GTN - Earnings call transcript Q3 2021

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Operator

Good day, and thank you for standing by. Welcome to the third quarter 2021 earnings conference call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Hilton Howell. Please go ahead.

Hilton Howell

operator. you, Thank everyone. Good morning, to for thank call want on everyone here. morning being this I the

Chief As Ryan; operator, you Development Legal mentioned, me our CEO Chief third Mary President, our our XXXX Officer, today, of and Chairman Howell, quarter Smith. Officer, Operating LaPlatney; Gray's Financial Gray Kevin and as the Co-CEO, usual, Officer, Latek; Television. executive call. Pat Bob and Thank earnings for our are our I joining Jim With am officers, Hilton Chief our

will this will We begin disclaimer morning that provide. with Kevin a

Kevin Latek

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

Hilton Howell

Kevin. you, Thank

for to another As actually year end has me we approach the and a from we moved quickly. of so X believe fantastic Right television August. Media acquisition are, closing behind Corporation's this that addition of year few the strong good Local still hard in has very weeks we Television it's XXXX, a transformative and away in from from just Meredith it Quincy momentum are Gray of Group. now, XX stations markets Media

thrilled. are We

third our of benefiting then this modest we however, start share We getting reflect election stations advertising have consent we million. quarter presidential only focused to revenue the are an broadcast reported that morning and hopeful financial pleased from which very highest revenue with strong local year. of particular, our at new our a reported figures just the strong year. and Quincy have combined integrating $XXX season expectations from we These of are contributions third $XXX high-performance retransmission We for closing from and exceptionally million national the the when were quarter third all total XXXX. political thrilled of you to Today, in XXXX $XXX are television million, stations essentially In new family. the of that us August our and remarkable X. on joined These really achievements which this with very results on we unchanged was revenue quarter are into most exceeded

hardworking and generally backfill grow growing XXXX. expected to strong who year of advertising I think years credit take their due as who, make I, a company need such for the technologists don't our with the were and with and in advertisers to financings successful. to services essence, issue markets the Gray under want revenue, us senior political core have, experience therefore, content, sector local account both follows and X revenue the the that revenue retransmission of want. in as particularly or this financing up that well everyone dramatic political Meredith We in revenue $XXX exceptionally to this. seasonal great transactions moment by enough congratulate quickly the year to quarter, as facility an sales of entered revenue million. and every nonpolitical to day, create this would we that of billion increased for $X.X our journalists, connection personally end seasonal typically have Subsequent loan credit third all facility the existing of we revenue exceptionally agreed Quite to the anyone to decline our executives simply, political Television and our the capital the professionals acquisition. work term throughout incremental We revolving products to decline

by planned at $X.X par. due XXXX issue was note billion in from million billion. to agreed $X.XXX we upsized X.XXX% offering an notes addition, $XXX In The unsecured originally

currently capital the that at average a for result successful will Meredith the estimate these cost financings, be transaction just our X.XX%. of we closing of time As of

and Television together investors, all in Our advertising recognize our our that people, partners distribution customers, services. their and and value credit products investments our Gray on delivers exceptional equity now

companies short, grateful our we media finest We Television through the all this of Gray the maybe in that have nearly stronger In better business us are unified. more a bright, Gray's country. come is trust, are and are successfully one of we by gratified strong, and prospects are pandemic and bit into and the growing even

