Tag: Entertainment

Digital, Media & Technology Industry Report: Buckle Your Seat Belts

Posted on by cpatches

Monday, April 24, 2022

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

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

Refer to the bottom of the report for important disclosures

Overview: Key takeaways from the NAB. Media investors are unpacking the information from the National Association of Broadcaster’s (NAB) convention. While there are promising new technologies that are sure to create shiny new objects to catch investor’s attention, particularly AI, the chatter is about the current advertising environment. Looking for the key takeaways? Sign up here for the virtual conference on April 27th. 

Digital Media & Technology: Head fake? Every one of Noble’s Internet and Digital Media Indices not only finished the quarter up, but significantly outperformed the S&P 500.  The best performing index was Noble’s Social Media Index, which increased by 70% in the first quarter of 2023, followed by Noble’s Ad Tech Index (+31%), MarTech Index (+30%), and Digital Media Index (+18%). 

Television Broadcasting: Weak current revenue trends. While auto advertising appears to be faring better, the weight of the economic challenges appear to be causing further moderation in advertising. Will auto and, potentially Political, carry the second half 2023 revenue performance?

Radio Broadcasting: All out of love. The industry is reeling from a Wall Street research downgrade to an underperform on iHeart Media, which sent all radio stocks tumbling. Some stocks performed better than others. What’s behind the downgrade and which stocks performed better? 

Publishing:Advertising takes a hit. After a period of moderating revenue trends, Publishers reported a weakened advertising environment. The downturn was due to Print advertising which took a nose dive. As a result, publishing companies implemented another round of expense cuts to bolster cash flow. There is a bright spot as Digital continues to perform strongly. 

Overview

The NAB Show Stopper

Media investors are unpacking all of the information from last week’s National Association of Broadcaster’s (NAB) convention. There is a lot to digest given that there were over 1,400 exhibits, 140 new exhibitors this year. Because of the overwhelming number of exhibitors, many that go to Vegas for this annual convention do not go to the convention floor. It is a shame. There was a lot to see and learn. As Noble’s Media & Entertainment Analyst I walked the convention floor, which covers 4.6 million square feet of exhibit halls and meeting rooms. I stopped by booths and taped presentations to explain the new technologies, the plan for implementation of new services, and the prospect for revenue monetization. One important demonstration focused on the new broadcast standard, ATSC 3.0, the hope for a bright future for the television industry. This new standard should allow the industry to become more contemporary in terms of how its audience consumes video and information. In addition, it offers the ability for the industry to participate in new revenue streams, including Datacasting, which may become bigger than Retransmission revenue in the future. 

In addition to touring the floor, I attended NAB panel discussions and hosted meetings with media management teams in a fireside chat format to discuss current business trends, the new technologies (including Artificial Intelligence (AI) and the new broadcast standard). In addition, these C-suite management teams provided their key takeaways from the NAB convention and offered why they participated in the conference this year. These discussions are available to you for free on Channelchek.com on April 27th in a virtual conference. In this upcoming Channelchek Takeaway Series on the NAB Show, I offer my key takeaways, including the current advertising outlook, my take on the monetization of the new technologies and what media investors should do now given the current economic and advertising environment. Your free registration to this informative event is available here. 

This report highlights the performance of the media sectors over the past 12 months and past quarter. Overall, media stocks struggled in the past year, but there has been some improved quarterly performance, particularly in Digital Media and Broadcast Television, discussed later. All media stocks are struggling to offset losses over the course of the past year with trailing 12 months stocks down in the range of 5% on the low end to down 68% on the high end. The best performing sector in the past 12 months were Social Media stocks, down 5% versus the general market decline of 9% over the comparable period.

In the first quarter, stock performance was mixed. The best performers in the traditional media sectors were Broadcast Television stocks, up nearly 10% versus the general market which increased 7% in the comparable period. But, the individual TV stock performance reflected a different story, explained later in this report. The worse performer for the quarter were the radio stocks, driven by a Wall Street downgrade of one of the leading radio broadcasters. The Digital Media stocks had another good performance. We believe that stock performance will be a roller coaster for at least another quarter or two as the weight of the Fed rate increases begin to adversely affect the economy.

While National advertising has remained weak, we believe that Local advertising is now beginning to moderate as well. The Local advertising weakness appears to be in the smaller markets as well as the larger markets. This is somewhat different than the most recent economic cycles whereby the smaller markets were somewhat resilient. It seems that the smaller markets are feeling the adverse affects from inflation, rising employment costs and tightening bank credit. In our view, the disappointing advertising outlook likely will cause second quarter revenue estimates to come down, creating a difficult environment for media stocks. As such, we encourage investors to be opportunistic and take an accumulation approach to building positions for the prospective economic and advertising improvement. Our favorites have digital media exposure, given that we expect Digital Advertising (while softening as well) will be more resilient than traditional advertising mediums. Our favorites include Travelzoo (TZOO), Townsquare Media (TSQ), Harte Hanks (HHS), E.W. Scripps (SSP), and Direct Digital (DRCT). 

Digital Media

Head fake?

Last quarter we wrote that the S&P 500 increased for the first time since the fourth quarter of 2021 and that we were beginning to see signs of life in Noble’s Internet and Digital Media Indices as well.  Those signs of life continued to bear fruit throughout the first quarter, as every one of Noble’s Internet and Digital Media Indices not only finished the quarter up, but significantly outperformed the S&P 500. Figure #1 LTM Digital Media Performance highlights that many of the Digital Media sectors are now approaching year earlier levels given the most recent favorable performance. The best performing index was Noble’s Social Media Index, which increased by 70% in the first quarter of 2023, followed by Noble’s Ad Tech Index (+31%), MarTech Index (+30%), and  Digital Media Index (+18%). 

Figure #1 LTM Digital Media Performance

Source: Capital IQ 

Noble’s Indices are market cap weighted, and we attribute the strength of the Social Media Index to its largest constituent, Meta Platforms (META; a.k.a. Facebook) whose shares increased by 76% in the first quarter. Figure #2 Q1 Digital Media Performancehighlights the first quarter performance for the digital stocks.Meta’s management stirred interest in the shares from its 4Q 2022 earnings call when they spent most of their time talking about “efficiency”, which investors interpreted to mean that Meta was newly focused on profitability.  After a relatively disastrous 3Q 2022 earnings call, after which shares fell by 25%, the company demonstrated on its 4Q 2022 earnings call that it clearly had gotten the message:  investors were not enamored about the company’s plans in October 2022 to spend billions of dollars to develop its Metaverse initiatives. Rather, on its fourth quarter call, management focused on driving its short form video initiative, Reels (i.e., becoming more TikTok like), reducing its headcount by reducing layers of management, lowering its operating expenses and reducing its capital expenditures. Investors applauded this newfound focus on profitability and shares rebounded from a low of $88.90 per share in early November to $211.94 at the March quarter-end.   

The next best performing index was Noble’s Ad Tech Index which increased by 31% during 1Q 2023.  Fourteen of the 23 stocks in the index were up in the first quarter. Standouts during the quarter were Integral Ad Science (IAS; +62%) and Perion Networks (PERI; +56%).  Integral Ad Science exceeded expectations in its fourth quarter results and guided to better-than-expected results in 1Q 2023.  The company continues to expand its product suite, scale its social media offerings (i.e., for TikTok) and is well positioned to continue to benefit from the shift from linear TV to connected TV (CTV).  Perion shares continued their winning:  Perion was the only ad tech stock whose shares were up in 2022.  Perion’s 56% increase in 1Q 2023 reflected beat on both revenues (by 2%) and EBITDA (by 10%) as well as improved guidance for 1Q 2023.  Perion’s profitability increased significantly in 2022, with EBITDA nearly doubling (+90%) from 2021 ($70M) to 2022 ($132M).

Noble’s MarTech Index increased by 30% with 14 of the 22 stocks in the index posting increases in 1Q 2023.  The best performing stocks were Qualtrics (XM; +70%) Sprinklr (CXM; +59%), Salesforce (CRM; +51%), Hubspot (HUBS; +48%) and Yext (YEXT; +47%). Qualtrics agreed to be acquired for $12.5 billion by Silver Lake and the Canadian Pension Plan Investment Board, which came at a 73% premium to its 30-day volume weighted stock price. Sprinklr beat revenue expectations and significantly beat EBITDA expectations (doubling the Street expectations) and guided to a current year forecast that focuses more on efficiency and profitability.

MarTech stocks have been victims of their own success. Two years ago at this time the sector was trading at 11.3x forward revenue estimates, and a year ago the group was trading at 6.5x forward revenues. Today the group trades at 4x forward revenues and investors appear to be wading back into the sector. Figure #3 Marketing Tech Comparables highlights the compelling stock valuations.One of the laggards in the sector has been Harte Hanks (HHS), which declined 20% in the first quarter. We believe that the shares have not gained traction following the successful rebound toward profitability in 2022. The shares advanced a powerful 136% in 2022 from lows in May to highs achieved in August 2022. Since that time, investors appear to be taking chips off the table. In our view, the HHS shares appear to be oversold. Its business appears to be resilient. Given the recent weakness in the shares, the shares appear to be undervalued and offer a favorable risk reward relationship. As such, the HHS shares are among our favorites in the sector.  

Another one of our current favorites is Direct Digital Holdings (DRCT). As Figure #4 Advertising Tech Comparables illustrates, the DRCT shares trade in line with the averages for the group at roughly 5.4 times 2024 adj. EBITDA. Notably, the company recently restated upward its 2022 full year revenue and adj. EBITDA results. Given the favorable operating momentum, we raised our full year 2023 and 2024 revenue and adj. EBITDA estimates, keeping our previous growth estimates. With the higher 2024 adj. EBITDA, we tweaked upward our price target from $5.50 to $6.00. Given a favorable fundamental outlook and compelling stock valuation, we view the shares as among our favorites.  

