Release – Genco Shipping Trading Limited Announces Second Quarter Financial Results

Posted on August 5, 2021 by Admin

Genco Shipping & Trading Limited Announces Second Quarter Financial Results

New Credit Facility for Global Refinancing Marks a Key Milestone Towards Implementation of Genco’s Comprehensive Value Strategy

Genco Agrees to Acquire Three Modern, Fuel Efficient Ultramax Vessels

Reports Highest Quarterly Earnings Per Share Since 2010

NEW YORK, Aug. 04, 2021 (GLOBE NEWSWIRE) — Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the “Company”), the largest U.S. headquartered drybulk shipowner focused on the global transportation of commodities, today reported its financial results for the three months and six months ended June 30, 2021.

The following financial review discusses the results for the three months and six months ended June 30, 2021 and June 30, 2020.

Second Quarter 2021 and Year-to-Date Highlights

As part of Genco’s comprehensive value strategy announced in April 2021, we have taken the following steps in the year-to-date:
- Entered into an agreement for a new $450 million credit facility (the “$450 Million Credit Facility”) to refinance our existing $495 Million Credit Facility and $133 Million Credit Facility, which provides additional flexibility for capital allocation, lowers our cash flow breakeven rate, and improves key terms
- New facility consists of a $150 million term loan and a revolving line of up to $300 million that can be used for acquisitions and general corporate purposes
- Agreed to acquire an additional three modern, fuel efficient Ultramax vessels in July 2021, bringing our total to six Ultramaxes we have agreed to acquire since April 2021
- Repaid $82.2 million of debt during the first half of 2021, or 18% of the beginning year debt balance
  - Expect to close the refinancing of our credit facilities by the end of August and continue to pay down debt under the new facility’s revolver through the end of the year, advancing towards our goal of 20% net LTV by year end
- Fixed three Ultramax vessels on period time charters for approximately two years each at rates between $23,375 and $25,500 per day
Genco increased its regular quarterly cash dividend to $0.10 per share for the second quarter of 2021
- Payable on or about August 25, 2021 to all shareholders of record as of August 17, 2021
- We have now declared cumulative dividends totaling $0.905 per share over the last eight quarters
- Genco is targeting Q4 2021 results for its anticipated first dividend under its new corporate strategy, which would be payable in Q1 2022
We recorded net income of $32.0 million for the second quarter of 2021
- Basic and diluted earnings per share of $0.76 and $0.75, respectively
- Represents our highest quarterly earnings per share result since 2010
Voyage revenues totaled $121.0 million and net revenue¹ (voyage revenues minus voyage expenses and charter hire expenses) totaled $76.0 million during Q2 2021
- Our average daily fleet-wide time charter equivalent, or TCE¹, for Q2 2021 was $21,137, marking our highest quarterly TCE since Q4 2010
- We estimate our TCE to date for Q3 2021 to be $27,599 for 71% owned fleet available days, based on current fixtures
Recorded adjusted EBITDA of $50.2 million during Q2 2021¹
- During the first half of 2021, adjusted EBITDA totaled $70.9 million nearly identical to our full year 2020 adjusted EBITDA of $71.8 million
Maintained a strong financial position with $161.2 million of cash, including $44.9 million of restricted cash, as of June 30, 2021
During the third quarter, we plan to establish a new joint venture, GS Shipmanagement Pte. Ltd., with The Synergy Group (“Synergy”) for the technical management of our fleet, which aims to unlock further value for shareholders through its differentiated approach to ship management
Entered into an initial framework to jointly study the feasibility of ammonia as an alternative marine fuel alongside various participants across the maritime value chain
Ranked #1 out of 52 other public shipping companies in the Webber Research 2021 ESG scorecard
We have agreed to sell our oldest vessel, the Genco Provence (2004-built Supramax) which we expect to deliver to the buyer by October 2021

John C. Wobensmith, Chief Executive Officer, commented, “The second quarter of 2021 was a transformative period for Genco, highlighted by the execution of several key initiatives under our comprehensive value strategy, focused on dividends, deleveraging and growth. We are pleased with the significant progress we are making working towards paying the first dividend under this strategy, while continuing to pay dividends to shareholders under our current policy.”

Mr. Wobensmith continued, “The foundation of our value strategy, which was announced in April, is our strong balance sheet and capital structure. Our recently agreed upon global credit facility refinancing further enhances Genco’s capital structure, providing additional flexibility, reducing our cash flow breakeven rates to industry lows, and supporting sustainability of quarterly dividends through diverse market environments. Additionally, we continued to opportunistically expand our fleet at a unique point in the cycle, seeking to capture the disconnect between decade high freight rates and asset values that have yet to catch up, which has resulted in compelling return on capital opportunities. In terms of our operating performance, our second quarter results represent our highest EPS and TCE since 2010, while our current fixtures for the third quarter to date point to further improvements. Looking ahead, the near-term market dynamics are highly supportive, and we continue to believe that the constrained overall supply picture for the next several years will provide a low baseline for demand growth to have to exceed in order to move freight rates higher.”

¹We believe the non-GAAP measure presented provides investors with a means of better evaluating and understanding the Company’s operating performance. Please see Summary Consolidated Financial and Other Data below for a further reconciliation.

Credit Facility Refinancing

On August 3, 2021, as a key step of our comprehensive value strategy, we entered into the $450 Million Credit Facility, which consists of a 5-year term loan portion together with a sizeable revolver that can be used for growth. We intend to use the $450 Million Credit Facility for a global refinancing of our previous two credit facilities. This new debt structure will provide improved capital allocation flexibility and significantly reduce our cash flow breakeven rate, which, combined with the strength of our balance sheet provides a solid foundation for the implementation of our value strategy. The $450 Million Credit Facility provides for a revolving line of up to $300 million which can be used for acquisitions and general corporate purposes. Based on current market conditions and management’s estimates, we are targeting debt outstanding at December 31, 2021 to be approximately $250 million following targeted voluntary debt paydowns totaling approximately $117 million in the second half of this year.² Importantly, if we make these targeted paydowns, we will have no mandatory debt amortization payments until December 2025, or later if we make additional voluntary paydowns. Regardless of this favorable mandatory amortization schedule, we plan to continue to voluntarily pay down our debt with the medium term objective of reducing our net debt to zero.

Key terms of the $450 Million Credit Facility are as follows:

Competitive pricing of LIBOR+ 2.15% to LIBOR+ 2.75% basis a net debt to EBITDA measurement which may be further decreased or increased based on our performance regarding emissions targets
Quarterly revolver commitment reductions of $11.7 million per quarter followed by a balloon of $215.6 million
Favorable covenant package including a minimum liquidity covenant requiring our unrestricted cash and cash equivalents to be the greater of $500,000 per vessel or 5% of total indebtedness, while unused revolver commitments can be used against this measurement
Other customary financial covenants, including a minimum collateral maintenance covenant at 140%, a minimum working capital covenant of not less than zero, and a debt to capitalization covenant of no more than 70%
Vessel replacement feature whereby collateral vessels can be sold or disposed of without prepayment of the loan if a replacement vessel or vessels meeting certain requirements are included as collateral within 360 days of such sale or disposition
No restrictions on dividends other than customary event of default and pro forma financial covenant compliance provisions

Importantly, five of our vessels to be acquired will remain unencumbered and not pledged as collateral for this new facility. This will provide Genco with further flexibility and optionality on a go-forward basis.

As of June 30, 2021, Genco had $367.0 million of debt outstanding, gross of unamortized deferred financing costs. During the first half of 2021, Genco paid down a total of $82.2 million of debt including a prepayment of its scrubber and revolving credit facilities. In July 2021, we paid down an additional $9.4 million of debt. Borrowings under the new credit facility are subject to customary closing conditions.

² Target paydown is based on management’s estimate of expenses and capital expenditures through the end of the year and net revenues based on current fixtures to date, rates under the current forward freight agreement (FFA) curve less 10% and adjusted for the size and specifications of the vessels in our fleet, including vessels under contract from their expected delivery dates, as well as assumed premiums for our scrubber-fitted vessels. We have applied sensitivity to the current FFA curve in using it as an illustrative assumed rate as more conservative than using the unmodified rate. This is not a prediction of rates. Actual rates will vary.

Comprehensive Value Strategy Update

Genco’s comprehensive value strategy is centered on low financial leverage, paying quarterly cash dividends to shareholders based on cash flows after debt service less a reserve, and growth of the Company’s asset base. We believe this strategy will be a key differentiator for the Company and drive shareholder value over the long-term.

Drawing on one of the strongest balance sheets in the industry, Genco has utilized a phased in approach to further reduce its debt and refinance its current credit facilities in order to lower its cash flow breakeven levels and position the Company to pay a sizeable quarterly dividend across diverse market environments. We maintain significant flexibility to grow the fleet through accretive vessel acquisitions. Genco is targeting Q4 2021 results for its anticipated first dividend under its new corporate strategy, which would be payable in Q1 2022.

In implementing this strategy, the Company has taken the following measures to date:

Deleveraging: paid down $82.2 million of debt during the first six months of 2021, or approximately 18% of our outstanding debt
Refinancing: entered into a new global credit facility to increase flexibility, improve key terms and lower cash flow breakeven rates
Growth: agreed to acquire six modern, fuel efficient Ultramaxes since April 2021
Securing revenue: opportunistically fixed various period time charterers to secure cash flows and de-risk recent acquisitions

Vessel	Type	Rate		Duration	Min Expiration
Genco Liberty	Capesize	$	31,000	10-13 months	Feb-22
Baltic Bear	Capesize	$	32,000	10-14 months	Mar-22
Genco Vigilant	Ultramax	$	17,750	11-13 months	Sep-22
Genco Freedom	Ultramax	$	23,375	20-23 months	Mar-23
Baltic Hornet	Ultramax	$	24,000	20-23 months	Apr-23
Baltic Wasp	Ultramax	$	25,500	23-25 months	Jun-23

For the second quarter of 2021, Genco declared a cash dividend of $0.10 per share. This represents an increase of $0.05 per share compared to the previous quarter. Our quarterly dividend policy and declaration and payment of dividends are subject to legally available funds, compliance with applicable law and contractual obligations (including our credit facilities) and the Board of Directors’ determination that each declaration and payment is at the time in the best interests of the Company and its shareholders after its review of our financial performance.

Technical Management Joint Venture

During the third quarter, we plan to establish a new joint venture, GS Shipmanagement Pte. Ltd., owned 50% by Genco and 50% by The Synergy Group to be the new technical manager of our fleet. We expect the creation of this newly formed joint venture will accomplish the following:

Increase visibility and control over vessel operations
Increase fleet-wide fuel efficiency to lower our carbon footprint through an advanced data platform
Unlock potential vessel operating expense savings
Provide a unique and differentiated service to the management of our vessels

Genco currently has eight vessels under the technical management of Synergy, all of which will be transferred to the joint venture in the near term. For the balance of the fleet, notice of withdrawal has been provided to our two other existing ship managers Anglo-Eastern and Wallem Shipmanagement, and we plan to transition technical management of all of our vessels to the joint venture during the next three to five months. Synergy, headquartered in Singapore, provides technical management services to over 375 vessels of all vessel types including drybulk vessels, tankers, LNG vessels, container ships and car carriers with offices in 12 countries and ship routes all over the globe. Synergy’s vast experience across different sectors of shipping, reputation for excellence in all areas of ship management, and focus on innovation as well as sustainability provide strong building blocks for a mutually beneficial partnership.

Genco’s active commercial operating platform and fleet deployment strategy

Overall, we utilize a portfolio approach towards revenue generation through a combination of short-term, spot market employment as well as opportunistically booking longer term coverage. Our fleet deployment strategy currently remains weighted towards short-term fixtures, which provide us with optionality on our sizeable fleet. Our barbell approach towards fleet composition enables Genco to gain exposure to both the major and minor bulk commodities with a fleet whose cargoes carried align with global commodity trade flows. This approach continues to serve us well given the upside experienced in major bulk rates together with the continued improvement and relative stability of minor bulk rates.

Based on current fixtures to date, we estimate the following to be our TCE to date for the third quarter of 2021 on a load-to-discharge basis. Actual rates for the third quarter will vary based upon future fixtures. We have approximately ten Capesize vessels coming open in the coming weeks during this strong market, of which we plan to ballast select vessels to the Atlantic basin.

Capesize: $31,304 for 66% of the owned available Q3 2021 days
Ultramax and Supramax: $25,273 for 75% of the owned available Q3 2021 days
Fleet average: $27,599 for 71% of the owned available Q3 2021 days

Our second quarter of 2021 TCE results by class are listed below.

Capesize: $23,760
Ultramax and Supramax: $19,215
Fleet average: $21,137

Our second quarter TCE represents a 73% increase relative to Q1 2021. Furthermore, our estimated Q3 TCE based on current fixtures is 31% higher than Q2, highlighting our opportunistic and mostly spot oriented approach to fixture activity to capture a rising market. During the second and third quarters, we have selectively booked period time charter coverage for approximately one to two years on two Capesizes and four Ultramax vessels. We view these fixtures as part of our portfolio approach to fixture activity and prudent to take advantage of in the current firm freight rate environment. Specifically, the three Ultramax time charters for two years each were booked to de-risk the purchase of the three Ultramax vessels we agreed to purchase in July 2021 and are expected to result in an unlevered cash-on-cash return of approximately 50% over the two year period.

Fleet Update

Since April 2021, the Company has entered agreements to purchase six modern, fuel efficient Ultramax vessels including our most recent acquisition of three vessels agreed upon in July 2021. We expect to take delivery of these vessels between August 2021 and January 2022. Since December 2020, we have grown our core Ultramax fleet by nine vessels to a total of 15 vessels as we continue to modernize and expand our fleet at an attractive point in the drybulk cycle. A summary of our Ultramax acquisitions since Q2 2021 is below:

Vessel	DWT	Yard Built	Year Built	Expected delivery	T/C Rate		Min Expiration	Max Expiration
Genco Enterprise	63,997	Yangfan	2016	Aug-21
Genco Madeleine	63,166	Dayang	2014	Aug-21	$	11,200	Aug-21	Oct-21
Genco Constellation	63,310	Chengxi	2017	Aug-21	$	12,500	Aug-21	Oct-21
Genco Mayflower	63,371	Chengxi	2017	Aug-21	$	11,500	Sep-21	Nov-21
Genco Mary	61,000	DACKS	2022	Jan-22
Genco Laddey	61,000	DACKS	2022	Jan-22

During the second quarter of 2021, we paid $21.6 million in advances for certain agreed upon vessels. For the third quarter of 2021, we anticipate paying $87.2 million to complete the acquisition of four vessels. Furthermore, in the first quarter of 2022, we expect to pay the remaining $40.8 million to acquire the two DACKS vessels above.

Regarding vessel divestitures, in July 2021 we delivered the Genco Lorraine, a 2009-built 53,000 dwt Supramax, to the new owner. We have also agreed to sell the Genco Provence, the oldest vessel in our fleet, for gross proceeds of $13.25 million. With this sale, we will also avoid drydocking capex scheduled for 2022 of approximately $0.8 million. We expect delivery to occur in the fourth quarter of 2021.

Financial Review: 2021 Second Quarter

The Company recorded net income for the second quarter of 2021 of $32.0 million, or $0.76 and $0.75 basic and diluted earnings per share, respectively. Comparatively, for the three months ended June 30, 2020, the Company recorded a net loss of $18.2 million, or $0.43 basic and diluted net loss per share. Net income for the three months ended June 30, 2021, includes a loss on sale of vessels of $0.02 million.