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

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

Donald LaPlatney

Thanks, in room levels would We to and very XXXX by our total Quincy Today, X%. Gray In by advertising the this year. higher in increased "later the quarter Hilton. the end than reached the Similarly, revenues third at our of suggested pacing outside category was would that core see XXXX. quarter our the than revenue due XXXX, our to an finished gaming a chain year's Advertising that XXXX. quarter, incredibly from third forward. shot of companies total year". in again at contribution, revenues third XXX% the XXXX to this the revenues gaming exceeded earnings below the core down revenue the by QX has Still, revenue in core third this that XXXX. we core Roughly call, been both total QX stations. finished core first new X%. compared quarter return revenue of in and levels quarter core of results nonpolitical category XXXX of quarter and revenue the Like with XXXX, in quarter third year $XX more of just our second our retrans run case the To the third believe all contributed for even And report 'XX of third this and beat On it to with that pre-pandemic in well-covered the gaming combined a our for quarter a I total levels margin. core peers, to XXXX, fourth strong categories, the XX% going been is and to challenging million anticipated in by nearly we wide strength core XXXX are we audit some we of has that currently without exceeded supply revenue at level has quarters drill total bit, QX quarter thrilled total XXXX issues.

the audit X was through nonelection period the XXXX, category the XX% down quarters roughly Excluding last stations, in year. to the of same XXXX the compared Quincy first

in do all other come is across the automotive categories. category a we strength virtually will Perhaps more believe However, uniform interesting back XXXX.

revenues short-term I pandemic Gray short, revenue is now the behind turn now that worst health code confirm the on the ZIP can And we In weakness is for call Gray's core gain. us. longer-term while category the impact Kevin. in to the fact, pain, the of In as today in diversification automotive. the relative is firmly in Television, are same auto business

Kevin Latek

Good morning again.

transaction of not Turning this and closed the the our to the first the division to did time, FCC's deny the that Meredith Gray-Meredith transaction in transaction station FCC and require in early the month. only to soon in October. attract because September, We report waivers. our transaction M&A. late fairly transaction pleased overlap the granted U.S. Department anticipate the market does track I'm sale to petitions -- on of Justice remains we next any Gray-Meredith antitrust At any to the consent receiving to of termination not this early close

On previous earnings the cycle negotiations any this have the in second XXXX. had we retrans that our do of last This I material we quarter. X-year call, the until not completed reported negotiations of for major retransmission the means end

expire all As in CBS with today, our affiliation on all we report happy renewal I'm agreement in end of of prior these of you have our at principle calls, to decks year. reached agreements this CBS an know the from that of affiliations. the

soon. new finalize execute and to CBS very with affiliation We expect the agreements

counts an from third the in ahead were increases later first midsized currently stations retransmission Meredith quarter total million, XXXX. X rate August which result the the in revenues billion of in $XXX is XX% to rate our XX% in renewed the former agreements, $X of cross of stations. year. $XXX the revenues We retransmission million, stable annual months Quincy sub about a this This XXXX. $XXX million of over of roughly third fourth excluding addition retransmission the gross recently increase contribution Our of of in any quarter is markets expect revenue X quarter, or escalators, the were and Year-to-date, increase in

subscriber received terms to OTT we reports reports subscriptions of The In all declines subscriptions. OTT MVPDs in in growth being offset most by show providers quarter MVPD subscriber now continue the from for of second XXXX. in of counts, subscriber nearly the

that fact, second for repeat after was X.X% get because our In higher XXXX going subscriber the quarter platforms the to total XXXX. all we of asked X the sentence. repeat count of call big I'm often quarter that for paid across the second than in-market to total

for stations that second quarter value provide. total of sub as testament view than for higher the total a our X paid count subscriber the to XXXX. live big all X.X% content local was stable quarter the Gray the second Our counts the in-market of relatively across XXXX platforms We

on want I political Finally, to some revenue. provide color

first year's we identifiable beat X months of revenue million, to issues. than a approximately handful reported period quarters post corresponding due XXXX, new XXXX, stations. X attributable $XX presidential less that the year, was from the easily in This of significantly the results results the recent For the Quincy to $XXX,XXX most

