openings cost of producers nothing, it has created huge incremental awareness, that's also expected to provide meaningful marketing benefits in the upcoming streaming and other release windows. Combined with consumer awareness benefits and the significant lost revenue due to streaming-related piracy, we believe that it's becoming increasingly clear that students are leaving money on the table with the day-and-date streaming strategy. These realities may underline recent announcements by many studios, including Warner Bros, that they will maintain or reconsider an exclusive cinema release window for all or some of their films in 2022. There's also been a recent experimentation with an exclusive cinema release window by Netflix for certain of their feature linked films. This could be a trend that expands to other companies that have recently entered the streaming business. For the first time since the COVID-19 pandemic began in March of 2020, some release schedules have begun to normalize. Nearly all movie theaters have reopened and cinema audiences have begun to return and most importantly, so too have our advertising clients. At the end of Q2, 97% of the theaters within our own network were open in a robust motion picture release schedule was in place, a stark contrast with the bleak conditions at the end of Q2 of 2020. As U.S. movie theaters begin to reopen and capacity restrictions begin to be lifted in all major metropolitan areas during Q2, the number of ad impressions available to sell to our clients began to increase, resulting in a small amount of in-theater revenues versus none in Q2 last year when theaters closed. While our Q2 revenue was still significantly below pre-pandemic levels, the trends are encouraging as future marketing budgets are starting to be allocated to cinema now that clients can see for themselves that our valuable, young, engaged movie audience has been trending towards critical mass once again. This growth momentum reflects all of the hard work of our sales team over the past year is that kept cinema advertising and NCM, in particular, top of mind with advertisers, even though we've had very few high-quality cinema advertisements to sell. Maintaining these client and agency relationships during the pandemic has paid significant dividends during this year's TV network upfront that are in their final stages. We've already completed numerous upfront commitments and are actively engaged in finalizing many other negotiations with major advertisers for marketing campaigns that will cover the broadcast year beginning this October. Approximately half of our top 20 upfront partners in 2019 are back and have closed deals with us for 2021 with another 25% expected to return to our screens by the end of Q3. We also continue to have promising discussions with many other new and existing clients across a wide array of key categories, including QSR, telecom, auto, entertainment, CPG, technology, finance, insurance, retail and others. The upfront market demand that we are seeing may also be related to some changes in consumer TV viewing behavior caused by the pandemic. High-quality video GRPs are becoming harder for marketers to find as TV consumers begin to favor SVOD versus ad-supported television. This reduced ad-supported TV viewership combined the continued aging of the traditional TV audience is forcing ad-supported TV networks to increase pricing to secure the same level of upfront commitment. This creates a real opportunity for us as marketers must find their premium video GRPs elsewhere and our CPMs are in fact, more competitive. There also appears to be less excitement about the new fall TV programming schedule from the media buying community as COVID-related production issues have reduced the number of new shows premiering on linear ad-supported TV and networks have begun to put more of their program investment behind series that will help them grow the subscription base of their emerging streaming networks. This puts cinema in a very strong position with a crowded film slate for the rest of this year and well into 2022. While the recent news of the increase in new COVID cases, including the spread of the Delta variant, recent news regarding vaccine mandates, working on the potential markets, potentially stricter COVID projections in the future may impact box office attendance and advertiser sentiment, but we remain excited for the box office later in the year and box office as much for Q3 and Q4 of '21 continue to be very positive with the major upcoming film set for release, including Shang-Chi and the Legend of the 10 Rings, the next James Bond movie No Time To Die, Halloween Kills, Doom, Ghostbusters, Afterlife, Top Gun Maverick, Spider-Man, No Way Home, Sing 2 and of course, The Matrix 4. In addition to the recovery of our core cinema ad business, we're also making good progress on our strategy to create a more robust consumer analytics data base and unique ways to bundle our highly coveted leader audiences with online impressions from our new and expanding digital platforms and other consumers that visit our other digital out-of-home partner locations. These new integrated marketing offerings will allow advertisers to engage movie fans anytime and anywhere. Throughout the COVID pandemic, our Newbie digital ad offerings continue to attract new advertisers. In addition to our owned and operated digital products and apps, we're continuing to execute on our plan to integrate with world-class consumer tech platforms, including YouTube and TikTok, to exclusive partnerships that allow us to sell advertising alongside the compelling entertainment content that our Gen Z and millennial audience would love. Our advertising on YouTube is an ideal example of a complementary digital expansion, as we are now working with brands like pharma and QSR categories to run their ads alongside premium, brand-safe movie content like trailers and fan favorite movie online across