SALM - Earnings call transcript Q3 2021

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Operator

Greetings. Welcome to the Salem Media Group, Inc., Third Quarter 2021 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 Officer. to turn Masyr, host now Financial Chief will conference your over Evan I

begin. may You

Evan Masyr

Welcome and for third thank you quarter Media for XXXX Group's Salem earnings call. joining us today

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

call he Joining the you Officer of business a President Publishing. that the Please information. statements Interactive future to had we Broadcast defined non-GAAP future materially opening submit future or forecasts call considered me existing conference on potential of of adjusted Edward Private disclosure portion undertake differ are over Actual today at call call no made income, with will is including to This conference and are G, and Media Atsinger, statements Santrella. plans, back potential the travel Regulation forward-looking turn those non-GAAP done, financial prospects, Relations to an may with obligation performance will the We EBITDA, operator in that from statements from Once Santrella, EBITDA, Dave? financial www.salemmedia.com. measures information the results based not contains is statements XXXX. the of In or prepared David conformity be the operating reported call Executive of our of meaning instruct how and unable flow. adjusted intend meeting. forward-looking just new results our cash the and for be the events, join our to on of indication anticipated David markets, as questions. available also come on performance. conference Chief relate should on conflict not station remarks. to advised on Investor minute and currently are I within of growth Evans, These begin are or this accompany to on now lost free Securities required the Act SOI, do moment as of We'll future call measures performance, to available to Regulation update President a David results, Litigation markets, to had growth G, specifically Reform important of acquisitions. forward-looking an and the financial website line under the

David Santrella

Evan guidance the with digital today's Salem's as and Salem's then for with review our I'll a more Thanks update the details and division call national call thanks well growth COVID improvement improvement an I'll our the shutdowns, on then substantial with as activity, rebounds earnings digital of to to Masyr, overall of and and recent start following the remarks as Salem’s the conclude quarter. refinancing a concluding the Evans on prepared our our review focus financial Evan on over publishing on successful financial in M&A providing discussing performance results And fourth related turn leverage the division. the and the being financial will David and quarter recent all the by ratio economy performance giving results for call. business. third the

we being third EBITDA revenue the in meaningful the XXXX, X.X%, of adjusted the total Despite pandemic, an X.X%, XX.X%. in to For of did last increasing soft third quarter year. two due have increased expenses XXXX increased resulting revenue quarter QX drivers

$XXX,XXX compared as million to third First, of year. we revenue of had only political this quarter the in $X.X

increased we're to, with factor Additionally, Because to XXXX year. to grew total comparing QX third comparable yet down of at resulting where X.X%, XX.X%. to performance, significant compare in as is adjusted on no X.X%, Uncle total worth When XXXX basis XXXX. XX.X% quarter we the to are even on now had levels looking revenue increase X.X%, the XXXX. has million you in $X.X When items, nine reopened. last XXXX in though industry also EBITDA on from X.X%. months, Salem an those comparisons shooting XXXX, film out compared not It's economy revenue EBITDA increased revenue we year-to-date movie a very internally Through in total for. down and expenses pre-pandemic revenue fully revenue the of revenue expenses compared a year has are more pleased to focused has is XXXX that Salem difficult Tom adjusted the EBITDA up We're but X.X%, is actually been that reached

discuss at growth worth to division. year, in Trump the Compared And revenue the former we of an overview in broadcast several beginning added we've digital names XX.X% in repeating provide revenue that to the profile XXXX, the quarter that third will Ellison, That percentage increase. digital a within The recently, broadcast of our to General lineup. our up and revenue Podcast to this division revenue this third which XX.X% last continue was again. digital our quarter plus is from division. million. In of high Network, the in quarter of national division, I discussing financial increased Attorney is calls performance bears we the David third the but of revenue Most combined the the digital performance Salem means of the $XX.X XXX.X%. from total XX.X% had the national million. digital launched is Collins. and to digital the to in division few Doug Georgia, total highlighted $X.X moments, broadcast now the revenue the I'll expect former continue it's we revenue On think revenue the add congressman

