Moving iMage Technologies, Inc.

Greetings and welcome to the Moving Image Technologies second quarter fiscal 2023 earnings results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Siegel from Hayden IR. Thank you, Brian. You may begin.

Thank you, Operator. Good morning and welcome to the Moving Image Technology second quarter of fiscal 2023 earnings conference call and webcast. With me today is Chairman and CEO, Phil Rasmussen, Co-Founder and Executive VP of Sales and Marketing, Joe Delgado, and Interim CFO, Bill Green. For those of you that have not seen today's release, it is available on the investor section of our website. Before beginning, I would like to remind everyone that except for historical information, the matters discussed in this presentation are for forward-looking statements that involve several risks and uncertainties. Words like believe, expect, and anticipate mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place. So our actual future results could differ significantly from those statements. Further information on the company's risk factors is contained on the company's quarterly and annual reports filed with USSEC. Now I'd like to turn the call over to Phil. Phil?

Thank you, Brian, and thank you all for joining us today. I'm Phil Rapson, CEO of Mooney Image Technologies, or MIT for short. Like last quarter, Today I'm going to spend my part providing an update on overall industry trends that we believe will drive the tremendous growth opportunity for MIT over the next few years. And then Joe will provide an overview of MIT's business and growth strategy. He will then turn the call over to Brian to review our financials and outlook, followed by question and answer. MIT serves commercial cinema owners, stadiums, arenas, live event venues, and esports. Today, most of our business is serving cinema operators and owners. In North America, there are approximately 40,000 screens, 18,000 of which are outside the top five circuits. So while we work with the studios, most of our business is with small to medium-sized operators. As you look at MIT as an investment, both industry and company-specific factors will contribute to our future performance. First, I'll address the industry tailwinds, and then Joe will discuss our company-specific reasons to invest in MIT. Industry tailwinds provide for underlying optimism in our ability to grow the company, include the domestic box office improvement, technology and venue upgrade cycles, new theater builds, and the addition of amenities to the movie-going experience. As you probably know, this industry was hit hard by COVID during 2020 and the first half of 2021. With boss office receipts declining from over $11 billion in 2019 to $2.1 billion in 2020, but they recovered in 2022 to over $5.7 billion, momentum should continue into 2023 with an already exciting slate of releases expected, setting the backdrop for an even stronger year. Additionally, while the studios have made it clear, I want to reiterate this point for those who still have doubts. The rumors of the demise of the in-theater cinema are dead. The experiment in 2021 to skip the box office and go straight to streaming was a failure. Streaming is an incremental downstream source of revenue for the studios, but exclusive theater releases are what drives studio success. Next. We are in the early stages of a technology upgrade cycle, especially for laser projectors and servers. But we are also looking at sound systems and ADA device refreshes over the next few years as well. During the last upgrade cycle, we participated in approximately 17,000 cinema screens over nearly five years. So we believe there is a long runway ahead. And our second quarter saw some solid activity in this area. Finally, as part of the CARES Act, non-publicly traded live event operators were able to access over $16 billion in grants through the SBA. This program, called the Shuttered Venue Operations Grant, or SVGA, or SVOG, has provided almost $15 billion in grants to date, with over $2.5 billion going to cinema operators. This money is flowing, and this spending has kicked off a multi-year growth cycle. Cinema operators can use these funds for operations or productively refurbish, upgrade, and renew modern theaters to enhance the overall moviegoing experience. This includes adding amenities such as in-house bars and lounges, breweries, restaurants, and in-cinema dining. In fact, dine-in cinemas are among the fastest growing parts of the industry. We are very well positioned with these circuits. Before turning the call over to Joe, I'd like to thank our dedicated employees. Without them, we would not be in what I believe is the strongest position we've ever been in as a company from an operational, financial, product, and competitive perspective.