Salem Media (SALM) 8 Mar 232022 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen. Welcome to the Salem Media Group Q4 2022 Earnings Conference Call. [Operator Instructions].

And now at this time, I'll turn things over to Mr. Evan Masyr, Executive Vice President and Chief Financial Officer. sir. ahead, go Please

thank Fourth for Quarter and Salem us Media Group's XXXX you you, joining all for Thank Earnings Call.

if back from reminder, you a you at disconnected As any can dial website in our listen or at www.salemmedia.com. get time,

are me and Chief room Officer. Chief Evans, Santrella, today the Executive David In Operating with Officer; David

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

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

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

call Dave will the Dave? over that, I with And to now turn Santrella.

to Salem's developments and update. of for to quarter a respect the provide and XXXX. details call discuss financial fourth of new to our today. quarter performance back turn for M&A more give Evan all thanks fourth being with Evan, Thanks, first to part a brief then call some guidance the Today, results, review on the quarter I'll debt provide we'll and

call revenue revenue. adjusted quarter the down XX%. the its the declined down hear today ad-driven of is and the you'll and on overall X.X%. up that Total throughout fourth economy for X.X% EBITDA on thing One impact particularly were slowing Expenses was Salem,

review I you. combine revenue quarter revenue the XX% National division digital digital and and you our the division, overall within the revenue. I Before results Digital for division, want When nearly the summarize in digital revenue was to Broadcast by is of total the flat overall

the in mature XX.X%. Broadcast and digital continue The that we financial more best decline future National grew flat will to digital to the the where we due overall softness declined Despite source of being I while Digital revenue resources. division as in still invest our growth address XX%, the revenue bit. revenue see little Digital economy, will a the

in the of fourth operate. in the quarter I'll quarter where which financial over the X.X% Broadcast Now fourth according the of performance increased division. growth markets we go shows This in X.X% well Miller Kaplan, industry the division to above compared in fourth is XXXX. the to the industry in Revenue growth each quarter

quarter, political fourth and for the in was both the revenue growing drivers the overall of industry revenue. One us

political in million $X.X in quarter XXXX. fourth $X.X fourth quarter recognized in million We compared the to just of the

economy. X.X% in of national political revenue we up revenue, is The up seen Salem. in the which revenue year, mid-term spot, $X.X which the in advertising spot down and X.X% is level the had due million weak a XX.X%. For for Local network political highest revenue to election is was political principally

has Salem's during ongoing for our X.X% the is business increased that is to was shown programming which quarter. demand the pleased up quarter revenue due model resiliency to was revenue, component by X.X% programming I'm and This in report growth routinely in and times. unique the a Remember limited being Christian programming ministry for that time. X.X% recessionary This block is led National to year. up block

combined digital XX% we SalemNOW the Broadcast revenue, further are our News about the in the Salem believe talked Channel already revenue division, growth we and I Because within during Surround, our Salem this quarter. these investing initiatives. Salem the increased digital opportunity, which is biggest Podcast Network, encompasses

quarter was a Broadcast the declined expenses XX.X% impact match, Salem's News increased bad compared Revenue National credit of the continued beginning the quarter Digital of the the XXXX. debt our Channel, XX.X%, investment in XXX(k) the at of of driven and by sale in of which in XXXX fourth to fourth division XXXX. reinstituted

the to to is a Facebook Similar due websites. conservative of quarter, In traffic to This algorithm significant revenue Facebook feature last less July, changes to content. led demise and in cookie. Salem's decline its opinion to the the from third-party has to decline political implemented Facebook

also Also, expenses putting Digital revenues. cookie CPMs. mobile advertising X.X% pressure due advertising top digital which many digital browsers to are initiatives. devices and is On economy access on were to overall cost these blocking hurting third-party is X issues, weak information, management up the of

a schedule We our quarter schedule Book the at light fourth in in XX.X% declined Revenue compared fourth Publishing of XXXX. to release had book a the division quarter. strong book

by in Our Corrupted and Eric Metaxas. the Letter fourth were of to top Ted American books the Justice quarter by XXXX Cruz Church

