Goffin Recognized for Driving Company & Team Growth at Colossus SSP, a Direct Digital Holdings Company
HOUSTON, April 28, 2023 /PRNewswire/ — Direct Digital Holdings, Inc. (Nasdaq: DRCT) (“Direct Digital Holdings” or the “Company”), a leading advertising and marketing technology platform operating through its companies Colossus Media, LLC (“Colossus SSP”), Huddled Masses LLC (“Huddled Masses”) and Orange142, LLC (“Orange142”), today announced that Lashawnda Goffin, Chief Executive Officer of Colossus SSP, has been selected to win the 2023 Catalyst Award, a special accolade that is part of the AdExchanger and AdMonsters’ 2023 Top Women in Media & Ad Tech program. The award is given to a woman industry leader who has driven a tremendous amount of growth for the business and team over the past year.
“Since Lashawnda began her leadership role with Direct Digital Holdings’ supply-side platform, Colossus SSP, she has been a major force in its rapid growth. Year-over-year revenues between 2021 and 2022 more than tripled – an impressive achievement,” said Mark D. Walker, CEO and Co-Founder of Direct Digital Holdings. “She is deserving of this award for her work at Colossus SSP, as well as for advancing diversity and progress within our industry.”
“Throughout my time at Direct Digital Holdings, I’ve encouraged my team at Colossus SSP to adopt innovative ways to grow our business, while working towards building a more inclusive marketplace by empowering niche and multicultural publishers,” said Goffin. “I am very honored to receive this award and will accept it as recognition of the exceptional business results my entire team continues to achieve.”
Currently, Colossus SSP represents 26,000 media properties – offering inventory from both multicultural/diverse and general market publishers. The company has 163,000 advertisers accessing its platform monthly, generating over 130 billion impressions per month across display, CTV, in-app and other media.
Lashawnda Goffin will receive the 2023 Catalyst Award on Monday, June 5 at the AdExchanger and AdMonsters’ Top Women in Media & Ad Tech Awards Gala, which will be held at the Metropolitan Pavilion in New York City.
About Direct Digital Holdings Direct Digital Holdings (Nasdaq: DRCT), owner of operating companies Colossus SSP, Huddled Masses and Orange 142, brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. Direct Digital Holdings’ sell-side platform, Colossus SSP, offers advertisers of all sizes extensive reach within general market and multicultural media properties. The company’s subsidiaries Huddled Masses and Orange142 deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from energy to healthcare to travel to financial services. Direct Digital Holdings’ sell- and buy-side solutions manage approximately 90,000 clients monthly, generating over 100 billion impressions per month across display, CTV, in-app, and other media channels. Direct Digital Holdings is the ninth Black-owned company to go public in the U.S and was named a top minority-owned business by The Houston Business Journal.
Forward-Looking Statements This press release may contain forward-looking statements within the meaning of federal securities laws, including the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and which are subject to certain risks, trends and uncertainties.
As used below, “we,” “us,” and “our” refer to Direct Digital Holdings. We use words such as “could,” “would,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar expressions to identify forward-looking statements, but not all forward-looking statements include these words. All statements contained in this release that do not relate to matters of historical fact should be considered forward-looking statements.
All of our forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Our forward-looking statements are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance expressed in or implied by the forward-looking statements, including, but not limited to: our dependence on the overall demand for advertising, which could be influenced by economic downturns; any slow-down or unanticipated development in the market for programmatic advertising campaigns; the effects of health epidemics, such as the ongoing global COVID-19 pandemic; operational and performance issues with our platform, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems; any significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers’, suppliers’ or other partners’ computer systems; any unavailability or non-performance of the non-proprietary technology, software, products and services that we use; unfavorable publicity and negative public perception about our industry, particularly concerns regarding data privacy and security relating to our industry’s technology and practices, and any perceived failure to comply with laws and industry self-regulation; restrictions on the use of third-party “cookies,” mobile device IDs or other tracking technologies, which could diminish our platform’s effectiveness; any inability to compete in our intensely competitive market; any significant fluctuations caused by our high customer concentration; any violation of legal and regulatory requirements or any misconduct by our employees, subcontractors, agents or business partners; any strain on our resources, diversion of our management’s attention or impact on our ability to attract and retain qualified board members as a result of being a public company; our dependence, as a holding company, of receiving distributions from Direct Digital Holdings, LLC to pay our taxes, expenses and dividends; and other factors and assumptions discussed in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and other sections of our filings with the SEC that we make from time to time. Should one or more of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this release to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Takeaways from the National Association of Broadcasters’ NAB Show
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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
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A Focus on Profitability Drives A Strong Start to the Year
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. The best performing index was Noble’s Social Media Index, which increased by 70% in the first quarter of 2023, followed by Noble’s eSports & iGaming Index (+32%), Ad Tech Index (+31%), MarTech Index (+30%), and Digital Media Index (+18%).
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. We attribute this increase to management’s 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.
Noble’s eSports and iGaming Index increased by 32% as 9 of the 16 stocks in the index posted gains, the two largest market cap weighted stocks. Shares of the largest stock in the index, Flutter Entertainment (FLTR) increased by 31%) while shares of the second largest stock in the index, DraftKings (DKNG) increased by 70%. Flutter’s improvement is likely due to an improved inflection point in the company’s U.S. operations which include its FanDuel operations. DraftKings also beat revenue and EBITDA expectations in 4Q 2022 and appears to be proving out its path to profitability. In both cases, investors are rewarding companies who are accelerating their path to profitability.
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 streak: 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 $70 million in 2021 to $132 million in 2022.
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 4.1x forward revenues and investors appear to be wading back into the sector.