Finally, Noble’s Digital Media Index, while lagging that of its digital peers at an 18% increase, significantly outperformed the S&P 500 (+7%), with a broad based recovery in which 9 of the sector’s 11 stocks increased during 1Q 2023.  The best performing stock was Spotify (SPOT; +69%), whose revenues fell short of expectations by less than 1%, significantly beat consensus Street EBITDA expectations by $58M and more importantly pivoted towards demonstrating operating leverage.  Spotify, which posted an EBITDA loss of nearly $500 billion in 2022, is expected to generate $650 billion in EBITDA in 2024, according to Street estimates. A deteriorating ad market in 2022 combined with higher interest rates likely prompted the company to shift its priorities to running a profitable company and doing it more quickly and with some urgency.  The second best performing stock was Travelzoo (TZOO; +36%), as the company’s 4Q 2022 revenues and EBITDA increased by 31% and 328%, respectively.  Notably, Travelzoo’s EBITDA came in 58% higher than Street consensus. The company appears to be benefiting from pent up travel demand for travel and management highlighted the opportunity for margin expansion in the coming quarters. Given the favorable outlook, we raised our price target to $10. Near current levels, the TZOO shares appear to offer above average returns and we reiterate our Outperform rating.    

Figure #2 Q1 Digital Media Performance 

Source: Capital IQ

Figure #3 Marketing Tech Comparables 

Source: Eikon, Company filings & Noble estimates

Figure #4 Advertising Tech Comparables

Source: Eikon, Company filings & Noble estimates 

Traditional Media 

As Figure #5 LTM Traditional Media Performance illustrates, these stocks have struggled to gain sea legs, trending lower over the course of the past year. All traditional media sectors have underperformed over the past year, with Radio the poorest performing group. As Figure #6 Q1 Traditional Media Performance illustrates, only the TV Broadcast stocks edged out the general market performance in the latest quarter. 

Figure #5 LTM Traditional Media Performance

Source: Capital IQ

Figure #6 Q1 Traditional Media Performance

Source: Capital IQ

Television Broadcast 

Weak current revenue trends 

As illustrated in the previous chart, the TV stocks outperformed the general market in the first quarter. This market cap weighted index masked the performance of many poor performing stocks in the quarter.  Sinclair Broadcasting (SBGI; up 10%), Entravision (EVC; up a strong 26%), and Fox (FOX; up 12%) were among the best performing stocks and favorably influenced the TV index in the quarter. But, there were many poor performing stocks including E.W. Scripps (SSP; down 29%), Gray Television (GTN; down 22%) and Tegna (TGNA; down 20%). We believe that there was heightened interest in Entravision given its favorable Q1 results which was fueled by its fast growing Digital business. Figure #7 TV Q4 YoY Revenue Growth illustrates the Entravision’s Q4 revenue performance was among the best in the industry. While Entravision was among the best revenue performers, its margins are below that of its peer group as illustrated in Figure #8 TV Q4 EBITDA Margins. This is due to the accounting treatment of its Digital revenues given that it is an agency business. Given that Digital represents roughly 80% of the company’s total company revenue, we plan to put the EVC shares into the Digital Media sector to more accurately reflect its business. The poorer performing stocks are among the higher debt levered in the industry. As such, we believe the underperformance reflects concern of a slowing economy and investors flight to quality in the sector. 

We do not believe that we are out of the woods with the TV stocks and the market is expected to be volatile. The advertising environment appears to be deteriorating given weakening economic conditions. There are bright spots which include some improvement in the Auto category. Dealerships appear to be stepping up advertising given higher inventory levels. In addition, broadcasters appear optimistic about Political advertising, which could begin in the third quarter 2023. There is a planned Republican presidential candidate debate scheduled in August. As such, there is some promise that candidates will advertise in advance of that debate and into the fourth quarter given the early primary season. We do not believe that Political and Auto will be enough to offset the weakness in National and in the weakening Local category. In our view, Q2 and full year 2023 estimates are likely to come down. Furthermore, we believe that broadcasters will be shy about predicting Political advertising even into 2024 given the past disappointments in management forecasts in the last Political cycle. 

We encourage investors to take an accumulation approach to the sector. Notably, as Figure #9 TV Comparables highlights, nearly all of the stocks are trading near each other, with the exception of the larger media stocks. In our view, the valuations are near recession type valuations and appear to have limited downside risk. Our current favorite is E.W. Scripps (SSP). While the company is not immune to the current weak advertising environment, we believe that there is a favorable Retransmission revenue opportunity as 75% of its subscribers are due in the next 12 months. In addition, we believe that Retransmission margins will improve. Given the relatively small float for the shares, the SSP shares tend to underperform when the industry is out of favor, but then outperform when the industry is back in favor. In our view, the SSP shares offer a favorable risk/reward relationship and top our favorites in the sector. 

Figure #7 TV Q4 YoY Revenue Growth

Source: Eikon & Company filings

Figure #8 TV Q4 EBITDA Margins

Source: Eikon & Company filings

Figure #9 TV Comparables 

Source: Noble Estimates & Eikon

Radio Broadcasting

All out of love

The Radio stocks had another tough quarter, down 17% versus a 7% gain for the general market. Notably, there was a wide variance in the individual stock performance, with the largest stocks in the group having the worst performance in the quarter, including Audacy (AUD; down 40%), Cumulus Media (CMLS; down 41%) and iHeart Media (IHRT; down 36%). The first quarter stock performance did not appear to reflect the fourth quarter results. As Figure #10 Radio Industry Q4 YoY Revenue Growth illustrates, revenues were relatively okay, with some exceptions. Some of the larger Radio companies which have a large percentage of National advertising, underperformed relative to the more diversified Radio companies, especially those with a strong Digital segment presence. Figure #11 Radio Industry Q4 YoY EBITDA Margins illustrate that the margins for the industry remain relatively healthy. 

The weakness in the Radio stocks was fueled in the quarter from a downgrade to under perform on the shares of iHeart by a Wall Street firm. Many radio stocks were down in sympathy. The analyst attributed the downgrade to the current macro environment and its heavy floating rate debt burden. The company is not expected to generate enough free cash flow to de-lever its balance sheet. We believe the downgrade as well as the excessive debt profile of Audacy, another industry leader which likely will need to restructure, sent all radio stocks tumbling. Some stocks performed better than others. While Cumulus Media’s debt profile is not as levered as iHeart or Audacy, the shares were caught in the net of a weak advertising outlook. Cumulus is among the most sensitive to National advertising, which currently continues to be weak. 

Some of our favorite stocks which are diversified and have developing digital businesses performed better. Those stocks included Townsquare Media (TSQ; up 10%), and Salem Media (SALM; up 4%). Notably, while the shares of Beasley Broadcasting (BBGI) were down 10%, the shares performed better than the 17% decline for the industry in the quarter. Importantly, Beasley recently provided favorable updated Q1 guidance for the first quarter. Q1 revenues are expected to increase 1% to 2.5% and EBITDA growth is expected to be in the range of 40% to 50%, significantly better than our estimates. Furthermore, management provided a sanguine outlook for 2023 and 2024. Digital revenue is expected to reach 20% to 30% of total revenue with a goal of reaching 40% in 2024. By comparison, Digital revenue was 17% of total revenue in the fourth quarter 2022. Furthermore, the company is sitting on roughly $35 million in cash. It has opportunistically repurchased $10 million of its bonds at a significant discount. We believe that it is likely to maintain a strong cash position given the economic uncertainty. 

We view Townsquare Media (TSQ), Salem Media (SALM) and Beasley Broadcast (BBGI) as among our favorites in the industry given the diverse revenue streams. While these companies are not immune to the economic headwinds, we believe that its Digital businesses should offer some ballast to its more sensitive Radio business. In the case of Salem, 30% of its revenues are relatively stable with block programming. As Figure #12 Broadcast Radio Comparables illustrates, the shares of Townsquare are among the cheapest in the industry, trading below peer group averages. Notably, the company instituted a hefty dividend. As a result, investors get paid while we await a favorable upturn in fundamentals. As such, the shares of TSQ tops our list of favorites. 

Figure #10 Radio Industry Q4 YoY Revenue Growth

Source: Eikon & Company filings

Figure #11 Radio Industry Q4 YoY EBITDA Margins

Source: Eikon & Company filings

Figure #12 Broadcast Radio Comparables 

Source: Noble estimates & Eikon

Publishing 

Advertising takes a hit  

After a period of moderating revenue trends, Publishers reported a weakened advertising environment. As illustrated in Figure #13 Publishing Industry YOY Revenue Growth, illustrates that revenue trends deteriorated with Print advertising taking a nose dive. This trend was illustrative in the results from Lee Enterprises, one of our current favorites in the sector. After a fiscal fourth quarter flat revenue performance, the company reported a 8.5% decline in its fiscal first quarter. The Q1 revenue performance reflected an 18.5% decrease in Print advertising, an acceleration in the rate of the 11% decline in the previous quarter. 

The surprisingly weak quarter hit the company’s adj. EBITDA margins. Traditionally, Lee maintained some of the best margins in the industry. As Figure #14 Q4 Publishing Industry EBITDA Margins illustrates, the company fell in ranking to among the lowest in the sector. Importantly, in spite of the revenue weakness, the company maintains its previous adj. EBITDA guidance of $94 million to $100 million. To achieve its cash flow target in light of the soft revenue outlook, Lee implemented a round of expense cuts to bolster cash flow. Cost reductions are expected to result in $40 million of savings in FY23, and $60 million in annualized savings going forward. While we are disappointed that the company’s Print business is not moderating as previously expected, the company’s Digital businesses remain favorably robust. In addition, its Digital business is turning toward contributing margins. As such, we remain sanguine about the company’s digital transition. 

As Figure #15 Publishing Comparables highlights, there is a wide gap between the valuation of the New York Times (NYT) and the rest of the industry, including Lee. While the highly debt levered shares of Gannett appear cheaper, we believe that Lee has a more favorable debt profile with a fixed 9% annual rate, no fixed principal payments, no performance covenants and a 25 year maturity. With the shares trading at 5.3 times our 2024 adj. EBITDA estimate compared with 15.4 times at the New York Times, we believe that there is limited downside risk in the LEE shares. Furthermore, we believe that the company is well positioned as economic and advertising prospects improve. Given the company’s favorable outlook for its Digital transition, we believe that the shares should close the gap in valuations with the leadership stock in the group. Consequently, the shares of LEE are among our favorite play for an improving economic outlook. 

