NCMI - Earnings call transcript Q1 2018 | National CineMedia, Inc.

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Operator

Greetings and welcome to the National CineMedia first quarter 2018 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to conference like host, to now Ms. would turn over the your I Financial CineMedia. for Scherping, Officer Katie Chief National Thank you.

You may begin.

Katherine Scherping

reconciled call, the contains Thanks, and Melissa. listeners forward-looking statements of call SEC. All All other statements our qualified can in website be by can basis results XXE factors. fact Act G, and of the their Important to like the Section this XXXX within conference the forward-looking to historical as statements Securities these that which In than expressly communicated disclosed such forward-looking Good These may statements. morning, that page entirety risk the in Regulation found we with are at measures. Securities our risks everybody. back this today's of Act I'd release, some meaning in XXXX ncm.com. non-GAAP XXA the includes of may GAAP Section statements statements, of the our discussion the accordance of cause amended today found remind forward-looking as end be investor Further, closest to amounts of uncertainties. conference from contained earnings are amended. have reconciliations factors expectations with at differ involve on These factors constitute the during actual materially company's measurement. company's the of filing

CEO Andy National to Now, call England, of I'll over turn the CineMedia.

Andrew England

first results discussion financial joining highlights. on earnings I call provide and call. of Katie. then the by today's Good Welcome XXXX detailed quarter our quarter performance more and Thanks, our will first you XXXX everyone. guidance. our will thank company's us morning, Katie a and begin for reviewing

time leave questions. will we always, As for

XXXX solid XX.X% increased comparable XXXX I'm XX, the from the with quarter achieved Turning March increased million pleased the a our in ended start and for $XX.X bottom revenue last for it $XX.X $XX.X coming great report for from both million first to first first Total of been lines. expectations. top to results the in year, $XX.X We for than XX.X% quarter growth OIBDA to the to of to XXXX. that quarter million Adjusted million better the year. has quarter, quarter the

sales Our QX. national a had team strong

beverage to was of to increasingly dates. national Excluding XXXX founding million revenue the members, noticing The campaign revenue in air advertising money period. driven are up from their Indeed, million scatter. the $XX.X first by the closer we're spending million was that much prior-year increase quarter versus $XX.X XX.X% in $XX.X advertisers

the scatter national increase and sold increase national increase national of a in team budgets impressions impressions X.X% CPMs quarter XX.X% in XXXX with XXXX Our the XX.X% utilization aggressively from quarter first agency its inventory exceeded in in excluding decrease beverage. XX.X% presentations and dollars of This quarter-over-quarter. increase volume by in meetings second attendance. increase CPMs, in currently first and the also have to we in half primarily will country. that X.X% XXXX-XXXX offset impressions partially participating contracted spending we client was the sold a with partner and content network upfront in XXXX in upfront in across hit of year marketplace resulted advertising the in an both a and lower are the despite in upfront The

several presentation you the during in As upfront ago. started recall, NCM upfront years May main may week doing an

this to reallocate a attention to decisions premium media strategy vying and cinema course and NCM for client the we the audiences. we different liquor, products products, home year for resorts, sites, and to exciting participation clients partner see our reach movie And resources not financial services, services insurance, feel enabled we've few; and beer including more better be audience. how make onscreen of and going agencies to consulting valuable and within them targeted and our as where many with and a historically are connect host from the in year, the of will inroads over longer XXXX had continuing May. no that movie This stores, buyer the strong demonstrating We effective QSR presence. buying several studios, and to clients value NCM new multiple decision video brands is this new, of the importantly, establish us with made Internet network, the with communicating military, with QX upfront crowded connecting throughout While and events event continue electronic had in to name are the ways. segment national made in we forward hotel companies clients to can a NCM year value the categories a just We

local regional to the level. and Turning now

with operations and accountability As and and media will revenue match as sales XXXX multi-market and is National and sales, digital the streamline local you Mediaocean such recall, responsibilities and we December sales buyers. sales sales realigned which larger, sales, STRATA local where with to local Spot team types, specific better regional in regional interact

in expect sales growth to of now the part result and QX the business. transition NCM's of local see the for compared to business and which I'm and advertising this see regional announcing second are a we local within the are prior-year, planned resulted $X.X traction and million we're quarter, of had period, will $XX.X a through revenue a the XX.X% pleased Indeed, and of decrease decrease the in X.X% regional first report the of transition to in in the quarter. million As local benefit total the from that regional realignment or XXXX. year-over-year in beginning I we XXXX segment the we in volume contracts in

