Codere Online (CDRO) – Is The Market Bigger Than Expected?

Monday, May 16, 2022

Codere Online (CDRO)
Is The Market Bigger Than Expected?

Codere Online refers, collectively, to Codere Online Luxembourg, S.A. and its subsidiaries. Codere Online launched in 2014 as part of the renowned casino operator Codere Group. Codere Online offers online sports betting and online casino through its state-of-the art website and mobile application. Codere currently operates in its core markets of Spain, Italy, Mexico, Colombia, Panama and the City of Buenos Aires (Argentina). Codere Online’s online business is complemented by Codere Group’s physical presence throughout Latin America, forming the foundation of the leading omnichannel gaming and casino presence in the region.

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.

Q1 results. The company reported Q1 revenue of €25.5 million, representing 24% year-over-year growth and a strong 15% quarterly sequential revenue growth. The growth was driven primarily by the Mexico market, which grew to €10 million in revenue compared with €6.4 million in the prior year period.

Expanding user base. Monthly active users in the quarter totaled roughly 83,000, up a strong 22% year-over-year. Growth in monthly actives in Mexico, one of its largest markets, was even more impressive, up 31%, the key driver of user growth.  

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

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

Release – Motorsport Games Reports First Quarter 2022 Financial Results



Motorsport Games Reports First Quarter 2022 Financial Results

Research, News, and Market Data on Motorsport Games

MIAMI, May 16, 2022 (GLOBE NEWSWIRE) — Motorsport Games Inc. (NASDAQ: MSGM) (“Motorsport Games” or the “Company”) today reported financial results for its first quarter ended March 31, 2022 (“Q1 2022”). The Company has also posted to the Company’s investor relations 
website a Q1 2022 Quarter End Review video and a Q1 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 Q1 2022, we continued our product and content releases. We brought the full release of our KartKraft karting simulation to PC, as well as a user experience update to our rFactor 2 racing simulation game that was positively received by our audience. In January 2022, our esports team delivered the sequel to the 24 Hours of Le Mans Virtual as a world-class event, and in February 2022 we held the inaugural 2022 INDYCAR Pro-Challenge. Games and esports initiatives were also bolstered by expanding our relationship with Formula E, and we were selected by Kindred Concepts to power their next generation racing simulation experience for Formula 1 using our rFactor 2 platform.”

Kozko added, “While we continue to explore multiple funding options to resolve our going concern qualifications, we remain confident in our ability to deliver against our product roadmap.”

First Quarter 2022
Business Update

  • Le
    Mans Virtual Series Grand Finale.
     The Company held the 2-day grand finale esports event for the 5-round 2021/22 Le Mans Virtual Series in January 2022, bringing together 50 cars with 200 drivers from 39 different countries. The series was followed by more than 81 million fans across live tv, digital streaming and social media platforms.

  • Official
    KartKraft Launch in January 2022.
     The Company officially launched its first KartKraft racing game in January 2022 after acquiring the intellectual property, assets and code from original developer, Black Delta, in March 2021.

  • rFactor
    2 User Interface Refresh and Content Updates.
     The Company released a new, easier to navigate User Interface for rFactor 2 in January 2022. Additionally, the Company began releasing a regular cadence of quarterly content updates to provide players with the most robust product offering for their virtual racing needs. The Company expects the updates to revamp and improve both its rFactor 2 platform and user experience.

  • INDYCAR
    2022 Esports Pro-Challenge.
     The Company held the inaugural 2022 INDYCAR Esports Pro-Challenge in February 2022, featuring current NTT INDYCAR SERIES drivers, including reigning champion Alex Palou, 4-time Indianapolis 500 champion Helio Castroneves and 2-time series champion Josef Newgarden, making it the first official INDYCAR-branded esports event since the Company entered into the long-term license in July 2021 to produce INDYCAR virtual racing series.

  • rFactor
    2 Racing Simulation Platform Selected To Power Next-Level Formula 1
    Competitive Socializing Experience.
     Adam Breeden, the pioneer of competitive socializing in the U.K., selected rFactor 2 as the racing simulation platform for the newly-formed Kindred Concepts – a groundbreaking, immersive, state of the art F1® racing simulation experience, gamified for a mass audience.

  • rFactor
    2 Became the Official SIM Racing Platform of Formula E.
     The Company implemented Formula E content, including its drivers and teams, into rFactor 2. rFactor 2 now features every season of Formula E since 2018 and enables racing on many high-fidelity circuits within the series. The Formula E content pack was updated in March 2022 and is available to purchase for all users of rFactor 2. In addition, Formula E launched its Accelerate Esports series powered by rFactor 2’s in-game competitions platform, and rFactor 2 will power the Formula E Gaming Arena at future esports races and events allowing players to experience the thrill of the ABB FIA Formula E World Championship in esports venues all around the world.

Financial Results for
the Three Months Ended March 31, 2022

Revenues for Q1 2022 were $3.3 million, as compared to $2.5 million for Q1 2021. The $0.8 million, or 34%, quarter-over-quarter increase reflects higher gaming sales of $0.5 million in Q1 2022, primarily from rFactor 2. Q1 2022 esports revenues increased by $0.3 million, primarily from the 24 Hours of Le Mans esports event held in January 2022.

Jon New, Chief Financial Officer of Motorsport Games, commented, “It is great to see both the growth of revenues in each of our Gaming and esports segments and the increased diversity of our revenue stream, with rFactor 2 and esports contributing 27% of total revenues for the quarter. Our business plan to increase and diversify our revenue stream is beginning to drive improved top-line financial performance.” 

Q1 2022 net loss was $16.0 million, as compared to Q1 2021 net loss of $14.1 million. The $1.9 million increase in net loss was primarily due to a non-cash $9.3 million write-down of goodwill and intangible assets. This was primarily driven by revisions to the product roadmap during Q1 2022, resulting in changes to the scope and timing of new product releases, as well as changes in the value of the Company’s market capitalization during the first quarter of 2022. A $1.2 million increase in Q1 2022 development expenditures, and a $0.7 million increase in sales and marketing spend further contributed to the Q1 2022 increased net loss. The increases in expenses described above were partially offset by a $11.3 million reduction in general and administrative expenses and a $1.4 million reduction in gains from equity method investments.

