Category: Media and Marketing

Release – Gray Announces Proposed $1.5 Billion Incremental Term Loan and $500 Million Revolving Credit Facility Updates Guidance for Third Quarter 2021

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Gray Announces Proposed $1.5 Billion Incremental Term Loan and $500 Million Revolving Credit Facility; Updates Guidance for Third Quarter 2021

 

ATLANTA, Oct. 20, 2021 (GLOBE NEWSWIRE) — Gray Television, Inc. (“Gray,” “we,” “us” or “our”) (NYSE: GTN) announced today that in connection with its pending acquisition of the Local Media Group of Meredith Corporation (“Meredith LMG”), Gray is proposing, subject to market and other conditions, to enter into an amendment and restatement of its existing senior credit facility (the “Senior Credit Facility”). Gray also announced updates to certain of its previously announced guidance for the third quarter of 2021, based on preliminary information available to date.

Comments on Proposed Senior Credit Facility Amendment and Incremental Loans:

Gray expects to amend its Senior Credit Facility through some or all of the following, which would:

  • Provide for an additional $1.5 billion seven-year incremental term loan under the Senior Credit Facility to finance, in part, the acquisition of Meredith LMG, and

  • Amend and restate certain terms of its revolving credit facility to increase borrowing capacity under the facility from $300 million to up to $500 million, which would consist of (i) a $425 million credit facility with five year commitments, and (ii) a $75 million credit facility with commitments expiring January 2, 2026.

We cannot provide any assurance about the timing, terms, or interest rate associated with the planned financing, or that the financing transactions will be completed.

Comments on Updated Third Quarter 2021 Guidance:

Gray initially issued guidance for third quarter 2021 on August 5, 2021. While Gray is continuing the process of finalizing its financial results for the third quarter of 2021, Gray today is updating its guidance on its estimated results of operations as set forth below. This updated guidance represents the most current information and estimates available to Gray as of the date of this release. We have not yet completed our normal financial closing and review process; therefore, these estimates are subject to change upon finalization. As a result, our actual results may be different and such differences could be material. Investors should exercise caution in relying on the information contained herein and should not draw any inferences from this information regarding financial or operating data that is not presented below.

    Updated Guidance
Selected operating data:   Low End
Guidance for
the Third
Quarter of
2021		   % Change From
Third
Quarter of
2020		   High End
Guidance for
the Third
Quarter of
2021		   % Change From
Third
Quarter of
2020		   Third
Quarter of
2020
    (dollars in millions)
                         
OPERATING REVENUE:                        
                         
Broadcasting Revenue (less agency commissions)   $ 570   (4 )%   $ 580   (2 )%   $ 593
                     
Total Revenue (less agency commissions)   $ 590   (2 )%   $ 600   (1 )%   $ 604
                     
                         
OPERATING EXPENSES                        
(before depreciation, amortization and gain on disposal of assets):                        
Broadcasting   $ 385   18 %   $ 390   20 %   $ 326
Production companies   $ 13   63 %   $ 14   75 %   $ 8
Corporate and administrative (1)   $ 30   100 %   $ 35   133 %   $ 15

(1) Corporate and administrative expenses include approximately $11 million of transaction related expenses

Including the impact of our acquisition of Quincy Media, Inc. and related divestitures that occurred on August 2, 2021, our previous guidance range for broadcasting revenue was from $571 million to $581 million; our previous guidance range for broadcasting expenses was from $387 million to $390 million; our previous guidance range for production company expenses was from $12 million to $13 million, and our previous guidance range for corporate and administrative expenses was from $27 million to $30 million.

As of September 30, 2021, we currently expect to report approximately:

  • $322 million of cash on hand
  • $1,785 million principal amount of secured debt; and
  • $4,035 million principal amount of total debt (excluding unamortized deferred financing costs and premium).

We currently anticipate that our total leverage ratio, as defined under our Senior Credit Facility, measured on a trailing eight quarter basis, netting all cash on hand, and giving pro forma effect for all acquisitions completed through the date of this release, will be between 4.15 times and 4.20 times as of September 30, 2021.

The Company

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

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

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

Gray Contacts:

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

Gray Announces Proposed $1.5 Billion Incremental Term Loan and $500 Million Revolving Credit Facility; Updates Guidance for Third Quarter 2021

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Gray Announces Proposed $1.5 Billion Incremental Term Loan and $500 Million Revolving Credit Facility; Updates Guidance for Third Quarter 2021

 

ATLANTA, Oct. 20, 2021 (GLOBE NEWSWIRE) — Gray Television, Inc. (“Gray,” “we,” “us” or “our”) (NYSE: GTN) announced today that in connection with its pending acquisition of the Local Media Group of Meredith Corporation (“Meredith LMG”), Gray is proposing, subject to market and other conditions, to enter into an amendment and restatement of its existing senior credit facility (the “Senior Credit Facility”). Gray also announced updates to certain of its previously announced guidance for the third quarter of 2021, based on preliminary information available to date.

Comments on Proposed Senior Credit Facility Amendment and Incremental Loans:

Gray expects to amend its Senior Credit Facility through some or all of the following, which would:

  • Provide for an additional $1.5 billion seven-year incremental term loan under the Senior Credit Facility to finance, in part, the acquisition of Meredith LMG, and

  • Amend and restate certain terms of its revolving credit facility to increase borrowing capacity under the facility from $300 million to up to $500 million, which would consist of (i) a $425 million credit facility with five year commitments, and (ii) a $75 million credit facility with commitments expiring January 2, 2026.

We cannot provide any assurance about the timing, terms, or interest rate associated with the planned financing, or that the financing transactions will be completed.

Comments on Updated Third Quarter 2021 Guidance:

Gray initially issued guidance for third quarter 2021 on August 5, 2021. While Gray is continuing the process of finalizing its financial results for the third quarter of 2021, Gray today is updating its guidance on its estimated results of operations as set forth below. This updated guidance represents the most current information and estimates available to Gray as of the date of this release. We have not yet completed our normal financial closing and review process; therefore, these estimates are subject to change upon finalization. As a result, our actual results may be different and such differences could be material. Investors should exercise caution in relying on the information contained herein and should not draw any inferences from this information regarding financial or operating data that is not presented below.

    Updated Guidance
Selected operating data:   Low End
Guidance for
the Third
Quarter of
2021		   % Change From
Third
Quarter of
2020		   High End
Guidance for
the Third
Quarter of
2021		   % Change From
Third
Quarter of
2020		   Third
Quarter of
2020
    (dollars in millions)
                         
OPERATING REVENUE:                        
                         
Broadcasting Revenue (less agency commissions)   $ 570   (4 )%   $ 580   (2 )%   $ 593
                     
Total Revenue (less agency commissions)   $ 590   (2 )%   $ 600   (1 )%   $ 604
                     
                         
OPERATING EXPENSES                        
(before depreciation, amortization and gain on disposal of assets):                        
Broadcasting   $ 385   18 %   $ 390   20 %   $ 326
Production companies   $ 13   63 %   $ 14   75 %   $ 8
Corporate and administrative (1)   $ 30   100 %   $ 35   133 %   $ 15

(1) Corporate and administrative expenses include approximately $11 million of transaction related expenses

Including the impact of our acquisition of Quincy Media, Inc. and related divestitures that occurred on August 2, 2021, our previous guidance range for broadcasting revenue was from $571 million to $581 million; our previous guidance range for broadcasting expenses was from $387 million to $390 million; our previous guidance range for production company expenses was from $12 million to $13 million, and our previous guidance range for corporate and administrative expenses was from $27 million to $30 million.

As of September 30, 2021, we currently expect to report approximately:

  • $322 million of cash on hand
  • $1,785 million principal amount of secured debt; and
  • $4,035 million principal amount of total debt (excluding unamortized deferred financing costs and premium).

We currently anticipate that our total leverage ratio, as defined under our Senior Credit Facility, measured on a trailing eight quarter basis, netting all cash on hand, and giving pro forma effect for all acquisitions completed through the date of this release, will be between 4.15 times and 4.20 times as of September 30, 2021.

The Company

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

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

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

Gray Contacts:

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

Digital, Media & Entertainment Industry – The Supply Chain Stuff Is Really Tricky

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Wednesday, October 13, 2021

Digital, Media & Entertainment Industry
The Supply Chain Stuff Is Really Tricky

Michael Kupinski, DOR, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to end of report for Analyst Certification & Disclosures

Overview. We believe that media companies are beginning to see the ripple effect of the supply issues and inflation pressures that is affecting the general market. The lack of truck drivers in some ports are creating a bottle neck to move product, labor shortages, and chip shortages are beginning to take its toll, particularly in the larger markets where the economy is largely felt. Will these issues adversely affect the advertising rebound? How will the stocks react?

Digital Media: Facebook Faces The Music. One of the weak performers in the quarter was Noble’s Social Media Index, down nearly 2%, with most of the stocks in the index down for the quarter, including Facebook, down 2.4%. The star performer in the quarter was a Noble closely followed stock in the Marketing Tech sector, Harte Hanks, up 34.5%.

Esports and iGaming: Have the stocks bottomed? The Esport stock performance in Q3 was disappointing given that there has been a significant amount of deal activity and investment in the space. A small, but notable investment was made by a TV broadcaster, E.W. Scripps, into Misfits Gaming Group (MGG), a global esports and entertainment company. Investors should take note.

Television Broadcasting: A Content Push. The shares of Entravision bucked the poor performance of the TV stocks, up 6% versus a decline of 2.9% for the industry. The company transformed itself into a Digital Media company with compelling growth prospects. Other broadcasters have made investments outside of broadcasting in the quarter as well.