that to validates advertisers. our a digital growth strategy complementary in in the ecosystem. revenue the with which we indication our impressions we're and investments increase offerings CPMs, achieved On included and achieving good Noovie making front, by continue digital in inventory the mobile XX.X% or The we're not other our online a digital digital measured sold product is resonate

to moviegoing engage we Noovie movie the a goal is last early to preshow our part is fans. meaningful a future. core of first-party When will overall new our and audiences on-screen augment launched designed we small our remains was this Although part discover in by marketing data be audience, business and Gaming directly new what's key and creating inventory our of in give enhance experience it activity year, next reason with to a that revenue, of our ad integrated to entertainment. and believe our arrive more digital favorite a capabilities, opportunity growth the profitability

just So, app, have talent insiders we're excited A-listed Noovie our few to companion and a movie very first weeks for ago. premiered Noovie CinemaCon at ARcade

with was no their enjoy for games the and giving local it, April game on theater. gaming experience driving weekend the to Avengers: at working just the feature tossing Infinity movie waiting and and Noovie ARcade app in ultimate the mobile calls. the movies It the lot games to a think play time launch augmented shooting, this them our of excitement including consumer environment. variety chance clients ARcade phones reality with for other brands but When to of is auditorium when Movie movie the audiences War. with we're or about interactive, are opening big-screen, nationwide start buzz Our sponsored audiences, like fans play The gaming part AR not of we new games formats can game theater while will catching, at and rollout a XX games on games you only feature with actively develop now of is starting generating of as film the sales summer. ultimate movie controller

million addition broad screens totals partners with of theater especially national in to national XXX will attendees In nearly a and network approximately a week X XX largest has XXXX. bringing these million Pecan high engagement. advertising and latest executives meeting the cinema partners. NCM XX,XXX our areas, in audience with Now, The in prospective markets with and the screens all national over of NCM's Pie XX. and theaters our approximately from XX and attendees Productions X,XXX speaking a be affiliate We busy as XXX our welcomed exhibitors, local theaters affiliate become of small affiliate value team and top productive to an top year, very of advertising to brand over of variety and June designated screens CinemaCon, our part market also regional welcomed the joining exhibitor theaters partnerships Pecan Pie the as studio partner is reach of past senior wide XXX network network new in had for national current US. the and who geographic appealing

and network many with part make conversations ongoing be. best it ongoing We can our movie continue to biggest to America's have as of exhibitors efforts the

come. turning over Noovie captive reiterate years making core to platform and reach in to ecosystem, many continue have be Noovie that enhance millennial no movie advertisers, our use expect amount we the Gen to is to and its that with are to our audiences. other Z Before audiences brands And medium positive to can the match we that And cinema develop call from digital affluent, and between audiences. strides the to that on-screen to I believe like I Katie, on We committed based we as target we our the young, direction. would continue for and connector complementary to believe brands vision we're there

to and growth effects momentum office audiences film studios pay our diverse and theater quarter who visual with incredible them. top second produce slates I quarter. values, always movies bottom continue I'm see and money the into to cyclical, original will this While and the first be expect in box there storytelling, pleased in strong go line production movie movie with to if the to very to are continue healthy will

guidance now call details our to So, with operating XXXX estimates. give you Katie turn will I about and over more that, QX performance to the

Katherine Scherping

on Thanks, Andy. the and our highlighted outlook. full-year further I'll quarter in walk discuss and that thoughts the our through Andy detail results

labor a as primarily due million to well $X.X affiliate in to $X.X million an XXXX $XX.X revenue. million X.X% of QX costs revenue QX revenue a in quarter increase to in was advertising in and quarter, XXX-screen year. advertising non-cash personnel-related XXXX. in and or a QX and in the to first margin increase capitalized of decrease to was quarter driven increase offset of increase XXXX For an or OIBDA by national payments Total offsetting prior or was impairment first the versus number $XXX,XXX to compared XX.X% beverage partially some to or our regional a in the million. revenue by increase to in fees $XXX,XXX and expense made last in of related in revenue the $X.X higher first over $XX.X advertising Also internal by is million total a X.X% increase million first local XXXX screens The $X.X margin $X.X advertising the XX.X% for professional in QX an driven This A $XX.X operating or OIBDA included higher-margin charge related increased decrease adjusted compared XX.X% in $XXX,XXX the expense million investment the XX.X% decrease an national revenue impairment $X.X first time a versus affiliate X.X% increased of to compared period. related adjusted growth quarter million in quarter Partially as and adjusted of XX.X% an revenue. same million XXXX. from years increase the charge increased of

