National CineMedia(US:NCMI)2021-08-10 02:53Financial Data and Key Metrics Changes - In Q2 2021, the company recorded $14 million in revenue, up 250% compared to Q2 2020, but significantly below the $110.2 million in Q2 2019, reflecting a 75% decline in attendance compared to 2019 levels [34][40] - Adjusted OIBDA for Q2 was negative $18.7 million, compared to negative $12.7 million in Q2 2020, primarily due to increased theater access fees as attendance rose [36] - The GAAP loss per diluted share was $0.28 in Q2 2021, compared to a loss of $0.18 in Q2 2020 [41] Business Line Data and Key Metrics Changes - The cinema advertising business is recovering, with 97% of theaters in the network open by the end of Q2 2021, leading to a small amount of in-theater revenues compared to none in Q2 2020 [13][14] - Approximately half of the top 20 upfront partners from 2019 have returned for 2021, with another 25% expected to return by the end of Q3 [16] Market Data and Key Metrics Changes - The company noted a significant pent-up demand for cinema experiences, evidenced by strong box office performances of films like "A Quiet Place 2" and "F9" [8][10] - The advertising market is seeing a shift as traditional TV viewership declines, creating opportunities for cinema advertising as marketers seek premium video GRPs [17][18] Company Strategy and Development Direction - The company is focusing on diversifying its marketing and product offerings by expanding its online presence and consumer analytics [7][21] - New digital advertising offerings are being developed, including partnerships with platforms like YouTube and TikTok to reach younger audiences [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the cinema business, anticipating a return to pre-pandemic revenue levels by the end of 2021, contingent on the stability of the film release schedule [54] - The company is managing liquidity through a short-term revolving debt facility to bridge working capital deficits as advertising revenue rebuilds [46][47] Other Important Information - The company declared a quarterly cash dividend of $0.05 per share, resulting in a current yield of 6.5% based on the closing share price [48] - Total debt at the end of Q2 2021 increased to $1.01 billion, with an average interest rate of approximately 5.6% [45] Q&A Session Summary Question: What trends are seen in the scatter market? - Management noted that the scatter market is recovering well, with traditional advertisers returning, including entertainment clients and CPG companies [60][61] Question: How are advertisers feeling about their budgets and pricing? - Advertisers are focused on flexibility rather than price, wanting the ability to shift their advertising dollars as needed [65][66] Question: Is theater attendance a good proxy for advertiser confidence? - Consistent movie attendance is crucial for building advertiser confidence, with blockbuster films helping but not being the sole factor [74][75]