First, Maine XXXX. we concerning January We very we lines received in in Senate Virginia's a mind produced fourth exceeded very from the million of that a governor. in about the spending X/X that early transmission of electric the revenues the when high-power political initiative days year first comes that for the revenue January X few runoff actually in few every had in Keep race races days our political in quarter. again, competitive on valid revenue, $X had robust Georgia

area noteworthy the development cycle. the most begin trend with will continue that So year. earlier we to from us altered to in numbers for strong to this benefit we time campaigns much the get these end be political The new by the of each is

the the X we started political about In year for even elections to the day. a net total that ago, first we occur years spending by of is we Clearly, occurring X handful year's of ads where spending started us before stay. -- through quarter elections roughly with in in of earlier a day. X/X in to revenue third second X fact, quarter that remarked relates X here that We year contrast, XXXX. had months or have election a Only XXXX. the occurred this third November election more in In when in than quarter XX with have dozen November XXXX, will before ad and earlier XXXX, of November spending to elections not races few or races this races advertising

will company XXXX, non-presidential ahead our now to Looking experience Meredith post that expect combined we post political record-breaking another Quincy, year.

both control be houses Congress will of Next year, in of play.

adding both results the see Quincy Virginia been the every groups this also competitive levels, fundraising this next add field candidates races at the We we super year. governor by records year, each likely all more and races the last year races week with new emeritus significantly including And that for Moreover, than are have interest served stations parties, in of that state on gubernatorial I'll shattered Jersey packs. and set nearly expanded reports of New across country. political in

encouraging guide political these signs, all for we Given issue XXXX. first today our

As million XX% year's the political combined divested that Gray-Quincy-Meredith anticipate year's revenues a less will last of revenue We stations, roughly $XXX in reminder, presidential a in next portfolio, net in year. reach total recorded total election XXXX.

of total We to turn therefore, approximately to net XXXX are, $XXX million. now today the revenue I'll guiding call Jim political for Ryan.

James Ryan

and Thank good morning, everyone. Kevin, you,

the what on call that very everybody increase XX% to very combined over keep continuing I'll XX-Q remarks report a Form file in revenue, great and we'll us quarterly have anticipated into because QX later usual, As and short pleased quarter, and our of and core, acquisition. it release our guidance does that continuing financial and successful of information and stations. the or makes to as pending transactions couple XX-Q the total improvement sequentially national it, we in a make move XXXX, very also local our deal I'll my 'XX. The today. Meredith strong revenue, our core results include financing our demonstrating comments improvement earlier, QX are covered not of Hilton including We're the optimistic remind QX the Meredith brief guidance we X% QX of the of highlights for that.

medical, revenue. everybody of a auto of still XX% financial, mentioned, is XX% issues, mentioned, to revenue is diversification lagging it's would due about of currently supply the about and total well to that In combination revenue. total services remind chain and speaking but reported group, I year-to-date core Pat that Pat only As legal our which our core represents comparison,

volume group associated with #X which I'll current than of close Meredith price XXXX and prior or serving completed is weakness approximately more portfolio over in the transactions. with the QX and offsetting the the everybody television $X.X like #X remind the that for the rated and be recap At percentage markets increase in down. of increases metrics divested pacings In Meredith pending markets, to fact, showing dollar services teens low total in best-of-breed certain is the purchase for XXX I'd auto. our Meredith is the quality, billion $XXX to transaction, is station Quincy The we'll hands XXX both million stations. Quincy

that Our of and fully last for transactions X-quarter average trailing combined historical be revenues, $X.XXX would divestitures as X/XX/XX, approximately so pro all all was forma milion.