David, with quarter. book not Leo X the in titles are As schedule The me. by is a the release Dining is normally first the Patalinghug. help Saints case, there strong biggest

Patalinghug.

down Thank in Klavan expenses by the you, Foley, forgive How to ongoing Leo Scalia related Save Metaxas. sales and -- Michael XX.X% of to Patalinghug, well James decline as Spencer by Scalia, due revenue. Scalia by Rosen; by strong me, books West as Publishing the sorry, James were and Eric

structure. provide update stop back XXXX. delayed to negotiated in month, back capital September an we draw we Last on our exercised want I the

the issuing be to X.XX% will notes We XXXX X.XXX% million in $XX.X notes. XXXX new take remaining out

$X trustee approximately million the to After the down end of to close the everything will call pay have the ABL expect We of notes XXXX the our have to we by the initiated through and access month. close, revolver.

acquired $XXX,XXX. activity. we newsletter $XXX,XXX. M&A X, KKOL-AM our closed on financial for for I Seattle on of discussion the X, acquisition to want Also the in December DayTradeSPY we shift On October to

$XXX,XXX. we ISI purchased Publishing for XX, December on Finally,

January, the we company. transmitter the into Miami the done able Salem AM have for licenses land from an assets is from Salem million. X entered acquire could In AM, and broadcast Edward $X.X company stations, Salem's $XX the same the liquidity was radio ad Executive radio on and whereby to WRHC The sites. station the the the company sellers. purchased related agreement WWFE This the for Atsinger, for to million WMYM land price paid FCC million and purchase paid AM for of for $X.X Chairman closed preserve

we this George the related and liabilities cash report subscription digital but the the on deferred of X, pay not future of closing closed for subscriptions. websites. other did acquisition February and any will assume at transaction On We certain pay Gilder and newsletters XX%

the I'll call guidance details for Evan performance on quarter's turn the QX. And to for additional back that, with and

Thank you, Dave.

For decrease to operating total net to on revenue $XX.X EBITDA $XX.X expenses X.X% increased expenses a in a million, and decreased the basis XX.X%. of to operating broadcast fourth quarter, $XX.X and million to to decreased $XX.X adjusted million. revenue $X.X recurring $XX.X XX.X% X.X% station X.X% last million, year, to increased broadcast of income increased million resulting Compared Operating million.

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

leverage XXXX X debt As notes, X/X% was credit December ratio was up $XX of made the XXXX, of defined The XXXX agreements. total X X/X% $XXX.X as million million million, on $X under of notes XX, $XXX.X outstanding million facility. X.XX of ABL Salem's and

settlement, sale for of from XX% fair the of first changes $XX.X assets, expense, a legal to million. flat consideration, impairments, first total projecting amortization million. compared quarter expenses the the is of of is operating and projecting stock-based or or estimated X% expense, disposal between on increase X% losses contingent earn-out expenses $XX.X forward, and to first Salem XXXX in depreciation be before XXXX XXXX, revenue of to Looking between decline expense Salem also quarter quarter of gains operating and revenue of value non-GAAP compensation the

remarks, questions. up prepared call our and would we the like any open concludes to this for Operator? And now

this [Operator Michael Mr. Capital first question take afternoon Instructions]. Markets. Kupinski from of NOBLE our We'll

quarter, that's give always typically so an I all, us for was I glad I'm thoughts of programming it A year. kind of a price there? increase guys estimates, of increases First your the of was in difficult in idea to put of first things. a but the good couple you what see know my block thing. in first the you that the beat know Any you Can the quarter? price

