Direct Digital Holdings Reports Second Quarter 2022 Financial Results

Research, News, and Market Data on Direct Digital Holdings

HOUSTON, Aug. 11, 2022 /PRNewswire/ — Direct Digital Holdings, Inc. (Nasdaq: DRCT) (“Direct Digital” or the “Company”), a leading advertising and marketing technology platform through its operating companies Colossus Media, LLC (“Colossus Media”), Huddled Masses LLC (“Huddled Masses”) and Orange142, LLC (“Orange142”), today announced financial results for the second quarter ended June 30, 2022.

Mark Walker, Chairman and Chief Executive Officer of Direct Digital, commented, “We are pleased to report record revenue for the second quarter of 2022, demonstrating the strong growth driven by our business model. By focusing on expanding both of our impactful buy- and sell-side business segments, we have been able to expand our portfolio and client reach, delivering increased topline revenue, and consequently, overall growth in our adjusted EBITDA.”

Keith Smith, President of Direct Digital, added, “This quarter’s results are a testament to Direct Digital’s diverse and open digital marketplace business model. This, along with our supportive partner in Lafayette Square Loan Servicing, LLC, who has recently allowed us to extend our existing non-dilutive debt facility, has propelled the Company to exceptional results for the quarter, which we expect will provide us a strong remainder of the year. Consequently, Direct Digital will be raising guidance for full-year 2022.”

Second Quarter 2022 Financial Highlights:

• Revenue increased to $21.3 million in the second quarter of 2022, an increase of $10.1 million, or up 90% over the $11.2 million in the same period of 2021.
  • Sell-side advertising segment, consisting of the Colossus Media business, grew to $11.9 million and contributed $9.8 million of the increase, or up 477% over the $2.1 million in the same period of 2021.
  • Buy-side advertising segment, consisting of the Huddled Masses and Orange142 businesses, grew to $9.3 million and contributed $0.2 million of the increase, or up 2% over the $9.1 million in the same period of 2021.
• Operating income increased $0.6 million, up 22%, to $3.1 million for the second quarter of 2022, compared to income of $2.5 million in the same period of 2021. Operating income was impacted by approximately $0.7 million of public company related costs for the quarter.
• Net income was $2.6 million in the second quarter of 2022, up 58%, compared to $1.7 million in the same period of 2021.
• Adjusted EBITDA⁽¹⁾ increased 18% to $3.6 million in the second quarter 2022, compared to $3.0 million in the same period of 2021.
• Net operating cash provided by operating activities for the six-months ended June 30, 2022 was $0.1 million, compared to a net operating cash of $2.6 million generated in the same period of 2021.

Business Highlights

• For the second quarter ended June 30, 2022, Direct Digital processed approximately 98 billion monthly impressions through its sell-side advertising segment, an increase of 176% over the same period of 2021, with over 643 billion bid requests for the quarter.
• In addition, the Company’s sell-side advertising platforms received over six billion bid responses, an increase of over 857% over the same period in 2021, through 88,000 buyers for the quarter.
• The Company’s buy-side advertising segment served over 152 customers, an increase of 18% compared to the same period of 2021.

Financial Outlook

Direct Digital’s guidance assumes that the U.S. economy continues to recover, and there are no major COVID-19-related setbacks that may cause economic conditions to deteriorate or otherwise significantly reduce advertiser demand. Direct Digital plans to offer annual guidance and update it throughout the year. Accordingly, the Company estimates the following:

• For fiscal year 2022, Direct Digital is raising expectations for guidance by approximately 40% to increase from a range of $48.0 million-$52.0 million to $70 million-$75 million, or up 113% year-over-year growth at the mid-point, while targeting an Adjusted EBITDA Margin in the double digits.

Conference Call and Webcast Details

Direct Digital will host a conference call on Thursday, August 11, 2022 at 5:00 p.m. Eastern Time to discuss the Company’s quarterly results. The live webcast and replay can be accessed at https://ir.directdigitalholdings.com/. Please access the website at least fifteen minutes prior to the call to register, download and install any necessary audio software. For those who cannot access the webcast, a replay will be available at https://ir.directdigitalholdings.com/ for a period of twelve months following the live webcast.

Footnote

⁽¹⁾ “Adjusted EBITDA” is a non-GAAP financial measure and Adjusted EBITDA Margin is an operating ratio derived from a non-GAAP financial measure. The section titled “Non-GAAP Financial Measures” below describes our usage of non-GAAP financial measures and provides reconciliations between historical GAAP and non-GAAP information contained in this press release.  

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of federal securities laws, including the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and which are subject to certain risks, trends and uncertainties.

As used below, “we,” “us,” and “our” refer to Direct Digital. We use words such as “could,” “would,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar expressions to identify forward-looking statements, but not all forward-looking statements include these words. All statements contained in this release that do not relate to matters of historical fact should be considered forward-looking statements.

All of our forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Our forward-looking statements are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance expressed in or implied by the forward-looking statements, including, but not limited to: our dependence on the overall demand for advertising, which could be influenced by economic downturns; any slow-down or unanticipated development in the market for programmatic advertising campaigns; the effects of health epidemics, such as the ongoing global COVID-19 pandemic; operational and performance issues with our platform, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems; any significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers’, suppliers’ or other partners’ computer systems; any unavailability or non-performance of the non-proprietary technology, software, products and services that we use; unfavorable publicity and negative public perception about our industry, particularly concerns regarding data privacy and security relating to our industry’s technology and practices, and any perceived failure to comply with laws and industry self-regulation; restrictions on the use of third-party “cookies,” mobile device IDs or other tracking technologies, which could diminish our platform’s effectiveness; any inability to compete in our intensely competitive market; any significant fluctuations caused by our high customer concentration; any violation of legal and regulatory requirements or any misconduct by our employees, subcontractors, agents or business partners; any strain on our resources, diversion of our management’s attention or impact on our ability to attract and retain qualified board members as a result of being a public company; our dependence, as a holding, of receiving distributions from Direct Digital Holdings, LLC to pay our taxes, expenses and dividends; and other factors and assumptions discussed in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and other sections of our filings with the SEC that we make from time to time. Should one or more of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this release to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

About Direct Digital Holdings
Direct Digital Holdings, Inc. (Nasdaq: DRCT), through its operating companies Colossus Media, LLC, Huddled Masses LLC and Orange142, LLC, brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. Direct Digital Holdings’ sell-side platform, Colossus Media, LLC, offers advertisers of all sizes extensive reach within general market and multicultural media properties. The company’s subsidiaries Huddled Masses LLC and Orange142, LLC deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from energy to healthcare to travel to financial services. Direct Digital Holdings, Inc’s sell- and buy-side solutions manage approximately 88,000 clients monthly, generating over 98 billion impressions per month across display, CTV, in-app and other media channels. The company has been named a top minority-owned business by The Houston Business Journal.

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SOURCE Direct Digital Holdings

Released
August 11, 2022

Thursday, August 11, 2022

Motorsport Games (MSGM)
Time to Refill the Tank

Motorsport Games, a Motorsport Network company, combines innovative and engaging video games with exciting esports competitions and content for racing fans and gamers around the globe. The Company is the officially licensed video game developer and publisher for iconic motorsport racing series across PC, PlayStation, Xbox, Nintendo Switch and mobile, including NASCAR, INDYCAR, 24 Hours of Le Mans and the British Touring Car Championship (“BTCC”). Motorsport Games is an award-winning esports partner of choice for 24 Hours of Le Mans, Formula E, BTCC, the FIA World Rallycross Championship and the eNASCAR Heat Pro League, among others.

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

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

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

Q2 misses expectations. The company reported Q2 revenue of $2 million, missing our estimate of $4.2 million by 52%. Adj. EBITDA loss of $4.95 million was below our expectation of a loss of $3.74 million. Product releases are key to improved financial performance, which is expected in the second half this year.

Product roadmap remains intact. Management noted that the company’s scheduled title releases remain largely on schedule. The next release will be of the newest NASCAR game for Nintendo Switch, in Q4 of this year. 

…

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. 

Motorsport Games Reports Second Quarter 2022 Financial Results

Research, News, and Market Data on Motorsport Games

MIAMI, Aug. 10, 2022 (GLOBE NEWSWIRE) — Motorsport Games Inc. (NASDAQ: MSGM) (“Motorsport Games” or the “Company”) today reported financial results for its second quarter ended June 30, 2022 (“Q2 2022”). The Company has also posted to the Company’s investor relations website a Q2 2022 Quarter End Review video and a Q2 2022 earnings slide deck, which highlight certain key milestones that occurred in the period, as well as an updated Investor Presentation.

Dmitry Kozko, Chief Executive Officer of Motorsport Games, commented, “In Q2 2022, Motorsport Games continued its product and content releases to best deliver against our product roadmap. Within rFactor 2, we released new features and official BTCC content for our fans to enjoy. A promotional plan was announced, helping guide us further along in the lead up to the 2024 release of the official BTCC game. Our growing esports initiatives were further bolstered by the announcement of this year’s 2022/23 Le Mans Virtual Series schedule, which has continued to grow in stature, recognition and scale since the inaugural event. Lastly, we’ve delivered the highly anticipated next-gen console update for NASCAR 21: Ignition for our players on Xbox Series S and X, as well as PlayStation 5.”