The Q1 2022 decrease of $11.3 million in general and administrative expenses was primarily due to an $11.9 million reduction in non-recurring IPO expenses that were incurred in Q1 2021, including IPO bonuses and stock-based compensation.

Q1 2022 Adjusted EBITDA loss(1) was $5.6 million, as compared to Q1 2021 Adjusted EBITDA loss of $2.8 million. The $2.7 million increase in Q1 2022 Adjusted EBITDA loss(1) was primarily driven by the same factors as the increased Q1 2022 net loss, higher Q1 2022 interest and amortization and Q1 2021 had more non-operational add-backs with Q1 2021 IPO related expenses (including stock-based compensation).

The following table provides a reconciliation from net loss to Adjusted EBITDA(1) for Q1 2022 and Q1 2021, respectively:

Cash Flow and
Liquidity

For Q1 2022, the Company had negative cash flows from operations of approximately $5.6 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 its 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 discussed above, 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 table 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, May 16, 2022, to discuss its financial results. The live conference call can be accessed by dialing 1-800-786-6104 from the U.S. or 1-416-981-9029. 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 expectations that our rFactor 2 updates will revamp and improve both our rFactor 2 platform and user experience and our expectations that rFactor 2 will power the Formula E Gaming Arena at future esports races and events and allow players to experience the thrill of the ABB FIA Formula E World Championship in esports venues all around the world; (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) the ability of the Company to fund future development and operating expenses, including, without exception 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, our belief that it will be necessary for us to secure additional funds to continue our existing business operations, including any references to our existing $12 million line of credit with our parent company, Motorsport Network, and to fund our obligations, including, without limitation, the Company’s expectation to supplement its liquidity through 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 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; and/or (iv) difficulties and/or delays in resolving our liquidity position, and other unanticipated difficulties in resolving our continuing financial condition and ability to obtain 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 its $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, 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’ ability 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:
Ashley DeSimone
Ashley.DeSimone@icrinc.com

Media:
ASTRSK PR
motorsportgames@astrskpr.com


Harte Hanks (HHS) – A Great Start To The Year

Friday, May 13, 2022

Harte Hanks (HHS)
A Great Start To The Year

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

Michael Kupinski, Director of Research, 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.

Q1 beats expectations. The company reported Q1 revenue of $49.1 million, a 12.1% increase over the prior year quarter and a solid 7.1% above our estimate of $45.8 million. Adj. EBITDA of $4.8 million, which increased 114% above the prior year quarter, beat our estimate of $2.3 million by 108%.

Fulfillment & Logistics booming. A key driver of the company’s strong quarter was its Fulfillment & Logistics Services segment, which increased revenue 28.4%, a sequential improvement from Q4 at 24.5%. Fulfillment & Logistics will likely be a key revenue driver for the company in 2022, in addition to improving revenue trends in its Marketing Services segment.

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

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

Release – Direct Digital Holdings Reports First Quarter 2022 Financial Results



Direct Digital Holdings Reports First Quarter 2022 Financial Results

Research, News, and Market Data on Direct Digital Holdings

First Quarter 2022 Revenue Up 100% Year-Over-Year to $11.4
Million

HOUSTON, May 12, 2022 /PRNewswire/ — Direct Digital Holdings, Inc. (Nasdaq: DRCT) (“Direct Digital”), a leading advertising and marketing technology platform, announced financial results for the first quarter ended March 31, 2022.

Chairman and Chief Executive Officer Mark Walker said, “We are pleased to report record revenue for the first quarter of 2022, which demonstrates the increasing value of Direct Digital’s world-class buy- and sell-side advertising platform for middle-market clients. Our quarterly growth was primarily driven by our sell-side advertising segment, and we are excited about the prospect of maintaining this momentum throughout 2022 by continuing to innovate our programmatic advertising offerings for the middle market segment, enhance our publisher partner engagement and monetization strategies, and further extend our reach into the underserved and underrepresented publisher communities.”

Keith Smith, President, added, “Our recent IPO, strategic debt refinance, and successful repurchase of equity from one of Direct Digital’s pre-IPO owners have optimally positioned Direct Digital to achieve its ambitious goals for 2022 and beyond.”

First Quarter 2022
Financial Highlights:

  • Revenue increased to $11.4 million in the first quarter of 2022, an increase of $5.7 million, or 100% over the $5.7 million in the same period of 2021.
    • Our sell-side advertising segment grew to $5.6 million, or 540% over the $0.9 million in the same period of 2021, and contributed $4.7 million of the increase in overall revenue.
    • Our buy-side advertising segment grew to $5.8 million, or 21% over the $4.8 million in the same period of 2021, and contributed $1.0 million of the increase in overall revenue.
  • Operating income increased to $0.6 million for the first quarter of 2022 compared to an operating loss of approximately ($26,000) in the same period of 2021.
  • Net loss was $(0.7) million in the first quarter of 2022, compared to $(0.8) million in the same period of 2021.
  • Adjusted EBITDA(1) increased 113% to $1.1 million in the first quarter 2022, compared to $0.5 million in the same period of 2021.
  • Net operating cash used in the first quarter was ($0.9) million compared to a net operating cash of $3.6 million generated in the same period of 2021.

Business Highlights

  • For the first quarter ended March 31, 2022, we processed approximately 90 billion monthly impressions through our sell-side advertising segment, an increase of 93% growth in the same period of 2021, with over 570 billion bid requests for the quarter.
  • In addition, our sell-side advertising platforms received over 3 billion bid responses, an increase of over 849% over the same period in 2021, through 69,000 buyers for the quarter.
  • Our buy-side advertising segment served over 128 customers, an increase of 41% in comparison to the same period of 2021.

