Cinedigm Corp. (CIDM) on Q4 2021 Results - Earnings Call Transcript
Operator: Good day, ladies and gentlemen. Today, we are hosting a Conference Call to discuss Cinedigm’s Preliminary Fourth Quarter Fiscal 2021 Results. At this time, all participants are in a listen-only mode. We will have a question-and-answer session at the end of the call. Please note this conference is being recorded. I will now turn the conference over to your host, Laura Kiernan, Head of Investor Relations. Thank you. You may begin.
Laura Kiernan: Thank you very much. Good afternoon, everyone, and welcome to Cinedigm’s fourth quarter preliminary results call. Before we begin, I would like to point out that certain statements made on today’s call may contain forward-looking statements. These statements are based on management’s current expectations and are subject to risks, uncertainties and assumptions. Potential risks and uncertainties that could cause the company’s business and financial results to differ materially from those forward-looking statements are described in the company’s periodic reports filed with the SEC from time to time. All of the information discussed on this call as of today, July 14, 2021, and Cinedigm does not take -- does not intend to update until we file our 10-K. With us today we have Chris McGurk, Chairman and CEO; Erick Opeka, our Chief Strategy Officer and President of Cinedigm Networks; Gary Loffredo, Chief Operating Officer, General Counsel and President, Cinedigm and Cinedigm Cinema Equipment Business; and Senior Vice President of Accounting, Cheryl Odoardi, who -- as well as Yolanda Macias, Head of Content. All of whom will be available for questions following the presentation. I will now turn the call over to Mr. Chris McGurk to begin.
Chris McGurk: Thanks, Laura. Welcome, everyone, and thanks for joining us on the call today. Before I begin, I wanted to address the delay in filing our 10-K, which we expect will be filed very soon. We’re obviously not happy about it and we apologize. We pledged to become much timelier in our financial reporting over the next few quarters, because we owe that to our investors. The challenges we experienced in reporting on a timely basis are partly due to our growing pains, as we have made such a major transformation in our business to streaming, which is growing extraordinarily fast organically and with five acquisitions that we have made over the last few months on top of that. Given all that, we clearly need to step up in finance to enable timely reporting and we will fix that. And we don’t want this delay to take away from the fact that we had a tremendous fourth quarter, perhaps the best in our history. So rest assured, our results had nothing to do with the delay. So now I will provide an update on our corporate strategy and key investment highlights. Then I’ll turn things over to Erick for a more in-depth review of our streaming business results. Then Gary will cover the continued remarkable progress we have made over the last few months in eliminating that and strengthening our balance sheet. Then we’ll open the call for Q&A; and finally, I’ll provide some closing remarks.
Erick Opeka: Thank you, Chris, and thanks to everyone for joining the call today. I’ll provide you with some details in a moment, but I wanted to summarize, as of June 30th, we had approximately 683,000 subscribers across our subscription portfolio of streaming networks. We’ve seen an estimated 116% increase in ad supported viewer growth over the last quarter and we’re setting new records with well over 1 billion minutes consumed in the prior quarter. We saw major increases across the Board and distribution, platform expansions and partnerships, and this flywheel of greater distribution increased viewership and ultimately monetization led to an estimated 197% increase in streaming revenues in the fourth quarter versus the prior year quarter. The fastest growth we’ve seen to-date in the business. Our success in executing our plan is attracting high caliber distribution platforms, top advertising partners, and most importantly, premium brand and content partners. Given this dynamic, we expect to continue our accelerated growth trajectory over the next 12 months as we focus on the rapid expansion of our business. Let me provide you with our preliminary key business highlights during fourth quarter fiscal 2021, which was our quarter ended March 31, 2021, as they relate to Cinedigm Networks. First, our ad supported streaming channel or AVOD revenues increased an estimated 331% over the prior year quarter and an estimated 23% sequentially over the last quarter. Our subscription streaming channels revenues increase an estimated 117% over the prior year quarter and 65% sequentially over last quarter. Our streaming digital content licensing and sales driven by partners such as Amazon, Apple and Tubi recorded record digital sales billings growth for the fourth consecutive quarter in a row. Our combined streaming and digital revenues increased an estimated 66% over the prior year quarter and 27% sequentially over last quarter.
