Category: Media and Entertainment

Release – Salem Media Group, Inc. Announces Third Quarter 2023 Total Revenue of $63.5 Million

Posted on by aweinsoff@channelchek.com

Research News and Market Data on SALM

November 13, 2023 4:05pm EST

IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (the “company”) (Nasdaq: SALM) released its results for the three and nine months ended September 30, 2023.

Third Quarter 2023 Results

For the three months ended September 30, 2023 compared to the three months ended September 30, 2022:

Consolidated

  • Total revenue decreased 5.0% to $63.5 million from $66.9 million;
  • Total operating expenses increased 31.9% to $99.8 million from $75.6 million;
  • Operating expenses, excluding stock-based compensation expense, debt modification costs, gains and losses on the sale or disposition of assets, impairments, depreciation expense and amortization expense (1) increased 0.2% to $61.0 million from $60.8 million;
  • Operating loss increased to $36.3 million from $8.8 million;
  • Net loss increased to $31.3 million, or $1.15 net loss per share, from $11.9 million, or $0.44 net loss per share;
  • EBITDA (1) decreased to $(33.1) million from $(5.7) million; and
  • Adjusted EBITDA (1) increased 9.3% to $2.5 million from $2.3 million.

Broadcast

  • Net broadcast revenue decreased 4.2% to $49.0 million from $51.1 million;
  • Station Operating Income (“SOI”) (1) decreased 31.8% to $6.8 million from $10.0 million;
  • Same Station (1) net broadcast revenue decreased 4.9% to $48.6 million from $51.0 million; and
  • Same Station SOI (1) decreased 28.2% to $7.3 million from $10.1 million.

Digital Media

  • Digital media revenue decreased 2.2% to $10.0 million from $10.2 million; and
  • Digital Media Operating Income (1) decreased 20.9% to $1.5 million from $1.9 million.

Publishing

  • Publishing revenue decreased 17.5% to $4.6 million from $5.5 million; and
  • Publishing Operating Loss (1) increased 36.6% to $1.4 million from $1.0 million.

Included in the results for the three months ended September 30, 2023 are:

  • A $35.1 million ($26.0 million, net of tax, or $0.95 per share) impairment charge to the value of broadcast licenses in Boston, Chicago, Cleveland, Colorado Springs, Columbus, Dallas, Detroit, Greenville, Little Rock, Miami, New York, Orlando, Philadelphia, Phoenix, Portland, Sacramento, San Diego, San Francisco and Tampa;
  • A $0.7 million ($0.5 million, net of tax, or $0.02 per share) impairment charge to the value of goodwill in Townhall and Salem Author Services;
  • A $0.5 million ($0.3 million, net of tax, or $0.01 per diluted share) net gain on the disposition of asset relates primarily to the $0.4 million pre-tax gain on the sale of radio stations in Seattle, Washington; and
  • A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expense of stock options.

Included in the results for the three months ended September 30, 2022 are:

  • A $7.7 million ($5.7 million, net of tax, or $0.21 per share) impairment charge to the value of broadcast licenses in Boston, Chicago, Columbus, Dallas, Greenville, Honolulu, Little Rock, Orlando, Philadelphia, Portland, Sacramento, and San Francisco;
  • A $0.2 million ($0.1 million, net of tax) loss on the disposal of assets;
  • A $3.8 million ($2.8 million, net of tax, or $0.10 per share) legal settlement expense; and
  • A $0.1 million non-cash compensation charge related to the expensing of stock options.

Per share numbers are calculated based on 27,216,787 diluted weighted average shares for the three months ended September 30, 2023 and 2022.

Year to Date 2023 Results

For the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022:

Consolidated

  • Total revenue decreased 2.7% to $192.8 million from $198.2 million;
  • Total operating expenses increased 21.9% to $237.3 million from $194.6 million;
  • Operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, debt modification costs, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (1) increased 5.4% to $186.2 million from $176.6 million;
  • The company had an operating loss of $44.6 million as compared to operating income of $3.5 million;
  • The company recognized $4.0 million in film distribution income from an unconsolidated equity investment in the nine months ended September 30, 2022;
  • Net loss increased to $43.5 million, or $1.60 net loss per share, from $1.0 million, or $0.04 net loss per share;
  • EBITDA (1) decreased to $(34.3) million from $17.0 million; and
  • Adjusted EBITDA (1) decreased 68.4% to $6.6 million from $20.8 million.

Broadcast

  • Net broadcast revenue decreased 3.3% to $147.0 million from $152.0 million;
  • SOI (1) decreased 40.7% to $18.5 million from $31.2 million;
  • Same station (1) net broadcast revenue decreased 3.8% to $146.1 million from $151.8 million; and
  • Same station SOI (1) decreased 35.9% to $20.1 million from $31.3 million.

Digital media

  • Digital media revenue increased 0.1% to $31.3 million; and
  • Digital media operating income (1) decreased 22.4% to $4.8 million from $6.2 million.

Publishing

  • Publishing revenue decreased 2.7% to $14.4 million from $14.8 million; and
  • Publishing Operating Loss (1) increased 81.3% to $2.9 million from $1.6 million.

Included in the results for the nine months ended September 30, 2023 are:

  • A $38.4 million ($28.4 million, net of tax, or $1.04 per share) impairment charge to the value of broadcast licenses in Boston, Chicago, Cleveland, Colorado Springs, Columbus, Dallas, Detroit, Greenville, Little Rock, Miami, New York, Orlando, Philadelphia, Phoenix, Portland, Sacramento, San Diego, San Francisco and Tampa;
  • A $2.6 million ($1.9 million, net of tax, or $0.07 per share) impairment charge to the value of goodwill in Townhall and Salem Author Services;
  • A $0.1 million loss on the early retirement of long-term debt associated with the 2024 Notes;
  • A $0.3 million ($0.2 million, net of tax, or $0.01 per diluted share) net gain on the disposition of assets reflects a $3.3 million pre-tax gain on the sale of the economic interests in the leases at our Greenville, South Carolina to a related party and a $0.4 million estimated pre-tax gain on the sale of radio station KNTS-AM and KLFE-FM in Seattle, Washington that was offset by a $3.3 million estimated pre-tax loss on the pending sale of radio station KSAC-FM in Sacramento, California and $0.1 million of net losses from various fixed asset disposals; and
  • A $0.3 million ($0.2 million, net of tax, or $0.01 per share) non-cash compensation charge related to the expense of stock options.