X%. Yes, it was just shy of

was I can QX? of signs some trends. kind of give little board? trends outlook about the know first kind your of Or flavor better were are Just into give things of quarter a brightness, looking kind you I Any on a can us revenue what wondering than And fourth the just was the give a life? a in revenue it of is some quarter. same for. continuing guide are little is the you us if for the that I across the And showing that thought particular color us that of kind Okay. actually

month. written January a than of for January month, was sluggish. little in in got better was dollars pretty February actually the terms Yes, the

at has for kind March for much today how we out the pretty far, started today write current Michael, of next much that. do good. do and month month write and next the I look, after month So then how we actually the

first I've writing March. And what us seen in several with the least been pleased days at I've of

can't that's good. of headwind estate because is as mortgage, might can a you a seems that high. QX, as necessarily industry I always we're category expect, way tell big most category now. in I all it fighting right radio you doing question, going point category the great a of interest is and now So you this there's to real rates that right we is a But significant is particular which tell is a no not in had, really gangbusters. are and

vaccines a from is had right, lot we that really not spending government, promoting as anymore. XXXX, Well, In there whatnot. advertising of and much the

So overall few that down categories just are there's a been and headwinds. again,

has Got local been maybe better. bit been wondering saying you are it's whereas was local extremely national What national local weak seeing have your and you. up. spot? has a others National part, between little weak, that been was most the and for holding spot And I was just interesting

And national, that network really than what's to our I particularly driven Michael, strong, stronger of because then you has spot. those. -- commercial our in approach national able kind listen political. of XXX-degree of been it's different that. selling we're radio that itself because also think take Well, program, just can in QX national network of listen to was to course, you each We're then, that by can of podcast a And spot is

what Right, then right. of But are in for QX? terms you local seeing

Can you rephrase the question?

odds stronger business. sale that's are and which things than podcast QX, And I'd a like say at momentum initiatives I'd our we that's sale national our the seem organization got does and little news of the rest national newer digital with has of in say channel the feeding seeing industry. national because local network because and and our

then, used would just in to debt, to I largely And I drive I this be you -- plan that you. flow assume Got the would down year of that terms is to pay cash assume. guess, going

just year? of confirm the capital allocation for So this to -- kind but

pay year of back -- place, bit had will when the bond #X free from definitely, us this to debt, down bonds flow put the as quite debt XXXX, our is -- a down Michael, million there. you've you really we $XXX single Yes, be compare use the continue seen we and in to for do issue cash

we will down focus deleveraging. on paying to continue So and debt

Edward EF go now We to Reily next Hutton. of

a towards of XXXX. regarding maybe us negative December. months in the But in any was this difference wondering to little quarter. momentum between through bit the November help guidance is that guided And and if guidance, the the and I got quarter's my QX, surprised you wondering what and Mike if X% into questions. growth of reconcile most X% the you could just you of just maybe result, actual carried negative

a guidance of from think a Letters better better was I fourth stronger QX expected little with the the books just Justice that the and that did prior Eric by Corrupted we did little But publishing Metaxas. because we we was I of things to biggest the have mentioned, American political well. of a in And definitely perspective. we Cruz couple part Dave fourth of the think Church bit a guidance by our better. that the a came than a the why as slate together That and year. glaring putting Ted books we in of When quarter, for had quarter were did negative

we're Okay. seems the And it targeting Florida market. really

the to should regard next allocation, expect we maybe Just with same capital more for year? of

adding us market. I this don't the Miami any at see additional in point licenses

have I trying think we that licenses X can to accomplish that feel there. we're good we we achieve with what the

our of we'll now And take from question Marsh next Singular Research. David

rest that about guys out that any you of publishing As the the back in particularly are publishing the direction? throughout there excited titles we could look are get moving right year,

look for Hawley, Gilder, Tulsi home Book and call Josh I revenue specific profit If business and we list were whole, wouldn't in at particular to The to run I I the slate compared Bee, Babylon a out and both titles I'd authors, I But Ted from as Saad, Cruz. Gad one Gabbard mention think books growth will XXXX title. George when XXXX. Publishing see the

