Gray Announces Operating Results for the Second Quarter
Gray Television (NYSE: GTN) reported Q2 2024 financial results, noting total revenue of $826 million and operating expenses of $607 million. Core advertising revenue was slightly below expectations at $373 million, but political advertising surged to $47 million, marking a 292% increase from Q2 2023. Net income rose to $22 million from $4 million last year. Adjusted EBITDA remained stable at $225 million.
For Q3 2024, Gray anticipates flat to low single-digit growth in core advertising revenue. The company lowered its full-year core advertising revenue guidance to $1.525 billion, down from $1.6 billion. Political advertising revenue is expected to be strong at $180-$200 million in Q3.
Gray continues to manage costs and improve efficiency, reducing full-year broadcast operating expenses guidance by an additional $15 million. The company also undertook significant debt reduction efforts, extending maturities to 2027 and beyond. The weighted average cost of debt increased to 7.7% from 6.8%.
Gray Television (NYSE: GTN) ha riportato i risultati finanziari del secondo trimestre 2024, evidenziando ricavi totali di 826 milioni di dollari e spese operative di 607 milioni di dollari. I ricavi pubblicitari core sono stati leggermente al di sotto delle aspettative, con 373 milioni di dollari, ma la pubblicità politica è aumentata a 47 milioni di dollari, registrando un incremento del 292% rispetto al secondo trimestre 2023. L'utile netto è salito a 22 milioni di dollari rispetto ai 4 milioni dell'anno scorso. L'EBITDA rettificato è rimasto stabile a 225 milioni di dollari.
Per il terzo trimestre 2024, Gray prevede una crescita piatta o a singola cifra bassa nei ricavi pubblicitari core. L'azienda ha abbassato le sue previsioni di ricavi pubblicitari core per l'intero anno a 1,525 miliardi di dollari, in calo rispetto a 1,6 miliardi di dollari. Si prevede che i ricavi dalla pubblicità politica siano forti, compresi tra 180 e 200 milioni di dollari nel terzo trimestre.
Gray continua a gestire i costi e migliorare l'efficienza, riducendo ulteriormente le previsioni sui costi operativi di broadcasting per l'intero anno di 15 milioni di dollari. L'azienda ha anche intrapreso significativi sforzi per ridurre il debito, estendendo le scadenze fino al 2027 e oltre. Il costo medio ponderato del debito è aumentato al 7,7% rispetto al 6,8%.
Gray Television (NYSE: GTN) informó los resultados financieros del segundo trimestre de 2024, destacando ingresos totales de 826 millones de dólares y gastos operativos de 607 millones de dólares. Los ingresos publicitarios centrales fueron ligeramente inferiores a las expectativas con 373 millones de dólares, pero la publicidad política aumentó a 47 millones de dólares, marcando un incremento del 292% en comparación con el segundo trimestre de 2023. Los ingresos netos subieron a 22 millones de dólares, frente a 4 millones del año pasado. El EBITDA ajustado se mantuvo estable en 225 millones de dólares.
Para el tercer trimestre de 2024, Gray anticipa un crecimiento plano o de un solo dígito bajo en los ingresos publicitarios centrales. La compañía redujo su guía anual de ingresos publicitarios centrales a 1.525 millones de dólares, bajando de 1.6 mil millones. Se espera que los ingresos por publicidad política sean sólidos, entre 180 y 200 millones de dólares en el tercer trimestre.
Gray continúa gestionando costos y mejorando la eficiencia, reduciendo aún más su guía de gastos operativos de transmisión para el año completo en 15 millones de dólares. La empresa también llevó a cabo esfuerzos significativos para reducir la deuda, extendiendo los plazos hasta 2027 y más allá. El costo promedio ponderado de la deuda aumentó al 7.7% desde el 6.8%.