Included in the results for the nine months ended September 30, 2022 are:

  • A $11.7 million ($8.6 million, net of tax, or $0.32 per share) impairment charge to the value of broadcast licenses in Boston, Chicago, Columbus, Dallas, Greenville, Honolulu, Little Rock, Orlando, Philadelphia, Portland, Sacramento and San Francisco;
  • A $8.5 million ($6.3 million, net of tax, or $0.23 per diluted share) net gain on the disposition of assets related primarily to the $6.5 million pre-tax gain on the sale of land used in the company’s Denver, Colorado broadcast operations, the $1.8 million pre-tax gain on sale of land used in the company’s Phoenix, Arizona broadcast operations, and $0.5 million pre-tax gain on the sale of the company’s radio stations in Louisville, Kentucky offset by various fixed asset disposals;
  • A $4.8 million ($3.5 million, net of tax, or $0.13 per share) legal settlement expense;
  • A $0.1 million ($0.1 million, net of tax) goodwill impairment charge;
  • A $0.2 million ($0.2 million, net of tax, or $0.01 per share) charge for debt modification costs; and
  • A $0.2 million ($0.2 million, net of tax, or $0.01 per share) non-cash compensation charge related to the expensing of stock options.

Per share numbers are calculated based on 27,216,787 diluted weighted average shares for the nine months ended September 30, 2023, and 27,202,983 diluted weighted average shares for the nine months ended September 30, 2022.

Balance Sheet

As of September 30, 2023, the company had $159.4 million outstanding on the 7.125% senior secured notes due 2028 (“2028 Notes”) and $20.5 million outstanding on the ABL facility.

Acquisitions and Divestitures

The following transactions were completed since July 1, 2023:

  • On November 6, 2023 the company sold radio stations WGTK-FM, WRTH-FM and WLTE-FM in Greenville, South Carolina for $6.8 million.
  • On July 21, 2023 the company sold radio station KNTS-AM in Seattle, Washington for $0.2 million.
  • On July 13, 2023 the company sold radio station KLFE-AM in Seattle, Washington for $0.5 million. Radio station KLFE-AM was being programmed under a Time Brokerage Agreement (“TBA”) as of August 1, 2022.

Pending transactions:

  • On October 17, 2023 the company entered into an agreement to sell land in Sarasota, Florida for $9.5 million. The closing is conditional upon getting the property rezoned, and the company expects to close the sale in late 2024.
  • On September 29, 2023 the company entered into an agreement to sell Salem Church Products for $30.0 million. At closing the company will receive $22.5 million in cash and a promissory note of $7.5 million. The principal shall be due and payable in three installments in the amount of $2.5 million starting the one-year anniversary of the closing date in 2024 through 2026. When the transaction closes, the parties will also enter into a $10.0 million multi-year agreement for the company to advertise Gloo platform’s products and services across its radio and digital platform. The company expects to close the sale in the fourth quarter of this year.
  • On September 1, 2023 the company entered into an agreement to sell radio station WTWD-AM and an translator in Tampa, Florida for $0.7 million subject to approval of the Federal Communications Commission (“FCC”). The company expects to close the sale in the fourth quarter of this year.
  • On June 29, 2023 the company entered into an agreement to sell radio station KSAC-FM in Sacramento, California for $1.0 million subject to approval of the FCC. Radio station KSAC-FM started being programmed under a TBA on August 1, 2023. The company expects to close the sale in the fourth quarter of this year.

Conference Call Information

The company will host a teleconference to discuss its results on November 13, 2023 at 4:00 p.m. Central Time. To access the teleconference, please dial (888) 770-7291, and then ask to be joined into the Salem Media Group Third Quarter 2023 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 November 27, 2023 and can be heard by dialing (800) 770-2030, passcode 2413416 or on the investor relations portion of the company’s website, located at investor.salemmedia.com.

Follow us on Twitter @SalemMediaGrp.

Fourth Quarter 2023 Outlook

For the fourth quarter of 2023, the company is projecting total revenue to decline between 6% and 8% from the fourth quarter 2022 total revenue of $68.8 million. This guidance assumes the closing of the pending sale of Salem Church Products in the fourth quarter. Excluding the impact of the 2022 political revenue and the financial results from the pending asset sale, the company would project total revenue to decline between 2% and 4%. The company is also projecting operating expenses before gains or losses on the sale or disposal of assets, stock-based compensation expense, legal settlement, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (“Recurring Operating Expenses”) to be between flat and a decrease 3% compared to the fourth quarter of 2022 Recurring Operating Expenses of $61.6 million. Excluding the impact of the pending asset sale, expenses are projected to be between an increase of 1% and a decrease of 2%.

A reconciliation of Recurring Operating Expenses (a non-GAAP measure) 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.

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 the company to close and integrate announced transactions, market acceptance of the company’s radio station formats, competition from new technologies, inflation and other adverse economic conditions, and other risks and uncertainties detailed from time to time in the company’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. The company 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 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 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 debt modification costs, 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. SOI, Digital Media Operating Income, Publishing Operating 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 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 Loss, EBITDA and Adjusted EBITDA are 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 operating 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 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 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.   View source version on businesswire.com: https://www.businesswire.com/news/home/20231106203825/en/ Evan D. Masyr
Executive Vice President and Chief Financial Officer
(805) 384-4512
evan@salemmedia.com Source: Salem Media Group, Inc. Released November 13, 2023

Salem Media Group (SALM) – Waiting on a Big Deal

Posted on by cpereira@noblefcm.com


Tuesday, November 14, 2023

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.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

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

Q3 results below expectations. The company reported Q3 revenue of $63.5 million, slightly below our forecast of $64.7 million. Adj. EBITDA was $2.5 million, 42% below our forecast of $4.3 million, primarily due to elevated expenses.

Key asset sale agreements. In the last month, the company sold 3 stations in Greenville, SC, for $6.8 million. Moreover, the sale of the Salem Church Products business ($30 million) is expected to close in Q4, as well as several other asset sales. 


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored 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. 

Release – Entravision Appoints Jack Randall as Executive Vice President of Political and Strategic Sales

Posted on by aweinsoff@channelchek.com

Research News and Market Data on EVC

November 13, 2023

SANTA MONICA, Calif.–(BUSINESS WIRE)– Entravision Communications Corporation (NYSE: EVC), a leading global advertising solutions, media and technology company, today announced the hire of Jack Randall as Executive Vice President of Political and Strategic Sales, effective November 13, 2023. In his new role, Mr. Randall will lead the development and execution of high-impact sales strategies tailored specifically for the political and advocacy sector. Mr. Randall’s expertise and understanding of the unique needs of this segment will help propel the Company to new heights by optimizing Entravision’s potential in what will be the highest funded election cycle in U.S. history. Mr. Randall will report to Chris Munoz, Executive Vice President of National Sales.