Finally, Noble’s Digital Media Index, while lagging that of its digital peers posted an 18% increase and significantly outperformed the S&P 500 (+7%) with a broad based recovery in which 9 of the sector’s 11 stocks increase 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 million 2022 is expected to generate $650 million in EBITDA in 2024, according Street estimates. A deteriorating ad market 2022 combined with higher interest rates likely prompted the company to shift its priorities to running a profitable company and doing it more quickly. 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 demand for travel and management highlighted the opportunity for margin expansion in the coming quarters.
Sluggish M&A Market Carries Over into 2023
Last quarter we remarked that M&A deals in the Internet and Digital Media sector had held up well through the first three quarters of 2022 despite economic headwinds. However, the number of deals slowed in 4Q 2022 (by 17%) and total deal value fell dramatically (by 70%). The slowdown carried over into 1Q 2023. According to Dealogic, Global M&A fell by 48% to $575 billion in 1Q 2023 compared to $1.1 trillion in 1Q 2022. Global M&A dollar values fell to their lowest level in a decade. In the U.S., deal values fell by 44% to $283 billion from $176 billion in 1Q 2022.
The M&A market had weathered stock price declines, Fed rate hikes, elevated inflation, and geopolitical conflict in 2022. In 1Q 2023, to this “recession that never comes” economic environment we added increased volatility and uncertainty caused by banking failures. One of the biggest impediments to deals is debt financing. Private equity firms have had to write larger check in lieu of a robust debt financing market. Banks have been less willing to provide financing because some have had to hold loans on their balance sheet or take losses when selling debt to investors while smaller regional banks have seen deposits flee to larger banks, especially those considered too big to fail.
Finally, increased antitrust scrutiny likely has played a role in the M&A deal slowdown. Lengthy merger reviews resulted in three public transactions being blocked by regulators: Standard General’s acquisition of Tegna; JetBlue’s acquisition of Spirit Airlines, and Intercontinental Exchange’s acquisition of Black Knight, Inc.
1Q 2023 Internet and Digital Media M&A: A Dearth of Large Deals
Based on Noble’s analysis, deal making in the first quarter of 2023 in the Internet and Digital Media sectors actually increased by 11% compared to 1Q 2022. The total number of deals we tracked in the Internet and Digital Media space increased to 202 deals in 1Q 2023 compared to 182 deals in 1Q 2022. On a sequential basis, the total number of deals increased by 39% compared to 145 deals in 4Q 2022. The only explanation we can provide for this is that with the expectation that an economic slowdown was pending, many companies likely made the decision to sell in mid-2022, with the deals being announced in 1Q 2023.
The biggest change was in the first quarter’s M&A deal value, where the total dollar value of deals fell by 95% to $5.4 billion of announced deals in 1Q 2023 compared to $108.5 billion in announced deals in 1Q 2022. On a sequential basis, deal value fell by 40% from $9.1 billion in deal value in 4Q 2022.
From a deal volume perspective, the most active sectors we tracked were Digital Content (59 deals), Agency & Analytics (51 deals), and MarTech (39), followed by Information Services (17 deals), Ad Tech (11 deals) and eCommerce sectors (10 deals). From a dollar value perspective, MarTech led the way with $1.6 billion in transactions, followed by Information Services ($1.4 billion), Digital Content ($922 million) and Agency and Analytics ($875 million). The largest deals in the quarter by dollar value are shown below.
Notably, there were no mega deals ($10B+) in the first quarter of 2023, compared to the first quarter of 2022 when Microsoft agreed to by Activision Blizzard for $68 billion and Take-Two Interactive agreed to acquire Zynga for $12 billion. Once the Fed stops hiking rates and visibility into operating trends returns, we may begin to see an environment in which mega deals will be contemplated again.
TRADITIONAL MEDIA COMMENTARY
The following is an excerpt from a recent note by Noble’s Media Equity Research Analyst Michael Kupinski
The NAB Show Stopper
Media investors are unpacking all of information from last week’s National Association of Broadcasters (NAB) convention. There is a lot to digest given that there were over 1,400 exhibits, and 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 is a lot to see and learn. Noble’s Media & Entertainment Analyst Michael Kupinski walked the convention floor, which covers 4.6 million square feet of exhibit halls and meeting rooms. He 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, he participated in 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 will be available for free to Channelchek users on Channelchek.com on April 27th as a virtual conference. In this upcoming Channelchek Takeaway Series on the NAB Show, Michael offers his key takeaways, including the current advertising outlook, his take on the monetization of the new technologies and what media investors should do now given the current economic and advertising environment. 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 as high as down 68%.
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. However, 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. 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.
Broadcast Television
Weak Current Revenue Trends
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 (up 10%), Entravision (up a strong 26%), and Fox (up 12%) were the best performing stocks and favorably influenced the TV index in the quarter. But, there were many poor performing stocks including E.W. Scripps (down 29%), Gray Television (down 22%) and Tegna (down 20%). We believe that there was heightened interest in Entravision given its favorable Q1 results which was fueled by its fast growing digital advertising business. Entravision’s Q4 revenue performance was among the best in the industry. While Entravision was among the best revenue performer, its margins are below that of its peer group EBITDA Margins. This is due to the accounting treatment of its digital revenues given that it is an agency business.. The poorer performing stocks are among the higher debt levered in the industry. 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 schedule in August. 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 Local advertising. 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.
Broadcast Radio
All Out of Love
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, during which 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. Margins for the industry remain relatively healthy.
The weakness in the Radio stocks was fueled in the quarter from a downgrade to Underperform 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.
Townsquare Media (TSQ), Salem Media (SALM) and Beasley Broadcast (BBGI) are all diversifying their revenue streams. While these companies are not immune to the economic headwinds, we believe theirdigital 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.