third total comparison think spot increased was were XX.X% look advertising broadcast when of meaningful Again, quarter numbers, pre-pandemic For X.X%. more the last decreased up impacted while quarter third the XXXX, X%. third advertising national we of These political XXXX, of spot broadcast comparing XXXX. year. when to revenue increased revenue those I quarter by compared it's when to at X.X% Local

would third We're quarter the total annual the X.X% as of advertising to compared the to was been spot to XXXX total programming XXXX, revenue to Comparing political last X.X%. rate programming XX.X% in in decreased Advertising National declined X.X% up In would local block renewal beginning compared and Excluding economy. to year, while to back X.X%. process national have XX.X% programming quarter advertising compared National local the due our levels advertising X.X% up up not third quarter. XXXX. just in block and up increased was is ministries. was the with have last year, block

be increased will Renewals they but that perhaps as rates for do limited our to in best is the significant expect the very typically We range. there the demand is X% increased news run X.X% XX%, airtime operations from as well flat, from was ministries, essentially quarter existing our last new the their from compared ministries some footprint. Revenue available to year. to network that third as want radio in increase over

of host, you'll our for nationally run syndicated As to Elder, Governor California. one decided likely of Larry recall,

the when recent had election, announced his to recall from During he step show. his he down candidacy,

did a we his in a revenue. job decrease had slight Carl filling terrific While in for nonetheless Larry, replacement Jackson

think X.X%. job, the but doing of candidate led a show. back failed. disappointed running, ultimately overwhelmingly would not received have glad fantastic The We're the he his Larry and recall he done XX.X% all garnered next we're Larry's the as effort votes candidates While he's where radio we highest Governor

of expenses We Podcast Expenses income compared in have Evans. and were in were in this to call SOI Salem expect favorable only operating commissions, And to his that, potential. which XXXX increase I'll X.X%. station good due increase a expenses over in year run with impact in up part up associated division turn started listenership resulting X.X% for to an which on the future to was and expense Governor an When will his Network sales large probably up broadcast revenue in the X.X%, due is January thing. a operating was David of XX%. and with increase The

David Evans

Thank Dave. you,

division, compared Media XXXX. was third Centerline increase increase XXXX, postings Turning growth Church and quarter This X.X% the and by quarter to of the the XX.X% products third of due by recent at revenue compared ShiftWorship. churchstaffing.com our national digital led Salem in unit, to to to revenue when business of acquisitions increased increases an of job our

newsletter, due due the related to websites Additionally, we newsletter principally the watch advertising recent business, retirement supported good from the marketing to programming financial national as well XX.X% revenue expenses ad costs than in as our Expenses had better division acquisitions. a growth in increased increased were to Christian our ago. rates at growth year digital

book compared publisher quarter. to good sell Finally, XX%, the publishing revenue XX.X% an in was had able Revenue to XXXX. XXXX. was to increase at strong from the more getting third to to due self-publishing lineup Comparing compared but X.X% Revenue a QX down of QX books due very quarter published was year, in that last up expanded to the a particularly due traditional in to XXXX force up our revenue books. books Regnery, that was the of sales in X.X% was publishing division some division

Eric call Publishing in sale Bee the And quarter back mesa. some Is by ever were I'll Dead down the good being Alex our published, well earlier Metaxas, Pandemia expenses the to Babylon Wokeness. magazine year. XX.X% Guide the to business Looking turn in the to Berenson, of particularly due now XXXX, by books of ahead fourth we've Atheism the of got process as as to

Evan Masyr

Thank you, David.