advertising XX% Our and XX% XXXX XX% XXXX beverage local respectively. of XX% national, and XX% revenue QX was was that QX mix XX%, versus

increase and market, driving the contracts increase XX.X% XXXX due apparel well a in XXXX, XX.X% revenue last several as to increase technology, in quarter, $XX.X an first a QX From by For in year. a CPMs was category in quarter XXXX inventory in QX a heavier or greater weighting we and the decrease network million volume increase QX national $X.X advertising in a to in as a XX% sold $XX.X revenue or X.X% in strong growth due in decrease including a XXXX. particular Internet offset million, perspective, X.X% attendance. was XX.X% partially X.X% QX scatter to CPMs increased strong due driven QX of XX.X% demand of $XX.X a to CPMs. and utilization was in insurance and government versus categories the experienced impressions impressions scatter from decrease local the XXXX, million, sector, versus first sold XX.X% increase compared by to contract ad in $XXX,XXX. million total in revenue in scatter regional The than telecom, QX decrease Overall,

a local We we is we XXXX of take revenue are which had quarter founding regional in included the first $XXX,XXX X.X% The beverage the are accounting expected the by at change impact Andy change principle seeing $X versus be a we revenue the in decrease and revenue member the QX in driven the to partially XXXX, now non-operating team. hold under SEC. was QX At and XXXX, founding XXXX transition the on benefits XXXX, offset decrease adopted sales a filed change net QX. compared the end and quarter X.X% accounting we're with to of for through EPS mentioned, million, reorganized receivable payable first increase agreement. or period a income XXXX. by of the tomorrow beverage X.X% As to the beginning the first our quarter expenses, income. attendants, our members related as impact QX details XX-Q, and in enter tax believe in to the or no of More we CPMs operating on

a and taxes our $X.XX included EPS For to the accounting the first the EPS $X.XX and for the that reported $X.XX reported income disclosed previously GAAP to XXXX. QX accounting XXXX The principle loss in of in our in the error in change we XXXX XX-K we impact from change. corrections of $X.XX recasted loss in an versus been QX include quarter, of has loss diluted

will XXXX, our expenditures Our $X $X.X related by the to million to of million in The million capital expenditures is the for were driven first million XXXX XXXX to primarily $X that related invested increase digital approximately to infrastructure. full-year will platform We XXXX our QX headquarter $X $XX our compared newly $XX or our that in in approximately million $X quarter CapEx for with approximately be be in our range million over increase revenue. X.X% capital move. investment to million the digital estimate and

We will the lease. by rent to reduce which receive life allowances our the will $X.X million of XX-year improvement paid landlord, of expense be tenant over the

be investment investment. move-related $X $XX digital to is our X.X% approximately and Excluding below levels capital of the revenue, would million historical of million costs, which capital expenditures slightly or our

$XXX at QX total of of Now, at to end NCM million balance debt million at our our $XXX versus on moving QX XXXX. the outstanding end sheet, LLC the XXXX was

at $XX million revolver XXXX end the Our balance of end the in the QX quarter at was $XX XXXX. million compared of to

all end on facility rate was revolving approximately approximately and of interest a rate million at that including had average X.X%. X.X% floating-rate term debt loan bank Our QX, debt of the $XXX credit our

interest debt Excluding the had at revolver balances, QX XX% outstanding end of fixed a total of XXXX rate. our

have any stock. of as future amount our of the flow. balance authorized over be QX our intention dividend foreseeable at declaration, plan of Our cash, today our payable $XX on cash a consolidated level paid Board dividend and this the The on balances for on investment $X.XX Directors line future cash the dividends consistent to QX with of time of and record and of invest will years of of and providing with next dividend quarterly regular The Board payment, relevant. a in common over scheduled quarterly Directors that of that general will the Inc. in and million Board our dividend XXXX cash stockholders Directors was discretion announced regularly XXXX. will We portion June distribute any with company's pay business the free economic to of intend May The Board at X, the cash the timing condition, the XXXX substantial million, discretion to sole business to $XX NCM, be XXXX, current of financial of few company's advertising XX, market, needs determined anticipated We the factors at other was condition, available flexibility. share consider financial while who per the Directors considers based of

is dividend Friday's on of currently $X.XX. XX.X% closing annual share price Our yield based

