SALM - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to the Salem Media Group, Incorporated Second Quarter 2022 Conference Call. Please note today’s conference is being recorded. [Operator Instructions] Thank you. At this time, I’d like to turn the conference over to Evan Masyr, Chief Financial Officer.

Evan Masyr

Welcome and thank you all for joining us today for Salem Media Group’s second quarter 2022 earnings call.

you in at website or if can time, at reminder, back dial listen a get any disconnected you www.salemmedia.com. As from our Chief Chief room Officer; on this the the with well. today is David In as me week but David Officer, Operating Santrella, Evans, phone is traveling is Executive

how results are performance just Please undertake differ moment call available David financial company’s anticipated, that, those reported is These phone or to our with the Dave? come information intend the advised on the over Securities statements growth the conference performance. non-GAAP materially our measures Litigation required G, salemmedia.com. new measures including or prepared operator performance, will within potential With made call Regulation the conference to results meaning And once of We portion future defined Act G, opening and be acquisitions. considered EBITDA, on future growth will not do conformity forward-looking potential questions. a contains should disclosure Santrella. now markets, SOI, forward-looking future markets update no for I prospects obligation future that Actual In begin forecasts the remarks. of instruct to you under of forward-looking of or Regulation that the of of the specifically statements the statements, relate call on existing currently EBITDA. to to like and at in Private income also non-GAAP adjusted This from results, to an the operating be plans, may the and financial Investor station done, with turn website accompany would of on statements submit as We we on are indication are this financial from XXXX. of events, based not back Reform information. available to Relations

David Santrella

few thanks Salem’s growth to talk and results XXXX call. a we’ll At today’s a discuss the Evan, on continued of guidance will the financial on the give and to digital. second turn quarter. point, about back all call provide policy. film future brief update, that performance who I’ll in the and dividend Evan more Today, with provide financial third quarter on conclude Thanks, leverage for Mules, and comments detail Salem’s quarter second We’ll the joining success for focusing will M&A

driving few launch associated increased match, performance XXXX. detail increased travel Salem’s Channel, increased Let’s items more the to start in revenue increased expenses the with company’s from a services adjusted Without expenses, I’ll which News XX.X%. There XXXX, EBITDA, the which with $X.X increase the includes total the are X.X%, these costs. of and of XX.X%, expenses XXX(k) increases, expense Compared for call, the up X.X%. in reinstatement QX XXXX only entertainment quarter discuss and would be and of cost the discussion including second professional a overall on of Mules, film later million increased

I division, each to revenue. to on digital of focus want our performance detailed the a into get take we Before minute

company. year. to The revenue total second the of multimedia revenue evolve from XX% second which just includes quarter combined digital over division grew we the XX.X% of revenue from digital broadcast division into digital quarter within revenue, a last as represents plus continue digital the revenue Combined

to segment. our Our will be fastest digital continue is revenue expectation growing

Podcast Surround, broadcast revenue XX.X% was Network. in broadcast the growth driven revenue. quarter each by look division quarter compared been This division’s growing Now of broadcast to last XXXX. SalemNOW, of increased second to within Salem the million. division has XX.X% second the within up and fastest year. Digital the the Salem let’s the in Digital at performance is $X.X Revenue component

I’ve new more streams ministries also over both up ministries. three Block from programming and year. [Audio broadcast existing improved programming increase Our programming from Dip] calls, demand the performed was last revenue Local XX.X% quarter. block Dip] well last mentioned in [Audio earnings traditional the

high to impact continue us national With in quarter. renewal advertising a long-term increased programming, block revenue we Traditional increased our rates X.X% on revenue the advertising expect positive Local in revenue. the spot XX.X%. having X.X%,

still largely political Network to local see continue its revenue revenue. inflation This with [indiscernible]. was advertising pre driven pandemic to up While is concern by spot growth not especially level, X.X%. back has

move worth on whole. political reviewing as divisions I revenue a Before

QX than we Dip] was For had had year. [Audio had of than was of is the $X,XXX quarter, QX million The $X.X in million. XXXX in which we more in only we million last $X.X $XXX,XXX to QX compared revenue XXXX

Salem to programmatic digital our revenue. subscription growth our X.X% Townhall revenue strong switch meaningful Media, at had XXXX. of acquisitions X.X% conservative in where church increase and at due due in QX service. news VIP and me revenue increased to business opinion [Audio websites of Let year. demand national Dip] growth products [Audio from division its had in both made advertising to last Revenue The its Dip] direct XX.X%

financial Finally, market and stock a concerns. weakness due decline we XX.X% recession had in publications revenue at to