Kozko added, “While we continue to explore multiple funding options to provide the Company sufficient liquidity to develop our products, we remain confident in our ability to deliver against our product roadmap.”

Second Quarter 2022
Business Update

?	NASCAR 21: Ignition Patch Released Providing Native Support for PlayStation 5 and Xbox Series X|S. The Company released a patch for NASCAR 21: Ignition bringing support for 4K resolutions with next-generation consoles from Microsoft and Sony. The patch is free to everyone who owns the game and will be a free upgrade moving forward.
?	Le Mans Virtual Series Returns for more Elite Esports Competition Including the Award Winning 24 Hours of Le Mans Virtual. The Le Mans Virtual Series returns this September with more of the elite, endurance esports competition, that has attracted world motor racing champions, captured global attention and received plaudits from teams, drivers and fans alike. All 5 rounds of the coming series will be held online on the rFactor2 platform, including the 24 Hours of Le Mans Virtual, the climax of the premier endurance esports championship. This format allows teams to compete virtually on simulators located all around the world for a total prize fund of US $250,000.
?	Future Promotional Plan to Upcoming Official BTCC Game Announced. The Company announced a promotional plan update, including activations, content releases and ‘first-play content’ tech demos through rFactor 2, to its planned British Touring Car Championship (“BTCC”) official game, which will release in 2024, as previously disclosed by the Company.
?	rFactor 2 Quarterly Content Update. In May 2022, the Company released a collection of improvements, new features and content. A new sound engine, wet weather updates, particles and sparks, and shift protection bring more realism to the rFactor 2 racing simulation platform. Several BTCC cars and tracks were also released bringing more of the BTCC experience to the fans.
?	KartKraft Single Console Release Schedule Update. The timing of the next KartKraft release on one of the consoles, which was originally planned for a 2022 release date, will now likely move into 2023, due to potential opportunities we are exploring with a first party platform and their potential interest in an exclusive title release next year.

Financial Results for
the Three Months Ended June 30, 2022

Revenues for Q2 2022 were $2.0 million, as compared to $2.2 million for Q2 2021. The $0.2 million, or 10%, quarter-over-quarter decrease reflects $0.3 million lower gaming sales, partially offset by a $0.1 million increase in esports revenues, primarily from the 24 Hours of Le Mans esports event held in January 2022.

Q2 2022 net loss was $7.5 million, a $1.5 million increase compared to the Q2 2021 net loss of $6.0 million. The increase in net loss was driven by: (i) a $0.9 million increase in Q2 2022 development expenditures; (ii) a $0.8 million increase in sales and marketing spend (iii) a $0.6 million increase in foreign currency losses; (iv) a $0.2 million decrease in gross profit (v) a $0.2 million increase in interest expense (vi) a $0.1 million increase in impairment; and (vii) a $0.1 million increase in depreciation and amortization. The increases in Q2 2022 expenses described above were partially offset by a $1.4 million reduction in general and administrative expenses driven primarily by a $1.1 million payment in Q2 2021 for the settlement of certain stock appreciation rights.

Q2 2022 Adjusted EBITDA loss⁽¹⁾ was $4.9 million, a $1.2 million increase in loss when compared to Q2 2021 Adjusted EBITDA loss of $3.7 million. The increase in Adjusted EBITDA loss⁽¹⁾ was primarily driven by the same factors causing the increase in Q2 2022 net loss. 

The following table provides a reconciliation from net loss to Adjusted EBITDA⁽¹⁾ for Q2 2022 and Q2 2021, respectively:

		Three Months Ended June 30, 2022				Three Months Ended June 30, 2021
Net Loss		$	(7,487,671	)		$	(5,960,943	)
Interest expense			191,662				31,899
Depreciation and Amortization			493,658				522,709
EBITDA			(6,802,351	)			(5,406,335	)
Acquisition-related expenses			1,467,492				1,600,087
Impairment of goodwill and intangible assets			149,048				–
Stock-based compensation			238,573				116,274
Adjusted EBITDA		$	(4,947,238	)		$	(3,689,974	)

Financial Results for
the Six Months Ended June 30, 2022

Revenues were $5.3 million and $4.7 million for the six months ended June 30, 2022 and 2021, respectively, an increase of $0.6 million, or 13%, period over period. For the six months ended June 30, 2022, revenues from our Gaming Segment increased $0.2 million, or 5%, to $4.9 million, compared to $4.7 million for the six months ended June 30, 2021, while revenues from our Esport Segment increased by $0.4 million for the six months ended June 30, 2022, when compared to the six months ended June 30, 2021. The increase in our Gaming segment revenues compared to the 2021 period was primarily due to $0.7 million in higher game sales and an increase of $0.6 million in additional revenues earned through the development of simulation platforms using our rFactor 2 platform for third parties. These increases were partially offset by $1.1 million in retail pricing concessions. The increase in our Esport Segment revenues was primarily driven by the 24 Hours of Le Mans esports event held in January 2022.

The net loss for the six months ended June 30, 2022 was $23.5 million, an increase of $3.5 million when compared to the $20.0 million net loss for the six months ended June 30, 2021. The increase in net loss was driven by: (i) a $9.4 million increase in goodwill and intangible asset impairment; (ii) a $2.0 million increase in development expenditures; (iii) a $1.5 million increase in sales and marketing spend; (iv) a $1.4 million decrease in gains from equity method investments; (v) a $0.9 million increase in foreign currency losses; (vi) a $0.6 million decrease in gross profit; and (vii) a $0.2 million increase in interest expense. These increases were offset by $12.7 million of lower general and administrative expense. 

For the six months ended June 30, 2022, Adjusted EBITDA loss⁽¹⁾ was $10.5 million, a $4.0 million increase, when compared to the $6.5 million Adjusted EBITDA loss for the six months ended June 30, 2021. The increase in Adjusted EBITDA loss⁽¹⁾ was primarily driven by the same factors as the increase in net loss for the six months ended June 30, 2022, when compared to the six months ended June 30, 2021.

The following table provides a reconciliation from net loss to Adjusted EBITDA⁽¹⁾ for the six months ended June 30, 2022 and the six months ended June 30, 2021:

		Six Months Ended June 30, 2022				Six Months Ended June 30, 2021
Net Loss		$	(23,454,716	)		$	(20,046,367	)
Interest expense			393,258				151,438
Depreciation and Amortization			1,071,172				659,309
EBITDA			(21,990,286	)			(19,235,620	)
IPO-related expenses			–				2,947,192
Acquisition-related expenses			1,468,742				1,930,566
Impairment of goodwill and intangible assets			9,428,370				–
Gain attributable to equity method investment			–				(1,370,837	)
Stock-based compensation			591,603				9,193,190
Adjusted EBITDA		$	(10,501,571	)		$	(6,535,509	)

Cash Flow and
Liquidity

For the six months ended June 30, 2022, the Company had negative cash flows from operations of approximately $12.0 million. The Company expects to continue to have negative operating cash flows for the foreseeable future, as it continues to incur expenses to develop new game franchises. The Company’s existing cash on hand will be insufficient to fund its minimum liquidity requirements for at least the next 12 months and will need to be supplemented with additional debt and/or equity financing, cash generated by cost control initiatives, and/or additional changes to our product roadmap to reduce working capital requirements.

The Company’s future liquidity and capital requirements include funds to support the planned costs to operate its business, including amounts required to fund working capital, support the development and introduction of new products, maintain existing game titles and certain capital expenditures. The adequacy of the Company’s available funds generally depends on many factors, including its ability to successfully develop consumer-preferred new products or enhancements to its existing products, continued development and expansion of the Company’s esports platform and its ability to collaborate with and/or acquire other companies or technologies to enhance or complement the Company’s product and service offerings. 

The Company is currently seeking additional funds through a variety of arrangements and through maintaining and enhancing strong cost controls. There can be no assurances that the sources of liquidity referred to above will provide the Company with sufficient liquidity to meet its ongoing cash requirements as, among other things, the Company’s liquidity can be impacted by a number of factors, including the Company’s level of sales and expenditures, as well as accounts receivable, sales allowances, prepaid manufacturing expenses and accrued expenses.

⁽¹⁾Use of Non-GAAP Financial Measures

Adjusted EBITDA (the “Non-GAAP Measure”) is not a financial measure defined by U.S. generally accepted accounting principles (“U.S. GAAP”). See the reconciliations of the Non-GAAP Measure to its most directly comparable U.S. GAAP measure in the financial tables above.

Adjusted EBITDA, a measure used by management to assess the Company’s operating performance, is defined as EBITDA, which is net (loss) plus interest (income) expense, depreciation and amortization, less income tax benefit (if any), adjusted to exclude: (i) IPO-related expenses; (ii) acquisition related expenses; (iii) gain attributable to equity method investment resulting from the acquisition of additional equity interest in Le Mans Esports Series Ltd.; (iv) stock-based compensation expenses; (v) impairment of goodwill and intangible assets; and (vi) other charges or gains resulting from non-recurring events.

The Company uses the Non-GAAP Measure to manage its business and evaluate its financial performance, as Adjusted EBITDA eliminates items that affect comparability between periods that the Company believes are not representative of its core ongoing operating business. Additionally, management believes that using the Non-GAAP Measure is useful to its investors because it enhances investors’ understanding and assessment of the Company’s normalized operating performance and facilitates comparisons to prior periods and its competitors’ results (who may define Adjusted EBITDA differently).