그레이 텔레비전(NYSE: GTN)은 2024년 2분기 재무 결과를 발표하며, 총 수익이 8억 2600만 달러, 운영 비용이 6억 700만 달러임을 알렸습니다. 핵심 광고 수익은 3억 7300만 달러로 다소 기대에 미치지 못했지만, 정치 광고는 4700만 달러로 2023년 2분기 대비 292% 증가했습니다. 순이익은 작년 400만 달러에서 2200만 달러로 상승했습니다. 조정된 EBITDA는 2억 2500만 달러로 안정세를 유지했습니다.
그레이는 2024년 3분기 동안 핵심 광고 수익이 평탄하거나 낮은 한 자릿수 성장률을 기록할 것으로 예상하고 있습니다. 회사는 연간 핵심 광고 수익 예상치를 15억 2500만 달러로 낮췄습니다 (이전 16억 달러). 정치 광고 수익은 3분기 동안 1억 8000만에서 2억 달러로 강세를 보일 것으로 예상됩니다.
그레이는 비용 관리와 효율성 향상을 계속하고 있으며, 전체 연간 방송 운영 비용 예측치를 추가로 1500만 달러 낮췄습니다. 회사는 또한 2027년 이후로 만기를 연장하는 등의 상당한 부채 감소 노력을 기울였습니다. 부채의 가중 평균 비용은 6.8%에서 7.7%로 증가했습니다.
Gray Television (NYSE: GTN) a déclaré des résultats financiers pour le deuxième trimestre 2024, avec des revenus totaux de 826 millions de dollars et des dépenses d'exploitation de 607 millions de dollars. Les revenus publicitaires centraux étaient légèrement inférieurs aux attentes, atteignant 373 millions de dollars, mais la publicité politique a explosé à 47 millions de dollars, marquant une augmentation de 292 % par rapport au deuxième trimestre 2023. Le revenu net a augmenté à 22 millions de dollars contre 4 millions de dollars l'année précédente. L'EBITDA ajusté est resté stable à 225 millions de dollars.
Pour le troisième trimestre 2024, Gray prévoit une croissance plate ou basse à un chiffre dans les revenus publicitaires centraux. L'entreprise a abaissé sa prévision annuelle des revenus publicitaires centraux à 1,525 milliard de dollars, contre 1,6 milliard de dollars auparavant. Les revenus de la publicité politique devraient être solides, se situant entre 180 et 200 millions de dollars au troisième trimestre.
Gray continue de gérer les coûts et d'améliorer l'efficacité, réduisant de 15 millions de dollars supplémentaires ses prévisions de dépenses d'exploitation pour l'ensemble de l'année. L'entreprise a également entrepris d'importants efforts pour réduire sa dette, prolongeant les échéances jusqu'en 2027 et au-delà. Le coût moyen pondéré de la dette a augmenté à 7,7 % contre 6,8 %.
Gray Television (NYSE: GTN) berichtete über die Finanzzahlen des zweiten Quartals 2024 und wies Gesamteinnahmen von 826 Millionen Dollar und Betriebskosten von 607 Millionen Dollar aus. Die Kernwerbungseinnahmen lagen mit 373 Millionen Dollar leicht unter den Erwartungen, doch die politische Werbung stieg auf 47 Millionen Dollar und verzeichnete damit einen Anstieg von 292 % im Vergleich zum zweiten Quartal 2023. Der Nettogewinn stieg auf 22 Millionen Dollar gegenüber 4 Millionen Dollar im Vorjahr. Das bereinigte EBITDA blieb mit 225 Millionen Dollar stabil.
Für das dritte Quartal 2024 erwartet Gray ein flaches bis niedriges einstelliges Wachstum bei den Kernwerbungseinnahmen. Das Unternehmen senkte die Prognose für die gesamten jährlichen Kernwerbungseinnahmen auf 1,525 Milliarden Dollar, nach zuvor 1,6 Milliarden Dollar. Die Einnahmen aus politischer Werbung werden voraussichtlich stark ausfallen und zwischen 180 und 200 Millionen Dollar im dritten Quartal liegen.
