TGNA - Earnings call transcript Q1 2019

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Operator

Good day and welcome to the TEGNA First Quarter 2019 Earnings Conference Call. This call is being recorded.

Our speakers for today will be Dave Lougee, President and Chief Executive Officer; and Victoria Harker, Chief Financial Officer. At this time, I would like to turn the call over to John Janedis, Senior Vice President, Capital Markets and Investor Relations. Please go ahead, sir.

John Janedis

you. Thank welcome quarter and webcast. call our to morning earnings first and Good our Lougee TEGNA’s will results. Dave and financial our and Today, CEO, Harker, and President CFO, Victoria performance review the for up open we’ll that, questions. After call the opportunity this release. Hopefully, you’ve to had morning’s review press

yet If of the tegna.com. a release, you seen copy available it’s have at not

in over provided certain measures. Factors the of financial to the differ Before forward-looking the actual our statements like turn our non-GAAP that SEC to that to and cause that, call conference most to release comparable remind our differ. We’ve Investor Dave. them in reconciliations measures may we With outlined those presentation of get portion started, call This this me website. are GAAP measures and results you Relations on I’d also and directly includes filings. let press may webcast includes the

David Lougee

John you, Thank good and everyone. morning,

than eight Quest by as of have synergies. networks we cover cap equity channels into these add basis extremely use very too more portfolio Tribune battleground election XX in an and a and average will We've it including and those are financial strengthening reach is the positioning annual acquisition free of productive stations and of Network shortly, of over-the-air them efficient. states, our $XXX enthusiasm the increased shareholders. includes the we of got about in will the a programming with Iowa Following years and EBITDA and but XX strength These viewing out this They million proven I'd In result a became stations very time and the will revenues M&A fourth eight we acquisition purchase Justice Four a And both to by minority efficient the networks Nexstar stations includes eight strategy UHF be to Big of our of audiences and which as affiliates expand basis, revenues Four each that's I presidential on over to cost and fit to for has Justice June each Pennsylvania continue announced of This announced past Victoria reiterate details acquisition year. want also XXXX. for flow, the the of in continued space and subscription thought Tribune. a markets successful of a will like excellent transaction as quarter further Big our are the of Networks. both key for It's growth, of very portfolio. from XXXX. the quarter tailwind. a been our largest supported the announced well Quest acquisition earlier divested our cash and owners for that on increase this had play their acquisition X%, create these inorganic majority of Nexstar next and local since markets March, and week benefit pure and our of for we multicast because week, and well affiliates will value Earlier begin. this acquisition the TV nearly for that us, but our by networks, being discount only On two-year secular we these record as where the organic first including of the the XX% we stations some comes

XX% in quarter grew reported organic well quarter sales, total the this subscription of Revenue growth by was $XXX highlights financial revenues high-end expectations. as million million for of a X% $XXX quarter. first an on as revenue at Out total of year-over-year our Moving for in the and the now record operations. digital increase driven growth to primarily company to content

calls. end credit to Our fourth predictable such Southeast. that, strong our consent in political spending due supported our That flows overall attractive early subscription next profits. repriced a an large approximately obvious announced between on the existing the while rate NBC agreements. to of one and price in our future not and our And and large growth late stability Related to revenues prior markets markets reasons increases clarity quarter retransmission the of our want anticipate all of XXXX us growth of XXXX I this and and stability of both subscribers, previously our to a want the affiliation year highlight population we business reiterate paid cash have with XX% the year, and us by Adding stable agreements election characteristics, outlined trend to Texas to record give is and that, subscribers. continues I with of footprint that with XXXX for continued and will of level we combined year, year the XXXX portfolio ABC of the as all next and is respectively,

grow thereafter. roughly with half that margin year year two and These importance the create will of continue beginning the cash the to total shareholder value revenues drivers ability time, beginning enhance in XXXX-XXXX flow – will business predictable basis remain our increasing expectations to economic cycle backdrop. account subscription revenue streams Our of and regardless of over high and and as on will political revenues for our

are which late share content in November-February ratings audience markets. large of In age an provide with I'm stations year-over-year key would program our and adults team continues XX% increases creative and being to Daily relevant XX, accomplishment. and half increased again periods, station update news, XX. demographic more XX only proud viewers. recognized than DBL’s our up XX of grow. large live are market the I key our that ratings of Now, Live, Produced like constantly efforts, in our on the morning syndication the is adults producing innovation results in showing to to for in to have Blast for in a significant programming Denver, in local out

