GTN - Earnings call transcript Q2 2021

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Operator

Good day, and thank you for standing by, and welcome to the Quarter 2 2021 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Hilton Howell, Chairman, CEO. Please go ahead.

Hilton Howell

Thank you, operator, and good morning, everyone.

I'm the indicated, of and operator Television. Gray the Hilton Chairman Howell, CEO As for this your joining all you Thank time quarter earnings our morning XXXX call. second for and are our Chief and person Gray's here Financial With our Kevin Legal and Officer, me LaPlatney; corporate Jim Development in Ryan. offices Pat Co-CEO, our Latek; at Chief Officer, President Officer, joining remotely And Smith. us is Bob our Chief Operating with morning this a begin Kevin provide. disclaimer We will that Kevin?

Kevin Latek

could and will statements. statements a operating this These and and Hilton, in assist Certain morning, filed website and the EBITDA; flow; among Gray financial future number cash earnings various call result as a non-GAAP operating on less may from corporate future good non-GAAP results. its Form of broadcast forth The in reported Included free are release. cash most differ statements. GAAP statements cash risks to to supplements financial forward-looking update the report the their company. related impact certain is most our Hilton. flow, annual address or undertakes obligation our GAAP acquisitions I of the metrics on key uncertainties. you, Thank have set measures in leverage The of XX-K our those earnings may coronavirus to are our the discussion of matters results, forward-looking any meant flow; on include but a cash our COVID-XX, or of well and measurements and implied no Those recent the information. Web been future with and uses company the everyone. our disease, www.gray.tv. on call regarding, company's in SEC, the reports replace and pending operating be things, turn are results provided forward-looking including over are And the other source broadcast statements in novel to these in most as site Actual as expenses; discussed website, ratios. recent financial our its important company adjusted of that our and factors as now divestiture of subject expressed a in flow; particular, Included not on measures, reconciliations the analysis release, as valuation to measures public call recent

Hilton Howell

we Allen's overlap our want who the Quincy Thank Media Well, Welcome Monday, the formally and Allen completed you, all Byron Media this of Quincy know, us Gray. joined of Kevin. you call new markets employees Broadcasting. acquisition divestiture to Media to I as welcoming the on Monday. associates by in stations and all of open therefore on our from Quincy to

Board the the near Allen eight extend Gray announced to accounting our team same over gratitude and Media, carefully made and fine of second and all in of as the Media's our part to new transactions colleagues honored them. markets the we a family Ralph I the are are the extremely his I Oakley, we stewards new to built television time, portfolio. bankers, reality, of all many Today, thrilled as and At financial play the and am across doubling stations the a be Gray, our Media Allen that We Quincy television results at and of his decades. this appreciation quarter, including lawyers well proud Quincy these involved professionals those who and in transaction. at firms for

from second combined total this and our million Net core local or million we the advertising that broadcast morning. was revenue, which strategic results income improving and XXXX. from nearly variety national $XX will In cost $X.XX reported to we or core improving revenue, revenue common we of our of second prior revenues is $XX from attributable Our per of quarter stockholders initiatives our excluding obviously acquisition increase to continually the climate, once quarter economic $XXX a we million, management trends quarter an prior Quincy see to the of second political XXXX, total prudent address proved that own revenue the pandemic. call of again and To XXXX, revenue, ad which summarize, resulting XX% diluted total matched share. the

to increased XX% XXXX, the second revenue reported from pandemic. $XXX compared prior of revenue core the matched hand at again, or on senior ratio total the cash a after X.XXx core hand XXXX. basis and effect credit leverage giving a to by transaction-related cash core X-quarter trailing Specifically, million Total revenue facility quarter of We defined million total $XX nearly with the our our of all on expenses. our quarter to total of as netting end in on

or XXXX. higher XX% Our quarter the broadcast of million $XXX of $XX second than million cash flow was

to and second increasing of the our was for $XX employees, $XXX coast of positive EBITDA XXXX. able quarter to adjusted million the million, our very these We many thousands of through quarter in results production to from work compared produce hard XX% were or companies. Our of XXXX coast television now second stations literally the

believe in we will that revenues. revenues position of strategic second while year very including communities. spending the among of our the to improvements continue new business as and recovering challenges Meredith is these Quincy Allen of political with We core also quickly will in also throughout involved in our our the nearly technology all that, some year closely deals undoubtedly well opportunities, strong all of M&A enter maintain with consumer a our pending also in deal strong quarter Gray and exceptions, increased year really just markets. our the revenues our initiatives, our Media, a economy work, end We a the devoting major We retransmission and acquisition drive sales Television customers monitoring and and as strong as to successfully Among and, another Corporation. of in evolution increased course, countless great workforce, managed hours this advertising the pandemic optimism and

also remain Meredith of the We fourth this in transaction that year. we quarter the will close confident

For is exemplified our cash companies the our that these reasons our senior Gray quarterly of prospects are this media track and stable, Television country. business return to management and paying and remain agree Gray's dividends, by to in into and as one on Board finest television bright, we

my color earnings will colleagues few hear remarks next quarter our from additional release. to We second with a

line I the Thereafter, for questions. will open Pat?