Gray verwaltet weiterhin die Kosten und verbessert die Effizienz, indem die Prognose für die Betriebskosten im Rundfunk für das gesamte Jahr um weitere 15 Millionen Dollar gesenkt wird. Das Unternehmen unternahm auch erhebliche Anstrengungen zur Reduzierung der Schulden und verlängerte die Fälligkeiten bis 2027 und darüber hinaus. Die gewichteten durchschnittlichen Fremdkapitalkosten stiegen von 6,8 % auf 7,7 %.
- Total revenue increased by 2% to $826 million in Q2 2024.
- Political advertising revenue surged by 292% to $47 million.
- Net income rose to $22 million from $4 million in Q2 2023.
- Adjusted EBITDA remained stable at $225 million.
- Significant debt reduction and extension of maturities to 2027 and beyond.
- Core advertising revenue was slightly below expectations at $373 million.
- Full-year core advertising revenue guidance lowered to $1.525 billion from $1.6 billion.
- Weighted average cost of debt increased to 7.7% from 6.8%.
Insights
Gray Television's Q2 2024 results show mixed performance. Total revenue increased 2% year-over-year to
The company has revised its full-year 2024 guidance downward:
- Core advertising revenue forecast reduced from
$1.6 billion to$1.525 billion - Retransmission consent revenue expected to be
$1.475 billion , down from previous estimates - Broadcast operating expenses and corporate expenses reduced by
$15 million and$5 million respectively
On a positive note, Gray has made significant progress in debt management, extending maturities and reducing near-term obligations. This improves financial flexibility but comes at the cost of a higher weighted average cost of debt (now
Gray Television's Q2 results and revised guidance reflect broader industry trends and macroeconomic pressures. The strong political advertising revenue (
The downward revision of full-year core advertising revenue forecast (
The company's efforts to manage costs and improve efficiency are prudent given these headwinds. However, the ongoing decline in pay-TV subscribers, as evidenced by the lowered retransmission consent revenue forecast, remains a long-term structural challenge for the broadcast TV industry.
Gray Television's debt management strategy demonstrates proactive financial stewardship. Key legal and financial moves include:
- Amending the Senior Credit Facility to increase revolving credit commitments and extend maturity
- Prepaying the
$1.15 billion 2019 Term Loan - Issuing a new
$500 million 2024 Term Loan maturing in 2029 - Tendering
$690 million of$700 million 2026 Notes - Issuing
$1.25 billion of 2029 Notes
These actions have successfully pushed major debt maturities beyond 2026, providing financial breathing room through two political advertising cycles. However, the increased weighted average cost of debt (from
The company's debt repurchase program, with
ATLANTA, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Gray Television, Inc. (“Gray Media,” “Gray,” “we,” “us” or “our”) (NYSE: GTN) today announced financial results for the second quarter ended June 30, 2024, including total revenue of
Our core advertising revenue in the second quarter was
Political advertising revenue in the second quarter was
Our retransmission consent revenue in the second quarter was
Earlier this year, we reduced our broadcast operating expense guide for full-year 2024 by
We continue to focus on improving our balance sheet. In the first half of 2024, we undertook significant steps to reduce our debt and extend the maturities of those debt obligations that were scheduled to mature within the next two years. As a result, our next material debt maturity will not occur until 2027, following the 2024 and 2026 political cycles, and our weighted average cost of debt has increased to
- Amended our Senior Credit Facility to:
- Increase lender commitments under our Revolving Credit Facility to
$680 million , increased the number of participating banks and extend the maturity date to December 31, 2027; - Fully prepay the
$1.15 billion 2019 Term Loan that was scheduled to mature on January 2, 2026; - Issue a
$500 million 2024 Term loan that will mature on June 4, 2029;
- Increase lender commitments under our Revolving Credit Facility to
- Pre-paid through a tender offer,
$690 million of the$700 million in outstanding 2026 Notes, scheduled to mature on July 15, 2026; - Issued
$1.25 billion of our 2029 Notes, that are secured pari passu with our Senior Credit Facility and that will mature on July 15, 2029; - Used available liquidity to repurchase and retire approximately
$50 million of our outstanding 2027 Notes on the open market at an average price of approximately90.5% of their par value; - So far in the third quarter of 2024, we have used our available liquidity to retire an additional
$29 million of our outstanding 2027 Notes on the open market at an average price of approximately92.1% of their par value. Currently, the remaining par value of our 2027 Notes has been reduced to$671 million ; and - In order to complete the above transactions, we have used
$200 million drawn under our Revolving Credit Facility. Due to strong operating cash flows since then, currently we have repaid$75 million of that borrowing and continue to prioritize repayment of our debt.