a those XX many awards ago, regional efforts. innovation weeks were awards company byproduct and Murrow media XX of with Edward in disciplined R. America than more Just content were couple honored we our any a of direct

state country In than prestigious Cronkite Again, addition, our also multi-part in four Walter special series awarded, KING Peabody news in Class. Political the Seattle in Washington and Back organization of the education TEGNA any won were investigative ongoing awarded of for Journalism. stations were a Awards the for more station Award Excellence called other in

one BOMBER on as call digital Studios, unsolved video in VAULT’s a called Justice across archive that audio debuted it. reserve IT, we the like series initiative the programming of that content. And in podcast capitalize Austin, strong number organizations investigative VAULT launched assets – Texas news of was and own portfolio month third last leveraging weeks on have local crimes. Network. politics We to stations genre growing. We of for a of To an resonate purchased March recently from and And unparalleled and first unique to debuted iTunes. A are the is podcast of continues these I’d archive archive with partly country and interestingly news the to deep why multiple our assets the solve of audiences of most leveraging this on listened that's station these platforms. and archive

successful these and strategic will on will be initiative archive more closed exclusive requirements. Looking allow our financial capitalize to we’ve today the plan year and we've forward, Returning on of Network acquisition that there which million opportunities us of assets new had M&A, announced than to busy $XXX that in business and attractive VAULT the a Justice fit or assets.

noted recent expect XXXX, a we cash in two-year XX% revenue. the acquisitions further guidance. basis And that XX% we As be support flow last XXXX our on to of to quarter,

on that transaction how our and M&A about benefit will discipline Additionally, of by debt along times XXXX, XX the below examples times the end shareholders. acquisitions following our to our close prime target leverage pay are of of KWES Nexstar down fit further to with we to four a of the any number strategy and M&A. purchases recent the the process and We've of absent we spoken purchase accretive return expect divestitures of WTOL we this

strategy. Nexstar the stable with provided will XX.X% execution the made over Going the a discounted subscription of divestitures, on progress this are we while forward, it's worth a cap FCC raise given everyone still on cap a – reminding lot we await still have to pleased In the closing, cap discounts whether following by and in this decision quarter M&A under we this we've from at the the place specifically basis. UHF be room growth the of revenue acquisition on

continue Our consistent to now and expanded to call political mix support footprint, pass Victoria. favorable I’ll over revenues, innovations And differentiate and subscription us growth. our and geographic the of Thank you. content

Victoria Harker

Thanks, morning, Thanks Dave, us. and for good joining everyone.

of the you remarks, allocation my the inorganic we’re I'll on financial Dave cover about mentioned, going As In well plans and growth as well initiatives update forward. quarter. we’ve capital so organic as both this excited executed expected on both impacts our

our just consolidated financial cover special a items I'd like review to results, with Before you. I few

perspective, to you reflected double-digit provide an strong the items million operating $X real by and during operational gain include on capital million of $XX these of related related sale like I'd expenses both first of net reimbursements market context. estate primarily revenue Premion included to our strong also fees. spectrum a growth our and an For give some sale color transaction the in offset in million update Non-operating interest the demand quarter. to from reduced million raise. $X $X to quarter, repacking From income in is which remaining partially Premion

properties been this with Our demand. to have strengthens and keep platforms up

in issued the I'm system systems in revenue to issue and issue first relating quarter our call, by million. is earnings first impacted $XX campaigns delivered specific quarter expected. to anticipated say we XXXX last cash the we as during $XX us quarter fourth pleased the refunds which were behind As million

quarter a on are our TEGNA’s in basis provide non-GAAP results. that financial results. insight Now operations comments onto consolidated drivers performance the my Keep financial of clear the mind operational to into on first continuing of today from most focused

and all prior period press You'll reported in release. our of data our comparatives find

at guidance basis year-over-year our the is the revenue Now first up quarter was high reported of for X% which end range. Total on our company results. a for

expectations. of perspective, you’ve political From X% million subscription advertising tax declined revenue advertising advertising end revenue the from Super last ran last is year-over-year revenue three cyclical during NBC the services adjusted to Notably $XX largely As impacts year's in million. $XX constant was by million $XX perspective, year-over-year Bowl of our at and and an due revenue was and nearly revenue $X absence stations a when million revenue of Olympics which from driven in grew which up incremental XX seen flat release, of our excluding Olympics same revenue marketing Total revenue Bowl, this last and these total till the year. also quarter year. for items, high Super from