the top social video platforms, which included a 7-figure deal in particular in Q2. We've just also started a new TikTok custom social influencer offering that we've developed in a unique partnership with the digital specialty group for ad intelligence. We anticipate that this new offering will be particularly successful on the local side as it gives our local team an easy and affordable way for small business advertisers to participate in one of the world's biggest social platforms through NCM and to bundle with around screen ad, create powerful marketing bundle to reach young consumers. Our digital offerings also provide valuable consumer data. Our ultimate goal is to become the premier source of movie-related consumer data. As such, we have increased our focus on the aggregation of highly valuable consumer data we collect both from our consumer-facing apps such as movie trivia and movie [indiscernible] and also from movie ticketing data and partnership with the exhibitor. These important movie ticket audience data sources are expected to grow our data sets to 300 million by year-end. It will greatly expand our ability to create more robust targeting solutions for advertisers and to create custom close-loop attribution measurement for brand [indiscernible]. Our growing industry position as the movie audience experts will put us in an ever stronger competitive position in and larger digital advertising platforms and is an important part of our supporting our premium CPM value proposition. We're also continuing to expand our new digital Out-Of-Home group, which was created to allow brands to access a unique combination of theater audiences and consumers in a variety of vendors like supermarkets, convenience stores, restaurants and office buildings. Although this is very much an emerging business for us, we're seeing a growing pipeline of commitments from brands and categories, including CPG, health care, education, professional, financial services, government, travel and tourism and insurance. We also recently expanded our digital Out-Of-Home network to include some exciting new venues, including our new Noovie on-campus network powered by True, which offers brands a unique way to reach young Gen Z movie bands and point of market entry consumers in college and university campus locations where they spend the most time, including high-traffic nonacademic commercial spaces such as campus retail and bookstores, student centers and cafeterias and athletics and recreation areas. We're also exploring new entertainment marketing arenas with an exclusive eSports advertising and content monetization agreement with eSports community aggregator to create new ways for brands to capitalize on that cultural phenomenon. As we mentioned during our Q1 call, our new digital Out-Of-Home and digital social video platform inventory also provides us with two initial entry points into the programmatic buying marketplace, which is an important step in our strategy to make all our NCM markets easier to buy. Our capital investments in our new cinema advertising management system that was launched in Q1 is laying the foundation for programmatic access to our on-screen inventory as well, which we expect will create higher inventory utilization and other monetization opportunities for our in-theater inventory in the future. And while we're still early days of this recovery, as local multiplexes begin to sell out auditoriums showing the new from opening, it's clear that consumer demand for the cinema experience continues to be strong. And as previously described, there are also signs that market or demand for our high-quality video GRPs may be on the rise. While our business recovery is clearly underway and revenue levels and related accounts receivable balances are beginning to build, our monthly cash flow burn rates remain elevated and there will be working capital timing differences associated with the payment of operating and debt service costs and collection of ad sales accounts receivable. Thus, we've implemented initiatives to manage our liquidity, including approval from our Board and founding members of a short-term revolving debt facility between NCM, Inc. and NCM LLC to bridge short-term working capital deficits that Ted will get into more detail shortly. We also continuing to balance the need to continue certain cost reduction measurements with the need to keep our talented NCM team in place and motivated to quickly ramp up our business as advertisers demand increases. Our sales teams are now back to full strength and we brought back some several staff that are needed to support the increased contract volume levels. We've begun to reinstate some of the company - some of our temporary pandemic salary reductions. We also expect to implement our return to office plan for our Denver corporate office and regional offices in Los Angeles, Chicago and New York City shortly. I know that these staffing plans may not be happening as quickly as all of us would like, so I remain very grateful to our entire NCM team for their incredible resilience, dedication and support. NCM has not only survived the worst of the pandemic because of everyone's hard work. The company is very well positioned for success in a post-pandemic world. I also would like to acknowledge the support of our Board, our exhibitor partners and our advertising clients and their agents and again sincerely thank them for their continued support as we begin to emerge from this historic time together stronger than ever. While uncertainty related to the COVID-19 pandemic remains, we believe that we're well positioned to reestablish the growth momentum that we had created before the pandemic started. We look forward to a continued recovery through the remainder of the year and to much better times ahead. So with that, I'll now turn the call over to Ted to discuss more details about our financials, cost-saving measures, liquidity position and outlook. Ted?