Pat LaPlatney

advertising auto finished call second would total auto to revenue, The were and said year. 'XX quarter advertising the so Thank strength With XXXX constraints 'XX, return you, levels a core which we that or the optimistic remains Hilton advertising. later and in shortages excluding combined our revenue, outlier, to Hilton. within terms continues which we face revenue, categories, of political previous quarter the I supply local call, that as was second XXXX all of national point revenue, down we relative On of that to total are this nearly mentioned. X depressing category, in core and broadcast chip

place year the have quarter auto with quarter would the The been flat 'XX, In of category the of that advertisers left flat auto revenue especially 'XX illustrates stations versus second big the if diversification the to legal, home improvement, compared holes of would gambling, health by total challenged has of and total core categories, the our 'XX. first simply quarter higher and of financial was quarter in fact the last underlying revenue taken core few XXXX. X.X% the of with years. our auto see if local second revenue Similarly, other the XXXX. 'XX television this year in effectively higher in the backfilled over in strength X.X% and to the is category been into stabilizes have supply expect half we fourth first And this that if half chain soon, fact, the would rebound the relatively category that the automobile

training and effort. tremendous health sales to Gray provide Our continue and team to the auto benefits teams the

and organization particularly dramatically teams is digital, focus industry. the helped most investment auto in areas few years. a sales have the Our these and effective the revenue strong digital grow build The last helping in to health over best, they've on

as and digital and picking national trained sellers is continues video, hub new our do are fully digital continued Premion with dividends to revenue in every into audience. team money in clients work and And digital day. our partnership Our to up pour now programming great paying our growing

groups unique take sports entertainment are that Origin expansive world. nicely, and archive their sports up-and-comers at recently and on Our the the Sports, a has look Raycom OTT Sports an launched in has rebounding platform and

record year. We at expect this Swirl as well as RTM results

of team Tag, partnership unit impact our the which early is tremendous new despite Collision In national series, crash injury pipeline designed behind journalistic a our from a We're and World male Division, investigative body women standards only really the highlighted wheel. the of forward. their proud death dummies recent addition, the dividends Honey and and require at crash Zurik, being with efforts. around pay going test Chase will and risk XXXXs Tupela In work the of for how Lee Jon higher investigative amazing Decker business federal

raised the at the raising executive on policy among unknown National previously White issue as Corp. well a this House Decker Press issue a question as thereby In press folks fact, briefing, Jon the recent

of XX investigative of in the safety We're to producing we involved Health and see airing very the there's Congress that of investigative and this language proud initiative, as Great disparities members all in on on in our of well month. Mississippi Senate authorize stations as a Thereafter, in country. that regions pleased modeled focusing $X.X trillion Gray our the documentary test this females dummies also across bipartisan that's health and address important crash team Appalachia now began bill infrastructure were stations Delta would to X-hour Divide equity are issue, our children.

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Kevin Latek

Good again. morning Hi.

sale our first pleased weeks special does of transaction our the achieved than transaction cycle. not the M&A. on last the customers. consent separate fourth Turning and to report the transaction waivers terms to or second close objection the to three the In station no Meredith any prior our FCC, quarter. television We require no in completed remains and We Across to the quarter, few a negotiations Flint to XXX favorable our Meredith for received major virtually MVPDs, that the for more I'm track anticipate we of we accommodations. closing retransmission closing. in service our year the prices with viewers disruptions renewal in other of this FCC

set Looking for next XX words, contract no the forward, our renewals essentially In the MVPD retransmission other XXXX. at will renewal expirations we year-end cycle with have resumes next months. of

quarter revenues the roughly quarter, million the by same our less guidance which is in is amount our This retransmission for which amount in $X were second so $XXX fluctuations our are the basic or Our retrans from exceeded reports revenue our result payments, large primarily quarter and first retransmission customers. two issues These subscriber timing very guidance. quarter the with of first million. of