trend. further in performance such and as and categories banking the home this Bowl Now improvement. reflecting category on I’ll and auto those professional fourth quarter, up including Again revenue provide education the in adjusted macro were color were categories services, for several some trends specific impact, Olympics quarter sectors. lower Super Other

to trends our be mentioned, Dave As subscriber solid. continue also growth

produces As we've flows, which clear revenue stream margin high stable the was cash like visibility. discussed forecasting before annuity

revenue confident in of remain we revenue for XXXX of our another mid-teens guidance As healthy percent year. year expect result, growth a subscription increase and previous the in

now expenses X% driven GAAP were primarily, higher expenses, on basis higher X% our programming this quarter a expected by Moving fees. or non-GAAP, higher as operating to or

networks. these reminder to a reverse fees As compensation include paid

expenses programming costs, higher flat. Excluding were

non-GAAP expense managing ongoing $XX year, from first During $X our business. efforts quarter to our the nearly the cost corporate down reflecting million streamline million, was last of

strong firepower, a to expense the line $X.X in sheet corporate free times. during million in quarter incorporated two-year balance for $XX revenues range flow, line We XX% with result a the with with million, producing of a leverage commitment projections fully net debt $XXX generated was in a XX% million quarter EBITDA that Justice reduced a guidance X by of roughly in the and $XXX ongoing and XX%. we cash our solid As to growing billion of Also to the margin. quarter, approximately our of excluding XX%

and saw continues us As new both initiatives and again flows to to products finding cash in our the acquisitions. of invest you strength quarter, to new de-lever allow this while

stations and Now we’ve being and the divested more Dave a turning – acquisitions of Quest announced to Tribune Nexstar network, XX year, announced this noted, week M&A, already Justice than$XXX earlier as including by earlier and this multicast this Nexstar.

X.X additional announced the in As purchase becoming this eight pure largest synergies, of with contractual $XXX XX a March the price to since providing in represents including after rate acquisition including of XXXX-XXXX reminder, savings. [Indiscernible] the on us million acquired XXXX, run retrance mechanical benefit XX% reflects multiple June times play times a multiple when tax transactions The This are XX, of single markets. X.X rate. stations of EBITDA more which equates than to

We is XXXX funded facility. use the $X.X and quarter expect under third of the billion largely the transaction to cash in or borrowing for of close credit undrawn available and being

in Beyond of them do this, the Quest with cash not TEGNA million. XX% currently a million Justice own, networks valuing will that pay approximately approximately $XX $XX at and we

all following summary, fit in our that their in consolidate we value the EPS free While channel the and results operating cash reflect fully financial the previously our of in equity, stake immediately. line accretive results multicast of the of both both nearly will M&A perfectly of financial these the financial below strategic cornerstones close strategy, In P&L. flow acquisitions are our profile the our captured at

in part of produce of margins free range cash flow portfolio. base stations once and the All as the our have our acquired business, same strong will

guidance. second and turning Now XXXX to quarter year full

reminder, later revenue million political a the quarter that issue. adjusted in to quarter As last $XX and Premion advertising the out of booked that year $X fourth approximately originally but second quarter was due systems million included of in of

we upper million of to revenue basis, increase Excluding mid-single to political total revenue On Premion and end quarter growth digits. the adjustment, second low at reported the be expected is a single revenue $X digits. expect

Key our expenses, base metrics digits second full-year increase of terms for expense. the XXXX guidance expect down business unchanged. we in In quarter to excluding mid-single a for remain slightly programming

of subscription reminder, full press IR the NCPD This up done XX% based by be with $XXX up additional can end $XX million of mid-teens in in of year subs expense million to to highlights projected renewal year in website. year, in revenue also full be an amortization the range our approximately our million, repricing our $XXX timing here range As of year on XXXX. to and the interest some approximately for by next renewal, full in the are the end, year which that corporate XX% of to depreciation $XX of on be release and paying XX% of expected $XX expense year million, million million. $XX percent a Full for is results trends

which was be tax new We also non-recurring was $XX expect to recurring million in rate approximately is in our repacking, capital and which expenditures about that in million between including the $XX in the and for a channel million and CapEx million $XX $XX relocation effective mandatory includes million, XX%. $XX quarter of to completed headquarters expected Houston first facility XX%, February. The year completed projects