The Non-GAAP Measure is not a recognized term under U.S. GAAP and does not purport to be an alternative to revenue, income/loss from operations, net (loss) income, or cash flows from operations or as a measure of liquidity or any other performance measure derived in accordance with U.S. GAAP. Additionally, the Non-GAAP Measure is not intended to be a measure of free cash flows available for management’s discretionary use, as it does not consider certain cash requirements, such as interest payments, tax payments, working capital requirements and debt service requirements. The Non-GAAP Measure has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for the Company’s results as reported under U.S. GAAP. Management compensates for the limitations of using non-GAAP financial measures by using them to supplement U.S. GAAP results to provide a more complete understanding of the factors and trends affecting the business than would be presented by using only measures in accordance with U.S. GAAP. Because not all companies use identical calculations, the Company’s measures may not be comparable to other similarly titled measures of other companies. Reconciliations of the Non-GAAP Measure to net loss, its most directly comparable financial measure, calculated and presented in accordance with U.S. GAAP, are presented in the table above.

Conference Call and
Webcast Details

The Company will host a conference call and webcast at 5:00 p.m. ET today, August 10, 2022, to discuss its financial results. The live conference call can be accessed by dialing 1-877-407-0784 from the U.S. or 1-201-689-8560. Alternatively, participants may access the live webcast on the Motorsport Games Investor Relations website at https://ir.motorsportgames.com under “Events.”

About Motorsport Games

Motorsport Games, a Motorsport Network company, combines innovative and engaging video games with exciting esports competitions and content for racing fans and gamers around the globe. The Company is the officially licensed video game developer and publisher for iconic motorsport racing series across PC, PlayStation, Xbox, Nintendo Switch and mobile, including NASCAR, INDYCAR, 24 Hours of Le Mans and the British Touring Car Championship (“BTCC”). Motorsport Games is an award-winning esports partner of choice for 24 Hours of Le Mans, Formula E, BTCC, the FIA World Rallycross Championship and the eNASCAR Heat Pro League, among others.

For more information about Motorsport Games visit: www.motorsportgames.com. 

Forward-Looking
Statements

Certain statements in this press release, the related conference call and webcast which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements in this press release, the related conference call and webcast that are not statements of historical fact may be deemed forward-looking statements. Words such as “continue,” “will,” “may,” “could,” “should,” “expect,” “expected,” “plans,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: (i) Motorsport Games’ future business, future results of operations and/or financial condition; (ii) the expected future impact of new or planned products or offerings and the timing of launching such products and offerings, including, without limitation our belief that we will deliver against our product roadmap, our expectation to release the official BTCC game in 2024 and the next KartKraft release on one of the consoles in 2023; (iii) the expected future impact of implementing management strategies and the impact of other industry trends, including, without limitation our ability to execute a business continuity plan and adapt to developments real-time, as well as our business plan to increase and diversify our revenue stream; (iv) our expectation that the Company will continue to have negative operating cash flows for the foreseeable future, as we continue to incur expenses to develop new game franchises; and (v) our liquidity and capital requirements, including, without limitation, our ability to continue as a going concern, our belief that our existing cash on hand will not be sufficient to fund our liquidity requirements for at least the next 12 months and our expectation to supplement liquidity with additional debt and/or equity financing, cash generated by cost control initiatives, and/or additional changes to our product roadmap to reduce working capital requirements, as well as statements regarding our cash flows and anticipated uses of cash. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Motorsport Games and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to: (i) difficulties, delays or less than expected results in achieving the Company’s growth plans, objectives and expectations, such as due to a slower than anticipated economic recovery and/or the Company’s inability, in whole or in part, to continue to execute its business strategies and plans, such as due to less than anticipated customer acceptance of the Company’s new game titles, the Company’s experiencing difficulties or the inability to launch its games as planned, less than anticipated performance of the games impacting customer acceptance and sales and/or greater than anticipated costs and expenses to develop and launch its games, including, without limitation, higher than expected labor costs and, in addition to the factors set forth in (ii) through (iv) below, the Company’s continuing financial condition and ability to obtain additional debt and/or equity financing to meet its liquidity requirements, such as the going concern qualification on the Company’s annual audited financial statements posing difficulties in obtaining new financing on terms acceptable to the Company, or at all; (ii) difficulties, delays in or unanticipated events that may impact the timing and scope of new product launches, such as due to difficulties or delays in using its product development personnel in Russia due to the Russia invasion of Ukraine and the related sanctions and/or more restrictive sanctions rendering transacting in the region more difficult or costly and/or difficulties and/or delays arising out of any resurgence of the ongoing and prolonged COVID-19 pandemic; (iii) less than expected benefits from implementing the Company’s management strategies and/or adverse economic, market and geopolitical conditions that negatively impact industry trends, such as significant changes in the labor markets, an extended or higher than expected inflationary environment (such as the impact on consumer discretionary spending as a result of significant increases in energy and gas prices which have been increasing since early in 2020), a higher interest rate environment, tax increases impacting consumer discretionary spending and or quantitative easing that results in higher interest rates that negatively impact consumers’ discretionary spending, or adverse developments relating to the Russia invasion of Ukraine; (iv) greater than anticipated negative operating cash flows such as due to higher than expected development costs, higher interest rates and/or higher inflation; and/or (v) difficulties and/or delays in resolving our liquidity and capital requirements, including without limitation, difficulties in securing funding that is on commercially acceptable terms to us or at all, such as our inability to complete in whole or in part any potential debt and/or equity financing transactions, as well as any inability to achieve cost reductions. Factors other than those referred to above could also cause Motorsport Games’ results to differ materially from expected results. Additional examples of such risks and uncertainties include, but are not limited to: (i) delays and higher than anticipated expenses related to the ongoing and prolonged COVID-19 pandemic, any resurgence of COVID-19 and the Russia invasion of Ukraine; (ii) Motorsport Games’ ability (or inability) to maintain existing, and to secure additional, licenses and other agreements with various racing series; (iii) Motorsport Games’ ability to successfully manage and integrate any joint ventures, acquisitions of businesses, solutions or technologies; (iv) unanticipated operating costs, transaction costs and actual or contingent liabilities; (v) the ability to attract and retain qualified employees and key personnel; (vi) adverse effects of increased competition; (vii) changes in consumer behavior, including as a result of general economic factors, such as increased inflation, higher energy prices and higher interest rates; (viii) Motorsport Games’ inability to protect its intellectual property; and/or (ix) local, industry and general business and economic conditions. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in Motorsport Games’ filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, its Quarterly Reports on Form 10-Q filed with the SEC during 2022, as well as in its subsequent filings with the SEC. Motorsport Games anticipates that subsequent events and developments may cause its plans, intentions and expectations to change. Motorsport Games assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Motorsport Games’ plans and expectations as of any subsequent date. 

Website and Social
Media Disclosure

Investors and others should note that we announce material financial information to our investors using our investor relations website (ir.motorsportgames.com), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media and blogs, to communicate with our investors and the public about our company and our products. It is possible that the information we post on our websites, social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the websites, social media channels and blogs, including the following (which list we will update from time to time on our investor relations website):

Websites	Social Media
motorsportgames.com	Twitter: @msportgames & @traxiongg
traxion.gg	Instagram: msportgames & traxiongg
motorsport.com	Facebook: Motorsport Games & traxiongg
	LinkedIn: Motorsport Games
	Twitch: traxiongg
	Reddit: traxiongg

The contents of these websites and social media channels are not part of, nor will they be incorporated by reference into, this press release.

Contacts:

Investors:
Investors@motorsportgames.com 

Media:
ASTRSK PR
motorsportgames@astrskpr.com

Appendix:

The following table provide a comparative summary of the Company’s financial results for the periods presented:

MOTORSPORT GAMES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended June 30,								Six Months Ended June 30,
		2022				2021				2022				2021
Revenues		$	2,008,987			$	2,238,927			$	5,330,776			$	4,713,059
Cost of revenues			856,157				906,303				2,869,963				1,688,111
Gross profit			1,152,830				1,332,624				2,460,813				3,024,948
Operating expenses:
Sales and marketing			1,540,220				704,222				3,228,669				1,728,440
Development			2,681,643				1,818,178				5,085,980				3,068,540
General and administrative			3,349,609				4,717,180				6,772,763				19,481,218
Impairment of goodwill			–				–				4,788,268				–
Impairment of intangible assets			149,048				–				4,640,102				–
Depreciation and amortization			117,725				66,448				233,796				97,223
Total operating expenses			7,838,245				7,306,028				24,749,578				24,375,421
Loss from operations			(6,685,415	)			(5,973,404	)			(22,288,765	)			(21,350,473	)
Interest expense			(191,662	)			(31,899	)			(393,258	)			(151,438	)
Gain attributable to equity method investment			–				–				–				1,370,837
Other (loss) income, net			(610,594	)			44,360				(772,693	)			84,707
Net loss			(7,487,671	)			(5,960,943	)			(23,454,716	)			(20,046,367	)
Less: Net loss attributable to non-controlling interest			(82,375	)			(180,849	)			(911,803	)			(454,299	)
Net loss attributable to Motorsport Games Inc.		$	(7,405,296	)		$	(5,780,094	)		$	(22,542,913	)		$	(19,592,068	)
Net loss attributable to Class A common stock per share:
Basic and diluted		$	(0.63	)		$	(0.50	)		$	(1.93	)		$	(1.88	)
Weighted-average shares of Class A common stock outstanding:
Basic and diluted			11,673,587				11,494,919				11,670,888				10,421,910

 

Harte Hanks to Present at the 12th Annual Midwest IDEAS Investor Conference on August 24th and 25th in Chicago, IL

Research, News, and Market Data on Harte Hanks

CHELMSFORD, MA / ACCESSWIRE / August 9, 2022 / Harte Hanks, Inc. (NASDAQ:HHS), a leading global customer experience company focused on bringing companies closer to customers for nearly 100 years, today announced that Brian Linscott,its Chief Executive Officer, will present at the Midwest IDEAS Investor Conference on Wednesday, August 24, 2022, at The Gwen in Chicago, IL. Harte Hanks’s presentation is scheduled to begin at 11:00am CT. The presentation will be webcast and may be accessed through the conference host’s main website: https://www.threepartadvisors.com/midwest and in the investor relations section of the company’s website: https://investors.hartehanks.com/.