Thanks, Tom. While the second quarter saw the industry begin to emerge from the pandemic with many seating restrictions lifted, mask mandates removed and the release of multiple successful movie titles, our network were still significantly impacted during the second quarter with attendance down 75% compared to 2019 but up meaningfully compared to almost no attendance in Q2 of 2020. As a result, we've recorded $14 million of Q2 revenue, up 250% versus Q2 2020 but still well below a more normalized 2019 level when Q2 revenue was $110.2 million. Given the continued significant impact of the COVID-19 pandemic on our business throughout the current quarter, an analysis of our revenue and adjusted OIBDA in Q2 versus prior periods is not meaningful. Therefore, I will continue to focus much of my comments today on our current liquidity position, our continued success in limiting our monthly cash flow burn rate and thoughts on how we see our business recovering in the back half of 2021. Total Q2 adjusted OIBDA was negative $18.7 million compared to negative $12.7 million in Q2 of 2020. This lower Q2 adjusted OIBDA reflects higher founding member theater access fees associated with the significant increase in theater attendance during the quarter. This lag between the increase in theater attendance and increases in ad revenue was related to media buyers wanting to confirm a critical mass of ad impressions before they made meaningful ad commitments. As attendance levels did not begin to build until late in Q2, we were only able to compete for scatter budgets late in the quarter, and we were unable to secure any material 2021 upfront commitments made last summer while movie theaters were closed. As Tom mentioned, we expect that this lag will start to improve in Q3 as we begin to secure more scatter budgets and will improve even more meaningfully in Q4 as we benefit from the 2021, 2022 upfront that is just ramping up. Our Q2 average cash burn rate was approximately $13.7 million per month during the quarter, which we expect to be the high watermark for the cash burn rate before decreasing in Q3 to an average of $11 million to $12 million per month and continue towards positive cash flow in Q4. During Q2, as the theater attendance began to increase, we started to bring staff back and restore compensation of some staff members to pre-pandemic levels. As of today, 44% of our employee base continues to be furloughed or have salary reductions of up to 40%. These continued cost reduction measures reduced our core operating expense in Q2 to $5.7 million per month compared to our pre-COVID run rate of $9.5 million per month or a savings of 40%. As we have discussed in the past, due to our high gross operating margins, we will achieve operating cash flow breakeven after debt service on an accrual basis when our quarterly revenue reaches approximately 50% of 2019 levels, which we continue to believe will be achieved as we exited Q3 of this year. For the first six months, our total 2021 revenue was $19.4 million versus $68.7 million in 2020, a decline of $49.3 million driven by the COVID-19 pandemic impacting all of 2021 versus only impacting the 2020 6-month period beginning in mid-March. Adjusted OIBDA decreased to a negative $34.9 million from $1.7 million in 2020, again, driven primarily by the timing of the COVID-19 pandemic beginning in mid-March 2020 versus all of 2021. For the second quarter, we've reported a GAAP loss per diluted share of $0.28 versus a loss per diluted share of $0.18 in Q2 of 2020. As adjusted to exclude the impairment of long-lived assets, net loss per share for the second quarter 2021 would have remained the same and the net loss per share for the second quarter 2020 would have decreased to $0.17. The net loss per share in 2021 and 2020 was again the result of significant network attendance declines resulting from the impact of the COVID-19 pandemic on the cinema business. For the six months of 2021, we've reported a GAAP diluted loss per share of $0.53 compared to an earnings per diluted share of $0.22 in the first six months of 2020. For the first six months of 2021, capital expenditures were $3.4 million versus $5.5 million invested in 2020. This decrease is related to the halt of all nonessential capital spending once the pandemic started. Total capital expenditures are expected to be approximately $7 million to $7.5 million in 2021. In the second quarter and for the first six months of 2021, we've recorded $200,000 of integration and other encumbered theater payments primarily from AMC Carmike theaters versus $0 and $1.4 million respectively last year. The AMC integration payments are based on what NCM could have earned had advertising been sold on those theaters by our sales teams. As a reminder, these integration and other encumbered theater payments are added to adjusted 