Our QX and everybody X/XX/XX cash to defined our of anticipate currently and unusual outstanding please items calculus XXXX. Quincy. that quick 'XX, Meredith anticipated, approximately Quincy the to comments assuming taxes switch there flow. common planned of free all approximate the dividends and in regards the $X.XXX With year-to-date XX/XX/XX senior the some $XX on that I'll XXXX rippling of we total like onetime-only transaction a did for, and when Also, agreed make no note $X.XXX was will credit and as in with X months. paid QX. it That it of million price we billion, quarter through in in was December. the to our and the divestitures an of in was cash, we approximately facility, were purchase and X.Xx remind the We historical also $XX then estimated cash million on of Quincy QX of the flow billion, ratio Meredith between debt synergies closing include I'd LAQ at couple net was combined XX/XX/XX in We at acquisitions. leverage would have

consideration So to that's for into comparability to prior another item take periods.

million would the for million approximately million adjust year-to-date you $XXX million compared $XXX XXXX, and be our QX in cash If be $XX 'XX timing onetime-only in would and about dividends, of free to QX items the compared cash $XX in difference to XXXX. free our

forward 'XX, cash free average I our quarter and free remind -- $XXX comments our thinking reported would and that 'XX call. up ahead on flow from was our cash following We million. everybody Turning second on

both of blended our year. be cash we flow after a requirements million funding closing, We effect Quincy mentioned, approximately Meredith, pension Post per would operating year. have would historical average to X/XX/XX basis I Meredith million As X-year basis, combined cash as $X.XXX was and anticipating interest on giving billion. of $X about LAQ per of $XXX

provides This stock year. and approximately million on are $XXX a estimate to flow it between cash $XXX we're We $XX of anticipating per currently of excluding cash million, 'XX/'XX expenditures $XXX year. cash and per our accretive basis, X-year estimating XX% $XXX million million preferred X-year capital approximately free the taxes routine range to is to historical average dividend million flow. $XXX blended and would And somewhere free of average $XXX million dividends, blended XX% a million common is

very are transaction the positioned I'll turn in expected back to well December. with to Meredith going call the close XXXX, into We Hilton.

Hilton Howell

open we'll Jim. you, Thank now Operator, for any up questions.

Operator

Instructions]. [Operator

comes Our from of the Wolfe question John Janedis Research. first from line

John Janedis

couple confusion. in think guidance, Jim, I may a moving the is pieces for of maybe fourth but are There quarter this some be there and

EBITDA same-station So quarter? track, And contribution is that versus Meredith can with be 'XX? deal look should we the give XQ growth like? for What us the 'XX does for what you expecting what kind on the of

James Ryan

far them would we're characterize But through comparisons closing. you. forma -- basis Quincy, with combined single local up even core moment, digits guiding digits, as through actually 'XX, both 'XX forma, but also a and national for I'm mid-single QX XXXX. Meredith, to have pro don't it bear local looking I up a up low- a Quincy the not about, Meredith. me just up 'XX up for be little that being historical First, pro does high And at o as include Meredith. fully 'XX, I'd with over -- up -- bit National to

John Janedis

yes, then, broadly more then. And Okay.

I On the the TV context of revenue category. the to I don't And know you point, in from, about dollars or know this supply say, diversification clients? thinking ad get are I'm categories call, newer coming gaming advertisers. commentary, you how the if in guys e-com talked you chain, talked much new past, I'd but spend, about your just or services of much what crypto at

Donald LaPlatney

this is Look. course -- Of I -- would Pat speaking. We

very a -- strong We number about very, QX what from and you direct year? have about on here talking you -- in exactly our tell is to for and sit local but focus talking new or new the you're are

John Janedis

I just think of maybe general, Pat. a in run number, maybe type rate

Robert Smith

We X,XXX we Smith. track accounts the local sequentially month over the Bob new quarter, it's Well, grown and in monthly local every this we -- a direct quarter, basis. had on In since track is third January. direct

John Janedis

Maybe one quickly. Okay. one for last Jim

implication any the guidance? cash guide, given all Just been everything has baked there? in new the free is on political flow there Or

James Ryan

Yes. in. That be would baked

Operator

of Our next question comes Benchmark Company. from the Kurnos Dan from line

Daniel Kurnos

hound Congratulations, the deal anymore to you you sleep. and CBS Kevin. to don't about I get get

congratulations. So

political, just morning what issue I in know commentary -- all would would May around what's going that any don't have this around occur, on spend. us how, and especially of given and we some New Jersey the -- On other heard Virginia thought the in we happened

how us, off where local you is cooperating engagements be just a maybe big total? not of number which really have remind that footprint is local stations a of an given important, amount is And I DMAs what present guide, your kind just, factored X-part and two, previously can into seems that issue year, may and is, to in certain given So been number one, your an of component the in guess, question, increasing your one?