Gary Loffredo: Thank you, Erick, and good afternoon, everyone. I’d like to cover some of our preliminary unaudited key fourth quarter results with you before we turn it over to Q&A. Our consolidated revenues were $8.3 million, representing an increase of 6.9% versus the prior year. Marking a key inflection point for Cinedigm as our streaming growth has now more than offset the expected and planned decline in our legacy digital cinema business revenues. This growth was driven by 25% higher content and entertainment revenues of $7.2 million and was partially offset by the expected decline in the legacy cinema equipment revenues. Our streaming channel revenues were up 197% versus the prior year quarter and 39% sequentially over the last quarter. Our streaming digital revenues make up 75% of the company’s total revenues in the quarter versus 48% in the prior year quarter. We expect this trend to continue as streaming digital revenue approaches approximately 90% of our revenue base. During the fourth quarter, we reached an agreement with AMC Entertainment for a sales plan for legacy digital cinema equipment with net proceeds over the next two year -- over two years to the company of $10.8 million. Over the 12-month fiscal period, we have reduced our total debt by $37.3 million as of March 31, 2021, representing a 76% reduction to a balance of $11.9 million from $49.1 million at March 31, 2020. This includes conversion of $15 million of convertible notes to equity at $1.50 per share. As of March 31, 2021, the company had cash and cash equivalents of $16.8 million, compared to $14.3 million as of March 31, 2020. On April 30, 2021, the company further reduced its non-recourse legacy digital cinema equipment debt by $4.3 million. On July 8, 2021, we announced that $2.2 million of loan proceeds and the associated interest previously carried under the Paycheck Protection Program was entirely forgiven and eliminated. This loan worked exactly as intended as it helped us preserve our employee base during the pandemic and now expand it as our business rapidly grows. As of today, as Chris mentioned, we further reduced our debt to zero by paying off all of our non-recourse digital cinema prospect loan in its entirety, fulfilling our strategy of completely eliminating our debt balance that stood at almost $50 million at the end of the prior fiscal year in just 15 months. We currently have ample liquidity available to us to invest in our growing business. We reached another milestone, on June 28, 2021, Cinedigm was selected for inclusion in the Russell Microcap Index. So now that we have monetized some of our digital cinema assets, as evidenced by our recent sales agreement for $10.8 million over two years with AMC Entertainment, while eliminating all of our debt, we are well-positioned to continue to execute on both our internal and our roll up acquisition growth strategies. Additionally, by finalize the acquisition of our advanced streaming technology platform FoundationTV and leveraging our industry leading Matchpoint technology, we believe we have solidified our position as a leading independent streaming content entertainment and technology company. With FoundationTV, we have now formed a new Cinedigm India division to develop streaming services for Indian and South Asian markets in addition to powering Cinedigm’s global portfolio of streaming services. This concludes our formal updates. Operator, please open the line for questions.
Operator: Thank you. At this time, we will be conducting a question-and-answer session. Our first question is from Dan Kurnos of The Benchmark Company. Please state your question.
Dan Kurnos: Great. Thanks. Good afternoon. First off, I just - Gary, congratulations on being debt-free. That’s quite a milestone. It’s quite a turnaround over the last what, it would have been 18 months, I guess, really here. So, certainly, kudos for that. Erick, I guess, for me first, just on some of the trends, look, we obviously saw the headlines out of the recent upfront, we saw positive headlines from Roku in terms of upfront. We saw that, Tubi and Pluto had really good numbers. CPMs are kind of through the roof right now. I’m just curious what you think sort of sustainability is particularly on the AVOD side? How much you’re benefiting from that? What you’re doing in terms of trying to create or generate more inventory in those channels and then I’ll follow-up after that? Thanks.
Chris McGurk: Erick?
Erick Opeka: Yeah. Thanks for your question, Dan. So I definitely agree that so what’s compelling for us right now is, as you see, ad -- the -- there’s a massive and direct correlation, obviously, from the rapid rise of our available inventory to ad revenue. For us just given the heavy growth, one of the strategies that we’ve deployed is really to maintain, what I’ll characterize is value-based CPM and solid volume today rather than command -- try to command top market CPMs. I think this strategy works out really well for us right now, because just the sheer volume and increase of the available ad inventory that we have, it’s that balance between keeping it full and charging a higher rate. We think we found the maximized mix by coming in at slightly below the market and having a higher fill rate rather than our premium CPM at a lower fill rate. We think that gets advertisers in and used to working with us, which will set us up well for when we rise -- raise the rates later in Q4. So - but even with that, I think our rates are up 15% to 20%, even with us sort of playing the volume game on the programmatic side. We’re still up 15% to 20% on CPMs over the same period last year, at least in June that I was most recently looking at.