Currently, we have remaining availability of approximately
| Summary of Second Quarter Operating Results |
Operating Highlights (the respective 2024 periods reflect the “on-year” of the two-year political advertising cycle):
- Total revenue in the second quarter of 2024 was
$826 million , an increase of2% from the second quarter of 2023. - Core Advertising Revenue in the second quarter of 2024 was
$373 million , a decrease of$6 million or2% from the second quarter of 2023. - Political advertising revenue in the second quarter of 2024 was
$47 million , an increase of292% from the second quarter of 2023. - Net income was
$22 million in the second quarter of 2024, compared to$4 million in the second quarter of 2023. - Adjusted EBITDA was
$225 million in the second quarter of 2024, essentially unchanged from the second quarter of 2023.
Other Key Metrics
- As of June 30, 2024, calculated as set forth in our Senior Credit Agreement, our First Lien Leverage Ratio and Leverage Ratio, each net of all cash, was 3.21 to 1.00 and 5.92 to 1.00, respectively.
- Non-cash stock compensation was
$6 million during the second quarter of 2024, and$7 million in the second quarter of 2023.
Taxes
- During the six-months ended June 30, 2024 and 2023, we made income tax payments, net of refunds, of
$85 million and$24 million , respectively. During the remainder of 2024, based on our current forecasts, we anticipate making income tax payments, net of refunds, within a range of$92 million to$102 million . - As of June 30, 2024, we have an aggregate of
$282 million of various state operating loss carryforwards, of which we expect that approximately$201 million will not be utilized.
| Guidance for the Three-Months Ending September 30, 2024 |
Based on our current forecasts for the quarter ending September 30, 2024, we anticipate the following key financial results, as outlined below in approximate ranges and as compared to the quarter ending September 30, 2023, as well as certain currently anticipated full-year financial results. As always, guidance may change in the future based on several factors and therefore may not reflect actual results:
| Year Ending | ||||||||||||
| Quarter Ending | December 31, 2024 | |||||||||||
| September 30, 2024 | Estimates | |||||||||||
| September 30, 2023 | (Guidance) | As of Aug 8, 2024 | ||||||||||
| (Actual) | Low | High | (Guidance) | |||||||||
| (in millions) | ||||||||||||
| Revenue (less agency commissions): | ||||||||||||
| Core advertising | $ | 363 | $ | 365 | $ | 375 | $ | 1,525 | ||||
| Political advertising | 26 | 180 | 200 | |||||||||
| Retransmission consent | 378 | 365 | 370 | 1,475 | ||||||||
| Production companies | 20 | 23 | 25 | 105 | ||||||||
| Other | 16 | 15 | 16 | 70 | ||||||||
| Total revenue | $ | 803 | $ | 948 | $ | 986 | ||||||
| Operating expenses (excluding depreciation, amortization and loss on disposal of assets): | ||||||||||||
| Broadcasting: | ||||||||||||
| Station expenses | $ | 322 | $ | 351 | $ | 356 | $ | 1,395 | ||||
| Network affiliation fees | 234 | 233 | 233 | 935 | ||||||||
| Non-cash stock-based compensation | 1 | 1 | 1 | 5 | ||||||||
| Total broadcasting expense | $ | 557 | $ | 585 | $ | 590 | $ | 2,335 | ||||
| Production companies | $ | 18 | $ | 20 | $ | 22 | $ | 85 | ||||
| Corporate and administrative: | ||||||||||||