Publishing
After a period of moderating revenue trends, publishers reported a weakened advertising environment. Revenue trends deteriorated with print advertising taking a nose dive. This trend was illustrative in the results from Lee Enterprises. 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., but the company fell in ranking to among the lowest in the sector. Importantly, in spite of the revenue weakness, the company maintained its previous adj. EBITDA guidance of $94 million to $100 million for F2023. 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 FY 23, and $60 million in annualized savings going forward. While the company’s print business declined more than expected , the company’s digital businesses remains favorably robust. In addition, its digital business is turning toward contributing margins; another step in the company’s digital evolution.
This newsletter was prepared and provided by Noble Capital Markets, Inc. For any questions and/or requests regarding this news letter, please contact Chris Ensley
DISCLAIMER
All statements or opinions contained herein that include the words “ we”,“ or “ are solely the responsibility of NOBLE Capital Markets, Inc and do not necessarily reflect statements or opinions expressed by any person or party affiliated with companies mentioned in this report Any opinions expressed herein are subject to change without notice All information provided herein is based on public and non public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on their own appraisal of the implications and risks of such decision This publication is intended for information purposes only and shall not constitute an offer to buy/ sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice Past performance is not indicative of future results.
Please refer to the above PDF for a complete list of disclaimers pertaining to this newsletter
CULVER CITY, Calif., April 13, 2023 (GLOBE NEWSWIRE) — Snail, Inc. (Nasdaq: SNAL) (“Snail” or “the Company”), a leading, global independent developer and publisher of interactive digital entertainment, is pleased to announce that that Noble Capital Markets has initiated company-sponsored equity research coverage on the Company. The full report by Noble Capital Markets Senior Research Analyst Michael Kupinski, as well as news and advanced market data on Snail, Inc. is available on Channelchek.
About Snail, Inc.
Snail is a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world, with a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs and mobile devices.
About Noble Capital Markets
Noble Capital Markets, Inc. was incorporated in 1984 as a full-service SEC / FINRA registered broker-dealer, dedicated exclusively to serving underfollowed small / microcap companies through investment banking, wealth management, trading & execution, and equity research activities. Over the past 37 years, Noble has raised billions of dollars for these companies and published more than 45,000 equity research reports. www.noblecapitalmarkets.com email: contact@noblecapitalmarkets.com
About Channelchek
Channelchek (.com) is a comprehensive investor-centric portal – featuring more than 6,000 emerging growth companies – that provides advanced market data, independent research, balanced news, video webcasts, exclusive c-suite interviews, and access to virtual road shows. The site is available to the public at every level without cost or obligation. Research on Channelchek is provided by Noble Capital Markets, Inc., an SEC / FINRA registered broker-dealer since 1984. www.channelchek.com email: contact@channelchek.com
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 twelve-month periods ended December 31, 2022.
Fourth Quarter and Full Year 2022 Highlights
Record fourth quarter and annual revenue
Record fourth quarter and annual consolidated adjusted EBITDA
Record political advertising revenue compared to prior election cycles, including presidential
Net loss attributable to common stockholders of $1.6 million in the fourth quarter compared to net income attributable to common stockholders of $3.9 million in the prior-year quarter
Net income attributable to common stockholders for the full year down 38% compared to the prior-year
Consolidated adjusted EBITDA up 11% and 17% compared to the prior-year quarter and full year, respectively
Operating cash flow down 93% and up 21% compared to the prior-year quarter and full year, respectively
Free cash flow down 37% and 20% compared to the prior-year quarter and full year, respectively
Quarterly cash dividend increase to $0.05 per share
“We are pleased with our 2022 performance, which marks a record year for Entravision for revenue and consolidated adjusted EBITDA,” said Entravision Interim Chief Executive Officer and Chief Financial Officer, Chris Young. “Our results demonstrate the resiliency and strength of our business through challenging macro conditions, and the successful execution of our strategic plan to create a leading global advertising solutions, media and technology company. We have enhanced our digital segment organically, as well as through strategic partnerships, geographic expansion and accretive acquisitions to bolster our suite of digital services in the large and growing advertising industry. Our complementary non-digital businesses, while a smaller percentage of our revenue portfolio, continue to be an important contributor to our growth. We will continue to leverage our tools, reach, technology and world-class team to meet our clients’ evolving needs and deliver enhanced shareholder value.”
Paul Zevnik, Interim Chair and co-founder said, “The Entravision team mourns the sudden and tragic loss of our late CEO, founder and dear friend, Walter Ulloa. Walter passed unexpectedly on the last day of the most successful year in the company’s history. Since we founded Entravision in 1996, we have developed a clear vision to build a leading global advertising solutions, media and technology company serving diverse demographics with diverse media. Through Walter’s leadership and with the support of a strong leadership team and dedicated entrepreneurs across each of Entravision’s business platforms, we have achieved tremendous growth and transformed the Company’s geographical breadth and media portfolio. Most importantly, we created a company that is a great place to work with a focus on engagement, trust, open communications, community service and involvement, and long-lasting relationships with our key partners. I miss our friend dearly, and the Board is committed to working with management to advance Walter’s vision and execute on our roadmap to deliver enhanced value for our stakeholders and partners.”
Quarterly Cash Dividend
As previously announced, the Company’s Board of Directors approved a quarterly cash dividend to shareholders of $0.05 per share on the Company’s Class A and Class U common stock, in an aggregate amount of approximately $4.4 million. This is double the Company’s previous quarterly dividend of $0.025 in 2022 and returns the dividend to its pre-pandemic level. The quarterly dividend will be payable on March 31, 2023 to shareholders of record as of the close of business on March 16, 2023, and the common stock will trade ex-dividend on March 15, 2023. 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 fourth quarter of 2022 totaled $296.3 million, up 27% from $233.9 million in the prior-year period. Of the overall increase, approximately $52.6 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 investments in variable interest entities in 2022, which did not contribute to our results of operations in the comparable prior-year period. In addition, of the overall increase, approximately $5.6 million was attributable to our television segment, primarily due to an increase in political advertising revenue, partially offset by decreases in local and national advertising 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. Additionally, of the overall increase, approximately $4.2 million was attributable to our audio segment, primarily due to increases in political advertising revenue and national advertising revenue, partially offset by a decrease in local advertising revenue.