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. Moving to our balance sheet. Our total debt net of cash at NCM LLC at the end of Q2 2021 increased $116 million to $1.01 billion versus $894 million at the end of Q2 2020. Our average interest rate on all debt was approximately 5.6% at the end of Q2 compared to 4.9% at the end of Q2 2020, including our $479 million floating rate term loan bank debt and revolving credit facility that had a rate of approximately 5.2%. Excluding revolver balances, 67% of our total debt outstanding at the end of Q2 2021 had a fixed interest rate. NCM LLC's current cash balances are $89.3 million versus our liquidity covenant that requires a minimum cash balance of $55 million. Due to the timing difference between the collection of NCM LLC's increasing accounts receivable and payment of various expenses, including debt service, as Tom mentioned, we have received Board approval and required founding member approval to enter into a short-term revolving debt facility in the amount of $20 million between NCM, Inc. and NCM LLC. This will bridge working capital deficits and provide short-term working capital loans as NCM LLC rebuilds its advertising revenue base and collects related accounts receivable to ensure NCM LLC maintains compliance with the financial covenants required by its debt obligations. Our Board of Directors has authorized an NCM, Inc. quarterly cash dividend of $0.05 per share of common stock. The dividend will be paid on September 6, 2021, to stockholders of record on August 23, 2021. This quarterly dividend will result in a current yield of 6.5% based on today's closing share price of $3.08 a share. The NCM, Inc. cash balance will be $46.3 million after payment of the most recent dividend, and thus, our $0.05 dividend can be paid for the next 2.5 years with no additional NCM LLC distributions to NCM, Inc. This is well beyond the NCM LLC distribution restrictions contained in the recent bank debt amendment that terminate at the end of Q3 '22, subject to certain limitations. This is also not expected to be impacted by our planned short-term revolving debt facility between NCM, Inc. and NCM LLC that will be used to fund short-term working capital needs through its March 31, 2022 maturity date. NCM Inc. contends to pay a regular quarterly dividend for the foreseeable future at the discretion of the Board of Directors. The 2.5 years of dividend cushion is considerably longer than we have historically targeted. We will continue to monitor this cushion and related dividend level consistent with our intention to distribute over time substantially all our free cash flow resulting from distributions from NCM LLC once they resume. As always, the declaration, payment, timing and amount of future dividends payable will be at the sole discretion of the Board of Directors who will consider general economic and advertising market business conditions, the company's financial condition, available cash, current and anticipated cash needs and any other factors that the Board of Directors considers relevant. This includes the impacts that NCM LLC related to the COVID-19 pandemic and restrictions under the NCM LLC credit agreement and the current availability and funding of the unsecured revolving loan agreement between NCM, Inc. and NCM LLC. Finally, while market conditions are improving, there continues to be a number of uncertainties related to the impact of the COVID-19 pandemic on our business, making it difficult to provide a reliable future revenue and adjusted OIBDA guidance. With that said, I will conclude my comments with a few general observations regarding our financial condition and expected business performance for the back half of the year. Based on our current financial projections, I would expect our revenue exiting Q3 to be on a run rate of approximately 50% compared to 2019 levels and be on breakeven on a cash flow basis from an accrual standpoint. As mentioned, Q3 revenue will be almost half - as mentioned, Q3 revenue will be almost all scatter market driven given our limited Q3 upfront commitments due to our inability to participate in last year's upfront marketplace because of the theater closures and uncertainty about the film release schedule. Beginning in Q4, we expect increasing network attendance and a return to more normalized scatter sales. This, combined with the Q4 upfront commitments that we are in the process of securing, will be a significant driver of higher Q4 revenue and positive Q4 adjusted OIBDA after debt service. By the end of 2021, we expect revenue to be trending back towards pre-pandemic revenue levels. Assuming the theatrical release schedule remains firm, box office attendance continues to rebound and the upfront is consistent with the company's expectations. This concludes our prepared remarks, and we'll now open up the lines for questions. Operator.