of third our revenue retrans recently retransmission we anticipate $XXX few the agreements quarter, of approximately reflecting For impact months. million, over the the renewed last currently

of billion, calendar For stations. year, the retransmission Quincy revenue total full approximately and gross excluding the we expect Meredith $X

among and to our in OTT distributors. satellite continue see wide We levels subscriber cable, variations various

count and payments We of received the reports reports natural for subscriber distributors the delays subscriber approximately from At providers X% all reports. lag appears OTT the total first nearly for and unexpected XXXX first from some X was of count XXXX and now due in have MVPDs with it from the our lower quarter most that platforms those all to XXXX. quarter of in-market the paid across than first for quarter the point, this Big

live, rate of pay TV provide. value encouraged than which continue channels, much that sub-erosion providers We the our testament pay local TV lower are is a to a believe to that we many we the and content the of see of stations

to month, proposed FCC's briefly the to a now address clear, proposed FCC FCC's that response over and and with opportunity filed. to last intend want this further I it decision and then, on everyone has decision, been we forfeiture. week, invite response call respond the turn still comment forfeiture, the Ryan. that largely to we Later and our the And I proposed Alaska and do is once finding. issue fine, cannot however, the an FCC's Finally, month: to Gray will last submit year was the Jim in to our not I be so. Until the misreported that, will to read over has last pending To transaction final Gray proceeding. misunderstood not a

Jim Ryan

Thank everyone. And This on close very you, million for that GAAP contains a Atlanta. Kevin. Dovetailing already QX obviously, to read release levels. The remarks, be core is we're you treated a can earnings little have of expenditure recently today. Hilton's total XXXX Good $XX deal either read land purposes. approximately today. great filed of We in came or morning, very will Metro XX-Q pleased again, the later a investment as information in capital acquired that revenue certainly

we acquisition that internally, QX. and However, as have flow and view from excluded our cash QX $XX free that for year-to-date accordingly calculations million investment an

see our brief the incremental QX you broadcast cash then and separated as baseline QX stations. our release, comments on we've for flow some our guidance And additional and in Now provided guidance. expenses Quincy revenue will

low improvements on Gray, total to improvement of local range. core in what legacy our quarter continuing us the revenue So baseline exceed third increase demonstrates sequential percentage of revenue, revenue, makes This is with continuing later and of national and optimistic the XXXX we core guidance total call combined or anticipated this year. single-digit the

our is core and said, continuing Pat while of to year-to-date is it's auto As still it lagging, about improve, revenue. only XX%

approximately about represents total months comments our year Pat's our X first of core in comprises has about on this $XX We revenue, diversification and revenue revenue, medical, currently of to year. group Olympic financial, broadcast. up which services our are services the well $XX Following legal the a core on the the and relating of net quarter million of third performing XX% group, the anticipating been all basis relative million in to

August to Turning incremental net broadcast expense, of mean acquisition $XX million additional quarter, million which in impact the of cash would specifically of and Quincy third to million to to Quincy million we an of revenue, for the $XX incremental approximately resulting to add September, incremental $XX $XX flow. the million million expect approximately $X $X

broadcast would million, in your the to year help of to for of of full expect and flow cash adjusting $XX operating that $XX $XX synergies. Quincy fourth $XX to quarter million, $XX your be in we For models expenses XXXX, will revenues broadcast resulting million of provide million million, million incremental $XX before

not impacted are materially expenses by corporate Quincy the Our acquisition.

on with pretax, flow to average a quarter XXXX. the million. X.Xx. the total divestiture gross price transaction multiple combined transaction proceeds, purchase now and me Total fourth purchase that are currently $X.XX Let divestitures blended these of $XXX certain recap The associated 'XX/'XX expect completed is transactions is we of The metrics in X pending the total billion. before Quincy cash Meredith close

within debt in estimated year. to would first pro the 'XX/'XX ratio, approximately $XX and billion. senior Meredith XX/XX/XX Our forma $X.XX basis for million a of a transaction XX/XX/XX the an historical We our larger basis I the outstanding achieved everybody, expected at facility forma total closing, as currently transactions was Quincy net $XX on X.Xx be our cash, synergies million leverage that transaction, $X.XX defined operating is of anticipate which with combined remind and both pro in credit billion, of was XXXX, include synergies. closed we flow early cash slightly And in of would that Raycom

free share. cash Some and cash flow comments on flow per free

shares our free As XXXX, in million we year $XXX approximately presentation, current of or of have XX.X share. we investor $X.XX approximately today, million outstanding. In per as full published cash generated

or currently QX generated $XXX anticipate say, As we flow we Quincy total which free and year this I year. the excludes by call, -- of be pay will cash million $XX million. nonpolitical -- million incremental look XXXX, free free also we cash, expect range to any on as That our said we a in cash is to a Meredith of dividends $XXX total to year should free excludes and

expected cash $XXX or share. 'XX/'XX per flow $X.XX -- average million was is Our be million to $XXX

repeat me because up let kind that So I of did mess that sentence.