Dan Kurnos: Got it. That’s helpful and that makes sense. It’s kind of interesting perhaps you guys then become sort of an outlet for those looking for inventory since we know that there are some constraints with some of the larger players that they’ve been running into in terms of avails. But just to follow-up, maybe just talk about some expanded distribution opportunities that you have that you’re looking at in this marketplace. It’s been really interesting to see both the consolidation, as well as some of the new services really pushing hard, like, the VIZIO SmartCast, not that they haven’t been around forever, but making more noise about it anyway. So maybe talk about that. And then I’ll just finish off with, on the international front, you guys have been making a lot more noise lately, obviously, getting some personnel in place and it looks like you’re really starting to ramp operations there. I’m sure you’d love to get some more content going in that arena, but even beyond that, just how should we think about international starting to become the bigger contributor to the equation?
Erick Opeka: Yeah. Great question. So first, on sort of outlook for the ad supported and FAST market, which I think is a big piece of our growth, that’s certainly the highest percentage growth for us. I see a couple of key trends. One is, obviously, the continued shift of ad dollars from cable to FAST and other ad supported. I think advertisers -- I’ve seen lots of reports and this is anecdotal, but that the comfort level with FAST is rapidly increasing. The results are coming in and they like what they see. So I think you’re going to see that sort of that long-term trend is just going to continue. The second big thing, I think is, as we see, clearly, the market is starting to consolidate around some big -- the platforms and key leaders. We’re looking to players, like, Google, with Google TV, similar to what we saw with mobile devices how Google, other players, like, Apple had big leads domestically, but then, in aggregate, globally, Android became the dominant platform. I think they’re -- I think we are seeing sort of a shift already overseas, and I think, we could see Google start to become a big player. Amazon, just given their investments in the IMDb TV platform, we think is a big growth opportunity for us there. So, and then, obviously, on the international side, for us, I think, all of the revenue you’re seeing here today is predominantly domestic. We have a little bit of international revenue, but it’s very, very incremental at this stage. We think -- we’re seeing some trends. Obviously, Europe is a -- as a comparable and mature advertising market relative to the U.S. But we are seeing markets such as South Asia, where the sheer number of users and the rapid adoption of connected TV in that market as prices come down and the offerings have vastly improved. We’re starting to see that market become sustainable from a CPM basis. And LatAm, which has had a pretty decent ad support environment on the mobile side for many years. We are starting to see that market to really become a market with good ROI. So long-term, we’re going to look at those big billion-plus user swaps that we can start to attack. Having a base and a team in India that knows the market, knows the players and is already working on securing deals for us, we think the future there is pretty bright in the coming quarters and years.
Dan Kurnos: Great. Thanks for all the color. Appreciate it and care enough that you had us beat by $1 million on the top line. So it seems like a pretty good way to finish off the year.
Chris McGurk: We appreciate that comment. Thank you.
Operator: Our next question is from Brian Kinstlinger of Alliance Global Partners. Please state your question.
Brian Kinstlinger: Hey, guys. What a great quarter for streaming OTT, which by my calculation is $6 million in the fourth quarter. I think it really solidifies the transformation of your company overall. So while those numbers are fantastic and believe you really hadn’t even hit your stride, given the ad render rates have been so low, I think, in the past. So can you talk about your partnership with Amagi? If I said that right Amagi Solutions? And how it’s already and will continue to drive stronger monetization of your viewership? And then as a result of that, the better fill rates, our brands are turning more often to -- for additional campaigns?
