Moving iMage Technologies, Inc.

Greetings and welcome to the Moving Image Technologies fourth quarter and fiscal year end 2024 earnings call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. It is now my pleasure to introduce your host, Brian Siegel, Vice President of Investor Relations and Strategic Communications. Thank you. You may begin.

Thank you, Operator. Good morning and welcome to Moving Image Technologies Earnings Conference Call Webcast. With me today is Chairman and CEO, Phil Raffelson, who will provide an industry overview, co-founder and Executive VP of Sales and Marketing, Joe Delgado, who will provide a strategy and business overview, and our 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 forward-looking statements that involve several risks and uncertainties. Words like believe, expect, 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. Actual future results could differ materially from those statements. Further information on the company's risk factors is contained in the company's quarterly and annual reports filed with the SEC. Now I'd like to turn the call over to Phil. Take it away.

Thank you, Brian. And thanks to everyone joining us today. I'm Phil Rafson, CEO of Moving Image Technologies, or MIT. We're excited about the future of cinema and the broader entertainment industry, where MIT is positioned to lead with cutting-edge technologies. Fiscal 2024 was truly a tale of two vastly different business environments. We began with excellent first quarter results marked by strong revenue growth and profitability. However, the momentum we built was halted by the actors and writers strikes, which significantly affected our second through fourth quarter results. Our customers were unable to initiate their budgeting process. and consequently spend their budgets until the strikes were resolved. This created a tough environment for generating near-term value, but we remained focused on positioning MIT for long-term success. During this challenging period, we took proactive steps to strengthen our future prospects. We repurchased stock in the open market move forward with the development and go-to-market strategies for our emerging higher-margin recurring revenue products, such as MIT Translator, eCaddy, and CineQC, and most recently implemented $600,000 in annualized cost reductions. These actions are not only enhancing our operational efficiency, but also aligning us with future growth opportunities. We believe we've successfully navigated this period and positioned the company for a return to growth with greater operating leverage as a result of the strategic initiatives we've executed over the past 12 months. By the June quarter, we saw the cinema industry regain its footing despite the strikes with the resurgence of blockbuster films and growing demand for premium cinema experiences, driving a revitalized market. MIT, as a leader in innovative technology solutions for exhibitors, is well positioned to capitalize on this momentum and ride the wave of industry growth moving forward. Looking ahead, we're confident in the continued strength of the industry. Consumers are demanding high-quality, immersive viewing environments, and exhibitors are responding by investing in advanced projection, immersive audio, and premium amenities. Here's why we're excited. Number one, theaters are investing heavily. The eight largest cinema chains in the United States and Canada plan to invest over $2.2 billion in upgrades over the next three years. smaller chains will follow suit to stay competitive, driving further demands for our technologies. Number two, mandatory tech upgrade cycle. The cinema industry is entering a new upgrade cycle as projectors and servers reach end of life. The last cycle lasted six years. Today, we're just in the first innings of this shift, and we already see significant opportunities. For example, just one medium-sized customer alone plans to upgrade over 200 projectors, representing $15 to $25 million in potential projector sales alone for us over the next four years. Number three, strategic investments by major players. Sony Pictures recently acquired Alamo Drafthouse Cinemas, signaling strong confidence in the future of theatrical releases. We expect this to accelerate growth and present further opportunities for MIT. Number four, diversification of theater offerings. Cinemas are expanding into live events, gaming, and corporate rentals, which requires versatile, high performance equipment. Our movie, sports, product, and other solutions position MIT perfectly to meet these evolving needs. In summary, The cinema industry is transforming, and MIT is right at the heart of it. The shift forward, premiumization, and technological innovations aligns perfectly with our offerings. We're confident in our ability to drive sustained growth and continue delivering world-class solutions to enhance the moviegoing experience. Thank you.