the Our to share was Quincy of per million excluding average in $XXX a equates anticipate excluding per per range to 'XX/'XX XXXX excluding cash free Meredith share. our to million cash flow common million and $X.XX average $XXX $XXX $X.XX would dividends, flow, free or of share. million, We $XX $X.XX which and be

not premature, guide share that because a operating to XXXX XX% operating cash for we XX% our that guide blended are the be would for formal transactions. 'XX Quincy free we confident We would approximately political per for nor While flow cash the a accretive and flow 'XX/'XX very include XXXX/XXXX providing guide formal Meredith -- of cash are impact when formal flow a nor our be

leverage the be, of in will quickly our relatively 'XX to by to delever ratio the an and close Hilton. Xs it something low at We are that it it say us net now million. close turn XXXX for historical combined was comment political It's 'XX in just and and with expected the Meredith million, everyone. going XXXX was Meredith, anyone's XXXX. in to very A transaction help net $XXX X.Xx large end $XXX Quincy brief net back will is well a positioned 'XX. political I'll but call political revenue late on to guess from basis safe to will into what be On remind expected political, the

Hilton Howell

you, Jim. Thank

this have. to at questions may up like anyone we'd for open So operator, point, that

Operator

is first Janedis question from Wolfe Your John Instructions] Research. from [Operator

John Janedis

of Are come And you've about sure acquisition, expenses? I'm is non-retrans demand should for land One a the about then stages. thinking seen expenses you Hilton, last trajectory about? on a had the business weeks lot there in talk few couple. that the been sound press we your back in into I the can be that the separately, there's

there? of Or cash to Quincy the Do more -- give clauses flow was potential savings, hit event? color is mentioned cost some to meaningful finally, And that look is Jim, you the 'XX pre-synergy. on out? can more flow So then going after-acquired have that's cetera, what there generation to year-end? the you for or cost cash build for to like? et expect you prior What's And a

Jim Ryan

will after-acquired be synergies is of happen The be immediately. perfectly clauses will should I not Raycom, think think just for The retrans a the will you all -- won't it happen in but all XXX day on it take going X or month-to-month It phase-in. to effect linear, like rest either. more about as it day -- it's

Hilton Howell

we And Doraville wonderful used then, studios quite a on purchase. time. assembly of that ask we up, funds expect, that coming -- in period Senate lineup John, let have. of the It's answer a of cash the short questions with Candidly, upon it's runoff, or generate will large flow sort are of a from completion free them, we your piece they so me And property. the little the very that a

flow those will XX studios. see months, within believe to we so you And from free significant XX cash

what now, you of ahead. economy is on the bullish and the very in As the massive, business we see know, right it's Georgia fastest-growing and production we're section

John Janedis

it, the, Just back and the third are other call expenses thinking maybe higher? I'll Gray. those to guidance or going away quarter going just of retrans tick legacy flattish Are of kind question those for about to kind Maybe from beyond. to be the on

Jim Ryan

least, is in much third more in there we deal-related But trickles might million to go later. of. least at little So $XX flowing some that there quarter, of million again, the and guidance, bit quarter a be $XX third costs through at know total to that

of that's release. for out it the were were the a So popping shouted both guidance but corporate little bit, in and section those broadcast

flat all We remind XXXX to we the everybody's I'll base of levels. we this compensation in increases to that midyear compensation. the held started employees also when almost company gave everybody in modest year,

only up obviously, right for the And quarter to for something those your of reverse which payroll reverse of do of percentage millions As things for And midyear QX, one the we for very of midyear, just but drivers done a based good midyear. X the and held was bit that's levels QX, around in them of by we've deal again, comp months our comp. back of basis improving, increases, been QX, single expense year. QX, a dollars retrans it kind had from lot a expenses something we it's that each of the tick biggest the since little come is -- QX. have flat do quarters will QX, that of felt a repricing of employees for unusual -- because of on and range us, the our first both increasing And is was for

to So we there guidance, is will out recall, be there what number I QX. for a And if QX expected modest the think I for singled QX, that be. increase that