Erick Opeka: Yeah. Great question. Yeah. So, Amagi has been one of the -- one of our sort of cornerstone partners in North America. I think, Amagi is really powering the FAST linear revolution globally. I think they’re managing hundreds of channels now. And one of the -- and we -- I think we were their first customer in North America, just to show, we’d like to think we were early to the market getting this established. But we’ve been building with them along the way. And Amagi, one of the challenges we -- you face in connected TV advertising is, there’s a lot of technical challenges to -- from when an ad call is made from a consumer at their home in front of their screen to being actually able to fulfill it. You need to be able to do that in record time. And that’s at the heart, without getting too technical of what the render rates mean. In the past we had struggled with render rates, just simply because it’s one of the first tackles you have to -- one of the first challenges you have to tackle in this business. Amagi, recently we piloted new technology with Amagi in this -- in our -- in the prior quarter -- in the quarter after the end of this fiscal year, but before the -- up through today. So I would say, in April, May. And we’ve seen some pretty dramatic results and our ability to rapidly render advertising. What that means is our ability to capture more revenue and more ad opportunities off of the same inventory and base is really going to enable us to accelerate and win bids and opportunities. So from that perspective, while we’re -- so even though we’re in the slowest ad period of the year, we’ve seen pretty dramatic results. I don’t have those quantified for you today. But I would say anecdotally those results have been quite impressive. And we expect as we continue to work on that technology, both technology with Amagi. But also I wouldn’t discount the technology, our partner at SpringServe, that was recently acquired by Magnite due to just how well they do and work with connected TV partners. So between Amagi partners like SpringServe and others, we think the big opportunity for us is not only are we scale -- as we’re scaling inventory through new channels and scaling our footprint, plus the secular trends and growth, plus rising -- getting rising CPMs, increasing fill rates and improving render rates, we have a lot of levers to squeeze a lot more revenue out of the existing business. But when you add on all the other channels and other distribution that we’re doing, there really is a lot of growth opportunity for us here, that just hasn’t been fully taken advantage of yet even with all of the success we’re demonstrating here.
Brian Kinstlinger: So you have 16 channels, I’m not sure how many are in production. You talked about The Elvis Presley Channel. How many of the 16 plus, the ones that are in production are being built right now? Have that home run capability that you see, like, Bob Ross? How many can hit those peak numbers or the upper echelon of the revenue targets?
Erick Opeka: Well, one thing that I kind of look at this business, it’s not an exact parallel business, but I think it’s a good comparison. In broadcast, there’s the dotnet or diginet business, that business has been around about eight years or nine years really at maturity. Now if you look at what a top performing channel in that sector, in that space does, I would say, it’s in the $50 million to $60 million range. So that’s eight years to 10 years into it. My take in this space is the top performing channels, when this business gets mature over the next three years to five years. We’ll probably be in the 50% to 60% range. That’s what we’re anticipating of what a top channel could do. Obviously, that’s -- that could change depending on how the business evolves or the market evolves. So our goal is to have as many channels as possible, at the level I would consider a top echelon channel. Today, obviously, we feel Bob Ross could fit that bill. It’s -- the proof will be in this sustained ability to keep growing and driving revenue. But our -- but now that we really understand the dynamics and drivers of what makes these channels work, we’re really 100% focused on those types of channels now. So I think, you will see from us as we move forward if and when we announced new channels, it will be Bob Ross or it will be more of Elvis, more of Bob Ross and we will take -- we will still take chances on startup or new conceptual ideas if they have a good brand and good content base. But, overall, we’re looking for big brands, broadly recognizable content, strong strategic partnership with major enterprises like we did with authentic brands that like we do with all three media and American Public Television. So that’s going to be the power for the course going forward, less speculative channels.
Brian Kinstlinger: Sorry, I had a noise in my background. It leaves me to my next question, in the past, a year ago, maybe a year and a half, when we first sat down, you guys targeted $2 million as a successful FAST channel, lots has changed, you’ve learned so much. Can you comment today and what would be the low level threshold of a successful channel for you today?
Erick Opeka: Well, it really depends, if you’re looking at this as a sort of a multi-platform play, right, like, as our look is a bit forward. So today we have channels that are brands that both have a subscription component and ad supported component, as well as a linear component. My take is, our goal going forward is, we really don’t want to do channels that we don’t think have mid-to-high seven figure potential in the near-term, 18 months to 24 months. That doesn’t mean, obviously, every channel we launch will do that. But I do think that, in the near-term that’s what we’re -- what we strive for, I do think that, one of the key factors is always, will the channel, if the channel can secure the appropriate carriage and distribution, then those numbers are achievable. I think what we -- that the market is obviously getting more competitive for carriage, I think, we’ve been a party that’s paving the way, proving the market. So, obviously, success begets competition, as we’ve seen, we see other studios and others entering the market. But I think our strategy is to heavily differentiate ourselves and have offerings that the studios won’t be unable to compete with and they can’t be easily replicated by other parties. So that’s really our model going forward and I do think that the base of both channels, we recently announced and we will announced in the future sort of fit that paradigm.