plan we new as the no from previously additional disclosed, until this, repurchases funding Beyond we acquisitions. de-lever share

free M&A range comments the XX% project Building of XX% on balances and to XXXX -year follows desire framework accretive of basis revenue profile XXXX of disciplined flow to the strategic, a TEGNA our XXXX revenue down for Dave's two environment, XX% this XXXX. to be of capital as regarding acquisitions. enhance on all and through growth result allocation our a that XX% for and we in a cash percent to As a current

strong medium to which through return growth focus balance are allocate Capital to long-term the equity a consistently maximizing offer to and commitment our decisions our continue dividends. capital we driven shareholder allocation to terms those returns. of by and shareholders We highest options value sheet, and capital on organic appreciation

are we for the actively fit processes continue us. earlier, in for M&A noted to Dave that participate assets As

our We under And capacity further. execute acquisitions even recent on have with strategy the current our regulatory to framework. ample

confidence our creating historically demonstrated acquired as for and to flow organic disciplined our have first We We innovative, demonstrate can progress that are on significant strengthening initiatives both that we summary, drive firepower strategic shareholder and synergies well incremental from our strategy. value. results well reaffirming as focused diversifying long-term the assets cash our in laser we remain revenue our as significant In and and as fund do investors acquisitions. streams, making quarter and XXXX outlook have

and continued enhance serves of cyclical value. As profitable less growth and ability shareholder a producing to our only result to create cash businesses highly the flow

that, the like We ahead. are very excited to With about questions. I’d opportunities it up to open Operator?

Operator

[Operator Instructions] we'll today Ryvicker And with our question from first hear Marci Research. Wolfe

Unidentified Conference Call Participant

what two Seth recently share your a questions color raise is view The whether on regulatory marketplace. front. cap is also ownership on of timeline maybe the This Hi. just in takeaways you. I process national the Can the DOJ on had for filling in some – next the TV and will Marci. of of cap your into workshop the on event hosted you FCC the [ph] the this definition Thank and ad terms year? the national

David Lougee

Thank you. Good morning Seth.

last to Facebook the Department Justice Comcast, benefit the just Sales for credit for everybody's referencing that a quite the marketplace yeah, is panel while from the of definition being to the executive of video NAB to a by So General it's held Friday and -- specifically Head the representatives the their were help it continue marketplace. on to fact -- myself, of and well-intentioned panel for outdated and are the the be a panel the of was actual stage reality a video broadcasters driven Counsel the on

the to view. was of the panel general of Division So panel unanimous an Antitrust the head holding for I and the and credit give a content attorney Delrahim

heard us unclear clear. be the zero -- whole DOJ would it the we have the out that sort us it now knows this -- hurt not they and I cannot hope it Just so one out marketplace lot did disagreement backwards a that panelist, was to was about and that letter advertisers. amongst to got of was about everybody failed because that as because we what is that are they'll loud on all And interchangeable But take, in that it. but and issue know the next there is of go steps for market turned you result recognize indicated they year to a transaction last certainly message that

acted waiting you to know We can and get certainly able you about We intelligence – cap, confirm wants to have Chairman we don't to something – do on this don't the consideration. it's to under and confirm it and we we're know the year. know year. I certainly see. it but remain On with confirmation will be to we will know have that I we this that happen watching

to I think will year definition have next you is change, broadcasters action change the and lot to piece added review that, it needing market. that the FCC be the definition of and a the DOJ the market open of up regarding minded quadrennial other they'll that be their needing yeah of coming and to is very of the comments to

positive is lot there's industry, that So I unclear. pieces but the think moving the a of will timing for net

Unidentified Conference Call Participant

Thanks. it. Got

Operator

Thank you.

Alexia we’ll JPMorgan. to with Quadrani move Next

David Karnovsky

Karnovsky Alexia. a Hi. further Justice the and Quest. acquisition little Thank Can David you. This discuss of you is for

know see plan You the on there anything these channels a how for much is programming potential air perspective? do you the you from and over in changing audience

David Lougee

TV run our just well a going like this but group our because put station in is as Atlanta – we're into to unsolved separately own programming we that what? was cost able operation crime. markets it and only very we’re and other run is David people do substitute to it continue I few lean the no, where your going in, it about, know that current Atlanta way So in we to be to it will effective we'll that question you on of that's the based John out and Wrote a markets create complimentary of apologize run