“We eagerly welcome Jack to the Entravision team,” said Chris Munoz, Executive Vice President of National Sales, Entravision. “His remarkable expertise in media sales, coupled with a deep understanding of our audience, instills confidence in his capacity to spearhead our endeavors in this specialized field. Jack’s appointment stands as a significant milestone for our company, underscoring our dedication to innovation and strategic growth.”

Mr. Randall brings more than 40 years of experience as an accomplished executive in the media industry. He previously served as Head of Strategic Sales at T-Mobile Advertising Solutions from 2022 to 2023, where he worked directly with brands to develop custom interactive content and proprietary custom audiences for targeted media plans. Previously, he served as VP Business Development at Octopus Interactive, which was acquired by T-Mobile in 2022. Prior to that, Mr. Randall served as Chief Commercial Officer for consumer research company, CivicScience, and spent 20 years in roles of increasing seniority at Univision Communications Inc., a leading Spanish-language media company. Mr. Randall is Principal, Business Strategy at his own firm, JRR Consulting LLC and is a member of The Executive Forum and Co-Chair of the Media, Marketing, and Insights SIG. Mr. Randall graduated from Wake Forest University and holds certifications in Digital Marketing and Google Adwords.

“Entravision’s commitment to the Latino community is unwavering, and I am thrilled to join a company that recognizes the vital role of this community in shaping our future,” said Mr. Randall. “As a longtime advocate for the Hispanic community, I look forward to contributing to Entravision’s growth trajectory ahead.”

About Entravision Communications Corporation

Entravision is a global advertising solutions, media and technology company. Over the past three decades, we have strategically evolved into a digital powerhouse, expertly connecting brands to consumers in the U.S., Latin America, Europe, Asia and Africa. Our digital segment, the company’s largest by revenue, offers a full suite of end-to-end advertising services in 40 countries. We have commercial partnerships with Meta, X Corp. (formerly known as Twitter), TikTok, and Spotify, and marketers can use our Smadex and other platforms to deliver targeted advertising to audiences around the globe. In the U.S., we maintain a diversified portfolio of television and radio stations that target Hispanic audiences and complement our global digital services. Entravision remains the largest affiliate group of the Univision and UniMás television networks. Shares of Entravision Class A Common Stock trade on The New York Stock Exchange under the ticker symbol: EVC. Learn more about all of our media, marketing and technology offerings at entravision.com or connect with us on LinkedIn and Facebook.

Kimberly Orlando
ADDO Investor Relations
310-829-5400
evc@addo.com

Source: Entravision Communications Corporation

Direct Digital Holdings (DRCT) – Demostrates Scaleable Growth

Posted on by cpereira@noblefcm.com


Friday, November 10, 2023

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

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

Impressive results. The company posted revenue of $59.5 million and adj. EBITDA of $5.4 million, both well above our expectations. Revenues accelerated sequentially, up 125.5% in the latest quarter, up from 66.5% in Q2. Notably, Sell-side revenue grew a whopping 174% over the prior year period.

Investments paying off. In our view, the especially strong quarter indicates that the company’s growth investments and tech platform are paying off sooner than expected. Importantly, the Sell-side segment processed 400 billion monthly impressions, due to increased capacity.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored 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. 

Townsquare Media (TSQ) – Sum Of The Parts Support Significant Upside Potential

Posted on by cpereira@noblefcm.com


Friday, November 10, 2023

Townsquare is a community-focused digital media and digital marketing solutions company with market leading local radio stations, principally focused outside the top 50 markets in the U.S. Our assets include a subscription digital marketing services business, Townsquare Interactive, providing website design, creation and hosting, search engine optimization, social media and online reputation management as well as other digital monthly services for approximately 26,800 SMBs; a robust digital advertising division, Townsquare IGNITE, a powerful combination of a) an owned and operated portfolio of more than 330 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data, and b) a proprietary digital programmatic advertising technology stack with an in-house demand and data management platform; and a portfolio of 321 local terrestrial radio stations in 67 U.S. markets strategically situated outside the Top 50 markets in the United States. Our portfolio includes local media brands such as WYRK.com, WJON.com, and NJ101.5.com and premier national music brands such as XXLmag.com, TasteofCountry.com, UltimateClassicRock.com and Loudwire.com.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

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

In line quarter.  The company reported Q3 revenue of $115.1 million and adj. EBITDA of $27.2 million, both of which were in line with our estimates. Notably, digital advertising revenue grew a solid 5.5% from the prior year period, in spite of net revenue decreasing 3.8% over the same period. Digital revenues accounted for 52% of total revenue in Q3, a development we view favorably.

Q4 outlook on target. We are modestly lowering our Q4 revenue forecast in light of softer than expected Q4 pacings. Q4 total revenue is lowered from $116.3 million to $111.3 million. Notably, our Q4 and full year 2023 adj. EBITDA forecasts of approximately $24.9 million and $100.1 million, respectively, are largely unchanged due to direct operating expense reductions.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored 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. 

Harte Hanks (HHS) – Building Blocks For Enhanced Growth

Posted on by cpereira@noblefcm.com


Friday, November 10, 2023

Harte Hanks (NASDAQ: HHS) is a leading global customer experience company whose mission is to partner with clients to provide them with CX strategy, data-driven analytics and actionable insights combined with seamless program execution to better understand, attract, and engage their customers. Using its unparalleled resources and award-winning talent in the areas of Customer Care, Fulfillment and Logistics, and Marketing Services, Harte Hanks has a proven track record of driving results for some of the world’s premier brands including Bank of America, GlaxoSmithKline, Unilever, Pfizer, HBOMax, Volvo, Ford, FedEx, Midea, Sony, and IBM among others. Headquartered in Chelmsford, Massachusetts , Harte Hanks has over 2,500 employees in offices across the Americas, Europe and Asia Pacific .

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

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

Q3 results largely in line. Total company revenue weas $47.1 million, in line with our $47.5 million estimate. Total company revenues were essentially flat with Q2 revenue of $47.8 million, which the company views as its baseline quarter. Q3 adj. EBITDA was $4.2 million, a few hundred thousand shy of our $4.8 million adj. EBITDA estimate.

Investing to accelerate growth. We believe that management is putting the pieces together to enhance the company’s long term revenue and adj. EBITDA growth. It has embarked on a strategy to add sales staff and drive efficiencies company wide. We believe that this strategy will pay dividends beginning in the second half 2024, but notably in 2025 as revenues ramp and margins improve. 


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored 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. 