| Corporate expenses | $ | 19 | $ | 22 | $ | 25 | $ | 101 | ||||
| Non-cash stock-based compensation | 4 | 5 | 5 | 19 | ||||||||
| Total corporate and administrative expense | $ | 23 | $ | 27 | $ | 30 | $ | 120 | ||||
| Annual 2024 estimated supplemental information: | ||||||||||||
| Interest expense | $ | 475 | ||||||||||
| Amortization of deferred financing costs | $ | 14 | ||||||||||
| Preferred stock dividends | $ | 52 | ||||||||||
| Common stock dividends | $ | 32 | ||||||||||
| Total capital expenditures, excluding Assembly Atlanta | ||||||||||||
| Capital expenditures for Assembly Atlanta, net of anticipated reimbursements | $ | 18 | ||||||||||
| Income tax payments, net of refunds | ||||||||||||
| Selected Operating Data (Unaudited) | |||||||||||||||
| Three Months Ended June 30, | |||||||||||||||
| % Change | % Change | ||||||||||||||
| 2024 to | 2024 to | ||||||||||||||
| 2024 | 2023 | 2023 | 2022 | 2022 | |||||||||||
| (dollars in millions) | |||||||||||||||
| Revenue (less agency commissions): | |||||||||||||||
| Core advertising | $ | 373 | $ | 379 | (2 | )% | $ | 366 | 2 | % | |||||
| Political advertising | 47 | 12 | 292 | % | 90 | (48 | )% | ||||||||
| Retransmission consent | 371 | 394 | (6 | )% | 382 | (3 | )% | ||||||||
| Other | 17 | 16 | 6 | % | 17 | 0 | % | ||||||||
| Total broadcasting revenue | $ | 808 | $ | 801 | 1 | % | $ | 855 | (5 | )% | |||||
| Production companies | 18 | 12 | 50 | % | 13 | 38 | % | ||||||||
| Total revenue | $ | 826 | $ | 813 | 2 | % | $ | 868 | (5 | )% | |||||
| Operating expenses (1): | |||||||||||||||
| Broadcasting | |||||||||||||||
| Station expenses | $ | 331 | $ | 314 | 5 | % | $ | 300 | 10 | % | |||||
| Network affiliation fees | 233 | 235 | (1 | )% | 225 | 4 | % | ||||||||
| Transaction Related Expenses | - | 1 | (100 | )% | 2 | (100 | )% | ||||||||
| Non-cash stock-based compensation | 1 | 2 | (50 | )% | 1 | 0 | % | ||||||||
| Total broadcasting expense | $ | 565 | $ | 552 | 2 | % | $ | 528 | 7 | % | |||||
| Production companies | $ | 14 | $ | 11 | 27 | % | $ | 14 | 0 | % | |||||
| Corporate and administrative: | |||||||||||||||
| Corporate expenses | $ | 23 | $ | 25 | (8 | )% | $ | 20 | 15 | % | |||||
| Non-cash stock-based compensation | 5 | 5 | 0 | % | 5 | 0 | % | ||||||||
| Total corporate and administrative expense | $ | 28 | $ | 30 | (7 | )% | $ | 25 | 12 | % | |||||
| Net income | $ | 22 | $ | 4 | 450 | % | $ | 99 | (78 | )% | |||||
| Adjusted EBITDA | $ | 225 | $ | 227 | (1 | )% | $ | 307 | (27 | )% | |||||
| Six Months Ended June 30, | |||||||||||||||
| % Change | % Change | ||||||||||||||
| 2024 to | 2024 to | ||||||||||||||
| 2024 | 2023 | 2023 | 2022 | 2022 | |||||||||||
| (dollars in millions) | |||||||||||||||
| Revenue (less agency commissions): | |||||||||||||||
| Core advertising | $ | 745 | $ | 736 | 1 | % | $ | 731 | 2 | % | |||||
| Political advertising | 74 | 20 | 270 | % | 116 | (36 | )% | ||||||||
| Retransmission consent | 752 | 789 | (5 | )% | 775 | (3 | )% | ||||||||
| Other | 36 | 35 | 3 | % | 37 | (3 | )% | ||||||||
| Total broadcasting revenue | 1,607 | 1,580 | 2 | % | 1,659 | (3 | )% | ||||||||
| Production companies | 42 | 34 | 24 | % | 36 | 17 | % | ||||||||
| Total revenue | $ | 1,649 | $ | 1,614 | 2 | % | $ | 1,695 | (3 | )% | |||||
| Operating expenses (1): | |||||||||||||||