Radio Broadcasting: Hitting The Refresh Button. In the latest quarter, Cumulus Media followed the trend to re-brand itself as an “audio-first, multi-platform” company. The move follows other radio companies including Audacy and Townsquare Media. The move is viewed favorably and allows the industry to court investors with a focus on its growth businesses.

Overview

Elon Musk, the CEO of Tesla and SpaceX, once said that “The supply chain stuff is really tricky.” This certainly describes the current environment. We believe that media companies are beginning to see the ripple effect of the supply issues and inflation pressures that is affecting the general market. The lack of truck drivers in some ports are creating a bottle neck to move product. There are chip shortages, which appear to be limiting the supply of new cars. In addition to supply issues, there are labor shortages in many sectors that appear to be limiting services and product, contributing to inflationary pressures. The fall-out from these issues may be hitting some larger markets where the economy is largely felt. The question is whether or not these issues will have a direct affect on the advertising recovery? We believe it is and it may become evident in the upcoming third quarter results. Given product shortages, companies may not advertise products that consumers have difficulty finding.

Advertising has a direct correlation to discretionary income. If consumers do not have the discretionary income to purchase, then there is no need to advertise. As such, companies may cut back on advertising given the prospect that consumers have less discretionary income in an inflationary environment. While we raised the inflation concern in our previous quarterly report, the Fed and the government indicated at that time inflationary pressures would subside in the second half. This was based on the prospect that the economic rebound would moderate, easing inflationary pressures. Now, the Fed has indicated that it will begin raising interest rates, which was different than the prospect of keeping interest rates low for an extended period of time. Such a prospect of rising interest rates, given the already tight supply issues, could stall the economic recovery, leading to “stagflation”. Stagflation refers to a period of persistent high inflation with high unemployment and stagnant demand in the economy. What is worrisome is that this is a cost-push inflation environment, disrupted by the ability to bring the goods to the market. Media fundamentals tend not to do well in this economic scenario, which decreases advertising price elasticity. Media stocks tend to have issues as well. There tends to be a contraction in media stock valuation multiples.

Surprisingly, most traditional media stocks have held up well over the past year, particularly the larger cap media stocks. Figure #1 Traditional Media 12 Month Performance highlights that both Radio and Television stocks are ahead of the general market, as measured by the S&P 500 Index, on a trailing 12 month basis, up 191.6%. 49.1% and 28.1%, respectively, Notably, the traditional media stocks outperformed many other media sectors, described later in this report. But, could there be trouble on the horizon? In the latest quarter, the traditional media stocks modestly under performed the general market. Radio stocks were down 2.9%, with Television stocks down 1.7%, compared with a 0.2% advance for the general market. 

We are cautiously optimistic that the fundamental environment leans favorably. Furthermore, media stock valuations appear reasonable to favorable. Investors should be selective, however, favoring companies with a growth element and those with a bent toward smaller markets, such as our favorites in the traditional media space as Entravision, E.W. Scripps, Townsquare Media, and Salem Media. We believe that the sell-off in Digital Media and esports industries appear to be overdone. There appears to be a cycle rotation toward larger cap stocks, which offer liquidity. But, valuations appear compelling, particularly in the esports & iGaming segment, offering a favorable risk reward relationship. Our favorites and current coverage include eSports Entertainment, Engine Media and Motorsport Games. 

Figure #1 Traditional Media 12 Month Performance


Digital Media

Facebook Faces The Music

As Figure #2 Digital Media Trailing 12 Month Performance illustrates, the Digital Media stocks in general performed well, but there were some disappointing sectors, including one of our current favorites, esports & igaming. The Noble Esports and iGaming Index was down 4.5%. The Esports and iGaming sector is discussed in another section of this report. Notably, the Noble Digital Media Index was up a strong 7.3% and the Noble Marketing Tech Index climbed 1.6%, outperforming the 0.2% gain in the general market.

One of the weak performers in the quarter was Noble’s Social Media Index, down nearly 2%, with most of the stocks in the index down for the quarter, including Facebook, down 2.4%. Facebook was hit on several issues in the quarter, including privacy and on testimony in front of a Senate subcommittee from a whistleblower, Frances Haugen, a former data scientist at Facebook. First, Apple stepped up privacy by allowing users to opt out of tracking across every app on its service. Notably, there were a large number of customers that chose to opt out. As a result, Facebook is not able to track user behavior, limiting conversion data for the ads run on its platform. One traditional advertising company executive exclaimed that the lack of conversion data for Facebook now puts it on par with traditional media companies that must use attribution data to determine success of advertising. Thus far, media companies have not been able to capitalize on the current Facebook conversion data issue.

We believe that the conversion data is potentially more troubling for the company than the testimony from the whistleblower, which largely portrayed Facebook as a greedy company that knows its services are detrimental to children. While Congress seems keen on regulating the company, there does not appear to be a consensus on how to rein it in. 

Figure #2 Digital Media Trailing 12 Month Performance

Helping to drive stock performance in the Digital Media sector was a robust M&A environment. Noble tracked 137 deals worth $46.4 billion in the Internet & Digital Media sector vs. 116 deals worth $29.1 billion in 3Q 2020. The number of deals increased 18% year-over-year, while the value of deals increased by 60% over 2Q 2021. On a sequential basis, the number of deals decreased by 6% while the value of deals increased by 55%.  Year-to-date, the number of deals has increased by 24% (to 462 deals this year vs. 374 deals last year) and the value of deals has increased by 121% to $109.2 billion from $49.5 billion in 2020. 

For the third quarter in a row, the most active sectors were Digital Content, with 47 transactions, followed by Marketing Technology transactions (32).  The Agency & Analytics (20), Ad Tech (16) and Information (14) sectors also remained active.

From a deal value perspective, MarTech deals led with $23.3 billion in transaction value, followed by the Digital Content segment with $8.6 billion in deal value, followed by Information services with $8.2 billion in deal value.  Driving deal value in the MarTech sector was Intuit’s $12 billion acquisition of email marketer MailChimp, and Thoma Bravo’s $6.5 billion acquisition of customer experience software provider Medallia. 

Within the digital media sector, there were several subsectors that were active.  Last quarter saw a pickup in M&A activity in the digital publishing sector, with BuzzFeed selling to a SPAC, BuzzFeed acquiring Complex Media, and Graham Holdings acquiring The Leaf Group.  The third quarter saw a continuation of elevated M&A activity as owners seek scale to better compete with the “walled gardens” of Facebook, Google, Amazon and other social media platforms. 

One of the notable stock performances in the Marketing Tech sector was Harte Hanks. The shares advanced 34.5% in the latest quarter and reflected a strong 183.6% gain year to date. In our view, the shares reflect a strong revenue and cash flow turnaround at the company. Furthermore, on October 4, the company submitted a listing application to uplist to NASDAQ Global Market. Such a move would allow the company to attract a potentially larger investor pool. We continue to view the HRTH shares as among our favorites in the Marketing Tech sector. As Figure #3 Marketing Technology Comparables illustrates, the HRTH shares trade well below its Marketing Tech peers. 


Figure #3 Marketing Technology Comparables


Market Data as of 10/11/2021

Esports & iGaming

Have the stocks bottomed?

As illustrated in Figure #4 Q3 Stock Performance, the Noble’s Esports Index underperformed the general market in the third quarter, down 4.5% compared with a modest 0.2% increase for general market. During the latest third quarter, only 5 esports stocks out of 16 were in positive territory and only 7 are up for the year. On a trailing twelve-month basis, the Index lost 0.7% compared with the general market’s 28.1% gain. Importantly, the Esport index performance is sequentially better than the previous quarter, which declined 12.7%, providing a glimmer of hope that the stocks may be near bottom. 


Figure #4 Q3 Stock Performance


The Esport stock performance is disappointing given that there has been a significant amount of deal activity and investment in the space. The video gaming and game developer sector had the largest number of transactions (20) and accounted for $5.2 billion in M&A during the quarter, slightly down from 20 deals accounting for $7.8 billion in 2Q 2021.  Notable deals include Netmarble’s $2.2 billion acquisition of mobile game developer SpinX Games, and DraftKings’ (Nasdaq: DKNG) $2.0 billion acquisition of Golden Nugget Online Gaming (GNOG).  Golden Nugget operates online casino games, but also owns an igaming betting platform. There were also two gaming platform deals during the quarter:  Unity Software’s $320 million acquisition of Parsec Cloud, and Roblox’s $90 million acquisition of gaming platform Guilded.

And, finally, there was a $10 million investment by a traditional media company, E.W. Scripps, into Misfits Gaming Group (MGG), a global esports and entertainment company. MGG owns three esports teams, content creators, and a full service, in house media team. While the dollar amount is somewhat small, it is noteworthy given that yet another traditional media company has put its toe in the esports pool. 

We find it interesting that the weak stock performance does not reflect the current fundamentals for the industry. According to Limelight Networks, video gamers spent an average of 8 hours and 27 minutes each week playing video games in 2021, an increase of 14% over 2020. This is an increase from the depths of the Covid stay at home mandates in 2020. Many investors believed that the time consuming video games could not go higher. It did.