Cost of revenue in the fourth quarter of 2022 totaled $192.0 million, up 29% from $148.4 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 investments in variable interest entities in 2022, which did not contribute to our results of operations in the comparable prior-year period.
Operating expenses in the fourth quarter of 2022 totaled $57.2 million, up 19% from $48.1 million in the prior-year period. Of the overall increase, approximately $7.0 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 non-cash stock-based compensation, and an increase due to our investments in variable interest entities in 2022, which did not contribute to our results of operations in the comparable prior-year period. In addition, of the overall increase in operating expenses, approximately $1.1 million was attributable to our television segment primarily due to an increase in rent expense, an increase in bad debt expense and an increase in non-cash stock-based compensation, partially offset by a decrease in expenses associated with the decrease in local and national advertising revenue. Additionally, of the overall increase in operating expenses, approximately $1.0 million was attributable to our audio segment primarily due to an increase in expenses associated with the increase in national advertising revenue and an increase in rent expense.
Corporate expenses in the fourth quarter of 2022 totaled $22.6 million, up 101% from $11.2 million in the prior-year period. The increase was primarily due to $8.1 million of severance related expense incurred upon the passing of our late Chief Executive Officer, and due to increases in non-cash stock-based compensation and an increase in salaries.
Net revenue for the year ended December 31, 2022 totaled $956.2 million, up 26% from $760.2 million in the prior-year period. Of the overall increase, approximately $191.8 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 investments in variable interest entities in 2022 and our acquisitions in 2021, which did not contribute to our results of operations for the full prior-year period. In addition, of the overall increase, approximately $6.4 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 $2.1 million attributable to our television segment, primarily due to decreases in local and national advertising revenue, a decrease in spectrum usage rights 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 an increase in political advertising revenue.
Cost of revenue for the year ended December 31, 2022 totaled $623.9 million, up 34% from $466.5 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 investments in variable interest entities in 2022 and our acquisitions in 2021, which did not contribute to our results of operations for the full prior-year period.
Operating expenses for the year ended December 31, 2022 totaled $197.8 million, up 14% from $173.0 million in the prior-year period. Of the overall increase, approximately $22.5 million was attributable to our digital segment and was primarily due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense and non-cash stock-based compensation, and an increase due to our investments in variable interest entities in 2022 and our acquisitions in 2021, which did not contribute to our results of operations for the full prior-year period. In addition, of the overall increase in operating expenses, approximately $0.6 million was attributable to our television segment primarily due to an increase in rent expense, an increase in bad debt expense and an increase in non-cash stock-based compensation, partially offset by a decrease in expenses associated with the decrease in local and national advertising revenue. Additionally, of the overall increase in operating expenses, approximately $1.7 million was attributable to our audio segment primarily due to an increase in expenses associated with the increase in local advertising revenue and an increase in rent expense.
Corporate expenses for the year ended December 31, 2022 totaled $49.4 million, up 50% from $33.0 million in the prior-year period. The increase was primarily due to $8.1 million of severance related expense incurred upon the passing of our late Chief Executive Officer, and 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 December 31, 2022 totaled approximately $155.2 million. Total debt under the Company’s credit agreement was $209.3 million. Net of $75 million of cash and marketable securities, total leverage as defined in the Company’s credit agreement was 1.3 times as of December 31, 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 fourth quarter and full year 2022 results on Thursday, March 9, 2023 at 5:00 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 10176187. 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 Interim Chief Executive Officer, and Chief Financial Officer and Treasurer Entravision Communications Corporation 310-447-3870
IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (Nasdaq: SALM) released its results for the three and twelve months ended December 31, 2022.
Fourth Quarter 2022 Results
For the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021:
Consolidated
Total revenue decreased 0.5% to $68.8 million from $69.1 million;
Total operating expenses increased 38.0% to $67.2 million from $48.7 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 5.7% to $61.6 million from $58.3 million;
Operating income decreased 92.0% to $1.6 million from $20.5 million;
The company had a net loss of $2.2 million, or $0.08 net loss per share compared to net income of $16.8 million, or $0.61 net income per diluted share;
EBITDA (1) decreased 78.5% to $4.9 million from $22.7 million; and
Adjusted EBITDA (1) decreased 33.0% to $7.3 million from $10.8 million.
Broadcast
Net broadcast revenue increased 4.5% to $53.3 million from $51.0 million;
Station Operating Income (“SOI”) (1) decreased 17.4% to $10.1 million from $12.3 million;
Same Station (1) net broadcast revenue increased 4.5% to $53.3 million from $51.0 million; and
Same Station SOI (1) decreased 15.7% to $10.3 million from $12.2 million.
Digital Media
Digital media revenue decreased 10.3% to $10.4 million from $11.6 million; and
Digital Media Operating Income (1) decreased 44.3% to $1.7 million from $3.0 million.
Publishing
Publishing revenue decreased 21.3% to $5.2 million from $6.5 million; and
Publishing Operating Loss (1) was $0.6 million as compared to publishing operating income of $0.2 million.
Included in the results for the quarter ended December 31, 2022 are:
A $2.3 million ($1.7 million, net of tax, or $0.06 per share) impairment charge to the value of broadcast licenses in Columbus, Portland, and San Francisco;
A $0.1 million ($0.1 million, net of tax) loss on the disposal of assets;
A $0.1 million gain on the early retirement of long-term debt associated with the 2024 Notes; and
A $0.1 million non-cash compensation charge related to the expensing of stock options.