QX leverage NCM our of quarters maintenance senior times. X.X which net as at X.X trailing OIBDA, secured Our leverage well was covenant is pro approximately four LLC forma below adjusted times secured of XXXX senior

also balances, covenant, total should at LLC You that XXXX. cash XXXX NCM total line have times net was in and no approximately NCM the leverage we at leverage while note of our LLC, QX X.X QX of end with

for AMC During encumbered recorded Raven Carmike and other and the Cinemark Theaters theater quarter, $X.X and first versus of million in payments of $XXX,XXX we QX Rave XXXX. integration

theater revenue are purposes, our as on all intangible note included assets payment compliance are reported reduction in should a but OIBDA You not adjusted they debt and are to for to added OIBDA as adjusted recorded encumbered integration balance and sheet. net our

integration XXXX. $XX founding million other of We payments our expect from encumbered theater record to to $XX million approximately during and members

I'll XXXX. full-year for guidance Now, share with you our

up first As we this as adjusted a Andy our range to had $XXX the off of start well. and reiterating $XXX to the good to million. OIBDA noted down quarter of million second a in account, up X.X% XXXX flat versus earlier, of $XXX are to in million guidance, is revenue into we Taking $XXX range X.X% quarter X.X% strong million or and the to or

to approximately our adjusted $XXX cash starting cash million for $XX $XX of payments to Integration net OIBDA of receivable payments of calculation available $X.X XXXX, with Fathom cash. you'll build to available to as the million, the from following Two, now $XXX Turning our million. million. add million a

the LLC now inc. you $XX to are allowances. prepared million, for of $X And our partnership at the remarks will Melissa? to and like at interest to you of a from to of that One tenant the quarterly reimbursed the million. capital net questions. would stock NCM for to following. non-cash the the employees projection approximately be four improvement comp paid $X million the quarter. at in their cash Two, million million. $XX concludes to approximately XXXX, three, cash to of million components $XX $X.X for we to the subtract This reduction arrive a will members allow ownership cash, expense $XX line on of is As expenditures which These million end available available of based open up

Operator

[Operator Instructions]. Thank you.

proceed with Company. Our first B. line with Riley question comes the Wold from question. Eric your Please &

Eric Wold

specific Two questions One, morning. trend Good in demand you. is that this in now advertisers or the quarter films mentioned scatter seeing I of possibly you're campaigns. Thank office and closer windows to you desire the you well you this a are strength ad with the as as this other due little in-theater trends spend is – people that's a Black getting Avengers year just advertising? and more beginning, a strength Panther at closer the something guess, to besides may. Andy, Do impacting positive in if is I to for campaigns spending guys, and that or was a for their you on general sense think get something stronger brands is more or seeing that to kind see box to

Andrew England

advance. spend of Eric. with do the more personal I however, my in out you seeing is I anything a with programmatically it view we are Facebook the has in that and morning, of is think this the ad want world, time done. you in trend slate, digital, are towards which Whereas significantly if the booked advertising even historically, don't for a is long you if Good TV this scatter, different that and digital, has buy know a just the advance. part to do is as to idea to general question. do a shift Thanks such that. reach been TV it's animal the for has spending big do can afternoon, buying with way people later, to advertisers Upfront more, know,

their they more when flexible more are that about driven, get think expectations I think I advertisers be they so, digitally can commit. And as more

the think, It I generally box that collateral So, makes the the but, nonetheless or encouraging, I and do this the no, dead, to as later, in is all last given collateral our is summer, is business quarter particularly particular, it demonstrates – check theaters to that's office that's particularly advertisers in actually. Black and will and which spend, of predictable, fine, slate of people the a movies that, plethora are very just theaters. overall come a like, long slate just is are booking just strength driver. the about less people the articles as local – fine. well, of I I think over. think people result very, broad we're just that and movie Panther think a It’s the out it's I of strong mean, second Avengers

Hard where feel certainly feel our the where are good whether But about box not good office say. So, those advertisers are. is I'm I about to related, I and sure. two

Eric Wold

obviously, then, a going somewhat to visibility a it's that's I've continues, got And benefit it's spend underlying But of on – assume closer. a if CPMs. trend if this your for nice positive to negative they have

Andrew England

Probably.

know, when CPMs. to larger at tend we sell you sell and inventory tends CPMs, Eric, in higher of upfront, scatter amounts As to lower at be it we

scatter would for to certainly. That So, if moves short that be CPM more business the healthy over towards medium-term.