I performance. allow to get on me and leverage, quarter's Before some provide details into M&A this additional

resulted same-station increased broadcast million. million, million, $XX.X million, $XX.X Operating broadcast broadcast to net our revenue. increased In in network X.X% $XX.X in XX% revenue operations, represents million. $XX.X expenses which On million, a SOI income of quarter an increase X.X% EBITDA to increased and XXX recurring from operating X.X% and million. radio same-station the in of revenue basis, include broadcast to adjusted increased million. X.X% our to to $XX.X X.X% revenue results total in increased $XX.X broadcast net station $XX.X increase a XX.X% For to These XX stations X.X%. increased to basis $XX.X resulting on revenue of of a third operating expenses Net X.X%

performance review XX and Now the in broadcast radio talk of our briefly and Christian stations strategic contributed XX% programmed total X.X% quarter. for our teaching revenue revenue foundational increased of format. formats. stations are our we'll of These

total XX quarter, contributed XX% contributed Our for of broadcast of XX had of broadcast XX.X% talk these revenue Christian the and revenue. the and from increase quarter. stations XX% stations Revenue contemporary revenue, music stations news total our increased for X.X% an in

and revenue increased million digital represents XX.X% broadcast broadcast XX% $X.X Our our total of to revenue.

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

Finally, our total revenue. million and of publishing division X% represents $X.X increased X.X% to

ShiftWorship.com domain some church the products want digital while acres XX, Metro continue outside $X.X quarter. during our will division. for XX I land July business Now, coverage. this part we assets acres provide the for where activity and maintaining Also operate Dallas sold retaining to nine we of M&A million as our updates acquired we we on full and broadcast July On X, million while of to KSKY-AM on of $XX.X just

of have in process selling. We that of the we're pieces two additional land

First, million. we $XX.X for to acres entered sell late XX Tampa into an of became effective in August, agreement, land in

We WTBN-AM moving operated for diplex and transmitter at will owned WGUL-AM facility. it our be the and

by expect year. close transaction this the to We the end on of

agreement in area million. to sell we acres August $X.X just Second, of XX, land signed for nine over an Denver the on

and do early from revenue We in Tampa these continue Denver close expect our will to either due operations now On notes debt these after attention in anticipate due transactions the are XXXX to XXX.X the losing land not plan completed in exchange I KBJD-AM impacted and XXXX. to any we both XX% want significant broadcast from leverage. an this September notes XXXX sales of operations close. our in seven% or million as broadcasting X.XX% from their of for stations and and turn continue resulting of will We XX, KRKS-AM that site. our sale XX%

undrawn, completely of ability our they backstop hand, under $XX our XXXX cash us the which to in addition the million that to before on refinancing, and notes part a we assures revolver, secured the the pay off mature. As is availability

XXXX. June million of paycheck XXXX. The million and of XXXX, loans forgiveness from was July to the in contributing of As the was $XXX.X was total million factor the down $XX.X XX to SBA as protection September XX, of debt biggest reduction $XXX.X of

forward purchase bonds of million we if be the The Additionally of reduced of end our $XX an that price quarter, to at 'XX worth able and quarter in million from a of XXXX. we leverage $X.X average with remaining quarter of mentioning the And And million of the cash revenue EBITDA, XXXX, XX of debt during September as $XX.X X% revenue leaves to resulted an the with looking are from open just XXXX the That XXX.XX. It would over flat the projecting of XXXX XX X.XX price the for bonds million. quarter we ratio with since leverage ratio in of net we total the million along of have repurchased our XXX.XXX. fourth bonds. another total $XX.X declining between the in the of adjusted of been our to market of our of be $X.X of as is us at X.XX. we have, September XXXX XXXX debt increase X.XX now fourth improvement

any be increase on of in political to increase also sale disposal projecting of and XXXX, the projecting compared contingent $X.X fair XXXX fourth X%. estimated of flat the expenses and X% we're million X%. would we're of This operating between to XXXX, quarter X% expenses projecting of remarks we million. And between impairments quarter X% Excluding quarter of to between to compensation or prepared X%. we're We're X% and expense Operator? Compared or concludes and our comparing and increase fourth like sale the of based the revenue gains of also to in amortization before quarter now of to revenue projecting expenses XXXX, between to questions. expense, the the changes answer revenue of expense fourth assets, increase $XX.X impact earnings the in consideration, non-GAAP fourth operating depreciation stock and losses value to

Operator

will conducting Our we Thank session. you. question. Kupinski question Capital Please Markets. Noble [Operator from your is time question-and-answer Instructions] with And this proceed be with a at Michael first