Included in the results for the quarter ended December 31, 2021 are:
A $13.0 million ($9.6 million, net of tax, or $0.35 per diluted share) net gain on the disposition of assets relates to a $12.9 million pre-tax gain on the sale of land in Tampa, Florida as well as various other fixed asset disposals;
The company repurchased an additional $38.6 million of the 6.75% senior secured notes due 2024 (“2024 Notes”) for $39.3 million in cash, recognizing a net loss of $1.0 million ($0.7 million, net of tax or $0.03 per share); 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 December 31, 2022, and 27,534,329 diluted weighted average shares for the quarter ended December 31, 2021.
Year to Date 2022 Results
For the twelve months ended December 31, 2022 compared to the twelve months ended December 31, 2021:
Consolidated
Total revenue increased 3.4% to $267.0 million from $258.2 million;
Total operating expenses increased 23.5% to $261.8 million from $212.0 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 8.3% to $238.2 million from $219.9 million;
The company’s operating income decreased 88.9% to $5.2 million from $46.2 million;
The company recognized $4.1 million in film distribution income from an unconsolidated equity investment;
The company had a net loss of $3.2 million, or $0.12 net loss per share compared to net income of $41.5 million, or $1.52 net income per diluted share;
EBITDA (1) decreased 68.5% to $21.9 million from $69.4 million; and
Adjusted EBITDA (1) decreased 26.7% to $28.1 million from $38.3 million.
Broadcast
Net broadcast revenue increased 7.2% to $205.3 million from $191.4 million;
SOI (1) decreased 9.6% to $41.3 million from $45.7 million;
Same station (1) net broadcast revenue increased 7.2% to $204.9 million from $191.2 million; and
Same station SOI (1) decreased 9.1% to $41.7 million from $45.8 million.
Digital media
Digital media revenue decreased 1.2% to $41.7 million from $42.2 million; and
Digital media operating income (1) decreased 5.4% to $7.9 million from $8.4 million.
Publishing
Publishing revenue decreased 18.9% to $20.0 million from $24.6 million; and
Publishing Operating Loss (1) was $2.2 million compared to publishing operating income of $1.4 million.
Included in the results for the twelve months ended December 31, 2022 are:
A $14.0 million ($10.3 million, net of tax, or $0.38 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 $8.4 million ($6.2 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 $48,000 gain 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 $0.3 million ($0.2 million, net of tax, or $0.01 per share) charge for debt modification costs; and
A $0.3 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 twelve months ended December 31, 2021 are:
A $2.5 million ($1.9 million, net of tax, or $0.07 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 7.125% Senior Secured Notes due 2028 (“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 $2.5 million of fees paid to third parties included in operating expenses for the period;
A $23.6 million ($17.4 million, net of tax, or $0.64 per diluted share) net gain on the disposition of assets relates to $12.9 million pre-tax gain on the sale of land in Tampa, Florida, 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 that was offset by a $0.4 million of additional costs recorded upon closing on the radio station WKAT-AM and an FM translator in Miami, Florida as well as various other fixed asset disposals;
The company repurchased an additional $43.3 million of the 2024 Notes for $44.0 million in cash, recognizing a net loss of $1.0 million ($0.8 million, net of tax or $0.03 per share); and
A $0.3 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 27,206,434 diluted weighted average shares for the twelve months ended December 31, 2022, and 27,296,618 diluted weighted average shares for the twelve months ended December 31, 2021.
Balance Sheet
As of December 31, 2022, the company had $114.7 million outstanding on the 7.125% senior secured notes due 2028 (“2028 Notes”), $39.0 million outstanding on 6.75% senior secured notes due 2024 (“2024 Notes”) and $9.0 million outstanding balance on the ABL facility.
Acquisitions and Divestitures
The following transactions were completed since October 1, 2022:
On February 1, 2023, the company acquired the George Gilder Report and other digital newsletters and related website assets. The company assumed the deferred subscription liabilities paying no cash at the time of closing. The purchase price is 25% of net revenue generated from sales of most Eagle Financial products during the next year to people who are on George Gilder subscriber lists that are not already on Eagle Financial lists.
On January 10, 2023 the company closed on the acquisition of radio stations WWFE-AM, WRHC-AM and two FM translators in Miami, Florida for $3.0 million. The Asset Purchase Agreement (“APA”) was amended for Salem to acquire only the radio stations and translators for $3.0 million, a related party to acquire the land directly from the seller for $2.0 million, and Salem to have an option to purchase the land from the related party pursuant to an option to purchase real estate agreement. Salem’s executive officers, who have no relationship with the related party, began negotiations for the related party lease agreements and option agreements, subject to final approval by Salem’s Audit Committee pursuant to its related party transaction policy. The option to purchase real estate agreement was approved by Salem’s Audit Committee on March 1, 2023.
On January 6, 2023 the company closed on the acquisition of radio station WMYM-AM and an FM translator in Miami, Florida for $3.2 million. The company began operating the radio station under a Time Brokerage Agreement beginning on November 16, 2022. The APA was amended for Salem to acquire only the radio station and translator for $3.2 million, a related party to acquire the land directly from the seller for $1.8 million, and Salem to have an option to purchase the land from the related party pursuant to an option to purchase real estate agreement. Salem’s executive officers, who have no relationship with the related party, began negotiations for the related party lease agreements and option agreements, subject to final approval by Salem’s Audit Committee pursuant to its related party transaction policy. The option to purchase real estate agreement was approved by Salem’s Audit Committee on March 1, 2023
On December 30, 2022, the company acquired the book inventory and publishing rights of ISI Publishing for $0.4 million of cash.