Kevin Latek

usually on Issue -- I'll what I'll see could XX% say. Most take part. the political. I total X% first to is

the XX%; additional sometimes over Your total question, say more, do bake little the political. in around engagement? less it of a last presidential presidential a we several I'd cycles, this been way, little running has sometimes

we're governance instead XX engagement. year the fundraising spending, next races at earlier looking the do seeing are year. -- last this of We X much records, like We

about factors would our next year, of with in why be so came of that kind year. all had up Remember, roughly revenue XX% guide we spending XXXX's of Georgia. into of last exceptional for guide too, And a we

Again, Atlanta. forma Georgia. in pro presence a includes that number have We

election our we a So the revenues Georgia hotspots political day, and was sum every market year. have then Macon. in of in very between and had last other than election And end state another lot Atlanta we year, significant single day of by the

last the So X that's run repeat likely had not in Senate same a then so off races, saw to we Georgia. year. -- runoff at then We and level and competitive that

the but maybe as the political than there good then not So have we'll we at feeling presidential cautiously this Georgia the for and we be lack like engagement, double of the And make that to have equals all push this up point, additional we're to and races we're the be of that's loss Georgia. feeling right, But more that largely year able will roughly the as for progresses. -- -- runoff more in make raising take, some raise we're out. the there, guide We're to we'll runoff. be up activity going enough of optimistic to double excitement of we're pretty At if point, and the next guide.

Daniel Kurnos

just -- you on some have more. That's if it. then And really ahead, Bob, go helpful. Got

Kevin Latek

It's usually helpful I'm when Bob right. Smith says

pause thought I'd just that. I for So

Robert Smith

Kevin is right.

Daniel Kurnos

there All go, you Kevin. right. Well

more that than of just is than your strong now. And right. growth I off quantify some what's pretty some exposure if affirmation all guys category sounded can been an to services be like incremental to gambling think got that Can sits you QX. I we've optimistic gambling? offsetting with get incredibly then indeed of clear but you're auto list in And that but you are where year. sports You've just guess, metric it on commentary you actually gave kind growth worsening, it started as -- you you're more category around core, Sports really,

James Ryan

but showing fourth auto. quarter, I said fourth I again, quarter is mean, too, green is, mean, everything I Pat Yes. think

to So it's nice that. see

gaming of at ZIP on goes, something we're gaming said the basis looking in now, a million us was couple for calls single-digit which as that the -- right a obviously up last year say full $XX code is year, XXXX I'd in for full probably basically number. far of we As

far over several growth fantastic had grow as said continue it's states next to year, it. Pat to the and So this so years expect we earlier, more would as legalize it

Robert Smith

If could they quite of that, we're to a I add bit in spending that and activated. because too, is Arizona Louisiana recently seeing

We anticipate December also anticipate, revenue. have small New markets which York we X, in New of couple York, while quarter we will a that will on fourth come live to contribute

Operator

Evans question next from Our Kyle Stephens. the comes of line from

Kyle Evans

Could you or or is follow-up give kind got of how then us on qualitative on Tegna going? Premion any I've Jim. a X your And update with quantitative for partnership

Donald LaPlatney

Kyle, high XXXX, -- our it's all I out for early Pat. we're say of rollout budget rolled well we finished it's I you in us. we going a our markets, QX. it's Yes. well. and ahead very I of And area growth think, our can would We of tell for --

