SALM - Earnings call 3 2023 | Salem Media Group, Inc.

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Operator

Good day, everyone, and welcome to the Salem Media Group Third Quarter 2023 Earnings Call. Today's call is being recorded.

It is now my pleasure to turn the call over to Evan Masyr, Chief Financial Officer. Please go ahead.

Evan Masyr

Welcome, and thank you for joining us today for Salem Media Group's Third Quarter 2023 Earnings Call.

Santrella, you in at website Officer. or me are if can time, at reminder, and today back Officer; dial listen David a get Chief any disconnected you www.salemmedia.com. With David As Evans, Executive Operating Chief from our

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

not to performance, the an relate performance. plans, considered growth made forward-looking reported potential of anticipated, on growth update indication those and no from should Litigation are this future results, information. and currently statements Please or future do events, acquisitions. Reform of based forward-looking be We markets, advised prospects markets available forward-looking from that opening financial Actual that statements obligation statements results of the call potential as Private future our forecasts Act undertake of future performance may the to are intend new results materially not the on or for These defined existing including of statements, be XXXX. under Securities differ

Investor meaning This adjusted of or non-GAAP non-GAAP measures conference to of portion disclosure the with measures our required operating Relations accompany In financial of salemmedia.com. call Regulation station financial Regulation available conformity SOI, within also specifically EBITDA. the G, website and the on contains income EBITDA at G, is information

turn Santrella. David? now like David to I call the to over will

David Santrella

talk performance prepared that, back details fourth Salem's remarks to review on the turn update the quarter. quarter about on afternoon on webcast. call of I'll some quarter, in debt in performance My to and asset additional and Evan third the a give good and for call third an Evan, After guidance sales. on the provide Thanks, the focus the on and to Salem's financial everyone will the

our peers, challenges many and of rates. the As economy interest heard industry our elevated with face continues you've from to

ad In fact, we're S&P has feeling it said that persistent well. we as in recession, and a are

For X.X% accrual though improved and X.X% declined $X.X the last settlement legal million. X.X%, increased EBITDA just Expenses X.X% third quarter, excluding due year's total of political. to revenue adjusted only

outlined With cost X and is last we've remain cuts operating cash in focused calls, our the improving, free on we efficiencies. flow

year. broadcast the revenue now $XXX,XXX third continues National quarter the spot Salem's political of in revenue quarter, compared the spot of to revenue only I'll due each was down overall comps break in for political In declined we the for be In the quarter biggest division, revenue decline Broadcast this million. of division. or X.X% as down was million for recession. to $X.X the to X.X% the performance $X.X third Overall, and XX.X% down recorded XXXX, largely in and advertising impact local was Spot the down X.X%. spot advertising total revenue reason ad

of X.X% Network recession increase down revenue out in after the in division XX.X%. advertising stalled Digital QX. down to the the Broadcast only a quarter X.X% growth within with revenue has revenue was slight

the a digital, expect we National all However, double-digit return in in growth division including QX. to Digital

programming third As quarter. division down Broadcast division our the digital digital represent revenue, a digital flat, national revenue. total in the XX.X% revenue reminder, X.X% total and both Block of was in revenue essentially

programming Salem As total unique revenue. XX% and of model. you our up and XX% an of our know, is for makes broadcast Block to this business our revenue important category

Gateway Bible QX revenue to severance of severance investments digital XXXX in of due acquisition. associated to expenses from the is change quarter. the offset Broadcast were national X% the to increased Gilder George up up place XXXX. at Gilder increased and the newsletter in the costs division, by operating market, Miami algorithm News the that costs This was Digital newsletters expense partially due Facebook Channel in were Salem investment acquired the the and X.X% nonrenewal beginning expenses third and due acquisition. representation which X.X% declined In and the took agreement and revenue with recent George

Revenue from decreased the due third publishing our book publishing to light schedule. XX.X% a quarter in

the Additionally, to the the softness variable down in has our declines business in due Expenses overall caused economy business. costs. primarily were Publishing in some self-publishing XX%

lot want close to sales call, Sacramento for mentioned consent entered received on now from an FCC We've sale activity. that into our very last $X.X and have to asset you on We've the I and that report. KSAC-FM to update million. I we been busy initial next the in On agreement to sell a expect month.