Brian Kinstlinger: Great. Last question I have is related to the movie theaters opening. You had a big order from AMC on the legacy business that obviously helped clean up the balance sheet. First of all, how do you see that order, I think, it was $10 million-ish, being recognized over the next couple of quarters, next couple of years? How should we think about revenue? And then outside of that order, how should we think about that business going forward? Is it -- this is the last order or now that you ever no debt, you’ll continue to run this, although, it’s not a focus, high level the strategy of that business?
Chris McGurk: I have Gary, and Gary, you want to just comment on that?
Gary Loffredo: Yeah. Yeah. I will.
Chris McGurk: Yeah.
Gary Loffredo: Yeah. So the $10.8 million from AMC, as we said, will be recognized over two years from the date that we signed the agreement. We’re not given specific dates, but it will be recognized in the quarter that we receive it. And there are additional systems out there that we can sell and we are talking to exhibitors. We expect to be at Cinema Con this year and starting to talk to exhibitors about purchasing systems. Obviously, they’ve all been focused on the pandemic and now coming out of it. They are -- well, we engaged with those discussions. And as you said, the theaters are starting to open up and we expect all the movies that were pushed off to come into movie theaters now and that business will come back. But as we’ve said, that is our -- we planned and we expect that business to decline and it will continue to decline. So it’s not going to be -- it’s not the focus of our growing business.
Brian Kinstlinger: Great. All right. Thanks so much.
Chris McGurk: Thank you.
Operator: Our next question is from Laura Martin of Needham. Please state your question.
Laura Martin: Hi, there. Can you guys hear me okay?
Chris McGurk: We can.
Erick Opeka: Very well, Laura.
Laura Martin: Fantastic.
Chris McGurk: And thanks for the call, Laura.
Laura Martin: Okay.
Chris McGurk: We’re very happy for your call.
Laura Martin: Yeah. My pleasure. Thank you. So the debt number is down. Congratulations. Awesome. My question is on normalized debt. So I think about you guys doing acquisitions going forward? Should we assume you’ll do those all for equity? Are you willing to bring the debt up somewhat to sort of lower the average cost of capital? How do you think about normalized debt level over maybe a one-year to two-year timeframe for starters?
Erick Opeka: Chris, you want me to tackle that?
Chris McGurk: Yeah. Yes. We want to. But I think the short answer is it depends. But go ahead, Erick.
Erick Opeka: Yeah. I think…
Chris McGurk: And we want to keep our options open. We have we have plenty of options and being debt free gives us the option depending on the acquisition. If it can puts some debt we will consider that. But we want to be smart about it.
Erick Opeka: Yeah. I think, opportunistically, we do, as we look at the landscape out there, we do see a lot of enthusiasm for our equity, I think, from potential -- from the prior deals we’ve done. We would expect that could be a component of future deals. But I do think having a debt free balance sheet, gives us a lot of flexibility structurally to do deals that we wouldn’t have been able to do even a couple years ago. So, frankly attracts -- it’s a very attractive situation for people to be coming into as if they’re looking to become a part. But all, we will optimize the cost of capital by pulling whatever levers we think we have to pull to get to optimize and improve the ROI on a deal.
Laura Martin: Okay. And then my second question is, it’s very rare to find a company that has AVOD, FAST and SVOD. So three questions about that, like, cross ownership with so many streaming choices? One is, are you -- we’re sort of writing out here on Wall Street that SVOD will sort of relinquish consumers and consumer time to AVOD? Are you seeing that any kind of consumer shifts as economies reopen? Building on that, when you think about data advantages or other sort of hidden value-added upsides from owning all three types, could you sort of talk about that? And then when I think about organic growth, as you think about those three services over the next 12 months, which one do you think is going to grow as revenue faster organically? Thank you.