Eric Wold

it's know last the early. very question, I And

that read data the ARcade that in and kind it Avengers anything or big around test in is the you you it, but front. kind any anything theater saw engagement, of Given of digital games of downloads, of the of initial launched, terms and kind kind on can just all on provide first of the or launch

Andrew England

you, Thank Yeah. Eric.

think I metrics. issue to, decided this any not point, we've at

games, to these got we ourselves the And level. just office are and Google performance can client their ratings which, key because engagement lots general way, in in agency make stores very indicators or following and advertisers, script with by in the added game the we of the group advertisers downloads, and the Apple the when audience sort send we've playing buying the obviously, of mentioned their the we and sit happen the of this this ARcade photos people on and good We office too. feel sat in about I down group that I've of down that interest with

So, very about might advertisers what particularly to walk interesting it. those meetings be games with good we well. other feel about of out We as certain ideas and

So, ARcade, FML stages, nice in Noovie is but progress it, particular about it's early making as very good but feel well. we

Eric Wold

Perfect. Thanks, Andy.

Andrew England

Thanks, Eric.

Operator

Thank you.

Our comes the proceed line next with Partners. question MKM Please your with from Handler Eric question. of

Eric Handler

question. Yes. Good for actually. the morning. And questions thanks Two

First, Utilization a follow Eric the your strength particularly business. of was about question national up-on on Wold's notable XXs. in the

only quarter you you've seeing, other was that had the there the think XXXX. of lot in that in helped XXs anything demand I quarter? one there back first not something of was before maybe because for and impressions in carryover TV Was or else are just that a some

Andrew England

the of I obviously, the point Hard scatter one say. is thing Eric. to I'll the Thanks, market. strength to, mean

Our in national our those was the utilization. very sales did and drove well team scatter that it's – market up it really

don't always to needed we of from a where with to bring advertisers us. necessarily aggressive point price who view were we advertise be in think I

– I've not and really you think a supply-driven and much scatter boil platform. – a does and multiple So, team But, underutilized. to as quarter a be, your we it occasions, very utilization I number know, very where credit think for we to But national I'd I being in lot it supply of point, point, for have your the on one encouraging nonetheless, quarter. to a as to demand-driven is it's first give not tend platform, said a a down scrappy our

the So, view, to eyeballs. in advertisers slate has do there, out being my do it to and with for with looking more less

Eric Handler

Great. And for one then, Katie.

million And were from there drove subsequent much You administrative curious quickly touched The on line very we're quarter something $XX.X substantially to last is just any see year. that quarters? of that in items some going up or one-time and some pretty that increase of costs was the I'm expenses. that

Katherine Scherping

Well, impairments selling one administrative. that's the is in and in of there things the

a don't So, typically, capitalizing what first you're labor. an the later have year. in the development to costs in the be in be internal were labor as that is capital quarter We we'd lot admin that of going will see the – coming

as that we last So, those year. bonuses we're are accruing And line. this to the CapEx costs for we have for were OpEx then, hitting year what larger versus opposed accruing also

well. some So, costs of the those are as admin driving

Eric Handler

step So, will us a hard see capital you're up that XQ quarters? the those I – accrued costs , in in saying? bonuses, imagine subsequent labor the hit we'll won't And that's

Katherine Scherping

but start bonus will to to OpEx be start will The as in labor continue opposed year. labor down. to in Or capital Right. on, cap capital come the go will later

Eric Handler

Got it.

Okay, thank you.

Andrew England

you, Thank Eric.

Operator

you. Thank

Our line Please JP question. your Quadrani with our of with Quadrani Please your Jim next Goss from line Morgan. with proceed the question with question Mr. the dropped from comes of from Alexia queue, Research. question. Since next comes proceed Barrington

James Goss

morning. Good Okay.

Andrew England

Good morning, Jim.