Gray Television (GTN) – A Return On Its Hidden Value May Become Visible

Posted on by cpereira@noblefcm.com


Thursday, November 09, 2023

Gray Television is a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets in the United States. Our television stations serve 113 television markets that collectively reach approximately 36 percent of US television households. This portfolio includes 80 markets with the top-rated television station and 100 markets with the first and/or second highest rated television station. We also own video program companies Raycom Sports, Tupelo Honey, PowerNation Studios and Third Rail Studios.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

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

Solid Q3 results. The company reported Q3 revenue of $803 million, edging our estimate of $786 million by 2.2%. Notably, Adj. EBITDA in the quarter was a strong $210 million, handily surpassing our estimate of $179 million by 17.3%. Illustrated in Figure #1 Q3 Results. The quarter was driven by better than expected, high margin, political revenue and lower than expected corporate expenses. Importantly, political revenue in Q3 was $26 million, which beat our estimate of $15 million by 73%.

2024 outlook. In our view, the company stands to benefit from several favorable factors in the coming year. Notably, management increased political revenue guidance from $60 million to $80 million for full year 2023, which may indicate a strong election cycle in 2024. Additionally, the company has a history of surpassing expectations. Thus, we believe there could be positive upside in our 2024 estimates.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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. 

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

Posted on by aweinsoff@channelchek.com

Research News and Market Data on GTN

ATLANTA, November 8, 2023 — 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 December 29, 2023, to shareholders of record at the close of business on December 15, 2023.

About Gray Television:

We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets. Our television stations serve 113 television markets that collectively reach approximately 36 percent of US television households. This portfolio includes 80 markets with the top-rated television station and 102 markets with the first and/or second highest rated television station in 2022. We also own video program companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, as well as the studio production facilities Assembly Atlanta and Third Rail Studios. We own a majority interest in Swirl Films. For more information, please visit www.gray.tv.

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 inability to provide expected future payment of dividends, 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.

# # #

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

Bowlero (BOWL) – A Valuable Lesson On Pricing

Posted on by cpereira@noblefcm.com


Wednesday, November 08, 2023

Bowlero Corp. is the worldwide leader in bowling entertainment, media, and events. With more than 300 bowling centers across North America, Bowlero Corp. serves more than 26 million guests each year through a family of brands that includes Bowlero, Bowlmor Lanes, and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

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

FY Q1 results. The company reported Q1 revenue of $227.4 million, 4.7% below our estimate of $238.5 million. The modest revenue miss was attributed to experimenting with various mid-week promotional pricing, which did not go well, before pivoting to a more cost effective pricing strategy. Adj. EBITDA in Q1 was $52.1 million, approximately 16% below our estimate of $62 million. While operating results were a tad softer, management gained valuable knowledge about its customer base.

2024 Outlook. Management views fiscal 2024 as a year of investment for more robust top and bottom line growth in fiscal 2025. Notably, for full fiscal year 2024, the company has allocated roughly $160 million for acquisitions, $40 million for new builds, and $75 million for conversions. In our view, the aggressive expansion efforts should help the company continue its impressive revenue growth trajectory.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored 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. 

Release – Salem Media Group Schedules Third Quarter 2023 Earnings Release and Teleconference

Posted on by aweinsoff@channelchek.com

Research News and Market Data on SALM

 Download as PDFNovember 06, 2023 1:24pm EST

IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (NASDAQ: SALM) announced today that it plans to report its third quarter 2023 financial results after the market closes on November 13, 2023.

The company also plans to host a teleconference to discuss its results on November 13, 2023, at 4:00 PM Central Time. To access the teleconference, please dial (888) 770-7291, and then ask to be joined to the Salem Media Group Third Quarter 2023 call or listen to the webcast.

A replay of the teleconference will be available through November 27, 2023, and can be heard by dialing (800) 770-2030 – replay pin number 2413416, or on the investor relations portion of the company’s website, located at investor.salemmedia.com.

ABOUT SALEM MEDIA GROUP:

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231106645543/en/

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

Source: Salem Media Group, Inc.

Released November 6, 2023

Release – Entravision Communications Corporation Reports Third Quarter 2023 Results

Posted on by aweinsoff@channelchek.com

Research News and Market Data on EVC

November 2, 2023

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SANTA MONICA, Calif.–(BUSINESS WIRE)– Entravision Communications Corporation (NYSE: EVC), a leading global advertising solutions, media and technology company, today announced financial results for the three- and nine-month periods ended September 30, 2023.

Third Quarter 2023 Highlights

  • Record quarterly advertising revenue
  • Net revenue up 14% over the prior-year quarter
  • Net income attributable to common stockholders down 71% compared to the prior-year quarter
  • Consolidated EBITDA down 45% compared to the prior-year quarter
  • Operating cash flow up 45% over the prior-year quarter
  • Free cash flow down 74% compared to the prior-year quarter
  • Quarterly cash dividend of $0.05 per share

“We achieved a record quarterly advertising revenue of $274.4 million, up 14% year-over-year, led by strength in our Digital segment, which now comprises 84% of total revenue,” said Chris Young, Chief Financial Officer. “We continued to execute on our Digital transformation strategy during the quarter with the signing of two new partnerships with Match and Pinterest to further diversify our portfolio of digital solutions. While non-returning political revenue and sales mix contributed to the year-over-year decline in our Consolidated EBITDA, we anticipate increased political spending ahead of the 2024 elections will benefit our Television and Audio segments and Consolidated EBITDA in the quarters to come.”

Quarterly Cash Dividend

The Company announced today that its Board of Directors approved a quarterly cash dividend to shareholders of $0.05 per share on the Company’s Class A and Class U common stock, in an aggregate amount of $4.4 million. The quarterly dividend will be payable on December 29, 2023 to shareholders of record as of the close of business on December 15, 2023, and the common stock will trade ex-dividend on December 14, 2023. The Company currently anticipates that future cash dividends will be paid on a quarterly basis; however, any decision to pay future cash dividends will be subject to approval by the Board.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure is included beginning on page 10.