Financial Outlook

Our guidance assumes that the U.S. economy continues to recover, and we do not have any major COVID-19-related setbacks or other major shocks that may cause economic conditions to deteriorate or otherwise significantly reduce advertiser demand. We plan to offer annual guidance and update it throughout the year, accordingly, we estimate the following:

  • For fiscal year 2022, we continue to expect revenue to be in the range of $48.0 million to $52.0 million, or 31% year-over-year growth at the mid-point.

“We are happy to report such a strong first quarter, which is a testament to our strategic post-IPO operating plan. We believe we are poised to continue to deliver significant growth, and favorable conditions in the advertising industry will also drive our business as we take advantage of these tailwinds to execute on both our organic and inorganic growth strategies, ultimately providing long-term shareholder value,” commented Mark Walker.

Conference Call and
Webcast Details

Direct Digital will host a conference call on Thursday, May 12, 2022 at 5:00 p.m. Eastern Time to discuss the Company’s quarterly results. The live webcast, dial-in information 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.

(1)

“Adjusted EBITDA” is 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,” “prospect,” “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; our limited operating history, which could result in our past results not being indicative of future operating performance; 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 company, on 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 or implied by 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 (Nasdaq: DRCT) brings state-of-the-art supply- and demand-side advertising platforms together under one umbrella company. The holding group’s supply-side platform Colossus SSP offers advertisers of all sizes extensive reach within general market and multicultural media properties. Its operating companies 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 and travel to financial services. Direct Digital Holdings’ buy-side solutions manages over 200 clients daily, and the sell-side solution serves over 80,000 advertisers generating over 70+ billion impressions per month across display, CTV, in-app, and other media channels.

 

CONSOLIDATED BALANCE SHEETS

March 31, 2022

December 31, 2021

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

4,406,800

$

4,684,431

Accounts receivable, net

7,754,091

7,871,181

Prepaid expenses and other current assets

875,928

1,225,447

Total current assets

13,036,819

13,781,059

Goodwill

6,519,636

6,519,636

Intangible assets, net (Note 3)

15,103,123

15,591,578

Deferred financing costs, net (Note 2)

66,869

96,152

Operating lease – right-of-use assets

917,877

Other long-term assets

56,602

11,508

Total assets

$

35,700,926

$

35,999,933

LIABILITIES AND MEMBERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$

5,920,459

$

6,710,015

Accrued liabilities

6,087,173

1,044,907

Notes payable, current portion

687,500

550,000

Deferred revenues

431,432

1,348,093

Operating lease liabilities, current portion

209,914

Related party payables (Note 7)

70,801

Total current liabilities

13,336,478

9,723,816

Notes payable, net of short-term portion and $2,153,821 and $2,091,732, deferred financing cost, respectively

19,021,179

19,358,268

Mandatorily redeemable non-participating preferred units

6,455,562

Line of credit

400,000

400,000

Paycheck Protection Program loan

287,143

287,143

Economic Injury Disaster Loan

150,000

150,000

Operating lease liabilities, net of current portion

708,262

Total liabilities

33,903,062

36,374,789

COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS’ / MEMBERS’ EQUITY (DEFICIT)

Units, 1,000,000 units authorized at December 31, 2021; 34,182 units issued and outstanding as of December 31, 2021

4,294,241

Class A common stock, $0.001 par value per share, 160,000,000 shares authorized, 2,800,000 shares issued and outstanding as of March 31, 2022

2,800

Class B common stock, $0.001 par value per share, 20,000,000 shares authorized, 11,378,000 shares issued and outstanding as of March 31, 2022

11,378

Additional paid-in capital

7,272,856

Accumulated deficit

(5,489,170)

(4,669,097)

Total stockholders’ / members’ equity (deficit)

1,797,864

(374,856)

Total liabilities and stockholders’ / members’ equity

$

35,700,926

$

35,999,933

 

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)

Three Months Ended
March 31,

2022

2021

Revenues

Buy-side advertising

$

5,831,041

$

4,828,048

Sell-side advertising

5,539,296

865,686

      Total revenues

11,370,337

5,693,734

Cost of revenues

Buy-side advertising

2,069,346

1,954,640

Sell-side advertising

4,520,192

741,693

      Total cost of revenues

6,589,538

2,696,333

Gross Profit

4,780,799

3,482,420

Operating expenses

Compensation, taxes and benefits

2,555,036

1,773,081

General and administrative

1,640,892

1,250,515

      Total operating expenses

4,195,928

3,023,596

Income (loss) from operations

584,871

(26,195)

Other (expense) income

(1,256,494)

(783,098)

      Tax expense (benefit)

Net loss

$

(671,623)

$

(809,293)

Net loss per share of common stock / common unit:

      Basic and diluted

$

(0.09)

$

(23.68)

Weighted-average number of shares / common units outstanding:

      Basic and diluted

7,089,000

34,182

 

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

For the Three Months Ended

March 31,

2022

2021

Cash Flows Provided By (Used In) Operating Activities:

Net loss

$

(671,623)

$

(809,293)

     Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Amortization of deferred financing costs

152,287

84,629

Amortization of intangible assets

488,455

488,455

Amortization of right-of-use assets

17,602

Forgiveness of Paycheck Protection Program loan

(10,000)

Paid-in-kind interest

95,344

Loss on redemption of non-participating preferred units

590,689

Bad debt expense

(2,425)

Changes in operating assets and liabilities:

Accounts receivable

119,515

1,508,681

Prepaid expenses and other current assets

304,423

(84,211)

Accounts payable

(926,581)

(717,036)

Accrued liabilities

62,803

46,148

Deferred revenues

(916,661)

2,966,693

Related party payable

(70,801)

                       Net cash provided by (used in) operating activities

(852,317)

3,569,410

Cash Flows Provided By (Used In) Financing Activities:

Proceeds from issuance of Class A common shares, net of transaction costs

11,329,818

Payments on term loan

(137,500)

(77,801)

Payment of deferred financing costs

(185,093)

Redemption of non-participating preferred shares

(7,046,251)

Redemption of common units

(3,237,838)

Distributions to members

(148,450)

(144)

                     Net cash provided used in financing activities

574,686

(77,945)

                     Net (decrease) increase in cash and cash equivalents

(277,631)

3,491,465

Cash and cash equivalents, beginning of the period

4,684,431

1,611,998

Cash and cash equivalents, end of the year

$

4,406,800

$

5,103,463

NON-GAAP FINANCIAL
MEASURES

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), including, in particular operating income, net cash provided by operating activities, and net income, we believe that earnings before interest, taxes, depreciation and amortization (“EBITDA”), as adjusted for acquisition transaction costs, forgiveness of Paycheck Protection Program loans, gain from revaluation and settlement of seller notes and earnout liability, loss on early extinguishment of debt, and loss on early redemption of non-participating preferred units, (“Adjusted EBITDA”), a non-GAAP measure, is useful in evaluating our operating performance. The most directly comparable GAAP measure to Adjusted EBITDA is net loss.