David Karnovsky

Just all-in? the potential air see in the you the over

David Lougee

it a is I response that it's, is networks lot of sales audience you it advertising that Yeah, those just direct think the which of can see just growing it dramatically, results multicast and works. in

a kind lost what's is cutting think marketplace the cord as discussion cord of I lot there's the shaving. a lot actually around of and So in

for rid you're then or registered there that get on get want being and because amount And so lot so or will to of under is Nielsen any are cable cable in find boxes those the consumers years one like being, so TV TVs that, then those as air, to less house go your go something channels a and definition still utilized tremendous for of over that channels satellite in viewing cable Nielsen’s over three if the consumer you antennas home. still But keep the and down is a a you box set. of lot those those a other sports

our drafting a is absolute So audience. premium we’re business, just sort tailwind of it just and like a is, OTT of natural it on growing

David Karnovsky

some guide on you some your subscription full benefit saw the few to guide QX, Okay. in subscriber year the Thanks. if in renewals, partial any in next seasonal And XX% pick-up of wondering think you are I just quarters then there just factors declines and of assumes consider? get I’m QX growth or this in given the mid-teen,

David Lougee

subscribers have never all string we modeled never by guidance and to our far so comfortable our as were in year seasonal our with are our pleasantly that We comfortable for we with we numbers months though we're but total of that. here, year up. Well surprised as where be a full guidance. We last even this were modeled, continue factors

Operator

And next Evercore. move with David to Joyce

David Joyce

on you. advertising marketing questions Thank of Couple and the services side.

strength there difference between What are some of that the the growth, with larger – some top On of are are that seeing in linear shifts smaller you the side, marketers on any the that there. are what you there campaigns is color looking the for the appreciate markets, coming things much to are and the of the service? when Victoria Premion are and traditional earlier, of along then with where double-digit timing but markets, particular ad over your pockets advertising,

David Lougee

for kind say so for is in bottom a color Victoria's cities, us I little On and right we incremental for it's first in second categories tale line, services, what now because on actually quarter, very two the a the Thanks comments say looking quarter, just of I get it's question no of pun Great. noisy would an David. advertising us discussion gave but for numbers to I actual Q, for is second so in it's difficult and us operations, science intended. to always for really Olympics forward the Olympic art quarters, than a is more that was marketing what

best lot – any is Your But down, from up dramatically. so it's and and a down than first are places bit some in for actually question our fact, also far others more unsolicited your turn the market We I’ll have those based doing markets for we In our not so our we are not second ask help is, tougher. on and caller it's a tremendous now than offer maybe it in not years. mean the question is many the it's now stations in believe is categories, some that in of I on and we on, question seeing is driven are any quarter, XX also performing And we but – markets which some have are extent the our tide categories to lot better of really then we're traditional secret auto just largest are our why. spot we markets a much right two smaller performing economically us, a top of it's but categories. down a of market, are in stations X of some in our which smallest previous bit advertising is markets, down

was so a sales. I out think just of SAR most lowest SAR since by the they XXXX direct product of that came now it's the Report February recent

we'd for that same in be relative So of But, it on is years quarter. the one probably auto. but -- performances but for is what strongest is auto, the to but

David Joyce

seeing you incremental the are Premion? on an And

David Lougee

Yeah. can both Premion their for are they're – traditional right lot offer and time apologies spending on audiences on on of that for on targeting, new reaching a and looking they’re TV we looking both. is platforms which yeah I and looking they're both can for aren't over-the-top advertisers we what

third-party – the we, are directly publishers, that's from we our – like from that's we're So, networks exchangers, content ad a not Discovery. A&E and and using sourcing

So quality offering real we're also inventory.

three would are those, highlighted. So those the I

Victoria Harker

a talked came this And Premion. projecting about just again second is results of relative of the the of systems the $X out interject the just rest relative to And quarter the there. made that we out to sort little year category to revenue issue. for million the bit of We’ve to the in adjustment

$X For than third the quarter, million. $X.X and fourth slightly the just will less number quarter for that be about that about million

in So, to reported quarterly through in you need go. all the those but were quarters. those obviously relative quarter to year, taken comps keep mind as total as the results impact we fourth They go the we last

David Joyce

Okay, great. Thank you.

Operator

And Kyle we'll move on to Evans with Stephens.