Notably, if video games were rated like TV stations, there would be more people gaming than watching some popular TV shows. Not surprising that E.W. Scripps, a television broadcaster, has taken interest in esports. E.W. Scripps is certain to use the investment as a programming element for its Florida based television stations. We are intrigued if the esports programming on its TV stations will drive viewers, as gamers traditionally have not been television viewers. If successful, we believe that there will be more companies like Scripps looking for programming options in the esports industry. Furthermore, we would not rule out the prospect of Scripps adding to its investment. Scripps has been a very entrepreneurial company, creating significant shareholder value in areas such as cable networks, and, most recently podcasting. Investors should take note.  

Recognizing the growth of the industry and the favorable risk/reward that the esports and igaming stocks offer, we expanded our coverage in the space. In the last quarter, we expanded coverage to include Engine Media (GAME) and Motorsport Games (MSGM). This is in addition to our previous coverage of eSports Entertainment (GMBL). While many of the stocks are considered to be relatively small and developmental, investors should consider taking a basket approach when investing in the industry. By adding all three to a portfolio, an investor could cover the industry from soup to nuts, so to speak. Motorsport Games is a game publisher and developer. Engine Media includes sports betting, esports, and game developing. And, eSports Entertainment is a leading esports and gaming company. Each company has unique attributes in the industry and each with favorable growth opportunities. As Figure #5 Esports/IGaming Company Comparables illustrate, our favorites trade well below the industry’s mean on the basis of Enterprise Value to Revenue. Furthermore, the industry is considered to be over sold and, we believe, offers a favorable risk/reward relationship. 

Figure #5 Esports/IGaming Company Comparables


Market Data as of 10/11/2021

Television Broadcasting

A Content Push

As Figure #6 Q3 Broadcast Performance illustrates, the Television group had a difficult quarter, ending down 2.9% versus a modest gain for the general market. The weakness is somewhat surprising given the current rebounding advertising environment, especially as we close in on another Political year in 2022. The stocks were due for a breather, however, up a solid 49.1% in the past 12 months. Bucking the trend in stock performance in the quarter was Entravision. The stock was up 6.3% in the quarter out-performing the industry and the general stock market. Entravision is riding a wave of an acceleration in its revenue growth from recent acquisitions in Digital Marketing. The company’s Digital businesses now account for more than 70% of total company revenues.  

Figure #6 Q3 Broadcast Performance

We believe that there were several important developments in the quarter. One development highlighted the industry’s ongoing debt reduction strategy. Another development focused on several companies’ investments into programming and/or content.

First, in the latest quarter, E.W Scripps increased free cash flow guidance for the full year from a range of $210 million to $240 million to a range of $240 million to $260 million. Consequentially, its debt leverage multiple is expected to be in the low 4s by the end of next year. Furthermore, the company made a small, but important investment into esports, described earlier in this report. In spite of the favorable news, the SSP shares under-performed its peer group in the latest quarter, down 11.4%. We believe that the performance follows the trend that if the industry gets a cold, the SSP shares catch a flu. Conversely, if the TV stocks perform better, the SSP shares tend to outperform. We believe that the company is in a strong position to benefit from an influx of Political advertising in 2022. 

In addition, we encourage investors to view the company’s recent video presentation (click here), which highlights its differentiated approach to the industry and its favorable growth potential in its Over The Air (OTA) and Over The Top (OTT) platforms and networks. 

Another development in the industry was on the content investment front. In addition to E.W. Scripps investing into esports content, Gray Television announced that it acquired Third Rail Studios from Integral Group for $27.5 million. Third Rail Studios is located adjacent to the studio compound that Gray is building in Atlanta. It has notable clients including Netflix and Apple and is known for such series and films as Ozark, Mile 22, the Dolly Parton series and the Ballad of Richard Jewell, among others. 

We believe that investors will focus on the upcoming third quarter results, which will reflect tougher comparisons to the year earlier influx of Political advertising and improving advertising trends. It is likely that the hoped for improvement in certain categories, like Auto, may be elusive, given the ongoing chip shortage and supply issues. We believe that any potential revenue disappointment may be short lived as investors focus on 2022 and the expected large influx of Political advertising. We continue to view E.W. Scripps, Gray Television and Entravision as among our favorites in the sector. As Figure #7 Broadcast TV Company Comparables illustrate, the shares of E.W. Scripps and Gray Television are among the cheapest in the industry, trading below peer group averages. 

Figure #7 Broadcast TV Company Comparables

Market Data as of 10/11/2021

While the share of Entravision may trade above its peer group, the company has one of the best revenue and cash flow growth profiles in the industry. As Figures #8 & #9 illustrates, Entravision reported among the strongest revenue and EBITDA growth in the second quarter. Certainly, the results reflected acquisition fueled growth. However, we believe that the company will likely reflect revenue growth above many in its peer group. 

Figure #8 Q2 Revenue Performance


Figure #9 Q2 EBITDA Performance


Radio Broadcasting

Hitting the refresh button

As the Figure #6 Q3 Broadcast Performance illustrates, the Radio Index declined 3.0% in the third quarter, giving back some of the strong gains over the past year. On a year-to-date basis the Radio Index is still up a remarkable 66.4% and 131.6% over the past 12 months. So, it was not surprising that investors took some chips off of the table. Among the strongest performer in the group in Q3 was one of our favorites, Salem Media Group, up a strong 45.7%. The company benefited from a refinancing that de-risked its balance sheet and put the company on a path toward significant debt reduction. The refinancing lengthened the maturity of roughly 50% of its debt to 2028, with a modest increase in its interest rate. With the company’s free cash flow, current cash and availability on its revolver, the company has the ability to pay off its debt which comes due in 2024. We believe that the refinancing assuaged investor concerns over the company’s relatively high debt leverage. 

Another highlight in the last quarter was the continued movement to re-brand. Townsquare Media was among the first to highlight the fact that it no longer was a “radio-first” company and that it was now a “digital first” company. The move to re-brand followed strong growth in its Digital Media segment, which now accounts for nearly 50% of the total company revenues and cash flow. In the latest quarter, Cumulus Media used the Channelchek.com platform to announce in its new investor presentation its re-branding as an “audio-first, multi-platform” company. The company’s presentation may be viewed by clicking here. These moves were designed for investors to focus on the growthier elements of the companies.

Following through on its multi-platform strategy, Cumulus announced a content distribution partnership to bring Cumulus’s 413 radio stations and podcasts to the Audacy platform. We believe that the move provides a significant boost to Audacy to scale its digital platform, competing with recent moves made by iHeartMedia. The Audacy app has over 2,000 local and national radio stations, from more than 100 markets and podcasts. For Cumulus, it allows the company to distribute its content on multiple platforms to make it available “anywhere and anytime people want to enjoy it.” While terms of the agreement were not disclosed, we believe that it is based on a revenue share, a win-win for both companies.   

The latest move follows Audacy’s radio station “land” grab with other station operators including the 57 Urban One stations, located in 13 markets, announced in August. As a result, the Audacy digital media platform now boasts stations from Alpha Media, Beasley Media, Bonneville, CodComm, Cox Media Group, Entravision, Mid-West Family Broadcasting, Salem Media Group and Seven Mountains Media. These agreements follow iHeartMedia’s July 29th move to partner with TuneIn to distribute its 850 digital stations and podcasts on its platform. We believe that iHeart is capitalizing on its recent purchase of Triton Digital to provide advertising and programmatic sales on its platform. We believe that these moves toward digital platforms and recent re-branding are a solid strategy to reshape the narrative of the industry and to hit a refresh button with investors.  

We are concerned that the supply issues in the general economy may adversely affect large market radio advertising in the near future. Companies may simply cut back on advertising should supply constraints continue. We believe that smaller market radio stations may fare better. In addition, companies with diversified revenue streams in growthier digital media platforms should perform better. Finally, we believe companies that have solid debt reduction strategies should assuage investor concerns should the general economy falters. As such, our favorites include Townsquare Media, Salem Media Group, and Cumulus Media. 

As Figure #10 Broadcast Radio Company Comparables illustrates, the shares of Townsquare and Cumulus Media trade at compelling multiples. While the shares of Salem Media trade at higher multiples, the company’s significant debt reduction should improve the equity value. 

Figure #10

Market Data as of 10/11/2021

We would note that Townsquare Media has some of the highest margins in the industry, as Figure #11 Q2 Radio Margins illustrate. The company’s margins are bolstered by roughly 30% margins in its Digital Media segment, which accounts for nearly 50% of total company revenues. 

Figure #11

Companies Mentioned In This Report:

Cumulus Media

Engine Media

Entravision

eSports Entertainment

E.W. Scripps

Gray Television

Harte Hanks

Motorsport Games

Townsquare Media

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All statements or opinions contained herein that include the words “we”, “us”, or “our” are solely the responsibility of Noble Capital Markets, Inc.(“Noble”) and do not necessarily reflect statements or opinions expressed by any person or party affiliated with the company mentioned in this report. Any opinions expressed herein are subject to change without notice. All information provided herein is based on public and non-public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed. No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio. The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on its own appraisal of the implications and risks of such decision.

This publication is intended for information purposes only and shall not constitute an offer to buy/sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile. This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice. Past performance is not indicative of future results.

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ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE

Director of Research. Senior Equity Analyst specializing in Media & Entertainment. 34 years of experience as an analyst. Member of the National Cable Television Society Foundation and the National Association of Broadcasters. BS in Management Science, Computer Science Certificate and MBA specializing in Finance from St. Louis University.

Named WSJ ‘Best on the Street’ Analyst six times.