The Company’s revenues increased to $121.0 million for the three months ended June 30, 2021, as compared to $74.2 million recorded for the three months ended June 30, 2020, primarily due higher rates achieved by both our major and minor bulk vessels, as well as our third party time chartered-in vessels, which was partially offset by the operation of fewer vessels in our fleet. The average daily time charter equivalent, or TCE, rates obtained by the Company’s fleet was $21,137 per day for the three months ended June 30, 2021 as compared to $6,693 per day for the three months ended June 30, 2020. During the second quarter of 2021, drybulk freight rates reached multi-year highs led by increased global economic activity, recovering steel production and augmented demand for drybulk commodities in China as well as the rest of the world. These demand catalysts have been met by limited net fleet growth due to the historically low orderbook as a percentage of the fleet.

Voyage expenses were $36.7 million for the three months ended June 30, 2021 compared to $41.7 million during the prior year period. This decrease was primarily attributable to the operation of fewer vessels in our fleet, partially offset by an increase in bunker consumption. Vessel operating expenses decreased to $18.8 million for the three months ended June 30, 2021 from $21.1 million for the three months ended June 30, 2020, primarily due to fewer owned vessels during the second quarter of 2021 as compared to the second quarter of 2020, partially offset by COVID-19 related expenditures and higher crew related and spare expenses. General and administrative expenses increased to $5.9 million for the second quarter of 2021 compared to $5.5 million for the second quarter of 2020, primarily due to higher legal and professional fees. Depreciation and amortization expenses decreased to $13.8 million for the three months ended June 30, 2021 from $15.9 million for the three months ended June 30, 2020, primarily due to a decrease in depreciation for vessels that were sold during the second half of 2020 and the first half of 2021, as well as a decrease in depreciation for certain vessels in our fleet that were impaired during 2020. These decreases were partially offset by an increase in depreciation expense for the three vessels acquired during Q4 2020 and Q1 2021.

Daily vessel operating expenses, or DVOE, amounted to $5,151 per vessel per day for the second quarter of 2021 compared to $4,366 per vessel per day for the second quarter of 2020. This increase is primarily attributable to COVID-19 related expenditures and higher crew related expenses, as well as higher spares and stores related expenditures. We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Based on estimates provided by our technical managers, our DVOE budget for 2021 is $5,000 per vessel per day on a fleet-wide basis reflecting the larger weighting of our fleet towards Capesize vessels following the sales of smaller Supramax and Handysize vessels as well as an anticipated increase in COVID-19 related expenses. The potential impacts of COVID-19 are beyond our control and are difficult to predict due to uncertainties surrounding the pandemic.

Apostolos Zafolias, Chief Financial Officer, commented, “We are pleased to have entered into a new credit agreement for the global refinancing of our previous credit facilities on favorable terms and appreciate the strong support of our leading bank group. By further strengthening our capital structure, we expect to significantly increase our flexibility for both paying sizeable dividends to shareholders and opportunistically growing our fleet through accretive vessel acquisitions, consistent with our track record. Moreover, we expect our new credit facility to markedly reduce our cash flow breakeven rate, which will further strengthen our industry leading balance sheet. Going forward, we will remain focused on ensuring the strength of our balance sheet through continuing to pay down debt with a medium-term objective of reducing our net debt to zero.”

Financial Review: Six Months 2021

The Company recorded net income of $34.0 million or $0.81 and $0.80 basic and diluted net earnings per share for the six months ended June 30, 2021, respectively. This compares to a net loss of $138.6 million or $3.31 basic and diluted net loss per share for the six months ended June 30, 2020. Net income for the six months ended June 30, 2021 includes a $0.7 million loss on sale of vessels. Net loss for the six months ended June 30, 2020 includes $112.8 million in non-cash vessel impairment charges and a $0.5 million loss on sale of vessels. Revenues increased to $208.6 million for the six months ended June 30, 2021 compared to $172.5 million for the six months ended June 30, 2020, primarily due to higher rates achieved by our fleet as well as our third party time chartered-on vessels, which was partially offset by the operation of fewer vessels in our fleet. Voyage expenses decreased to $71.8 million for the six months ended June 30, 2021 from $90.1 million for the same period in 2020. TCE rates obtained by the Company increased to $16,508 per day for the six months ended June 30, 2021 from $8,251 per day for the six months ended June 30, 2020. Total operating expenses for the six months ended June 30, 2021 and 2020 were $166.0 million and $299.1 million, respectively. Total operating expenses include a loss on sale of vessels of $0.7 million for the six months ending June 30, 2021. For the six months ended June 30, 2020, total operating expenses include $112.8 million in non-cash vessel impairment charges, as well as a loss on sale of vessels of $0.5 million for the six months ending June 30, 2020. General and administrative expenses for the six months ended June 30, 2021 increased to $12.0 million as compared to the $11.2 million in the same period of 2020, due to higher legal and professional fees. DVOE was $5,015 for the year-to-date period in 2021 versus $4,390 in 2020. The increase in daily vessel operating expense was predominantly due to COVID-19 related expenditures and higher crew related expenses, as well higher spares related expenditures. Due to COVID-19 restrictions last year, we were unable to perform our regularly scheduled crew changes, resulting in an abnormally low DVOE for the first half of 2020. EBITDA for the six months ended June 30, 2021 amounted to $70.1 million compared to $(93.5) million during the prior period. During the six months of 2021 and 2020, EBITDA included non-cash impairment charges and gains and losses on sale of vessels as mentioned above. Excluding these items, our adjusted EBITDA would have amounted to $70.9 million and $19.8 million, for the respective periods.

Liquidity and Capital Resources

Cash Flow

Net cash provided by operating activities for the six months ended June 30, 2021 was $62.6 million as compared to net cash used in operating activities of $9.0 million for the six months ended June 30, 2020. This increase in cash provided by operating activities was primarily due to higher rates achieved by our major and minor bulk vessels, changes in working capital, as well as a decrease in drydocking related expenditures and interest expense.

Net cash provided by investing activities for the six months ended June 30, 2021 was $4.2 million as compared to net cash used in investing activities of $0.6 million for the six months ended June 30, 2020. This fluctuation was primarily due to an increase in net proceeds from the sale of vessels during the first half of 2021 as compared to the first half of 2020, as well as a decrease in scrubber related expenditures. These fluctuations were partially offset by an increase in deposits made on three Ultramax vessels that we entered into agreements to purchase during the second quarter of 2021.

Net cash used in financing activities during the six months ended June 30, 2021 and 2020 was $85.2 million and $9.8 million, respectively. The increase was primarily due to an increase in repayments of $45.6 million under the $495 Million Credit Facility and the $133 Million Credit Facility. During the first half of 2021, we made a $21.2 million repayment of the revolver under the $133 Million Credit Facility, and we made a $20.0 million repayment of the scrubber tranche under the $495 Million Credit Facility. Additionally, this increase in net cash used in financing activities was due to the $24.0 million drawdown and $11.3 million drawdown on the $133 Million Credit Facility and the $495 Million Credit Facility, respectively, during the first half of 2020. These increases were partially offset by a $5.1 million decrease in the payment of dividends during the first half of 2021 as compared to the first half of 2020.

Capital Expenditures

We make capital expenditures from time to time in connection with vessel acquisitions. As of August 4, 2021, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, nine Ultramax and 13 Supramax vessels with an aggregate capacity of approximately 4,314,000 dwt and an average age of 10.6 years.

In addition to acquisitions that we may undertake, we will incur additional capital expenditures due to special surveys and drydockings. Furthermore, we plan to upgrade a portion of our fleet with energy saving devices and apply high performance paint systems to our vessels in order to reduce fuel consumption and emissions. We estimate our capital expenditures related to drydocking, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, ballast water treatment system costs, fuel efficiency upgrades and scheduled off-hire days for our fleet for the balance of 2021 and 2022 to be:

	Q3 2021	Q4 2021	2022
Estimated Drydock Costs ⁽¹⁾	$1.5 million	$5.0 million	$8.0 million
Estimated BWTS Costs⁽²⁾	$0.2 million	$2.4 million	$4.0 million
Estimated Fuel Efficiency Upgrade Costs ⁽³⁾	$0.2 million	$4.6 million	$4.7 million
Estimated Offhire Days ⁽⁴⁾	40	110	210

(1) Estimates are based on our budgeted cost of drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed. We expect to fund these costs with cash on hand. These costs do not include drydock expense items that are reflected in vessel operating expenses. Estimated drydocking costs for 2022 exclude the $0.8 million in relation to the agreed upon sale of the Genco Provence.

(2) Estimated costs associated with the installation of ballast water treatment systems is expected to be funded with cash on hand.

(3) Estimated costs associated with the installation of fuel efficiency upgrades are expected to be funded with cash on hand.

(4) Actual length will vary based on the condition of the vessel, yard schedules and other factors. The estimated offhire days per sector scheduled for Q3 2021 consists of 20 days for Ultramaxes and 20 days for Supramaxes. Estimated offhire days for 2022 exclude days related to the Genco Provence due to the vessel’s agreed upon sale.

Summary Consolidated Financial and Other Data

The following table summarizes Genco Shipping & Trading Limited’s selected consolidated financial and other data for the periods indicated below.


				Three Months Ended June 30, 2021			Three Months Ended June 30, 2020			Six Months Ended June 30, 2021			Six Months Ended June 30, 2020
				(Dollars in thousands, except share and per share data)						(Dollars in thousands, except share and per share data)
				(unaudited)						(unaudited)
INCOME STATEMENT DATA:
Revenues:
	Voyage revenues			$	121,008		$	74,206		$	208,599		$	172,542
		Total revenues			121,008			74,206			208,599			172,542

Operating expenses:
	Voyage expenses				36,702			41,695			71,775			90,063
	Vessel operating expenses				18,789			21,058			37,834			42,871
	Charter hire expenses				8,325			1,432			13,761			4,507
	General and administrative expenses (inclusive of nonvested stock amortization				5,854			5,471			11,957			11,238
	expense of $0.6 million, $0.5 million, $1.1 million and $1.0 million , respectively)
	Technical management fees				1,305			1,724			2,769			3,578
	Depreciation and amortization				13,769			15,930			27,209			33,504
	Impairment of vessel assets				–			–			–			112,814
	Loss on sale of vessels				15			–			735			486
		Total operating expenses			84,759			87,310			166,040			299,061

Operating income (loss)					36,249			(13,104	)		42,559			(126,519	)

Other income (expense):
	Other income (expense)				210			120			356			(464	)
	Interest income				48			253			119			847
	Interest expense				(4,470	)		(5,473	)		(9,012	)		(12,418	)
		Other expense, net			(4,212	)		(5,100	)		(8,537	)		(12,035	)

Net income (loss)				$	32,037		$	(18,204	)	$	34,022		$	(138,554	)
Net earnings (loss) per share – basic				$	0.76		$	(0.43	)	$	0.81		$	(3.31	)
Net earnings (loss) per share – diluted				$	0.75		$	(0.43	)	$	0.80		$	(3.31	)
Weighted average common shares outstanding – basic					42,071,019			41,900,901			42,022,669			41,883,629
Weighted average common shares outstanding – diluted					42,612,132			41,900,901			42,445,184			41,883,629


							June 30, 2021			December 31, 2020
BALANCE SHEET DATA (Dollars in thousands):							(unaudited)

Assets
	Current assets:
		Cash and cash equivalents					$	116,280		$	143,872
		Restricted cash						44,606			35,492
		Due from charterers, net						13,912			12,991
		Prepaid expenses and other current assets						11,057			10,856
		Inventories						26,441			21,583
		Vessels held for sale						7,798			22,408
	Total current assets							220,094			247,202

	Noncurrent assets:
		Vessels, net of accumulated depreciation of $228,014 and $204,201, respectively						913,829			919,114
		Deposits on vessels						21,638			–
		Vessels held for exchange						–			38,214
		Deferred drydock, net						13,956			14,689
		Fixed assets, net						5,877			6,393
		Operating lease right-of-use assets						6,192			6,882
		Restricted cash						315			315
		Fair value of derivative instruments						564			–
	Total noncurrent assets							962,371			985,607

	Total assets						$	1,182,465		$	1,232,809

Liabilities and Equity
	Current liabilities:
		Accounts payable and accrued expenses					$	27,256		$	22,793
		Current portion of long-term debt						55,920			80,642
		Deferred revenue						9,375			8,421
		Current operating lease liabilities						1,811			1,765
	Total current liabilities							94,362			113,621

	Noncurrent liabilities
		Long-term operating lease liabilities						7,144			8,061
		Contract liability						–			7,200
		Long-term debt, net of deferred financing costs of $7,418 and $9,653, respectively						303,687			358,933
	Total noncurrent liabilities							310,831			374,194

	Total liabilities							405,193			487,815

	Commitments and contingencies

	Equity:
		Common stock						419			418
		Additional paid-in capital						1,711,523			1,713,406
		Accumulated other comprehensive income						138			–
		Accumulated deficit						(934,808	)		(968,830	)
		Total equity						777,272			744,994
	Total liabilities and equity						$	1,182,465		$	1,232,809


							Six Months Ended June 30, 2021			Six Months Ended June 30, 2020
STATEMENT OF CASH FLOWS (Dollars in thousands):							(unaudited)

Cash flows from operating activities
		Net income (loss)					$	34,022		$	(138,554	)
		Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
		Depreciation and amortization						27,209			33,504
		Amortization of deferred financing costs						2,235			1,909
		Right-of-use asset amortization						690			676
		Amortization of nonvested stock compensation expense						1,073			957
		Impairment of vessel assets						–			112,814
		Loss on sale of vessels						735			486
		Amortization of premium on derivative						111			–
		Interest rate cap premium payment						(240	)		–
		Insurance proceeds for protection and indemnity claims						101			278
		Insurance proceeds for loss of hire claims						–			78
		Change in assets and liabilities:
			(Increase) decrease in due from charterers					(921	)		331
			(Increase) decrease in prepaid expenses and other current assets					(894	)		504
			(Increase) decrease in inventories					(4,858	)		4,174
			Increase (decrease) in accounts payable and accrued expenses					5,028			(17,454	)
			Increase (decrease) in deferred revenue					954			(2,259	)
			Decrease in operating lease liabilities					(871	)		(828	)
			Deferred drydock costs incurred					(1,822	)		(5,593	)
		Net cash provided by (used in) operating activities						62,552			(8,977	)

Cash flows from investing activities
		Purchase of vessels and ballast water treatment systems, including deposits						(24,678	)		(2,275	)
		Purchase of scrubbers (capitalized in Vessels)						(126	)		(10,839	)
		Purchase of other fixed assets						(431	)		(2,716	)
		Net proceeds from sale of vessels						29,096			14,726
		Insurance proceeds for hull and machinery claims						295			484
		Net cash provided by (used in) investing activities						4,156			(620	)

Cash flows from financing activities
		Proceeds from the $133 Million Credit Facility						–			24,000
		Repayments on the $133 Million Credit Facility						(24,320	)		(3,280	)
		Proceeds from the $495 Million Credit Facility						–			11,250
		Repayments on the $495 Million Credit Facility						(57,883	)		(33,321	)
		Cash dividends paid						(2,983	)		(8,126	)
		Payment of deferred financing costs						–			(283	)
		Net cash used in financing activities						(85,186	)		(9,760	)

Net decrease in cash, cash equivalents and restricted cash								(18,478	)		(19,357	)

Cash, cash equivalents and restricted cash at beginning of period								179,679			162,249
Cash, cash equivalents and restricted cash at end of period							$	161,201		$	142,892



				Three Months Ended June 30, 2021
Adjusted Net Income Reconciliation				(unaudited)
Net income				$	32,037
	+		Loss on sale of vessels		15
			Adjusted net income	$	32,052

			Adjusted net earnings per share – basic	$	0.76
			Adjusted net earnings per share – diluted	$	0.75

			Weighted average common shares outstanding – basic		42,071,019
			Weighted average common shares outstanding – diluted		42,612,132

			Weighted average common shares outstanding – basic as per financial statements		42,071,019
			Dilutive effect of stock options		340,072
			Dilutive effect of restricted stock units		201,041
			Weighted average common shares outstanding – diluted as adjusted		42,612,132