About IDEAS Investor Conferences

The mission of the IDEAS Conferences is to provide independent regional venues for quality companies to present their investment merits to an influential audience of investment professionals. Unlike traditional bank-sponsored events, IDEAS Investor Conferences are “SPONSORED BY INVESTORS. FOR
INVESTORS.” and for the benefit of regional investment communities. Conference sponsors collectively have more than $200 billion in assets under management and include: 1102 Partners, Adirondack Research and Management, Allianz Global Investors: NFJ Investment Group, Ariel Investments, Aristotle Capital Boston, Barrow Hanley Mewhinney & Strauss, BMO Global Asset Management, Constitution Research & Management, Inc., Fidelity Investments, First Wilshire Securities Management, Inc., Gamco Investors, Granahan Investment Management, Great Lakes Advisors, Greenbrier Partners Capital Management, LLC, GRT Capital Partners, LLC, Hodges Capital Management, Ironwood Investment Management, Keeley Teton Advisors, Luther King Capital Management, Marble Harbor Investment Counsel, North Star Investment Management, Perritt Capital Management, Punch & Associates, Westwood Holdings Group, Inc., and William Harris Investors.

The IDEAS Investor Conferences are held annually in Boston, Chicago and Dallas and are produced by Three Part Advisors, LLC. Additional information about the events can be located at www.IDEASconferences.com.

If interested in participating or learning more about the IDEAS conferences, please contact Lacey Wesley at (817) 769 -2373 or lwesley@threepa.com.

About Harte Hanks:

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.

Investor Relations Contact:

FNK IR
Rob Fink or Tom Baumann
646.809.4048 / 646.349.6641
HHS@fnkir.com

For media inquiries, contact Jennifer London at Jen.London@HarteHanks.com

SOURCE: Harte Hanks, Inc.

 

Monday, August 08, 2022

E.W. Scripps (SSP)
Strong Political Saves The Day

The E.W. Scripps Company (NASDAQ: SSP) is a diversified media company focused on creating a better-informed world. As one of the nation’s largest local TV broadcasters, Scripps serves communities with quality, objective local journalism and operates a portfolio of 61 stations in 41 markets. The Scripps Networks reach nearly every American through the national news outlets Court TV and Newsy and popular entertainment brands ION, Bounce, Defy TV, Grit, ION Mystery, Laff and TrueReal. Scripps is the nation’s largest holder of broadcast spectrum. Scripps runs an award-winning investigative reporting newsroom in Washington, D.C., and is the longtime steward of the Scripps National Spelling Bee. Founded in 1878, Scripps has held for decades to the motto, “Give light and the people will find their own way.”

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

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

In line Q2 results. The second quarter results were roughly in line with our estimates with revenues of $594.5 million versus our estimate of $603.0 million and adj. EBITDA of $140.2 million versus our estimate of $139.3 million. The biggest variance to our estimates was in the Scripps Networks business, which was adversely affected by weakened National and Direct Response advertising. 

Q3 guide is lower than our estimates, but not horrible. We are lowering our Q3 revenue estimate from $662.0 million to $638.5 million, which reflects 15% growth over the prior year comparable period. We are lowering our Q3 adj. EBITDA estimate from $207.5 million to $170.5 million. The revision reflects soft National advertising in its Networks business and weak Core advertising. The company should cycle to moderate expenses in its Network business in Q4. …

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. 

Monday, August 08, 2022

Gray Television (GTN)
Political Better Than Expected

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, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

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

Q2 exceeds expectations. The company reported quarterly revenue of $868 million, 11% above our estimate of $782 million. Adj. EBITDA was also strong, at $309 million, which beat our estimate of $280 million by 10.4%.

Inundated with Political. The skeptical management became a believer that Political could meet or exceed 2020 levels. Management raised 2022 Political advertising forecast from $575 million to $652 million. …

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. 

Reminder: Direct Digital Holdings to Report Second Quarter 2022 Financial Results

Research, News, and Market Data on Direct Digital Holdings

August 04, 2022 9:00am EDT
Download as PDF

HOUSTON, Aug. 4, 2022  /PRNewswire/ — Direct Digital Holdings (Nasdaq: DRCT) (“Direct Digital”), a leading advertising and marketing technology platform and owner of operating companies Colossus SSP, Huddled Masses and Orange 142, will report financial results for the second quarter ended June 30, 2022, on Thursday, August 11, 2022 after the U.S. stock market closes. Management will host a conference call and webcast on the same day at 5:00 P.M. ET to discuss the results.

 

The live webcast and replay can be accessed at https://ir.directdigitalholdings.com/.

About
Direct Digital Holdings
Direct Digital Holdings (Nasdaq: DRCT), owner of operating companies Colossus SSP, Huddled Masses and Orange 142, brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. Direct Digital Holdings’ sell-side platform, Colossus SSP, offers advertisers of all sizes extensive reach within general market and multicultural media properties. The company’s subsidiaries Huddled Masses and Orange142 deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from energy to healthcare to travel to financial services. Direct Digital Holdings’ sell- and buy-side solutions manage approximately 70,000 clients monthly, generating over 90 billion impressions per month across display, CTV, in-app and other media channels. The company has been named a top minority-owned business by The Houston Business Journal.

 View original content to download multimedia:https://www.prnewswire.com/news-releases/reminder-direct-digital-holdings-to-report-second-quarter-2022-financial-results-301599633.html

SOURCE Direct Digital Holdings

Released August 4, 2022

 

Motorsport Games and BTCC Announce “BTCC rFactor 2 Hot Lap Challenge” for Final Four Events of the Season

Research, News, and Market Data on Motorsport Games

MIAMI, Aug. 05, 2022 (GLOBE NEWSWIRE) — Motorsport Games Inc. (NASDAQ:
MSGM) (“Motorsport Games” or the “Company”), a leading racing game developer, publisher and esports ecosystem provider of official motorsport racing series throughout the world, in conjunction with the British
Touring Car Championship (BTCC), announces today the BTCC
rFactor 2 Hot Lap Challenge. The challenge will be available for fans to participate in at the final four race weekends of the 2022 BTCC season. Visitors who also register for the Motorsport Games/BTCC mailing list will be among the first to receive exclusive news and updates on the upcoming BTCC game, slated for full release in 2024.

Ticket holders at each event are welcome to stop by the Motorsport Games x BTCC booth in order to experience official BTCC content within rFactor 2, the realistic racing simulation platform. Fans will compete to post their hot lap time (Time2Beat), with the best posted result winning the signed gear grand prize. The booth will feature four racing simulators pre-loaded with a rFactor 2 tech demo, running official BTCC cars and tracks. Free giveaways will also be available while supplies last. The BTCC rFactor 2 Hot Lap Challenge will be available to play at the following race weekends:

• Snetterton (Norfolk, UK): August 13-14, 2022
• Thruxton (Hampshire, UK): August 27-28, 2022
• Silverstone National (Towcester, UK): September 24-25, 2022
• Brands Hatch GP (Kent, UK): October 8-9, 2022

“The launch of the BTCC rFactor 2 Hot Lap Challenge is one of the many ways in which Motorsport Games is bringing this iconic motorsport series to life for fans to enjoy,” said Dmitry Kozko, CEO of Motorsport
Games. “This activation, a part of four events this season, provides a first look at the BTCC brought to life within the virtual world. By bringing the BTCC into the Motorsport Games fold, we are continuing to enhance our product differentiation within a robust racing games marketplace for fans across the globe.”

The BTCC rFactor 2 Hot Lap Challenge serves the goal for both Motorsport Games and the BTCC of refining and strengthening the future BTCC game title, scheduled to arrive in 2024. Fans who take part in the Time2Beat activations will be able to provide real time feedback that will be used in the game’s development. The hot lap challenges are a part of the larger promotional plan update previously announced by Motorsport Games, including additional activations, content releases and ‘first-play content’ tech demos through rFactor 2 containing BTCC content.