sale on week, studio office Carolina building, of the Greenville, X tower In FM sale. we X that South the we X, still the last in site stations November of $X.X own on for for market, closed are and translators, listed million. which radio Just all

an to equal beginning which Church Salem Products paid of X million agreement for million installments be into million $XX On remaining will closing. at the of first The anniversary be $XX.X September closing. entered in paid sell XX, on $X.X we will the

agreement Salem a million minimum that Additionally, for the million for includes will multiyear into Salem will agreement, a equity we $XX separate a for that buyer, LLC. price will put upon advertise Glu advertising receive guarantees $XX equity. The the whereby option closing, enter of equity

are soon this closing on possible. as as transaction We working

to Tampa, On radio September million. into station and $X.X we X, entered Florida a for in WTWD-AM translator an sell agreement

is million. and On to this an month. getting late Sarasota, The sale the expect upon to We we the to in October next agreement we by end close XX, closing property for in sell land into entered rezoned of conditional close expect XXXX. the Florida $X.X

these revolver. year. sales proceeds The fully off current February expires to X from the We'll revolver on use asset pay the next of

expect year. working the by the have We revolver of are currently a in to it on and end new place

of call the XXXX. With quarter guidance that, for last the and on to the back I'll turn performance details Evan more quarter's for

Evan Masyr

Dave. Thank you,

X.X% comps. million, recurring Broadcast basis $XX.X to to $X.X in operating increased XX.X%. a on EBITDA of to decreased Operating X.X% and a total and expenses $XX.X X.X% adjusted last income increased net For the million, million, decreased decrease of to operating to to third X.X% Compared increased quarter, to million station largely million. year, brought expenses $XX.X revenue million, $XX resulting $X.X due revenue political

On XX.X% broadcast a XXX broadcast and revenue and basis, stations net of same-station broadcast million. revenue. decreased our decreased $XX.X from to SOI our same-station $X.X X.X% include to XX operations net radio XX.X% network represents of and results million, These revenue

September $XX.X the on million total As million, notes composed XXXX, and X.XXX% was asset-based $XXX.X XXXX of $XXX.X outstanding facility. XX, of debt million of loan

we the ABL. in default on quarter, are on As I discussed our call last

November has availability next working has and minimum on million. moved Through year different rate the now been XX, been million decreased August now Fargo The Wells our The million. most from X. have of signed with interest excess lender, and August amount We notional X the is increased amendments, the $XX $X recently on X, March have XX these revolver been forbearance X. maturity required to to September has and February been $XX X from up agreements

company default. the through this work jointly The continuing to bank and are

at the too XX lender and working end should As we're revolver ratio September clearly on a by that was The ABL new leverage new place in of have with XX.X%, Dave the high. year. currently a mentioned,

we mention entered have heard Dave You for into of agreements. sales all which the asset

other be makes our We assets where are proceeds evaluate portfolio We'll any sense. asset paying with down identify monetization to continuing we via sale aggressively get. to debt

Additionally, Channel and financial our from therefore, start-up News in losses results cluster X Salem have leverage. the businesses, Miami our and negatively impacted

over the improved provide performance expect next to We these of years. couple

decline to total forward, total Looking the from X% revenue for quarter X% million. of XXXX, quarter fourth revenue fourth between $XX.X is Salem and of projecting 'XX

in assumes fourth quarter. Church the of closing sale Now this of guidance Salem the pending the Products

in decrease expense, and compared of depreciation fourth earn-out Salem compensation political be expenses between contingent the of is on non-GAAP or settlement, gains pending XXXX consideration. XXXX the the financial million. of sale, X% $XX.X to revenue Excluding sale to between assets, asset disposal expense changes the flat to the would and from revenue expenses be also value estimated the projecting operating X% stock-based fair or settlement of losses decline of the a and operating Impairments, projecting and before legal expense amortization the quarter impact we total results X%. in

impact asset the projected are between and X% expenses a of the increase to sales, decrease an be Excluding of pending X%. of

like with And remarks, would and this back to questions. now any I'll Lisa? that. over we us turn it answer help our concludes prepared Lisa to to

Operator

Marsh [Operator Singular Instructions] first We'll question from take our Research. David with