				Three Months Ended June 30, 2021			Three Months Ended June 30, 2020			Six Months Ended June 30, 2021			Six Months Ended June 30, 2020
				(Dollars in thousands)						(Dollars in thousands)
EBITDA Reconciliation:				(unaudited)						(unaudited)
	Net income (loss)			$	32,037		$	(18,204	)	$	34,022		$	(138,554	)
	+		Net interest expense		4,422			5,220			8,893			11,571
	+		Depreciation and amortization		13,769			15,930			27,209			33,504
			EBITDA ⁽¹⁾	$	50,228		$	2,946		$	70,124		$	(93,479	)

	+		Impairment of vessel assets		–			–			–			112,814
	+		Loss on sale of vessels		15			–			735			486
			Adjusted EBITDA	$	50,243		$	2,946		$	70,859		$	19,821


				Three Months Ended						Six Months Ended
				June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
FLEET DATA:				(unaudited)						(unaudited)
Total number of vessels at end of period					40			53			40			53
Average number of vessels⁽²⁾					40.1			53.0			41.7			53.7
Total ownership days for fleet⁽³⁾					3,647			4,823			7,544			9,765
Total chartered-in days ⁽⁴⁾					446			248			787			671
Total available days for fleet⁽⁵⁾					4,041			4,892			8,242			10,121
Total available days for owned fleet⁽⁶⁾					3,595			4,643			7,455			9,450
Total operating days for fleet⁽⁷⁾					3,998			4,827			8,120			9,951
Fleet utilization⁽⁸⁾					98.3	%		97.8	%		98.1	%		97.8	%


AVERAGE DAILY RESULTS:
Time charter equivalent⁽⁹⁾				$	21,137		$	6,693		$	16,508		$	8,251
Daily vessel operating expenses per vessel ⁽¹⁰⁾					5,151			4,366			5,015			4,390

				Three Months Ended						Six Months Ended
				June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
FLEET DATA:				(unaudited)						(unaudited)
Ownership days
Capesize					1,547.0			1,547.0			3,077.0			3,094.0
Panamax					–			–			–			64.8
Ultramax					819.0			546.0			1,550.8			1,092.0
Supramax					1,281.5			1,820.0			2,689.2			3,640.0
Handymax					–			–			–			–
Handysize					–			910.0			227.5			1,874.7
Total					3,647.5			4,823.0			7,544.5			9,765.5

Chartered-in days
Capesize					–			–			–			–
Panamax					–			–			–			–
Ultramax					111.7			114.2			344.2			292.5
Supramax					334.2			98.7			442.5			302.8
Handymax					–			–			–			14.5
Handysize					–			35.6			–			60.7
Total					445.9			248.5			786.7			670.6

Available days (owned & chartered-in fleet)
Capesize					1,514.4			1,530.1			3,020.0			3,058.4
Panamax					–			–			–			64.4
Ultramax					930.7			637.2			1,886.4			1,305.6
Supramax					1,595.6			1,782.0			3,107.7			3,753.0
Handymax					–			–			–			14.5
Handysize					–			942.5			227.5			1,924.6
Total					4,040.7			4,891.8			8,241.6			10,120.5

Available days (owned fleet)
Capesize					1,514.4			1,530.1			3,020.0			3,058.4
Panamax					–			–			–			64.4
Ultramax					819.0			523.0			1,542.2			1,013.1
Supramax					1,261.4			1,683.3			2,665.2			3,450.2
Handymax					–			–			–			–
Handysize					–			906.9			227.5			1,863.9
Total					3,594.8			4,643.3			7,454.9			9,450.0

Operating days
Capesize					1,505.6			1,529.6			3,004.8			3,057.8
Panamax					–			–			–			60.1
Ultramax					923.3			635.6			1,874.0			1,303.3
Supramax					1,568.6			1,765.2			3,050.3			3,707.8
Handymax					–			–			–			14.5
Handysize					–			896.7			191.3			1,807.1
Total					3,997.5			4,827.1			8,120.4			9,950.6

Fleet utilization
Capesize					99.1	%		98.9	%		99.3	%		99.4	%
Panamax					–			–			–			92.7	%
Ultramax					99.2	%		99.7	%		98.9	%		99.8	%
Supramax					97.1	%		97.7	%		97.4	%		98.1	%
Handymax					–			–			–			100.0	%
Handysize					–			94.8	%		84.1	%		93.4	%
Fleet average					98.3	%		97.8	%		98.1	%		97.8	%

Average Daily Results:
Time Charter Equivalent
Capesize				$	23,760		$	9,466		$	18,692		$	13,062
Panamax					–			–			–			5,256
Ultramax					19,524			7,848			15,331			7,973
Supramax					19,027			5,301			15,480			5,911
Handymax					–			–			–			–
Handysize					–			3,952			8,008			4,867
Fleet average					21,137			6,693			16,508			8,251

Daily vessel operating expenses
Capesize				$	5,461		$	5,049		$	5,335		$	4,968
Panamax					–			–			–			3,338
Ultramax					4,684			3,829			4,820			4,233
Supramax					4,966			4,190			4,714			4,200
Handymax					–			–			–			–
Handysize					–			3,864			5,541			3,874
Fleet average					5,151			4,366			5,015			4,390

1) EBITDA represents net income (loss) plus net interest expense, taxes, and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in consolidating internal financial statements and it is presented for review at our board meetings. We believe that EBITDA is useful to investors as the shipping industry is capital intensive which often results in significant depreciation and cost of financing. EBITDA presents investors with a measure in addition to net income to evaluate our performance prior to these costs. EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP measure) and should not be considered as an alternative to net income, operating income or any other indicator of a company’s operating performance required by U.S. GAAP. EBITDA is not a measure of liquidity or cash flows as shown in our consolidated statement of cash flows. The definition of EBITDA used here may not be comparable to that used by other companies.
2) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was part of our fleet during the period divided by the number of calendar days in that period.
3) We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
4) We define chartered-in days as the aggregate number of days in a period during which we chartered-in third-party vessels.
5) We define available days as the number of our ownership days and chartered-in days less the aggregate number of days that our vessels are off-hire due to familiarization upon acquisition, repairs or repairs under guarantee, vessel upgrades or special surveys. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.
6) We define available days for the owned fleet as available days less chartered-in days.
7) We define operating days as the number of our total available days in a period less the aggregate number of days that the vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
8) We calculate fleet utilization as the number of our operating days during a period divided by the number of ownership days plus chartered-in days less drydocking days.
9) We define TCE rates as our voyage revenues less voyage expenses and charter hire expenses, divided by the number of the available days of our owned fleet during the period. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts. Our estimated TCE for the third quarter of 2021 is based on fixtures booked to date. Actual results may vary based on the actual duration of voyages and other factors. Accordingly, we are unable to provide, without unreasonable efforts, a reconciliation of estimated TCE for the third quarter to the most comparable financial measures presented in accordance with GAAP.


	Three Months Ended June 30, 2021		Three Months Ended June 30, 2020		Six Months Ended June 30, 2021		Six Months Ended June 30, 2020
Total Fleet	(unaudited)				(unaudited)
Voyage revenues (in thousands)	$	121,008	$	74,206	$	208,599	$	172,542
Voyage expenses (in thousands)		36,702		41,695		71,775		90,063
Charter hire expenses (in thousands)		8,325		1,432		13,761		4,507
		75,981		31,079		123,063		77,972

Total available days for owned fleet		3,595		4,643		7,455		9,450
Total TCE rate	$	21,137	$	6,693	$	16,508	$	8,251

10) We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period.

About Genco Shipping & Trading Limited

Genco Shipping & Trading Limited is a U.S. based drybulk ship owning company focused on the seaborne transportation of commodities globally. We provide a full-service logistics solution to our customers utilizing our in-house commercial operating platform, as we transport key cargoes such as iron ore, grain, steel products, bauxite, cement, nickel ore among other commodities along worldwide shipping routes. Our wholly owned high quality, modern fleet of dry cargo vessels consists of the larger Capesize (major bulk) and the medium-sized Ultramax and Supramax vessels (minor bulk) enabling us to carry a wide range of cargoes. As of August 4, 2021, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, nine Ultramax and 13 Supramax vessels with an aggregate capacity of approximately 4,314,000 dwt and an average age of 10.6 years.

The following table reflects Genco’s fleet list as of August 4, 2021:


	Vessel	DWT	Year Built
Capesize
1	Genco Resolute	181,060	2015
2	Genco Endeavour	181,060	2015
3	Genco Constantine	180,183	2008
4	Genco Augustus	180,151	2007
5	Genco Liberty	180,032	2016
6	Genco Defender	180,021	2016
7	Baltic Lion	179,185	2012
8	Genco Tiger	179,185	2011
9	Genco London	177,833	2007
10	Baltic Wolf	177,752	2010
11	Genco Titus	177,729	2007
12	Baltic Bear	177,717	2010
13	Genco Tiberius	175,874	2007
14	Genco Commodus	169,098	2009
15	Genco Hadrian	169,025	2008
16	Genco Maximus	169,025	2009
17	Genco Claudius	169,001	2010
Ultramax
1	Baltic Hornet	63,574	2014
2	Genco Freedom	63,498	2015
3	Genco Vigilant	63,498	2015
4	Baltic Mantis	63,470	2015
5	Baltic Scorpion	63,462	2015
6	Genco Magic	63,446	2014
7	Baltic Wasp	63,389	2015
8	Genco Weatherly	61,556	2014
9	Genco Columbia	60,294	2016
Supramax
1	Genco Hunter	58,729	2007
2	Genco Auvergne	58,020	2009
3	Genco Rhone	58,018	2011
4	Genco Ardennes	58,018	2009
5	Genco Brittany	58,018	2010
6	Genco Languedoc	58,018	2010
7	Genco Pyrenees	58,018	2010
8	Genco Bourgogne	58,018	2010
9	Genco Aquitaine	57,981	2009
10	Genco Warrior	55,435	2005
11	Genco Predator	55,407	2005
12	Genco Provence	55,317	2004
13	Genco Picardy	55,257	2005

Conference Call Announcement

Genco Shipping & Trading Limited will hold a conference call on Thursday,
August 5, 2021 at 8:30 a.m. Eastern Time to discuss its 2021 second quarter financial results. The conference call and a presentation will be simultaneously webcast and will be available on the Company’s website, www.GencoShipping.com. To access the conference call, dial (323) 289-6581 or (800) 430-8332 and enter passcode 8885406. A replay of the conference call can also be accessed for two weeks by dialing (888) 203-1112 or (719) 457-0820 and entering the passcode 8885406. The Company intends to place additional materials related to the earnings announcement, including a slide presentation, on its website prior to the conference call.

Website Information

We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor Relations section. Accordingly, investors should monitor the Investor Relations portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please click the “Receive E-mail Alerts” link in the Investor Relations section of our website and submit your email address. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as “anticipate,” “budget,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance. These forward-looking statements are based on our management’s current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube oil, bunkers, repairs, maintenance, general and administrative expenses, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete maintenance, repairs, and installation of equipment to comply with applicable regulations on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and freight and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; (xvii) completion of documentation for vessel transactions and the performance of the terms thereof by buyers or sellers of vessels and us; (xviii) the relative cost and availability of low sulfur and high sulfur fuel, worldwide compliance with sulfur emissions regulations that took effect on January 1, 2020 and our ability to realize the economic benefits or recover the cost of the scrubbers we have installed.; (xix) our financial results for the year ending December 31, 2021 and other factors relating to determination of the tax treatment of dividends we have declared; (xx) the financial results we achieve for each quarter that apply to the formula under our new dividend policy, including without limitation the actual amounts earned by our vessels and the amounts of various expenses we incur, as a significant decrease in such earnings or a significant increase in such expenses may affect our ability to carry out our new value strategy; (xxi) the exercise of the discretion of our Board regarding the declaration of dividends, including without limitation the amount that our Board determines to set aside for reserves under our dividend policy; (xxii) our ability to fulfill conditions for borrowings under the $450 Million Credit Facility in order to refinance our $495 Million Credit Facility and our $133 Million Credit Facility; (xxiii) the duration and impact of the COVID-19 novel coronavirus epidemic, which may negatively affect general global and regional economic conditions; our ability to charter our vessels at all and the rates at which are able to do so; our ability to call on or depart from ports on a timely basis or at all; our ability to crew, maintain, and repair our vessels, including without limitation the impact diversion of our vessels to perform crew rotations may have on our revenues, expenses, and ability to consummate vessel sales, expense and disruption to our operations that may arise from the inability to rotate crews on schedule, and delay and added expense we may incur in rotating crews in the current environment; our ability to staff and maintain our headquarters and administrative operations; sources of cash and liquidity; our ability to sell vessels in the secondary market, including without limitation the compliance of purchasers and us with the terms of vessel sale contracts, and the prices at which vessels are sold; and other factors relevant to our business described from time to time in our filings with the Securities and Exchange Commission; (xxiv) completion of definitive documentation for the technical management joint venture we plan to enter into; and (xxv) other factors listed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent reports on Form 8-K and Form 10-Q. Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves. As a result, the amount of dividends actually paid may vary. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:
Apostolos Zafolias
Chief Financial Officer
Genco Shipping & Trading Limited
(646) 443-8550

Source: Genco Shipping & Trading Limited

Release – Salem Media Group Inc. Announces Second Quarter 2021 Total Revenue of $63.8 Million

Posted on August 5, 2021 by Admin

Salem Media Group, Inc. Announces Second Quarter 2021 Total Revenue of $63.8 Million

IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (Nasdaq: SALM) released its results for the three and six months ended June 30, 2021.

Second Quarter 2021 Results

For the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020:

Consolidated

Total revenue increased 20.6% to $63.8 million from $52.9 million;
Total operating expenses increased 8.2% to $58.1 million from $53.8 million;
Operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, depreciation expense and amortization expense (1) increased 9.9% to $55.0 million from $50.1 million;
The company’s operating income was $5.6 million compared to an operating loss of $0.9 million;
The company generated net income of $2.3 million, or $0.08 net income per diluted share compared to a net loss of $2.5 million, or $0.09 net loss per share;
EBITDA (1) increased 235.9% to $9.0 million from $2.7 million;
Adjusted EBITDA (1) increased 212.1% to $8.7 million from $2.8 million; and
Net cash provided by operating activities decreased to $1.0 million from $11.2 million.

Broadcast

Net broadcast revenue increased 18.5% to $46.8 million from $39.5 million;
Station Operating Income (“SOI”) (1) increased 66.6% to $10.6 million from $6.4 million;
Same Station (1) net broadcast revenue increased 18.7% to $46.5 million from $39.1 million; and
Same Station SOI (1) increased 58.7% to $10.6 million from $6.7 million.

Digital Media

Digital media revenue increased 9.5% to $10.3 million from $9.4 million; and
Digital Media Operating Income (1) increased 11.8% to $2.0 million from $1.8 million.

Publishing

Publishing revenue increased 68.3% to $6.7 million from $4.0 million; and
Publishing Operating Income (1) was $0.2 million to compared to an operating loss of $1.6 million.

Included in the results for the quarter ended June 30, 2021 are:

A $0.3 million ($0.2 million, net of tax, or $0.01 per share) net gain on the disposition of assets relates to $0.5 million pre-tax gain on the sale of Singing News Magazine and Singing News Radio offset by an additional $0.1 million pre-tax loss recorded at closing on the sale of radio station WKAT-AM and FM translator in Miami, Florida; and
A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options.

Included in the results for the quarter ended June 30, 2020 are:

A $0.1 million non-cash compensation charge related to the expensing of stock options.

Per share numbers are calculated based on 27,232,423 diluted weighted average shares for the quarter ended June 30, 2021, and 26,683,363 diluted weighted average shares for the quarter ended June 30, 2020.