In addition to operating income and net income, we use Adjusted EBITDA as a measure of operational efficiency. We believe that this non-GAAP financial measure is useful to investors for period-to-period comparisons of our business and in understanding and evaluating our operating results for the following reasons:

  • Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as depreciation and amortization, interest expense, provision for income taxes, and certain one-time items such as acquisition transaction costs and gains from settlements or loan forgiveness that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired;
  • Our management uses Adjusted EBITDA in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of operating performance and the effectiveness of our business strategies and in communications with our board of directors concerning our financial performance; and
  • Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Our use of this non-GAAP financial measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods presented:

RECONCILIATION OF NON-GAAP FINANCIAL METRICS
(Unaudited)

For the Three Months
Ended March 31,

2022

2021

Net loss

$

(671,676)

$

(890,293)

Add back (deduct):

    Amortization of intangible assets

488,455

488,455

    Interest expense

713,787

811,757

    Forgiveness of Paycheck Protection Program loan

(10,000)

    Loss on early redemption of non-participating preferred units

590,689

Adjusted EBITDA

$

1,121,305

$

480,919

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/direct-digital-holdings-reports-first-quarter-2022-financial-results-301546560.html

SOURCE Direct Digital Holdings


Beasley Broadcast Group (BBGI) – A Lot More Work To Do On The Digital Front

Wednesday, May 11, 2022

Beasley Broadcast Group (BBGI)
A Lot More Work To Do On The Digital Front

Beasley Broadcast Group, Inc. owns and operates 61 stations (47 FM and 14 AM) in 15 large- and mid-size markets in the United States. Approximately 20 million consumers listen to the Company’s radio stations weekly over-the-air, online and on smartphones and tablets, and millions regularly engage with the Company’s brands and personalities through digital platforms such as Facebook, Twitter, text messaging, digital and web applications and email. The Overwatch League’s Houston Outlaws esports team is a wholly owned subsidiary. The Company also owns BeasleyXP, a national esports content hub, and AXLR-R8, a Rocket League Championship Series team, in its esports portfolio. For more information, please visit www.bbgi.com.

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.

Exceeds Q1 expectations. The company reported Q1 revenue of $55.7 million, 5% above our expectation of $53 million. Adj. EBITDA of $1.88 million also our beat our expectation of a loss of $0.55 million.

Second quarter outlook. Q2 revenue is pacing up 7%, which is a little lighter than our original 9% growth estimate. Local advertising is pacing up a strong 17%, but national advertising is pacing down 23%. Digital advertising is expected to be up in the 20% plus range. As such, we are tweaking our Q2 revenue and adj. EBITDA estimate.  …

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. 

Salem Media Group (SALM) – Transforming The Way You Think About Salem

Wednesday, May 11, 2022

Salem Media Group (SALM)
Transforming The Way You Think About Salem

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

Michael Kupinski, Director of Research, 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.

Solid 1st quarter. The company reported Q1 revenue of $62.9 million, 1.8% above our estimate of $61.5 million. Adj. EBITDA of $6.85 million was virtually in line with our forecast of $6.9 million, deviating by just 0.8%.

Block programming looking strong. Block programming revenue was up 10%, which consists of 3% growth in local and 13% growth in national. This was due in part to the addition of two large ministries in the quarter. Notably, Salem has a 95%+ renewal rate with block programming….

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

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

Townsquare Media (TSQ) – The Engine That Could

Wednesday, May 11, 2022

Townsquare Media (TSQ)
The Engine That Could

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

Michael Kupinski, Director of Research, 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.

Exceeds Q1 expectations, above guidance. The company reported Q1 revenue of $100.2 million, above our estimate of $99.4 million and management’s previous guidance. Adj. EBITDA in the quarter was $22.1 million, exceeding our estimate of $21.4 million.

Digital inflection point. Total Digital revenue grew an attractive 15.9% year-over-year to $51.1 million. Notably, after accounting for 48% of total revenue in Q4 of 2021, Digital eclipsed the 50%-mark, accounting for 51% of total revenue in Q1. In our view, this milestone emphasizes that Townsquare truly has become a digital-first media company.  …

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

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

Release – Award-Winning NBC reporter Michele Tafoya joins the Salem Podcast Network



Award-Winning NBC reporter Michele Tafoya joins the Salem Podcast Network

Research, News, and Market Data on Salem Media


IRVING, Texas–(BUSINESS WIRE)– Salem
Media Group
, Inc. (NASDAQ: SALM) announced today that Salem Podcast Network has signed former NBC Sideline Reporter Michele Tafoya to host a new podcast called “Sideline Sanity”. The podcast, which will air four episodes a week beginning Monday, May 23rd, will focus on life, politics, and world news.

“I’m thrilled to launch my first podcast with the Salem Podcast Network,” Michele said. “It’s exciting to join the chorus of talented Salem voices discussing the historic issues facing America and the world.”

The Salem Podcast network launched in January 2021 and is already ranked as the 11th most listened to podcast network on the Triton Digital platform, with 17 million average downloads per month.