Andres Miranda

for Hi, Andres Michael Miranda in filling Kupinski. this is

quarter. First of solid all, congrats on a

great have out here. me did I few guess guys a job. questions if I You help can a you

work companies the first on one from as advertising to shortages, being, The spot or were supply advertising on or particularly impact has issues chain seen advertising. relates any there national it

Evan Masyr

the categories obviously but issues. are supply estate, from really advertising up, recruitment of Yeah, impacting certainly that in is We industries and chain advertising issues are real there are saw events favorable some from chain QX. that advertising down supply some other to way related

David Evans

out where that slowdown getting books seeing book a in publishing there bit printed. in of are little a and inventory are We new books delays the got of area we've are sold

Andres Miranda

due Thank in issues. you. If has company have the has industry? with issues category the ad on us about companies gaming any Many the color advertising for how you talk radio indicated give advertising is Could outdoor you? can gaming the that taken supply the chain out advertising soft issues having from lag you that you're to some this

David Santrella

after recognize or we other now reasons. whether many do yet And advertising to want gone category in been right we not after really business that industry. that strong. gaming that Salem Salem continue to is industry certainly debate a not doing that not. in We are going the our has that's for

Andres Miranda

issues have in with Thanks. question, you the companies seeing any affiliates much talk given for your that the any talent conservative One network on side, more or for other benefit? lift are

David Santrella

you that repeat understood that I'm Can sure question? not I Andres.

Andres Miranda

conservative side? or talk the company your another with for any issues lift given for talent has on network in affiliate that seeing any you the Are benefit? Yeah, had much

Evan Masyr

has is is in have some Salem choices, gubernatorial that Yeah, to some some other The increased our fact about his Elder making business. the is interest that due for which – back to skittish to we affiliates from we're of offer reach news us. marketplace Larry coming affiliates that seeing some them having from in increased the race, in good open out their changes popularity, obviously, are what

Our business. open network for is

we're network what happy on quite happy and that take with any are are Our interested. new hosts we're affiliates to doing,

Andres Miranda

you. Thank

third do not well? quarter begun of have early a companies Could thoughts booked this being advertising you until sense to us as year? Some for year. size year they're any give advertising of the Or next you the political if that that indicated on are raises for the political any seeing advertising see the for have of you have next political

Evan Masyr

seen very kind do I for big be surge political next of a going not year. But but for don't that will of year. We anticipate know strong that next big there's far, be year early surge political I've strong. a orders a of orders, so to been it's

Andres Miranda

cash allocation leverage reducing sort does the to what question. a give has aggressive will Since debt in back Great. back it And give you us color done normal for five front consider M&A competitors? and Could being capital maturities to and in generate great extending some flexibility like times, to last you the on of you more buying if have in one starting deal of of been or the some shares future? the terms roughly flow, the focus company’s more

Evan Masyr

Yeah, years. continue and free that. certainly the made number I’ll that flow of acquisitions cash free be so look our that some capacity continue continue debt flow And We've still to mind We and we've makes say to secured, the to sense. retirement get over out our lower backstop leverage have that down. at one between to Clearly, gives I’d the acquisitions. notes. will do flexibility. enough use we'll But cash even we'll XXXX where us last to continue we'll several never refinancing the generate on hand, the cash revolver, take answer

Andres Miranda

and very again. That's all That I makes That's sense. helpful. you Thank congrats got. much,

Evan Masyr

you. Thank

David Evans

Thanks.