Year to Date 2021 Results

For the six months ended June 30, 2021 compared to the six months ended June 30, 2020:

Consolidated

Total revenue increased 10.8% to $123.1 million from $111.1 million;
Total operating expenses decreased 13.0% to $113.1 million from $130.0 million;
Operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (1) increased 1.5% to $106.5 million from $104.9 million;
The company had operating income of $10.0 million compared to an operating loss of $18.9 million;
The company generated net income of $2.6 million, or $0.10 net income per diluted share compared to a net loss of $57.7 million, or $2.16 net loss per share;
EBITDA (1) was $16.5 million as compared to a loss of $11.6 million;
Adjusted EBITDA (1) increased 167.5% to $16.7 million from $6.2 million; and
Net cash provided by operating activities decreased 46.2% to $10.2 million from $19.0 million.

Broadcast

Net broadcast revenue increased 7.3% to $90.8 million from $84.7 million;
SOI (1) increased 49.9% to $21.3 million from $14.2 million;
Same station (1) net broadcast revenue increased 7.7% to $90.4 million from $83.9 million; and
Same station SOI (1) increased 44.0% to $21.5 million from $14.9 million.

Digital media

Digital media revenue increased 7.6% to $20.0 million from $18.5 million; and
Digital media operating income (1) increased 14.8% to $2.9 million from $2.6 million.

Publishing

Publishing revenue increased 55.8% to $12.3 million from $7.9 million; and
Publishing Operating Income (1) was $0.7 million compared to an operating loss of $2.7 million.

Included in the results for the six months ended June 30, 2021 are:

A $0.1 million net gain on the disposition of assets relating to a $0.5 million pre-tax gain on the sale of Singing News Magazine and Singing News Radio offset by $0.4 million additional loss recorded at closing on the sale of radio station WKAT-AM and FM translator in Miami, Florida and various fixed asset disposals; and
A $0.2 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options.

Included in the results for the six months ended June 30, 2020 are:

A $17.3 million impairment charge ($12.8 million, net of tax, or $0.48 per share), of which $0.3 million related to impairment of mastheads, and the remainder to broadcast licenses due to the financial impact of the COVID-19 pandemic;
A $0.3 million impairment charge ($0.2 million, net of tax, or $0.01 per share) related to the company’s goodwill; and
A $0.2 million non-cash compensation charge ($0.1 million, net of tax, or $0.01 per share) related to the expensing of stock options.

Per share numbers are calculated based on 27,185,598 diluted weighted average shares for the six months ended June 30, 2021, and 26,683,363 diluted weighted average shares for the six months ended June 30, 2020.

Balance Sheet

As of June 30, 2021, the company had $216.3 million outstanding on the 6.75% senior secured notes due 2024 (the “Notes”), no balance outstanding on the Asset Based Revolving Credit Facility (“ABL Facility”), and $11.2 million outstanding on Paycheck Protection Program (“PPP”) loans from the Small Business Administration (“SBA”).

During July 2021, the SBA forgave all but $20,000 of the loans. The company will record the loan forgiveness in the period in which the loans are forgiven.

Acquisitions and Divestitures

The following transactions were completed since April 1, 2021:

On July 23, 2021, the company sold approximately 34 acres of land in Lewisville, Texas, currently being used as the transmitter site for Company owned radio station KSKY-AM, for $12.1 million in cash. The company will retain enough of the property in the southwest corner of the site to operate the station.
On July 2, 2021, the company acquired SeniorResource.com for $0.1 million of cash.
On July 1, 2021, the company acquired the ShiftWorship.com domain and digital assets for $2.6 million of cash.
On June 1, 2021, the company acquired radio stations KDIA-AM and KDYA-AM in San Francisco, California for $0.6 million in cash.
On May 25, 2021, the company sold Singing News Magazine and Singing News Radio for $0.1 million in cash. The buyer assumed the deferred subscription liabilities of $0.4 million.
On April 28, 2021, the company closed on the acquisition of the Centerline New Media domain and digital assets for $1.3 million of cash.

Pending transactions:

On June 2, 2021, the company entered into an Asset Purchase Agreement (“APA”) to acquire radio station KKOL-AM in Seattle, Washington for $0.5 million. The company paid $0.1 million of cash into an escrow account and began operating the station under a Local Marketing Agreement (“LMA”) on June 7, 2021.
On February 5, 2020, we entered into an APA with Word Broadcasting to sell radio stations WFIA-AM, WFIA-FM and WGTK-AM in Louisville, Kentucky for $4.0 million with credits applied from amounts previously paid, including a portion of the monthly fees paid under a Time Brokerage Agreement (“TBA”). Due to changes in debt markets, the transaction was not funded, and it is uncertain when, or if, the transaction will close. Word Broadcasting continues to program the stations under a TBA that began in January 2017.

Conference Call Information

Salem will host a teleconference to discuss its results on August 4, 2021 at 4:00 p.m. Central Time. To access the teleconference, please dial (877) 524-8416, and then ask to be joined into the Salem Media Group Second Quarter 2021 call or listen via the investor relations portion of the company’s website, located at investor.salemmedia.com. A replay of the teleconference will be available through August 18, 2021 and can be heard by dialing (877) 660-6853, passcode 13720097 or on the investor relations portion of the company’s website, located at investor.salemmedia.com.

Third Quarter 2021 Outlook

For the third quarter of 2021, the company is projecting total revenue to increase between 2% and 4% from third quarter 2020 total revenue of $60.6 million. In the third quarter of 2020 the company had approximately $3.5 million of revenue from political and the Uncle Tom film on SalemNOW. Excluding that revenue, revenue is projected to increase between 9% and 11%. The company is also projecting operating expenses before gains or losses on the sale or disposal of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense to increase between 7% and 10% compared to the third quarter of 2020 non-GAAP operating expenses of $51.0 million.

A reconciliation of non-GAAP operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense to the most directly comparable GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the potential high variability, complexity and low visibility with respect to the charges excluded from this non-GAAP financial measure, in particular, the change in the estimated fair value of earn-out consideration, impairments and gains or losses from the disposition of fixed assets. The company expects the variability of the above charges may have a significant, and potentially unpredictable, impact on its future GAAP financial results.

About Salem Media Group, Inc.

Salem Media Group is America’s leading multimedia company specializing in Christian and conservative content, with media properties comprising radio, digital media and book and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programming focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the Christian and conservative media landscape. Learn more about Salem Media Group, Inc. at www.salemmedia.com, Facebook and Twitter.

Forward-Looking Statements

Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of Salem to close and integrate announced transactions, market acceptance of Salem’s radio station formats, competition from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem’s reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.

(1) Regulation G

Management uses certain non-GAAP financial measures defined below in communications with investors, analysts, rating agencies, banks and others to assist such parties in understanding the impact of various items on its financial statements. The company uses these non-GAAP financial measures to evaluate financial results, develop budgets, manage expenditures and as a measure of performance under compensation programs.

The company’s presentation of these non-GAAP financial measures should not be considered as a substitute for or superior to the most directly comparable financial measures as reported in accordance with GAAP.

Regulation G defines and prescribes the conditions under which certain non-GAAP financial information may be presented in this earnings release. The company closely monitors EBITDA, Adjusted EBITDA, Station Operating Income (“SOI”), Same Station net broadcast revenue, Same Station broadcast operating expenses, Same Station Operating Income, Digital Media Operating Income, Publishing Operating Income (Loss), and operating expenses excluding gains or losses on the disposition of assets, stock-based compensation, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation and amortization, all of which are non-GAAP financial measures. The company believes that these non-GAAP financial measures provide useful information about its core operating results, and thus, are appropriate to enhance the overall understanding of its financial performance. These non-GAAP financial measures are intended to provide management and investors a more complete understanding of its underlying operational results, trends and performance.

The company defines Station Operating Income (“SOI”) as net broadcast revenue minus broadcast operating expenses. The company defines Digital Media Operating Income as net Digital Media Revenue minus Digital Media Operating Expenses. The company defines Publishing Operating Income (Loss) as net Publishing Revenue minus Publishing Operating Expenses. The company defines EBITDA as net income before interest, taxes, depreciation, and amortization. The company defines Adjusted EBITDA as EBITDA before gains or losses on the disposition of assets, before changes in the estimated fair value of contingent earn-out consideration, before impairments, before net miscellaneous income and expenses, before gain on bargain purchase, before (gain) loss on early retirement of long-term debt and before non-cash compensation expense. SOI, Digital Media Operating Income, Publishing Operating Income (Loss), EBITDA and Adjusted EBITDA are commonly used by the broadcast and media industry as important measures of performance and are used by investors and analysts who report on the industry to provide meaningful comparisons between broadcasters. SOI, Digital Media Operating Income, Publishing Operating Income (Loss), EBITDA and Adjusted EBITDA are not measures of liquidity or of performance in accordance with GAAP and should be viewed as a supplement to and not a substitute for or superior to its results of operations and financial condition presented in accordance with GAAP. The company’s definitions of SOI, Digital Media Operating Income, Publishing Operating Income (Loss), EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures reported by other companies.

The company defines Adjusted Free Cash Flow as Adjusted EBITDA less cash paid for capital expenditures, less cash paid for income taxes, and less cash paid for interest. The company considers Adjusted Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by its operations after cash paid for capital expenditures, cash paid for income taxes and cash paid for interest. A limitation of Adjusted Free Cash Flow as a measure of liquidity is that it does not represent the total increase or decrease in its cash balance for the period. The company uses Adjusted Free Cash Flow, a non-GAAP liquidity measure, both in presenting its results to stockholders and the investment community, and in its internal evaluation and management of the business. The company’s presentation of Adjusted Free Cash Flow is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The company’s definition of Adjusted Free Cash Flow is not necessarily comparable to similarly titled measures reported by other companies.

The company defines Same Station net broadcast revenue as broadcast revenue from its radio stations and networks that the company owns or operates in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. The company defines Same Station broadcast operating expenses as broadcast operating expenses from its radio stations and networks that the company owns or operates in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. The company defines Same Station SOI as Same Station net broadcast revenue less Same Station broadcast operating expenses. Same Station operating results include those stations that the company owns or operates in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. Same Station operating results for a full calendar year are calculated as the sum of the Same Station-results for each of the four quarters of that year. The company uses Same Station operating results, a non-GAAP financial measure, both in presenting its results to stockholders and the investment community, and in its internal evaluations and management of the business. The company believes that Same Station operating results provide a meaningful comparison of period over period performance of its core broadcast operations as this measure excludes the impact of new stations, the impact of stations the company no longer owns or operates, and the impact of stations operating under a new programming format. The company’s presentation of Same Station operating results are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The company’s definition of Same Station operating results is not necessarily comparable to similarly titled measures reported by other companies.

For all non-GAAP financial measures, investors should consider the limitations associated with these metrics, including the potential lack of comparability of these measures from one company to another.

The Supplemental Information tables that follow the condensed consolidated financial statements provide reconciliations of the non-GAAP financial measures that the company uses in this earnings release to the most directly comparable measures calculated in accordance with GAAP. The company uses non-GAAP financial measures to evaluate financial performance, develop budgets, manage expenditures, and determine employee compensation. The company’s presentation of this additional information is not to be considered as a substitute for or superior to the directly comparable measures as reported in accordance with GAAP.

Salem Media Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2020			2021			2020			2021
		(Unaudited)
Net broadcast revenue		$	39,470		$	46,783		$	84,650		$	90,831
Net digital media revenue			9,443			10,339			18,547			19,958
Net publishing revenue			3,958			6,660			7,924			12,346
Total revenue			52,871			63,782			111,121			123,135
Operating expenses:
	Broadcast operating expenses		33,094			36,162			70,421			69,505
	Digital media operating expenses		7,653			8,338			15,979			17,011
	Publishing operating expenses		5,567			6,426			10,629			11,631
	Unallocated corporate expenses		3,850			4,192			8,060			8,480
	Change in the estimated fair value of contingent earn-out consideration		3			—			(2	)		—
	Impairment of indefinite-lived long-term assets other than goodwill		—			—			17,254			—
	Impairment of goodwill		—			—			307			—
	Depreciation and amortization		3,558			3,286			7,258			6,456
	Net (gain) loss on the disposition of assets		34			(263	)		113			55
Total operating expenses			53,759			58,141			130,019			113,138
Operating income (loss)			(888	)		5,641			(18,898	)		9,997
Other income (expense):
	Interest income		—			—			—			1
	Interest expense		(4,013	)		(3,935	)		(8,045	)		(7,861	)
	Gain on early retirement of long-term debt		—			—			49			—
	Net miscellaneous income and (expenses)		6			63			(46	)		85
Net income (loss) before income taxes			(4,895	)		1,769			(26,940	)		2,222
Provision for (benefit from) income taxes			(2,380	)		(488	)		30,779			(358	)
Net income (loss)		$	(2,515	)	$	2,257		$	(57,719	)	$	2,580

Basic income (loss) per share Class A and Class B common stock		$	(0.09	)	$	0.08		$	(2.16	)	$	0.10
Diluted income (loss) per share Class A and Class B common stock		$	(0.09	)	$	0.08		$	(2.16	)	$	0.10

Basic weighted average Class A and Class B common stock shares outstanding			26,686,363			26,869,145			26,686,363			26,802,892
Diluted weighted average Class A and Class B common stock shares outstanding			26,683,363			27,232,423			26,683,363			27,185,598

Salem Media Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands)

		December 31, 2020		June 30, 2021
				(Unaudited)
Assets
Cash	$	6,325	$	19,858
Trade accounts receivable, net		24,469		24,568
Other current assets		15,002		11,992
Property and equipment, net		79,122		79,415
Operating and financing lease right-of-use assets		48,355		45,050
Intangible assets, net		347,547		347,019
Deferred financing costs		213		174
Other assets		3,538		3,868
Total assets	$	524,571	$	531,944

Liabilities and Stockholders’ Equity
Current liabilities	$	50,860	$	47,366
Long-term debt		213,764		225,327
Operating and financing lease liabilities, less current portion		47,847		44,131
Deferred income taxes		68,883		68,480
Other liabilities		7,938		8,227
Stockholders’ Equity		135,279		138,413
Total liabilities and stockholders’ equity	$	524,571	$	531,944

SALEM MEDIA GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Dollars in thousands, except share and per share data)

	Class A				Class B
	Common Stock				Common Stock				Additional
									Paid-In		Accumulated			Treasury
	Shares		Amount		Shares		Amount		Capital		Deficit			Stock			Total
Stockholders’ equity, December 31, 2019		23,447,317	$	227		5,553,696	$	56	$	246,680	$	(23,294	)	$	(34,006	)	$	189,663
Stock-based compensation		—		—		—		—		103		—			—			103
Cash distributions		—		—		—		—		—		(667	)		—			(667	)
Net loss		—		—		—		—		—		(55,204	)		—			(55,204	)
Stockholders’ equity, March 31, 2020		23,447,317	$	227		5,553,696	$	56	$	246,783	$	(79,165	)	$	(34,006	)	$	133,895
Distributions per share	$	0.025	—		$	0.025	—		—		—			—			—
Stock-based compensation		—		—		—		—		96		—			—			96
Net loss		—		—		—		—		—		(2,515	)		—			(2,515	)
Stockholders’ equity, June 30, 2020		23,447,317	$	227		5,553,696	$	56	$	246,879	$	(81,680	)	$	(34,006	)	$	131,476

	Class A			Class B
	Common Stock			Common Stock			Additional
							Paid-In		Accumulated			Treasury
	Shares	Amount		Shares	Amount		Capital		Deficit			Stock			Total
Stockholders’ equity, December 31, 2020	23,447,317	$	227	5,553,696	$	56	$	247,025	$	(78,023	)	$	(34,006	)	$	135,279
Stock-based compensation	—		—	—		—		78		—			—			78
Options exercised	185,782		2	—		—		390		—			—			392
Net income	—		—	—		—		—		323			—			323
Stockholders’ equity, March 31, 2021	23,633,099	$	229	5,553,696	$	56	$	247,493	$	(77,700	)	$	(34,006	)	$	136,072