On December 1, 2022, the company acquired radio station KKOL-AM in Seattle, Washington for $0.5 million. The company paid $0.4 million of cash at closing and $0.1 million of cash into an escrow account and began operating the station under a Local Marketing Agreement on June 7, 2021.
On October 1, 2022, the company acquired websites and the related assets of DayTradeSPY, a financial publication, 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.
Conference Call Information
Salem will host a teleconference to discuss its results on March 8, 2023 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 Fourth 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 March 22, 2023 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.
First Quarter 2023 Outlook
For the first quarter of 2023, the company is projecting total revenue to be between flat and a decline of 2% from the first quarter 2022 total revenue of $62.6 million. 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 7% and 10% compared to the first quarter of 2022 Recurring Operating Expenses of $55.8 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.
IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (NASDAQ: SALM), announced today that it has acquired George Gilder’s investment newsletters Gilder’s Technology Report, Gilder’s Technology Report PRO, Gilder’s Moonshots, Gilder’s Private Reserve and Gilder’s Guideposts.It also launched a new website for George Gilder, www.GilderReport.com.
Adding George Gilder and his team of experts (Richard Vigilante, Steve Waite and John Schroeter) to Eagle Financial Publications’ portfolio of investment newsletters and trading services adds more depth to an already powerful mix of products. Eagle currently publishes products and services written by investment experts Mark Skousen, Bob Carlson, Bryan Perry, Jim Woods and Jon Johnson. Eagle also has several financial and retirement websites: www.StockInvestor.com, www.DividendInvestor.com and www.SeniorResource.com.
Roger Michalski, Vice President and Publisher of Eagle, said, “I am thrilled and honored to add George Gilder and his servicesto our mix of products. I have followed George’s work for years and there is nobody better than him in identifying the technological trends that change the way we live… and how to profit from the companies leading the way.”
ABOUT GEORGE GILDER:
George Gilder is an established investor, writer and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance. He’s written over 20 books, many of them bestsellers, including titles such as Wealth and Poverty and Life After Google. George pioneered the formulation of supply-side economics when he served as Chairman of the Lehrman Institute’s Economic Roundtable, as Program Director for the Manhattan Institute, and as a frequent contributor to A.B. Laffer’s economic reports and the editorial page of the Wall Street Journal.
Throughout his career, he’s been profiled in People, Wired, Forbes, Fox News, the Wall Street Journal, The Economist, Harvard Business Review, the American Spectator, and more.
ABOUT SALEM MEDIA GROUP:
Salem Media Group is America’s leading multimedia company specializing in Christian and conservative content, with media properties comprising radio, digital media and book and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programming focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the Christian and conservative media landscape. Learn more about Salem Media Group, Inc. at www.salemmedia.com, Facebook and Twitter.
IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (NASDAQ: SALM) announced today that it plans to report its fourth quarter 2022 financial results after the market closes on March 8, 2023.
The company also plans to host a teleconference to discuss its results on March 8, 2023 at 4:00 PM Central Time. To access the teleconference, please dial (888) 770-7291, and then ask to be joined to the Salem Media Group Fourth Quarter 2022 call or listen to the webcast.
A replay of the teleconference will be available through March 22, 2023 and can be heard by dialing (800) 770-2030 – replay pin number 2413416, or on the investor relations portion of the company’s website, located at investor.salemmedia.com.
ABOUT SALEM MEDIA GROUP:
Salem Media Group is America’s leading multimedia company specializing in Christian and conservative content, with media properties comprising radio, digital media and book and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programming focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the Christian and conservative media landscape. Learn more about Salem Media Group, Inc. at www.salemmedia.com, Facebook and Twitter.
CHELMSFORD, MA / ACCESSWIRE / February 21, 2023 /Harte Hanks, Inc. (NASDAQ:HHS), a leading global customer experience company focused on bringing companies closer to customers for nearly 100 years, announced today that the company will release financial results for the fourth quarter and full year period ended December 31, 2022 on Tuesday, March 7, 2023 after the close of the market.
The Company will host a conference call and live webcast to discuss these results on Tuesday, March 7, 2023 at 4:30 p.m. EST. Interested parties may access the webcast at https://investors.hartehanks.com/events or may access the conference call by dialing (877) 545-0523 in the United States or (973) 528-0016 from outside the U.S. and using access code 471821.
A replay of the call can also be accessed via phone through March 21, 2023 by dialing (877) 481-4010 from the U.S., or (919) 882-2331 from outside the U.S. The conference call replay passcode is 47696.
About Harte Hanks:
Harte Hanks (NASDAQ:HHS) is a leading global customer experience company whose mission is to partner with clients to provide them with CX strategy, data-driven analytics and actionable insights combined with seamless program execution to better understand, attract and engage their customers.
Using its unparalleled resources and award-winning talent in the areas of Customer Care, Fulfillment and Logistics, and Marketing Services, Harte Hanks has a proven track record of driving results for some of the world’s premier brands, including Bank of America, GlaxoSmithKline, Unilever, Pfizer, HBOMax, Volvo, Ford, FedEx, Midea, Sony and IBM among others. Headquartered in Chelmsford, Massachusetts, Harte Hanks has over 2,500 employees in offices across the Americas, Europe, and Asia Pacific.
As used herein, “Harte Hanks” or “the Company” refers to Harte Hanks, Inc. and/or its applicable operating subsidiaries, as the context may require. Harte Hanks’ logo and name are trademarks of Harte Hanks.