Figure #13 Publishing Industry YoY Revenue Growth 

Source: Eikon & Company filings

Figure #14 Q4 Publishing Industry EBITDA Margins

Source: Eikon & Company filings

Figure #15 Publishing Comparables 

Source: Noble estimates & Eikon

For more information on companies mentioned in this report click on the following:

Beasley Broadcast

Cumulus Media

Direct Digital

Entravision

E.W. Scripps

Harte Hanks

Lee Enterprises

Salem Media Group

Townsquare Media

Travelzoo

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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.

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ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE

Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis.
Named WSJ ‘Best on the Street’ Analyst and Forbes/StarMine’s “Best Brokerage Analyst.”
FINRA licenses 7, 24, 63, 87

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RESEARCH ANALYST CERTIFICATION

Independence Of View
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Release – Travelzoo Reports Fourth Quarter 2022 Results

Posted on by aweinsoff@channelchek.com

Research News and Market Data on TZOO

03/22/2023

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NEW YORK, March 22, 2023 /PRNewswire/ — Travelzoo® (NASDAQ: TZOO):

  • Revenue of $18.6 million, up 36% year-over-year
  • In constant currencies, revenue was $19.4 million, up 42% year-over-year
  • Non-GAAP consolidated operating profit of $4.8 million
  • Earnings per share (EPS) of $0.20

Travelzoo, a global Internet media company that provides exclusive offers and experiences for members, today announced financial results for the fourth quarter ended December 31, 2022. Consolidated revenue was $18.6 million, up 36% from $13.7 million year-over-year. In constant currencies, revenue was $19.4 million. Travelzoo’s reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members.

The reported net income attributable to Travelzoo from continuing operations was $2.5 million for Q4 2022. At the consolidated level, including minority interests, the reported net income from continuing operations was $2.5 million. EPS from continuing operations was $0.20, compared to EPS of ($0.27) in the prior-year period.

Non-GAAP operating profit was $4.8 million. The calculation of non-GAAP operating profit excludes impairment of intangible assets ($200,000), amortization of intangibles ($453,000), stock option expenses ($348,000) and severance-related expenses ($200,000). GAAP operating profit was $3.6 million. See section “Non-GAAP Financial Measures” below.

“Revenue growth accelerated in both North America and in Europe, leading to much stronger earnings,” said Holger Bartel, Travelzoo’s Global CEO. “As the recovery from the pandemic continues, we will leverage Travelzoo’s global reach and trusted brand to further improve earnings in future periods.”

“With more than 30 million members, 7 million mobile app users, and 4 million social media followers, Travelzoo is loved by travel enthusiasts who are affluent, active and open to new experiences.”

Cash Position
As of December 31, 2022, consolidated cash, cash equivalents and restricted cash were $19.4 million. Net cash used in operations was $2.3 million for the three months ended December 31, 2022. Cash was used primarily in connection with a decrease of merchant payables by $6.3 million.

Reserve
Reported revenues include a reserve of $1.3 million related to commissions to be earned from vouchers sold. The reserve is booked as contra revenue.

Travelzoo North America
North America business segment revenue increased 53% year-over-year to $13.1 million. Operating profit for Q4 2022 was $3.7 million, or 29% of revenue, compared to an operating loss of $2.1 million in the prior-year period.

Travelzoo Europe
Europe business segment revenue increased 9% year-over-year to $4.7 million. At constant currencies, Europe business segment revenue increased 23% year-over-year. Operating profit for Q4 2022 was $42,000, compared to an operating loss of $1.7 million in the prior-year period.

Jack’s Flight Club
On January 13, 2020, Travelzoo acquired 60% of Jack’s Flight Club, a membership subscription service. Jack’s Flight Club revenue increased 6% year-over-year to $855,000. During Q4 2022, premium subscribers increased 27%. Revenue from increases in subscribers is reported with a lag because we recognize revenue from subscriptions monthly pro rata over the subscription period (quarterly, semi-annually, annually). Non-GAAP operating profit for Q4 2022 was $220,000, compared to a non-GAAP operating profit of $292,000 in the prior-year period. After consolidation with Travelzoo, Jack’s Flight Club’s net loss was $102,000, with $61,000 attributable to Travelzoo as a result of recording $200,000 of intangible assets impairment and $216,000 of amortization of intangible assets related to the acquisition.

Licensing
In June 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Japan for the exclusive use of Travelzoo’s brand, business model, and members in Japan. In August of 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Australia for the exclusive use of Travelzoo’s brand, business models, and members in Australia, New Zealand, and Singapore. Under these arrangements, Travelzoo’s existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Licensing revenue is booked with a lag of one quarter. Travelzoo recorded $7,000 in licensing revenue from the licensee in Australia, New Zealand, and Singapore in Q4 2022. Licensing revenue is expected to increase going forward.

Members and Subscribers
As of December 31, 2022, we had 30.4 million members worldwide. In North America, the unduplicated number of Travelzoo members was 16.3 million as of December 31, 2022, down 4% from December 31, 2021. In Europe, the unduplicated number of Travelzoo members was 9.0 million as of December 31, 2022, up 8% from December 31, 2021. Jack’s Flight Club had 1.9 million subscribers as of December 31, 2022, up 8% from December 31, 2021.

Discontinued Operations
As announced in a press release on March 10, 2020, Travelzoo decided to exit its Asia Pacific business and operate it as a licensing business going forward. Consequently, the Asia Pacific business has been classified as discontinued operations since March 31, 2020. Prior periods have been reclassified to conform with the current presentation. Certain reclassifications have been made for current and prior periods between the continued operations and the discontinued operations in accordance with U.S. GAAP.

Income Taxes
Income tax expense was $1.1 million in Q4 2022, compared to an income tax benefit of $333,000 in the prior-year period.

Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo’s calculation of non-GAAP operating income, also called “non-GAAP operating profit” in this press release and today’s earnings conference call, excludes the following items: impairment of intangibles, amortization of intangibles, stock option expenses, and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in the United States of America (“GAAP”). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Looking Ahead
For Q1 2023, we currently expect higher revenue and profitability. During the pandemic, we have been able to lower our fixed costs. We believe we can keep our fixed costs relatively low in the foreseeable future.

Conference Call
Travelzoo will host a conference call to discuss fourth quarter 2022 results today at 11:30 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations to

  • download the management presentation (PDF format) to be discussed in the conference call
  • access the webcast.

About Travelzoo
Travelzoo® provides its 30 million members with exclusive offers and one-of-a-kind experiences personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with more than 5,000 top travel suppliers—our long-standing relationships give Travelzoo members access to irresistible deals.

Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words “expect”, “predict”, “project”, “anticipate”, “believe”, “estimate”, “intend”, “plan”, “seek” and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the SEC. We cannot guarantee any future levels of activity, performance or achievements. Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Travelzoo, Top 20, and Jack’s Flight Club are registered trademarks of Travelzoo.

Investor Relations:
ir@travelzoo.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/travelzoo-reports-fourth-quarter-2022-results-301778197.html

SOURCE Travelzoo

Release – Bowlero Corp. Completes Acquisition In New Jersey

Posted on by aweinsoff@channelchek.com

Research News and Market Data on BOWL

02/24/2023

RICHMOND, Va.–(BUSINESS WIRE)– Bowlero Corp., (NYSE: BOWL) the global leader in bowling entertainment, completed the acquisition of The Big Event in New Jersey on February 14th. This announcement marks the Company’s first completed acquisition in calendar year 2023, out of a robust pipeline of remaining acquisitions.

Brett Parker, President & Chief Financial Officer of Bowlero Corp., stated, “Today’s announcement illustrates our continued commitment to expanding our unit base and simultaneously improving our average unit volumes.”

The Big Event is located in Cherry Hill, NJ, 20 miles outside of Philadelphia. This impressive 36 lane center features billiards, ping pong, shuffleboard, arcade games and VIP private event rooms. The acquisition of The Big Event marks the Company’s 10th location in the state of New Jersey. This center opened under Bowlero Corp. management on Friday, February 17th.

Parker stated in closing, “We look forward to welcoming this center to our growing national footprint and, as always, we remain focused on growth while continuing to prioritize a world-class experience for our guests.”

Thus far in fiscal year 2023 Bowlero Corp completed 12 acquisitions.

About Bowlero Corp
Bowlero Corp. is the global leader in bowling entertainment, media, and events. With more than 325 bowling centers across North America, Bowlero Corp. serves more than 30 million guests each year through a family of brands that includes Bowlero, Bowlmor Lanes, and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com

For Media:
PR@BowleroCorp.com

For Investors:
IRSupport@BowleroCorp.com

Source: Bowlero Corp.

Release – Bowlero Corp. to Participate in Upcoming Investor Conferences

Posted on by aweinsoff@channelchek.com

Research News and Market Data on BOWL

02/21/2023

RICHMOND, Va.–(BUSINESS WIRE)– Bowlero Corp. (NYSE: BOWL) (“Bowlero” or the “Company”), the world’s largest owner and operator of bowling centers, will participate in the following investor conferences:

  • Raymond James Institutional Investors Conference on March 6, 2023
  • J.P. Morgan Global High Yield & Leveraged Finance Conference on March 7, 2023

Brett Parker, Vice Chairman, President & Chief Financial Officer of Bowlero, will participate in a fireside chat at 4:35 PM ET on Monday, March 6, 2023 at the Raymond James Institutional Investors Conference. He will also participate in a fireside chat at 2:00 PM ET on Tuesday, March 7, 2023 at the J.P. Morgan Global High Yield & Leverage Finance Conference. Mr. Parker will be available for meetings during both conferences.

If available, a live webcast and replay of the presentation will be posted to the Events & Presentations section of the Bowlero Investor Relations website at https://ir.bowlerocorp.com/overview/default.aspx.

About Bowlero Corp.

Bowlero Corp. is the worldwide leader in bowling entertainment. With more than 325 bowling centers across North America, Bowlero Corp. serves nearly 30 million guests each year through a family of brands that includes Bowlero and AMF. Bowlero Corp. is also home to the Professional Bowlers Association, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.

For Media:
PR@BowleroCorp.com

For Investors:
IRSupport@BowleroCorp.com

Source: Bowlero Corp.

