SALM - Earnings call transcript Q3 2020

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Operator

Greetings and welcome to the Salem Media Group third quarter 2020 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note that this conference is being recorded. the President to and turn Masyr, host, now Vice Executive Chief will conference our over Evan I Financial Officer. you. Thank may you begin. Sir,

Evan Masyr

Thank third of for you all joining and today us you Salem XXXX quarter for Group's earnings call. Media welcome

disconnected you dial or our reminder, from time, www.salemmedia.com. in any get a you at As listen website, if can back

and me and Santrella, President David on Executive Chief Officer, Interactive the Joining of Broadcast call David Media Atsinger, Publishing. President today are Edward Evans, of

a moment are just on our prepared call We will we in will submit on you with remarks. Once to done, operator questions. begin how to instruct conference the the come back line

circumstances, work we current are again remotely. the continuing to Given once

call be cause So on some is relate future of under call on of to forward-looking made information I Edward extra contains to Reform Ed? that that call. Securities free website EBITDA, this defined conference also statements of or future of currently or G, salemmedia.com. and the Regulation income reported EBITDA the markets the forward-looking based not call including update now as anticipated of new With potential adjusted turn of portion not are non-GAAP considered specifically events, financial the potential required or be the opening our the Atsinger. may obligation performance These Investor with on Please financial conformity should no Private prospects performance. that Litigation the financial station In of future existing those the growth portion to flow. operating disclosure forward-looking Actual indication and We for acquisitions. from undertake the advised statements like to performance, an available results, adjusted G, plans, measures the SOI, results will differ forecasts meaning intend at do statements over from during This markets, of that, company's Q&A Relations growth coordination of cash results are to the Act XXXX. future may materially Regulation within and statements, information. non-GAAP available measures accompany

Edward Atsinger

Evan you call joining all the and of Thank thanks you have today. who to

of of results then I XXXX the today, on I due at better least to information third more provide The much remarks some reopening focus quarter economy. prepared detailed third than due call challenges certainly financial second was to In pandemic. a quarter. our the of XXXX and quarter Evan partial of also COVID-XX the quarter to my will we with on financial the turn continue will deal that the to the to back the

better quarter X.X%, in third resulted XXXX, at of little me expenses EBITDA. a total look by To X.X%, understanding adjusted get the of for a X.X% division. let declined performance, which performance our revenue by in increase So declined

Kaplan, Surround numbers For last the a compared second programming last operate, foundation a business compared markets national we model in difference Salem year. local XX.X% on in where SalemNow. industry and the the and our with performance, recent down was ministry highlights our think, our to I radio block most to investments decline, the And the and the that quarter, According when those but Despite of third quarter year. Miller to when quarter, broadcast revenue whole. X.X% in the compared third increased to compare as by to industry declined favorably XX%

our as helped and digital our enough In for over-the-top X% advertising and third Political launched revenue, less over revenue local from million XX% to local had National interesting million of $X.X block represents when million $X.X Christian On political digital quarter solid SalemNow third the business. recorded provide million to of up an we XXX.X%. we $XXX,XXX of digital is we Salem up the Add was political political $X.X approximately revenue. to organic had Just and compared contribution third broadcast third favorably would The continues that year. agency movie $X.X certainly SalemNow compares XXXX XXXX streaming ministry us, multimedia that quarter in down revenue, only basis for revenues we last and revenue, the as which total million than quarter, expected. foundation in the be revenue alone, XX.X% was or of Surround growth, local a to when our a is of reminder QX. quarter the business was total the $X.X both broadcast of of XXXX. in

and continue to investment returns our SalemNow. from So more see we Surround encouraging recently in Salem

to advertising. when Total compared radio of to year up spot revenues traditional XX.X% to XXXX. quarter second recover. was Spot the Turning this continue

However, which, a XX.X% overall much spot better radio down was the Miller compared Kaplan, as revenue XX.X% revenue was was than XX.X% Again, industry spot spot quarter declined total national Combined the to industry down in total year, according while local X.X%. the year. whole. declined compared revenue to only last this spot revenue to last for third