“The BTCC rFactor 2 Hot Lap Challenge being brought to our events is yet another way we are ensuring a memorable fan experience at our races,” said Alan Gow, BTCC Chief Executive. “We know that our fans are eager to get their hands on the official BTCC game and we ensure that progress and expanded development plans are continuing to be made in the here and now. We look forward to hearing the fans’ feedback directly and having another entertaining and engaging experience available during race weekends.”

Motorsport Games plans to continue adding additional BTCC branded content into rFactor 2. Motorsport Games and rFactor 2 have already added the Infiniti Q50 and Toyota Corolla BTCC cars into the simulation for fans to drive as part of a first content rollout. Daily BTCC competitions through the rFactor 2 competition system will be open to all users, allowing for statistics-driven benefits to each driver’s rating. All content released via rFactor 2 will be utilized as a technical test bed, allowing consumers and official drivers to provide feedback for the development team and help build the best experience upon full release.

To keep up with the latest Motorsport Game news, visit www.motorsportgames.com and follow on Twitter, Instagram, Facebook and LinkedIn.

About Motorsport Games:
Motorsport Games, a Motorsport Network company, is a leading racing game developer, publisher and esports ecosystem provider of official motorsport racing series throughout the world. Combining innovative and engaging video games with exciting esports competitions and content for racing fans and gamers, Motorsport Games strives to make the joy of racing accessible to everyone. The Company is the officially licensed video game developer and publisher for iconic motorsport racing series across PC, PlayStation, Xbox, Nintendo Switch and mobile, including NASCAR, INDYCAR, 24 Hours of Le Mans and the British Touring Car Championship (“BTCC”), as well as the industry leading rFactor 2 and KartKraft simulations. RFactor 2 also serves as the official sim racing platform of Formula E. Motorsport Games is an award-winning esports partner of choice for 24 Hours of Le Mans, Formula E, BTCC, the FIA World Rallycross Championship and the eNASCAR Heat Pro League, among others. Motorsport Games is building a virtual racing ecosystem where each product drives excitement, every esports event is an adventure and every story inspires.

About the British Touring Car Championship:
The British Touring Car Championship (BTCC) was formed in 1958 and is Britain’s most popular motor racing spectacle with its race season comprising ten events at top circuits across the UK. It is contested by professional racing drivers in competition versions of every day road cars, giving it tremendous public appeal. Over 380,000 watch the BTCC trackside each year and it receives widespread UK terrestrial TV exposure on the ITV network, with all ten events broadcast live across ITV, ITV4 and itv.com.

The 2022 campaign marks the start of the BTCC’s Hybrid Era, as the championship becomes the first touring car series in the world to integrate hybrid power into all of its race cars.

Forward-Looking Statements:
Certain statements in this press release which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as “continue,” “will,” “may,” “could,” “should,” “expect,” “expected,” “plans,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, statements concerning the expected future impact of new or planned products, features and/or offerings and the timing of launching such products, features and/and offerings, including, without limitation Motorsport Games’ plans to continue to enhance its product differentiation within a robust racing games marketplace for fans across the globe, that the BTCC rFactor 2 Hot Lap Challenge serves the goal for both Motorsport Games and the BTCC of refining and strengthening the future BTCC game title, scheduled to arrive in 2024, Motorsport Games’ plans to continue adding additional BTCC branded content into rFactor 2 and that the daily BTCC competitions will help build the best experience upon the games’ full release. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Motorsport Games and are difficult to predict. Examples of such risks and uncertainties include, without limitation, difficulties, delays in or unanticipated events that may impact the timing and scope of new product launches, such as due to: (i) difficulties or delays in using its product development personnel in Russia due to the Russia invasion of Ukraine and the related sanctions and/or more restrictive sanctions rendering transacting in the region more difficult or costly and/or difficulties and/or delays arising out of any resurgence of the ongoing and prolonged COVID-19 pandemic; (ii) less than expected benefits from implementing the Company’s management strategies; (iii) adverse economic, market and geopolitical conditions that negatively impact industry trends, such as significant changes in the labor markets, an extended or higher than expected inflationary environment (such as the impact on consumer discretionary spending as a result of significant increases in energy and gas prices which have been increasing since early in 2020), a higher interest rate environment, tax increases impacting consumer discretionary spending and/or quantitative easing that results in higher interest rates that negatively impact consumers’ discretionary spending; and/or (iv) difficulties and/or delays in resolving our liquidity position and financial condition by obtaining additional capital to meet our liquidity needs, including without limitation, difficulties in securing funding that is on commercially acceptable terms to us or at all, such as our inability to complete in whole or in part any potential debt and/or equity financing transactions, as well as any inability to achieve cost reductions and/or less than expected availability of funds under Motorsport Games’ $12 million line of credit from Motorsport Network. Factors other than those referred to above could also cause Motorsport Games’ results to differ materially from expected results. Additional examples of such risks and uncertainties include, but are not limited to: (i) delays and higher than anticipated expenses related to the ongoing and prolonged COVID-19 pandemic and any resurgence of COVID-19; (ii) Motorsport Games’ ability (or inability) to maintain existing, and to secure additional, licenses and other agreements with various racing series; (iii) Motorsport Games’ ability to successfully manage and integrate any joint ventures, acquisitions of businesses, solutions or technologies; (iv) unanticipated operating costs, transaction costs and actual or contingent liabilities; (v) the ability to attract and retain qualified employees and key personnel; (vi) adverse effects of increased competition; (vii) Motorsport Games’ ability to protect its intellectual property; and/or (viii) local, industry and general business and economic conditions. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in Motorsport Games’ filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, its Quarterly Reports on Form 10-Q filed with the SEC during 2022, as well as in its subsequent filings with the SEC. Motorsport Games anticipates that subsequent events and developments may cause its plans, intentions and expectations to change. Motorsport Games assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Motorsport Games’ plans and expectations as of any subsequent date. Additionally, the business and financial materials and any other statement or disclosure on, or made available through, Motorsport Games’ website or other websites referenced or linked to this press release shall not be incorporated by reference into this press release.

Website and Social Media Disclosure:

Investors and others should note that we announce material financial information to our investors using our investor relations website (ir.motorsportgames.com), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media and blogs, to communicate with our investors and the public about our company and our products. It is possible that the information we post on our websites, social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the websites, social media channels and blogs, including the following (which list we will update from time to time on our investor relations website):

Websites	Social Media
motorsportgames.com	Twitter: @msportgames & @traxiongg
traxion.gg	Instagram: msportgames & traxiongg
motorsport.com	Facebook: Motorsport Games & traxiongg
	LinkedIn: Motorsport Games
	Twitch: traxiongg
	Reddit: traxiongg

The contents of these websites and social media channels are not part of, nor will they be incorporated by reference into, this press release.

Press:
ASTRSK PR
motorsportgames@astrskpr.com

BTCC Media Office
Simon Melluish or Emma Illman
Tel. +44 (0) 1372 414120
Email. 
simon.melluish@mpacreative.com or emma.illman@mpacreative.com

 

Gray Television Delivers Solid Second Quarter Operating Results

Research, News, and Market Data on Gray Television

ATLANTA, Aug. 05, 2022 (GLOBE NEWSWIRE) — Gray
Television, Inc. (“Gray,” “we,” “us” or “our”) (NYSE: GTN) today announced its strong financial results for the second quarter ended June 30, 2022, including a 231% increase in net income attributable to common stockholders, compared to the second quarter of 2021. Overall, the second quarter of 2022 produced record results, including $868 million in total revenue, due to the combination of recent acquisitions, added scale, increasingly efficient integrated operations, and the “on-year” of the two-year political advertising cycle. We anticipate continued strong financial results for the remainder of the year, especially political advertising revenue. Based on our current forecasts, we now anticipate that our political advertising revenue for calendar year 2022 will match the $652 million of political advertising revenue that our current portfolio of stations recorded in 2020, a presidential election year.  

Gray’s strong cash flow in the second quarter of 2022 enabled us to return $125 million of capital to our shareholders during the second quarter by, paying down $54 million of outstanding debt; repurchasing $50 million of our common stock in the open market; and paying $21 million of cash dividends to our preferred and common shareholders. Even after these actions, Gray ended the quarter with $162 million of cash on hand. Strong operating results and political advertising revenue are expected to enable Gray to fund additional de-leveraging and cash dividend payments during the remainder of the year.

Due to the significant effect that material transactions have had on our results of our operations, we present the financial information herein consistent with both U.S. Generally Accepted Accounting Principles (“GAAP” or “As Reported Basis”) and on a Combined Historical Basis (“CHB”), which incorporates certain historical results of acquired businesses, less the historical results of divested businesses. We also furnish certain other detailed non-GAAP metrics to provide more meaningful period-over-period comparisons to assist the public in its analysis and valuation of the Company. This additional information includes a summary of incremental expenses that were specific to our acquisitions, divestitures, and related financing activities (“Transaction Related Expenses”), non-cash stock-based compensation expenses and certain non-GAAP terms common in our industry. Please refer to the detailed discussion of the foregoing terms and concepts included elsewhere herein.

Summary of Second Quarter Operating Results

As Reported Basis (the respective 2021 periods reflect the “off-year” of the two-year political advertising cycle):

• Total revenue was $868 million, an increase of 59% from the second quarter of 2021.
• Net income attributable to common stockholders was $86 million, or $0.91 per fully diluted share, an increase of 231% from the second quarter of 2021.
• Broadcast Cash Flow was $327 million, an increase of 79% from the second quarter of 2021.
• Adjusted EBITDA was $309 million, an increase of 82% from the second quarter of 2021.