James Ryan

seeing also, the was August and add we're the and Quincy that to rolled very was seeing we're in impact stations could of it those in I September, If out results now. It already quickly already. stations

Robert Smith

should an going we buy Premion proud congratulate they have into financially. they But positive together. doing. to it's to that is on that allowed know of I honored I'd be to We that. of talent Tegna. with management Premion service, did stuff our to an proud company, Premion kind flattered the really want I just have job. around within Kyle, Tegna of example interest done for Because at team Gray, the to there's be add it. a if very what been like They exceptional of putting to lot great and were and a are in small and they're

Kyle Evans

trailing identical gave 'XX/'XX have a the decks. for Great. OCF been the in you one Jim, we that's your looks revenue that to us and almost X-quarter X/XX/XX that

basically just Right? like means that -- And 'XX first the 'XX. so half first of it's the looks of half which

James Ryan

Yes, basically.

Kyle Evans

and as of forward? looking mind, to at biggest forward the model your going or the I'm XX/XX what, X grow going the kind puts that for, OCF If are X in takes

James Ryan

saying 'XX, are You're or into XX/XX/XX, you going just out Kyle? a

Kyle Evans

out, I Well, to but go you want XX/XX. of course, the

James Ryan

would about... I think

Kyle Evans

out as you you let to go far want I'd Jim. go,

James Ryan

I guide in But discussed, conservative admit a by is political would initial it 'XX this as good reasonably underneath number. think we've good the will a obviously, big about a and a said just political here. 'XX year I being -- huge picture, I'm way and we've a little was our sized all

So as that offsets net that delta core in retrans growth 'XX, expecting grow we're in the political. probably

'XX. And probably 'XX you're total so a looked on then being a 'XX if 'XX looks a lot And basis. lot conservative, like like

in So code it puts you back ZIP the same probably.

flow kind -- the conservative, Now million you be this on But it 'XX. be lucky on more I would are of And maybe that gave otherwise, so into backfill I'm being that Because good -- is plus. move kind locked would that. I you in million-smart. $X.X a tell our political, time can is of number you billion, in cash $XXX code, you then we not of way. and place I you it free get think to and else which I'd 'XX in by anybody And think $XX don't in financing puts ZIP -- the mean, as I at will it got going to thinking we puts But those start point. numbers actually about we either. pretty back the done, reasonably same

Kyle Evans

to should thinking free big Got kind Or well? be that that steady EBITDA on of around anything it. we hold And of about? the is cash conversion as moving

James Ryan

of that. I think it generally bigger shouted holds the steady. I out I mean components

But Flint divestiture we to is at as as historical thing. move math going baked about pro QX really on $XX we're jumps I a into only said, on being QX a like don't we out that million on Quincy. noise of the to taxes. that got going million in $XX another pay taxes what -- the which we -- got cash up coming significant. me in combined You year next when into We've decided I onetime of nothing forma for But that our basis,

Operator

line Our next Goss of question from Jim Barrington Research. comes from the

James Goss

using was proliferation some curious any I know you was impact. increasing potential I mostly a right. rerun-oriented the of networks. that. used with digital you you secondary, I do I'm about toward any wondering of lot increasing you might them, know I particular them stations you or have have and of if of And can if All I And wonder frame wondering, strategy economic them? usage

Donald LaPlatney

it's Jim, Yes, Pat.

have Telemundo's. all So in signal, we and stations, then we then our a and have have of markets, a we virtually some secondary primary X network Big

we have networks to. the an interest Beyond actually referring in that own We that, you're Circle. equity

is So Gray that's And vehicle them, primary again, have vast we as strategy situated the our then we're majority the today, signal really one and X we'll or a diginets signals. cash call roughly And sales that's for X the way of those, take pass-through to do of stations. remainder. multicast in when

still I not hope X.X chunk question. off. until your out. -- revenue, a that to to get increase it's but rolled of by amount I when happens, -- huge will we more, but a add a potentially vary bandwidth it's have And mark much it's of change ATSC is And to nice And think So think revenue. going chunk don't I that going of that years answered that's that the few we that's still strategy