“I cannot wait for the rest of the country to get to know Minnesota’s own Michele Tafoya beyond her successful years of reporting from the sidelines,” said Salem Twin Cities General Manager Nic Anderson. “She’s full of insight, passionate about her platform and she’s ready to speak her mind. And Salem Media-Twin Cities is eager to help as we produce her podcast for a national audience and look forward to working with her locally as opportunities arise,” added Anderson.

Michele Tafoya is an award-winning sportscaster and political commentator. Michele recently announced her retirement as the longtime sideline reporter for NBC’s Sunday Night Football. Since her start with the network in 2011, Michele has won four Emmys for her work on the field in the Outstanding Sports Personality –Sports Reporter category and has recently been nominated a tenth time for the 2021-2022 season. Michele is the only reporter nominated every year of the award’s existence. After her last game at Superbowl LVI in 2022, she announced her involvement as co-chair for Republican candidate Kendall Qualls’ campaign for governor of Minnesota. She also recently appeared as a guest host on THE VIEW as well, holding her own and speaking her truth alongside the panel.

With a career spanning over 30 years, Michele is a versatile talent who has covered nearly every sport, from the Super Bowl LII (2018) to the 2016 Olympic Summer Games in Rio, Brazil. She has helped pave the way for the younger generation of women sportscasters and cares deeply about making a difference in this country. Tafoya received a Bachelor of Arts degree in Mass Communications from the University of California, Berkeley in 1988, and a Master’s degree in Business Administration from the University of Southern California in 1991. She currently resides in Minnesota with her family.

ABOUT SALEM MEDIA GROUP:

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006200/en/

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

Source: Salem Media Group, Inc.


Release – Direct Digital Holdings to Report First Quarter 2022 Financial Results



Direct Digital Holdings to Report First Quarter 2022 Financial Results

Research, News, and Market Data on Direct Digital Holdings

HOUSTON, May 11, 2022 /PRNewswire/ — Direct Digital Holdings (Nasdaq: DRCT) (“Direct Digital”), a leading advertising and marketing technology holding group, will report financial results for the first quarter ended March 31, 2022, on Thursday, May 12, 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) brings state-of-the-art supply- and demand-side advertising platforms together under one umbrella company. The holding group’s supply-side platform Colossus SSP offers advertisers of all sizes extensive reach within general market and multicultural media properties. Its operating companies 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 and travel to financial services. Direct Digital Holdings’ sell- and buy-side solutions manage 17,500 clients daily, generating over 30 billion impressions per month across display, CTV, in-app, and other media channels.

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/reminder-direct-digital-holdings-to-report-first-quarter-2022-financial-results-301545448.html

SOURCE Direct Digital Holdings

Released May 11, 2022

Release – Salem Media Group, Inc. Announces First Quarter 2022 Total Revenue of $62.6 Million



Salem Media Group, Inc. Announces First Quarter 2022 Total Revenue of $62.6 Million

Research, News, and Market Data on Salem Media

IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (NASDAQ: SALM) released its results for the three months ended March 31, 2022.

First Quarter 2022 Results

For the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021:

Consolidated

  • Total revenue increased 5.5% to $62.6 million from $59.4 million;
  • Total operating expenses increased 4.8% to $57.6 million from $55.0 million;
  • Operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (1) increased 8.4% to $55.8 million from $51.4 million;
  • Operating income increased 14.2% to $5.0 million from $4.4 million;
  • Net income increased 438.4% to $1.7 million, or $0.06 net income per diluted share from $0.3 million, or $0.01 net income diluted per share;
  • EBITDA (1) increased 8.6% to $8.2 million from $7.5 million;
  • Adjusted EBITDA (1) decreased 13.6% to $6.8 million from $7.9 million; and
  • Net cash used by operating activities decreased 53.1% to $4.3 million from $9.2 million.

Broadcast

  • Net broadcast revenue increased 10.0% to $48.4 million from $44.0 million;
  • Station Operating Income (“SOI”) (1) decreased 3.7% to $10.3 million from $10.7 million;
  • Same Station (1) net broadcast revenue increased 9.4% to $48.1 million from $44.0 million; and
  • Same Station SOI (1) decreased 5.0% to $10.3 million from $10.9 million.

Digital Media

  • Digital media revenue increased 7.1% to $10.3 million from $9.6 million; and
  • Digital Media Operating Income (1) increased 93.1% to $1.8 million from $0.9 million.

Publishing

  • Publishing revenue decreased 31.8% to $3.9 million from $5.7 million; and
  • Publishing Operating Loss (1) was $0.6 million compared to Publishing Operating Income (1) of $0.5 million.

Included in the results for the quarter ended March 31, 2022 are:

  • A $1.7 million ($1.3 million, net of tax, or $0.05 per diluted share) net gain on the disposition of assets relates primarily to the gain on sale of land in Phoenix, Arizona offset by various fixed asset disposals; and
  • A $0.2 million ($0.2 million, net of tax, or $0.01 per share) charge for debt modification costs; and
  • A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options.

Included in the results for the quarter ended March 31, 2021 are:

  • A $0.3 million ($0.2 million, net of tax, or $0.01 per share) net loss on the disposition of assets recorded upon the closing of the sale of radio station WKAT-AM and an FM translator in Miami, Florida; and
  • A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options.

Per share numbers are calculated based on 27,610,407 diluted weighted average shares for the quarter ended March 31, 2022, and 27,138,773 diluted weighted average shares for the quarter ended March 31, 2021.

Balance Sheet

As of March 31, 2022, the company had $114.7 million outstanding on the 7.125% senior secured notes due 2028 (“2028 Notes”), $57.7 million outstanding on 6.75% senior secured notes due 2024 (“2024 Notes”), and no outstanding balance on the ABL Facility.

Acquisitions and Divestitures

The following transactions were completed since January 1, 2022:

  • On May 2, 2022, the company acquired websites and related assets of Retirement Media for $0.2 million in cash.
  • The company invested $3.5 million, for a total investment to date of $4.5 million, in a Limited Liability Company “LLC” that will own, distribute, and market a motion picture.
  • On February 15, 2022, the company closed on the acquisition of radio station WLCC-AM and an FM translator in the Tampa, Florida market for $0.6 million of cash.
  • On January 10, 2022, the company closed on the sale of 4.5 acres of land in Phoenix, Arizona for $2.0 million in cash.