Kyle Evans

Hey, good my morning. questions. for taking Thanks

David Lougee

Kyle. morning, Good

Kyle Evans

Thanks.

talk should you the XX% bit end next next we a phase Could those model little over of into the year. how repricing two quarters? between the mentioned and You now

David Lougee

Yeah, sure.

Specifically, XX% by at middle quarter, then next do all of we’ll XX% the of end quarter, we'll almost half that the the Kyle, year the the year. back have of back do fourth and the this we'll end – towards of happening of

Kyle Evans

Thank you.

David Lougee

Roughly.

Kyle Evans

it. Got Roughly?

of given more your You sub-count have historically kind peers. clarity than

David Lougee

Yep.

Kyle Evans

and it's six growth kind underneath of more It that sounds bit months sounds to talk size, a is like that very any now by seeing number? DMA you're very number. Could about of trends the what stable, little other like flat seeing zero you close you're

David Lougee

Yeah.

whether the traditional MVPDs for two us stable small out the So markets, the Both been And are but markets our size surprise, a is because I'm at the larger all going in larger be see much other can not no there. clear public are to the starting around for pretty than good is companies they larger there a us, of numbers are exclusively. on more growth the hanging in you offering for market, absolutely – than consumers. smaller some better are trend the the that is small. services DMA more counts. is, traditional is out trickle which But job yet that the much traditional the loss in game virtual – of in side, almost MVPD, with that's the right, doing now the the has satellite the to And trends

Kyle Evans

digits. scale what Got that think Victoria I level be the little brackets a said you then operating you. help have if maybe tighter higher a from On see? and that TV does wondered I streaming of networking growth rest don't inform and business third-party the double add those business, that there how to guys that was could around solid Premion, over put your wouldn't you able maybe seeing top are

David Lougee

One, first yes. question,

at give we basis, guidance. we'll will year quarters probably don't in we continue we're business know well. not getting to we're continue So have guidance said we’re margin run you in any see running continue – growth you exit last price, going good to of I very we we’re maybe mid-teens now. double-digit – because to. as some we not parts the on it letting but we've continue doing it, a on it, value know kind it give we're – moving credit know We're more and right to you on – we're good We'll it as stock got to in our it's any say and frankly think so we'll that got later not a going quarter exact maybe know we've have as of continue so lot – a I we're grow you the as for we're growth said But strong in it. very, but a do just it past we

with mean trends, I what say know our what and new of question then get you lot it it's a see see to and think we probably and advertiser a it's your right. You is you all, business with business third-party it's I we about consumer mean

does us of our strategies So sort it trends go-to-market question advertiser of to other firsthand a at some it's lot consumer a your of and inform are. look us help sales, on given because

Kyle Evans

for change Premion? competitive Any the landscape to there

David Lougee

[indiscernible] They’re new, out time. time both out increasing there – the we same and inventory exploding there same competitors but the as at competitors the are all demand at

will can sophistication benefit a in over us us in over days, exchanges, this to third are party and that out are room will I exchanges lot that's we're But buy. space lot advertiser terms at which there a broadcasters and there's because both programmatic market will commoditized There space own what for say not not what out here programmatic So cost out doing. the of people including advertiser. low more competitors especially and we of right, become our local we the early the think would that believe is there. in effective selling we're of time a we that time differentiates

to the relative So, be would landscape. my competitive that comments

Kyle Evans

appreciate. Great. I Thanks.

David Lougee

Kyle. Thanks,

Operator

[Operator Craig Next Huber move Instructions] to with Partners. Research Huber we’ll

Craig Huber

morning. Thank Good you.

and of guess acquisition $XX earned average? would you First question, revenues Network acquisition corporate revenue And I size the Justice lines, was you? the to this same at million on what of sources and how that the say roughly relative can the you, your just Quest, the for to Dave, margins attractiveness

David Lougee

going numbers growth to they would because they higher revenue numbers be they've Craig. at double but a got are Well, you as nice I a both segment not exact but characteristics that a give than and revenue than would be to just bit EBITDA, be basis, reported can't Your higher starting a little that.

So, their but just, on to they're rate size have we'd right trajectory. TV the the thrilled company stations, material based be them to because if now, growth not were they they're of

Craig Huber

Okay. And then also…

David Lougee

good solid like margin margins, they margins. have question, About broadcast your

Craig Huber

can or is And that slightly flat Great. that's your core comment XQ on then, for anything year-over-year? trending How your please? Dave you ad the excluding sort pieces Thank of TV acquisitions up you.