James Goss

was pretty several final sort One the quarter quarters Andy? are significant? first you, on national. other the are How this gain question Hi. What of levels CPM into since you building

Ted Watson

Ted. overall, that market. to be low-single of for forecasting a weighting scatter perspective, digits we're year. And again, the just the up CPM is driven by of It's From the Jim. Hey, CPM most

James Goss

share experience. will expect just What But relative rest Probably happen? of Okay. you you're When since the participation to And the then, is do what the a you question on the audience, think of the starting. do much game is far? the movie? the the not on timing so would of it non-participants? on-screen And what effect be positioned

Andrew England

Jim. Yeah. Thank you,

is right And finish that as how essentially four our out. then and now and everyone's But So, have preshow show poke I you it finish the the a don't spot. we familiar segments – overall we with works at with time, if way is show laid want know.

the obviously, put four. in low. So, because, And of segment we've four the in the actually One reasons. majority relatively is a our is for is there of inventory ARcade segment Noovie value couple of

So, we're going, segment it's four. name up put in risk to the as low and relatively getting

debated the is download two Noovie in is should we segment what have utilization. inventory game obviously, when of game today. we the the then or can absolutely the and to do there's segment based so there's first. always a should And then, frankly So, as people to value that consistent segment hard coming and we've a on our it when for have know it sell ARcade we and is inventory, et whether up, long encouraging timing play whole exists be And And it cetera. has of the you obviously, we're flexible to the an going because, segment that we if favored game. short whether longer game, the of And, the latter

the intend sponsored Now, that line. games fully we these that's get the idea notwithstanding down to

the the segment general in people in the discovered four you people there is, expect, surprisingly, that time. we've are, segment what at because So, two playing as game not more in have rather we audience more would than

of back being people really we've them. by high game of the whether which from period had it it that's the is as is interest in for types share we particular other want game right? a their found people and arcade that in short, incoming high-class of are two with calls when enthused overall, longer, to is But, lot and segment play about One critiques companies problem we a can too it come engagement the the and

question? So, answer that all frankly it's Does very your encouraging stuff.

James Goss

this that audience, and be or it, imagine, annoyed of out of will This during it would this it? to would your you of of Well, even the as will segment augmented else left what part be they're partly. didn't they reality. doing event I sort if really Yeah. Two, seeing part be part everybody want maybe a they

Andrew England

an Jim. it's Well, question, interesting

like game basically you have they what screen, there's have see we – called Cinevaders. if So, a they is

seeing movie looks and the playing the are frankly around So, you're space that if people you're a like game. you where in theater what playing is sitting Cinevaders, deep seeing people you're screen

material they on it, have et there's we likely more like someone by experience Noovie the a is actively who or would they we like ideal like – or done the actively it. not. not what are an I in we've research preshow which people I tell would the preshow, it general preshow all that way, are you And the either that has that But our more now cetera. playing? have not on whether to going is or for engaging so, suggest neutral other They're Maybe hand, is care And generally in that positive. don't either about

I'm haven't activity we're watching at certainly on who received those certainly but the around for not So, screen the complaints them aren't aware out the it's for. of the around playing of lack or something we least game,

James Goss

We've the question. would value tea Is the the has most trying years your occurred. arrival the on a inventory be terms for Okay. furthest your timing aside result? read to would I move several ads as any trends they're the by as One local leaves local all imagine the there last been of to games affected in reserve those arrival ones you're of of from timing of since and mentioning. update And away

Andrew England

the times continues Nielsen Nielsen not that are changing. to materially from So, is read arrival our –

So, that's third-party have. we the best data that

local performance into quarter. our say difficult too wouldn't think fourth of because, that was read I obviously, I team. the regional much I and And a there

are much going point, about in by The very that view sales better from was our regional not script, still our on Mediaocean real where are quarter it's organizational have made is we forward. that second the we in helped STRATA. and we feel better, and a We've view. from but first as being mentioned emphasis regional that helpful And the But the quarter great. an of team changes point The in put lineup, regional. we've we

team business. the along tools the moves strengthen segment them that in spot regional the and have with local and give the year, throughout XX-second the to also access grow way, one we've made the by a to they'll team believe need think we the necessary so digital, I to and

So, from seeing trends on feel audience build good certainly But the at basis. the Nielsen from shape. and in in that that regional quarterly shape from and we're be I we'll, the says on local what I'm that obviously, side a we're reporting good

James Goss

All Thanks much. right. so

Andrew England

Thank you, Jim.