Operator

Your The of from Kurnos next the question from Dan is Benchmark. line

Dan Kurnos

a and relatively you, negotiations Kevin, for Any somewhat quick answer Maybe, a here. the on quick expecting update currently? I'm CBS one

Kevin Latek

You're right.

no. short So answer,

Dan Kurnos

issues, till you I figured, maybe I better have a anything year. question retrans. Obviously, That's don't around had and out of some the the timing try. you to called just just Then what end

just these I gross thinking ask deals, before with you -- higher approach more there's runway variance think in the about as a both where of how And but of versus outcomes I've net. upfront maybe you versus Just you're the marketplace, escalators. market the wide obviously this asked for then

evolve over as but about into Just -- year. get those year they conversations this balance as much wants I'm the of just next can that of upfront kind sure how and you're -- how might thinking everybody

Kevin Latek

year. no negotiations we next year year, have of the and next balance will in because of evolve, idea balance negotiations the no how have or year I this this

two on there's ended Our cycle, renewed contracts contracts the nothing are they virtually up. in when so all year June three we cycle last this XX our terms, -- and

-- market not over I is for just months. the We're have So won't the XX feel next market. in any where don't the I

completed, XXX terms years months ago they that we In see some course way done, of with pushed what were that sort sense came of over of without aggressive what very the the we've happy to are just think, both posturing, privately. they more so. in we through I contracts And publicly or we out, both XX with used the about and

I want year to think take always at -- find next year conversations. just whole of with rate something that's constructive both first relationship, going to able I -- think able they going were to virtually a is the clearly, every we're parties. We actually, the look do the three work And not be. in the for to that we one were We negotiations.

way out. they So we're the happy certainly came

Going the forward, of reason any gap we retrans. view time, between deliver in see terms receive. over remain to the that value change And we our undervalued the we grotesquely close value will I don't we and

nothing changed that. view there's has on that our So

watched we And had or hadn't community. with TV. obviously People year TV, it's deliver. unfortunately an a it's weather didn't certainly last those value we our local ratings. we a who tremendous certainly our folks, and in into investigative value, piece whether or We they're all while demonstrate continue And to tuning demonstrated local crisis every emergencies day keep

in TV. news. cases, many last are and to and of always media, turning the a now sources one critical turning across local of there's somewhere, other So footprint, not people about or to being, newspapers happening local we reliable our feel very They're good moment

Dan Kurnos

political. you just guys about one don't want Maybe on Understanding one, quick to 'XX. last just talk

just sense into how can get thinking we of QX. some maybe about maybe of So you're creeping that a even

You descriptor But think into maybe about -- your kind of -- talk ballot this we narrative ton help the pick spending it, as year, seeing going guys we call. of political the how think frame last Just incredibly into just going do is or mentioned next think, there. I you're year? about or environment Obviously, us issues?

Kevin Latek

for that extended it's roughly start I year, XXXX. to think by in for 'XX, political political substantial, That's elections getting year. very somewhat Jim this saying for advertising we're don't little the out seeing said. happen to bit And I -- till We keeps see races, advertising. And certainly Even a what similar think in phenomenon. I will started a next calendars

small alone, dollar know, not one D.C. of of guys more you for super the this million prior highly the are off-year the side, committees, so now by are been live And the still has -- lot political days, but both super perhaps are elections. do. another aren't cash seen Congressional going and the donations seems now The $XXX the anything case to donate therefore a the the than other so I Trump, gone, you breaking records unspent candidates Democrats campaign Trump's and money. of drop-off couple motivated. That's Senate dwarfing of actually stuff the being not super been record-breaking large and one both the D.C., every the has at of committees. several As PACs, Democrats raised fundraising headline is all. individual PACs I months, in last on And committees, read when There super parties, been Republicans that's new there's the certainly of in PACs. it call money in one raised another

in than estimates on we adjective, are the to kumbaya country that So seems a moment elections this definitely continual 'XXs. we quieter somewhat It smaller, don't as go remember maybe a are see upward where political say, we going trajectory. dollar any pick affairs other reasonable back being coming because can't political, your what We we to to the who it than folks substantial closer a it can't are put on next year. to very are on figure put from