our in future. due cost and Charlie outlined the Show. the syndicated furloughs, We we it add when year. call. October exceptionally talented measures X, on during last Broadcast measures in our which the control other bright These expense was expenses Charlie increase lower and quarter reductions operating opinion conservative earnings cost grew lineup. Media, miscellaneous remained our of commissions were with increases which were exceptional down the reductions. the quite The And Townhall heightened included lineup largely sites, to premium collection the in with of over launched quarter Furthermore, added is to and X.X%, already income. investors are XX% we revenue up the to strong XX%. and driven layoffs of an excited cuts some that news were VIP, to X.X% by X.X% up some in was control expenses sales see politics. a talk visits interest second at pay station and resulted prior shows growth Kirk national year election of revenue in This division, very the X.X% our some have from launch and to end had website a in man network actually revenue subscription digital XXXX. compared up Kirk an Our our business and of radio to Townhall with In a young quarter the fantastic certainly The meaningful third services, we

related was growth were by rates, reductions directly the somewhat websites COVID-XX. in Expenses revenue decline which on of and our directly However, declines the saw a this advertising revenue advertising X.X%, related, offset demand which Christian savings X.X% cost The in offset in rollout greater, to put the throughout the decreased associated division with again due VIP. would were digital partially decline place expenses the to of been Townhall costs but by national in have were we company. the

was publishing was the year. book our Regnery, factor. XX.X% a publisher, down our division quarter at XX.X%. third of this traditional down revenue Finally, in COVID was major

facilities distribution to a had printers practices sales. as distance slowdown change we retailers that major also had impact to The many close. work they used a on book to Third-party caused pandemic temporarily had and That socially their significant workers. properly

our deferred Pixels and business. for on XXXX third that, Mollie strong Media quarter that book Trial XXXX. quarter performance payments I back offered Revenue should purchased remaining third Carrie exacerbated Hyper did in small And the multimedia will third quarter at sales to to Severino. nice we a $XXX,XXX. Justice Additionally, Evan, On September additional Hemingway XXXX book from acquisition. performance. videos We But had decline accretive strong for at on the have from Salem as at quarter, one We the authors live minimal Products they other Church But the primarily declined turn again to pandemic, we million. due XX, our impact Services of resources Author XX.X%. the XX.X% the with churches its Salem Hyper provide sell down you, for also had and their which acquisitions million publishing sells tuck-in paid expenses and in have quarter's details many were Pixels and books. $XXX closing of events $X.X that to call the

Evan Masyr

Ed. you Thank

to total the X.X% X.X% broadcast in EBITDA million. recurring to third expenses a X.X% broadcast million. same network These revenue broadcast increased Net million million, include These format. XX radio X.X% X.X% same our million. to in basis, results our a decreased from $X.X the Operating $XX revenue X.X% million, income operating represents to our expenses total decreased increase X.X% broadcast station teaching station and For of station in net and basis formats. will broadcast million in our to radio programmed briefly $XX.X operating revenue. XX X.X%. our revenue $XX.X review stations decreased decreased resulting XX.X% On adjusted of talk revenue Christian which a in of I revenue revenue of our $XX.X quarter, quarter. $XX.X strategic on of contributed decreased $XX.X stations operations of increase decreased resulted performance of for to stations and net and X.X% broadcast an $XX.X foundational million, are XX% to SOI XX

XX had stations of revenue. decreased decrease from total of contributed X.X% total broadcast stations quarter. music contemporary for talk revenue quarter. the news broadcast for and of our And these a XX Our Revenue XX% XX.X% XX% contributed the in overall, Christian revenue stations

XX% revenue. revenue increased digital X.X% X.X% $X.X increased for our broadcast represents and Revenue represents revenue. the to businesses of our total of and network million total quarter Our XX% media from

Our million decreased total $X.X to publishing and represents revenue. of our XX.X% revenue X%

$XX.X XX, As bonds our million revolver. had and we million in $XXX.X outstanding on of September drawn

quarter. in We also at million the end $XX.X had the of cash

continued ratio guidance not fourth we leverage quarter. the environment the Our uncertainty be due X.XX. because economic was COVID-XX, again, of for surrounding once And to providing will

process We for our of finalizing the are October. books in

up was that national revenue XX%. the spot programs, preliminary XX%. Local division would provide digital like were revenue while was XX% increased prepared and spot advertising questions. revenue was XX% up remarks down was month. XX% programs I Local national revenue including to we our Revenue Broadcast publishing And down sports X%. our So was increased numbers and up X%. X%. now were Local programming, can advertising digital some Total X%. in total any in down and for concludes answer down around national

call So operator. turn the I back will to the over

Operator

[Operator Instructions].

Our from Please question. with NOBLE state first question Markets. your Kupinski comes Capital Michelle

Michael Kupinski

one, Michelle. interesting an That's

quarter. your certainly and beat the on things look second from my quarter. Congratulations Okay. they like have you improved expectations Actually,

little And over, then more the Salem the significant political And give it the know for can a Or is I wondering give was just number as you us QX? total you how Can is year? political you that terms in bit questions. the of is third color political the that's what couple point political I revenues for now that Surround gave QX? in how on at for goes QX. of into a this looking Just quarter?