FINRA licenses 7, 24, 66, 86, 87

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This report is intended to provide general securities advice, and does not purport to make any recommendation that any securities transaction is appropriate for any recipient particular investment objectives, financial situation or particular needs. Prior to making any investment decision, recipients should assess, or seek advice from their advisors, on whether any relevant part of this report is appropriate to their individual circumstances. If a recipient was referred to Noble Capital Markets, Inc. by an investment advisor, that advisor may receive a benefit in respect of transactions effected on the recipients behalf, details of which will be available on request in regard to a transaction that involves a personalized securities recommendation. Additional risks associated with the security mentioned in this report that might impede achievement of the target can be found in its initial report issued by Noble Capital Markets, Inc.. This report may not be reproduced, distributed or published for any purpose unless authorized by Noble Capital Markets, Inc.

RESEARCH ANALYST CERTIFICATION

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All views expressed in this report accurately reflect my personal views about the subject securities or issuers.

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appearance and/or research report.

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Neither I nor anybody in my household has a financial interest in the securities of the subject company or any other company mentioned in this report.

NOBLE RATINGS DEFINITIONS % OF SECURITIES COVERED % IB CLIENTS
Outperform: potential return is >15% above the current price 84% 29%
Market Perform: potential return is -15% to 15% of the current price 4% 2%
Underperform: potential return is >15% below the current price 0% 0%

NOTE: On August 20, 2018, Noble Capital Markets, Inc. changed the terminology of its ratings (as shown above) from “Buy” to “Outperform”, from “Hold” to “Market Perform” and from “Sell” to “Underperform.” The percentage relationships, as compared to current price (definitions), have remained the same.

Additional information is available upon request. Any recipient of this report that wishes further information regarding the subject company or the disclosure information mentioned herein, should contact Noble Capital Markets, Inc. by mail or phone.

Noble Capital Markets, Inc.
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Report ID: 24100

Noble Capital Markets Media Sector Review – Q3 2021

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Noble Capital Markets Media Sector Review – Q3 2021


INTERNET AND DIGITAL MEDIA COMMENTARY

Gaming and Digital Publishing M&A Remains Elevated

As shown in the chart below, the best performing Index over the last twelve months has been Digital Media stocks (+65% on a market weighted basis), followed by Ad Tech (+51%), Social Media (+37%), MarTech (+17%), and Esports & iGaming (-1%). Helping to drive returns has been a robust M&A marketplace, particularly in the gaming and digital media sectors.

Internet and Digital Media M&A Continues at a Robust Pace in 3Q 2021

M&A activity in 3Q 2021 in the Internet and Digital Media sector continued at a robust pace in 3Q 2021, as Noble tracked 137 deals worth $46.4 billion in the Internet & Digital Media sector vs. 116 deals worth $29.1 billion in 3Q 2020. The number of deals increased 18% year-over-year, while the value of deals increased by nearly 60% over 3Q 2021. On a sequential basis, the number of deals decreased by 6% while the value of deals increased by 55%. Year-to-date, the number of deals has increased by 24% (to 462 deals this year vs. 374 deals last year) and the value of deals has increased by 121% to $109.2 billion from $49.5 billion in 2020.

For the third quarter in a row, the most active sectors were Digital Content, with 47 transactions, followed by Marketing Technology transactions (32). The Agency & Analytics (20), Ad Tech (16) and Information (14) sectors also remained active.

From a deal value perspective, MarTech deals led with $23.3 billion in transaction value, followed by the Digital Content segment with $8.6 billion in deal value, followed by Information services with $8.2 billion in deal value. Driving deal value in the MarTech sector was Intuit’s $12 billion acquisition of email marketer MailChimp, and Thoma Bravo’s $6.5 billion acquisition of customer experience software provider Medallia.

Gaming and Gaming Related Deals Top Digital Content M&A

The video gaming and game developer sector had the largest number of transactions (20) and accounted for $5.2 billion in M&A during the quarter, slightly down from 20 deals accounting for $7.8 billion in 2Q 2021.

Notable deals include Netmarble’s $2.2 billion acquisition of mobile game developer SpinX Games, and DraftKings’ (Nasdaq: DKNG) $2.0 billion acquisition of Golden Nugget Online Gaming (GNOG). Golden Nugget operates online casino games, but also owns an igaming betting platform. There were also two gaming platform deals during the quarter: Unity Software’s $320 million acquisition of Parsec Cloud, and Roblox’s $90 million acquisition of gaming platform Guilded.

Gaming, Sports Betting and Media Converge

We continue to see a merging of the gaming, media and sports betting industries and we expect some of the lines between these sectors to begin to blur as incumbents in one sector enter the other two. Casino gambling, internet gambling, sports betting and daily fantasy sports are no longer separate silos. Gambling companies see the unique audiences of gaming and esports audiences and see that combining them or partnering with media companies can help them expand the reach of gambling.

The catalyst for some of this activity is government legalization of online gambling and sports betting, which is creating opportunities for media companies, gaming companies and sports teams. The rise of fantasy sports leagues is seen as an entrée into sports betting, and a belief that sports betting leads to greater fan engagement. This would constitute a win-win-win for sports teams/leagues, media companies and gaming companies. This logic can also be seen in Penn National Gaming’s (Nasdaq: PENN) $1.8 billion acquisition of Score Media and Gaming (TSX: SCR) for 96x trailing revenues. Penn clearly sees Score Media’s content as the perfect content to drive sports betting and fan engagement for Penn National. We also note that DraftKings made a $25 billion offer to acquire Entain (LSE: ENT), a U.K. sports betting and gaming company. We do not include this transaction in our analysis, as Entain has yet to agree to terms. We expect continued M&A as the gaming, sports betting and media sectors converge.

Finally, while not an acquisition, we would note traditional media company E.W. Scripps’ $10 million investment into Misfits Gaming Group (MGG), a global esports and entertainment company. The deal further confirms the synergies between esports companies and media companies. MGG owns three esports teams, content creators, and a full-service, in-house media team. While the deal was an investment and not an acquisition, it is noteworthy given that it represents another traditional media company has put its toe in the esports pool.

=

The Search For Scale Continues for Digital Publishers

Within the digital media sector, there were several subsectors that were active. Last quarter saw a pickup in M&A activity in the digital publishing sector, with BuzzFeed selling to a SPAC, BuzzFeed acquiring Complex Media, and Graham Holdings acquiring The Leaf Group. The third quarter saw a continuation of elevated M&A activity of digital publishers as owners seek scale to better compete with the “walled gardens” of Facebook, Google, Amazon and other social media platforms.

Noble tracked 16 digital publishing deals worth $3.8 billion during the quarter. In addition to the previously mentioned Penn National Gaming’s $1.8 billion acquisition of Score Media and Gaming, notable deals included, Axel Springer’s $1 billion acquisition of Politico, and Forbes selling for $620 million to a SPAC. The largest digital publishing deals in 3Q 2021 are shown below. Subsequent to quarter end, IAC group’s DotDash agreed to acquire Meredith Corporation (MDP). While technically a traditional media business since 65% of Meredith’s revenues come from its magazine division, the deal does create a Top 10 digital media publisher. We expect continued M&A announcements in this sector as operators seek scale to take share in their respective sectors.

Esports & iGaming – Have the stocks bottomed?

Noble’s Esports Index underperformed the general market in the third quarter, down 4.5% compared with a modest 0.2% increase for general market. During the third quarter, only 5 esports stocks out of 16 were in positive territory and only 7 are up for the year. On a trailing twelve-month basis, the Index lost 0.7% compared with the general market’s 28.1% gain. Importantly, Noble’s Esports Index performed better than the previous quarter, which declined 12.7%, providing a glimmer of hope that the stocks may be near bottom.

We find it interesting that the weak stock performance does not reflect the current fundamentals for the industry. According to Limelight Networks, video gamers spent an average of 8 hours and 27 minutes each week playing video games in 2021, an increase of 14% over 2020. This is an increase from the depths of the Covid stay at home mandates in 2020. Many investors believed that the time-consuming video games could not go higher. It did.

Notably, if video games were rated like TV stations, there would be more people gaming than watching some popular TV shows. It is not surprising that E.W. Scripps, a television broadcaster, has taken interest in esports. E.W. Scripps is certain to use the investment in MisFits Gaming as a programming element for its Florida based television stations. It will be interesting to see whether esports programming on TV stations will drive viewers. If successful, there will likely be more companies like Scripps looking for programming options in the esports industry.

Social Media Underperforms – Facebook Faces The Music

One of the weak performers in the quarter was Noble’s Social Media Index, down nearly 2%, with most of the stocks in the index down for the quarter, including Facebook, down 2.4%. Facebook was hit on several issues in the quarter, including privacy and on testimony in front of a Senate subcommittee from a whistleblower, Frances Haugen, a former data scientist at Facebook. First, Apple stepped up privacy by allowing users to opt out of tracking across every app on its service. Notably, there were a large number of customers that chose to opt out. As a result, Facebook is not able to track user behavior, limiting conversion data for the ads run on its platform. One traditional advertising company executive exclaimed that the lack of conversion data for Facebook now puts it on par with traditional media companies that must use attribution data to determine success of advertising. Thus far, media companies have not been able to capitalize on the current Facebook conversion data issue.

We believe that the conversion data is potentially more troubling for the company than the testimony from the whistleblower, which largely portrayed Facebook as a greedy company that knows its services are detrimental to children. While Congress seems keen on regulating the company, there does not appear to be a consensus on how to rein it in.