James Goss

on technologies refinement have might the modest ancillary be anything focused room No, in because terms the was toward do a I he's accomplished then going under this everything good incremental or that's ownership probably into or Kevin, caps question call. either because he's M&A if turning elsewhere? portfolio for be of second you more left or whether wondering and exposures be priorities, out you'd my you would Yes. framework. But And would

Kevin Latek

that's Jim, guess, everybody really question I the table. at a for

to to don't obviously We on is Meredith, the is to down have either a the priority then of our debt. a Our TV close on balance room priority cap, pay and sheet be bandwidth FCC have acquisitions. we of large doing lot but lot don't

power of stations year, TV a in buying and dozens of anywhere. thousand tracking tell to literally looked and Obviously, most is So looks. between. of don't of separate it's in I for we our this sheet. more the other, investments hundred those kind XX everything would go have entree acquisitions one you, at year, NDAs Meredith up dollar and strategic We're and couple

losing get of we're complementary. at some we're sort the looking. not We're things of change, the that skill -- and not know that helpful, we things been not obviously of run looking we announced We to leave how course, side so but around to Wall not Nothing year, a a new that We're a area. on of our we We're but We'll ancillary, company professionals TV far buy really stations what some has We're Street. things looking to wheelhouse we're that's strong set. group are this done destroy So looking media of have. money. that are to constantly do company. looking we've are the start-up know what into -- to not to we've go the out looking pivoting couple or

Hilton Howell

this Jim, is Hilton.

largest obviously of on I all as think this we're close Meredith to say, year to be the is bit of XXXX going Let to of just into what to We a me of roll one -- roll sterling country. we're is to Kevin and then we're think to which we've transaction seen the look that it, in add this going we going timing going endorse. political right years at because what consolidation. being a We had little

scale have we've XX X and try gone lightning you, from both we're consolidating out bringing now, all right to going going to our those so year consolidate for give do Quincy, and which in opportunities XXXX. in And new But this really X then at we're lots markets when done, essentially tell But future operations. running XXX us be speed closes Meredith size And will years will to to been we've things. gone ago years stations. and I are really of to -- in the already remarkable and new the

very And excited so we're about that.

Operator

from of next Our comes question Wells line the Fargo. Cahall Steven from

Steven Cahall

the after you to so much it as call. don't Kevin, Maybe have restate

over combo? be subscribers satellite gotten were clear, Has what's it Has give virtual, been the the better? And Has color less as last bad? us cable year? some up your changed any Just year-on-year. could to gotten you most to

Kevin Latek

People a big number -- took left lost small resurgence. we cities. the as bills. A quarter ago decent recession we XXXX, their stopped the cities, of had we year paying saw people a subs in hold, even second -- And

is the been year-over-year some trend been. by declines They calls, in prior had have in same has in it offset heard pretty the the much MVPDs. as We've growth the You've strong really OTTs.

when time going we to So here. you're basically much of was put good very I I don't the year-over-year. a wouldn't talking the think That's about too subs at I much it number essentially was into It mean, given declines that gain some sub that be, over trend flat a be is small it's level, amount that high to the place flat of have. different.

Steven Cahall

The about Jim, the pro looks just kind Is fully as then for benefit you loaded we for cash interest historical deleverage, all trying margin that cash thanks And deal? flow the to numbers. what combined for flow cash nice. have pretty forma Great. those And of think see. free you'll could

James Ryan

incremental interest $XXX acquisition. estimated average the the Yes. blended debt X.XX%. of of that rate And said on is as initial Meredith The Meredith the earlier, debt cash million we includes

So that's $XXX reducing as too it's so along X, be -- debt, we is X pay the And cheap. we'll we then down interest interest. the cash go relatively obviously, day day million cash as

Steven Cahall

billion the cash right? that $X.X the And Great. Is includes interest.