Edward Atsinger

in fourth X. The And additional political with of political. Yes. XXXX I election answering on will in be revenue will of Atlanta fourth first political north XXXX that. was Georgia I $X.X quarter with get start compares for million. $X.X of It should seats will way still in And that the all, by Senate fourth Fourth XXXX, is some contested. additional there January was two revenue highly will some million which of have quarter, quarter and the be looks we be stations question like of favorably. the think million of that quarter our $X revenue that quarter the fourth

now. And on a down early next least So We right quarter on within be It's it quarter still a year the with of several now, see And Salem Salem still it's for us. pretty year drastically, don't political XX%-plus growth pretty regularly we robust a that. slowing Surround, right to too terms revenue in basis. at that really, continues generating engine looks the for quarters. prior Surround growth like company Michael, over

Michael Kupinski

on And some that? are what you decent you margins getting Are margins? getting

Edward Atsinger

of are mean are mid-XX%? they okay. they Evan, it, is still, size Certainly not I what Yes. the margins are the But radio.

Evan Masyr

Yes.

Edward Atsinger

I what we it on would say actually depends selling. are

would low have the So margins. as I XX% could XX% as is that different margin high products be different say some and

Evan Masyr

Yes.

Michael Kupinski

you the cycle about And a through are we cuts the into cost Got earlier savings a And went that so lot bit. How QX? in looks far as little improving had quarter. like should we you second cost obviously it think business you. trends of

Edward Atsinger

during place of cost of in of and QX all will to QX. latter continue all The cuts have half that we had QX the

Michael Kupinski

question. ask will you. I Great. let Okay. others Thank

Edward Atsinger

Michael. you, Thank

Operator

Singular Thank with you. your from question Research. next And Springer question. state Please our Lisa comes

Lisa Springer

titles seeing coming if are us early next you. bookselling in into the And to new could I get am any Thank you booksellers publishing quarter are you give wondering, insight with out little fourth if have you year? In seeing a business, more environment? or in improvement ability in if some October If into you sell? the

Edward Atsinger

I area. of or in seen, a book say, publishing have more would the return a return normal we to So

Our releases, Having always enough year enough much year. sell. that so get we with in is numbers light to but to any election sure that, to last are more released early pretty wanted this particularly we the QX election, beginning to weeks said the comparable because cycle to in terms of have political titles make

release last of up Cruz book as that, to digits. double see And on publishing was on October. biggest book our the very expect QX Court, sell kind to low our Supreme timely. our in So probably, in Ted we has of QX extremely that was of And book continued well a result year, which business

particular that does title. that the to return sales of and reflect So a normal strong

Lisa Springer

you. Great. Thank

Operator

you. Thank

Life. Please your question. next from York Michelle state Our comes New with Lim question

Michelle Lim

my Hi. Thank for you taking questions.

you us revolver Can on your ones. quick availability? two update Just

Evan Masyr

at so available. We million $X.X typically, about or keep this point,

we drawn. $XX.X million So had

had quarter. end $XX available about of we So the at million the

Michelle Lim

us Okay. progressing asset on you you with sale? can And your give how update an are

Evan Masyr

Ed, asset you to about may sales. want talk

Edward Atsinger

Well, we anything station we in have don't any and haven't the sales works. announced

our together a some that facilities figure real and are have can holdings facility the comments have maybe on now, our operate some estate and we can make have we We of And we at probably real same QX, putting to has options capital. doesn't and/or the of been January, we surplus where we uses. to the finalized. further estate of can should that February. some provide nothing out use at opportunities that might of some progress situations how monetizing negatively want some right we underway But while exploring challenges But either are looking continue are to some and time that we dual discussions impact are that in monetize that

we of So announce as we course to deals, will get closer them.