Unaudited Financial Highlights (In thousands, except share and per share data)
 
 Three-Month Period Nine-Month Period
 Ended September 30, Ended September 30,
 2023 2022 % Change 2023 2022 % Change
Net revenue$274,417  $241,014  14% $786,804  $659,881  19%
Cost of revenue – digital (1) 199,289   157,095   27%  562,881   431,951   30%
Operating expenses (2) 53,809   49,294   9%  163,069   140,527   16%
Corporate expenses (3) 13,292   9,525   40%  35,836   26,769   34%
Foreign currency (gain) loss 548   1,966   (72)%  289   2,112   (86)%
            
Consolidated EBITDA (4) 14,185   25,972   (45)%  41,420   66,566   (38)%
            
Free cash flow (5)$4,004  $15,443   (74)% $9,470  $44,026   (78)%
            
Net income (loss)$2,732  $9,090   (70)% $2,430  $19,444   (88)%
Net (income) loss attributable to redeemable noncontrolling interest$(13) $–  * $(1) $–  *
Net (income) loss attributable to noncontrolling interest$–  $303   (100)% $342  $303   13%
Net income (loss) attributable to common stockholders$2,719  $9,393   (71)% $2,771  $19,747   (86)%
            
Net income (loss) per share attributable to common stockholders, basic and diluted$0.03  $0.11   (73)% $0.03  $0.23   (87)%
            
Weighted average common shares outstanding, basic 87,995,567   84,945,873     87,803,770   85,469,675   
Weighted average common shares outstanding, diluted 89,888,721   87,417,501     89,835,363   87,671,726   
(1)Consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized.
(2)Operating expenses include direct operating and selling, general and administrative expenses. Included in operating expenses are $2.6 million and $1.0 million of non-cash stock-based compensation for the three-month periods ended September 30, 2023 and 2022, respectively, and $7.2 million and $2.9 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2023 and 2022, respectively.
(3)Corporate expenses include $4.4 million and $1.8 million of non-cash stock-based compensation for the three-month periods ended September 30, 2023 and 2022, respectively, and $9.8 million and $5.1 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2023 and 2022, respectively.
(4)Consolidated EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other operating gain (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from the Federal Communications Commission, or FCC, spectrum incentive auction less related expenses, expenses associated with investments, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings. We use the term consolidated EBITDA because that measure is defined in our 2017 Credit Agreement and 2023 Credit Agreement, and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from FCC spectrum incentive auction less related expenses, expenses associated with investments, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings.
(5)Free cash flow is defined as consolidated EBITDA less cash paid for income taxes, net interest expense, capital expenditures (less amounts reimbursed by landlord) and non-recurring cash expenses plus dividend income, and other operating gain (loss). Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income.
Unaudited Financial Results (In thousands)
 
 Three-Month Period
 Ended September 30,
 2023 2022 % Change
Net revenue$274,417  $241,014   14%
Cost of revenue – digital (1) 199,289   157,095   27%
Operating expenses (1) 53,809   49,294   9%
Corporate expenses (1) 13,292   9,525   40%
Depreciation and amortization 7,356   6,554   12%
Change in fair value of contingent consideration (5,997)  734  *
Impairment charge 989   —  *
Foreign currency (gain) loss 548   1,966   (72)%
Other operating (gain) loss —   (58)  (100)%
      
Operating income (loss) 5,131   15,904   (68)%
Interest expense, net (2,896)  (2,267)  28%
Dividend income —   6   (100)%
Realized gain (loss) on marketable securities (33)  (473)  (93)%
      
Income (loss) before income taxes 2,202   13,170   (83)%
Income tax benefit (expense) 530   (4,080) *
      
Net income (loss) 2,732   9,090   (70)%
Net (income) loss attributable to redeemable noncontrolling interest (13)  —  *
Net (income) loss attributable to noncontrolling interest —   303   (100)%
Net income (loss) attributable to common stockholders$2,719  $9,393   (71)%
(1) Cost of revenue, operating expenses and corporate expenses are defined on page 2.

Net revenue in the third quarter of 2023 totaled $274.4 million, up 14% from $241.0 million in the prior-year period. Of the overall increase, $42.6 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period. The overall increase was partially offset by a decrease of $6.1 million attributable to our television segment, primarily due to decreases in political advertising revenue and national advertising revenue, partially offset by increases in local advertising revenue and spectrum usage rights revenue. In addition, the overall increase was partially offset by a decrease of $3.1 million attributable to our audio segment, primarily due to a decrease in political advertising revenue, and decreases in local and national advertising revenue.

Cost of revenue in the third quarter of 2023 totaled $199.3 million, up 27% from $157.1 million in the prior-year period. The increase was primarily due to increased cost of revenue related to advertising revenue growth from our digital commercial partnerships business, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period.

Operating expenses in the third quarter of 2023 totaled $53.8 million, up 9% from $49.3 million in the prior-year period. Of the overall increase, $4.1 million was attributable to our digital segment and was primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the timing of the 2023 annual restricted stock unit (“RSU”) grant to certain employees, which was made in February 2023 compared to the 2022 annual grant, which was made in December 2022, and due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period. In addition, of the overall increase in operating expenses, $0.5 million was attributable to our audio segment primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above, and due to an increase in salaries. The overall increase was partially offset by a decrease of $0.1 million attributable to our television segment.

Corporate expenses in the third quarter of 2023 totaled $13.3 million, up 40% from $9.5 million in the prior-year period. The increase was primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above and RSU grant to our new CEO, and increases in professional service fees.

 Nine-Month Period
 Ended September 30,
 2023 2022 % Change
Net revenue$786,804  $659,881   19%
Cost of revenue – digital (1) 562,881   431,951   30%
Operating expenses (1) 163,069   140,527   16%
Corporate expenses (1) 35,836   26,769   34%
Depreciation and amortization 20,336   19,212   6%
Change in fair value of contingent consideration (8,939)  6,810  *
Impairment charge 989   —  *
Foreign currency (gain) loss 289   2,112   (86)%
Other operating (gain) loss —   (1,011)  (100)%
      
Operating income (loss) 12,343   33,511   (63)%
Interest expense, net (9,333)  (5,309)  76%
Dividend income 32   20   60%
Realized gain (loss) on marketable securities (94)  (473)  (80)%
Gain (loss) on debt extinguishment (1,556)  —  *
      
Income (loss) before income taxes 1,392   27,749   (95)%
Income tax benefit (expense) 1,038   (8,305) *
      
Net income (loss) 2,430   19,444   (88)%
Net (income) loss attributable to redeemable noncontrolling interest (1)  —  *
Net (income) loss attributable to noncontrolling interest 342   303   13%
Net income (loss) attributable to common stockholders$2,771  $19,747   (86)%

Net revenue for the nine-month period of 2023 totaled $786.8 million, up 19% from $659.9 million in the prior-year period. Of the overall increase, $140.9 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period. The overall increase was partially offset by a decrease of $9.1 million attributable to our television segment, primarily due to decreases in political advertising revenue and national advertising revenue, partially offset by increases in local advertising revenue, spectrum usage rights revenue and retransmission consent revenue. In addition, the overall increase was partially offset by a decrease of $4.9 million attributable to our audio segment, primarily due to a decrease in political advertising revenue, and decreases in local and national advertising revenue.