TRADITIONAL MEDIA COMMENTARY

The following is an excerpt from a recent note by Noble’s Media Equity Research Analyst Michael Kupinski

Overview

We believe that media companies are beginning to see the ripple effect of the supply issues and inflation pressures that is affecting the general market. The lack of truck drivers in some ports are creating a bottle neck to move product. There are chip shortages, which appear to be limiting the supply of new cars. In addition to supply issues, there are labor shortages in many sectors that appear to be limiting services and product, contributing to inflationary pressures. The fall-out from these issues may be hitting some of larger markets where the economy is largely felt. The question is whether or not these issues will have a direct affect on the advertising recovery? We believe it is and it may become evident in the upcoming third quarter results. Given product shortages, companies may not advertise products that consumers have difficulty finding.

Advertising has a direct correlation to discretionary income. If consumers do not have the discretionary income to purchase, then there is no need to advertise. As such, companies may cut back on advertising given the prospect that consumers have less discretionary income in an inflationary environment. While we raised the inflation concern in our previous quarterly report, the Fed and the government indicated at that time inflationary pressures would subside in the second half. This was based on the prospect that the economic rebound would moderate, easing inflationary pressures. Now, the Fed has indicated that it will begin raising interest rates, which was different than the prospect of keeping interest rates low for an extended period of time.

Such a prospect of rising interest rates, given the already tight supply issues, could stall the economic recovery, leading to “stagflation”. Stagflation refers to a period of persistent high inflation with high unemployment and stagnant demand in the economy. What is worrisome is that this is a cost-push inflation environment, disrupted by the ability to bring the goods to the market. Media fundamentals tend not to do well in this economic scenario, which decreases advertising price elasticity. Media stocks tend to have issues as well. There tends to be a contraction in media stock valuation multiples.

Noble is cautiously optimistic that the fundamental environment leans favorably. Furthermore, media stock valuations appear reasonable to favorable. Investors should be selective, however, favoring companies with a growth element and those with a bent toward smaller markets. Noble believes that the sell-off in digital media and esports industries appear to be overdone. There appears to be a cycle rotation toward larger cap stocks, which offer liquidity. But valuations appear compelling, particularly in the esports & iGaming segment, offering a favorable risk reward relationship.

Broadcast Television

A Content Push

Broadcast Television stocks had a difficult quarter, ending down 2.9% versus a modest gain for the general market. The weakness is somewhat surprising given the current rebounding advertising environment, especially as we approach another political year in 2022. The stocks were due for a breather, however, up a solid 49.1% in the past 12 months. Bucking the trend in stock performance in the quarter was Entravision. The stock was up 6.3% in the quarter out-performing the industry and the general stock market. Entravision is riding a wave of an acceleration in its revenue growth from recent acquisitions in digital marketing. The company’s digital businesses now account for more than 70% of total company revenues.

We believe that there were several important developments in the quarter. One development highlighted the industry’s ongoing debt reduction strategy. Another development focused on several companies’ investments into programming and/or content.

First, in the latest quarter, E.W Scripps increased free cash flow guidance for the full year from a range of $210 million to $240 million to a range of $240 million to $260 million. Consequentially, its debt leverage multiple is expected to be in the low 4s by the end of next year. Furthermore, the company made a small, but important investment into esports, described earlier in this report. In spite of the favorable news, SSP shares under-performed its peer group in the latest quarter, down 11.4%. We believe that the performance follows the trend that if the industry gets a cold, SSP shares catch a flu. Conversely, if the TV stocks perform better, SSP shares tend to outperform. We believe that the company is in a strong position to benefit from an influx of political advertising in 2022. In addition, we encourage investors to view the company’s recent video presentation on Channelchek.com, which highlights its differentiated approach to the industry and its favorable growth potential in its Over-The-Air (OTA) and Over-The-Top (OTT) platforms and networks.

Another development in the industry was on the content investment front. In addition to E.W. Scripps investing into esports content, Gray Television announced that it acquired Third Rail Studios from Integral Group for $27.5 million. Third Rail Studios is located adjacent to the studio compound that Gray is building in Atlanta. It has notable clients including Netflix and Apple and is known for such series and films as Ozark, Mile 22, the Dolly Parton series and the Ballad of Richard Jewell, among others.

We believe that investors will focus on the upcoming third quarter results, which will reflect tougher comparisons to the year earlier influx of political advertising and improving advertising trends. It is likely that the hoped-for improvement in certain categories, like auto, may be elusive, given the ongoing chip shortage and supply issues. We believe that any potential revenue disappointment may be short lived as investors focus on 2022 and the expected large influx of political advertising.

Broadcast Radio

Hitting the Refresh Button

Noble’s Radio Index declined 3.0% in the third quarter, giving back some of the strong gains over the past year. On a year-to-date basis the Radio Index is still up a remarkable 66.4% and 131.6% over the past 12 months. So, it was not surprising that investors took some chips off the table. Among the strongest performer in the group in Q3 was Salem Media Group, up a strong 45.7%. The company benefited from a refinancing that de-risked its balance sheet and put the company on a path toward significant debt reduction. The refinancing lengthened the maturity of roughly 50% of its debt to 2028, with a modest increase in its interest rate. With the company’s free cash flow, current cash and availability on its revolver, the company has the ability to pay off its debt which comes due in 2024. We believe that the refinancing assuaged investor concerns over the company’s relatively high debt leverage.

Another highlight in the last quarter was the continued movement to re-brand. Townsquare Media was among the first to highlight the fact that it no longer was a “radio-first” company and that it was now a “digital first” company. The move to re-brand followed strong growth in its digital media segment, which now accounts for nearly 50% of the total company revenues and cash flow. In the latest quarter, Cumulus Media used the Channelchek.com platform to announce in its new investor presentation its re-branding as an “audio-first, multi-platform” company. These moves were designed for investors to focus on the growthier elements of the companies.

Following through on its multi-platform strategy, Cumulus announced a content distribution partnership to bring Cumulus’s 413 radio stations and podcasts to the Audacy platform. We believe that the move provides a significant boost to Audacy to scale its digital platform, competing with recent moves made by iHeartMedia. The Audacy app has over 2,000 local and national radio stations, from more than 100 markets and podcasts. For Cumulus, it allows the company to distribute its content on multiple platforms to make it available “anywhere and anytime people want to enjoy it.” While terms of the agreement were not disclosed, we believe that it is based on a revenue share, a win-win for both companies.

The latest move follows Audacy’s radio station “land” grab with other station operators including the 57 Urban One stations, located in 13 markets, announced in August. As a result, the Audacy digital media platform now boasts stations from Alpha Media, Beasley Media, Bonneville, CodComm, Cox Media Group, Entravision, Mid-West Family Broadcasting, Salem Media Group and Seven Mountains Media. These agreements follow iHeartMedia’s July 29th move to partner with TuneIn to distribute its 850 digital stations and podcasts on its platform. We believe that iHeart is capitalizing on its recent purchase of Triton Digital to provide advertising and programmatic sales on its platform. We believe that these moves toward digital platforms and recent re-branding are a solid strategy to reshape the narrative of the industry and to hit a refresh button with investors.

We are concerned that the supply issues in the general economy may adversely affect large market radio advertising in the near future. Companies may simply cut back on advertising should supply constraints continue. We believe that smaller market radio stations may fare better. In addition, companies with diversified revenue streams in growthier digital media platforms should perform better. Finally, we believe companies that have solid debt reduction strategies should assuage investor concerns should the general economy falters.

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Noble Capital Markets Media Newsletter Q3 2021

This newsletter was prepared and provided by Noble Capital Markets, Inc. For any questions and/or requests regarding this news letter, please contact >Chris Ensley

DISCLAIMER

All statements or opinions contained herein that include the words “ we”,“ or “ are solely the responsibility of NOBLE Capital Markets, Inc and do not necessarily reflect statements or opinions expressed by any person or party affiliated with companies mentioned in this report Any opinions expressed herein are subject to change without notice All information provided herein is based on public and non public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on their own appraisal of the implications and risks of such decision This publication is intended for information purposes only and shall not constitute an offer to buy/ sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice Past performance is not indicative of future results.

Please refer to the above PDF for a complete list of disclaimers pertaining to this newsletter

Release – Esports Entertainment Group Reaches $1 Million Milestone in Crypto Mining Since Launch in May

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Esports Entertainment Group Reaches $1 Million Milestone in Crypto Mining Since Launch in May

 

Newark, New Jersey–(Newsfile Corp. – October 13, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”), an esports and online gambling company, is pleased to announce that ggCircuit’s crypto mining application for LAN centers has crossed the $1 million mark. The mining application is an add-on to the ggLeap subscription that enables center owners to utilize idle computing power to mine for Ethereum. Since the beta launch in May 2021, 304 centers across 58 countries have opted in and mined over $1 million.

“The crypto mining application has grown exponentially over the last few months and we’ve added nearly 200 more centers since July,” said Grant Johnson, CEO of Esports Entertainment Group. “This milestone is another significant step forward as we continue to grow and receive positive feedback on ggCircuit’s product.”

ggCircuit is a B2B software company that provides cloud-based management for LAN centers, a tournament platform, and integrated wallet/point-of-sale solutions for enterprise customers.

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

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

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

Media Inquiries
brandon.apter@esportsentertainmentgroup.com

Investor Relations Inquiries
Jeff@esportsentertainmentgroup.com

Esports Entertainment Group Reaches $1 Million Milestone in Crypto Mining Since Launch in May

Posted on by Admin

 


Esports Entertainment Group Reaches $1 Million Milestone in Crypto Mining Since Launch in May

 

Newark, New Jersey–(Newsfile Corp. – October 13, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”), an esports and online gambling company, is pleased to announce that ggCircuit’s crypto mining application for LAN centers has crossed the $1 million mark. The mining application is an add-on to the ggLeap subscription that enables center owners to utilize idle computing power to mine for Ethereum. Since the beta launch in May 2021, 304 centers across 58 countries have opted in and mined over $1 million.