| Broadcasting | |||||||||||||||
| Station expenses | $ | 678 | $ | 634 | 7 | % | $ | 600 | 13 | % | |||||
| Network affiliation fees | 467 | 470 | (1 | )% | 452 | 3 | % | ||||||||
| Transaction Related Expenses | - | 1 | (100 | )% | 4 | (100 | )% | ||||||||
| Non-cash stock-based compensation | 3 | 2 | 50 | % | 2 | 50 | % | ||||||||
| Total broadcasting expense | $ | 1,148 | $ | 1,107 | 4 | % | $ | 1,058 | 9 | % | |||||
| Production companies | $ | 35 | $ | 70 | (50 | )% | $ | 40 | (13 | )% | |||||
| Corporate and administrative: | |||||||||||||||
| Corporate expenses | $ | 47 | $ | 49 | (4 | )% | $ | 43 | 9 | % | |||||
| Transaction Related Expenses | - | - | 0 | % | 1 | (100 | )% | ||||||||
| Non-cash stock-based compensation | 9 | 7 | 29 | % | 9 | 0 | % | ||||||||
| Total corporate and administrative expense | $ | 56 | $ | 56 | 0 | % | $ | 53 | 6 | % | |||||
| Net income (loss) | $ | 110 | $ | (27 | ) | (507 | )% | $ | 161 | (32 | )% | ||||
| Adjusted EBITDA | $ | 422 | $ | 390 | 8 | % | $ | 555 | (24 | )% | |||||
(1) Excludes depreciation, amortization and loss (gain) on disposal of assets.
| Detail Table of Operating Results (Unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (in millions, except for per share information) | |||||||||||||||
| Revenue (less agency commissions): | |||||||||||||||
| Broadcasting | $ | 808 | $ | 801 | $ | 1,607 | $ | 1,580 | |||||||
| Production companies | 18 | 12 | 42 | 34 | |||||||||||
| Total revenue (less agency commissions) | 826 | 813 | 1,649 | 1,614 | |||||||||||
| Operating expenses before depreciation, amortization | |||||||||||||||
| and gain on disposal of assets, net: | |||||||||||||||
| Broadcasting | 565 | 552 | 1,148 | 1,107 | |||||||||||
| Production companies | 14 | 11 | 35 | 70 | |||||||||||
| Corporate and administrative | 28 | 30 | 56 | 56 | |||||||||||
| Depreciation | 36 | 35 | 72 | 70 | |||||||||||
| Amortization of intangible assets | 32 | 50 | 63 | 99 | |||||||||||
| Loss (gain) on disposal of assets, net | (1 | ) | 16 | (1 | ) | 26 | |||||||||
| Operating expenses | 674 | 694 | 1,373 | 1,428 | |||||||||||
| Operating income | 152 | 119 | 276 | 186 | |||||||||||
| Other income (expense): | |||||||||||||||
| Miscellaneous income (expense), net | 2 | (1 | ) | 112 | (3 | ) | |||||||||
| Interest expense | (118 | ) | (109 | ) | (233 | ) | (213 | ) | |||||||
| Loss from early extinguishment of debt | (7 | ) | - | (7 | ) | (3 | ) | ||||||||
| Income (loss) before income taxes | 29 | 9 | 148 | (33 | ) | ||||||||||
| Income tax expense (benefit) | 7 | 5 | 38 | (6 | ) | ||||||||||
| Net income (loss) | 22 | 4 | 110 | (27 | ) | ||||||||||
| Preferred stock dividends | 13 | 13 | 26 | 26 | |||||||||||
| Net income (loss) attributable to common stockholders | $ | 9 | $ | (9 | ) | $ | 84 | $ | (53 | ) | |||||
| Basic per share information: | |||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 0.09 | $ | (0.10 | ) | $ | 0.89 | $ | (0.58 | ) | |||||
| Weighted-average shares outstanding | 95 | 93 | 94 | 92 | |||||||||||
| Diluted per share information: | |||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 0.09 | $ | (0.10 | ) | $ | 0.88 | $ | (0.58 | ) | |||||
| Weighted-average shares outstanding | 96 | 93 | 95 | 92 | |||||||||||
| Other Financial Data (Unaudited) | |||||||
| Six Months Ended June 30, | |||||||
| 2024 | 2023 | ||||||