Entertainment & Leisure Industry Report: A Feel Good New Year, So Far

Posted on by cpatches
This image has an empty alt attribute; its file name is ent-industry-banner-1024x233.jpg

Tuesday, February 14, 2022

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

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

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

Refer to the bottom of the report for important disclosures

Overview: Entertainment and Leisure stocks have had a good start to the New Year, but the better performance has not erased the disaster that was 2022. We believe that stocks appear to be baking in a mild economic downturn, a soft landing, so to speak. Given that we are skeptic of the conventional thought, we take a cautious stance regarding the recent lift in valuations and encourage investors to take an accumulation approach.

Entertainment:Bowlero on a roll. The Noble Entertainment Index performed well, up 1.5% in the last 12 months, compared with negative returns for the S&P 500 (-7.1%). Although there were broad economic challenges over the past year, entertainment companies benefited from the general public’s return to “normal” following the COVID pandemic. We believe that in-person experiential entertainment recovery is still in its early stage and should continue into 2024.

Gaming: Looking for value in the rubble. The Noble Gaming Index is down 53.1% in the past year, well below the S&P 500, down 7.1%. But, recently, the Noble Gaming Index increased 12.9% in the last quarter, outperforming the 3.2% increase in the general market, as measured by the S&P 500 Index. A reflex bounce? Short squeeze? Or, were the shares oversold? We encourage investors to play it safe.

Esports: Motorsport Games revs its engine. The company was full steam ahead in investing in its new product launches in 2023, but it was running out of cash. Fortunately, a couple of favorable moves to add liquidity set the stock soaring, up 1,600% in one day, creating further opportunities to raise cash. Now, flush with cash, investors look toward the product rollouts.

Leisure: Travel to new heights. The U.S. Travel Association updated its 2023 outlook, projecting a resilient domestic leisure travel market. Consumers appear eager to splurge on travel, in spite of the economic headwinds. We focus on one of our favorite internet media plays, Travelzoo. The company recently updated Fourth Quarter 2022 guidance with revenues expected to be roughly $18.5 million, a strong 31% increase year over year.

Overview

Have economic prospects improved?

The Entertainment & Leisure industries performed better since the beginning of the year, providing some relief to the downturn that investors suffered in 2022. As Figure #1 Entertainment 12 Month Trailing Stock Performance highlights, the Entertainment and Leisure Indices are still recovering and many have yet to offset the 2022 declines, except for the Entertainment stocks. The Entertainment stocks not only have performed well in the first quarter, but have beat the general market as measured by the S&P 500 Index over the past year. The Noble Entertainment Index is up a modest 1.5% in the past year, better than the general market’s 7.1% decline. It is important to note that the Noble Indices are market cap weighted. As such, not all stocks reflected the favorable relative performance. 

What is driving the improved stock performance in the latest quarter? We believe that investors have become more positive about the economic outlook, with conventional wisdom now anticipating a soft economic landing or a mild economic recession. This is a shift toward an optimistic tone from one that anticipated a severe economic recession. The Federal Reserve caused the dire outlook. The Fed signaled that it will continue to raise interest rates until inflation is arrested, in spite of the adverse impact on the economy and jobs. But, since then, conventional wisdom on the economy has brightened as inflation seems to have subsided. The more favorable economic outlook is exemplified by a Wall Street firm that decreased the risk of an economic recession in 2023 by a sizable 25%.

We tend to be skeptics and conservative. As such, we tend not to buy into strength. Our view is that the stocks were oversold and reflected recessionary type valuations. But, have the economic prospects really improved that much? We encourage investors to take an accumulation approach, focusing on some of our favorite stocks highlighted in this report, including Bowlero, Codere Online Luxembourg, Engine Gaming and Media, and Travelzoo. 

Figure #1 Entertainment 12 Month Trailing Stock Performance

Source: Capital IQ

Entertainment

Bowlero on a roll

The Noble Entertainment Index performed well, up 1.5% in the last 12 months, compared with negative returns for the S&P 500 down 7.1%. Although there were broad economic challenges over the past year, entertainment companies benefited from the general public’s return to “normal” following the COVID pandemic. We believe that the trend toward social gathering and in-person activities are helping to offset broader macroeconomic headwinds. While some industries received a boost during late 2020 and 2021 when consumers were spending stimulus checks on online shopping, the recovery for in-person entertainment has been more recent. In our view, the recovery in experiential, in-person entertainment appears to be gaining traction and the recovery could continue into 2024.

As Figure #2 Entertainment Revenue Growth illustrates, virtually all of the experiential entertainment companies reported strong revenue growth in the latest reported quarter, (the calendar third quarter end September 2022). One of the examples of the in-person recovery is in bowling centers, in general, and Bowlero, specifically. The company recently announced that it eclipsed $1 billion in Trailing Twelve Month (TTM) revenue as of December 31, 2022, which included 48% same store sales growth over the prior year. Additionally, Bowlero added 40 bowling centers over the past 18 months as it continues to successfully execute on its roll-up strategy. As revenues have improved, so too have margins. As Figure #3 Entertainment EBITDA Marginsillustrates, Bowlero delivered industry leading margins in the latest reported quarter at 24.8%.

Bowlero is on a roll. With the BOWL shares up roughly 50% in the past 12 months, the shares have outperformed both the Noble Entertainment Index up 1.5%, as well as the broader market, as measured by the S&P 500, which decreased -7.1%. In spite of the favorable fundamental tailwind, the shares trade in line with its experiential entertainment peers. Figure #4 Entertainment Comparables illustrates that the BOWL shares trade at 9.7 times Enterprise Value to our estimated 2023 adj. EBITDA, below the peer average of 10.7 times, despite the company’s industry leading fundamentals. Given its favorable fundamental outlook, prospects for enhanced revenue and cash flow growth through acquisitions and favorable internal growth, and compelling stock valuation, the BOWL shares lead our list for favorites in the Entertainment industry. 

Figure #2 Entertainment Revenue Growth 

Source: Company 10Qs 

Figure #3 Entertainment EBITDA Margins 

Source: Company 10Qs

Figure #4 Entertainment Comparables 

Source: Company filings and Noble estimates 

Gaming

Looking for value in the rubble

The Noble Gaming Index is down 53.1% in the past year, well below the S&P 500, down 7.1%. In our view, the poor performance of Gaming stocks was the result of investors trying to take risk off the table. Many Gaming companies are still in developmental stages, with high marketing and customer acquisition costs. As such, many in the industry are unprofitable and rely on the balance sheets to fund operations. Before Covid, these companies benefited from the easy money policies and favorable capital markets, which many relied on for funding. But, with the recent sharp rise in interest rates and difficult general market conditions to raise capital, the music has stopped. Gaming stock valuations are now more scrutinized, in an environment of increasing cost of capital. As such, we believe industry players that are already profitable, and those with little to no debt and ample cash on the balance sheet are best positioned for to lead the industry.

Our focus is on the shares of Codere Online Luxembourg, CDRO. The CDRO shares are down 42.4% in the last year, underperforming the S&P 500’s -7.1% return. However, despite a tough 12-month period, the CDRO shares outperformed the Noble Gaming Index, which dropped 53.1%. We believe that the relative outperformance of the CDRO shares over the past year reflects its better financial position than most of its peers. Most recently, the Noble Gaming Index improved, as illustrated in Figure #5 Three Month Stock Performance. The Noble Gaming Index increased 12.9%, outperforming the 3.2% increase in the general market, as measured by the S&P 500 Index. A reflex bounce? Short squeeze? Or, were the shares oversold? It appears to be all the above for many of the stocks in the index. The largest gains were from companies that appeared to be struggling and had favorable news. We believe that investing in struggling companies with limited access to capital is a dangerous place to be.

In terms of Codere Online Luxembourg, the fundamentals of the company appear favorable. Codere Online’s cash burn has been within expectations and the company had a strong cash balance of  €72 million and virtually no long-term debt as of September 30, 2022. As such, the company appears positioned to continue executing its growth strategy in Latin America, which for the time being consists of broadening its presence in key markets such as Mexico and Columbia, and aggressively expanding in Argentina. 

The company’s growth could be bolstered if Brazil begins regulating sports betting in 2023. Importantly, Entain CEO Jette Nygaard-Anderson, recently stated that she expects Brazil to complete process of regulating sports betting in 2023, citing new administration of President Lula. In summary, Codere Online is distinguished from many of its peers, with an established foothold in key Latin American markets, flush with cash to penetrate existing markets and enter new ones. It has the ability to become the industry leader in many of its markets. 

Near current levels, the iGaming industry peer group is trading at 5.0 times Enterprise Value to 2023 revenues, illustrated in Figure #6 Gaming Comparables. Codere Online Luxemburg (CDRO) is one of our favorite plays in the iGaming industry due to several factors. As mentioned above, the company has virtually no long-term debt and €72 million in cash, as of September 30, 2022. We believe that the company has a favorable runway to reach cash flow breakeven while continuing to fund its expansion in the meantime. Furthermore, in our view, given its ability to invest in its developing markets, the company appears to have the ability to become the preeminent online gambling leader in many Latin American markets. Finally, the CDRO shares appear compelling, trading near 2.6 times expected 2023 revenue, well below peers. As a result, we view the CDRO shares as among our favorite online gambling plays, with the shares rated Outperform with $9 price target.   

Figure #5 Three Month Stock Performance

Source: Capital IQ

Figure #6 Gaming Comparables 

Source: Company filings and Noble estimates 

Esports

Motorsport revs its engine

The Noble Esports Index was down 53% over the past year, underperforming the broader market, which was down 7%, as as measured by the S&P 500 Index. Not unlike many other emerging industries, Esports has been battered by macroeconomic headwinds over the past year. Investors are placing more importance on companies that are generating positive cash flow, rather than speculating on future profitability, given recessionary concerns and elevated interest rates. While the Esports industry has shown favorable trends in the number of viewers and hours watched, many companies are still burning cash and may need to raise additional capital. Total hours watched of esports content was up 40% in Q3 of 2022, illustrated in Figure #7 Esports Viewership. 