“The crypto mining application has grown exponentially over the last few months and we’ve added nearly 200 more centers since July,” said Grant Johnson, CEO of Esports Entertainment Group. “This milestone is another significant step forward as we continue to grow and receive positive feedback on ggCircuit’s product.”

ggCircuit is a B2B software company that provides cloud-based management for LAN centers, a tournament platform, and integrated wallet/point-of-sale solutions for enterprise customers.

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

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

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

Media Inquiries
brandon.apter@esportsentertainmentgroup.com

Investor Relations Inquiries
Jeff@esportsentertainmentgroup.com

Release – Salem Media Group Announces Participation in Noble Capital Markets C-Suite Interview Series

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Salem Media Group Announces Participation in Noble Capital Markets C-Suite Interview Series

 

IRVING, Texas–(BUSINESS WIRE)– 
Salem Media Group, Inc.  (NASDAQ: SALM) announced today their participation in Noble Capital Markets’ C-Suite Interview Series, presented by Channelchek.

Salem Media CEO Edward Atsinger, President – Broadcast Media Dave Santrella, President – Interactive and Publishing David Evans, and EVP & CFO Evan Masyr sat down with Noble Capital Markets Senior Research Analyst Michael Kupinski for this exclusive interview. Topics covered included:

  • Among the most diversified in its peer set, management highlighted its “customer first” approach;
  • Recent refinancing is a big deal, derisks its balance sheet and sets it on a path toward significant debt reduction;
  • Management highlights some key growth drivers including Salem Now, Salem Surround and Salem Podcast Networks;
  • Larry Elder’s return to the air and how his rise to the national stage had helped the company; and
  • Conversion data issues at Facebook. Has this leveled the playing field?

The interview was recorded on September 29th and is available now on Channelchek.

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.

About Noble Capital Markets

Noble Capital Markets, Inc. was incorporated in 1984 as a full-service SEC / FINRA registered broker-dealer, dedicated exclusively to serving underfollowed small / microcap companies through investment banking, wealth management, trading & execution, and equity research activities. Over the past 37 years, Noble has raised billions of dollars for these companies and published more than 45,000 equity research reports. www.noblecapitalmarkets.com email: contact@noblecapitalmarkets.com

About Channelchek

Channelchek (.com) is a comprehensive investor-centric portal – featuring more than 6,000 emerging growth companies – that provides advanced market data, independent research, balanced news, video webcasts, exclusive c-suite interviews, and access to virtual road shows. The site is available to the public at every level without cost or obligation. Research on Channelchek is provided by Noble Capital Markets, Inc., an SEC / FINRA registered broker-dealer since 1984. www.channelchek.com email: contact@channelchek.com

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

Source: Salem Media Group, Inc.

Broadcast TV Not Getting Deserved Attention

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	Image Credit: EW Scripps Website

Don’t Touch that Dial, Broadcast TV Will be Right Back

 

Are broadcast TV stocks cheap? While audiences show up and tune in to live events, including sports and news, a high percentage of movie and TV series viewers have become cord-cutters and have shifted to streaming their entertainment. Ad dollars are now being split to stay with the right demographic and appropriate audiences, wherever they are. By many measures, the older broadcast networks, including local TV, are not getting the attention from investors that newer streaming companies experience.

In a recent article in Barron’s, the publisher points to the low valuations where many broadcast TV stocks are trading. It mentions point the country’s (U.S.) largest station owner, Nextar Media (NXST) as an example. According to the publication, $NXST is trading at six times its estimated 2022 earnings. Contrast this with Netflix (NFLX) which trades at 49 times earnings. Many of the broadcast companies continue to generate large amounts of cash flow from advertising and fees paid to cable, satellite, and internet services, including apps of major networks.

The Barron’s article also points to Atlanta-based Gray Television (GTN) as an example. At its current price ($23.30), the stock has a P/E ratio of five times 2022 earnings estimates. The reporting goes on to point out that the broadcaster has been in acquisition mode and made some strategic acquisitions. If the deals close, they will reach 36% of U.S. households in December and operate in 113 markets.

One of the many strengths $GTN has is its local news power. Local political campaigns look to reach the most people for each dollar spent. Gray brings in more political-ad dollars per household than any other station group. Further, many of its stations are in battleground states, including nine of the 10 markets expected to have the most competitive Senate races next year.

Another interesting company known for its pre-broadcast beginnings is E.W. Scripps (SSP). The company is the nation’s fourth-largest TV broadcaster. The $SSP networks can reach almost every U.S. citizen, whether it’s through traditional broadcast, on their newly acquired ION network, or their own distribution available on apps designed to retain cord-cutters.

According to the Nasdaq website, E.W. Scripps is trading at a P/E of 4.94 against 2022 estimates. In a recent Channelchek C-Suite interview, management discusses the company’s leadership with their own large networks and businesses and expansion onto multiple platforms. They’re essentially in two marketplaces with continued growth locally and nationally.

 

Take-Away

As investor attention usually turns to the latest “shiny object,” attention often turns away from what was getting recognition yesterday. Often, these older businesses are well run and shifting to capitalize on changing times. While they are receiving less attention, investors scout out value.

We scratched the surface by discussing two of the three media companies mentioned above. There is a trove of more information on GTN and SSP on Channelchek, as well as many other companies in this category. We urge you to explore the C-Suite video interviews below with the management of media companies.  

 

Suggested Videos:



E.W. Scripps

Salem Media Group





Gray Television

Townsquare Media

 

Sources:

https://www.nasdaq.com/market-activity/stocks/ssp/price-earnings-peg-ratios

https://scripps.com/company/history/

https://www.barrons.com/articles/stock-pick-buy-gray-television-51633733486?mod=hp_LEADSUPP_2

https://www.channelchek.com/aux/(expanded:check-channels)

 

Stay up to date. Follow us:

 

Salem Media Group Announces Participation in Noble Capital Markets C-Suite Interview Series

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Salem Media Group Announces Participation in Noble Capital Markets C-Suite Interview Series

 

IRVING, Texas–(BUSINESS WIRE)– 
Salem Media Group, Inc.  (NASDAQ: SALM) announced today their participation in Noble Capital Markets’ C-Suite Interview Series, presented by Channelchek.

Salem Media CEO Edward Atsinger, President – Broadcast Media Dave Santrella, President – Interactive and Publishing David Evans, and EVP & CFO Evan Masyr sat down with Noble Capital Markets Senior Research Analyst Michael Kupinski for this exclusive interview. Topics covered included:

  • Among the most diversified in its peer set, management highlighted its “customer first” approach;
  • Recent refinancing is a big deal, derisks its balance sheet and sets it on a path toward significant debt reduction;
  • Management highlights some key growth drivers including Salem Now, Salem Surround and Salem Podcast Networks;
  • Larry Elder’s return to the air and how his rise to the national stage had helped the company; and
  • Conversion data issues at Facebook. Has this leveled the playing field?

The interview was recorded on September 29th and is available now on Channelchek.

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.

About Noble Capital Markets

Noble Capital Markets, Inc. was incorporated in 1984 as a full-service SEC / FINRA registered broker-dealer, dedicated exclusively to serving underfollowed small / microcap companies through investment banking, wealth management, trading & execution, and equity research activities. Over the past 37 years, Noble has raised billions of dollars for these companies and published more than 45,000 equity research reports. www.noblecapitalmarkets.com email: contact@noblecapitalmarkets.com

About Channelchek

Channelchek (.com) is a comprehensive investor-centric portal – featuring more than 6,000 emerging growth companies – that provides advanced market data, independent research, balanced news, video webcasts, exclusive c-suite interviews, and access to virtual road shows. The site is available to the public at every level without cost or obligation. Research on Channelchek is provided by Noble Capital Markets, Inc., an SEC / FINRA registered broker-dealer since 1984. channelchek.vercel.app email: contact@channelchek.vercel.app

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

Source: Salem Media Group, Inc.

Presentation and C-Suite Interview with Salem Media (SALM) Management Team

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Following a corporate presentation, Noble Capital Markets Senior Research Analyst Michael Kupinski sits down with Salem Media CEO Edward Atsinger, EVP & CFO Evan Masyr, President – New Media David Evans, and President – Broadcast Media Dave Santrella for this exclusive interview.

Research, News, and Advanced Market Data on SALM


View all C-Suite Interviews

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.

C-Suite Interview with E.W. Scripps (SSP) CEO Adam Symson and CFO Jason Combs

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Noble Capital Markets Senior Research Analyst Michael Kupinski interviews E.W. Scripps CEO Adam Symson and CFO Jason Combs.

Research, News, and Advanced Market Data on SSP


View all C-Suite Interviews

About Scripps

The E.W. Scripps Company (NASDAQ: SSP) is a diversified media company focused on creating a better-informed world. As the nation’s fourth-largest local TV broadcaster, 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, Grit, Laff, Court TV Mystery, Defy TV 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.”

Release – Endeavour Silver Produces 1305399 Oz Silver And 10541 Oz Gold For 2.1 Million Oz Silver Equivalents In Q3, 2021

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Endeavour Silver Produces 1,305,399 Oz Silver And 10,541 Oz Gold For 2.1 Million Oz Silver Equivalents In Q3, 2021; 2021 Consolidated Production Guidance Raised To 7.7 – 8.0 Million Oz Silver Equivalents

 

VANCOUVER, British Columbia, Oct. 07, 2021 (GLOBE NEWSWIRE) — Endeavour Silver Corp. (NYSE: EXK) (TSX: EDR) reports production of 1,305,399 silver ounces (oz) and 10,541 gold oz in Q3, 2021, for silver equivalent (“AgEq”) production of 2.1 million oz at an 80:1 silver:gold ratio, totaling 6.1 million AgEq oz for the 9 months ended September 30, 2021.  

