Cinedigm Corp

Good day, ladies and gentlemen. Today we are hosting a conference call to discuss Synodome's fiscal 2023 first quarter results. My name is Adam and I will be your conference operator. Currently, all participants are in a listen-only mode. We will have a question and answer session at the end of the call, at which time participants can press star followed by one on the telephone keypad to enter the queue. If anyone needs operator help, please press star followed by zero. Please note that this call is being recorded. Your host for today is Gary Lofredo, COO and General Counsel. Please go ahead.

Good afternoon, everyone, and welcome to Synonym's fiscal 2023 second quarter results conference call. Before we begin, I would like to point out certain statements made on today's call contain forward-looking statements. These statements are based on management's current expectations and are subject to risks, uncertainties, and assumptions. The company's periodic reports that are filed with the SEC describe potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward-looking statements. All the information discussed on this call is as of today, November 15th, and Synonym undertakes no duty to update it. In addition, certain financial information presented in this call represent non-GAAP financial measures, and we encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics. I'm Gary LaFretto, President, Chief Operating Officer, and General Counsel of Synanime. With me today are Chris McGurk, Chairman and CEO, John Canning, Chief Financial Officer, Yolanda Macias, Chief Content Officer, Eric Opica, Chief Strategy Officer and President of Synanime Networks, and Tony Huidor, Chief Technology and Product Officer. all of whom will be available for questions following the prepared remarks. I will now turn the call over to Chris McGurk to begin.

Thank you, Gary. Welcome everyone and thanks for joining us on the call today. Before getting into a recap of our strong Q2 2003 performance, which was led once again by record streaming advertising revenues, I'd like to start off by addressing the recent outstanding success of what we call our 360 degree business and promotional approach to horror, which is the hottest genre in entertainment today. CineDime has always been a leading distributor of horror content. And as the category continued to outperform in the last couple of years, we saw an opportunity to take advantage of that trend even further, particularly in streaming, where horror content is still underrepresented and fans are still being underserved. So in 2021, we acquired Bloody Disgusting, the biggest name in online horror with millions of followers. And then we acquired the Screenbox Horror Streaming Channel to further consolidate our position in that lucrative genre. And just over a year later, those investments are now paying off big time. As you've certainly read out over the past month, our acquisition and release of the very low budget and artfully crafted indie phenomenon Terrifier 2 has led to an unprecedented successful box office run and an incredible amount of buzz around the film and its iconic central character, Art the Clown. Critically acclaimed and the best reviewed horror movie in years, Terrifier 2 has generated more than $10 million at the domestic box office, despite virtually no traditional release marketing effort, increasing its box office for three straight weekends, which almost never happens with a wide release, as the film became a viral phenomenon in large part due to our extremely effective PR and social media marketing efforts via Bloody Disgusting. The New York Times lauded the film and our viral marketing efforts calling it, quote, an unexpected and unlikely hit, the little horror movie that could. Forbes was amazed that the film would likely, quote, outperform most of this year's designated award season releases. And Yahoo News called it, quote, the sleeper horror hit of the season. Released on October 6th, none of Terrifier 2's success is reflected in this second quarter earnings report, as the financial upside from the film will begin to be reported in our next fiscal quarter and beyond. However, I am focusing on this success now because it clearly underscores Cinedigm's winning business strategy in regard to enthusiast fan bases and streaming content in general. Here's how we are leveraging the film across our business. While still in theaters, on Halloween, we also launched Terrifier 2 on our ScreenBox horror streaming channel. fueled by continued heavy viral marketing by Bloody Disgusting, the film has already driven increased traffic on Screenbox of more than 250%, with subscriptions up more than 295% compared to the channel's previous high month. On November 11th, we also released the film onto transactional VOD across a wide footprint that includes Amazon Prime, iTunes, Vudu, Google Play, Microsoft, and Redbox, where it is performing extremely well and exceeding our expectations. In December, we are shipping the film in DVD and Blu-ray to Walmart and Best Buy, among many other outlets. And then after that, it will be available for additional licensing to streaming and other platforms. We are also considering other ancillary options to support and extend the film, including graphic novels, podcasts, additional editorial, documentaries, television, NFTs, and potential re-release into theatrical. All this activity across the entire entertainment spectrum is what our 360-degree approach to horror is all about, leveraging our capabilities in marketing, viral promotion, and distribution across virtually every distribution channel in the ancillary market, not just in streaming, but on traditional platforms as well. This gives horror enthusiasts the content they want, when and where they want it, in a way most of our competitors cannot do because they lack our reach, our assets, and our acumen in the genre. While we will report a more accurate assessment of the film's upside impact on our results in our next quarterly earnings report in February 2023, the tremendous success of Terrifier 2 has clearly made a compelling statement about Cinedigm's leadership and capabilities in the lucrative horror space. And we believe this will lead to more breakout titles in the future. And beyond the horror genre, we are absolutely committed to bringing this 360-degree approach to our other enthusiast genres where we have the same capabilities, including Asian content, anime, and family content. Before I move off with Terrifier 2, I would like to commend Damien Leong the multi-talented creative force behind the film for having the skill and perseverance to create this film and then turn it into such a tremendous artistic, critically acclaimed, and commercial success. He and his production partners and the entire cast and crew on the movie epitomized the true essence of independent filmmaking. And everyone at Cine9 is extremely proud to be associated with their film. Now on to our second quarter. Our results in the quarter underscore once again how Synodyme continues to perform very strongly from a financial standpoint in contrast to many other players in our sector who have faced some headwinds due in large part to their single channel and or single revenue model strategies and lack of presence in the fast growing advertising supported and fast businesses. We have a diversified business model that captures revenue streams across the entire entertainment business spectrum. subscriptions, advertising, software as a service, content aggregation, content licensing, and releasing. That sets us apart from our competitors and is driving great results. In what is seasonally our slowest quarter, the second quarter, we increased consolidated revenue by 39% compared with the previous year quarter, grew total streaming revenue by 78%, grew ad revenues 102%, our 10th straight quarter of record ad revenue growth, and we increased our paid subscriber count by 48% over the prior year quarter to 1.06 million subscribers. Our revenue and net income results exceeded the average expectations of the analysts who follow the company and exceeded our own internal expectations. Now, we generated these stellar results because Synodyme's extraordinary executive team is delivering exactly what we have promised. Having now rolled up seven streaming content and channel acquisitions, including the aforementioned bloody disgusting screen box, expanding our enthusiast channel portfolio to 30 channels, building our content library into one of the largest modern streaming libraries in the world with over 50,000 films and TV titles, and leveraging our highly automated proprietary match point distribution platform across multiple readily streams. John will cover our financial results in more detail, and Eric will delve into the early success of our key business initiatives that we launched this year to further drive the business forward, including Cineverse, our flagship channel that debuted in September with several streaming channels and thousands of hours of content across multiple genres. Cineverse is the key initiative that will drive home our goal to become the Spotify of independent streaming video content. We are very well positioned across our streaming technology and content licensing businesses heading into our seasonally best two quarters of the year. And with the success of our horror strategy and Terrifier 2 included as an additional kicker to our results, we expect to report very strong performance in the next two fiscal quarters and significant top line growth for the full year as we move closer to our goal of sustainably positive cash flow and profits. And with that, let me turn it over to John for a more detailed review of our financial results.