The best performing stock in the Esports index was HUYA, which only declined by 9.7% on a TTM basis. Huya is the largest Esports live streaming platform in China and recently expanded into a variety of real-time events. Huya benefits from the favorable growth trends of the Esports and live streaming industries, as it does not rely on the popularity of a single game or tournament. The worst performing stock in the Esports index is Esports Entertainment Group (GMBL), which declined 97.2% on a TTM basis. The company burned through its cash and had limited access to additional capital.

In the latest quarter, however, the Noble Esports Index rebounded, up a strong 47.9%, as depicted in the earlier in Figure #5 Three Month Stock Performance. The strength in the quarter was due to a relatively few number of stocks, including HUYA (up 135.8%) and two of our favorite plays, Motorsport Games (MSGM) and Engine Gaming and Media (GAME), which increased 68.9% and 149.8%, respectively. In fact, Motorsport Games increased a stunning 1,618.8% with a trading day following news of a debt for equity swap. 

Motorsport Games revs its engine 

Motorsport Games is a publisher of motorsport video games, with the rights to iconic racing franchises such as NASCAR and 24 Hour of LeMans. The company recently completed a debt for equity swap which led to a surprisingly strong increase in the stock valuation. This allowed the company to complete several direct offerings, eliminating all company debt and raising over $11 million in cash. The capital raise alleviated liquidity concerns, allowing the company to continue developing games. In our view, the launch of several games in 2023 should allow the company to swing toward cash flow break even. We have moved our rating to Market Perform given that the shares blew through our $9 price target. Our rating is under review as the company updates investors on its product rollout roadmap and the level of cash burn until it launches its upcoming products. 

Engine Gaming & Media 

Another one of our favorites is Engine Gaming & Media (GAME). Engine Gaming & Media is a multi-platform media company engaged in most aspects of the Esports industry. The company’s media division coordinates video access and advertising, data analytics, and connects advertisers to social influencers in the gaming industry. Figure #7 Esports Viewership and Figure #8 Esports Live Streaming are from Stream Hatchet, the company’s live streaming data and Esports analytics business.

The company reported its fiscal first quarter results on January 17, 2023, which beat our expectations. Notably, the company’s influencer and gaming analytics software as a service revenue, a key growth vehicle, grew revenue by a strong 34.6% on a year over year basis. In addition, the company plans to merge with GameSquare Esports, which it expects will provide scale and provide cost synergies. Management indicated that the combination should accelerate the new company’s path toward profitability. We plan to update our models as more details emerge regarding the upcoming merger. 

Figure #9 Esports Comparables highlight the stock valuations in the Esports industry. The valuations of many of the stocks, including Motorsport Games and Engine Gaming and Media are in flux. As mentioned, Motorsport Games significantly improved its financial position with recent equity raises and debt for equity swaps. Engine Gaming and Media’s fundamentals likely will change with a planned merger. In our view, the latest quarter has been a watershed moment for these companies. We look forward toward reevaluating our models, ratings and price targets upon more details on the developments from the respective companies. 

Figure #7 Esports Viewership 

Source: Stream Hatchet

Figure #8 Esports Live Streaming 

Source: Stream Hatchet

Figure #9 Esports Comparables

Source: Company filings and Noble estimates

Leisure

Travel to new heights

Once again, we focus on the travel industry in our Leisure section due to some favorable developments and outlook. Notably, the U.S. Travel Foundation forecasts an increase in travel spending in 2023 above both 2022 and 2019 levels. This would indicate that the travel industry has fully recovered from the depressed Covid impacted levels. Airline flights are full and there is high demand for hotels, even though pricing for those rooms are significantly higher. What is driving the demand and will it continue?

For the U.S., there are three factors influencing the relatively favorable outlook for the U.S. travel industry. The domestic leisure travel has been resilient in spite of higher gas prices, hotel rooms and airline tickets. A recent article from Forbes suggests that U.S. leisure travel is rebounding despite inflation as it is one area where people are willing to splurge. A second contributing factor to the favorable outlook is Business travel. Business travel is expected to be somewhat weaker in 2023 given the prospect of a mild economic recession in 2023. But, the business travel outlook is improved as a severe economic downturn appears less likely. The weak area has been international inbound travel to the U.S. We believe that this is a function of the strong U.S. dollar relative to other major currencies. On the flip side, international travel from the U.S. appears to be favorable given the U.S. dollar strength. 

We believe that the inflationary trends, higher airline fares and hotel rates, as well as sluggish international travel, all have prompted travelers to seek travel deals. Consequently, one of our favorite plays on the travel industry, Travelzoo, has seen fundamental improvement. As an internet media company, its business is derived from its advertisers and travel partners to offer travel deals to its customers. This is different from travel suppliers and online travel agencies that rely on travel demand. Notably, Travelzoo recently updated its fourth quarter revenue guidance to be roughly $18.5 million, an increase of a strong 31% year over year, in line with our forecast.

Travelzoo is one of our favorite plays for the recovering travel industry. The shares are down roughly 46% in the past year, which we believe could present an attractive entry point for investors. Since reaching lows in December near $4.11 per share, the TZOO shares have rallied, up roughly 25% since that time. In our view, the shares may have reacted to a recent merger involving its founder, Ralph Bartel. The merger brought with it an influx of cash, but increased Mr. Bartels ownership of the company from slightly over 50% to over 60%. We view the move favorably as it provides increase liquidity for the company. Given the prospect for a favorable environment for travel deals, we view Travelzoo as among our favored ways to play the travel industry and the subsequent improved advertising from its travel partners. We rate the shares Outperform with a $9 price target. 

Research reports on companies mentioned in this report are available by clicking below:

Bowlero Corp. (BOWL)

Codere Online Luxembourg (CDRO)

Engine Gaming and Media (GAME)

Motorsport Games (MSGM)

Travelzoo (TZOO)

GENERAL DISCLAIMERS

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. Noble accepts no liability for loss arising from the use of the material in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Noble. This report is not to be relied upon as a substitute for the exercising of independent judgement. Noble may have published, and may in the future publish, other research reports that are inconsistent with, and reach different conclusions from, the information provided in this report. Noble is under no obligation to bring to the attention of any recipient of this report, any past or future reports. Investors should only consider this report as single factor in making an investment decision.

IMPORTANT DISCLOSURES

This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or discussed to another party, without the written consent of Noble Capital Markets, Inc. (“Noble”). Noble seeks to update its research as appropriate, but may be unable to do so based upon various regulatory constraints. Research reports are not published at regular intervals; publication times and dates are based upon the analyst’s judgement. Noble professionals including traders, salespeople and investment bankers may provide written or oral market commentary, or discuss trading strategies to Noble clients and the Noble proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this research report.
The majority of companies that Noble follows are emerging growth companies. Securities in these companies involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Noble research reports may not be suitable for some investors and as such, investors must take extra care and make their own determination of the appropriateness of an investment based upon risk tolerance, investment objectives and financial status.

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The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.
Noble is not a market maker in any of the companies mentioned in this report. Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) with any or all of the companies mentioned in this report within the next 3 months

ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE

Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis.
Named WSJ ‘Best on the Street’ Analyst and Forbes/StarMine’s “Best Brokerage Analyst.”
FINRA licenses 7, 24, 63, 87

WARNING

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

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

Receipt of Compensation
No part of my compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in the public
appearance and/or research report.

Ownership and Material Conflicts of Interest
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.

Release – Bowlero Corp. Exceeds $1.0 Billion In Trailing TwelveMonth Revenue During Q2 Fy2023

Posted on by aweinsoff@channelchek.com

Research News and Market Data on BOWL

01/09/2023

  • Record-breaking revenue performance bolstered by TTM Same Store Sales Growth of approximately 48% year over year1
  • TTM revenue exceeds the $878 million revenue projection from December 2021 go-public transaction by more than $122 million or 14%
  • MoneyBowl™, the Company’s proprietary skill-based gamification app, is expected to be active in 27 centers by January 13, 2023, and is already operational in 16 locations
  • Bowlero added 40 bowling centers over the last 18 months, ending Q2 of FY23 with 326 locations

RICHMOND, Va.–(BUSINESS WIRE)– Bowlero Corp. (NYSE: BOWL) (“Bowlero” or the “Company”), the world’s largest owner and operator of bowling centers, today provided a preliminary business update covering activity through January 1, 2023, the close of its second quarter of fiscal year 2023.2

Bowling Center Trailing 13-week Revenue Growth Trend (Graphic: Business Wire)

The Company’s revenue exceeded $1.0 billion on a trailing twelve month basis, marking a major milestone in the Company’s history following record revenue generation throughout calendar year 2022. This performance was driven by strong ongoing demand for bowling, the country’s largest participatory sport, across the portfolio exemplified by Bowlero’s same store sales growth of approximately 48% year over year. In particular, the TTM revenue performance was fueled by dramatic year over year growth in events and continued strong performance from walk-in retail and leagues.

The Company’s deployment of Moneybowl™ continues to gain momentum, growing from two locations on November 16, 2022 to an expected 27 locations by January 13, 2023.

Bowling center additions remain a significant factor in driving total revenue growth. Since June 28, 2021, Bowlero has added 40 new centers and has grown its operating center count by 14%. Of the 40 centers added, two locations were new builds and 38 were acquisitions. The pipeline for new locations remains robust.

Thomas Shannon, Founder and Chief Executive Officer, stated, “The last twelve months have been transformational for Bowlero. Exceeding $1.0 billion in TTM revenue is a remarkable milestone for the Company, capping off a year of notable accomplishments. We ended December of 2022 with 326 locations, after continuing our robust unit addition plan. We launched MoneyBowl™, and it should be in pilot at 27 locations, almost ten percent of our footprint, by the end of this week. These accomplishments were almost unimaginable when we operated only six centers back in 2013, and they are a testament to our world-class team and our relentless pursuit of providing world-class experiences across our growing portfolio of nearly 330 centers and maximizing shareholder value.”

Bowling Center Trailing 13-week Revenue Growth Trend 3

[Please see Bowling Center Trailing 13-week Revenue Growth Trend]

About Bowlero Corp.