[Operator Instructions] Your first question comes from Eric Wold with B. Riley Securities. Please go ahead.

Thank you. Good afternoon everybody. A few questions just kind of on what you're seeing out there. I start with the scatter market. Maybe talk about any patterns or trends you're seeing as that starts to come back in terms of the type of businesses that kind of are coming back faster than others and maybe some types of business that aren't getting involved yet or regional strength around the country. I guess anything that kind of gives you optimism in terms of the underlying trends or potential you can pause on the strength of that recovery in scatter?

Yes. So this is Tom. So the scatter market has actually been good. Obviously, it's very competitive given what's going on and all the optionality there is. There's been a tremendous amount of focus from agencies and clients on digital and AVOD from the biggest players. As you know, all the big media companies have opened up AVOD services. They're selling those AVOD impressions aggressively. I'm really happy with how far we've come on the scatter side. Historically, we've sold about 60% of our business in the upfront market, but scatter is coming along nicely. I can't say that any particular category is doing any less than it normally would. I will tell you that the traditional advertisers, particularly the entertainment clients that we support on the streaming side, the insurance companies, CPG, all those companies are coming back, including our biggest advertisers. So I'm quite happy about that. The way I measure this is to look at our future pipeline. And while we have building up in Q3 and Q4 and handicapping that against the number of actual data points that are leading to contracts versus in contract discussion. So as I see that fill up, which I'm quite happy about so far in Q3 and Q4, it leads me to feel there's a lot of strength across really all of our customer base. I would say there's really only a handful of clients that are still in the fence. And we're really feeling good about our current relationship with brands and agencies.

Thank you. And then your comment obviously about expecting to exit in Q3 on a 50% run rate and ramping in Q4, I'm assuming a lot of that is driven by the contracts you're putting in place now, the visibility from the upfront and kind of the willingness of these advertisers to commit out there. I guess can you give us a sense of just the tone you're hearing during the upfront - the tone you're hearing from the advertiser in terms of where their budgets are, what they might look like versus '19 and kind of in general, how they're feeling about in-theater versus other segments? And then lastly, kind of price sensitivity. You mentioned that linear is taking up price to try to offset their loss of business. How is that reflecting on your pricing? And what have you been doing on the front around CPM?

There's a lot of questions built into that question. So on the CPM front, on the upfront side, I would say we're holding our own versus historical upfront levels. It's scatter where we have to be a little more competitive and that's just part of the business right now. So as we recover, we're being a little more aggressive on a case-by-case basis. But for the most part, I look forward to really Q4 and '22 as having CPM levels that are relatively comparable to where we've been. So honestly, it hasn't really been an issue about having to discount our inventory. It's much more just making sure we can deliver the impressions reliably to the agencies and to the brands and making sure that they're continuing to build their confidence levels with us. And we're seeing that every week, every month, especially going into the back half of Q3 into Q4.