very a of the the look you portfolio as ones are as any I forward? right a source you are That's look And divesting as at appreciate maybe particular at could that sense a going out guys now, at helpful. know here? there portfolio that there tough any whole, makes I look use it's Okay. when stand then that. to overall, market possibly but assets asset it take a liquidity

all if then estate whether real hands our can business continually assess the in of or you, there. at basis, I hands Well, and regular constantly tell we units best we a our it's at constantly performance and individual assessing they're on of have of changing in we're values that, look and real And estate best else. somebody looking that the

force there's And me. guess, for in talent that guys actions then, fair. had you perhaps be I operators other reduction lastly able in that of other by some available maybe SiriusXM available might to or previously force. result some curious just helped if just That's -- reduction that XM was perhaps that revenue just in wasn't a drive add might I just -- as Sure. industry? had the any

Yes.

we're best think digital sales SiriusXM are on we're profiles other assets, at consider workforce been talent. greater with certainly for them. always and looking maybe the looking good at at Salem good talented people in digital sales has less And digital Where reductions -- the formats. the that our Surround a both very if both side. opportunity there's Salem for I other initiatives. and We If for as available. great other some there's are there support the within our broadcasters, investing will and opportunity talent our course, talent talent our there's is that a with And we them fits there, of

from Michael take we'll And follow-up a now Kupinski. question

If $XX.X of can is? you QX. XXXX wanted I from on appreciate a that kind just bit. outlook that. to for What I expense of explain million? QX little that that? of that down comparable kind the you And drill the repeat is Can just

an on or the what the talk then maybe refresh you increase. and Dave driving numbers give about update were, can what's I'll Yes.

the X% million that a to it's of from about you And in talk quarter XX% So $XX.X first to it? Dave, increase expenses do 'XX. want in

Yes.

In our to the being guidance, as additional grow digital digital impacted terms I to just of really staff mentioned, continue expense sales business. hiring by, it's

old. of pioneers side broadcasters wanted on Salem, opposed really of remember, as is be than X later our to really the did. broadcast followers have We faster business only there. about fast We You other -- years to to kind digital launched

to order we we And it direction. in have it. keep moved people to add more that growing, to that in we're glad But

then around -- it digital a and of to using We by larger a we so orders larger both build but infrastructure sales kind them those digital sales third in-house, fulfill fulfill to that can parties. in-house. cheaper force then have It's

we're advantage really that we able real qualified so that off for new is sellers companies of salespeople, big of And take opportunity. with found laying ROI tech And to the positive us.

on of side margins as think idea you an right? business broadcast of can do how Or grow matures? digital the kind profitable us what And the this your the and do could where margins -- are at so you give to Is yes, point? this

look guess of XX% that the products. I'd profit say the in-house, different to to in of at a grow because probably as some margin. bring incrementally, average, I we lot it's to Yes. margins is we difficult incremental But sell want margin stuff range. on look we digital the

Yes.

margin Manager. because sharing team kind with calculate of the sharing sales You profit stand-alone with a General broadcast. can't radio it's It's really

basis It sales margin selling incremental other inventory, shared spot So owned local we're and an we expenses. operated there's selling but inventory. of a some because we're is than are reselling people's lower bunch on profit when digital, also

there don't core that we cost business. So is local a our sold to media business have digital with goods spot the of

So it but is lower still profit that, margin because of nicely profitable.

spot on is whereas of sold expenses goods cost real the unit, local operating of the writing cost sold of goods that. sold. really goods into with We're or a Yes, the advertising advertising a baked for that the the to of matter, check there's buckets national cost for somebody digital, business

back like no Mr. And afternoon. questions appears have we gentlemen, further turn Santrella, any comments. you closing it I'd to to things for this

quarter. appreciate part we'll everybody, being the Okay. see We today. a of call for again it, Well, thanks, and next you

for you, all of and XXXX QX We'd Salem Call. Santrella. a joining all and does remainder great you us Mr. you Goodbye. Conference Thank to thank that much like Ladies conclude Earnings wish day. gentlemen, Group the Media so your