Hilton Howell

on but the meet a will an rationales and of which the is operations, of they year, great the people when part up they know briefly is we -- that seen the be just is XXXX. that I that Everything for for the election in or can we have is who it of And amazing presidential follow Kevin exceed all or one not, acquisition XXXX they it the Meredith knows will our from company the are what sum. way said? And XXXX if spending think that know, in positioned

of We Gray position every for very political the consequently states out country, are grabs. races XX of in are significant expensive almost in almost battleground. that in a most competitive And XX the and Senate has most up of entirety nine out the the

And closing spend will, and XXXX. extremely Meredith of upon significant strong we so acquisition, an that very I the ad think receive political the in

to And it going so great be be. look to deal exactly an what with going we it's to big. optimism of but we confidence inability it's you tell at a and But know

Dan Kurnos

is XX% have presidential Meredith that think going only I for you, historically, And too. you so

Operator

is Your Evans next Stephens. question from from Kyle

Kyle Evans

on negotiations. retrans through getting congrats Kevin, the

million Now of $XXX are net that at you've behind you, parity the them a satellite OTT basis? cable subs and still on the got

Kevin Latek

question, by cable You us necessarily not customer going same keep the which the happy we answer, and asking kind to keep is is customer. giving get are same a An I'm a paid value to us guys to of that as subscriber. OTT

other in bundle. bundle. was view shakes at the I I Hulu I all by who don't of I've we get folks cable people OTT lot and want whether other someone paid that -- are back TV Comcast less by mom-and-pop cord, and versus some out, paid a into We go when We some a Sort that less get by the want MVPDs cutting in a OTT. in versus get lot it depth, MVPDs. have which them the When it's lot coming paid. we by strong important a from And got

if customer means take traditional different that be the value the cable the coming it's satellite. or in to bundle, -- on a back view need sometimes bundle we staying into the of or that not even And

are long are the fee us. back as to they so customer a comes paying where that gets we So to from indifferent

Kyle Evans

on you forma I And guess the deals, US for out are maxed households. guys pro TV

with Premion. us partnered You you Tegna Could and update on…

Hilton Howell

just you me stop Let there.

We have not opening, roughly the not above capped a completely we're And X% out. we're so national cap. certainly

other just we Meredith of thank you maybe to size you. we a And I But while sure so have now, something understood acquisition can't right possibilities wanted that. to of the the lot do come. make

Kyle Evans

you points X So work have still to with?

Hilton Howell

less. or More

Jim Ryan

XX%. be We'll cap XX%, and at about the is

Kyle Evans

see to process going here. you're -- I large-scale anything that not of mean, the else ex like X you're But deals, in we're the

where a it both? update to can and on forward. kind whether digital more to Is or set, we going us M&A? of digital of high-level where look that areas not should today? view Speak for then just expect the partnerships. you sits some Just Is solution So that you grow

Pat LaPlatney

we and our whole partnership a now. digital So right money of Premion, with there's chasing highlighted I've video mentioned lot

think that area or digital we're sort I to question plays is that the on try going now. one and focused that pure find If out stations. that's are we investments right area, of in at the not on we're focusing other to go So

something look at but not we're some opportunities we'll I'm that tell in again, the to focused There's digital level doing you happy them. valuations executing arise, squarely now. all As world is not on on. -- a are we video that right very at a that now take pretty at stations, right healthy certainly What we're the focused and high really

current everything our in, and upside, -- of we'll have much amount Jim we that look, footprint. But look pretty over to years, you Hilton as we significant a Kevin that. do comes with continue and there's and told the feel, at so And we'll

Operator

from Your is Bank. next question from Aaron Deutsche Watts

Aaron Watts

and even or growth bit do clear categories? out-front to category ever you've two if quarter? back at of crystal do corner kind in there's One, see like your sounds Curious other questions the like leader auto category you you you you given the for auto ball, the categories see look think it your on a services think think Just dispersion gets can seen maybe that again or turn you'll some ad across side, more in betting, little the Do some optimism. me. a sports fourth you being

Pat LaPlatney

latter. think the I

XX% as you're that more I sort is not a a looking XX%. the don't I of benefit probably we'll split. mean, and to back Gray. even to although guys much being industry think ever be auto certainly XX% to used you a even, think or the see, I auto I back see huge huge -- but category. And not at really know, And to diversification to

Aaron Watts

think in whether auto to mediums, that's other say by or former some I driven digital hearing believe I'm otherwise? to fair that spend of other And it due that's going not the it's you Pat, categories. just that being to growth Is

Pat LaPlatney

some can catch those dollars of No. Auto our but is we stations. mediums, into with other moving digital television

when house be -- go their can digital, needs they clear, they're So outside not side. we on to that like products it's But our going where digital it's both. address have to we still the