Pending transactions:

  • On August 31, 2021, the company entered into an agreement to sell 9.3 acres of land in the Denver area for $8.2 million. The company expects to close this sale in the second quarter of 2022 and plans to continue broadcasting both KRKS-AM and KBJD-AM from this site.
  • On June 2, 2021, the company entered into an agreement to acquire radio station KKOL-AM in Seattle, Washington for $0.5 million. The company paid $0.1 million in cash into an escrow account and began operating the station under a Local Marketing Agreement on June 7, 2021. The company expects the transaction to close in the latter half of 2022.
  • On February 5, 2020, the company entered into an Asset Purchase Agreement with Word Broadcasting to sell radio stations WFIA-AM, WFIA-FM and WGTK-AM in Louisville, Kentucky for $4.0 million with credits applied from amounts previously paid, including a portion of the monthly fees paid under a Time Brokerage Agreement (“TBA”). Due to changes in debt markets, the transaction was not funded, and it is uncertain when, or if, the transaction will close. Word Broadcasting continues to program the stations under a TBA that began in January 2017.

Conference Call Information

Salem will host a teleconference to discuss its results on May 10, 2022 at 3:00 p.m. Central Time. To access the teleconference, please dial (877) 524-8416, and then ask to be joined into the Salem Media Group First Quarter 2022 call or listen via the investor relations portion of the company’s website, located at investor.salemmedia.com. A replay of the teleconference will be available through May 24, 2022 and can be heard by dialing (877) 660-6853, passcode 13727921 or on the investor relations portion of the company’s website, located at investor.salemmedia.com.

Follow us on Twitter @SalemMediaGrp.

Second Quarter 2022 Outlook

For the second quarter of 2022, the company is projecting total revenue to increase between 6% and 8% from second quarter 2021 total revenue of $63.8 million. The company is also projecting operating expenses before gains or losses on the sale or disposal of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense to increase between 7% and 10% compared to the second quarter of 2021 non-GAAP operating expenses of $55.0 million.

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

About Salem Media Group, Inc.

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

Forward-Looking Statements

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

(1) Regulation G

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

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

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

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

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

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

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

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

Salem Media Group, Inc.

Condensed Consolidated Statements of
Operations

(in thousands, except share and per share
data)

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2021

 

2022

 

 

(Unaudited)

Net broadcast revenue

 

$

44,048

 

 

$

48,432

 

Net digital media revenue

 

 

9,619

 

 

 

10,300

 

Net publishing revenue

 

 

5,686

 

 

 

3,877

 

Total revenue

 

 

59,353

 

 

 

62,609

 

Operating expenses:

 

 

 

 

 

 

Broadcast operating expenses

 

 

33,343

 

 

 

38,121

 

Digital media operating expenses

 

 

8,673

 

 

 

8,473

 

Publishing operating expenses

 

 

5,205

 

 

 

4,467

 

Unallocated corporate expenses

 

 

4,288

 

 

 

4,810

 

Change in the estimated fair value of contingent earn-out consideration

 

 

 

 

 

(5

)

Debt modification costs

 

 

 

 

 

228

 

Depreciation and amortization

 

 

3,170

 

 

 

3,276

 

Net (gain) loss on the disposition of assets

 

 

318

 

 

 

(1,735

)

Total operating expenses

 

 

54,997

 

 

 

57,635

 

Operating income

 

 

4,356

 

 

 

4,974

 

Other income (expense):

 

 

 

 

 

 

Interest income

 

 

1

 

 

 

 

Interest expense

 

 

(3,926

)

 

 

(3,394

)

Loss on early retirement of long-term debt

 

 

 

 

 

(53

)

Net miscellaneous income and (expenses)

 

 

22

 

 

 

1

 

Net income before income taxes

 

 

453

 

 

 

1,528

 

Provision for (benefit from) income taxes

 

 

130

 

 

 

(211

)

Net income

 

$

323

 

 

$

1,739

 

 

 

 

 

 

 

 

Basic earnings per share Class A and Class B common stock

 

$

0.01

 

 

$

0.06

 

Diluted earnings per share Class A and Class B common stock

 

$

0.01

 

 

$

0.06

 

 

 

 

 

 

 

Basic weighted average Class A and Class B common stock shares outstanding

 

 

26,736,639

 

 

 

27,177,375

 

Diluted weighted average Class A and Class B common stock shares outstanding

 

 

27,138,773

 

 

 

27,610,407

 

 

Salem Media Group, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

March 31, 2022

 

 

 

 

 

 

(Unaudited)

Assets

 

 

 

 

 

 

Cash

 

$

1,785

 

$

Accounts receivable, net

 

 

25,663

 

 

28,000

Other current assets

 

 

14,066

 

 

15,330

Property and equipment, net

 

 

79,339

 

 

80,262

Operating and financing lease right-of-use assets

 

 

43,665

 

 

45,985

Intangible assets, net

 

 

346,438

 

 

346,294

Deferred financing costs

 

 

843

 

 

793

Other assets

 

 

4,313

 

 

6,994

Total assets

 

$

516,112

 

$

523,658

 

 

 

 

 

 

 

Liabilities and
Stockholders’ Equity

 

 

 

 

 

 

Current liabilities

 

$

51,455

 

$

57,031

Long-term debt

 

 

170,581

 

 

168,300

Operating and financing lease liabilities, less current portion

 

 

42,273

 

 

44,777

Deferred income taxes

 

 

67,012

 

 

67,007

Other liabilities

 

 

6,580

 

 

6,393

Stockholders’ Equity

 

 

178,211

 

 

180,150

Total liabilities
and stockholders’ equity

 

$

516,112

 

$

523,658

 

SALEM MEDIA GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY

(Dollars in thousands, except share and per
share data
)

 

 

 

Class A

 

Class B

 

 

 

 

 

 

 

 

 

Common Stock

 