Stock-based compensation	—		—	—		—		84		—			—			84
Net income	—		—	—		—		—		2,257			—			2,257
Stockholders’ equity, June 30, 2021	23,633,099	$	229	5,553,696	$	56	$	247,577	$	(75,443	)	$	(34,006	)	$	138,413

SALEM MEDIA GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2021			2020			2021
OPERATING ACTIVITIES
Net income (loss)	$	(2,515	)	$	2,257		$	(57,719	)	$	2,580
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Non-cash stock-based compensation		96			84			199			162
Depreciation and amortization		3,558			3,287			7,258			6,456
Amortization of deferred financing costs		234			213			461			426
Non-cash lease expense		2,212			2,186			4,464			4,348
Provision for bad debts		1,721			(30	)		3,621			(325	)
Deferred income taxes		(2,455	)		(591	)		30,629			(403	)
Impairment of indefinite-lived long-term assets other than goodwill		—			—			17,254			—
Impairment of goodwill		—			—			307			—
Change in the estimated fair value of contingent earn-out consideration		3			—			(2	)		—
Net (gain) loss on the disposition of assets		34			(263	)		113			55
Gain on early retirement of long-term debt		—			—			(49	)		—
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue		3,111			(2,128	)		5,530			421
Inventories		(60	)		(131	)		10			(224	)
Prepaid expenses and other current assets		684			431			97			(319	)
Accounts payable and accrued expenses		(2,758	)		(2,037	)		1,720			453
Operating lease liabilities		(996	)		(2,433	)		(3,403	)		(4,931	)
Contract liabilities		7,134			188			7,267			1,310
Deferred rent income		(67	)		(59	)		(151	)		111
Other liabilities		1,198			5			1,204			35
Income taxes payable		98			21			155			42
Net cash provided by (used in) operating activities	$	11,232		$	1,000		$	18,965		$	10,197
INVESTING ACTIVITIES
Cash paid for capital expenditures net of tenant improvement allowances		(938	)		(2,135	)		(2,525	)		(3,994	)
Capital expenditures reimbursable under tenant improvement allowances and trade agreements		(10	)		(19	)		(94	)		(19	)
Deposit on broadcast assets and radio station acquisitions		—			—			—			(100	)
Purchases of broadcast assets and radio stations		—			(600	)		—			(600	)
Purchases of digital media businesses and assets		—			(1,300	)		—			(1,300	)
Proceeds from sale of assets		186			126			188			3,627
Other		2,407			(576	)		1,979			(814	)
Net cash provided by (used in) investing activities	$	1,645		$	(4,504	)	$	(452	)	$	(3,200	)
FINANCING ACTIVITIES
Payments to repurchase 6.75% Senior Secured Notes		—			—			(3,392	)		—
Proceeds from borrowings under ABL Facility		5,030			—			38,349			16
Payments on ABL Facility		(30	)		—			(31,775	)		(5,016	)
Proceeds from borrowings under PPP Loans		—			—			—			11,195
Payments of debt issuance costs		(65	)		(16	)		(66	)		(19	)
Proceeds from the exercise of stock options		—			—			—			392
Payments on financing lease liabilities		(17	)		(16	)		(35	)		(32	)
Payment of cash distribution on common stock		—			—			(667	)		—
Book overdraft		—			—			(1,885	)		—
Net cash provided by (used in) financing activities	$	4,918		$	(32	)	$	529		$	6,536
Net increase (decrease) in cash and cash equivalents	$	17,795		$	(3,536	)	$	19,042		$	13,533
Cash and cash equivalents at beginning of year		1,253			23,394			6			6,325
Cash and cash equivalents at end of period	$	19,048		$	19,858		$	19,048		$	19,858

Salem Media Group, Inc.
Supplemental Information
(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2021			2020			2021
	(Unaudited)
Reconciliation of Total Operating Expenses to Operating Expenses excluding Gains or Losses on the Disposition of Assets, Stock-based Compensation Expense, Changes in the Estimated Fair Value of Contingent Earn-out Consideration, Impairments and Depreciation and Amortization Expense (Recurring Operating Expenses)
Operating Expenses	$	53,759		$	58,141		$	130,019		$	113,138
Less depreciation and amortization expense		(3,558	)		(3,286	)		(7,258	)		(6,456	)
Less change in estimated fair value of contingent earn-out consideration		(3	)		—			2			—
Less impairment of indefinite-lived long-term assets other than goodwill		—			—			(17,254	)		—
Less impairment of goodwill		—			—			(307	)		—
Less net gain (loss) on the disposition of assets		(34	)		263			(113	)		(55	)
Less stock-based compensation expense		(96	)		(84	)		(199	)		(162	)
Total Recurring Operating Expenses	$	50,068		$	55,034		$	104,890		$	106,465

Reconciliation of Net Broadcast Revenue to Same Station Net Broadcast Revenue
Net broadcast revenue	$	39,470		$	46,783		$	84,650		$	90,831
Net broadcast revenue – acquisitions		—			(79	)		—			(79	)
Net broadcast revenue – dispositions		(220	)		(42	)		(443	)		(38	)
Net broadcast revenue – format change		(104	)		(205	)		(280	)		(345	)
Same Station net broadcast revenue	$	39,146		$	46,457		$	83,927		$	90,369

Reconciliation of Broadcast Operating Expenses to Same Station Broadcast Operating Expenses
Broadcast operating expenses	$	33,094		$	36,162		$	70,421		$	69,505
Broadcast operating expenses – acquisitions		—			(38	)		—			(38	)
Broadcast operating expenses – dispositions		(379	)		(79	)		(881	)		(185	)
Broadcast operating expenses – format change		(259	)		(206	)		(519	)		(384	)
Same Station broadcast operating expenses	$	32,456		$	35,839		$	69,021		$	68,898

Reconciliation of SOI to Same Station SOI
Station Operating Income	$	6,376		$	10,621		$	14,229		$	21,326
Station operating (income) loss – acquisitions		—			(41	)		—			(41	)
Station operating loss – dispositions		159			37			438			147
Station operating loss – format change		155			1			239			39
Same Station – Station Operating Income	$	6,690		$	10,618		$	14,906		$	21,471

Salem Media Group, Inc.
Supplemental Information
(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2021			2020			2021
	(Unaudited)
Calculation of Station Operating Income, Digital Media Operating Income and Publishing Operating Income (Loss)
Net broadcast revenue	$	39,470		$	46,783		$	84,650		$	90,831
Less broadcast operating expenses		(33,094	)		(36,162	)		(70,421	)		(69,505	)
Station Operating Income	$	6,376		$	10,621		$	14,229		$	21,326

Net digital media revenue	$	9,443		$	10,339		$	18,547		$	19,958
Less digital media operating expenses		(7,653	)		(8,338	)		(15,979	)		(17,011	)
Digital Media Operating Income	$	1,790		$	2,001		$	2,568		$	2,947

Net publishing revenue	$	3,958		$	6,660		$	7,924		$	12,346
Less publishing operating expenses		(5,567	)		(6,426	)		(10,629	)		(11,631	)
Publishing Operating Income (Loss)	$	(1,609	)	$	234		$	(2,705	)	$	715

The company defines EBITDA (1) as net income before interest, taxes, depreciation, and amortization. The table below presents a reconciliation of EBITDA (1) to Net Income (Loss), the most directly comparable GAAP measure. EBITDA (1) is a non-GAAP financial performance measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP. The company defines Adjusted EBITDA (1) as EBITDA (1) before gains or losses on the disposition of assets, before changes in the estimated fair value of contingent earn-out consideration, before impairments, before net miscellaneous income and expenses, before (gain) loss on early retirement of long-term debt and before non-cash compensation expense. The table below presents a reconciliation of Adjusted EBITDA (1) to Net Income (Loss), the most directly comparable GAAP measure. Adjusted EBITDA (1) is a non-GAAP financial performance measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.


	Three Months Ended June 30,						Six Months Ended June 30,
	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2021			2020			2021
	(Unaudited)
Net income (loss)	$	(2,515	)	$	2,257		$	(57,719	)	$	2,580
Plus interest expense, net of capitalized interest		4,013			3,935			8,045			7,861
Plus provision for (benefit from) income taxes		(2,380	)		(488	)		30,779			(358	)
Plus depreciation and amortization		3,558			3,286			7,258			6,456
Less interest income		—			—			—			(1	)
EBITDA	$	2,676		$	8,990		$	(11,637	)	$	16,538
Less net (gain) loss on the disposition of assets		34			(263	)		113			55
Less change in the estimated fair value of contingent earn-out consideration		3			—			(2	)		—
Plus impairment of indefinite-lived long-term assets other than goodwill		—			—			17,254			—
Plus impairment of goodwill		—			—			307			—
Plus (gain) on early retirement of long- term debt		—			—			(49	)		—
Plus net miscellaneous (income) and expenses		(6	)		(63	)		46			(85	)
Plus non-cash stock-based compensation		96			84			199			162
Adjusted EBITDA	$	2,803		$	8,748		$	6,231		$	16,670

The company defines Adjusted Free Cash Flow (1) as Adjusted EBITDA (1) less cash paid for capital expenditures, less cash paid for income taxes, and less cash paid for interest. The company considers Adjusted Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by its operations after cash paid for capital expenditures, cash paid for income taxes and cash paid for interest. A limitation of Adjusted Free Cash Flow as a measure of liquidity is that it does not represent the total increase or decrease in its cash balance for the period. The company uses Adjusted Free Cash Flow, a non-GAAP liquidity measure, both in presenting its results to stockholders and the investment community, and in its internal evaluation and management of the business. The company’s presentation of Adjusted Free Cash Flow is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The company’s definition of Adjusted Free Cash Flow is not necessarily comparable to similarly titled measures reported by other companies.

The table below presents a reconciliation of Adjusted Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP measure. Adjusted Free Cash Flow is a non-GAAP liquidity measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.

Salem Media Group, Inc.
Supplemental Information
(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2021			2020			2021
	(Unaudited)
Net cash provided by operating activities	$	11,232		$	1,000		$	18,965		$	10,197
Non-cash stock-based compensation		(96	)		(84	)		(199	)		(162	)
Depreciation and amortization		(3,558	)		(3,287	)		(7,258	)		(6,456	)
Amortization of deferred financing costs		(234	)		(213	)		(461	)		(426	)
Non-cash lease expense		(2,212	)		(2,186	)		(4,464	)		(4,348	)
Provision for bad debts		(1,721	)		30			(3,621	)		325
Deferred income taxes		2,455			591			(30,629	)		403
Change in the estimated fair value of contingent earn-out consideration		(3	)		—			2			—
Impairment of indefinite-lived long-term assets other than goodwill		—			—			(17,254	)		—
Impairment of goodwill		—			—			(307	)		—
Net gain (loss) on the disposition of assets		(34	)		263			(113	)		(55	)
Gain on early retirement of long-term debt		—			—			49			—
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue		(3,111	)		2,128			(5,530	)		(421	)
Inventories		60			131			(10	)		224
Prepaid expenses and other current assets		(684	)		(431	)		(97	)		319
Accounts payable and accrued expenses		2,758			2,037			(1,720	)		(453	)
Contract liabilities		(7,134	)		(188	)		(7,267	)		(1,310	)
Operating lease liabilities (deferred rent)		996			2,433			3,403			4,931
Deferred rent revenue		67			59			151			(111	)
Other liabilities		(1,198	)		(5	)		(1,204	)		(35	)
Income taxes payable		(98	)		(21	)		(155	)		(42	)
Net income (loss)	$	(2,515	)	$	2,257		$	(57,719	)	$	2,580
Plus interest expense, net of capitalized interest		4,013			3,935			8,045			7,861
Plus provision for (benefit from) income taxes		(2,380	)		(488	)		30,779			(358	)
Plus depreciation and amortization		3,558			3,286			7,258			6,456
Less interest income		—			—			—			(1	)
EBITDA	$	2,676		$	8,990		$	(11,637	)	$	16,538
Plus net (gain) loss on the disposition of assets		34			(263	)		113			55
Plus change in the estimated fair value of contingent earn-out consideration		3			—			(2	)		—
Plus impairment of indefinite-lived long-term assets other than goodwill		—			—			17,254			—
Plus impairment of goodwill		—			—			307			—
Plus (gain) on the early retirement of long-term debt		—			—			(49	)		—
Plus net miscellaneous (income) and expenses		(6	)		(63	)		46			(85	)
Plus non-cash stock-based compensation		96			84			199			162
Adjusted EBITDA	$	2,803		$	8,748		$	6,231		$	16,670
Less net cash paid for capital expenditures (1)		(938	)		(2,135	)		(2,525	)		(3,994	)
Less cash received (paid for) taxes		23			(82	)		5			(3	)
Less cash paid for interest, net of capitalized interest		(7,439	)		(7,808	)		(7,604	)		(7,861	)
Adjusted Free Cash Flow	$	(5,551	)	$	(1,277	)	$	(3,893	)	$	4,812

(1) Net cash paid for capital expenditures reflects actual cash payments net of cash reimbursements under tenant improvement allowances and net of property and equipment acquired in trade transactions.

Selected Debt Data		Outstanding at	Applicable Interest Rate
Selected Debt Data		June 30, 2021	Applicable Interest Rate
Senior Secured Notes due 2024 (1)	$	216,341,000	6.75%
Asset-based revolving credit facility (2)	$	—	—%
Small Business Administration Paycheck Protection Program loans (3)	$	11,194,895	1.00%
(1) $216.3 million notes with semi-annual interest payments at an annual rate of 6.75%.
(2) Outstanding borrowings under the ABL Facility, with interest spread ranging from Base Rate plus 0.50% to 1.00% for base rate borrowings and LIBOR plus 1.50% to 2.00% for LIBOR rate borrowings.
(3) The PPP loans accrue interest at 1% annually and mature in five years for any amount that is not forgiven.

Company Contact:
Evan D. Masyr
Executive Vice President and Chief
Financial Officer
(805) 384-4512
evan@salemmedia.com

Source: Salem Media Group, Inc.

Cumulus Media Inc. (CMLS) – Fixed Cost Reduction in 2022 Is A Big Deal

Posted on August 5, 2021 by Admin

Thursday, August 05, 2021

Cumulus Media Inc. (CMLS)
Fixed Cost Reduction in 2022 Is A Big Deal

CUMULUS MEDIA, Inc. (NASDAQ: CMLS) is a leading audio-first media and entertainment company delivering premium content to over a quarter billion people every month — wherever and whenever they want it. CUMULUS MEDIA engages listeners with high-quality local programming through 428 owned-and-operated stations across 87 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYS, the American Country Music Awards, and many other world-class partners across nearly 8,000 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. CUMULUS MEDIA provides advertisers with local impact and national reach through on-air, digital, mobile, and voice-activated media solutions, as well as access to integrated digital marketing services, powerful influencers, and live event experiences. CUMULUS MEDIA is the only audio media company to provide marketers with local and national advertising performance guarantees.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Q2 overachieves EBITDA expectations. Second quarter revenues were roughly in line with expectations, $224.7 million versus our $221.3 million estimate. But, the company exceeded our adj. EBITDA expectations, $36.9 million versus our $24.6 million, on significantly lower than expected costs.

Expense cuts provides cash flow visibility. Management guided full year 2022 adj. EBITDA to a range of $175 million to $200 million, above our $149 million estimate. Management indicated that it will achieve $70 million in fixed cost savings in 2022 versus the previous guidance of $50 million. We are raising our full year 2021 and our full year 2022 adj. EBITDA estimates, while largely maintaining …

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.