Aaron Watts

seeing then around variants, advertising reaction and Delta headlines are at question. or concerns advertising, the second of the as your approach from continues? you But increased question, provided this it and my this those a to some And partners I that spending sort see wait-and-see healthy on the answers point any guidance there's maybe is you've

Pat LaPlatney

sit slowdown Delta it clients. as variant of in say our I we any So a as are we because type concern. point. we closely, But watching really would obviously markets because of variant, as The haven't -- of the is any here today, not our this seen of but Delta

And in could but and upward. this so quickly and -- It happened happens what Britain. is hopefully, to it's concern, a through country it what moved we onward

Operator

Jim Research. Goss next from is from Your question Barrington

James Goss

So earlier, Georgia even more to but the you your being were the were or host intent properties you this or might a in might to of get anyway. any possibilities the or you whether way wondering, like the rights be programming perhaps of own I a nature -- I what such more think you and the given Doraville, to your some that. Raycom facility of referring And ownership of you facility with and issues acquiring sounded opportunity create have program it landlord production other to as studio wondered producers, a referring had were if property, I'm

Hilton Howell

it's a direct Well, not avenue.

don't film a majority As that companies the in anticipate are know, it well in this with those other talk we facilities we own has Atlanta. can mean that, but Swirl be about as will may which this remarkable we of you company, extent that Atlanta. is producer time. perhaps but the moment. it, that facilities agreement then Films, have for at -- decision of to They using be them, here here have we And at that made hand anything have in the to interested very not based within we been production the other I able as in using control already -- And we're to not they we open that reach folks have an

James Goss

I or too. wondering line digital wondering, either And with think involvement of else more ad Allen or them or more a I'm have continuing with or having It programming you might -- if was seemed that you like doing a you've anything sales been relationship along some partner? as Media. --

Hilton Howell

We as of don't acquired continuing distance else formal had result us at from in that stations any They've have to or broadcast a solid has Quincy Meredith partnership relationship we been do acquisitions, divestitures anything and the that both but operating a them. a very with operator the involved. there's the no

James Goss

And you Kevin lastly, news I your priorities Are Washington that might that under attention and ask Washington. for being in since running might just out now point would mentioned be any there surface? the right the you

Kevin Latek

of regulation? terms in mean... I mean I

James Goss

in that the might industry. or operations affect the anything regulation Yes,

Kevin Latek

unsure $X us main And our conversations I but and broadcasting. look Outside comments depending direct at Aaron Kentucky, think, issues. There impact than on tech don't to be one really million just the again, we how much the build-out. will prior amend revenue. of could XXXX, and that's pretty us. The I And of at Jim, be going, going In ownership political have where XXXX, XXXX, a priorities play first net out. big as prior closer have much, big governor's half on three we broadband mentioned In Virginia. rules think, be would focused In may the of think neutrality, is on issues I've all. media those broadcast to had political, you raised. -- my call, surely I FCC's But race: Congress are governors' no be that, Mississippi. impact races: Washington, Louisiana, think those we they bigger on around on mentioned, helpful, had I I

in year. I early two a may You ago. some, spending place took runoff then have mentioned, days for And seen as Cleveland, there's next House

half first political year's The this was of $XX revenue million.

very and big very instead three, governor's we're Kentucky big race X in in Louisiana in Mississippi, in of Virginia. with We're just 'XX, So like Virginia.

race three, political one the double XXXX. and half it this was first in So governors' year nearly in was of what yet, versus revenue our

got definitely track to on a I expect -- we've the House the are close. year, where right and both very think Senate we're So the strong next very

potential the their the of literally, Senate of tell could can the that, particular with House sides control both stake at donors on fundraisers the race. control or be this so And

next frankly, political context governors' the for our But put an half versus I well want into X/X just half first races element. with, very first bodes it So of XXXX think that's -- number XXXX I of to results is quite year. the

Operator

next Cahall from Wells Fargo. Steven Your from question is

Steven Cahall

the household any you've agreements? Thanks had Maybe is an timing. idea good have footprint color you for those historical as yet combined if side reverse acquisitions there your you changes compensation those you've on I the the deck in first on run per upcoming side. a much groups your as on the just net was was think of addition benefit months spending these in and political a your Raycom. I and that through retrans investor after as-acquired in great chart Could timing on about affiliate the pretty gross whether station on numbers move ahead? of And picture basis your then, historically wondering that historically, update us And much?