Common Stock

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paid-In

 

Accumulated

 

Treasury

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Deficit

 

Stock

 

Total

Stockholders’
equity, December 31, 2020

23,447,317

 

$

227

 

5,553,696

 

$

56

 

$

247,025

 

$

(78,023

)

 

$

(34,006

)

 

$

135,279

Stock-based compensation

 

 

 

 

 

 

 

78

 

 

 

 

 

 

 

 

78

Options exercised

185,782

 

 

2

 

 

 

 

 

390

 

 

 

 

 

 

 

 

392

Net income

 

 

 

 

 

 

 

 

 

323

 

 

 

 

 

 

323

Stockholders’
equity,

March 31, 2021

23,633,099

 

$

229

 

5,553,696

 

$

56

 

$

247,493

 

$

(77,700

)

 

$

(34,006

)

 

$

136,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

Class B

 

 

 

 

 

 

 

 

 

Common Stock

 

Common Stock

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paid-In

 

Accumulated

 

Treasury

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Deficit

 

Stock

 

Total

Stockholders’
equity, December 31, 2021

23,922,974

 

$

232

 

5,553,696

 

$

56

 

$

248,438

 

$

(36,509

)

 

$

(34,006

)

 

$

178,211

Stock-based compensation

 

 

 

 

 

 

 

106

 

 

 

 

 

 

 

 

106

Options exercised

40,913

 

 

 

 

 

 

 

94

 

 

 

 

 

 

 

 

94

Lapse in restricted shares

14,854

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

1,739

 

 

 

 

 

 

1,739

Stockholders’
equity, March 31, 2022

23,978,741

 

$

232

 

5,553,696

 

$

56

 

$

248,638

 

$

(34,770

)

 

$

(34,006

)

 

$

180,150

 

SALEM MEDIA GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS

(Dollars in thousands)

(Unaudited)

 

Three Months Ended

March 31,

 

2021

 

2022

OPERATING ACTIVITIES

 

 

 

Net income

$

323

 

 

$

1,739

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Non-cash stock-based compensation

 

78

 

 

 

106

 

Depreciation and amortization

 

3,170

 

 

 

3,276

 

Amortization of deferred financing costs

 

213

 

 

 

247

 

Non-cash lease expense

 

2,161

 

 

 

2,202

 

Provision for bad debts

 

(295

)

 

 

(209

)

Deferred income taxes

 

188

 

 

 

(5

)

Change in the estimated fair value of contingent earn-out consideration

 

 

 

 

(5

)

Loss on early retirement of long-term debt

 

 

 

 

53

 

Net (gain) loss on the disposition of assets

 

318

 

 

 

(1,735

)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable and unbilled revenue

 

2,549

 

 

 

(2,229

)

Inventories

 

(93

)

 

 

(411

)

Prepaid expenses and other current assets

 

(750

)

 

 

(748

)

Accounts payable and accrued expenses

 

2,490

 

 

 

4,024

 

Operating lease liabilities

 

(2,497

)

 

 

(1,852

)

Contract liabilities

 

1,122

 

 

 

136

 

Deferred rent income

 

170

 

 

 

(58

)

Other liabilities

 

29

 

 

 

 

Income taxes payable

 

21

 

 

 

(218

)

Net cash provided by operating activities

 

9,197

 

 

 

4,313

 

INVESTING ACTIVITIES

 

 

 

 

 

Cash paid for capital expenditures net of tenant improvement allowances

 

(1,859

)

 

 

(3,439

)

Capital expenditures reimbursable under tenant improvement allowances and trade agreements

 

 

 

 

(40

)

Deposit on broadcast assets and radio station acquisitions

 

(100

)

 

 

 

Purchases of broadcast assets and radio stations

 

 

 

 

(540

)

Investment in LLC

 

 

 

 

(2,000

)

Proceeds from sale of long-lived assets

 

3,501

 

 

 

2,001

 

Other

 

(238

)

 

 

(858

)

Net cash provided by (used in) investing activities

 

1,304

 

 

 

(4,876

)

FINANCING ACTIVITIES

 

 

 

 

 

Payments to repurchase 2024 Notes

 

 

 

 

(2,531

)

Proceeds from borrowings under ABL Facility

 

16

 

 

 

6,257

 

Payments on ABL Facility

 

(5,016

)

 

 

(6,257

)

Proceeds from borrowings under PPP Loans

 

11,195

 

 

 

 

Payments of debt issuance costs

 

(3

)

 

 

 

Proceeds from the exercise of stock options

 

392

 

 

 

94

 

Payments on financing lease liabilities

 

(16

)

 

 

(16

)

Book overdraft

 

 

 

 

1,231

 

Net cash provided by (used in) financing activities

 

6,568

 

 

 

(1,222

)

Net increase (decrease) in cash and cash equivalents

 

17,069

 

 

 

(1,785

)

Cash and cash equivalents at beginning of year

 

6,325

 

 

 

1,785

 

Cash and cash equivalents at end of period

$

23,394

 

 

$

 

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

Salem Media Group, Inc.

Supplemental Information

(in thousands)

Three Months Ended

March 31,

2021

 

2022

(Unaudited)

Net income

$

323

$

1,739

Plus interest expense, net of capitalized interest

3,926

3,394

Plus provision for (benefit from) income taxes

130

(211)

Plus depreciation and amortization

3,170

3,276

Less interest income

 

(1)

 

EBITDA

$

7,548

$

8,198

Less net (gain) loss on the disposition of assets

318

(1,735)

Less change in the estimated fair value of contingent

earn-out consideration

 

 

 

 

(5)

Plus debt modification costs

 

 

 

 

228

Plus loss on early retirement of long-term debt

53

Plus net miscellaneous income and expenses

 

 

(22)

 

 

(1)

Plus non-cash stock-based compensation

 

78

 

106

Adjusted EBITDA

$

7,922

$

6,844

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

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

Salem Media Group, Inc.