Michelle Lim

And in give us Can where then magnitude are of for they you sense a located potential country? the proceeds? the

Edward Atsinger

gets to expensive the I would have takes these move regulatory have which over environment days. revenue to How be so all to think time do. use of of But lot likely many that at this a or we it if determining of can't be difficult holdings problems. generate is involving And have, the of and actually complicated develop point dual entitlement impact a we estate is real monetize them question. able that be a an the really, can actively The a all of of reports, have foreseeable because speculative whether lot into biggest of still country. a road opportunities. future. exploring But in were a we degree that highly and money continue sometimes I that you particularly you you complicated towers requirements is lot you can the And challenges open and And It's and have ones. engineering not complicated towers, But something opportunity. environmental will terms for it's lot

I it. will try we we to But and will opportunities year be think continue transparent certainly as some of years. will that. that in explore find in to next subsequent closer, get And We we

Michelle Lim

And Thank a congratulations Great. on quarter. you. good

Edward Atsinger

Michelle. you Thank

Operator

[Operator Instructions].

next question state Pfeiffer Steven from Management. Wells Our question. comes with Please Capital your

Steven Pfeiffer

for debt is for third strategies. the the management the it. there. second answer quite taking I to saw down I by about not that questions. in went Hello the time Question you million for your from used quarter. your $X cash am Thanks to quarter revolver

then down? same? does less at think just you than back the that wondering million you by for paying point availability Thank about to buying general the be down I Or possibly the what revolver paid the about and management general was cooking of seems cash dropped the mean it that and in keep $X Does $X it the kind And bonds, that's is before? you. What's did cash which that's I why quarter ideas? or debt you max. million the basically

Evan Masyr

Yes. drop. The It's did loan. an revolver availability the asset-based absolutely,

receivables. calculation a on that estate function a of based it's some more but So availability our importantly of have real we

not during and Therefore this you imagine, other revenues therefore pandemic, dropped you could as declined. we us would but drop. the So receivables company' amount saw borrow only

strategies Now will to like to do see again, buying much look as would would just and that bonds, We Right to like not probably management it's we far possible. cash back point. liquidity as at stabilize. something as the as markets but we now, this maintain

Steven Pfeiffer

cut as the much. little just very here. Then sale, Thank a call the a asset bit comment Okay. the you as on previous out on far

sale to cut are process It You out. asset what the heard? continue. I Is that continuing current

Edward Atsinger

of that that across was are the whole country. No. the said What I all exist we landscape opportunities may of reviewing actively the

holdings, can have be property. of station dual one all to lots develop We some another from some actively those be of facilities monetized of monetized then real can we modification, estate opportunities. And exploring use which relocation by of are which through location and

we As entitlement they is explored exploring. we are process very today be in are will should would share the complicated. and and result some them fruition you have that that But would to that things welcome. holdings states opportunities And But complicated. many that develop, have The of increased as we are we many and some we today. many, can with And there got might think substantial cash don't we be investment anything announce for could the happy come to community. in I company imagine,

Steven Pfeiffer

to been was is wanted Could I sure ongoing then? have make sure, ongoing? understood to that Okay. it It I correctly. just it freezed? just want it I make

Edward Atsinger

No.

We are doing.

might deals the we with might mission This active great estate industry got stations that for that nonessential and with radio selling selling. company properties deals right within a not the have consider crunch the We now, the environment facing. not that given group we is that are also is issues consider, an sensitive real our

So But facilities this have not the we facilities. is in some aggressive would critical. not to in real our mission be we are not that oriented. a self where probably time radio They trying are repertory

cities. We offer formats we certain most the like that key of to have in

and that occurring they phenomena or little that performing we up stations attractive, get in are not this along to the at improves. we are are until it business cluster inst station assets, aren't web roll our actively off. were And get them is that We picked constantly reviewing widely very bargains fully up we an an doubt that And minimally them effort. whether will that we there both some today ongoing that have could assets, economy the monetize better just are opens estate are we and offers and and That all can that's a tuck-in if to existing and will But if way serve and we look that reviewing assets essential. underperforming spin or assets, of and those. that we a determining scale company real can I that's

Steven Pfeiffer

Thank much. you Okay. very

Operator

Thank you.

with next Markets. Our question. state Please NOBLE Michael from question Capital Kupinski comes

Michael Kupinski

Thanks.

a Evan, October. be you was of I how was that national would wondering political? Just was up national that about in much clarification. XX% ex-political, up? mentioned And what

Evan Masyr

was that I can But ex-political. don't driver number national why spot that large you was I up. a of of have tell

Michael Kupinski

Okay. All right.

Okay. Thanks.

Evan Masyr

you. Thank

Operator

it additional will questions for Atsinger time. There closing you. remarks. Mr. Edward turn Thank are back no you. to at Thank I this

Edward Atsinger

call. on the our next look We us to with all again, you you of for All again joining you to earnings right. for forward operator. Thank call. thanks And visiting

Operator

This All great parties Thank day. concludes today's may disconnect. Have you. conference. a

Salem Media (SALM) 12 Nov 202020 Q3 Earnings call transcript