Kevin Latek

for Steven, up of If our year. this end so did at is deal, the network cadence our years was -- correctly, contract CBS ago. about remember I the we four it

are end the NBC of XXXX. and ABC at up Our

XXXX. at Our of FOX is up the end

rerun household, the of I not terms per the numbers. have In

those on Quincy the very at. frankly, the again, you we was, companies. of top on was, know, of number top were where that decks top of big Senate dollars significant per XXXX, as Gray again in our two. exposure. If numbers. we right were In was And at XXXX Arizona, you household, and they was Meredith races There Nevada, again look in the in back we have $X.XX. public right Meredith when $X.XX, Quincy was Missouri, done very kind us, at have, were behind the was of where XXXX, election.

be us TV 'XX, I not and I've Gray, 'XX, that restate our if numbers, highest and the number revenue will per back no have keep will I political have household. doubt -- and but rerun 'XX, stations as that our Quincy one a to Meredith, as confidence So go every go footprint we 'XX combined the into we political continue 'XX,

Gray, We pretty have got Meredith in -- time. Outside us for been that, -- in to us. far are again, numbers some have our folks There's of of behind deck 'XX. outside those close really

So that I don't see would any reason change.

Quincy, and Our actually competitors number our now to political even and Meredith our is news closest better ranking. one two top, on footprint the with remains

Operator

is Your from line John next Kornreich JK from Media. of question the

John Kornreich

some us on next rough rough estimate That's cash guidance you like taxes, could up what they give be this a -- Jim, can And year? double is next might a rough year they for XX%? the I mean or be first year, question.

Jim Ryan

to payments XXXX. that, everybody up catch so XXXX. look the quarterly we last in that year-to-date people could million and I'd pandemic, to due those IRS John, late the will in far $XX remind taxes, suspended year, had cash normally and relation payments large But

are of comparisons because for of differences. year, be cash be we'd million. going skewed timing taxes to But about full expecting So the some $XX of the X-month

year, that's Next back go going up obviously, to again.

John Kornreich

double? it Could

Jim Ryan

better big is a Significantly which, big. expect is political because or we it's don't maybe of know say just of way how it, the we big, again, but natural political hit -- to the influence

wouldn't surprise if me yes, it So did. it

John Kornreich

guidance cash of the million that your did synergies. for Second XXXX, question, correct? cost on that free flow $XX for include Is all

Jim Ryan

of Our XXXX Quincy common and did... expected What before guidance and on free Meredith million before cash the $XX dividends. was we for

John Kornreich

$XXX But saying and then by then add million XX%. gave $XXX forma guidance to pro you million

Jim Ryan

million Meredith was $XXX and the to XXXX. legacy in the synergy Gray add impact the Quincy 'XX/'XX, when be we said the impact, would we What million Well, impact... $XXX

John Kornreich

Full synergy.

Jim Ryan

synergies. flow with would it think closed Full on fully everything full would XX% we 'XX/XX We in synergy, to share. XX% expect accretive to forma cash per basis be free pro a

John Kornreich

And share that assumes, more repurchase? I guess, no

Jim Ryan

Correct. shares million. XX.X based of current That's outstanding the on

John Kornreich

were the that was roughly not X%, first you down through question, said subs When the correct? Kevin. second through Last quarter, quarter, that your

Kevin Latek

month. lots six three, because sometimes there estimates We and and of the two are do end of months after lots reports of five the come in

to QX gave point of QX, so MVPDs And OTT. have some because this on we all at and reports we reports for had QX of for I the nearly QX from the the

John Kornreich

that the of one to last was arithmetic simple and starting still on that a first we Kevin. was lower? net net second in that The quarter bottom Or for you, for near one XX% the margin, this, your about you're one gives only margin that Are XX.X% your are Actually, retrans half. the on we level? going

Kevin Latek

that are have bottom. a don't I me We It be gauge. to still big to a we third hope with is do -- the would at for our I hard certainly mean it's subs. of CBS, which negotiation our

Operator

There are no questions over the phone.

Howell. and me to turn now the our CEO, over Hilton Chairman call Let

Hilton Howell

more morning. very going Well, forward. even on we're and that results and our this we much as reporting results be to thank We're Meredith you excited quarter soon now so this for that on to remarkable about Quincy us we've go very close optimistic joining closed all

thank you again. So Bye-bye.

Operator

participating. Thank This concludes today's conference for call. you

disconnect. may You now

Gray Television (GTN) 8 Aug 212021 Q2 Earnings call transcript