Regnery no do really perform corrupted Ted the Our at in that during Cruz as book by scheduled for QX last decline before in being two in for just the the XXXX XX.X% publishing scheduled said significant division, is We the very due and heavily book quarter. expect D’Souza. we a book Mules release by second back titles that quarter. have titles revenue well, to XXXX released loaded. the Dinesh We principal decrease decrease was to The had reason publishing in revenue an for XX.X%

to X.X% and recession. due economy Additionally services down concerns inflation was author about Salem author the

XX, for X, closed quarter Financial Retirement $X.X continue from site. websites at owns We portion in Eagle Turning of May M&A $XXX,XXX. stations Media, KBJD-AM discussion during acquired site million, small had on the nine sale broadcast for acres to activity. acquisition KRKS-AM June which operating On of will a that Salem the the of both six the retirement one to the on land and Denver area of

So now that let’s talk I Mules about XXXX mentioned earlier.

assets, from with first into investor experienced the executive was Moody broadcast of $X.X to Salem we the financial overall film million company’s the producer ever our digital pleased Mules. and In solid our sole LLC. and investment from results the XXXX equally we performance are Standalone addition

$X.X that the On certain had media private then Based the SalemNOW was returned independent I almost last and buzz, download the we on on for on theaters investment DVD approximately purchase earnings call, the immediately and screenings initial Not the film mentioned carry the advertising fees weeks. Rumble. to get the the $XXX,XXX and from release, only chains earned our SalemNOW, after few movie movie platform a film decided the the It interest on income generated success LLC revenue and theater investment. and country. distribution did of generated available we million throughout at for

an which at understatement. XX, will those income in And opportunities would Finally, Tom indeed be success, few earned additional the million recognize think is We have we on have XX. Based film Salem the distributor of To performance worth through XXXX our best discussions. that been $X.X venture. a that that scheduled is do August of Mules. from be we unconsolidated success joint released audience. we select invest some to is fit June looking financial is the upcoming other already this film an in has say are film the II, It the on mentioning films Uncle Salem to of same level in exclusive at however

the make movie it to One film, on film. not in we market While intend as we Mules. the Salem possible, as the to invested economics for has point distributing given XXXX final the get successful

the non-broadcast revenue the Salem sources. factor million approximately has This X.XX came from become multimedia profit you into share revenues we further If demonstrates the of XX% truly quarter a of our company. in earned how

let’s Finally, and policy. dividend Salem’s leverage discuss

the and company some of buy market. Salem’s flow in sufficient XXXX a had to operations additional As back strong open cash result the sales, notes asset

we the adjusted The During million brought in quarter, bonds with at to a X.XX%. debt reduction ratio coupled of growth $XX leverage XX.X% slight a our in down EBITDA repurchased discount.

been of cash ratio the you If June improvement X.XX%, leverage XX, years. it’s as be more XX a hand, the lowest on in in significant and the factor would than

improving under getting Board to leverage to shareholders back the asked investors pandemic, through company the control, even capital recognizing have returning start dividends. not Since about the that plans the subject and its get ratio been sheet too dividends, balance high. leverage has has to discussed has of our Salem’s As the been of

to and Board makes in X.X, in debate can in dividends. are quarterly Of that, terms If on therefore is Evan to that decisions the details able X.XX. more for will leverage the for the quarter’s investors of we’ll times, quarterly on has XXXX start It Fiction with I’ll $XXX,XXX is know. the limiting million outstanding, Film below paying two pay X.X worth additional under to the the [ph] bond Salem guidance up back up pay below that likely leverage is let However, issues is the payment merits. if dividends. notes the the turn venture dividends to now the And to Obviously, Salem call of is resume dividends, to any when four under Board QX. the leverage reviewing performance

Evan Masyr

Thank you, Dave.

profit million, adjusted share X.X% second to increased close increased the EBITDA still getting which basis million. of outlined. how recurring are and XX.X% mentioning levels. to revenue I Operating to million revenue from XXXX the a XX.X% Mules For X.XX Dave know peers on includes broadcast quarter, our $XX.X XXXX $XX.X million to some expenses total $XX.X they’re as increased

include of increased is revenue of broadcast and XX% to of broadcast and second operating the Salem performance of foundational to from decrease this station revenue adjusted resulting strategic our year, our increased net XX million, are Salem’s X.X% For broadcast revenue stations X.X% increased million increased XX.X% radio increased quarter. XX.X% [Ph] review programmed broadcast net to X.X% decreased $XX basis, our same the operating station XX.X% Compared XX.X%. operations to broadcast in $XX XXXX, XX $XX.X Comparing for revenue station us, and million $XX.X consecutive of income XXXX same contributed These XX quarter the broadcast ahead in I to revenue EBITDA network in talk revenue of of where representing X.X%. our stations $XX.X results formats. On and million. total a a last of of increased XX.X% net the corresponding will was revenue. stations million radio fourth and SOI revenue And quarter. to format. these total briefly teaching expenses quarter