Bowlero Corp. is the worldwide leader in bowling entertainment. With more than 325 bowling centers across North America, Bowlero Corp. serves nearly 30 million guests each year through a family of brands that includes Bowlero and AMF. Bowlero Corp. is also home to the Professional Bowlers Association, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that involve risk, assumptions and uncertainties, such as statements of our plans, objectives, expectations, intentions and forecasts. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “confident,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. These forward-looking statements reflect our views with respect to future events as of the date of this press release and are based on our management’s current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this press release. It is not possible to predict or identify all such risks. These risks include, but are not limited to: the impact of COVID-19 pandemic and any future outbreaks of contagious diseases on our business; our ability to design and execute our business strategy; changes in consumer preferences and buying patterns; our ability to compete in our markets; the occurrence of unfavorable publicity; risks associated with long-term non-cancellable leases for our centers; our ability to retain key managers; risks associated with our substantial indebtedness and limitations on future sources of liquidity; our ability to carry out our expansion plans; our continued ability to produce content, build infrastructure and market Professional Bowlers Association (“PBA”) events; our ability to successfully defend litigation brought against us; our ability to adequately obtain, maintain, protect and enforce our intellectual property and proprietary rights and claims of intellectual property and proprietary right infringement, misappropriation or other violation by competitors and third parties; failure to hire and retain qualified employees and personnel; the cost and availability of commodities and other products we need to operate our business; cybersecurity breaches, cyber-attacks and other interruptions to our and our third-party service providers’ technological and physical infrastructures; catastrophic events, including war, terrorism and other conflicts; public health issues or natural catastrophes and accidents; changes in the regulatory atmosphere and related private sector initiatives; fluctuations in our operating results; economic conditions, including the impact of increasing interest rates, inflation and recession; and other risks, uncertainties and factors described under the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) by the Company on September 15, 2022, as well as other filings that the Company will make, or has made, with the SEC, such as Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in other filings. We expressly disclaim any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

1Same-store sales are measured by comparing revenues for centers open for the entire duration of both the current and comparable measurement periods.
2Our independent registered public accounting firm has not completed its review of our results for our second quarter ended on January 1, 2023. The revenue amounts for this quarter are preliminary estimates of the results of operations that we expect to report for our second quarter ended on January 1, 2023. Our actual results may differ from these estimates due to the completion of our financial closing procedures, final adjustments and other developments that may arise between now and the time the financial results for our second quarter are finalized.
3Revenue growth is calculated as the growth in Bowling Center Revenue compared to the comparable week during the pre-pandemic 52-week period beginning March 2019 and ending February 2020. Total Bowling Center Revenue (i) excludes media-related revenue and closed bowling centers from both current period and pre-pandemic and prior year periods and (ii) includes new bowling centers that have opened since March 2020. For weeks ending between September 26, 2021 and December 26, 2021, the percentages above are calculated by comparing each week to the comparable week in 2019. For weeks ending between January 2, 2022 and February 27, 2022, the percentages above are calculated by comparing each week to the comparable week in 2020. For weeks ending between March 6, 2022 and January 1, 2023, the percentages above are calculated by comparing each week to the comparable week in 2019. Total Bowling Center Revenue for each date is the 13-week rolling average of weekly Total Bowling Center Revenue. We use the 13-week rolling average because the revenue performance in individual weeks can be positively or negatively impacted by timing shift of holiday/sporting events, holidays moving to weekends, and extreme weather events. Data for all weeks following the close of the quarter ended on October 2, 2022 are preliminary and have not been audited or reviewed and are forward-looking statements based solely on information available to us as of the date of this announcement.

For Media:
Bowlero Corp. Public Relations
pr@bowlerocorp.com

For Investors:
Bowlero Corp. Public Relations
IRSupport@BowleroCorp.com

Ashley DeSimone
Ashely.desimone@icrinc.com

Source: Bowlero Corp.

Release – Bowlero Corp. Completes Latest Acquisition

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on BOWL

12/06/2022

Adds Great Escape in Pleasant Hill, Iowa to Growing Portfolio

RICHMOND, Va.–(BUSINESS WIRE)– Bowlero Corp., (NYSE: BOWL) the global leader in bowling entertainment, announced today that it has completed the acquisition of Great Escape in Iowa. This is the Company’s 15th completed acquisition in calendar year 2022, bringing the Company’s total center count to 326.

Great Escape, located in Pleasant Hill, a suburb of Des Moines, is a 24-lane bowling center featuring laser tag, over 50 arcade games, virtual reality, and a full-service restaurant. Great Escape marks the Company’s second acquisition in Iowa this calendar year, the first being Thunderbowl located in Council Bluffs.

Brett Parker, President & Chief Financial Officer of Bowlero Corp. stated, “The addition of Great Escape is another exciting acquisition for Bowlero. We remain committed to bringing our guests a world-class entertainment experience, and furthering our presence nationwide.”

Great Escape is expected to open under Bowlero Corp. management on December 9th.

About Bowlero Corp
Bowlero Corp. is the global leader in bowling entertainment, media, and events. With more than 300 bowling centers across North America, Bowlero Corp. serves more than 27 million guests each year through a family of brands that includes Bowlero, Bowlmor Lanes, and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com

For Media:
Bowlero Corp. Public Relations
PR@BowleroCorp.com

For Investors:
Bowlero Corp. Investor Relations
IRSupport@BowleroCorp.com

Source: Bowlero Corp.

Release – Bowlero Corp. to Participate in the UBS Global TMT Conference

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on BOWL

11/28/2022

RICHMOND, Va.–(BUSINESS WIRE)– Bowlero Corp. (NYSE: BOWL) (“Bowlero”), the global leader in bowling entertainment, announced today that management will participate in The UBS Global TMT Conference taking place December 5-7, 2022 at the Sheraton New York Times Square Hotel in New York, NY.

Brett Parker, President & Chief Financial Officer of Bowlero, will participate in a fireside chat at 3:50 PM ET on Tuesday, December 6, 2022. Mr. Parker will also be available for meetings during the conference.

For more information, or to request a meeting with management, please reach out to your UBS representative.

About Bowlero Corp

Bowlero Corp. is the global leader in bowling entertainment, media, and events. With more than 300 bowling centers across North America, Bowlero Corp. serves more than 27 million guests each year through a family of brands that includes Bowlero, Bowlmor Lanes, and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.

For Media:
PR@BowleroCorp.com

For Investors:
IRSupport@BowleroCorp.com

Source: Bowlero Corp.

Release – Entravision Communications Corporation Reports Third Quarter 2022 ResultsRelease

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on EVC

11/03/2022

SANTA MONICA, Calif.–(BUSINESS WIRE)– Entravision Communications Corporation (NYSE: EVC), a leading global advertising solutions, media and technology company, today announced financial results for the three- and nine-month periods ended September 30, 2022.

Third Quarter 2022 Highlights

  • Record third quarter advertising revenue
  • Net revenue up 21% over the prior-year quarter
  • Net income attributable to common stockholders down 23% over the prior-year quarter
  • Consolidated adjusted EBITDA up 12% over the prior-year quarter
  • Operating cash flow up 62% over the prior-year quarter
  • Free cash flow down 31% over the prior-year quarter
  • Quarterly cash dividend of $0.025 per share

“Entravision continued to see progress in the third quarter of 2022, with revenue up 21% versus the prior-year period. Adjusted EBITDA also improved double-digits, increasing 12% year-over-year,” said Walter Ulloa, Chairman and Chief Executive Officer. “Entravision’s strength throughout the quarter was again driven by our digital segment, where revenue improved 29% versus the third quarter of 2021. In our television and audio businesses, political ad spend, in particular, continued to perform strongly.”

Mr. Ulloa continued, “Entravision’s solid performance in the third quarter, together with our progress year-to-date, demonstrates the resiliency and growth of our business in a tough macro environment. We continue to strategically expand across the globe and now have operations in 40 countries across five continents in service of more than 7,000 clients. We are thoughtfully positioning our digital teams in emerging economies where Entravision’s unique offerings have a key first-mover advantage and where a critical mass of connected consumers exists alongside a growing advertising industry. We remain optimistic in finding multiple growth opportunities around the world for our digital business and look forward to sharing our progress as we continue to grow and expand globally.”

Quarterly Cash Dividend

The Company announced today that its Board of Directors approved a quarterly cash dividend to shareholders of $0.025 per share on the Company’s Class A, Class B and Class U common stock, in an aggregate amount of approximately $2.1 million. The quarterly dividend will be payable on December 30, 2022 to shareholders of record as of the close of business on December 15, 2022, and the common stock will trade ex-dividend on December 14, 2022. The Company currently anticipates that future cash dividends will be paid on a quarterly basis; however, any decision to pay future cash dividends will be subject to approval by the Board.

Non-GAAP Financial Measures

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

Net revenue in the third quarter of 2022 totaled $241.0 million, up 21% from $199.0 million in the prior-year period. Of the overall increase, approximately $42.8 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business, and due to our investment in a variable interest entity during the third quarter of 2022 and our acquisition of 365 Digital during the fourth quarter of 2021, neither of which contributed to net revenue in the comparable period ended September 30, 2021. In addition, of the overall increase, approximately $0.1 million was attributable to our audio segment, primarily due to increases in political advertising revenue and local advertising revenue, partially offset by a decrease in national advertising revenue. The overall increase was partially offset by a decrease of approximately $0.8 million attributable to our television segment, primarily due to decreases in local and national advertising revenue, and a decrease in retransmission consent revenue. These decreases were mainly attributed to the expiration of our Univision and UniMás network affiliation agreements in Orlando, Tampa and Washington, D.C. on December 31, 2021. The decrease in our television segment revenue was partially offset by increases in political advertising revenue and spectrum usage rights revenue.

Cost of revenue in the third quarter of 2022 totaled $157.1 million, up 26% from $124.3 million in the prior-year period. The increase was primarily due to increased cost of revenue related to advertising revenue growth from our digital commercial partnerships business, and due to our investment in a variable interest entity during the third quarter of 2022 and our acquisition of 365 Digital during the fourth quarter of 2021, neither of which incurred cost of revenue for us in the comparable period ended September 30, 2021.