James Ryan

as don't senior I The the $X.X is the billion I agreement. think operating understand in defined cash question. our credit flow,

what call you would probably not EBITDA. exactly that but be akin So to, adjusted

Steven Cahall

Great.

That's clear. Yes. Okay. very

James Ryan

The before would deducting interest expense. be $X.X billion

calculated it. the can it release at you you -- to it's we see see and We've the -- been get non-GAAP So consistently years. for rec look can how to as

Steven Cahall

Quincy way there's there Meredith, on station ad we the And that Is you like sort some feel Quincy in then maybe put you to and an the at revenue just synergy contributions, see opportunity done might both that sales of Pat, do historically bring time? over up Great. when business for you've Gray?

Donald LaPlatney

question. Good Yes.

yes. paying there's approach already think our think We we Premion is the is part can't benefits of the Bob similar early I acquisition it. pretty as the just quantify on mentioned, But I in close answer Meredith. dividends once on game. Quincy the

of the synergies. forward. report we kind expense there'll believe some do so do revenue the retrans is the When be But just and yes. answer we is synergies math, we going reality And

James Ryan

with add the that, If in the Group. I have Quincy team best training to already opinion, our the could sales We, some in business. we're results seeing

And to months a our moving so of we with and were well very it proactive forward plan we're management. with that, them training a the seeing a few organizations through and results Quincy put well. sales as intensive ago, very do the sales sales is staff as week, the for And and Meredith

Operator

Our of Liu question line Monica next comes from Onex. from the

Monica Liu

QX that basis? of of higher But Figured quite help margin margin. XX% compared difference is I to appreciate all down and is some margin the or a most top the political, bridge I 'XX nonpolitical kind it like the to It on on just you EBITDA revenue on understand large has margin. line. can bit the ask even year-over-year related curious if and seems year-over-year. just I the a quarter, this question great a was that down you of which would because color provided a about looks quite

James Ryan

comparing in the I the retrans retrans. driver 'XX biggest that would I networks to reverse of 'XX to 'XX 'XX. increase of Or think to you're the back goes be mean, net where that or

operating was year-over-year to -- was all the $XX But the me. costs seeing -- the OTO highlighted you're quarter bear probably did trying with margin release commented of it the which for those front the we the million, impacting what We be some increase OTO on expense the right -- get are are the is just acquisitions, have deals, It costs. in again, report in which about, primarily year-over-year. forma pro up costs transaction-related For well. on to would was as the is of down well, up release, deal driver it me. that your I'm what as

So year-over-year it been comp. it's steady change in has what's really really reverse -- Everything driving relatively the holding is the else

Monica Liu

Okay.

retrans percentage me. question that year-over-year seems of growth can just at for follow One I think rate separately trends. a revenue details. That net I more pretty to looked from steady up I get more But actually percentage a also perspective. on your as

category, category. In I terms back has the of been well auto performance as a think weak understood

retail, you some that companies the categories from QX the if into of supply physical than larger are the entertainment, space commented restaurant, call shortage of as some Delta impact are the on the either curious the categories of seeing Just some other some seeing or expected. QX, variant or of in going impact their presence some from such

seeing you're end. the if trend from curious Just same your

Donald LaPlatney

really market. there's isolated we're not It's market now. overall, sure Pat. short The right not answer really. by is I'm that incidents seeing But

Operator

There are no further questions at time. this

Hilton Howell

wait a you year to has morning. so us joined want thank you, this transaction belt. very and Bye-bye. I of with holiday operator. to talk and Thank Thank much, close proud this Meredith you great we have QX our We're season. our new results, to And who in everyone the and can't underneath

Operator

today's That call. participating. Thank everyone, you, concludes conference for

disconnect. now may You

Gray Television (GTN) 6 Nov 212021 Q3 Earnings call transcript