DLH Holdings Corp. (DLHC) – In-line Fiscal Third Quarter

Posted on August 5, 2021 by Admin

Thursday, August 05, 2021

DLH Holdings Corp. (DLHC)
In-line Fiscal Third Quarter

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

3QFY21 Results. Revenue totaled $61.6 million, up from $51.4 million in 3Q20. Irving Burton contributed $7.3 million to revenue, while organic revenue grew as work increased across other DLH programs. Earnings were $2.9 million, or $0.21 per diluted share, compared to $2.1 million, or $0.16 per diluted share last year. We had projected revenue of $62 million and EPS of $0.20.

Backlog. Quarter-end backlog was $566.2 million, down from $688.4 million as of September 30, 2020. Funded backlog was $76.4 million. Given the expansion of its capabilities, we expect DLH to be aggressive on bidding for a wider range of opportunities than historically. We view this positively …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

enCore Energy Corp. (ENCUF)(EU:CA) – enCore Signs Uranium Sales Agreement

Posted on August 5, 2021 by Admin

Thursday, August 05, 2021

enCore Energy Corp. (ENCUF)(EU:CA)
enCore Signs Uranium Sales Agreement

enCore Energy Corp together with its subsidiary, is engaged in the acquisition and exploration of resource properties. The company holds the Marquez project in New Mexico as well as the dominant land position in Arizona with additional other properties in Utah and Wyoming. The firm also owns or has access to North American and global uranium data including the Union Carbide, US Smelting and Refining, UV Industries, and Rancher’s Exploration databases in addition to a collection of geophysical data for the high-grade Northern Arizona Breccia Pipe District.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

enCore Energy executed a 5-year sales agreement with UG USA, Inc. The agreement covers 2 million pounds of U3O8, or 400,000 lbs annually. On July 30, enCore announced commencement of refurbishment and upgrade of the Rosita processing plant in southern Texas for completion in 2022-2Q. On April 6, it announced the acquisition of 200,000 lbs. of U3O8. We expect enCore to fulfill its sales agreement with production at the Rosita plant and through the sale of inventory.

The agreement represents about half of Rosita’s production capacity. The Rosita plant has the capacity and licensing to process 800,000 lbs. of uranium per year, perhaps more if the plant is expanded during renovation. As such, the agreement covers about half of the plant’s capacity. The area surrounding Rosita has more than 600,000 lbs. of proven uranium, an amount that will expand with recent …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Genco Shipping Trading Limited (GNK) – In Line Quarter and New Acquisitions Have Positive Impact

Posted on August 5, 2021 by Admin

Thursday, August 05, 2021

Genco Shipping & Trading Limited (GNK)
In Line Quarter and New Acquisitions Have Positive Impact

Genco Shipping & Trading Limited, incorporated on September 27, 2004, transports iron ore, coal, grain, steel products and other drybulk cargoes along shipping routes through the ownership and operation of drybulk carrier vessels. The Company is engaged in the ocean transportation of drybulk cargoes around the world through the ownership and operation of drybulk carrier vessels. As of December 31, 2016, its fleet consisted of 61 drybulk carriers, including 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 4,735,000 deadweight tons (dwt). Of the vessels in its fleet, 15 are on spot market-related time charters, and 27 are on fixed-rate time charter contracts. As of December 31, 2016, additionally, 19 of the vessels in its fleet were operating in vessel pools.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q2021 EBITDA of $50.6 million and TCE rates of $21.1k/day in line with estimates. Call with management today at 8:30am EST and number is 323-289-6581. Three new Ultra acquisitions and another Supra sale were announced. Also, a new $450 million credit facility (term loan of $150 million and revolver of $300 million) has been lined up. We expect the call will highlight solid 3Q2021 forward cover and good progress on shifting toward the new capital allocation strategy that includes paying variable dividends in 1Q2022.

Increasing 2021 EBITDA estimate to $203 million based on TCE rates of $20.7k/day from $200 million and TCE rates of $20.2k/day. 3Q2021 forward cover is high with Capes 66% booked at $31.3k/day and Ultras/Supras 75% booked at $25.3k/day. Three new time charters signed, but visibility is limited beyond one quarter out …

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Grindrod Shipping (GRIN) – Webcast With CEO Reinforces Positive Stance

Posted on August 5, 2021 by Admin

Thursday, August 05, 2021

Grindrod Shipping (GRIN)
Webcast With CEO Reinforces Positive Stance

Grindrod Shipping, originated in South Africa with roots dating back to 1910. The company is based in Singapore, with offices around the world including, London, Durban, Cape Town, Tokyo and Rotterdam. Its primary listing is on Nasdaq and secondary listing on the JSE.

Grindrod Shipping owns and operates a diversified fleet of owned, long-term chartered and joint-venture dry-bulk and liquid-bulk vessels across the globe.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Capital Link sponsored web cast reinforced our positive stance on GRIN and the dry bulk market. In yesterday’s presentation, CEO Martyn Wade stated again that dry market fundamentals are staying better than expected and shippers remain focused on “just in case” instead of “just in time”. Supply/demand fundamentals remain favorable and TCE rate performance was solid in 1H2021. 2H2021 is off to a good start and the dry bulk market remains firm. Demand has rebounded on the back of global stimulus packages and solid secular minor bulk trends.

IVS Bulk joint venture interest of 31.1% acquisition for $46.3 million was very attractive move. The move effectively expands the fleet by ~3.7 vessels and eliminates the last jv interest. Pricing based on May 13th appraisal and April 30th financials, and interim improvement captured by GRIN. Combo of IVS Bulk cash, a new credit line of $23 million to redeem IVS Bulk preferred and GRIN cash after …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

The GEO Group Inc. (GEO) – A Second Quarter Beat

Posted on August 5, 2021 by Admin

Thursday, August 05, 2021

The GEO Group, Inc. (GEO)
A Second Quarter Beat

With over 94,000 beds owned, leased or managed across its business lines and serving over 260,000 people daily, GEO is a leading provider of mission critical real estate to its governmental partners. The Company is the first fully integrated equity REIT specializing in the design, financing, development, and operation of secure facilities, processing centers, and community reentry centers in the U.S., Australia, South Africa, and the U.K.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q21 Results. The GEO Group reported better-than-expected second quarter 2021 results. Total revenue for the quarter was $565.4 million compared to guidance of $558-$563 million and consensus of $561 million. We were at $563 million. GEO reported net income of $42 million, or $0.29 per diluted share, compared to guidance of $35-$38 million. Consensus was $0.28 and we were at $0.30. Adjusted earnings was $50.8 million or $0.42 per share.

Favorable Cost Trends. As with the first quarter, the earnings beat was driven by favorable cost trends, especially in the Secure Services business. Operating expenses as a percentage of revenue dropped to 71.6% from 74.3% in the first quarter. G&A as a percent of revenue rose to 9.7% sequentially from 8.41% due to $7.5 million of one-time restructuring charges. AFFO in the second quarter was $0.70 …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Release – Gray Reports Second Quarter Operating Results

Posted on August 5, 2021 by Admin

Gray Reports Second Quarter Operating Results

ATLANTA, Aug. 05, 2021 (GLOBE NEWSWIRE) — Gray Television, Inc. (“Gray,” “we,” “us” or “our”) (NYSE: GTN) today announced financial results for the second quarter ended June 30, 2021. We experienced strong momentum in the first half of 2021 that we believe will continue throughout the remainder of the year. Key financial results were as follows:

Revenue of $547 million, an increase of $96 million, or 21%, compared to the second quarter of 2020. The primary components of revenue were: combined local and national broadcast advertising revenue of $279 million and retransmission consent revenue of $242 million. Our retransmission consent revenue in the second quarter was slightly less than we had expected due to the timing of certain adjustments that will positively impact our retransmission consent revenue in the third quarter of 2021.
Net income attributable to common stockholders for the second quarter of 2021 was $26 million, or $0.27 per diluted share.
Broadcast Cash Flow was $183 million for the second quarter of 2021, increasing $60 million, or 49%, from the second quarter of 2020. Our Adjusted EBITDA for the second quarter of 2021 was $170 million, increasing $62 million, or 57%, compared to the second quarter of 2020.
In the second quarter of 2021, our combined local and national broadcast revenue, excluding political advertising revenue (“Total Core Revenue”), increased by $81 million, or 41% compared to the second quarter of 2020. Revenue and Total Core Revenue increased as advertiser demand returned in the improving macroeconomic environment. Gray’s Total Core Revenue in the second quarter of 2021 was nearly the same as the second quarter of 2019, the most recent non-political and pre-pandemic year.
As of June 30, 2021, our total leverage ratio, as defined in our senior credit facility, was 3.92 times on a trailing eight-quarter basis after netting our total cash on hand of $785 million and after giving effect to all Transaction Related Expenses (as defined below). As of June 30, 2021, the amount available under our revolving credit facility was $299 million. We are not subject to any maintenance covenants in our credit facilities at this time.
On August 2, 2021, we acquired all outstanding shares of Quincy Media, Inc. (“Quincy”) for $925 million in cash (the “Quincy Transaction”). Simultaneously, we completed the divestiture to Allen Media Broadcasting (“Allen”) of certain television stations in the seven markets in which we currently operate, for $380 million in cash, before taxes (the “Allen Transaction”), in order to facilitate regulatory approvals for the Quincy Transaction. We expect that, net of divestitures, the Quincy transaction will be immediately accretive to our free cash flow.
On May 3, 2021, we agreed to acquire all outstanding shares of Meredith Corporation (“Meredith”) subject to and immediately after the spinoff of Meredith’s National Media Group to the current Meredith shareholders (the “Meredith Transaction”). The agreement was amended on June 2, 2021 to revise the purchase consideration to $16.99 per share in cash, or $2.825 billion in total enterprise value. At the closing, Gray will acquire Meredith’s 17 television stations in 12 local markets, adding 11 new markets to our operations. To facilitate regulatory approvals for the Meredith Transaction, on July 14, 2021, we agreed to divest our existing television station WJRT (ABC) in the Flint-Saginaw, Michigan market, to Allen for $70 million in cash, before taxes. The Meredith Transaction is subject to approval by Meredith’s shareholders and customary closing conditions and regulatory approvals, including certain consents necessary to effectuate the spin-off of Meredith’s National Media Group immediately prior to closing. We expect to close the Meredith Transaction in the fourth quarter of 2021, and to close the sale of WJRT prior to the Meredith Transaction closing. We expect that, net of divestitures, the Meredith Transaction will be immediately accretive to our Free Cash Flow.
On April 7, 2021, we acquired land in the Atlanta suburb of Doraville, Georgia for approximately $80 million. We intend to use this property, in part, for future studio production facilities.

Selected Operating Data (unaudited), dollars in millions:
	Three Months Ended June 30,
					% Change				% Change
					2021 to				2021 to
	2021		2020		2020		2019		2019
Revenue (less agency commissions):
Broadcasting	$	537	$	449	20	%	$	499	8	%
Production companies	10		2		400	%	9		11	%
Total revenue	$	547	$	451	21	%	$	508	8	%

Political advertising revenue	$	6	$	21	(71	)%	$	5	20	%

Operating expenses (1):
Broadcasting	$	354	$	324	9	%	$	314	13	%
Production companies	$	9	$	5	80	%	$	9	0	%
Corporate and administrative	$	25	$	17	47	%	$	21	19	%

Net income	$	39	$	11	255	%	$	44	(11	)%

Non-GAAP cash flow (2):
Broadcast Cash Flow	$	183	$	123	49	%	$	185	(1	)%
Broadcast Cash Flow Less
Cash Corporate Expenses	$	161	$	108	49	%	$	166	(3	)%
Free Cash Flow	$	34	$	35	(3	)%	$	69	(51	)%

	Six Months Ended June 30,
					% Change				% Change
					2021 to				2021 to
	2021		2020		2020		2019		2019
Revenue (less agency commissions):
Broadcasting	$	1,067	$	964	11	%	$	980	9	%
Production companies	24		21		14	%	46		(48	)%
Total revenue	$	1,091	$	985	11	%	$	1,026	6	%

Political advertising revenue	$	15	$	57	(74	)%	$	8	88	%

Operating expenses (1):
Broadcasting	$	715	$	659	8	%	$	670	7	%
Production companies	$	26	$	24	8	%	$	44	(41	)%
Corporate and administrative	$	43	$	32	34	%	$	69	(38	)%

Net income	$	78	$	64	22	%	$	26	200	%

Non-GAAP cash flow (2):
Broadcast Cash Flow	$	351	$	304	15	%	$	308	14	%
Broadcast Cash Flow Less
Cash Corporate Expenses	$	314	$	276	14	%	$	244	29	%
Free Cash Flow	$	112	$	120	(7	)%	$	73	53	%

(1) Excludes depreciation, amortization and gain on disposal of assets.
(2) See definition of non-GAAP terms and a reconciliation of the non-GAAP amounts to net income included elsewhere herein.

Results of Operations for the Second Quarter of 2021, dollars in millions:

	Three Months Ended June 30,
	2021				2020				Amount			Percent
			Percent				Percent		Increase			Increase
	Amount		of Total		Amount		of Total		(Decrease)			(Decrease)
Revenue (less agency commissions):
Local (including internet/digital/mobile)	$	222	41	%	$	162	36	%	$	60		37	%
National	57		10	%	36		8	%	21			58	%
Political	6		1	%	21		5	%	(15		)	(71	)%
Retransmission consent	242		44	%	220		49	%	22			10	%
Production companies	10		2	%	2		0	%	8			400	%
Other	10		2	%	10		2	%	–			0	%
Total	$	547	100	%	$	451	100	%	$	96		21	%

Combined local and national revenue
(“Total Core Revenue”)	$	279	51	%	$	198	44	%	$	81		41	%

	Three Months Ended June 30,
	2021				2020				Amount		Percent
			Percent				Percent		Increase		Increase
	Amount		of Total		Amount		of Total		(Decrease)		(Decrease)

Operating expenses (before
depreciation, amortization and gain on disposal of assets):
Broadcasting:
Station expenses	$	209	59	%	$	199	62	%	$	10	5	%
Retransmission expense	144		41	%	124		38	%	20		16	%
Transaction Related Expenses	–		0	%	–		0	%	–
Non-cash stock-based compensation	1		0	%	1		0	%	–		0	%
Total broadcasting expense	$	354	100	%	$	324	100	%	$	30	9	%

Production companies expense	$	9			$	5			$	4	80	%

Corporate and administrative:
Corporate expenses	$	15	60	%	$	15	88	%	$ –		0	%
Transaction Related Expenses	7		28	%	–		0	%	7
Non-cash stock-based compensation	3		12	%	2		12	%	1		50	%
Total corporate and
administrative expense	$	25	100	%	$	17	100	%	$	8	47	%

Results of Operations for the Six-Month Period Ended June 30, 2021, dollars in millions:

	Six Months Ended June 30,
	2021				2020				Amount			Percent
			Percent				Percent		Increase			Increase
	Amount		of Total		Amount		of Total		(Decrease)			(Decrease)
Revenue (less agency commissions):
Local (including internet/digital/mobile)	$	425	39	%	$	361	37	%	$	64		18	%
National	114		10	%	87		9	%	27			31	%
Political	15		1	%	57		6	%	(42		)	(74	)%
Retransmission consent	489		45	%	433		44	%	56			13	%
Production companies	24		2	%	21		2	%	3			14	%
Other	24		3	%	26		2	%	(2		)	(8	)%
Total	$	1,091	100	%	$	985	100	%	$	106		11	%

Total Core Revenue	$	539	49	%	$	448	46	%	$	91		20	%

	Six Months Ended June 30,
	2021				2020				Amount			Percent
			Percent				Percent		Increase			Increase
	Amount		of Total		Amount		of Total		(Decrease)			(Decrease)

Operating expenses (before
depreciation, amortization and gain on disposal of assets):
Broadcasting:
Station expenses	$	425	60	%	$	410	62	%	$	15		4	%
Retransmission expense	289		40	%	246		37	%	43			17	%
Transaction Related Expenses	–		0	%	–		0	%	–
Non-cash stock-based compensation	1		0	%	3		1	%	(2		)	(67	)%
Total broadcasting expense	$	715	100	%	$	659	100	%	$	56		8	%

Production companies expense	$	26			$	24			$	2		8	%

Corporate and administrative:
Corporate expenses	$	29	67	%	$	28	88	%	$	1		4	%
Transaction Related Expenses	8		19	%	–		0	%	8
Non-cash stock-based compensation	6		14	%	4		12	%	2			50	%
Total corporate and
administrative expense	$	43	100	%	$	32	100	%	$	11		34	%

Transaction Related Expenses:

From time to time, we have incurred incremental expenses (“Transaction Related Expenses”) that were specific to acquisitions, divestitures and financing activities, including but not limited to legal and professional fees, severance and incentive compensation and contract termination fees. In addition, we have recorded certain non-cash stock-based compensation expenses. These expenses are summarized as follows, in millions:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Transaction Related Expenses:
Broadcasting	$	–	$	–	$	–	$	–
Corporate and administrative	7		–		8		–
Miscellaneous expense, net	7		–		7		–
Total Transaction Related Expenses	$	14	$	–	$	15	$	–

Total non-cash stock-based compensation	$	4	$	3	$	7	$	7

Taxes:

During the 2021 and 2020 six-month periods, we made aggregate federal and state income tax payments of approximately $38 million and $1 million, respectively. During the remainder of 2021, we anticipate making income tax payments (excluding pending refunds) of approximately $12 million. We have approximately $204 million of federal operating loss carryforwards, which expire during the years 2023 through 2037. We expect to have federal taxable income in the carryforward periods. As a result, we believe that these federal operating loss carryforwards will be fully utilized. Additionally, we have an aggregate of approximately $567 million of various state operating loss carryforwards, of which we expect that approximately half will be utilized.