to XX increase of XX% for total of increased quarter. $XX.X revenue represents to broadcast our of million $X.X the total million of in from broadcast Media and contemporary revenue of revenue. XX.X% broadcast represents to stations quarter the revenue quarter. Christian XX% the National decreased total for the and of news X% contributed increased revenue. Revenue from our talk represents for and [indiscernible] represents increased Revenue XX.X% the Overall, million revenue. XX% digital XX% and had broadcast XX Network these Our contributed XX.X% stations stations $X.X million an and revenue music division XX% revenue. Broadcast revenue increased Publishing total revenue. total Digital X.X% X.X%

XX, Dave of June XXXX million $XXX.X Salem’s $XXX.X debt as defined virtually nothing of Salem Notes. leverage of total As was million $XX.X ABL X% X% agreements. revolver. ratio, its on credit was of as up drawn notes $XX X.XX% by million million X.XX XXXX and and had mentioned, The made

X% contingent fair total quarter of projecting expense of This our expense changes between prepared before consideration, expense, Looking of revenue projecting assets, the disposal of was for quarter is XXXX million. was remarks. losses now the Salem estimated third forward operating million. also and of to like would revenue any Salem answer expenses amortization questions. to XX% Total X% between third $XX.X third to on earnout increase of Operator? impairments, we the to in gains compared value compensation stock-based increase And and the the non-GAAP expenses $XX.X operating XX% quarter or concludes XXXX. depreciation and sale XXXX, from

Operator

Capital NOBLE Your Instructions] from of with comes line the [Operator Michael Markets. question first Kupinski

Michael Kupinski

Thank good afternoon, you, and everyone.

on your spectacular. congratulations all, of quarter, first So just

out than wondering just then a business revenue if of quarter QX the to you far The there quarter. how was you’re the So the quarter there maybe and stop better address a than on second into is is have growth the let’s about your wondering broadcast far is And side, national anyone of some a that the talk of continuing QX. some us third It about in just go I X% has many performed the bit about was of meters seems that X% spot. the also national I one, couple. components I better Number what would that little third in and little other questions. as business network the that question particularly up on up talk color if you give else, bit could expecting those you can call like and local

David Santrella

So, seeing him believe QX. little tack will then up Michael you even in away Mules, and on XXXX something digital, when Evan, political will four really right you’re might II, this is a is it’ll Certainly big Dip] of of – drive out. heat be to I weeks. strong then that more I continue it think And to books QX What you’ll [Audio and that bit. component we’ve we’ve mentioned, of fast. the And release kind to Uncle movie But We of Tom drivers six the continues it bulk within two. coming certainly in new some that’s in getting QX plus XX, as revenue revenue, we very got August real like of revenue. think are is but that will the course, XX% ever a first

think the And as well. we then quarter drivers. will of add Dip] that’s so [Audio And to the that revenue what

Now there, it. rest the lot the go and forget can year to I of a you next

Michael Kupinski

can just you’re on maybe I’m can your mean, general, of the update obviously network little the the Well, you outside thoughts you’re also, of if I a to on bit, place us us kind give what ton you for about just And national of well political cycle. pacing your and in a hearing? year. business prior wondering political,

Just update year? wondering maybe what us if you are the can thoughts for

David Santrella

Yes.

network example, doing would And as – What who’s is also as to it’s as XXX-degree Salem business a host, driven Channel network podcast. doing you’ve We’ve doing on be we think they got deals. well. call got They’re really News They might well. program. look a do our I So be the a we may more.

And of what ecosystem I their think Salem’s response into so overall. vehicles positive advertising that’s that. more base they’re we’re from seeing helping within kind trying we’re incorporate to media more doing. And from And into

never just political, right such a has as In and is intense terms it it’s the as interesting – now. of political and environment heated as been

programs candidates interest a just have and And managers. of that so I politically think, – are the in have to investors political very others like their interest content us radio now, them, lot campaign particular right and a

Michael Kupinski

a Got is things you. extraordinary wondering, quarter, for the things any pushed you’re about? what that us expenses terms of then And that expense and the little the for or kind your just in in terms going growth [indiscernible] facing quarter, strong, was of any give particular the forward third are that into there on quarter, items seems of I

David Santrella

little than I think hope that better first conservative of all, the a performs guidance company that we that is the guidance. and

us quarter, continued things expenses in the again the the the will in investment affect travel to reinstitution Now, Channel expenses of match, said, expecting entertainment issues of News and the also QX in like that that marketing quarter. being third to XXX(k) increase spend led the some Salem the increased elevated third