Cost of revenue for the nine-month period of 2023 totaled $562.9 million, up 30% from $432.0 million in the prior-year period. The increase was due to increased cost of revenue related to advertising revenue growth from our digital commercial partnerships business, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period.

Operating expenses for the nine-month period of 2023 totaled $163.1 million, up 16% from $140.5 million in the prior-year period. Of the overall increase, $18.2 million was attributable to our digital segment and was primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above, and due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period. Additionally, of the overall increase in operating expenses, $0.9 million was attributable to our television segment primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above, partially offset by a decrease in bad debt expense. In addition, of the overall increase in operating expenses, $3.5 million was attributable to our audio segment primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above, and due to an increase in salaries and increased rent expense in the temporary office space until the move to our new permanent offices, which was completed in June 2023.

Corporate expenses for the nine-month period of 2023 totaled $35.8 million, up 34% from $26.8 million in the prior-year period. The increase was primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above and RSU grant to our new CEO, and increases in professional service fees, audit fees and rent expense.

Balance Sheet and Related Metrics

Cash and marketable securities as of September 30, 2023 totaled $128.7 million. Total debt as defined in the Company’s credit agreement was $211.1 million. Net of $50 million of cash and marketable securities, total leverage as defined in the Company’s credit agreement was 2.1 times as of September 30, 2023. Net of total cash and marketable securities, total leverage was 1.1 times.

Unaudited Segment Results (In thousands)
 
 Three-Month Period Nine-Month Period
 Ended September 30, Ended September 30,
 2023 2022 % Change 2023 2022 % Change
Net Revenue           
Digital$231,487 $188,877  23% $657,865 $516,966  27%
Television 29,552   35,678   (17)%  89,807   98,918   (9)%
Audio 13,378   16,459   (19)%  39,132   43,997   (11)%
Total$274,417  $241,014   14% $786,804  $659,881   19%
            
Cost of Revenue – digital (1)           
Digital$199,289  $157,095   27% $562,881  $431,951   30%
            
Operating Expenses (1)           
Digital 23,173   19,080   21%  69,755   51,577   35%
Television 19,892   20,003   (1)%  59,859   58,969   2%
Audio 10,744   10,211   5%  33,455   29,981   12%
Total$53,809  $49,294   9% $163,069  $140,527   16%
            
Corporate Expenses (1)$13,292  $9,525   40% $35,836  $26,769   34%
            
Consolidated EBITDA (1)$14,185  $25,972   (45)% $41,420  $66,566   (38)%
(1) Cost of revenue, operating expenses, corporate expenses, and consolidated EBITDA are defined on page 2.

Notice of Conference Call

Entravision Communications Corporation will hold a conference call to discuss its third quarter 2023 results on Thursday, November 2, 2023 at 5:00 p.m. Eastern Time. To access the conference call, please dial (844) 836-8739 (U.S.) or (412) 317-5440 (Int’l) ten minutes prior to the start time and reference Conference ID number 10182461. The call will also be available via live webcast on the investor relations portion of the Company’s website located at www.entravision.com.

About Entravision Communications Corporation

Entravision is a global advertising solutions, media and technology company. Over the past three decades, we have strategically evolved into a digital powerhouse, expertly connecting brands to consumers in the U.S., Latin America, Europe, Asia and Africa. Our digital segment, the company’s largest by revenue, offers a full suite of end-to-end advertising services in 40 countries. We have commercial partnerships with Meta, X Corp. (formerly known as Twitter), TikTok, and Spotify, and marketers can use our Smadex and other platforms to deliver targeted advertising to audiences around the globe. In the U.S., we maintain a diversified portfolio of television and radio stations that target Hispanic audiences and complement our global digital services. Entravision remains the largest affiliate group of the Univision and UniMás television networks. Shares of Entravision Class A Common Stock trade on the NYSE under ticker: EVC. Learn more about our offerings at entravision.com or connect with us on LinkedIn and Facebook.

Forward-Looking Statements

This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company’s filings with the Securities and Exchange Commission.

(Financial Table Follows)

Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
 
  Three-Month Period Nine-Month Period
  Ended September 30, Ended September 30,
  2023 2022 2023 2022
Net revenue $274,417  $241,014  $786,804  $659,881 
         
Expenses:        
Cost of revenue – digital  199,289   157,095   562,881   431,951 
Direct operating expenses  31,855   30,086   94,782   87,505 
Selling, general and administrative expenses  21,954   19,208   68,287   53,022 
Corporate expenses  13,292   9,525   35,836   26,769 
Depreciation and amortization  7,356   6,554   20,336   19,212 
Change in fair value of contingent consideration  (5,997)  734   (8,939)  6,810 
Impairment charge  989   —   989   — 
Foreign currency (gain) loss  548   1,966   289   2,112 
Other operating (gain) loss  —   (58)  —   (1,011)
   269,286   225,110   774,461   626,370 
Operating income (loss)  5,131   15,904   12,343   33,511 
Interest expense  (4,454)  (3,055)  (12,788)  (7,225)
Interest income  1,558   788   3,455   1,916 
Dividend income  —   6   32   20 
Realized gain (loss) on marketable securities  (33)  (473)  (94)  (473)
Gain (loss) on debt extinguishment  —   —   (1,556)  — 
Income (loss) before income taxes  2,202   13,170   1,392   27,749 
Income tax benefit (expense)  530   (4,080)  1,038   (8,305)
         
Net income (loss)  2,732   9,090   2,430   19,444 
Net (income) loss attributable to redeemable noncontrolling interest  (13)  —   (1)  — 
Net (income) loss attributable to noncontrolling interest  —   303   342   303 
Net income (loss) attributable to common stockholders $2,719  $9,393  $2,771  $19,747 
         
Basic and diluted earnings per share:        
Net income (loss) per share attributable to common stockholders, basic and diluted $0.03  $0.11  $0.03  $0.23 
         
Cash dividends declared per common share, basic and diluted $0.05  $0.03  $0.15  $0.08 
         
Weighted average common shares outstanding, basic  87,995,567   84,945,873   87,803,770   85,469,675 
Weighted average common shares outstanding, diluted  89,888,721   87,417,501   89,835,363   87,671,726 
Entravision Communications Corporation
Consolidated Balance Sheets
(In thousands; unaudited)
 
