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AMC Networks (AMCX)
Q1 2013 Earnings Call
May 09, 2013 11:00 am ET
Seth Zaslow - Senior Vice President of Investor Relations
Joshua W. Sapan - Chief Executive Officer and President
Sean S. Sullivan - Chief Financial Officer and Executive Vice President
Edward A. Carroll - Chief Operating Officer
Bryan Goldberg - BofA Merrill Lynch, Research Division
Michael C. Morris - Davenport & Company, LLC, Research Division
Richard Greenfield - BTIG, LLC, Research Division
Anthony J. DiClemente - Barclays Capital, Research Division
Todd Juenger - Sanford C. Bernstein & Co., LLC., Research Division
Benjamin Swinburne - Morgan Stanley, Research Division
Benjamin E. Mogil - Stifel, Nicolaus & Co., Inc., Research Division
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Thank you. Good morning, and welcome to the AMC Networks' First Quarter 2013 Earnings Conference Call. Joining us this morning are members of our executive team: Josh Sapan, President and Chief Executive Officer; Ed Carroll, Chief Operating Officer; and Sean Sullivan, Chief Financial Officer.
Following a discussion of the company's first quarter 2013 results, we will open the call for questions. If you don't have a copy of today's earnings release, it is available on our website at amcnetworks.com. This call can also be accessed via our website. Please take note of the following. Today's discussion may contain statements that constitute forward-looking statements within the meaning of the Private Securities and Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of the future performance or results and involve risks and uncertainties that could cause actual results to differ. Please refer to the company's filings with the Securities and Exchange Commission for a discussion of risks and uncertainties.
The company disclaims any obligation to update the forward-looking statements that may be discussed during this call. Further, we will discuss non-GAAP financial information. We believe the presentation of non-GAAP results provides you with useful supplemental information concerning the company's ongoing operations and is appropriate in your evaluation of the company's performance. Please refer to the press release and related footnotes for GAAP information and a reconciliation of GAAP to non-GAAP information, which we'll refer to on this call.
I would now like to turn the call over to AMC Networks' President and CEO, Josh Sapan.
Joshua W. Sapan
Good morning, and thank you for joining us. I'll provide a brief summary of our financial performance, followed by an update on the business, and then turn it over to Sean Sullivan for some greater financial detail.
We started the year off with a strong quarter, and the fundamentals of our business remain quite healthy. In the first quarter, the company reported 17% growth in revenue and 19% growth in AOCF. Our growth continued to be led by the success of our original programming. As we've discussed on prior calls, we've been steadily and significantly increasing the investment in our programming across all of our channels. As we look out to the remainder of 2013, we expect this investment to continue as we believe our content will increasingly define and drive the performance of all of our networks.
AMC, the largest of our channels, has clearly been the most notable for us as its slate of scripted dramas has met with the greatest attention. Primetime ratings at AMC were up roughly 30% in the quarter in the key demos adults 18 to 49 and 25 to 54. This performance was led by the third season of The Walking Dead, which broke records for basic cable TV. The season finale that aired in late March drew over 8 million adults 18 to 49, making it the most-watched episode in the series' history.
For the season, viewership in key demos adults 18 to 49 and 25 to 54 increased over 50% compared to the prior season and made the show the #1 program on all of TV, broadcast and cable, outdelivering broadcast hits such as Modern Family, The Voice and The Big Bang Theory. AMC's Mad Men debuted its 6th season at that beginning of April. The premier attracted over 3 million viewers in an upscale audience that is uniquely attractive to advertisers. And this summer, AMC is set to air the highly anticipated final 8 episodes of what I think it's fair to say has become one of TV's most critically acclaimed shows, Breaking Bad.
AMC is working aggressively to maintain the momentum it's built over the past several years by revamping existing shows such as the crime drama, The Killing, which is scheduled to return for its third season in June and greenlighting new scripted originals such as Low Winter Sun, a cop story set in Detroit, that will debut this August. The network has also announced several pilots, the most recently being one called Line of Sight, a science-fiction drama, and each of those are now in various stages of production.
We will continue to increase our investment in programming at our other networks as well, with the goal being able to make each channel stronger individually, and thus, the portfolio of networks more valuable in the aggregate. As it was with AMC, this is a multi-year strategy and each of WE tv, IFC and the Sundance Channel are at various stages of the implementation of that overall plan. WE tv operates in a very competitive, but lucrative women's marketplace. There are quite a few networks now targeting females in the 18 to 49 and 25 to 54 demo, that demo which is sought after by advertisers. WE tv has had success particularly on Thursday nights with shows such as Braxton Family Values, a reality show centered on the family of Toni Braxton, which has consistently grown its audience with each successive season and now averages over 550,000 viewers per episode or roughly 5x time period average in key demos, women 25 to 54. And Mary Mary is a show about 2 sisters who are Grammy Award-winning singers delivered over 300,000 viewers on average in its recently completed second season, an increase of almost 10% over the prior season.