So the expenses those a that will drivers are big QX. real in couple drive of

Michael Kupinski

quarter, trying fourth of or be marketing moderate bit? into expenses So And of would you because in will how related could what call to to I I’m release when into we your quarter? just of the a really increased flavor little What that, you the the film, get the is – much those quarter is distribution that fourth expect? expect going is of continuing fourth the of just would time suppose, the would I And really third a right? quarter somewhat are right? one spend, your guess, what –

David Santrella

this Yes. match The items started fourth that we XXX(k) continues again in in of the the quarter, first the year.

that’ll Travel quarters. will of hit four the as and hit year So most well. all likely entertainment

revenue, we the invest they to The division that’s continuing great and in I to continued run with talent Salem thing We investment. and in we’re a Channel. very the other it’s think to worth least recently that opportunity News little hired there investment but big is there start item there’s at someone think a

of remainder of think So some I that year. see you’ll through the the persist

Michael Kupinski

others I’ll Okay. questions. you let ask much. Thank so

David Santrella

Michael. Thanks,

Operator

the with Edward of Your from comes Hutton. next Riley question line EF

Edward Riley

Media Thanks that my Good Digital from saw some for really and afternoon, now? guys. taking right the wondering segment Noticed that what margin question. sequentially platform XXXX, just is QX driving

David Santrella

owned of doing frankly, and our digital You better the a margins increased we’re operated assets. selling quite as see job,

campaign So you third right. pay that, when something click sell like whether a market, party it’s per or

Bing you to – good own money. keep or or digital got have your when whomever. or instance, of pay or and lot campaign a cost owned own you you an that’s campaign You a your operated assets, Google e-mail within because of that for more database sold sell your But

So more digital marketing our of that helps of our taken in margins. We’ve house. the fulfillment

as sales only helping Podcast many we driving And Plus agencies the driving also sellers are revenue sales associated Salem that. our helps that right those of and So have markets which Network really Those SalemNOW station marketing. have margins then and around, that clusters. drive that advertising are growth is digital that now our digital digital of which are radio course selling with that’s all and of what’s well. that’s

Edward Riley

Would Got it you. the be It sounds into it’s like maybe fair project sustainable. pretty to future?

David Santrella

margins? current the project saying You’re

Edward Riley

Correct.

David Santrella

Yes, that’s I reasonable. think

Edward Riley

Okay, great.

on in the And what’s national? increase some XX% color more driving

David Santrella

political huge so that. Yes, political – part a Well, so is political in of there.

Edward Riley

in impact ex-political? any have guys you Do

Evan Masyr

mentioned other. overall, of give quarter. the them you me and the numbers obviously for political Let some includes network Dave

well. Michael potentially compared political For almost of ask quarter, interesting last political the about $X.X then was But $XXX,XXX. to as question year the And million also

$X ever $X.X biggest If is year And million. last political $X.X you was XXXX, year-to-date, million, million. basically our under political was look year

that. quite ahead pacing of actually we’re So

ex me, spot that’s [Audio been any numbers national Dip]. don’t in So front political but have of certainly

Edward Riley

revenues of fourth mentioned in the excited released year third then you. half side, that and about? Got of quarter titles in And you there’s expected you’re on the the be be Publishing to to the producing sort some mentioned that back releases. being quarter Any going

Evan Masyr

David, because I don’t line that. I know if on respond you’re have. the you may you to know

David Santrella

cycle be viable next and but is series big Dinesh the with in QX That’s have going commentaries. [Audio Dip] most D’Souza Dennis probably The as not we Prager Ted as in to Cruz. of his Yes. biggest both QX where the

Edward Riley

I’m then, you And you. Got XXXX benefit Okay. about from thus far? Mules have that received total guys curious the

David Santrella

you look that advertising they million. in the a came that interest take with about the if and fact Well, with had between at we the the we us $XXX,XXX income did got $X.X

return So the $X.X basically you’re $X.X million addition million. to of talking in our

So think that be understored success from invested that I the $X.X $X.X we would to back said Dave as – say when understatement we the success million, million. an safe got additional certainly

Edward Riley

Okay, guys. great. me That’s for it Congrats.

David Santrella

further call Officer no I turn Executive At you. will closing over Chief now for questions. time, are Santrella, to this Thank any David there the remarks.

David Santrella

call. closing to Well, for Thanks look we’ll of and I to have no talking questions, being Great next quarter. you the remarks. forward everybody part

Operator

for you participating. Thank

this disconnect at may time. You

Salem Media (SALM) 7 Aug 222022 Q2 Earnings call transcript