AMC Networks (AMCX)
Q2 2013 Earnings Call
August 08, 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
Vasily Karasyov - Sterne Agee & Leach Inc., Research Division
Ryan Fiftal - Morgan Stanley, Research Division
Benjamin E. Mogil - Stifel, Nicolaus & Co., Inc., Research Division
James Kopelman - Barclays Capital, Research Division
Amy Yong - Macquarie Research
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Thank you. Good morning, and welcome to the AMC Networks Second 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 second 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 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 delivered solid financial results in the second quarter and the fundamentals of our business remain strong. In the quarter, the company reported 16% growth in revenue and 9% growth in AOCF. For the 6 months of the year, the company grew revenue 16% and AOCF grew 14%. Our top line revenue growth continued to be directly stimulated by the success of our investment in original programming across all 4 of our networks. As we've discussed on prior calls, we've been steadily and significantly increasing the investment in our programming.
As we look out to the remainder of 2013, we expect this investment to continue, as we believe our content will increasingly define the performance of each and all of our networks.
Last month, a very nice note. AMC Networks received a total of 39 primetime Emmy nominations, the most in the company's history, and the most for any basic cable programming group. With 26 of those 39, AMC the channel, tied as the most Emmy-nominated basic cable network. Sundance Channel received 10 nominations, the most in the network's history, reflective, we think, of the investments Sundance has made in its content. And IFC received 2 nominations.
In an increasingly competitive business, this continued recognition for our programming and our networks underscores the strength of our strategy to identify and deliver high-quality original programming that really does connect with our target audiences.
Advertisers also continue to respond to our programming. In the second quarter, the National Networks grew advertising revenue 14% over the prior year. During the recently completed advertising upfront market, we took advantage of its success and of our growing ratings for our original programming.
We went to market for the first time with all 4 of our networks, which allowed us to perform well in what was a healthy market, generally, for cable channels. We saw significant demand for our scripted series, and we're able to attract new, quality advertisers to our shows. We further diversified our ad revenue base. We added volume, and importantly, we increased price.
At AMC, the largest of our 4 channels, our original programming continues to deliver audiences that are particularly attractive to advertisers. Of note, Mad Men aired in the second quarter and continued to be a real magnet for advertisers seeking an upscale audience.
Looking ahead, we will have 3 scripted drama series on AMC starting this coming weekend, the most we've ever had on the network at one time.
We will finish out the final season of Breaking Bad, a show that I think, it's fair to say, has become one of the most celebrated series on all of television. Breaking Bad will lead into a new crime drama called Low Winter Sun. We'll also introduce something called Talking Bad, a new live companion talk show to Breaking Bad, done in the similar vein as our Walking Dead aftershow which is called Talking Dead. Talking Dead has performed extremely well for us, and takes advantage of the large audience engagement stimulated by the dramatic scripted show that precedes it, so we think that plot for Breaking Bad makes a lot of sense.