David Marsh

you assets quite these quantify sales, to the EBITDA pending congrats I have I I few them. the probably of would but of is, all the able contribution outset, are and guess guess, you all collectively questions question sell? at biggest guys the first on a I the and on to revenue of say agreed

Evan Masyr

is address that. first not can good sales, Evans? the with to the that David land really a So contribution revenue Salem them. off, news is Church there Products, David

David Evans

Yes, product I'm be now, Yes. Greenville I the with sale the those I Evan actually to don't have in of of sale? London may impact Salem those. don't able impact have the handy. numbers so combine the right Church

Evan Masyr

to all would $X $X EBITDA you're David, million between looking million say, I Yes. to somewhere of these look if go I that at away. were of that transactions

David Marsh

Okay.

like probably talk land revenue as Okay. -- just a the just associated you the with particular at in mentioned, Could And there? process? That's And about no it. real zoning sale for resolution look And rezoning? taxes. all timing there's how confident the in It's probably that? does favorable you that what effect. on of then that you because estate And expense that what's are that

David Santrella

if that And have this with were didn't this. I Yes. that to GC, of get We're have -- you aware we on degree working in land the of might is wish earnings wouldn't some confidence what some of be you details us Florida sales working rezoning ability in the process. all after But on are -- We're is I we we on are with, our with to experts with call in more of intimately the to our we in deal. tell working -- call that who close helping Florida. put particularly can able back

Evan Masyr

buyer parcel. an The owns adjacent

next we the in Dave that that prepared so of the very expect late rezoning confident And take close place. year. remarks, to mentioned like will feel kind And we

a So time-consuming process. it is

that rezoned. that not we the something between confident now of about feel end it's getting like year, happen this but So do and will

David Marsh

more look it. of recent parcel any land of on it. well Is had side? taking you as And a the a there the as Miami, acquired are guys Got believe in I as do hanging are you acquisitions, in And valuers parcel? that as you in guys that estate interest still that Got real indications at some well. recent terms around long

Evan Masyr

for land looking we print the parcels diplex either say if -- an another or a at a value we're would and all reasonable that to somewhere they're I opportunity at we that Yes, move if own location there's sell have.

So our Certainly, the Miami looking with of acquired, in we at portfolio. properties that the we're recently along rest

David Marsh

just Sure. And tie the sense. we current then just lastly, Evan, if up could on Makes facility. just

so a guys refinancing us bit the what to means? facility. there's give an have sounds point this if guys mean at signed of trading? the towards I forbearance still that and you the you with detail mean a the -- in Could So number you're on And of pretty impact potential still more around problem a kind all like you I forbearing just equity little it at of briskly are What a agreements, moving -- default.

Evan Masyr

Yes.

their pretty X the trying we where under have issues another getting worked soon. new as And mean, credit we've Fargo, navigate forward and They as have. where Wells here really, rights every this with waiving to facility this. think place. really of with lender refinanced some kind reevaluating things: are month, looking accommodating the So of far They're default. us forbearance, that getting of well with the And to in are been asset I on through we're the we forbearance, with just timing the just temporarily they're sales the we I

through XX. Monday, November So the forbearance current goes

Counsel, some He give of day or forbearance in. land the bit a before date, can put is our more another that in Henderson, General will my place came that just Chris or on and another So little we detail sort. Dave, on expectation agreement rezoning. that either

So I'll moment. hand a it to Chris for

Christopher Henderson

Yes.

current the off from before pre-approval a signed have and sale with what zoning. early the going It's through call and signed it. have agreement to buyer we purchase a residential on walk with we land, they to Sarasota its had the county, the move proposing. We county. on were And we from On effectively

So we're we're we'll rezoning highly able rezoned it get is. doing that confident be the buyer to and the not

anticipate We will do the so to it that addition And in contract. the Buyer signed rezoning will we've closing. close.

As was of year. next December mentioned in

Operator

remarks. over And any turn the at additional back are I'd to Santrella [Operator questions to like or call there closing Instructions] no David further for time.

David Santrella

Okay. the you again. on Well, thanks, Bye. to talk everybody, Thank call. for being We'll you.

Operator

and does presentation. That now today's for Thank you Thank you. you conclude your may disconnect. participation,

Salem Media (SALM) 13 Nov 232023 Q3 Earnings call transcript