Management has increased 2021 consolidated production guidance to 7.7 – 8.0 million oz silver equivalents to reflect continued strong performance at Guanacevi due to higher than expected grades and tonnage milled. Full details are provided in the section, “Revision to Full Year 2021 Guidance” in this news release.  

2021 Third Quarter Highlights

  • Consolidated Production Ahead of Plan: Silver equivalent production at each mine is on track to meet or exceed 2021 production plans. 
     
  • Guanacevi Production Ahead of Plan:  Higher throughput and higher silver and gold grades resulted in record production during the quarter, ahead of the annual plan. Based on continued strong performance, the operations team has significantly improved the production outlook for the full year, resulting in an estimated 20% increase in silver equivalent metal. 
     
  • Bolanitos Production on Plan: Processed tonnes were ahead of plan, offset by lower ore grades.
     
  • El Compas Suspended: Final stockpiles were processed subsequent to the suspension of operations in early August. Most of the company personnel have been transferred to other sites or laid off, while the mine and plant have been placed on temporary care and maintenance. Management is evaluating several opportunities.
     
  • Metal Sales and Inventories: Sold 699,540 oz silver and 9,925 oz gold, held 1,030,304 oz silver and 1,211 oz gold of bullion inventory and 37,100 oz silver and 2,028 oz gold in concentrate inventory.  Management continued to withhold metal from sale during the price correction over the third quarter and plans to sell the withheld metal inventory in anticipation of a precious metal prices rebound.
     
  • Robust Economics in the Terronera Feasibility Study: Favorable outcomes including improved confidence in the project cost, design and operability provide a strong position for securing project financing. The Terronera Project Technical Report, authored in accordance with National Instrument 43-101, will be filed on SEDAR and EDGAR by October 24, 2021.
     
  • Acquired Bruner Gold Project in Nye County, Nevada:  Completed the acquisition of an advanced stage gold exploration project in a favourable jurisdiction for US$10 million in cash.

Dan Dickson, CEO, commented, “We are well positioned to exceed our original full year consolidated production guidance, which has led to the decision to formally revise our annual targets. Our 2021 business plan shows strong performance, which has resulted in higher production than last year, despite suspending operations at the small El Compas mine. This reaffirms an important year of investment into our people and culture programs to ensure the long-term sustainability of our operations.”

“Entering the fourth quarter, we are also continuing with our exploration programs and anticipate releasing additional drill results at Terronera, building on the encouraging regional results we announced previously this year. We are advancing the Terronera development and continue to negotiate critical contracts, procure various long lead equipment items and general mine equipment, are increasing the work force and preparing for early earth works.”

Mine Operations

Consolidated silver production increased by 39% compared to Q3 2020, primarily driven by a 46% increase in silver production at the Guanacevi mine offset by the suspension of operations at the El Compas mine.  Gold production increased by 3% with the Guanacevi mine seeing a 47% increase in silver equivalent ounces produced which was offset the suspension of operations at the El Compas mine.  Silver and gold production at the Bolanitos mine increased moderately with a 11% increase in silver production and an 8% increase in gold production. 

Guanacevi throughput exceeded plan and mining the new higher grade El Curso orebody has led to significantly improved grades and mine plan flexibility. Additionally, supplies of local third-party ores continued to supplement mine production, amounting to 10% of quarterly throughput, and contributing to the higher ore grades. 

Bolanitos and El Compas processed tonnes were higher compared to plan and offset by lower grades, due to normal variations in the Bolanitos ore body and a lower grade of the final stockpile at El Compas. 

As previously disclosed by the Company (see news release dated January 7, 2021), the existing reserve at El Compas was sufficient to continue mining until mid-2021. Management suspended operations in early August and is currently assessing opportunities.

Revision to Full Year 2021 Production Guidance

Updates to the full year 2021 consolidated production guidance are driven by strong performance at Guanacevi, while production at Bolanitos will remain the same as originally estimated for silver with a small increase in gold. Other operational components of the Company’s full year guidance remain unchanged from the targets released in the news release dated January 28, 2021, with the exception of the newly increased development budget at Terronera for an additional $13 million until year end.

The COVID-19 pandemic remains relevant in Mexico, and at the Company’s business locations, process and protocols remain in place to ensure staff and workers as well as our communities remain as safe as possible.  Any unforeseen outbreaks could impact production.             

  Guanacevi Bolanitos El Compas Consolidated
Tonnes per Day (TPD) 1,000 – 1,200 1,000 – 1,200 200 – 250 2,400 – 2,650
Silver Production (M oz) 4.0 – 4.2 0.4 – 0.5 0.1 – 0.1 4.5 – 4.8
Gold Production (K oz) 12.0 – 13.0 24.0 – 25.0 4.1 – 4.1 40.1 – 42.1
Silver Eq Production (M oz) 5.0 – 5.2 2.3 – 2.5 0.4 – 0.4 7.7 – 8.0
2021 silver equivalent production is calculated using an 80:1 silver:gold ratio.

Production Highlights for Three Months and Nine Months Ended September 30, 2021

Three Month Ended September   Nine Months Ended September
2021 2020 % Change   2021 2020 % Change
222,461 206,324 8% Throughput (tonnes) 673,932 519,771 30%
1,305,399 942,274 39% Silver ounces produced 3,427,223 2,396,478 43%
10,541 10,260 3% Gold ounces produced 32,816 24,553 34%
1,295,126 932,837 39% Payable silver ounces produced 3,394,103 2,373,246 43%
10,328 10,041 3% Payable gold ounces produced 32,177 24,078 34%
2,148,679 1,763,074 22% Silver equivalent ounces produced (1) 6,052,503 4,360,718 39%
699,539 741,262 (6%) Silver ounces sold 2,443,184 2,041,601 20%
9,925 8,997 10% Gold ounces sold 30,398 21,669 40%
Silver equivalent ounces calculated using 80:1 ratio.

Production Tables for Third Quarter, 2021 by Mine (1)

Production Tonnes Tonnes Grade Grade Recovery Recovery Silver Gold
by mine Produced per day Ag gpt(1) Au gpt(1) Ag  % Au  % Oz Oz
Guanaceví 105,496 1,147 387 1.13 89.5% 94.1% 1,174,168 3,605
Bolañitos 107,752 1,171 41 1.98 87.2% 90.6% 123,883 6,215
El Compas 9,213 192 24 1.81 103.4% 134.5% 7,348 721
Consolidated 222,461 2,445 204 1.57 89.3% 93.9% 1,305,399 10,541
(1) gpt = grams per tonne

Production Tables for Nine Months Ended September 30, 2021 by Mine (1)

Production Tonnes Tonnes Grade Grade Recovery Recovery Silver Gold
by mine Produced per day Ag gpt(1) Au gpt(1) Ag  % Au  % Oz Oz
Guanaceví 306,021 1,117 353 1.05 87.3% 91.3% 3,031,626 9,432
Bolañitos 313,356 1,144 39 2.09 89.1% 90.9% 350,154 19,150
El Compas 54,555 199 36 3.05 72.0% 79.1% 45,443 4,234
Consolidated 673,932 2,460 181 1.70 87.2% 89.3% 3,427,223 32,816
(1) gpt = grams per tonne

Release of Third Quarter, 2021 Financial Results and Conference Call

The 2021 Third Quarter Financial Results will be released before market on Tuesday, November 9, 2021 and a telephone conference call will be held the same day at 10:00am PT (1:00pm ET). To participate in the conference call, please dial the numbers below. No pass code is necessary.

Toll-free in Canada and the US: 1-800-319-4610
Local Vancouver: 604-638-5340
Outside of Canada and the US: +604-638-5340

A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass code is 7870#. The audio replay and a written transcript will be available on the Company’s website at www.edrsilver.com under the Investor Relations, Events section.

About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates two high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer.  Our philosophy of corporate social integrity creates value for all stakeholders.

SOURCE Endeavour Silver Corp. 

Contact Information:
Galina Meleger, Vice President, Investor Relations
Toll free: (877) 685-9775
Tel: (604) 640-4804
Email: gmeleger@edrsilver.com
Website: www.edrsilver.com

Follow Endeavour Silver on Facebook, Twitter, Instagram and LinkedIn

Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward?looking statements and information herein include but are not limited to statements regarding the impact of suspension of mining operations, Endeavour’s anticipated performance in 2021, including production forecasts, cost estimates and metal price estimates, and the timing and results of mine expansion and development and receipt of various permits. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.

Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include, among others, uncertainty of the ultimate impact of the COVID 19 pandemic on operations, changes in national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; metal prices; the speculative nature of mineral exploration and development, risks in obtaining necessary licenses and permits, and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities.

Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company’s mining operations ,the impact of the COVID 19 pandemic on mining operations in Mexico generally, and the Company’s operations specifically, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, resource and reserve estimates, metal prices, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.