Operating expenses in the third quarter of 2022 totaled $49.3 million, up 14% from $43.1 million in the prior-year period. Of the overall increase, approximately $5.9 million was attributable to our digital segment and was primarily due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense and our investment in a variable interest entity during the third quarter of 2022 and our acquisition of 365 Digital during the fourth quarter of 2021, which did not incur operating expenses for us in the comparable period. Additionally, of the overall increase in operating expenses, approximately $0.4 million was attributable to our audio segment primarily due to an increase in expenses associated with the increase in local advertising revenue. The overall increase in operating expenses was partially offset by a decrease of approximately $0.1 million that was attributable to our television segment primarily due to a decrease in expenses associated with the decrease in local and national advertising revenue, partially offset by an increase in rent expense and an increase in bad debt expense.

Corporate expenses in the third quarter of 2022 totaled $9.5 million, up 31% from $7.3 million in the prior-year period. The increase was primarily due to increases in non-cash stock-based compensation and an increase in salaries.

Net revenue for the nine-month period of 2022 totaled $659.9 million, up 25% from $526.3 million in the prior-year period. Of the overall increase, approximately $139.1 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business. In addition, the increase in net revenue in our digital segment was due to our investment in a variable interest entity and our acquisition of 365 Digital during the third quarter of 2022 and fourth quarter of 2021, respectively, neither of which contributed to net revenue in the comparable period ended September 30, 2021, and due to our acquisition of MediaDonuts during the third of 2021, which only partially contributed to net revenue in the comparable period ended September 30, 2021. Additionally, of the overall increase, approximately $2.1 million was attributable to our audio segment, primarily due to increases in political advertising revenue and local advertising revenue, partially offset by a decrease in national advertising revenue. The overall increase was partially offset by a decrease of approximately $7.7 million attributable to our television segment, primarily due to decreases in local and national advertising revenue, and a decrease in retransmission consent revenue. These decreases were mainly attributed to the expiration of our Univision and UniMás network affiliation agreements in Orlando, Tampa and Washington, D.C. on December 31, 2021. The decrease in our television segment revenue was partially offset by increases in political advertising revenue and spectrum usage rights revenue.

Cost of revenue for the nine-month period of 2022 totaled $432.0 million, up 36% from $318.1 million in the prior-year period. The increase was primarily due to increased cost of revenue related to advertising revenue growth from our digital commercial partnerships business, and due to our investment in a variable interest entity and our acquisition of 365 Digital during the third quarter of 2022 and fourth quarter of 2021, respectively, neither of which incurred cost of revenue for us in the comparable period ended September 30, 2021, and due to our acquisition of MediaDonuts during the third of 2021, which only partially incurred cost of revenue for us in the comparable period ended September 30, 2021.

Operating expenses for the nine-month period of 2022 totaled $140.5 million, up 12% from $125.0 million in the prior-year period. Of the overall increase, approximately $15.5 million was attributable to our digital segment and was primarily due to an increase in expenses associated with the increase in digital advertising revenue and an increase in salary expense. In addition, the increase in operating expenses in our digital segment was due to our investment in a variable interest entity and our acquisition of 365 Digital during the third quarter of 2022 and fourth quarter of 2021, respectively, neither of which incurred operating expenses for us in the comparable period ended September 30, 2021, and due to our acquisition of MediaDonuts during the third of 2021, which only partially incurred operating expenses for us in the comparable period ended September 30, 2021. Additionally, of the overall increase in operating expenses, approximately $0.6 million was attributable to our audio segment primarily due to an increase in expenses associated with the increase in local advertising revenue. The overall increase in operating expenses was partially offset by a decrease of approximately $0.6 million that was attributable to our television segment primarily due to a decrease in expenses associated with the decrease in local and national advertising revenue, partially offset by an increase in rent expense and bad debt expense.

Corporate expenses for the nine-month period of 2022 totaled $26.8 million, up 23% from $21.8 million in the prior-year period. The increase was primarily due to increases in non-cash stock-based compensation and an increase in salaries.

Balance Sheet and Related Metrics

Cash and marketable securities as of September 30, 2022 totaled approximately $164.8 million. Total debt under the Company’s credit agreement was $210.0 million. Net of $75 million of cash and marketable securities, total leverage as defined in the Company’s credit agreement was 1.4 times as of September 30, 2022. Net of total cash and marketable securities, total leverage was 0.5 times.

Notice of Conference Call

Entravision Communications Corporation will hold a conference call to discuss its third quarter 2022 results on Thursday, November 3, 2022 at 4:30 p.m. Eastern Time. To access the conference call, please dial (844) 836-8739 (U.S.) or (412) 317-5440 (Int’l) ten minutes prior to the start time and reference Conference ID number 10171311. The call will also be available via live webcast on the investor relations portion of the Company’s website located at www.entravision.com.

About Entravision Communications Corporation

Entravision is a leading global advertising, media and ad-tech solutions company connecting brands to consumers by representing top platforms and publishers. Our dynamic portfolio includes digital, television and audio offerings. Digital, our largest revenue segment, is comprised of four business units: our digital sales representation business; Smadex, our programmatic ad purchasing platform; our branding and mobile performance solutions business; and our digital audio business. Through our digital sales representation business, we connect global media companies such as Meta, Twitter, TikTok and Spotify with advertisers in primarily emerging growth markets worldwide. Smadex is our mobile-first demand side platform, enabling advertisers to execute performance campaigns using machine learning. We also offer a branding and mobile performance solutions business, which provides managed services to advertisers looking to connect with global consumers, primarily on mobile devices, and our digital audio business provides digital audio advertising solutions for advertisers in the Americas. In addition to digital, Entravision has 49 television stations and is the largest affiliate group of the Univision and UniMás television networks. Entravision also manages 45 primarily Spanish-language radio stations that feature nationally recognized, Emmy award-winning talent. Shares of Entravision Class A Common Stock trade on the NYSE under ticker: EVC. Learn more about our offerings at entravision.com or connect with us on LinkedIn and Facebook.

Forward-Looking Statements

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

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

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

Source: Entravision Communications Corporation

Release – Salem Media Group, Inc. Announces Third Quarter 2022 Total Revenue of $66.9 Million

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on SALM

November 03, 2022 4:05pm EDT

IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (Nasdaq: SALM) released its results for the three and nine months ended September 30, 2022.

Third Quarter 2022 Results

For the quarter ended September 30, 2022 compared to the quarter ended September 30, 2021:

Consolidated

  • Total revenue increased 1.3% to $66.9 million from $66.0 million;
  • Total operating expenses increased 50.7% to $75.6 million from $50.2 million;
  • Operating expenses, excluding stock-based compensation expense, debt modification costs, gains and losses on the sale or disposition of assets, legal settlement, impairments, depreciation expense and amortization expense (1) increased 10.3% to $60.8 million from $55.2 million;
  • The company had an operating loss of $8.8 million compared to operating income of $15.8 million;
  • The company recognized $0.1 million in film distribution income from an unconsolidated equity investment;
  • The company had a net loss of $11.9 million, or $0.44 net loss per share compared to net income of $22.1 million, or $0.81 net income per diluted share;
  • EBITDA (1) decreased to $(5.7) million from $30.2 million; and
  • Adjusted EBITDA (1) decreased 78.8% to $2.3 million from $10.8 million.

Broadcast

  • Net broadcast revenue increased 3.1% to $51.1 million from $49.6 million;
  • Station Operating Income (“SOI”) (1) decreased 17.9% to $10.0 million from $12.1 million;
  • Same Station (1) net broadcast revenue increased 3.2% to $51.1 million from $49.5 million; and
  • Same Station SOI (1) decreased 16.7% to $10.1 million from $12.1 million.

Digital Media

  • Digital media revenue decreased 4.3% to $10.2 million from $10.6 million; and
  • Digital Media Operating Income (1) decreased 21.9% to $1.9 million from $2.4 million.

Publishing

  • Publishing revenue decreased 3.7% to $5.5 million from $5.7 million; and
  • Publishing Operating Loss (1) was $1.0 million as compared to publishing operating income of $0.5 million.

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

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

Included in the results for the quarter ended September 30, 2021 are:

  • A $2.3 million ($1.7 million, net of tax, or $0.06 per share) charge for debt modification costs. On September 10, 2021, the company refinanced $112.8 million of the 2024 Notes by exchanging into $114.7 million (reflecting a call premium of 1.688%) of 2028 Notes. The transaction was assessed on a lender-specific level and was accounted for as a debt modification in accordance with ASC 470 with $2.3 million of fees paid to third parties included in operating expenses for the period;
  • A $11.2 million ($8.3 million, net of tax, or $0.30 per diluted share) gain on the forgiveness of PPP loans;
  • A $0.1 million loss from the early retirement of long-term debt associated with the 2024 Notes;
  • A $10.6 million ($7.8 million, net of tax, or $0.29 per diluted share) net gain on the disposition of assets relates to a $10.5 million pre-tax gain on the sale of land in Lewisville, Texas, and $0.1 million pre-tax gain on the sale of the Hilary Kramer Financial Newsletter and related assets as well as various other fixed asset disposals; and
  • A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options.

Per share numbers are calculated based on 27,216,787 diluted weighted average shares for the quarter ended September 30, 2022, and 27,280,949 diluted weighted average shares for the quarter ended September 30, 2021.

Year to Date 2022 Results

For the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021:

Consolidated

  • Total revenue increased 4.8% to $198.2 million from $189.1 million;
  • Total operating expenses increased 19.2% to $194.6 million from $163.3 million;
  • Operating expenses, excluding stock-based compensation expense, debt modification costs, gains and losses on the sale or disposition of assets, legal settlement, impairments, depreciation expense and amortization expense (1) increased 9.2% to $176.6 million from $161.6 million;
  • The company’s operating income decreased 86.4% to $3.5 million from $25.8 million;
  • The company recognized $4.0 million in film distribution income from an unconsolidated equity investment;
  • The company had a net loss of $1.0 million, or $0.04 net loss per share compared to net income of $24.7 million, or $0.91 net income per diluted share;
  • EBITDA (1) decreased 63.6% to $17.0 million from $46.7 million; and
  • Adjusted EBITDA (1) decreased 24.3% to $20.8 million from $27.5 million.

Broadcast

  • Net broadcast revenue increased 8.3% to $152.0 million from $140.4 million;
  • SOI (1) decreased 6.8% to $31.2 million from $33.5 million;
  • Same station (1) net broadcast revenue increased 8.1% to $151.6 million from $140.2 million; and
  • Same station SOI (1) decreased 6.7% to $31.3 million from $33.6 million.