Other Financial Data:

	As of
	June 30,			December 31,
	2021			2020
	(in millions)

Cash	$	785		$	773
Long-term debt	$	3,979		$	3,974
Series A Perpetual Preferred Stock	$	650		$	650
Borrowing availability under Revolving Credit Facility	$	299		$	200

	Six Months Ended June 30,
	2021			2020
	(in millions)

Net cash provided by operating activities	$	238		$	307
Net cash used in investing activities	(177		)	(59		)
Net cash used in financing activities	(49		)	(81		)
Net increase in cash	$	12		$	167

Detailed Table of Operating Results:

Gray Television, Inc.
Selected Operating Data (Unaudited)
(in millions, except for per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020

Revenue (less agency commissions):
Broadcasting	$	537		$	449		$	1,067		$	964
Production companies	10			2			24			21
Total revenue (less agency commissions)	547			451			1,091			985
Operating expenses before depreciation, amortization
and gain on disposal of assets, net:
Broadcasting	354			324			715			659
Production companies	9			5			26			24
Corporate and administrative	25			17			43			32
Depreciation	25			21			50			42
Amortization of intangible assets	27			26			53			52
Gain on disposal of assets, net	(1		)	(7		)	(5		)	(13		)
Operating expenses	439			386			882			796
Operating income	108			65			209			189
Other expense:
Miscellaneous expense, net	(7		)	(2		)	(6		)	(3		)
Interest expense	(47		)	(46		)	(95		)	(98		)
Income before income taxes	54			17			108			88
Income tax expense	15			6			30			24
Net income	39			11			78			64
Preferred stock dividends	13			13			26			26
Net income (loss) attributable to common stockholders	$	26		$	(2	)	$	52		$	38

Basic per share information:
Net income (loss) attributable to common stockholders	$	0.27		$	(0.02	)	$	0.55		$	0.39
Weighted-average shares outstanding	95			97			94			98

Diluted per share information:
Net income (loss) attributable to common stockholders	$	0.27		$	(0.02	)	$	0.55		$	0.39
Weighted-average shares outstanding	95			97			95			98

Guidance for the Three-Months Ending September 30, 2021:

Before the impact of the Quincy Transaction (and related divestures under the Allen Transaction), our Local, National, and together, our Total Core Revenue are anticipated to exceed the third quarter of 2019, the most recent non-political and pre-pandemic year, by low single digit percentage increases.

Based on our current forecasts for the third quarter of 2021, we anticipate changes from the third quarter of 2020 (excluding the Quincy Transaction, discussed below), as outlined below:

• Revenue, less agency commissions:

Local revenue will increase by 18% to 20% to approximately $222 to $225 million.
National revenue will increase by 14% to 16% to approximately $56 to $57 million.
- Total Core Revenue will increase by 17% to 19% to approximately $278 to $282 million.
Political revenue will decrease by 95% to 96% to approximately $5 to $6 million.
Retransmission consent revenue will increase by 17% to 18% to approximately $254 to $256 million.
Total broadcasting revenue will decrease by 6% to 7% to approximately $549 to $557 million.
Production company revenue will increase to approximately $18 to $19 million.

• Operating expenses (before depreciation, amortization and (gain) loss on disposal of assets, net):

Broadcasting expenses will increase by 14% to 15%, to approximately $373 to $375 million. This increase primarily reflects an increase in retransmission expense by approximately $21 million. This increase also includes Transaction Related Expenses within a range of $2 to $3 million.
Production company expenses will increase to approximately $12 to $13 million.
Corporate and administrative expenses will be approximately $27 to $30 million. This increase primarily reflects an increase in Transaction Related Expenses within a range of $6 to $8 million.

On August 2, 2021, we completed the Quincy Transaction (and related divestitures under the Allen Transaction). We currently expect that the addition of Quincy will have the following incremental effects on our broadcasting revenue and broadcasting operating expenses (before depreciation, amortization and (gain) loss on disposal of assets, net), as outlined below:

• Third quarter of 2021:

Broadcasting revenue, less agency commissions will increase by approximately $22 to $24 million.
Broadcasting operating expenses expenses (before depreciation, amortization and (gain) loss on disposal of assets, net) will increase by approximately $14 to $15 million.
- Broadcasting revenue, less broadcasting operating expenses expenses (before depreciation, amortization and (gain) loss on disposal of assets, net) will increase by approximately $8 to $9 million.

• Fourth quarter of 2021:

Broadcasting revenue, less agency commissions will increase by approximately $32 to $35 million.
Broadcasting operating expenses (before depreciation, amortization and (gain) loss on disposal of assets, net) will increase by approximately $22 to $24 million.
- Broadcasting revenue, less broadcasting operating expenses (before depreciation, amortization and (gain) loss on disposal of assets, net) will increase by approximately $10 to $11 million.

Our Corporate expenses (before depreciation, amortization and (gain) loss on disposal of assets, net) in the third and fourth quarters of 2021 are not currently expected to be materially impacted by the acquisition of Quincy other than anticipated Transaction Related Expenses and related realization of synergies.

The Company

Gray Television, headquartered in Atlanta, Georgia, is the largest owner of top-rated local television stations and digital assets in the United States. Upon its anticipated acquisition of the television stations of Meredith Corporation, Gray will become the nation’s second largest television broadcaster, with television stations serving 113 markets that reach approximately 36 percent of US television households. The pro forma portfolio includes 79 markets with the top-rated television station and 101 markets with the first and/or second highest rated television station according to Comscore’s audience measurement data. Gray also owns video program production, marketing, and digital businesses including Raycom Sports, Tupelo Honey, and RTM Studios, the producer of PowerNation programs and content and is the majority owner of Swirl Films.

Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act

This press release contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the federal securities laws. These “forward-looking statements” are not statements of historical facts, and may include, among other things, statements regarding our estimates, expectations, intentions, projections, and beliefs of operating results for future periods, macroeconomic trends, the impact of COVID-19 on our future operating results, future income tax payments, pending transactions and other future events. Actual results are subject to a number of risks and uncertainties and may differ materially from the current expectations and beliefs discussed in this press release. All information set forth in this release is as of the date hereof. We do not intend, and undertake no duty, to update this information to reflect future events or circumstances. As such, caution should be taken to not place undue reliance on forward-looking statements. Information about certain potential factors that could affect our business and financial results and cause actual results to differ materially from those expressed or implied in any forward-looking statements are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2020, and may be contained in reports subsequently filed with the U.S. Securities and Exchange Commission and available at www.sec.gov.

Conference Call Information

We will host a conference call to discuss our second quarter operating results on August 5, 2021. The call will begin at 10:00 AM Eastern Time. The live dial-in number is 1(855) 493-3489 and the confirmation code is 1176873. The call will be webcast live and available for replay at www.gray.tv. The taped replay of the conference call will be available at 1(855) 859-2056 and the confirmation code is 1176873, until September 5, 2021.

Gray Contacts

Web site: www.gray.tv

Hilton H. Howell, Jr., Executive Chairman and Chief Executive Officer, (404) 266-5513

Pat LaPlatney, President and Co-Chief Executive Officer, (334) 206-1400

Jim Ryan, Executive Vice President and Chief Financial Officer, (404) 504-9828

Kevin P. Latek, Executive Vice President, Chief Legal and Development Officer, (404) 266-8333

Effects of Acquisitions and Divestitures on Our Results of Operations and Non-GAAP Terms

From time to time, Gray supplements its financial results prepared in accordance with GAAP by disclosing the non-GAAP financial measures Broadcast Cash Flow, Broadcast Cash Flow Less Cash Corporate Expenses, Operating Cash Flow as defined in the Senior Credit Agreement, Free Cash Flow, Adjusted EBITDA and Total Leverage Ratio, Net of All Cash. These non-GAAP amounts are used by us to approximate amounts used to calculate key financial performance covenants contained in our debt agreements and are used with our GAAP data to evaluate our results and liquidity.

We define Broadcast Cash Flow as net income or loss plus loss on early extinguishment of debt, non-cash corporate and administrative expenses, non-cash stock-based compensation, depreciation and amortization (including amortization of intangible assets and program broadcast rights), any loss on disposal of assets, any miscellaneous expense, interest expense, any income tax expense, non-cash 401(k) expense, Broadcast Transactions Related Expenses and broadcast other adjustments less any gain on disposal of assets, any miscellaneous income, any income tax benefits and payments for program broadcast rights.

We define Broadcast Cash Flow Less Cash Corporate Expenses as net income or loss plus loss on early extinguishment of debt, non-cash stock-based compensation, depreciation and amortization (including amortization of intangible assets and program broadcast rights), any loss on disposal of assets, any miscellaneous expense, interest expense, any income tax expense, non-cash 401(k) expense, Transaction Related Expenses and other adjustments less any gain on disposal of assets, any miscellaneous income, any income tax benefits and payments for program broadcast rights.

We define Operating Cash Flow as defined in our Senior Credit Agreement as net income or loss plus loss on early extinguishment of debt, non-cash stock-based compensation, depreciation and amortization (including amortization of intangible assets and program broadcast rights), any loss on disposal of assets, any miscellaneous expense, interest expense, any income tax expense, non-cash 401(k) expense, Transaction Related Expenses, other adjustments, certain pension expenses, synergies and other adjustments less any gain on disposal of assets, any miscellaneous income, any income tax benefits, payments for program broadcast rights, pension income and contributions to pension plans.

Operating Cash Flow as defined in our Senior Credit Agreement gives effect to the revenue and broadcast expenses of all completed acquisitions and divestitures as if they had been acquired or divested, respectively, on June 30, 2019. It also gives effect to certain operating synergies expected from the acquisitions and related financings and adds back professional fees incurred in completing the acquisitions. Certain of the financial information related to the acquisitions has been derived from, and adjusted based on, unaudited, un-reviewed financial information prepared by other entities, which Gray cannot independently verify. We cannot assure you that such financial information would not be materially different if such information were audited or reviewed and no assurances can be provided as to the accuracy of such information, or that our actual results would not differ materially from this financial information if the acquisitions had been completed on the stated date. In addition, the presentation of Operating Cash Flow as defined in the Senior Credit Agreement and the adjustments to such information, including expected synergies resulting from such transactions, may not comply with GAAP or the requirements for pro forma financial information under Regulation S-X under the Securities Act of 1933.

We define Free Cash Flow as net income or loss plus loss on early extinguishment of debt, non-cash stock-based compensation, depreciation and amortization (including amortization of intangible assets and program broadcast rights), any loss on disposal of assets, any miscellaneous expense, any income tax expense, non-cash 401(k) expense, Transactions Related Expenses, broadcast other adjustments, certain pension expenses, synergies, other adjustments and amortization of deferred financing costs less any gain on disposal of assets, any miscellaneous income, any income tax benefits, payments for program broadcast rights, pension income, contributions to pension plans, preferred dividends, purchase of property and equipment (net of reimbursements) and income taxes paid (net of any refunds received).

We define Adjusted EBITDA as net income or loss, plus loss on early extinguishment of debt, non-cash stock-based compensation, depreciation and amortization of intangible assets, any loss on disposal of assets, any miscellaneous expense, interest expense, any income tax expense, non-cash 401(k) expense, Transaction Related Expenses less any gain on disposal of assets, any miscellaneous income and any income tax benefits.

Our Total Leverage Ratio, Net of All Cash is determined by dividing our Adjusted Total Indebtedness, Net of All Cash, by our Operating Cash Flow as defined in our Senior Credit Agreement, divided by two. Our Adjusted Total Indebtedness, Net of All Cash, represents the total outstanding principal of our long-term debt, plus certain other obligations as defined in our Senior Credit Agreement, less all cash (excluding restricted cash). Our Operating Cash Flow, as defined in our Senior Credit Agreement, divided by two, represents our average annual Operating Cash Flow as defined in our Senior Credit Agreement for the preceding eight quarters.

We define Transaction Related Expenses as incremental expenses incurred specific to acquisitions and divestitures, including, but not limited to legal and professional fees, severance and incentive compensation, and contract termination fees. We present certain line-items from our selected operating data, net of Transaction Related Expenses, in order to present a more meaningful comparison between periods of our operating expenses and our results of operations.

These non-GAAP terms are not defined in GAAP and our definitions may differ from, and therefore may not be comparable to, similarly titled measures used by other companies, thereby limiting their usefulness. Such terms are used by management in addition to, and in conjunction with, results presented in accordance with GAAP and should be considered as supplements to, and not as substitutes for, net income and cash flows reported in accordance with GAAP.

Reconciliation of Non-GAAP Terms, in millions:

	Three Months Ended June 30,
	2021			2020			2019

Net income	$	39		$	11		$	44
Adjustments to reconcile from net income to
Free Cash Flow:
Depreciation	25			21			20
Amortization of intangible assets	27			26			28
Non-cash stock-based compensation	3			3			2
Gain on disposal of assets, net	(1		)	(7		)	(3		)
Miscellaneous expense (income), net	7			2			(1		)
Interest expense	47			46			58
Income tax expense	15			6			18
Amortization of program broadcast rights	8			10			10
Payments for program broadcast rights	(9		)	(10		)	(10		)
Corporate and administrative expenses before
depreciation, amortization of intangible assets and
non-cash stock-based compensation	22			15			19
Broadcast Cash Flow	183			123			185
Corporate and administrative expenses before
depreciation, amortization of intangible assets and
non-cash stock-based compensation	(22		)	(15		)	(19		)
Broadcast Cash Flow Less Cash Corporate Expenses	161			108			166
Interest expense	(47		)	(46		)	(58		)
Amortization of deferred financing costs	3			3			3
Preferred stock dividends	(13		)	(13		)	(13		)
Common stock dividends	(7		)	–			–
Purchases of property and equipment (1)	(28		)	(24		)	(26		)
Reimbursements of property and equipment purchases	3			8			5
Income taxes paid, net of refunds	(38		)	(1		)	(8		)
Free Cash Flow	$	34		$	35		$	69

(1) Excludes approximately $80 million related to the purchase of land in Doraville, Georgia.