Source: Endeavour Silver Corporation

Endeavour Silver Produces 1,305,399 Oz Silver And 10,541 Oz Gold For 2.1 Million Oz Silver Equivalents In Q3, 2021; 2021 Consolidated Production Guidance Raised To 7.7 – 8.0 Million Oz Silver Equivalents

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Endeavour Silver Produces 1,305,399 Oz Silver And 10,541 Oz Gold For 2.1 Million Oz Silver Equivalents In Q3, 2021; 2021 Consolidated Production Guidance Raised To 7.7 – 8.0 Million Oz Silver Equivalents

 

VANCOUVER, British Columbia, Oct. 07, 2021 (GLOBE NEWSWIRE) — Endeavour Silver Corp. (NYSE: EXK) (TSX: EDR) reports production of 1,305,399 silver ounces (oz) and 10,541 gold oz in Q3, 2021, for silver equivalent (“AgEq”) production of 2.1 million oz at an 80:1 silver:gold ratio, totaling 6.1 million AgEq oz for the 9 months ended September 30, 2021.  

Management has increased 2021 consolidated production guidance to 7.7 – 8.0 million oz silver equivalents to reflect continued strong performance at Guanacevi due to higher than expected grades and tonnage milled. Full details are provided in the section, “Revision to Full Year 2021 Guidance” in this news release.  

2021 Third Quarter Highlights

  • Consolidated Production Ahead of Plan: Silver equivalent production at each mine is on track to meet or exceed 2021 production plans. 
     
  • Guanacevi Production Ahead of Plan:  Higher throughput and higher silver and gold grades resulted in record production during the quarter, ahead of the annual plan. Based on continued strong performance, the operations team has significantly improved the production outlook for the full year, resulting in an estimated 20% increase in silver equivalent metal. 
     
  • Bolanitos Production on Plan: Processed tonnes were ahead of plan, offset by lower ore grades.
     
  • El Compas Suspended: Final stockpiles were processed subsequent to the suspension of operations in early August. Most of the company personnel have been transferred to other sites or laid off, while the mine and plant have been placed on temporary care and maintenance. Management is evaluating several opportunities.
     
  • Metal Sales and Inventories: Sold 699,540 oz silver and 9,925 oz gold, held 1,030,304 oz silver and 1,211 oz gold of bullion inventory and 37,100 oz silver and 2,028 oz gold in concentrate inventory.  Management continued to withhold metal from sale during the price correction over the third quarter and plans to sell the withheld metal inventory in anticipation of a precious metal prices rebound.
     
  • Robust Economics in the Terronera Feasibility Study: Favorable outcomes including improved confidence in the project cost, design and operability provide a strong position for securing project financing. The Terronera Project Technical Report, authored in accordance with National Instrument 43-101, will be filed on SEDAR and EDGAR by October 24, 2021.
     
  • Acquired Bruner Gold Project in Nye County, Nevada:  Completed the acquisition of an advanced stage gold exploration project in a favourable jurisdiction for US$10 million in cash.

Dan Dickson, CEO, commented, “We are well positioned to exceed our original full year consolidated production guidance, which has led to the decision to formally revise our annual targets. Our 2021 business plan shows strong performance, which has resulted in higher production than last year, despite suspending operations at the small El Compas mine. This reaffirms an important year of investment into our people and culture programs to ensure the long-term sustainability of our operations.”

“Entering the fourth quarter, we are also continuing with our exploration programs and anticipate releasing additional drill results at Terronera, building on the encouraging regional results we announced previously this year. We are advancing the Terronera development and continue to negotiate critical contracts, procure various long lead equipment items and general mine equipment, are increasing the work force and preparing for early earth works.”

Mine Operations

Consolidated silver production increased by 39% compared to Q3 2020, primarily driven by a 46% increase in silver production at the Guanacevi mine offset by the suspension of operations at the El Compas mine.  Gold production increased by 3% with the Guanacevi mine seeing a 47% increase in silver equivalent ounces produced which was offset the suspension of operations at the El Compas mine.  Silver and gold production at the Bolanitos mine increased moderately with a 11% increase in silver production and an 8% increase in gold production. 

Guanacevi throughput exceeded plan and mining the new higher grade El Curso orebody has led to significantly improved grades and mine plan flexibility. Additionally, supplies of local third-party ores continued to supplement mine production, amounting to 10% of quarterly throughput, and contributing to the higher ore grades. 

Bolanitos and El Compas processed tonnes were higher compared to plan and offset by lower grades, due to normal variations in the Bolanitos ore body and a lower grade of the final stockpile at El Compas. 

As previously disclosed by the Company (see news release dated January 7, 2021), the existing reserve at El Compas was sufficient to continue mining until mid-2021. Management suspended operations in early August and is currently assessing opportunities.

Revision to Full Year 2021 Production Guidance

Updates to the full year 2021 consolidated production guidance are driven by strong performance at Guanacevi, while production at Bolanitos will remain the same as originally estimated for silver with a small increase in gold. Other operational components of the Company’s full year guidance remain unchanged from the targets released in the news release dated January 28, 2021, with the exception of the newly increased development budget at Terronera for an additional $13 million until year end.

The COVID-19 pandemic remains relevant in Mexico, and at the Company’s business locations, process and protocols remain in place to ensure staff and workers as well as our communities remain as safe as possible.  Any unforeseen outbreaks could impact production.             

  Guanacevi Bolanitos El Compas Consolidated
Tonnes per Day (TPD) 1,000 – 1,200 1,000 – 1,200 200 – 250 2,400 – 2,650
Silver Production (M oz) 4.0 – 4.2 0.4 – 0.5 0.1 – 0.1 4.5 – 4.8
Gold Production (K oz) 12.0 – 13.0 24.0 – 25.0 4.1 – 4.1 40.1 – 42.1
Silver Eq Production (M oz) 5.0 – 5.2 2.3 – 2.5 0.4 – 0.4 7.7 – 8.0
2021 silver equivalent production is calculated using an 80:1 silver:gold ratio.

Production Highlights for Three Months and Nine Months Ended September 30, 2021

Three Month Ended September   Nine Months Ended September
2021 2020 % Change   2021 2020 % Change
222,461 206,324 8% Throughput (tonnes) 673,932 519,771 30%
1,305,399 942,274 39% Silver ounces produced 3,427,223 2,396,478 43%
10,541 10,260 3% Gold ounces produced 32,816 24,553 34%
1,295,126 932,837 39% Payable silver ounces produced 3,394,103 2,373,246 43%
10,328 10,041 3% Payable gold ounces produced 32,177 24,078 34%
2,148,679 1,763,074 22% Silver equivalent ounces produced (1) 6,052,503 4,360,718 39%
699,539 741,262 (6%) Silver ounces sold 2,443,184 2,041,601 20%
9,925 8,997 10% Gold ounces sold 30,398 21,669 40%
Silver equivalent ounces calculated using 80:1 ratio.

Production Tables for Third Quarter, 2021 by Mine (1)

Production Tonnes Tonnes Grade Grade Recovery Recovery Silver Gold
by mine Produced per day Ag gpt(1) Au gpt(1) Ag  % Au  % Oz Oz
Guanaceví 105,496 1,147 387 1.13 89.5% 94.1% 1,174,168 3,605
Bolañitos 107,752 1,171 41 1.98 87.2% 90.6% 123,883 6,215
El Compas 9,213 192 24 1.81 103.4% 134.5% 7,348 721
Consolidated 222,461 2,445 204 1.57 89.3% 93.9% 1,305,399 10,541
(1) gpt = grams per tonne

Production Tables for Nine Months Ended September 30, 2021 by Mine (1)

Production Tonnes Tonnes Grade Grade Recovery Recovery Silver Gold
by mine Produced per day Ag gpt(1) Au gpt(1) Ag  % Au  % Oz Oz
Guanaceví 306,021 1,117 353 1.05 87.3% 91.3% 3,031,626 9,432
Bolañitos 313,356 1,144 39 2.09 89.1% 90.9% 350,154 19,150
El Compas 54,555 199 36 3.05 72.0% 79.1% 45,443 4,234
Consolidated 673,932 2,460 181 1.70 87.2% 89.3% 3,427,223 32,816
(1) gpt = grams per tonne

Release of Third Quarter, 2021 Financial Results and Conference Call

The 2021 Third Quarter Financial Results will be released before market on Tuesday, November 9, 2021 and a telephone conference call will be held the same day at 10:00am PT (1:00pm ET). To participate in the conference call, please dial the numbers below. No pass code is necessary.

Toll-free in Canada and the US: 1-800-319-4610
Local Vancouver: 604-638-5340
Outside of Canada and the US: +604-638-5340

A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass code is 7870#. The audio replay and a written transcript will be available on the Company’s website at www.edrsilver.com under the Investor Relations, Events section.

About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates two high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer.  Our philosophy of corporate social integrity creates value for all stakeholders.

SOURCE Endeavour Silver Corp. 

Contact Information:
Galina Meleger, Vice President, Investor Relations
Toll free: (877) 685-9775
Tel: (604) 640-4804
Email: gmeleger@edrsilver.com
Website: www.edrsilver.com

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Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward?looking statements and information herein include but are not limited to statements regarding the impact of suspension of mining operations, Endeavour’s anticipated performance in 2021, including production forecasts, cost estimates and metal price estimates, and the timing and results of mine expansion and development and receipt of various permits. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.

Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include, among others, uncertainty of the ultimate impact of the COVID 19 pandemic on operations, changes in national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; metal prices; the speculative nature of mineral exploration and development, risks in obtaining necessary licenses and permits, and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities.

Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company’s mining operations ,the impact of the COVID 19 pandemic on mining operations in Mexico generally, and the Company’s operations specifically, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, resource and reserve estimates, metal prices, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.

Source: Endeavour Silver Corporation