Erick Opeka: Yeah. Sure. So, the basis of our strategy has always been to provide the consumer the ability to enjoy our brands no matter what device, no matter what their economic station is in life, no matter their predilection. So what we’re finding with a lot of our brands, and by the way, this has been our strategy since 2015. I see a lot of companies today are sort of backdooring their way into the ad supported. We launched all of our services with the idea that with this was sort of a staple. And I’d love to say, we were the first guys thinking of it, but Hulu really set that trend years ago and we’ve always loved that model. We think it opens the tent broadly to consumers to experience and discover the brand and the content. And so we look at, for example, we have FAST linear channels that allow users to sample our brands and content. I kind of -- it kind of reminds me of another era when HBO would have the free HBO weekend that I recall very fondly from being a teenager decades ago, that expose you to the brand, let you sample it and then -- for free and then let you subscribe. So, I think, that sort of lineage of sampling, brand exposure really does a fantastic job for, not only elevating the brands and putting the brands in front of, I would, for example, Docurama, Dove, CONtv. These are in our house brands that when 10s of millions to hundreds of millions of people when they turn on their smart TVs around North America are exposed to the brand daily as they’re browsing through the channels, they’re sampling the content. So I think that piece of it is undeniably a great lift. I think we’d like to maintain the subscription side. One, I think the recurring predictable revenues, especially on a distributed strategy, really provides a nice smoothing effect against the seasonality of the ad supported business and we do have the ability to push users back and forth between those buckets. I do think that, one area that I do agree with you that we and we’re investing more this year is in our platform and data. And that’s predominantly because we do think having that direct consumer relationship provides you that granularity of data and insights that you can’t get from distributed channels and properties in that ecosystem or through licensing. So -- and to answer your question about which platform, we are most excited about for this next year. We are really excited about Fandor, which we acquired in January of this year. We think as with WarnerMedia have -- having shut down FilmStruck a few years ago, we really think that that space is underserved and globally could be quite a substantial audience. We’re not looking at it just domestically, right? We’re looking at it through the lens of how will this service work in South Asia? How will it work in Latin America? And so we’re really going to be pushing hard for every enthusiast service that we launch for it to have a global footprint. And the last bit on that is, we think a premium blue chip global cinema streaming service could have very significant potential if we were to enter into telco distribution deals and other deals in territories like India and Malaysia and others. So we think that provides just a really significant growth opportunity. And so that’s the one I’m probably the most excited about. But I wouldn’t say, Dove, Dove is no slouch just given how the dynamics of the family audiences that we’ve seen really uptake and we’re making a lot of content investments in that brand and channel over the next year.
Laura Martin: Thank you very much.
Erick Opeka: Thank you, Laura.
Operator: We have reached the end of the question-and-answer session. I will now turn the call back over to Chris McGurk for closing remarks.
Chris McGurk: Thank you. And first, thanks to Laura, Brian and Dan for those questions. They were great. So, again, thanks, everybody, for joining us today and for your interest in Cinedigm. And as I stated in my remarks, this quarter’s preliminary results, I think, clearly demonstrate that we’ve completed our multiyear transformation to become a leading independent streaming company of channels and content. And all of that leverages our industry leading digital technology and independent content distribution capabilities. As part of this transformation, we’ve made huge progress in transitioning our mix of revenue, with streaming digital revenues now making up 75% of the total. That trend is expected to continue towards nearly 100% of our revenues in the coming months and years. And as Erick stated, we expect to see very rapid growth ahead in the streaming category. Additionally, not only is there a huge potential market for our portfolio of enthusiasts streaming channels, we have an enviable competitive position as this strategy and our channels are perfectly complimentary for the big general entertainment subscription services, like, Disney Plus and Netflix. This along with our relatively low content and marketing costs in the ad supported business, plus partnering with and launching established brands like Bob Ross and Elvis Presley enabled Cinedigm to take a portfolio approach to our channel business, not betting the ranch on any one mega channel, but adjusting our portfolio based on market response in a very efficient high margin manner. Cinedigm represents a unique investment proposition situated squarely in the middle of the best part of the business, growing rapidly both organically and via our roll up acquisition strategy. And we also have a huge opportunity, as Erick mentioned, to grow very meaningfully overseas. And I want to again emphasize that we’re fully committed to fixing our time with this issue and we’re appreciative of our investor’s patient. We’re confident that our preliminary numbers reflect our very strong results and are extraordinarily pleased about the state of our business being 100% debt free and -- while growing our streaming business like wildfire. Finally, I want to thank our amazing team at Cinedigm for making this performance all possible. Not only the leadership team including Gary, Erick, Yolanda, Tony and Cheryl, but also every team and Board member that has worked so hard in extraordinarily challenging conditions over the last couple of years. I want to sincerely thank all of our team members for their effort as well as our long-term investors who have patiently watched our business transformation unfold and now finally arrived. Please follow up with Laura Kiernan of the High Touch Investor Relations with any other questions you may have. You can be reached at Cinedigm@htir.net. We look forward to speaking with you again soon. Thank you all.
Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.
