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

 

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SOURCE Direct Digital Holdings

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. 

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. 

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. 

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 23^rd, 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.com, Facebook 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.

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.

 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

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.com, Facebook and Twitter.

Forward-Looking Statements

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

(1) Regulation G

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

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

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

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

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

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

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

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

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

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. 

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. 

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. 

Friday, May 06, 2022

Entravision Communications (EVC)
In A Strong Growth Mode

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

Michael Kupinski, Director of Research, 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 expectations. While revenues were largely in line with expectations, the company overachieved our adj. EBITDA estimate. Total company revenues increased a very strong 32% to $197.2 million (vs our $198.3 million estimate) and adj. EBITDA increased an impressive 28% to $18.1 million (vs our $16.1 million estimate). 

Digital on fire. The company’s digital businesses, which contributed 78% of total company revenue, increased a strong 51%. The company is executing on an attractive Digital growth strategy of expanding reach into new countries and territories and expanding commercial partnerships. In addition, the company is expanding its programmatic ad tech platform into new territories as well.  …

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. 

Friday, May 06, 2022

Lee Enterprises (LEE)
Results Validate Its Digital Growth Strategy

Lee Enterprises, Incorporated provides local news, information, and advertising primarily in midsize markets in the United States. It publishes 49 daily newspapers, as well as offers 300 weekly newspapers and specialty publications in 23 states. The company also provides online advertising and services; and online infrastructure and online publishing services for approximately 1,500 daily and weekly newspapers and shoppers. In addition, it offers commercial printing services. The company has a strategic alliance with Yahoo!, Inc. to provide its classified employment advertising customer base the opportunity to post job listings and other employment products on Yahoo!s HotJobs national platform. Lee Enterprises, Incorporated was founded in 1890 and is based in Davenport, Iowa.

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.

A little light, but not worrisome. Fiscal Q2 revenues of $190.0 million was slightly less than our $191.2 million estimate. The results reflected better-than-expected growth in its Digital businesses and weaker results in its print advertising business. Adj. EBITDA was $16.9 million versus our $17.8 million estimate. 

Digital excels. Total Digital revenues were $58.1 million, 7% better than our expectation, and represented 31% of total company revenues, up from 27% in fiscal Q1. The strong results were driven by Digital Only Subscription revenue, up 44.7% to $32.9 million, an impressive 26% above expectations. Amplified, its digital agency business, increased revenues 108%. We believe that the strong Digital growth validates the company’s Digital investments and its growth strategy. …

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. 

Thursday, May 05, 2022

Cumulus Media (CMLS)
A Sanguine Outlook

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.

A solid quarter. Q1 revenues increased a strong 15% to $232.0 million, above our $227.2 million estimate. Adj. EBITDA was $31.2 million, above our $22.2 million estimate.  The Revenues and Adj. EBITDA results benefited from a $5 million in pull forward revenues and adj. EBITDA as a results of the cancelled Wynbet contract. Notably, the company would have beat our Adj. EBITDA estimate, without the adjustment.

Tweaking 2022 estimates upward. We are flowing through a portion of the Q1 upside to our full year 2022 estimates. We are raising our full year 2022 adj. EBIDA estimate from $173.7 million to $175.1 million. At this time, we are maintaining our full year 2023 estimates. …

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.