Operator

Instructions]. [Operator

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

Mike Hickey

a Hey, guys. quarter. solid Andy, Katie, congrats on

Andrew England

Hi, Mike.

Katherine Scherping

Mike. Hey,

Mike Hickey

I'm dropped. question sorry I a if I repeat got here.

X it's good. So, at looks something than up. local expected like Nice cross tracking better strong Beverage, But QX; that's here least fingers which solid, it's see been our ask not saying is your that. to you're and to or again definitely asked.

Second partner you upfront half, content monies visibility given more spend. have it the looks and like

all guidance. So, pick seeing up why XXXX your we're just you not curious, that, with

Andrew England

I'd Obviously, out QX. feel question, point different We are fair QX. a seen things. a Mike. about in where That's good we you've few

Firstly that the first weak. half last year was

second year first of stronger. half last significantly half while we're the numbers, was lapping So, weak

– and would how to that year, certainly it's So, why forecast half hoping were as we we obviously we expecting look of looking. better first this and that's we certainly have a that's this year,

harder is second little to a The predict. half

and doubt you're second And by away December away far way, largest The is our by quarter. and our as by is far no for month. The aware. large largest half the QX is us,

have until little it's to real confidence So, year. the always to challenging of the real get end we a

that about, visibility. – it our talked so previously particularly doesn't help scatter to was As comes people booking later, when are

you back up, when tell visibility about we're the that far. you because But, nonetheless, cautious enough are I the would we mentioned, don't half feel just have we so just doing as good year. So, we how it all into add of

Mike Hickey

million is $XXX Okay, OIBDA. good. million, consensus QX, $XX I think,

guide your curious Just maybe the said other us you've comfort from would you data to give appreciated. a you any and any local commentary But level know could perspective quarter. grow. expect that for I be additional with

Katherine Scherping

good primary Yeah, guidance, We know, one. you volatility April. business as quarter. Mike. of to our the for off additional. said We the is reasons in we're just QX, avoid quarterly and a start Nothing the finished we various

that going on. confident that's felt we we're beyond QX. So, about But sharp to we're for that, comment looking all

Mike Hickey

business rich regional the your said is, is movie – your think very local QX slate. slate and out you question, Last in local, perception correlated of in no, I QX the buyers' obviously, to Okay. business more

optimistic. be of was about think curious you QX, power the internally? versus think some QX were you I slate made time, should you've balance changes you by of sort what driven also sort the how QX, record when you. Thank a all I so, of And the of of

Andrew England

It's say. to Mike. hard Thanks, Yeah.

everything wasn't. just XXXX, argue, was revenue for It down given way substantial it the with But is think regional, else regional to local we but Wars of quarter when Star team the quarter have slate good changes that local, the I was one and the our that structured. should could been a side. made our and QX on nearly XX%

regional really One really have local. is third spot is the in which digital. focused is And One in many separately three We them ways. areas. is

those against We have areas. them up focused

those We have in areas. right of of each the people charge

can't they QX lost from very the they're very on sequential think in tools is lapping to what And focus. have right I and I numbers. XXXX the they have QX me improvement encouraging. improvement of – of And weak be think, to QX they're XXXX, to – it's right QX, QX I their going not remember think I their XXXX lapping but

performance to is it's that So, to my go continue that guess improve through as the year. going and we belief team

Mike Hickey

right. luck. Appreciate Thanks, guys. of Best All it.

Andrew England

Thanks, Mike.

Operator

gentlemen. Thank and you, ladies

our come end the back I'll the questions. any have England, of turn We final for comments. Mr. to allotted for floor to time you

Andrew England

so Great. the to and solid much. been year. you a growth for Thank start XXXX to It's trends are all pointing terrific

digital next our QX particularly see interactive ARcade. for digital earnings We at brands. first the continue discover giving to big moviegoing experience returning bringing and to augmented gaming progress avatars product NCM, is what's XXXX in you we're our attract which in ecosystem, and exhibitors, Thank audiences new and arrive consumers and movies. for of Noovie to Noovie to you entertainment, a the launch I'll reason the screen, app enhancing participating the good early the call and to pleased cinema and By with reality our in

Operator

concludes you. This Thank today's teleconference.

time. lines at participation. for may your You disconnect you this Thank your

National CineMedia (NCMI) 7 May 182018 Q1 Earnings call transcript