David Lougee

two flattish so commentary we're is that on sort basis. still little pivots See, a Yeah. I bit gave relatively earlier pace to seeing of as what on say a color I categories, up early

I is good, auto. on what given So commented which

lot I solid. it retail home – auto a utilities, so on I'll we – of goods, is there's as have a are weight and are that right education, tremendous and categories packaged improvement, you just categories number entertainment, that finance, of long and now. mentioned, up, list mean I media very healthy. give banking and but, telecom services, So a of a But is

Craig Huber

sort up then lot noise there's I the it your sort is How know stations. quarter, How but advertising is tracking it digital that say please? is a of your of trends mid-single-digits? And for TV of first tracking? in

David Lougee

grow but continues them Yeah. out, We don't nicely. digital to break

Craig Huber

you. Thank Okay.

David Lougee

you, Thank Craig.

Operator

Next we’ll Evans to move Stephens. Kyle with

Kyle Evans

decline? down you auto put thanks. mentioned A you quick that multiple just Could follow-up, a brackets Hey, around times. some

David Lougee

high it's Yeah, I'd digits just that quarter mid-single where a be and I but single-digits, around single-digits, it's moving roughly move just in you early low but change know not down right, is say down, the it's put would would that to but it. money can so

Kyle Evans

year guess at. at you do will run the here Any think what take it a to

David Lougee

No we budgets have mean would don’t would ad No, think I an Kyle, going idea their – -- be, us. they be, be would it it it be. what of just to will wait, I would just I are I

media. being pie, pie. So again And you our confident sales not – of by feel by about TEGNA’s secular that know, broadcasting share share it's in and a car Right. that very so I but issue driven of frankly yeah,

Kyle Evans

Thank Great. you.

David Lougee

large revenue and but with fast auto because on, was Texas would a enough much the know and -- exception is that. one our business Abilene selling is comments know the keep really ago. hurting it of And one total and so of of prices – a are Angelo there. comment earlier on today in like small gas growing is, can't a proportion us our you than or fracking too trucks as two my they really solid a even are advertising smaller terms in especially really services even San that of mind We reflecting marketing may with our the market markets where contract build oil And you well are it’s sales, in seeing hotels year smaller it you stuff I auto know and but and is thing actually issue for sector

Kyle Evans

taken. Point

Operator

Michael Noble we’ll move Next to Markets. with Capital Kupinski

Michael Kupinski

for Thanks questions. taking and the thanks

more stations on multicast but guys, is the the Going some about us acquisition can to cover? to what reason thought you decided to just Craig's question a back you give build networks to the you planning current that that adding And the small offering relatively now? this stations, if networks? consolidate know I you for upon these is Are the percent of nation the

David Lougee

Quest, – number, this I – on exact part the the on are so industrial part forget roughly Justice to utilizing of but fast the close We’re growing is the logic and XX is, our right. of spectrum, we

we’re distribution. We're right. the of purchasing, own the stations with already growing we number So

we for revenue So those already, if sky it's just stations – on stations. not it’s get added those of it's that out added added, distribution -- and the

So -- And network. right. going it’s portfolio well-programmed to and grow diversifying hence are the is over these year to in terms our of continue it

it's and So got simple It's a business financial run how efficient real play We inside know for growth us. -- just incredibly knitting. to frankly it's the nice very our it’s cost and profile. it's – exactly it's very, and

Victoria Harker

investment, But well very in operating is of very got It’s margin. the it today. terms strong obviously

there is significant OpEx a no or plan So CapEx… for

David Lougee

continue run It’s and Yeah. very lean be. to it will

also – So the that's her that's attractive really and of point, models it. of why to one

Michael Kupinski

FCC bit maybe your take thoughts discount like Got more what that – ownership and in that It with could about And also then be might of see it. there in at talk opportunity? make indicated a opportunities UHF stations you an place, indicated VHF it M&A that this you least thought if Dave, and that. It of ownership might to call rule you UHF then just you pipeline the the about seems in stations [indiscernible] than wanted believe past And UHF Maybe cap to does it for be about talking the valuable cap. the calls were this how TV when lifted. a attractiveness active little the may about do stations? that

David Lougee

that conversation out dialogue they .So from Commissioner, cap is of I Look will there that the a when wouldn't done. absolutely been the favor do take active him in active lifting cap I not while. FCC in he again Congress an for think of stop voting have of on that’s the he the might matter But we the mean, the has a Sure. but who not and Riley, is new. others timing said feels Congress authority has be believe think it's – it, if but