Reconciliation of Non-GAAP Terms, in millions:

	Six Months Ended June 30,
	2021			2020			2019

Net income	$	78		$	64		$	26
Adjustments to reconcile from net income to
Free Cash Flow:
Depreciation	50			42			40
Amortization of intangible assets	53			52			57
Non-cash stock-based compensation	7			7			5
Non-cash 401(k) expense	1			–			–
Gain on disposal of assets, net	(5		)	(13		)	(13		)
Miscellaneous expense (income), net	6			3			(4		)
Interest expense	95			98			116
Income tax expense	30			24			21
Amortization of program broadcast rights	17			19			20
Payments for program broadcast rights	(18		)	(20		)	(24		)
Corporate and administrative expenses before
depreciation, amortization of intangible assets and
non-cash stock-based compensation	37			28			64
Broadcast Cash Flow	351			304			308
Corporate and administrative expenses before
depreciation, amortization of intangible assets and
non-cash stock-based compensation	(37		)	(28		)	(64		)
Broadcast Cash Flow Less Cash Corporate Expenses	314			276			244
Interest expense	(95		)	(98		)	(116		)
Amortization of deferred financing costs	6			6			6
Preferred stock dividends	(26		)	(26		)	(26		)
Common stock dividends	(15		)	–			–
Purchases of property and equipment (1)	(41		)	(51		)	(44		)
Reimbursements of property and equipment purchases	7			14			17
Income taxes paid, net of refunds	(38		)	(1		)	(8		)
Free Cash Flow	$	112		$	120		$	73

(1) Excludes approximately $80 million related to the purchase of land in Doraville, Georgia.

Reconciliation of Net Income to Adjusted EBITDA and the Effect of Transaction Related Expenses and Certain Non-cash Expenses, in millions except for per share information:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020

Net income	$	39		$	11		$	78		$	64
Adjustments to reconcile from net income to
Adjusted EBITDA:
Depreciation	25			21			50			42
Amortization of intangible assets	27			26			53			52
Non-cash stock-based compensation	4			3			7			7
Gain on disposal of assets, net	(1		)	(7		)	(5		)	(13		)
Miscellaneous expense, net	7			2			6			3
Interest expense	47			46			95			98
Income tax expense	15			6			30			24
Total	163			108			314			277
Add: Transaction Related Expenses (1)	7			–			8			–
Adjusted EBITDA	$	170		$	108		$	322		$	277

Net income (loss) attributable to common stockholders	$	26		$	(2	)	$	52		$	38
Add: Transaction Related Expenses and non-cash
stock-based compensation	18			3			22			7
Less: Income tax expense related to Transaction Related
Expenses and non-cash stock-based compensation	(5		)	(1		)	(6		)	(2		)
Net income attributable to common stockholders – excluding Transaction Related Expenses and non-cash stock-based compensation	$	39		$	–		$	68		$	43
Net income attributable to common stockholders common per share, diluted – excluding Transaction Related Expenses and non-cash stock-based compensation	$	0.41		$	–		$	0.72		$	0.44
Diluted weighted-average common shares outstanding	95			97			95			98

(1) Excludes $7 million of Transaction Related Expenses included in miscellaneous expense, net for the three and six-month periods ended June 30, 2021, respectively.

Reconciliation of Total Leverage Ratio, Net of All Cash, dollars in millions:



	Eight Quarters
	Ended
	June 30, 2021

Net income	$	642
Adjustments to reconcile from net income to Operating Cash Flow as
defined in our Senior Credit Agreement:
Depreciation	186
Amortization of intangible assets	216
Non-cash stock-based compensation	33
Gain on disposal of assets, net	(74		)
Interest expense	397
Loss on early extinguishment of debt	12
Income tax expense	218
Amortization of program broadcast rights	74
Common stock contributed to 401(k) plan	12
Payments for program broadcast rights	(80		)
Pension benefit	(2		)
Contributions to pension plans	(6		)
Adjustments for unrestricted subsidiaries	1
Adjustments for stations acquired or divested, financings and expected synergies during the eight quarter period	1
Transaction Related Expenses	26
Operating Cash Flow as defined in our Senior Credit Agreement	$	1,656
Operating Cash Flow as defined in our Senior Credit Agreement, divided by two	$	828

	June 30, 2021
Adjusted Total Indebtedness:
Total outstanding principal	$	4,035
Letters of credit outstanding	1
Cash	(785		)
Adjusted Total Indebtedness, Net of All Cash	$	3,251

Total Leverage Ratio, Net of All Cash	3.92

Release – Gray Announces Quarterly Cash Dividend Of $0.08 Per Share

Posted on August 5, 2021 by Admin

Gray Announces Quarterly Cash Dividend Of $0.08 Per Share

ATLANTA, Aug. 05, 2021 (GLOBE NEWSWIRE) — Gray Television, Inc. (“Gray”) (NYSE: GTN) announced today that its Board of Directors has authorized a quarterly cash dividend of $0.08 per share of its common stock and Class A common stock. The dividend is payable on September 30, 2021, to shareholders of record at the close of business on September 15, 2021.

About Gray Television:

Forward-Looking Statements:

This press release contains certain forward looking statements that are based largely on Gray’s current expectations and reflect various estimates and assumptions by Gray. These statements are statements other than those of historical fact, and may be identified by words such as “estimates”, “expect,” “anticipate,” “will,” “implied,” “assume” and similar expressions. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward looking statements. Such risks, trends and uncertainties, which in some instances are beyond Gray’s control, include Gray’s ability to complete its pending acquisition of Meredith or other pending transactions on the terms and within the timeframe currently contemplated, any material regulatory or other unexpected requirements in connection therewith, and other future events. Gray is subject to additional risks and uncertainties described in Gray’s quarterly and annual reports filed with the Securities and Exchange Commission from time to time, including in the “Risk Factors,” and management’s discussion and analysis of financial condition and results of operations sections contained therein, which reports are made publicly available via its website, www.gray.tv. Any forward-looking statements in this communication should be evaluated in light of these important risk factors. This press release reflects management’s views as of the date hereof. Except to the extent required by applicable law, Gray undertakes no obligation to update or revise any information contained in this communication beyond the date hereof, whether as a result of new information, future events or otherwise.

Contact Data

Gray Contacts:
www.gray.tv
Jim Ryan, Executive Vice President and Chief Financial Officer, 404-504-9828
Kevin P. Latek, Executive Vice President, Chief Legal and Development Officer, 404-266-8333

Release – Comtech Telecommunications Corp. Awarded $1.4 Million Contract for RF Microwave Control Components

Posted on August 5, 2021 by Admin

Comtech Telecommunications Corp. Awarded $1.4 Million Contract for RF Microwave Control Components

MELVILLE, N.Y.–(BUSINESS WIRE)–Aug. 5, 2021–
August 5, 2021—
Comtech Telecommunications Corp. (NASDAQ: CMTL), a global leading provider of next-generation 911 emergency systems and secure wireless communications technologies, announced today, that during its fourth quarter of fiscal 2021, it was awarded a
$1.4 million contract for RF microwave control components from a major domestic prime contractor.

These integrated microwave assemblies and protection components provide for very broad frequency coverage and are key components in an integrated electronic countermeasures system used by the
U.S. military.

“This contract is another example of Comtech’s technical strength in delivering broadband high-power integrated assemblies for military applications and the ongoing demand for our high-power control component products,” said Fred Kornberg, Chairman of the Board and Chief Executive Officer of
Comtech Telecommunications Corp.

The contract was awarded to
Comtech PST Corp. (www.comtechpst.com) which is a leading independent supplier of high-power, high performance RF microwave amplifiers and control components for use in a broad spectrum of applications including defense, medical, satellite communications systems and instrumentation.

Comtech Telecommunications Corp. is a leading provider of next-generation 911 emergency systems and critical wireless communication technologies to commercial and government customers around the world. Headquartered in
Melville, New York and with a passion for customer success,
Comtech designs, produces and markets advanced and secure wireless solutions to customers in more than 100 countries. For more information, please visit www.comtechtel.com.

Certain information in this press release contains statements that are forward-looking in nature and involve certain significant risks and uncertainties. Actual results could differ materially from such forward-looking information. The Company’s
Securities and Exchange Commission filings identify many such risks and uncertainties. Any forward-looking information in this press release is qualified in its entirety by the risks and uncertainties described in such
Securities and Exchange Commission filings.

Comtech Investor Relations:
631-962-7005
investors@comtech.com

Source:
Comtech Telecommunications Corp.

Release – Esports Entertainment Group to Become LA Chargers Official Esports Tournament Platform Provider in a Multi-Year Deal

Posted on August 5, 2021 by Admin

Esports Entertainment Group to Become LA Chargers’ Official Esports Tournament Platform Provider in a Multi-Year Deal

Chargers to become shareholders of EEG as a result of the transaction

Newark, New Jersey and Los Angeles, California–(Newsfile Corp. – August 5, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”) has signed a partnership agreement with the Los Angeles Chargers (“Chargers”) to be the NFL franchise’s official esports tournament platform provider. As part of the new multi-year agreement, the Company will operate co-branded esports tournaments annually for the Chargers utilizing its Esports Gaming League (“EGL”) platform. Additionally, the Chargers have taken an equity stake in Esports Entertainment Group.

“We continue to gain strong traction among top-tier professional sports franchises with our industry-leading tournament platform,” said Grant Johnson, CEO of Esports Entertainment Group. “We are delighted to expand our reach in the NFL through our partnership with the Chargers. Our robust tournament platform will help the Chargers strengthen connections with their fans, while providing new avenues for engagement.”

As a proud partner of the Chargers, the Company will leverage player imagery within the Chargers’ local market and will also work with the Chargers to promote the tournaments in extensive ongoing digital marketing efforts spanning social, email, mobile, and online channels.

“The popularity of esports amongst our fans provides a great opportunity for our team to create deeper connections and meaningful engagements,” said Chargers Chief Revenue Officer Jim Rushton. “We think the Chargers Gaming Tournaments will be very popular with our fans and a fun way to compete in an entertaining and social environment with gamers throughout our fan base.”

“Working with the Chargers and other top teams in the NFL, NHL, NBA, and more provide a strong validation of the quality of our robust platform and its ability to meet the demanding needs of large-scale, high-profile deployments,” said Magnus Leppäniemi, President of Esports at Esports Entertainment Group.

The Company enables live and online events and tournaments where gamers can compete and enjoy a wide range of content relating to esports and video games on a proprietary technology platform. Services include full turnkey esports events, live broadcast production, game launches, and online branded tournaments.

About Esports Entertainment Group

Esports Entertainment Group is a full stack esports and online gambling company fueled by the growth of video-gaming and the ascendance of esports with new generations. Our mission is to help connect the world at large with the future of sports entertainment in unique and enriching ways that bring fans and gamers together. Esports Entertainment Group and its affiliates are well-poised to help fans and players to stay connected and involved with their favorite esports. From traditional sports partnerships with professional NFL/NHL/NBA/FIFA teams, community-focused tournaments in a wide range of esports, and boots-on-the-ground LAN cafes, EEG has influence over the full-spectrum of esports and gaming at all levels. The Company maintains offices in New Jersey, the UK and Malta. For more information visit www.esportsentertainmentgroup.com.

About Los Angeles Chargers

Now in their 63rd season, the Chargers continue to stretch the imagination and put on the most exciting show in football. Behind the dramatic games, unforgettable highlights, beloved players, groundbreaking performances, idyllic Southern California setting and best uniforms in the NFL lies an uncompromising drive for success – one rooted in toughness, resilience and good old-fashioned hard work. A charter member of the American Football League, the franchise was established in Los Angeles in 1960 and called the Los Angeles Memorial Coliseum home during its first year of existence. From 1961 to 2016, the team played in San Diego and advanced to five of the first six AFL Championship games ever played. The Chargers claimed the 1963 AFL title and later joined the National Football League when the two leagues merged in 1970. Since the merger, the Chargers have gone on to appear in Super Bowl XXIX and have captured an additional 10 division titles. The Chargers were purchased by construction leader, philanthropist and real estate developer Alex G. Spanos in 1984 and have been under the guidance of Spanos’ eldest son Dean, the team’s current Chairman of the Board, since 1994. Dean Spanos’ sons – A.G. Spanos, President of Business Operations, and John Spanos, President of Football Operations – oversee the day-to-day operations of the franchise. The Chargers returned to Los Angeles in 2017, began playing games in their new multi-billion-dollar SoFi Stadium home in 2020 and continue to redefine what an NFL franchise looks like in the 21st century. For more information, call 1-877-CHARGERS or visit chargers.com.

FORWARD-LOOKING STATEMENTS

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Contact:

U.S. Investor Relations
RedChip Companies, Inc.
Dave Gentry
407-491-4498
dave@redchip.com

Media & Investor Relations Inquiries
Jeff@esportsentertainmentgroup.com

Release – Lineage Cell Therapeutics to Report Second Quarter 2021 Financial Results and Provide Business Update on August 12 2021

Posted on August 5, 2021 by Admin

Lineage Cell Therapeutics to Report Second Quarter 2021 Financial Results and Provide Business Update on August 12, 2021

CARLSBAD, Calif.–(BUSINESS WIRE)–Aug. 5, 2021–

Lineage Cell Therapeutics, Inc.
(NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, today announced that it will report its second quarter 2021 financial and operating results on
Thursday, August 12, 2021, following the close of the
U.S. financial markets. Lineage management will also host a conference call and webcast on
Thursday, August 12, 2021, at
4:30 p.m. Eastern Time/
1:30 p.m. Pacific Time to discuss its second quarter 2021 financial and operating results and to provide a business update.

Interested parties may access the conference call by dialing (866) 888-8633 from the
U.S. and
Canada and (636) 812-6629 from elsewhere outside the
U.S. and
Canada and should request the “Lineage Cell Therapeutics Call”. A live webcast of the conference call will be available online in the Investors section of Lineage’s website. A replay of the webcast will be available on Lineage’s website for 30 days and a telephone replay will be available through
August 22, 2021, by dialing (855) 859-2056 from the
U.S. and
Canada and (404) 537-3406 from elsewhere outside the
U.S. and
Canada and entering conference ID number 4876810.

About Lineage Cell Therapeutics, Inc.

Lineage Cell Therapeutics is a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs. Lineage’s programs are based on its robust proprietary cell-based therapy platform and associated in-house development and manufacturing capabilities. With this platform Lineage develops and manufactures specialized, terminally differentiated human cells from its pluripotent and progenitor cell starting materials. These differentiated cells are developed to either replace or support cells that are dysfunctional or absent due to degenerative disease or traumatic injury or administered as a means of helping the body mount an effective immune response to cancer. Lineage’s clinical programs are in markets with billion dollar opportunities and include three allogeneic (“off-the-shelf”) product candidates: (i) OpRegen^®, a retinal pigment epithelium transplant therapy in Phase 1/2a development for the treatment of dry age-related macular degeneration, a leading cause of blindness in the developed world; (ii) OPC1, an oligodendrocyte progenitor cell therapy in Phase 1/2a development for the treatment of subacute spinal cord injuries; and (iii) VAC2, an allogeneic dendritic cell therapy produced from Lineage’s VAC technology platform for immuno-oncology and infectious disease, currently in Phase 1 clinical development for the treatment of non-small cell lung cancer. For more information, please visit www.lineagecell.com or follow the Company on Twitter @LineageCell.

Lineage Cell Therapeutics, Inc. IR
Ioana C. Hone
(ir@lineagecell.com)
(442) 287-8963

Solebury Trout IR
Gitanjali Jain Ogawa
(Gogawa@soleburytrout.com)
(646) 378-2949

Russo Partners – Media Relations
Nic Johnson or David Schull
Nic.johnson@russopartnersllc.com
David.schull@russopartnersllc.com
(212) 845-4242

Source:
Lineage Cell Therapeutics, Inc.

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