Combined Historical Basis (the respective 2021 periods reflect the “off-year” of the two year political advertising cycle):

• Revenue was $868 million, an increase of 15% from the second quarter of 2021.
• Core Advertising Revenue decreased less than 1% from the second quarter of 2021.
• Broadcast Cash Flow was $330 million, an increase of 25% from the second quarter of 2021.

Other Key Metrics

• As of June 30, 2022, our Total Leverage Ratio, Net of all Cash, was 5.16 times on a trailing eight-quarter basis, netting our total cash balance of $162 million and giving effect to all Transaction Related Expenses, which is calculated as set forth in our Senior Credit Facility.
• During the three and six-months ended June 30, 2022 and 2021, we incurred Transaction Related Expenses on an As Reported Basis that included but were not limited to legal and professional fees, severance and incentive compensation and contract termination fees. In addition, we recorded certain non-cash stock-based compensation expenses. These expenses are summarized as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
	(in millions)
Transaction Related Expenses:
Broadcasting	$	2		$	–		$	4		$	–
Corporate and administrative	–			7			1			8
Miscellaneous expense, net	–			7			–			7
Total Transaction Related Expenses	$	2		$	14		$	5		$	15
Total non-cash stock-based compensation	$	6		$	4		$	11		$	7

Taxes

• During the six-months ended June 30, 2022 and 2021, we made income tax payments of $119 million and $38 million, respectively. During the remainder of 2022, based on our current forecasts, we anticipate making income tax payments (net of our expected $21 million refund) within a range of $70 million to $90 million.
• As of June 30, 2022, we have an aggregate of $337 million of various state operating loss carryforwards, of which we expect that approximately half will be utilized.

FOX Network Affiliation Agreement Renewal

On August 4, 2022, we renewed the network affiliations for all of our FOX affiliated television stations across 27 markets, including Portland, Oregon; Cincinnati, Ohio; Greenville-Spartanburg, South Carolina; West Palm Beach, Florida; Las Vegas, Nevada; Birmingham, Alabama; and New Orleans, Louisiana.

Guidance for the Three-Months Ending September 30, 2022

Based on our current forecasts for the quarter ending September 30, 2022, we anticipate the following key financial results, as outlined below in approximate ranges. We present revenue net of agency commissions. We exclude depreciation, amortization and gain/loss on disposal of assets from our estimates of operating expenses.

• Revenue:
• Core advertising revenue of $345 million to $355 million.
• Retransmission revenue of $365 million to $370 million.
• Political revenue of $193 million to $195 million.
• Production company revenue of $20 million to $21 million.
• Total revenue of $940 million to $959 million.
• Operating Expenses:
• Broadcasting expenses of $545 million to $550 million, including retransmission expense of approximately $225 million and transaction related expenses of approximately $1 million and non-cash stock-based compensation expense of approximately $1 million.
• Production company expenses of approximately $17 million.
• Corporate expenses of $30 million to $35 million, including transaction related expenses of approximately $1 million and non-cash stock-based compensation expense of approximately $5 million.

Selected Operating Data on As Reported Basis (Unaudited)
	Three Months Ended June 30,
							% Change						% Change
							2022 to						2022 to
	2022			2021			2021			2020			2020
	(dollars in millions)
Revenue (less agency commissions):
Broadcasting	$	855		$	537		59	%		$	449		90	%
Production companies	13			10			30	%		2			550	%
Total revenue	$	868		$	547		59	%		$	451		92	%
Political advertising revenue	$	90		$	6		1400	%		$	21		329	%
Operating expenses (1):
Broadcasting	$	528		$	354		49	%		$	324		63	%
Production companies	$	14		$	9		56	%		$	5		180	%
Corporate and administrative	$	25		$	25		0	%		$	17		47	%
Net income	$	99		$	39		154	%		$	11		800	%
Non-GAAP cash flow (2):
Broadcast Cash Flow	$	327		$	183		79	%		$	123		166	%
Broadcast Cash Flow Less
Cash Corporate Expenses	$	306		$	161		90	%		$	108		183	%
Free Cash Flow	$	38		$	34		12	%		$	35		9	%
	Six Months Ended June 30,
							% Change						% Change
							2022 to						2022 to
	2022			2021			2021			2020			2020
	(dollars in millions)
Revenue (less agency commissions):
Broadcasting	$	1,659		$	1,067		55	%		$	964		72	%
Production companies	36			24			50	%		21			71	%
Total revenue	$	1,695		$	1,091		55	%		$	985		72	%
Political advertising revenue	$	116		$	15		673	%		$	57		104	%
Operating expenses (1):
Broadcasting	$	1,058		$	715		48	%		$	659		61	%
Production companies	$	40		$	26		54	%		$	24		67	%
Corporate and administrative	$	53		$	43		23	%		$	32		66	%
Net income	$	161		$	78		106	%		$	64		152	%
Non-GAAP cash flow (2):
Broadcast Cash Flow	$	598		$	351		70	%		$	304		97	%
Broadcast Cash Flow Less
Cash Corporate Expenses	$	554		$	314		76	%		$	276		101	%
Free Cash Flow	$	177		$	112		58	%		$	120		48	%

(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.

Selected Operating Data on As Reported Basis (Unaudited)
	Three Months Ended June 30,
	2022						2021						Amount			Percent
				Percent						Percent			Increase			Increase
	Amount			of Total			Amount			of Total			(Decrease)			(Decrease)
	(dollars in millions)
Revenue (less agency commissions):
Core advertising	$	366		42	%		$	279		51	%		$	87		31	%
Political	90			10	%		6			1	%		84			1400	%
Retransmission consent	382			44	%		242			44	%		140			58	%
Production companies	13			1	%		10			2	%		3			30	%
Other	17			3	%		10			2	%		7			70	%
Total	$	868		100	%		$	547		100	%		$	321		59	%

 

Operating expenses (before
depreciation, amortization and
gain on disposal of assets):
Broadcasting:
Station expenses	$	300		57	%		$	209		59	%		$	91			44	%
Retransmission expense	225			43	%		144			41	%		81				56	%
Transaction Related Expenses	2			0	%		–			0	%		2				100	%
Non-cash stock-based
compensation	1			0	%		1			0	%		–				0	%
Total broadcasting expense	$	528		100	%		$	354		100	%		$	174			49	%
Production companies expense	$	14					$	9					$	5			56	%
Corporate and administrative:
Corporate expenses	$	20		80	%		$	15		60	%		$	5			33	%
Transaction Related Expenses	–			0	%		7			28	%		(7		)		(100	)%
Non-cash stock-based compensation	5			20	%		3			12	%		2				67	%
Total corporate and
administrative expense	$	25		100	%		$	25		100	%		$            –				0	%

 

Selected Operating Data on As Reported Basis (Unaudited)
	Six Months Ended June 30,
	2022						2021						Amount			Percent
				Percent						Percent			Increase			Increase
	Amount			of Total			Amount			of Total			(Decrease)			(Decrease)
	(dollars in millions)
Revenue (less agency commissions):
Core advertising	$	731		43	%		$	539		49	%		$	192		36	%
Political	116			7	%		15			1	%		101			673	%
Retransmission consent	775			46	%		489			45	%		286			58	%
Production companies	36			2	%		24			2	%		12			50	%
Other	37			2	%		24			3	%		13			54	%
Total	$	1,695		100	%		$	1,091		100	%		$	604		55	%

 

Operating expenses (before
depreciation, amortization and
gain on disposal of assets):
Broadcasting:
Station expenses	$	600		57	%		$	425		60	%		$	175			41	%
Retransmission expense	452			43	%		289			40	%		163				56	%
Transaction Related Expenses	4			0	%		–			0	%		4				100	%
Non-cash stock-based
compensation	2			0	%		1			0	%		1				100	%
Total broadcasting expense	$	1,058		100	%		$	715		100	%		$	343			48	%
Production companies expense	$	40					$	26					$	14			54	%
Corporate and administrative:
Corporate expenses	$	43		81	%		$	29		67	%		$	14			48	%
Transaction Related Expenses	1			2	%		8			19	%		(7		)		(88	)%
Non-cash stock-based
compensation	9			17	%		6			14	%		3				50	%
Total corporate and
administrative expense	$	53		100	%		$	43		100	%		$	10			23	%

 

Detail Table of Operating Results on As Reported Basis (Unaudited)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2022				2021				2022				2021
	(in millions, except for per share information)
Revenue (less agency commissions):
Broadcasting	$	855			$	537			$	1,659			$	1,067
Production companies	13				10				36				24
Total revenue (less agency commissions)	868				547				1,695				1,091
Operating expenses before depreciation, amortization
and gain on disposal of assets, net:
Broadcasting	528				354				1,058				715
Production companies	14				9				40				26
Corporate and administrative	25				25				53				43
Depreciation	31				25				63				50
Amortization of intangible assets	52				27				104				53
Gain on disposal of assets, net	–				(1		)		(5		)		(5		)
Operating expenses	650				439				1,313				882
Operating income	218				108				382				209
Other expense:
Miscellaneous expense, net	–				(7		)		(2		)		(6		)
Interest expense	(81		)		(47		)		(160		)		(95		)
Income before income taxes	137				54				220				108
Income tax expense	38				15				59				30
Net income	99				39				161				78
Preferred stock dividends	13				13				26				26
Net income attributable to common stockholders	$	86			$	26			$	135			$	52
Basic per share information:
Net income attributable to common stockholders	$	0.92			$	0.27			$	1.45			$	0.55
Weighted-average shares outstanding	93				95				93				94
Diluted per share information:
Net income attributable to common stockholders	$	0.91			$	0.27			$	1.44			$	0.55
Weighted-average shares outstanding	94				95				94				95