Yes. And Eric, I would just add to that, as Tom said, the discussions really aren't around price. If there's any point that the advertisers want to focus on, it's flexibility. Again, just given the uncertainty with the pandemic that if things were to go south, if they have the ability to shift their advertising dollars, that's probably where the bigger focus of conversation's been.

And just to clarify that, Ted, when you say shift their advertising dollars, I mean shift another period or potentially shift out of their contracted amount?

Either or, right? So if they think they can shift it further down with cinema, they would do that, but if they need to be able to pull it out that they could do that as well.

Got it. Thank you both.

[Operator Instructions] Your next question is from Jim Goss with Barrington.

This is Pat on for Jim. Just a couple of other questions on what you're seeing with upfront and the - I was just wondering on selling the platinum spot, what you're sort of seeing there in terms of industries that are maybe good partners with that in the upfront or ones that aren't? Any sort of commentary on your first upfront being able to actually sell that?

Well, as you know, we had our very first platinum engagement in 2019 in Q4, which seems like a long time ago. I can tell you that the interest in platinum is still very strong. We're optimistic about the fourth quarter. It's still obviously a very expensive unit, but we're having very good conversations with many advertisers about their interest in platinum as part of our post-show package. I can't give any specifics. Hopefully, when we get on our call next quarter, we'll be able to talk to you more specifically about that particular product. But it's definitely reresonating with the ad community. And we're thankful for that because it was a key part of our Q4 2019 record quarter.

Okay, thanks. And then also a question on flexibility. I guess to what extent do advertisers have an interest in maybe focusing on, I guess, specific subset of screens, whether its premium format screens or things of that nature? Just sort of maybe - there seems to be a particular area of focus for consumers going back to cinemas?

The most part our advertisers and agencies and brands by the full national network. That's our core national business, obviously, we have a separate local and regional business, where people can be more selective on the city. But there's not any kind of a trend where its people buying a select group of premium national screens. So that trend that you're talking about is we're not seeing that now.

Okay. Thank you.

Your next question comes from Ben [Indiscernible] Capital. Mr. [Indiscernible] your line is open.

Hey guys, thanks for taking my question. Wanted to ask about how fair it is to see theater attendance as a proxy for advertiser confidence. And what I mean by that is if you look at F9 or Black Widow, or 552 [ph] all of those seem to have pretty good turnout, $50 million, $60 million, $70 million, $80 million. Is it going to take a several hundred million dollar type film, like a Top Gun to actually really get that critical mass you talked about in the opening marks? Just hear some commentary on that would be great? Thanks again.

So I think it would be helpful to have some real blockbuster movies but it's more important that we have consistent movie attendance that is reliable. When a brand wants to commit money to impressions, they want to make sure they're really going to be there and they're really going to run. We've done a pretty good job, I think, so far this summer having a relatively consistent theatrical schedule. But people like buying our platform, knowing that the impressions are going to get delivered and there's going to be really large reach. So yes, of course, Top Gun and the new Marvel movie will help achieve that. But the more critical thing is that week in and week out, flight in and flight out, that we have enough scale to actually meet the marketing needs of clients. So it won't just be one movie. It will be great news if Top Gun is a home run, which everyone seems to think it will be, but it's much more important that we have consistent week-to-week, month-to-month impression delivery. So it's really the strength of the whole schedule and the attendance to answer your question.

Thank you.

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

Okay, great. Thank you for your questions. As I mentioned previously, we're very well positioned for the future as audiences and advertisers return to the movies. The progress we're making to execute all of our business strategies, combined with an incredibly strong slate for the remainder of '21 and into '22 we'll ensure a really continued recovery and growth of our business. I once again want to thank all of NCM's team's hard work to reunite brands with the power of cinema, expand our cinema network, strengthen our digital offerings and of course, diversifying our advertising inventory beyond the big screen. And I also like to thank all of our cinema and advertising client partners, our shareholders and lenders for their continued support and patience and of course our founding members. We truly appreciate you joining this call and hope that everyone continues to stay safe and healthy. We look forward to seeing you again. Thank you.

Conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.