I'm it’s go, I the question when cap. if the As more. we we good buying talked sense Obviously in about, UHF when as stations far we're a buy getting stations still gotX.X% of sort UHF under that

the but the it but the but know UHF look drive important – look in at is is decision do on investment over but acquisitions, us make that look You understand station, look the of point so per characteristics know that we the right. a not market, we and what we And I – asset choose value sort the do it how the under certainly at of I does it and what's wouldn't question. that at you percentage cap, at resonates return more doesn't

Michael Kupinski

you. you. Got Thank

Operator

Huber Partners. And from next we'll back hear Huber Craig Research with

Craig Huber

Thank again. Two I you, folds if could.

just good I just have as What company the up? really is a keep attacking and years slightly of cost side follow low sort I'm a quarter for program. you’re excluding Your base first areas company guidance your for or that the has been it sort recently containment on including cost curious to of in here. the up basing board cost is across

Victoria Harker

happy Sure, to address I’m and that. Craig. Victoria This is

of since has company to corporate we attacking in service the terms quite when company. a the a come we down has the the center a in come setup nicely that relative We've standalone broadcast business to since become to lot consolidating and the continues that really are the been corporate office that of of non-customer the spin of shared facing lot In over June XXXX the time. which back time $XX of non-consumer, the so really functions, million down aspects and continued as

acquisitions from lower more of terms In right become new effective cost we how build efficient of more can and the at start. in terms on

terms the of efficient themselves of their effective more of some well stations, nice they've of consolidate done rules job those the in to in in both terms business, a of purchasing. terms creating very In working managing each descriptions in terms of terms P&L position as their of as

broad lower it's been In strategy while structure. effort. creating cost our a very of a M&A really support So,

David Lougee

we as actually, efforts too. And Craig, continue centralized purchased go cost have we in marginal our down more stations, the to

our new we're already services, it the centralized cases CapEx becoming those and been low taking of normal in to even very some things CapEx really that, we've shared apply us that we've noise technologies there. available very CapEx repacking like which and So, And many already where and new to issues. because for cheaper in And on we're in stations, some existing basis. embracing reduce station allow down technologies got a per basis at what's and onetime a has applying technologies But cost terms that we're OpEx getting got our able stations. also, we've to that much

Victoria Harker

on – $X And the out company current across license fees that's SAP of a well that’s a almost rolling in a implemented. not this a as new we're allow million us technology, iterations save to great box year �� the year out and that, of example once it's right the alone

technology it create the its, effective, for will new more but again, financial platform a order much whole support So company. efficient,

David Lougee

perspective, business, of we allocating And just a want good great all of we allocation not good is one Because products it efficiencies, about creating in of on, sales. from cost, Six more comment just and our job in across, doing our Sigma’s to task for a want about cost it's right. world perfect a

we those all more of of costs move better return on all that our the to our investment the for so, areas, expenses. can two And

Craig Huber

And have then, I a question here. broad Dave,

in the in general you economy, U.S. feel economy As what hear to How major about we large talked there, you dichotomy but the market, from which out how market your doing there? put there, between do small see the various sort how market you you I versus feeling a of are with about well seeing aside separation and the out economists customers and your market is talk small the various out you right large are now, and pundits economy you U.S. visit there. mean stations about state is local versus markets do TV in any

David Lougee

and I look you the look very consumer at you et I expectations general, rate optimistic good. at unemployment fairly In feel when actually feel cetera.

you market income gap are there, you growing is reflection relative to and be are to that Americas, I large to that dialogue? reflected and coastal and a right, it, centers doing small think see the of well about economy big urban America, starting public industry the two know TV in think in I large in town dialogue starting small in overall cities health the

Craig Huber

the you. that to today's I over question-and-answer remarks. Operator to back call At closing additional for Dave time, Thank any like turn would will conclude session. Lougee And Right. this or

David Lougee

Thank you very much.

of next closing, and are a we continue our progress with quarter. all build by that growth you and will quarter next been execution and again on we in our to the so on to highlighted news So pleased subscription strategy, we've stable have revenue making call this of Thank more you, give M&A good everyone.

Operator

And thank that participation. for We call. will you your conclude today’s

TEGNA (TGNA) 9 May 192019 Q1 Earnings call transcript