 

Selected Operating Data on Combined Historical Basis (Unaudited)
	Three Months Ended June 30,
							% Change						% Change
							2022 to						2022 to
	2022			2021			2021			2020			2020
	(dollars in millions)
Revenue (less agency commissions):
Broadcast	$	855		$	744		15	%		$	626		37	%
Production companies	13			10			30	%		$	2		550	%
Total	$	868		$	754		15	%		$	628		38	%
Operating expenses (1):
Broadcast	$	528		$	499		6	%		$	455		16	%
Production companies	$	14		$	9		56	%		$	5		180	%
Corporate and administrative	$	25		$	25		0	%		$	17		47	%
Non-GAAP cash flow (2):
Broadcast Cash Flow	$	330		$	264		25	%		$	186		77	%
Broadcast Cash Flow Less Cash
Corporate Expenses	$	309		$	242		28	%		$	171		81	%
Operating Cash Flow as defined in
the 2019 Senior Credit Facility	$	310		$	249		24	%		$	171		81	%
Free Cash Flow	$	43		$	75		(43	)%		$	57		(25	)%
	Six Months Ended June 30,
							% Change						% Change
							2022 to						2022 to
	2022			2021			2021			2020			2020
	(dollars in millions)
Revenue (less agency commissions):
Broadcast	$	1,659		$	1,483		12	%		$	1,351		23	%
Production companies	36			24			50	%		$	21		71	%
Total	$	1,695		$	1,507		12	%		$	1,372		24	%
Operating expenses (1):
Broadcast	$	1,058		$	1,004		5	%		$	932		14	%
Production companies	$	40		$	26		54	%		$	24		67	%
Corporate and administrative	$	53		$	44		20	%		$	32		66	%
Non-GAAP cash flow (2):
Broadcast Cash Flow	$	602		$	517		16	%		$	454		33	%
Broadcast Cash Flow Less Cash
Corporate Expenses	$	558		$	480		16	%		$	426		31	%
Operating Cash Flow as defined in
the 2019 Senior Credit Facility	$	561		$	488		15	%		$	426		32	%
Free Cash Flow	$	186		$	194		(4	)%		$	192		(3	)%

(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.

Selected Operating Data on Combined Historical Basis (Unaudited)
	Three Months Ended June 30,
	2022						2021						Amount				Percent
				Percent						Percent			Increase				Increase
	Amount			of Total			Amount			of Total			(Decrease)				(Decrease)
	(dollars in millions)
Revenue (less agency commissions):
Core advertising	$	366		42	%		$	369		49	%		$	(3	)		(1	)%
Political	90			10	%		8			1	%		82				1025	%
Retransmission consent	382			44	%		351			47	%		31				9	%
Production companies	13			1	%		10			1	%		3				30	%
Other	17			3	%		16			2	%		1				6	%
Total	$	868		100	%		$	754		100	%		$	114			15	%

 

Operating expenses (before
depreciation, amortization and
gain on disposal of assets):
Broadcasting:
Station expenses	$	300		57	%		$	291		58	%		$	9			3	%
Retransmission expense	225			43	%		207			42	%		18				9	%
Transaction Related Expenses	2			0	%		–			0	%		2				100	%
Non-cash stock-based
compensation	1			0	%		1			0	%		–				0	%
Total broadcasting expense	$	528		100	%		$	499		100	%		$	29			6	%
Production companies expense	$	14					$	9					$	5			56	%
Corporate and administrative:
Corporate expenses	$	20		80	%		$	15		60	%		$	5			33	%
Transaction Related Expenses	–			0	%		7			28	%		(7		)		(100	)%
Non-cash stock-based
compensation	5			20	%		3			12	%		2				67	%
Total corporate and
administrative expense	$	25		100	%		$	25		100	%		$            –				0	%

 

Selected Operating Data on Combined Historical Basis (Unaudited)
	Six Months Ended June 30,
	2022						2021						Amount			Percent
				Percent						Percent			Increase			Increase
	Amount			of Total			Amount			of Total			(Decrease)			(Decrease)
	(dollars in millions)
Revenue (less agency commissions):
Core advertising	$	731		43	%		$	720		48	%		$	11		2	%
Political	116			7	%		21			1	%		95			452	%
Retransmission consent	775			46	%		707			47	%		68			10	%
Production companies	36			2	%		24			2	%		12			50	%
Other	37			2	%		35			2	%		2			6	%
Total	$	1,695		100	%		$	1,507		100	%		$	188		12	%

 

Operating expenses (before
depreciation, amortization and
gain on disposal of assets):
Broadcasting:
Station expenses	$	601		57	%		$	586		58	%		$	15			3	%
Retransmission expense	451			43	%		416			42	%		35				8	%
Transaction Related Expenses	4			0	%		–			0	%		4				100	%
Non-cash stock-based compensation	2			0	%		2			0	%		–				0	%
Total broadcasting expense	$	1,058		100	%		$	1,004		100	%		$	54			5	%
Production companies expense	$	40					$	26					$	14			54	%
Corporate and administrative:
Corporate expenses	$	43		81	%		$	30		68	%		$	13			43	%
Transaction Related Expenses	1			2	%		8			18	%		(7		)		(88	)%
Non-cash stock-based compensation	9			17	%		6			14	%		3				50	%
Total corporate and
administrative expense	$	53		100	%		$	44		100	%		$	9			20	%

 

Other Financial Data on As Reported Basis (Unaudited)
	Six Months Ended June 30,
	2022				2021
	(in millions)
Net cash provided by operating activities	$	330			$	238
Net cash used in investing activities	(201		)		(177		)
Net cash used in financing activities	(156		)		(49		)
Net (decrease) increase in cash	$	(27	)		$	12
	As of
	June 30,				December 31,
	2022				2021
	(in millions)
Cash	$	162			$	189
Long-term debt, including current portion, less deferred
financing costs	$	6,705			$	6,755
Series A Perpetual Preferred Stock	$	650			$	650
Borrowing availability under Revolving Credit Facility	$	496			$	497

The Company

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 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 Media Group (formerly Tupelo Honey), PowerNation Studios, as well as the studio production facilities Assembly Atlanta and Third Rail Studios.

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

This press release contains certain forward-looking statements that are based largely on our current expectations and reflect various estimates and assumptions by us. 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 our control, include our inability to achieve expected synergies from recent transactions on a timely basis or at all, the impact of recently completed transactions, estimates of future revenue, future expenses and other future events. We are subject to additional risks and uncertainties described in our 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 our website, www.gray.tv. Any forward-looking statements in this press release 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 press release beyond the published date, whether as a result of new information, future events or otherwise. 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, 2021, 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, 2022. The call will begin at 11:00 AM Eastern Time. The live dial-in number is 1-800-289-0720 and the confirmation code is 7144937. 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 1-888-203-1112 and the confirmation code is 7144937, until September 4, 2022.

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 January 1, 2020 through December 31, 2021, we completed several acquisition and divestiture transactions. As more fully described in our Form 10-Q to be filed with the Securities and Exchange Commission today and in our prior disclosures, these transactions materially affected our operations. We refer to all television stations acquired or divested from January 1, 2020 through December 31, 2021, as the “Acquisitions”.

Due to the significant effect that the Acquisitions have had on our results of operations, and in order to provide more meaningful period over period comparisons, we present herein certain financial information on a Combined Historical Basis (or “CHB”). Combined Historical Basis financial information does not include any adjustments for other events attributable to the Acquisitions unless otherwise described. Certain of the Combined Historical Basis financial information has been derived from, and adjusted based on unaudited, unreviewed 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 the Combined Historical Basis financial information if the Acquisitions had been completed at the stated date. In addition, the presentation of Combined Historical Basis may not comply with United Stated Generally Accepted Accounting Principles (“GAAP”) or the requirements for proforma financial information under Regulation S-X under the Securities Act.

From time to time, we supplement our 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 July 1, 2020. 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 certain defined purchases) and income taxes paid (net of any refunds received and certain defined payments).