  September 30, December 31,
  2023 2022
ASSETS    
Current assets    
Cash and cash equivalents $110,624  $110,691 
Marketable securities  18,063   44,528 
Restricted cash  765   753 
Trade receivables, net of allowance for doubtful accounts  211,175   224,713 
Assets held for sale  1,223   — 
Prepaid expenses and other current assets  43,404   27,238 
Total current assets  385,254   407,923 
Property and equipment, net  67,750   61,362 
Intangible assets subject to amortization, net  55,706   61,811 
Intangible assets not subject to amortization  207,453   207,453 
Goodwill  90,672   86,991 
Deferred income taxes  2,591   2,591 
Operating leases right of use asset  45,159   44,413 
Other assets  21,550   8,297 
Total assets $876,135  $880,841 
     
     
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Current liabilities    
Current maturities of long-term debt $8,643  $5,256 
Accounts payable and accrued expenses  240,417   237,415 
Operating lease liabilities  7,150   5,570 
Total current liabilities  256,210   248,241 
Long-term debt, less current maturities, net of unamortized debt issuance costs  201,301   207,292 
Long-term operating lease liabilities  46,849   42,151 
Other long-term liabilities  17,294   30,198 
Deferred income taxes  68,464   67,590 
Total liabilities  590,118   595,472 
     
Redeemable noncontrolling interest  47,301   — 
Stockholders’ equity    
Class A common stock  8   8 
Class U common stock  1   1 
Additional paid-in capital  742,040   776,298 
Accumulated deficit  (501,604)  (504,375)
Accumulated other comprehensive income (loss)  (1,729)  (1,510)
Total stockholders’ equity  238,716   270,422 
Noncontrolling interest  –   14,947 
Total equity  238,716   285,369 
Total liabilities and equity $876,135  $880,841 
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)
 
  Three-Month Period Nine-Month Period
  Ended September 30, Ended September 30,
  2023 2022 2023 2022
Cash flows from operating activities:        
Net income (loss) $2,732  $9,090  $2,430  $19,444 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Depreciation and amortization  7,356   6,554   20,336   19,212 
Impairment charge  989   —   989   — 
Deferred income taxes  (40)  62   (169)  (3,151)
Non-cash interest  85   365   264   1,076 
Amortization of syndication contracts  118   117   358   348 
Payments on syndication contracts  (125)  (70)  (366)  (304)
Non-cash stock-based compensation  7,032   2,786   17,053   7,995 
(Gain) loss on marketable securities  33   473   94   473 
(Gain) loss on disposal of property and equipment  (29)  39   (11)  (599)
(Gain) loss on debt extinguishment  —   —   1,556   — 
Change in fair value of contingent consideration  (5,997)  734   (8,939)  6,810 
Changes in assets and liabilities:        
(Increase) decrease in accounts receivable  (1,219)  4,708   16,261   22,296 
(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets  (3,902)  1,069   (7,199)  (183)
Increase (decrease) in accounts payable, accrued expenses and other liabilities  14,993   (10,691)  26,460   4,725 
Net cash provided by operating activities  22,026   15,236   69,117   78,142 
Cash flows from investing activities:        
Proceeds from sale of property and equipment and intangibles  33   —   83   2,671 
Purchases of property and equipment  (5,023)  (4,673)  (19,881)  (7,882)
Purchase of a business, net of cash acquired  —   —   (6,930)  — 
Investment in variable interest entities, net of cash consolidated  —   (5,164)  —   (5,164)
Purchases of marketable securities  (1,183)  (5,241)  (11,355)  (92,480)
Proceeds from sale of marketable securities  10,000   36,369   38,093   46,868 
Purchases of investments  (100)  —   (300)  — 
Issuance of loan receivable  (5,550)  —   (13,636)  — 
Net cash provided by (used in) investing activities  (1,823)  21,291   (13,926)  (55,987)
Cash flows from financing activities:        
Proceeds from stock option exercises  —   —   554   218 
Tax payments related to shares withheld for share-based compensation plans  (63)  —   (158)  (267)
Payments on debt  (1,250)  (1,001)  (214,495)  (2,501)
Dividends paid  (4,400)  (2,124)  (13,182)  (6,415)
Distributions to noncontrolling interest  —   —   (3,380)  — 
Repurchase of Class A common stock  —   —   —   (11,280)
Payment of contingent consideration  (3,403)  (21,734)  (35,113)  (65,340)
Principal payments under finance lease obligation  (37)  (33)  (113)  (72)
Proceeds from borrowings on debt  1   —   212,420   — 
Payments for debt issuance costs  —   —   (1,777)  — 
Net cash used in financing activities  (9,152)  (24,892)  (55,244)  (85,657)
Effect of exchange rates on cash, cash equivalents and restricted cash  (3)  5   (2)  (1)
Net increase (decrease) in cash, cash equivalents and restricted cash  11,048   11,640   (55)  (63,503)
Cash, cash equivalents and restricted cash:        
Beginning  100,341   110,700   111,444   185,843 
Ending $111,389  $122,340  $111,389  $122,340 
Entravision Communications Corporation
Reconciliation of Consolidated EBITDA to Cash Flows From Operating Activities
(In thousands; unaudited)
 
The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:
 
  Three-Month Period Nine-Month Period
  Ended September 30, Ended September 30,
  2023 2022 2023 2022
         
Consolidated EBITDA (1) $14,185  $25,972  $41,420  $66,566 
EBITDA attributable to redeemable noncontrolling interest  319   —   736   — 
EBITDA attributable to noncontrolling interest  —   (5)  230   (5)
Interest expense  (4,454)  (3,055)  (12,788)  (7,225)
Interest income  1,558   788   3,455   1,916 
Dividend income  –   6   32   20 
Realized gain (loss) on marketable securities  (33)  (473)  (94)  (473)
Income tax expense  530   (4,080)  1,038   (8,305)
Amortization of syndication contracts  (118)  (117)  (358)  (348)
Payments on syndication contracts  125   70   366   304 
Non-cash stock-based compensation included in direct operating expenses  (2,637)  (981)  (7,218)  (2,878)
Non-cash stock-based compensation included in corporate expenses  (4,395)  (1,805)  (9,835)  (5,117)
Depreciation and amortization  (7,356)  (6,554)  (20,336)  (19,212)
Change in fair value of contingent consideration  5,997   (734)  8,939   (6,810)
Impairment charge  (989)  —   (989)  — 
Non-recurring cash severance charge  —   —   (612)  — 
Other operating gain (loss)  —   58   —   1,011 
Gain (loss) on debt extinguishment  —   —   (1,556)  — 
Net (income) loss attributable to redeemable noncontrolling interest  (13)  —   (1)  — 
Net (income) loss attributable to noncontrolling interest  —   303   342   303 
Net income (loss) attributable to common stockholders  2,719   9,393   2,771   19,747 
         