Investor Relations Contact:
Rob Fink or Tom Baumann 646.809.4048 / 646.349.6641 FNK IR HHS@fnkir.com
Traditional TV and OTT Meet to Maximize Local Hispanic Reach
SANTA MONICA, Calif.–(BUSINESS WIRE)– Entravision (NYSE: EVC), a leading global advertising solutions, media and technology company, announced today the launch of Entravision Plus, the newest way for companies to effectively connect and engage with Hispanic consumers through over-the-top (OTT) media and Connected TV (CTV). Entravision Plus helps optimize digital advertising results by leveraging performance-based data insights to connect with consumers as they consume content from premium Spanish-language publishers.
Entravision Plus is the latest addition in the full suite of digital solutions offered by Entravision. Along with OTT/CTV, this suite of digital services now includes: Digital Audio Ads, Display Ads, Digital Out of Home, Facebook / Instagram, TikTok, SEM, YouTube Ads, Email Marketing and Branded Content that complement the Company’s television and radio properties.
Currently, 90% of Hispanic consumers stream video on smart devices, which is 10% more than non-Hispanic consumers. In addition, the average Hispanic consumer spends over 26 hours per month watching video online, or seven more hours than the U.S average. With these statistics in mind, it is clear that a growing number of Latino households can now be reached via television and Entravision Plus online video products.
“Advertisers need to reach their consumers,” said Jessica Martinez, General Manager of Entravision US Digital. “We can now offer our clients the ability to reach consumers not only through our television and radio assets, but also through an array of digital products.”
Martinez continued, “Entravision Plus – our newest offering – provides advertisers with unique targeting, competitive ad separation and insightful analytics to reach all segments of the Latino consumers. We are excited to provide this premium solution, along with television and radio, to meet the needs of an evolving market. By leveraging Entravision Plus, we anticipate that our customers’ businesses will stand out and grow faster than ever before.”
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, comprises 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.
For more information please contact: Kimberly Esterkin Addo Investor Relations evc@addo.com 310-829-5400
HOUSTON, Feb. 6, 2023 /PRNewswire/ — Direct Digital Holdings, Inc. (Nasdaq: DRCT) (“Direct Digital Holdings” or the “Company”), a leading advertising and marketing technology platform operating through its companies Colossus Media, LLC (“Colossus SSP”), Huddled Masses LLC (“Huddled Masses”) and Orange142, LLC (“Orange142”), today announced that the Company will ring the Nasdaq closing bell on Tuesday, February 14, 2023, in celebration of one year since the Company listed on The Nasdaq Capital Market under ticker “DRCT”.
Company attendees at the closing bell ceremony include:
Mark D. Walker, Chairman, Co-Founder & Chief Executive Officer
Tonie Leatherberry, Director, Direct Digital Holdings
Richard Cohen, Director, Direct Digital Holdings
Misty Locke, Director, Direct Digital Holdings
The live broadcast will start at 3:45 PM Eastern Time on February 14, 2023 from the Nasdaq MarketSite Tower in New York City, New York. Please tune in to the broadcast by visiting www.nasdaq.com/marketsite/bell-ringing-ceremony.
Mark D. Walker commented on the occasion, stating, “As the ninth black-owned company to go public in the U.S., we are thrilled to be recognized by Nasdaq and thankful for the opportunity to ring the closing bell. To us, this ceremony will commemorate a year of tremendous growth and success since we first went public in February of 2022. We remain committed to delivering high-quality, technology-led digital advertising solutions to our clients and are excited for the further growth that access to the public markets allows us.”
About Direct Digital Holdings
Direct Digital Holdings (Nasdaq: DRCT), owner of operating companies Colossus SSP, Huddled Masses, and Orange 142, brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. Direct Digital Holdings’ sell-side platform, Colossus SSP, offers advertisers of all sizes extensive reach within general market and multicultural media properties. The company’s subsidiaries Huddled Masses and Orange142 deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from energy to healthcare to travel to financial services. Direct Digital Holdings’ sell- and buy-side solutions manage approximately 90,000 clients monthly, generating over 100 billion impressions per month across display, video, CTV, in-app and other media channels. Direct Digital Holdings is the ninth black-owned company to go public in the U.S and was named a top minority-owned business by The Houston Business Journal.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of federal securities laws, including the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and which are subject to certain risks, trends and uncertainties.
As used below, “we,” “us,” and “our” refer to Direct Digital Holdings. We use words such as “could,” “would,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar expressions to identify forward-looking statements, but not all forward-looking statements include these words. All statements contained in this release that do not relate to matters of historical fact should be considered forward-looking statements.
All of our forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Our forward-looking statements are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance expressed in or implied by the forward-looking statements, including, but not limited to: our dependence on the overall demand for advertising, which could be influenced by economic downturns; any slow-down or unanticipated development in the market for programmatic advertising campaigns; the effects of health epidemics, such as the ongoing global COVID-19 pandemic; operational and performance issues with our platform, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems; any significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers’, suppliers’ or other partners’ computer systems; any unavailability or non-performance of the non-proprietary technology, software, products and services that we use; unfavorable publicity and negative public perception about our industry, particularly concerns regarding data privacy and security relating to our industry’s technology and practices, and any perceived failure to comply with laws and industry self-regulation; restrictions on the use of third-party “cookies,” mobile device IDs or other tracking technologies, which could diminish our platform’s effectiveness; any inability to compete in our intensely competitive market; any significant fluctuations caused by our high customer concentration; any violation of legal and regulatory requirements or any misconduct by our employees, subcontractors, agents or business partners; any strain on our resources, diversion of our management’s attention or impact on our ability to attract and retain qualified board members as a result of being a public company; our dependence, as a holding company, of receiving distributions from Direct Digital Holdings, LLC to pay our taxes, expenses and dividends; and other factors and assumptions discussed in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and other sections of our filings with the SEC that we make from time to time. Should one or more of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this release to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
MIAMI, Jan. 31, 2023 (GLOBE NEWSWIRE) — Motorsport Games Inc. (NASDAQ: MSGM) (“Motorsport Games” or “Company”), a leading racing game developer, publisher and esports ecosystem provider of official motorsport racing series throughout the world, announced today that it has received notice from the Nasdaq Stock Market LLC (Nasdaq) on January 30, 2023 informing Motorsport Games that it has regained full compliance with the Nasdaq Listing Rules.