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 on As Reported Basis:
	Three Months Ended June 30,
	2022				2021				2020
	(in millions)
Net income	$	99			$	39			$	11
Adjustments to reconcile from net income to
Free Cash Flow:
Depreciation	31				25				21
Amortization of intangible assets	52				27				26
Non-cash stock-based compensation	6				3				3
Gain on disposal of assets, net	–				(1		)		(7		)
Miscellaneous expense, net	–				7				2
Interest expense	81				47				46
Income tax expense	38				15				6
Amortization of program broadcast rights	12				8				10
Payments for program broadcast rights	(13		)		(9		)		(10		)
Corporate and administrative expenses before
depreciation, amortization of intangible assets and
non-cash stock-based compensation	21				22				15
Broadcast Cash Flow	327				183				123
Corporate and administrative expenses before
depreciation, amortization of intangible assets and
non-cash stock-based compensation	(21		)		(22		)		(15		)
Broadcast Cash Flow Less Cash Corporate Expenses	306				161				108
Pension benefit	(1		)		–				–
Interest expense	(81		)		(47		)		(46		)
Amortization of deferred financing costs	4				3				3
Preferred stock dividends	(13		)		(13		)		(13		)
Common stock dividends	(8		)		(7		)		–
Purchases of property and equipment (1)	(50		)		(28		)		(24		)
Reimbursements of property and equipment purchases	–				3				8
Income taxes paid, net of refunds	(119		)		(38		)		(1		)
Free Cash Flow	$	38			$	34			$	35

(1)   Excludes approximately $62 million and $80 million related to the Assembly Atlanta project in 2022 and 2021, respectively.

Reconciliation of Non-GAAP Terms on As Reported Basis:
	Six Months Ended June 30,
	2022				2021				2020
	(in millions)
Net income	$	161			$	78			$	64
Adjustments to reconcile from net income to
Free Cash Flow:
Depreciation	63				50				42
Amortization of intangible assets	104				53				52
Non-cash stock-based compensation	11				7				7
Non-cash 401(k) expense	–				1				–
Gain on disposal of assets, net	(5		)		(5		)		(13		)
Miscellaneous expense, net	2				6				3
Interest expense	160				95				98
Income tax expense	59				30				24
Amortization of program broadcast rights	25				17				19
Payments for program broadcast rights	(26		)		(18		)		(20		)
Corporate and administrative expenses before
depreciation, amortization of intangible assets and
non-cash stock-based compensation	44				37				28
Broadcast Cash Flow	598				351				304
Corporate and administrative expenses before
depreciation, amortization of intangible assets and
non-cash stock-based compensation	(44		)		(37		)		(28		)
Broadcast Cash Flow Less Cash Corporate Expenses	554				314				276
Pension benefit	(2		)		–				–
Interest expense	(160		)		(95		)		(98		)
Amortization of deferred financing costs	8				6				6
Preferred stock dividends	(26		)		(26		)		(26		)
Common stock dividends	(16		)		(15		)		–
Purchases of property and equipment (1)	(67		)		(41		)		(51		)
Reimbursements of property and equipment purchases	5				7				14
Income taxes paid, net of refunds	(119		)		(38		)		(1		)
Free Cash Flow	$	177			$	112			$	120

(1)   Excludes approximately $92 million and $80 million related to the Assembly Atlanta project in 2022 and 2021, respectively.

Reconciliation of Non-GAAP Terms on Combined Historical Basis:
	Three Months Ended
	June 30,
	2022				2021				2020
	(in millions)
Net income	$	99			$	69			$	22
Adjustments to reconcile from net income to
Free Cash Flow:
Depreciation	31				32				30
Amortization of intangible assets	52				28				28
Non-cash stock-based compensation	6				4				4
Gain on disposals of assets, net	–				(3		)		(7		)
Miscellaneous expense, net	–				7				2
Interest expense	81				77				77
Income tax expense (benefit)	38				9				(2		)
Amortization of program broadcast rights	12				13				15
Payments for program broadcast rights	(13		)		(14		)		(15		)
Corporate and administrative expenses excluding
depreciation, amortization of intangible assets and
non-cash stock-based compensation	21				22				15
Broadcast Transaction Related Expenses	2				–				–
Broadcast other adjustments	1				20				17
Broadcast Cash Flow	330				264				186
Corporate and administrative expenses excluding
depreciation, amortization of intangible assets and
non-cash stock-based compensation	(21		)		(22		)		(15		)
Broadcast Cash Flow Less Cash Corporate Expenses	309				242				171
Pension benefit	(1		)		–				–
Adjustments for unrestricted subsidiaries	2				–				–
Corporate Transaction Related Expenses	–				7				–
Operating Cash Flow as Defined in Senior Credit Agreement	310				249				171
Interest expense	(81		)		(77		)		(77		)
Amortization of deferred financing costs	4				3				3
Preferred dividends	(13		)		(13		)		(13		)
Common stock dividends	(8		)		(7		)		–
Purchases of property and equipment (1)	(50		)		(32		)		(27		)
Reimbursements of property and equipment purchases	–				4				9
Income taxes paid, net of refunds	(119		)		(52		)		(9		)
Free Cash Flow	$	43			$	75			$	57

(1)   Excludes approximately $62 million and $80 million related to the Assembly Atlanta project in 2022 and 2021, respectively.

Reconciliation of Non-GAAP Terms on Combined Historical Basis:
	Six Months Ended
	June 30,
	2022				2021				2020
	(in millions)
Net income	$	161			$	142			$	91
Adjustments to reconcile from net income to
Free Cash Flow:
Depreciation	63				64				59
Amortization of intangible assets	104				56				57
Non-cash stock-based compensation	11				8				9
Non-cash 401(k) expense	–				1				–
Gain on disposals of assets, net	(5		)		(7		)		(16		)
Miscellaneous expense, net	2				6				25
Interest expense	160				155				155
Income tax expense	59				17				12
Amortization of program broadcast rights	25				27				29
Payments for program broadcast rights	(26		)		(29		)		(30		)
Corporate and administrative expenses excluding
depreciation, amortization of intangible assets and
non-cash stock-based compensation	44				37				28
Broadcast Transaction Related Expenses	4				–				–
Broadcast other adjustments	–				40				35
Broadcast Cash Flow	602				517				454
Corporate and administrative expenses excluding
depreciation, amortization of intangible assets and
non-cash stock-based compensation	(44		)		(37		)		(28		)
Broadcast Cash Flow Less Cash Corporate Expenses	558				480				426
Pension benefit	(2		)		–				–
Adjustments for unrestricted subsidiaries	4				–				–
Corporate Transaction Related Expenses	1				8				–
Operating Cash Flow as defined in Senior Credit Agreement	561				488				426
Interest expense	(160		)		(155		)		(155		)
Amortization of deferred financing costs	8				6				6
Preferred dividends	(26		)		(26		)		(26		)
Common stock dividends	(16		)		(15		)		–
Purchases of property and equipment (1)	(67		)		(47		)		(59		)
Reimbursements of property and equipment purchases	5				9				18
Income taxes paid, net of refunds	(119		)		(66		)		(18		)
Free Cash Flow	$	186			$	194			$	192

(1)   Excludes approximately $92 million and $80 million related to the Assembly Atlanta project in 2022 and 2021, respectively.

Reconciliation of Net Income to Adjusted EBITDA and the Effect of Transaction Related Expenses and Certain Non-Cash Expenses:
	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2022				2021				2022				2021
	(in millions, except for per share information)
Net income	$	99			$	39			$	161			$	78
Adjustments to reconcile from net income to
Adjusted EBITDA:
Depreciation	31				25				63				50
Amortization of intangible assets	52				27				104				53
Non-cash stock-based compensation	6				4				11				7
Gain on disposal of assets, net	–				(1		)		(5		)		(5		)
Miscellaneous expense, net	–				7				2				6
Interest expense	81				47				160				95
Income tax expense	38				15				59				30
Total	307				163				555				314
Add: Transaction Related Expenses (1)	2				7				5				8
Adjusted EBITDA	$	309			$	170			$	560			$	322
Net income attributable to common stockholders	$	86			$	26			$	135			$	52
Add: Transaction Related Expenses and non-cash
stock-based compensation	8				18				16				22
Less: Income tax expense related to Transaction Related
Expenses and non-cash stock-based compensation	(2		)		(5		)		(4		)		(6		)
Net income attributable to common stockholders – excluding
Transaction Related Expenses and non-cash stock-based
compensation	$	92			$	39			$	147			$	68
Net income attributable to common stockholders common per share,
diluted – excluding Transaction Related Expenses and non-cash
stock-based compensation	$	0.98			$	0.41			$	1.56			$	0.72
Diluted weighted-average common shares outstanding	94				95				94				95

(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:
	Eight Quarters
	Ended
	June 30, 2022
	(dollars in millions)
Net income	$	595
Adjustments to reconcile from net income to Operating Cash Flow as
defined in our Senior Credit Agreement:
Depreciation	221
Amortization of intangible assets	274
Non-cash stock-based compensation	32
Gain on disposal of assets, net	21
Interest expense	457
Loss on early extinguishment of debt	12
Income tax expense	248
Amortization of program broadcast rights	81
Common stock contributed to 401(k) plan	15
Payments for program broadcast rights	(83		)
Pension benefit	(4		)
Contributions to pension plans	(7		)
Adjustments for unrestricted subsidiaries	8
Adjustments for stations acquired or divested, financings and expected
synergies during the eight quarter period	606
Transaction Related Expenses	87
Other	2
Operating Cash Flow as defined in our Senior Credit Agreement	$	2,565
Operating Cash Flow as defined in our Senior Credit Agreement,
divided by two	$	1,283
	June 30, 2022
Adjusted Total Indebtedness:
Total outstanding principal	$	6,778
Letters of credit outstanding	4
Cash		(162	)
Adjusted Total Indebtedness, Net of All Cash	$	6,620
Total Leverage Ratio, Net of All Cash	5.16