Depreciation and amortization  7,356   6,554   20,336   19,212 
Impairment charge  989   —   989   — 
Deferred income taxes  (40)  62   (169)  (3,151)
Non-cash interest  85   365   264   1,076 
Amortization of syndication contracts  118   117   358   348 
Payments on syndication contracts  (125)  (70)  (366)  (304)
Non-cash stock-based compensation  7,032   2,786   17,053   7,995 
Realized (gain) loss on marketable securities  33   473   94   473 
(Gain) loss on debt extinguishment  —   —   1,556   — 
(Gain) loss on disposal of property and equipment  (29)  39   (11)  (599)
Change in fair value of contingent consideration  (5,997)  734   (8,939)  6,810 
Net income (loss) attributable to redeemable noncontrolling interest  13   —   1   — 
Net income (loss) attributable to noncontrolling interest  —   (303)  (342)  (303)
Changes in assets and liabilities:        
(Increase) decrease in accounts receivable  (1,219)  4,708   16,261   22,296 
(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets  (3,902)  1,069   (7,199)  (183)
Increase (decrease) in accounts payable, accrued expenses and other liabilities  14,993   (10,691)  26,460   4,725 
Cash flows from operating activities  22,026   15,236   69,117   78,142 
(1)Consolidated EBITDA is defined on page 2.
Entravision Communications Corporation
Reconciliation of Free Cash Flow to Cash Flows From Operating Activities
(In thousands; unaudited)
 
The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:
 
  Three-Month Period Nine-Month Period
  Ended September 30, Ended September 30,
  2023 2022 2023 2022
Consolidated EBITDA (1) $14,185  $25,972  $41,420  $66,566 
Net interest expense (1)  (2,811)  (1,902)  (9,069)  (4,233)
Dividend income  —   6   32   20 
Cash paid for income taxes  (2,347)  (4,018)  (5,929)  (11,456)
Capital expenditures (2)  (5,023)  (4,673)  (19,881)  (7,882)
Landlord incentive reimbursement  —   —   3,509   — 
Non-recurring cash severance charge  —   —   (612)  — 
Other operating gain (loss)  —   58   —   1,011 
Free cash flow (1)  4,004   15,443   9,470   44,026 
         
Capital expenditures (2)  5,023   4,673   19,881   7,882 
Landlord incentive reimbursement  —   —   (3,509)  — 
EBITDA attributable to redeemable noncontrolling interest  319   —   736   — 
EBITDA attributable to noncontrolling interest  —   (5)  230   (5)
(Gain) loss on disposal of property and equipment  (29)  39   (11)  (599)
Cash paid for income taxes  2,347   4,018   5,929   11,456 
Deferred income taxes  (40)  62   (169)  (3,151)
Income tax (expense) benefit  530   (4,080)  1,038   (8,305)
Changes in assets and liabilities:        
(Increase) decrease in accounts receivable  (1,219)  4,708   16,261   22,296 
(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets  (3,902)  1,069   (7,199)  (183)
Increase (decrease) in accounts payable, accrued expenses and other liabilities  14,993   (10,691)  26,460   4,725 
Cash Flows From Operating Activities $22,026  $15,236  $69,117  $78,142 
(1)Consolidated EBITDA, net interest expense, and free cash flow are defined on page 2.
(2)Capital expenditures are not part of the consolidated statement of operations.

Christopher T. Young
Chief Financial Officer and Treasurer
Entravision Communications Corporation
310-447-3870

Kimberly Orlando
ADDO Investor Relations
310-829-5400
evc@addo.com

Source: Entravision Communications Corporation

Saga Communications, Inc. (SGA) – Delivering On Its Growth Strategy Initiatives

Posted on by cpereira@noblefcm.com


Friday, November 03, 2023

Saga Communications, Inc. is a broadcast company whose business is primarily devoted to acquiring, developing and operating radio stations. Saga currently owns or operates broadcast properties in 27 markets, including 79 FM and 33 AM radio stations. Saga’s strategy is to operate top billing radio stations in mid sized markets, defined as markets ranked (by market revenues) from 20 to 200. Saga’s radio stations employ a myriad of programming formats, including Active Rock, Adult Album Alternative, Adult Contemporary, Country, Classic Country, Classic Hits, Classic Rock, Contemporary Hits Radio, News/Talk, Oldies and Urban Contemporary. In operating its stations, Saga concentrates on the development of strong decentralized local management, which is responsible for the day-to-day operations of the stations in their market area and is compensated based on their financial performance as well as other performance factors that are deemed to effect the long-term ability of the stations to achieve financial objectives. Saga began operations in 1986 and became a publicly traded company in December 1992. The stock trades on NASDAQ under the ticker symbol “SGA”.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

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

Solid Q3 results. The company reported Q3 revenue of $29 million, and adj. EBITDA of $5 million, both of which were in-line with our estimates of $28.9 million and $5 million, respectively. Notably, the company’s national advertising revenue was up 1% in the quarter, which is virtually unheard of among its peers. We believe that the company will have among the best Q3 results in the industry. 

Best in class. Management indicated that its Digital businesses grew a strong 34% in the quarter, likely to exceed the industry. Notably, the company’s national advertising revenue is up an impressive 6.9% year-to-date. In addition to the company’s industry leading digital revenue growth and resilient national advertising revenues, the company has a pristine balance sheet with no long term debt. 


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This Company Sponsored 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. 

Entravision Communications (EVC) – A Tempered, But Still Favorable View

Posted on by cpereira@noblefcm.com


Friday, November 03, 2023

Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television and radio operations to reach Hispanic consumers across the United States, as well as the border markets of Mexico. Entravision owns and/or operates 53 primary television stations and is the largest affiliate group of both the top-ranked Univision television network and Univision’s TeleFutura network, with television stations in 20 of the nation’s top 50 Hispanic markets. The Company also operates one of the nation’s largest groups of primarily Spanish-language radio stations, consisting of 48 owned and operated radio stations.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

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

A mixed quarter. Q3 revenues of $274.4 million, a record revenue quarter for the company, was largely in line with our $277.0 million estimate. But, the absence of high margin Political advertising and lower margin revenue mix caused an adj. EBITDA shortfall, $14.2 million versus our $17.0 million estimate. Lower Digital adj. EBITDA accounted for the largest portion of the EBITDA variance. 

Lower Q4 outlook. We are lowering our Q4 total company revenue from $318.0 million to $309.7 million to reflect the company’s current pacings. Based on lower margin assumptions, we are lowering our adj. EBITDA from $25.0 million to $19.0 million. For the year, we are lowering our adj. EBITDA estimate from $69.2 million to $60.4 million. 


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored 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.