Digital media

  • Digital media revenue increased 2.3% to $31.3 million from $30.6 million; and
  • Digital media operating income (1) increased 16.7% to $6.2 million from $5.3 million.

Publishing

  • Publishing revenue decreased 18.0% to $14.8 million from $18.1 million; and
  • Publishing Operating Loss (1) was $1.6 million compared to publishing operating income of $1.2 million.

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

  • A $11.7 million ($8.6 million, net of tax, or $0.32 per share) impairment charge to the value of broadcast licenses in Boston, Chicago, Columbus, Dallas, Greenville, Honolulu, Little Rock, Orlando, Philadelphia, Portland, Sacramento and San Francisco;
  • A $8.5 million ($6.3 million, net of tax, or $0.23 per diluted share) net gain on the disposition of assets relates primarily to the $6.5 million pre-tax gain on the sale of land used in the company’s Denver, Colorado broadcast operations, the $1.8 million pre-tax gain on sale of land used in the company’s Phoenix, Arizona broadcast operations, and $0.5 million pre-tax gain on the sale of the company’s radio stations in Louisville, Kentucky offset by various fixed asset disposals;
  • A $18,000 loss on the early retirement of long-term debt associated with the 2024 Notes;
  • A $4.8 million ($3.5 million, net of tax, or $0.13 per share) legal settlement expense;
  • A $0.1 million ($0.1 million, net of tax) goodwill impairment charge;
  • A $0.2 million ($0.2 million, net of tax, or $0.01 per share) charge for debt modification costs; and
  • A $0.2 million non-cash compensation charge ($0.2 million, net of tax, or $0.01 per share) related to the expensing of stock options.

Included in the results for the nine months ended September 30, 2021 are:

  • A $2.3 million ($1.7 million, net of tax, or $0.06 per share) charge for debt modification costs. On September 10, 2021, the company refinanced $112.8 million of the 2024 Notes by exchanging into $114.7 million (reflecting a call premium of 1.688%) of 2028 Notes. The transaction was assessed on a lender-specific level and was accounted for as a debt modification in accordance with ASC 470 with $2.3 million of fees paid to third parties included in operating expenses for the period;
  • A $11.2 million ($8.3 million, net of tax, or $0.30 per diluted share) gain on the forgiveness of PPP loans;
  • A $0.1 million loss from the early retirement of long-term debt associated with the 2024 Notes;
  • A $10.6 million ($7.8 million, net of tax, or $0.29 per diluted share) net gain on the disposition of assets relating to a $10.5 million pre-tax gain on the sale of land in Lewisville, Texas, a $0.5 million pre-tax gain on the sale of Singing News Magazine and Singing News Radio and a $0.1 million pre-tax gain on the sale of the Hilary Kramer Financial Newsletter and related assets offset by $0.4 million additional loss recorded at closing on the sale of radio station WKAT-AM and FM translator in Miami, Florida and various fixed asset disposals; and
  • A $0.2 million non-cash compensation charge ($0.2 million, net of tax, or $0.01 per share) related to the expensing of stock options.

Per share numbers are calculated based on 27,202,983 diluted weighted average shares for the nine months ended September 30, 2022, and 27,217,382 diluted weighted average shares for the nine months ended September 30, 2021.

Balance Sheet

As of September 30, 2022, the company had $114.7 million outstanding on the 7.125% senior secured notes due 2028 (“2028 Notes”) and $44.7 million outstanding on 6.75% senior secured notes due 2024 (“2024 Notes”).

Acquisitions and Divestitures

The following transactions were completed since July 1, 2022:

  • On October 1, 2022, the company acquired websites and the related assets of DayTradeSPY for $0.6 million in cash. As part of the purchase agreement, the company may pay up to an additional $1.0 million of cash in contingent earn-out consideration within one-year of the closing date based on the achievement of certain revenue benchmarks.

Pending Transactions

  • On September 29, 2022, the company entered into an Asset Purchase Agreement (“APA”) to acquire radio station WMYM-AM and an FM translator in Miami, Florida for $5.0 million. The company paid $0.3 million of cash into an escrow account and plans to operate the radio stations under a Time Brokerage Agreement beginning on November 16, 2022.
  • On September 22, 2022, the company entered into an APA to acquire radio stations WWFE-AM, WRHC-AM and two FM translators in Miami, Florida for $5.0 million.
  • On June 2, 2021, the company entered into an APA to acquire radio station KKOL-AM in Seattle, Washington for $0.5 million. The company paid $0.1 million of cash into an escrow account and began operating the station under a Local Marketing Agreement on June 7, 2021.

Conference Call Information

Salem will host a teleconference to discuss its results on November 3, 2022 at 4:00 p.m. Central Time. To access the teleconference, please dial (888) 770-7291, and then ask to be joined into the Salem Media Group Third Quarter 2022 call or listen via the investor relations portion of the company’s website, located at investor.salemmedia.com. A replay of the teleconference will be available through November 17, 2022 and can be heard by dialing (800) 770-2030, passcode 2413416 or on the investor relations portion of the company’s website, located at investor.salemmedia.com.

Follow us on Twitter @SalemMediaGrp.

Fourth Quarter 2022 Outlook

For the fourth quarter of 2022, the company is projecting total revenue to decrease between 3% and 5% from fourth quarter 2021 total revenue of $69.1 million. This decrease is due largely to the fact that Regnery had an extremely strong fourth quarter in book sales last year. The company is also projecting operating expenses before gains or losses on the sale or disposal of assets, stock-based compensation expense, legal settlement, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (“Recurring Operating Expenses”) to increase between 4% and 7% compared to the fourth quarter of 2021 Recurring Operating Expenses of $58.3 million.

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

About Salem Media Group, Inc.

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

Forward-Looking Statements

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

(1) Regulation G

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

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

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

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

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

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

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20221101006096/en/

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

Source: Salem Media Group, Inc.

Release – Bowlero Corp. To Report First Quarter 2023 Financial Results

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on BOWL

11/01/2022

Prepared remarks via webcast on November 16 at 4:30 PM ET

RICHMOND, Va.–(BUSINESS WIRE)– Bowlero Corp. (NYSE: BOWL) (“Bowlero” or the “Company”), the world’s largest owner and operator of bowling centers, will report financial results for the first quarter of fiscal 2023 on Wednesday, November 16, 2022 after the U.S. stock market closes. Management will discuss the results via webcast at 4:30 PM ET on the same day.

The live webcast, replay and results presentation will be available in the Events & Presentations section of the Bowlero Investor Relations website at https://ir.bowlerocorp.com/overview/default.aspx.

About Bowlero Corp.

Bowlero Corp. is the worldwide leader in bowling entertainment, media, and events. With more than 300 bowling centers across North America, Bowlero Corp. serves more than 27 million guests each year through a family of brands that includes Bowlero, Bowlmor Lanes, and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.

For Media:
PR@BowleroCorp.com

For Investors:
irsupport@bowlerocorp.com

Source: Bowlero Corp.

Release – Thomas Shannon, Founder and Ceo of Bowlero Corp., to Be Featured Tonight on Mad Money With Jim Cramer

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on BOWL

10/20/2022

RICHMOND, Va.–(BUSINESS WIRE)– Bowlero Corp. (NYSE: BOWL), the world’s leader in bowling entertainment, announced today that Thomas Shannon, Founder & Chief Executive Officer of Bowlero Corp., will be interviewed by Jim Cramer on tonight’s edition of Mad Money with Jim CrameronCNBC.

The interview is scheduled to air tonight during the 6:00 PM ET showing of Mad Money. To view the interview, please visit CNBC’s website at www.cnbc.com/live-tv/ or visit the CNBC channel anywhere you get live TV.

About Bowlero Corp

Bowlero Corp. is the worldwide leader in bowling entertainment, media, and events. With more than 300 bowling centers across North America, Bowlero Corp. serves more than 27 million guests each year through a family of brands that includes Bowlero, Bowlmor Lanes, and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.

For Media:
Bowlero Corp. Public Relations
pr@bowlerocorp.com

For Investors:
Bowlero Corp. Investor Relations
irsupport@bowlerocorp.com

Source: Bowlero Corp.

Release – Bowlero Corp Completes Three More Acquisitions

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on BOWL

10/20/2022

Marks the Company’s 10th, 11th, and 12th Completed Acquisitions of 2022

Robust Pipeline of Definitive Agreements Remain

RICHMOND, Va., Oct. 20, 2022 /PRNewswire/ — Bowlero Corp., (NYSE: BOWL) the world’s leader in bowling entertainment, announced today that it has completed three more acquisitions from its pipeline of definitive agreements in 2022. This marks the Company’s 7th completed acquisition of FY23. 

Brett Parker, President & Chief Financial Officer of Bowlero Corp stated, “We are delighted with the pace and quality of our acquisitions so far in 2022, with these completions marking our 45th location in California and expanding our presence in Wisconsin from three to five.” 

On the West Coast, Strikes Unlimited is a 50-lane center in Sacramento, CA with state-of-the-art technology, arcade games, an on-site pro-shop and home to the Halftime Bar and Grill.

Super Bowl Family Entertainment Center, located in Wisconsin, is a 48-lane center featuring a wide selection of arcade games, blacklight bowling, leagues and a sports bar and grill. Additionally, located minutes away from downtown Milwaukee, is JB’s on 41. With 10 private luxury suites, 35 modern bowling lanes, 40 arcade games and much more, this location is a nationally and locally ranked top bowling and entertainment destination.

All three locations will officially open under Bowlero Corp management the weekend of October 21st.

“Our pipeline for additional deals remains robust, and we will continue to pursue accelerated growth through our proven strategy of acquisitions and new builds,” said Parker in closing.

About Bowlero Corp

Bowlero Corp. is the worldwide leader in bowling entertainment, media, and events. With more than 300 bowling centers across North America, Bowlero Corp. serves more than 27 million guests each year through a family of brands that includes Bowlero, Bowlmor Lanes, and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com

Media Contact: The Door, bowlero@thedooronline.com

CisionView original content to download multimedia:https://www.prnewswire.com/news-releases/bowlero-corp-completes-three-more-acquisitions-301654450.html

SOURCE Bowlero Corp