Supplemental Information

(in thousands)

 

Three Months Ended

March 31,

2021

2022

(Unaudited)

Net cash provided by operating activities

$

9,197

 

$

4,313

 

Non-cash stock-based compensation

(78

)

(106

)

Depreciation and amortization

(3,170

)

(3,276

)

Amortization of deferred financing costs

(213

)

(247

)

Non-cash lease expense

 

 

(2,161

)

 

 

(2,202

)

Provision for bad debts

295

 

209

 

Deferred income taxes

(188

)

5

 

Change in the estimated fair value of contingent earn- out consideration

 

 

 

 

 

5

 

Net (gain) loss on the disposition of assets

(318

)

1,735

 

Loss on early retirement of long-term debt

 

(53

)

Changes in operating assets and liabilities:

 

Accounts receivable and unbilled revenue

(2,549

)

2,229

 

Inventories

93

 

411

 

Prepaid expenses and other current assets

750

 

748

 

Accounts payable and accrued expenses

(2,490

)

(4,024

)

Contract liabilities

(1,122

)

(136

)

Operating lease liabilities (deferred rent)

2,497

 

1,852

 

Deferred rent income

 

 

(170

)

 

 

58

 

Other liabilities

 

 

(29

)

 

 

 

Income taxes payable

 

 

(21

)

 

 

218

 

Net income

$

323

 

$

1,739

 

Plus interest expense, net of capitalized interest

3,926

 

3,394

 

Plus provision for (benefit from) income taxes

130

 

(211

)

Plus depreciation and amortization

3,170

 

3,276

 

Less interest income

 

(1

)

 

 

EBITDA

$

7,548

 

$

8,198

 

Plus net (gain) loss on the disposition of assets

318

 

(1,735

)

Plus change in the estimated fair value of contingent earn-out consideration

 

 

 

 

 

(5

)

Plus debt modification costs

 

 

 

 

 

228

 

Plus loss on early retirement of long-term debt

 

53

 

Plus net miscellaneous income and expenses

 

 

(22

)

 

 

(1

)

Plus non-cash stock-based compensation

 

78

 

 

106

 

Adjusted EBITDA

$

7,922

 

$

6,844

 

Less net cash paid for capital expenditures (1)

(1,859

)

(3,439

)

Plus cash received (paid for) taxes

79

 

(12

)

Less cash paid for interest, net of capitalized interest

 

(53

)

 

(65

)

Adjusted Free Cash Flow

$

6,089

 

$

3,328

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

 

 

Selected Debt Data

Outstanding at

Applicable Interest Rate

March 31, 2022

Senior Secured Notes due 2028 (1)

$

114,731,000

7.125%

Senior Secured Notes due 2024 (2)

$

57,674,000

6.750%

(1) $114.7 million notes with semi-annual interest payments at an annual rate of 7.125%.

(2) $57.7 million notes with semi-annual interest payments at an annual rate of 6.750%.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220506005535/en/

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

Source: Salem Media Group, Inc.


E.W. Scripps (SSP) – Why We Are Raising Full Year 2022 Estimates

Monday, May 09, 2022

E.W. Scripps (SSP)
Why We Are Raising Full Year 2022 Estimates

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.

Q1 exceeds expectations. First quarter results were better than expected on both the top line and cash flow. Total company revenues increased 4.6% to $565.7 million, 1.3% better than our $558.5 million estimate. Adj. EBITDA was $124.5 million, 16% better than our $107.5 million estimate. The variance on the revenue was due to stronger than expected core advertising, beating our estimate by 1.5% and better revenues in its Networks business, beating our estimate by 1.9%. 

Q2 guidance lower than expected. We are raising our total company revenue estimate from $596.0 million to $603.0 million. Due to the higher than expected costs in its Network segment, we are lowering our adj. EBITDA estimate from $167.4 million to $139.3 million. The Q2 adjustment took away the Q1 upside variance in Adj. EBITDA. …

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. 

Gray Television (GTN) – Plowing Through The Noise

Monday, May 09, 2022

Gray Television (GTN)
Plowing Through The Noise

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.

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

Exceeds expectations. The company blew through our revenue and adj. EBITDA estimates in its first quarter. Revenues increased a strong 9.8% to $827.0 million, nicely above our $793.0 million estimate, and above its previous guidance. Adj. EBITDA was a solid $251.0 million, up 8.2%, and above our $212.0 million estimate. 

Core and Retransmission revenue trends favorable. The Q1 upside revenue variance was driven by better than expected Core advertising (up 4% versus guidance of 3% to 5%) and better Retransmission revenue, in part related to a true-up. The company expects solid Retrans revenue of $385 million to $390 million in Q2, better than our original estimate. Management indicated that subscriber counts appear stable. …

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. 

Cumulus Media (CMLS) – A Timely, Smart Move To Buyback Stock

Friday, May 06, 2022

Cumulus Media (CMLS)
A Timely, Smart Move To Buyback Stock

Cumulus Media (NASDAQ: CMLS) is an audio-first media company delivering premium content to over a quarter billion people every month — wherever and whenever they want it. Cumulus Media engages listeners with high-quality local programming through 406 owned-and-operated radio stations across 86 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, CNN, the AP, the Academy of Country Music Awards, and many other world-class partners across more than 9,500 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through the Cumulus Podcast Network, its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. Cumulus Media provides advertisers with personal connections, local impact and national reach through broadcast and on-demand digital, mobile, social, and voice-activated platforms, as well as integrated digital marketing services, powerful influencers, full-service audio solutions, industry-leading research and insights, and live event experiences. Cumulus Media is the only audio media company to provide marketers with local and national advertising performance guarantees. For more information visit www.cumulusmedia.com.

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.

Launches Dutch Auction. The company announced that it will be commencing a Dutch Auction tender offer for up to $25 million of class A common stock, at a share price of no greater than $16.50 and no less than $14.50. The offer is set to run from May 6th to June 3rd of 2022, unless extended or terminated earlier by the company. 

Attractive valuation. We view the move favorably given the compelling valuation of the CMLS shares. Moreover, the announcement signals that management is taking an aggressive approach to return capital to shareholders.    …

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.