Operator

line comes Lisa with proceed question. Our your Please Research. question with the from Springer Singular next of

Lisa Springer

the elections websites? help And during do you shift Thank that Republican websites traffic traffic to this to your general, you. would strong My when a momentum of see in drive the you in question the see conservative view you on building week, is, side? think performance your Republican do in

David Evans

websites, significant most to traffic our cycle. in The driver things of big political news

increase as there was in August, lift Afghanistan. a So traffic with the early result for big September, There elections week. example, late the earlier this crisis certainly was a of a

of So news depending events. implications of be any surges can drives traffic kind the or short, they always the political nature upon Those very events has longer that cycle higher. be traffic can

Lisa Springer

many have Okay, wondering, land from? profit a was lately. contributor be of for been you quantify good to I your might us remains and and have stations just of land opportunity in what to that can sort how you earnings able sales excess land sales

David Santrella

Lisa to our does continue properties – on our look opportunities, lot at we Salem Yeah, stations. a AM of there's own own radio for

And When continue look There's to few so promising. that nothing identified opportunities. a definitive. know. we course quite will But that we look know of at you others let we've there's

Of course, process in that we of it's asset the sound lose revenue sale. thing sorts generating transactions generating like these about all new great don't the revenue the of money, from land because

for us. other well So have it I'll works let know, let to deals you you out know quite we announce. when we'll

Lisa Springer

final and I than surprises the quarter were the Okay, you my that you positive in quarter though, during top for. wondering, question guiding was had stronger line the were what third for just you came drove that?

Evan Masyr

us. we the expected. Podcast expected general did better. that Network think than mean, much I for Advertising growth divisions did did Salem at we we've than had – I all the had just in better better stronger

end Our We at bit of a gave quarter. digital better we division did the what guidance were than little last expecting.

of a different mixed of all it our say kind across was I'd bag So divisions.

Lisa Springer

good on Okay. a you much, and congratulations very quarter. thank Well,

Evan Masyr

you. Thank

David Santrella

you. Thank

David Evans

you. Thank

Operator

Our proceed Management. from with the [Operator Please Wells next question line your of question. Steven Instructions] comes with Pfeiffer Capital

Steven Pfeiffer

taking Hello, for the everyone. Thanks question.

wanted there. clarify on heard And numbers for the on quarter great the balances to about a had of I here. some over You just I operations debt

been it off I on I’m I numbers the if might line not the the didn't have – hear – clearly. sure here, cut think, call

the there? purchased if the read amount the quarter, the that of as stuff that me did Did approximately think and taken Of the was that's you half please could XXX.X out So tell part repeat price? you debt? please the what debt, old you million addition that said in to exchange? you refinancing you Can the of you of some I new was off during the so debt of

Evan Masyr

the – million at been another average Correct. quarter, an end, to to the bought We during then $X.X did purchase bought $X.X subsequent We back the quarter And million XXX.XX. Steven. XXXX an we've notes XXXX bonds of of of average we price at of price able XXX.XXX.

Steven Pfeiffer

– thought the That's I – sorry. it XXX.XXX, XXX.XX, way says okay.

correct? XXX.XXX its So

Evan Masyr

.XXX.

Steven Pfeiffer

And X.X And the that ’XX. was of before .XXX, of million okay. taken then out the end. X.X quarter balance was

Evan Masyr

That's correct.

Steven Pfeiffer

right. All Thank you very much.

Operator

comes from question? question Group. Rice Richard proceed the our Salem And of Please line your with Media next with

Richard Rice

This on question for guys. your congratulations quarter. third Again, you

going expand the one And line? does media bottom Are if content percentage guys question. overall to quick really, on Just SalemNow? your contribute so, to you that what

Evan Masyr

SalemNow. SalemNow, well. Yeah, when Salem what great we it we new acquire And similar well. And, have with think do do for to content we will it I when Regnery continue hits will don't, as and won't see exceptionally to for

In contribution overall have even now. of to I right its number don't terms a the bottom line,

David Santrella

it's I say to I mean, performance. material wouldn't relatively – a big overall insignificant, it's Yeah, our but driver not

Richard Rice

for all you it. Appreciate thank Okay, that.

Operator

And I'll have session. call turn the CFO, remarks. Masyr to the end back Evan reached question-and-answer the closing for we over now of

Evan Masyr

you XXXX. Thank we you, call early look our today's the joining forward updating to fourth quarter on everyone, on in progress for and

Operator

today's conference. Thank This you. concludes

Thank for disconnect you this time. You lines your participation. your at may

Salem Media (SALM) 7 Nov 212021 Q3 Earnings call transcript