Motorsport Games previously notified Nasdaq on November 11, 2022 that it was no longer in compliance with Nasdaq Listing Rule 5550(a)(4) requiring minimum of 500,000 publicly held shares, as defined in the Nasdaq Listing Rules, and (ii) Nasdaq Listing Rule 5605(b)(1), which requires a majority of the Company’s board of directors (the “Board”) to be comprised of independent directors as defined in Rule 5605(a)(2), and Nasdaq Listing Rule 5605(c)(2), which requires the audit committee of the Board to consist of at least 3 independent directors meeting the heightened independence standards for audit committee members.
As previously disclosed by the Company, as a result of the issuances by the Company to Alumni Capital LP of the Company’s Class A common stock pursuant to the previously reported purchase agreement with Alumni Capital LP, the Company’s publicly held shares exceeded 500,000 shares. Dmitry Kozko, Chief Executive Officer of Motorsport Games, commented, “With the addition of Nav Sunner in January and Andrew Jacobson in December, joining John Delta as independent directors, the board of directors is reconstituted adding significant talent and resources to our collective experience.”
Bios:
Nav Sunner is a highly experienced lawyer and business development expert immersed in the video games industry. After qualifying as a lawyer with Pinsent Masons, he spent several years as Head of Legal at Codemasters as well as General Counsel at Mastertronic Group. Following a further period practicing law as Co-Head of Interactive Entertainment for Osborne Clarke and, subsequently, as Head of Computer Games for Wiggin, Nav worked with Japanese games company GREE. Nav then spent time as Commercial Director for a games studio at Microsoft as well as being on the Board of esports company EGL. Currently, in addition to his video game consultancy “Navatron,” he is a Director at MMO games company Vavel. Nav’s long career in the video games industry has included extensively being involved with legal and business issues relating to racing games.
Andrew Jacobson is a digital media sales and marketing executive with over two decades of leadership experience in the online publishing, ad tech and automotive industries. During his career he has guided teams and companies – both large and startups – to record sales and revenue growth. In his current position, he leads Epsilon’s automotive programmatic digital media client team, and acts as a consultant to publishers and startups on strategy, product development, CRM, programmatic monetization, organization structure and compensation planning. In 2015, as Global Head of Sales, Andrew was part of the leadership team that grew and sold digital media company VerticalScope Holdings for more than $300 million. He has been a top-rated speaker, moderator and panelist at many industry conferences including J.D. Power Automotive Marketing Roundtable, SEMA, Programmatic I/O, Digital Dealer, Automotive Attribution Summit and others. Andrew holds a B.A. from Pomona College and an M.B.A. from the Kellogg School of Management, Northwestern University.
John Delta is an experienced operating and financial executive and entrepreneur with experience in enterprises from $2 million to $500 million. He is currently a Partner at TechCXO, which provides outsourced on demand C-Suite executives to institutionally-backed companies. He was formerly a consultant at McKinsey & Co. and Deloitte & Touche and was Vice President of Interactive Services at the NASDAQ Stock Market. He has extensive experience with both portfolio companies of Private Equity firms and US and international publicly traded companies. His main areas of focus are mid-stage software, SaaS and consumer-facing firms in need of assistance with CFO duties, transaction execution and scaling their finance/operations. John has broad consulting, operations and finance experience, and holds both a BA and MBA from the University of Virginia.
About Motorsport Games: Motorsport Games, a Motorsport Network company, is a leading racing game developer, publisher and esports ecosystem provider of official motorsport racing series throughout the world. Combining innovative and engaging video games with exciting esports competitions and content for racing fans and gamers, Motorsport Games strives to make the joy of racing accessible to everyone. The Company is the officially licensed video game developer and publisher for iconic motorsport racing series across PC, PlayStation, Xbox, Nintendo Switch and mobile, including NASCAR, INDYCAR, 24 Hours of Le Mans and the British Touring Car Championship (“BTCC”), as well as the industry leading rFactor 2 and KartKraft simulations. rFactor 2 also serves as the official sim racing platform of Formula E, while also powering F1 Arcade through a partnership with Kindred Concepts. Motorsport Games is an award-winning esports partner of choice for 24 Hours of Le Mans, Formula E, BTCC, the FIA World Rallycross Championship and the eNASCAR Heat Pro League, among others. Motorsport Games is building a virtual racing ecosystem where each product drives excitement, every esports event is an adventure and every story inspires.
Forward-Looking Statements: Certain statements in this press release which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as “continue,” “will,” “may,” “could,” “should,” “expect,” “expected,” “plans,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” and similar expressions are intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Motorsport Games and are difficult to predict. Examples of such risks and uncertainties include, without limitation, whether provided the Company will be able to maintain its compliance with the Nasdaq Listing Rules. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in Motorsport Games’ filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, its Quarterly Reports on Form 10-Q filed with the SEC during 2022, as well as in its subsequent filings with the SEC. Motorsport Games anticipates that subsequent events and developments may cause its plans, intentions and expectations to change. Motorsport Games assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Motorsport Games’ plans and expectations as of any subsequent date.
Website and Social Media Disclosure:
Investors and others should note that we announce material financial information to our investors using our investor relations website (ir.motorsportgames.com), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media and blogs, to communicate with our investors and the public about our company and our products. It is possible that the information we post on our websites, social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the websites, social media channels and blogs, including the following (which list we will update from time to time on our investor relations website):