| (in millions) | |||||||
| Net cash provided by operating activities | $ | 86 | $ | 459 | |||
| Net cash provided by (used in) investing activities | 50 | (187 | ) | ||||
| Net cash used in financing activities | (82 | ) | (297 | ) | |||
| Net increase (decrease) in cash | $ | 54 | $ | (25 | ) | ||
| As of | |||||||
| June 30, 2024 | December 31, 2023 | ||||||
| (in millions) | |||||||
| Cash | $ | 75 | $ | 21 | |||
| Long-term debt, including current portion, less deferred | |||||||
| financing costs | $ | 6,138 | $ | 6,160 | |||
| Series A Perpetual Preferred Stock | $ | 650 | $ | 650 | |||
| Borrowing availability under Revolving Credit Facility | $ | 474 | $ | 494 | |||
The Company
We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets serving 113 television markets that collectively reach approximately 36 percent of US television households. The portfolio includes 77 markets with the top-rated television station and 100 markets with the first and/or second highest rated television station, as well as the largest Telemundo Affiliate group with 43 markets totaling nearly 1.5 million Hispanic TV Households. We also own Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios. Gray owns a majority interest in Swirl Films.
Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act
This press release contains certain forward-looking statements that are based largely on our current expectations and reflect various estimates and assumptions by us. These statements are statements other than those of historical fact and may be identified by words such as “estimates,” “expect,” “anticipate,” “will,” “implied,” “assume” and similar expressions. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond our control, include: estimates of future revenue, future expenses and other future events. We are subject to additional risks and uncertainties described in our quarterly and annual reports filed with the Securities and Exchange Commission from time to time, including in the “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained therein, which reports are made publicly available via our website, www.graymedia.com. Any forward-looking statements in this press release should be evaluated in light of these important risk factors. This press release reflects management’s views as of the date hereof. Except to the extent required by applicable law, Gray undertakes no obligation to update or revise any information contained in this press release beyond the published date, whether as a result of new information, future events or otherwise. Information about certain potential factors that could affect our business and financial results and cause actual results to differ materially from those expressed or implied in any forward-looking statements are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2023, and may be contained in reports subsequently filed with the U.S. Securities and Exchange Commission and available at www.sec.gov.
Conference Call Information
We will host a conference call to discuss our second quarter operating results on August 8, 2024. The call will begin at 11:00 AM Eastern Time. The live dial-in number is 1-800-285-6670. The call will be webcast live and available for replay at www.graymedia.com. The taped replay of the conference call will be available at 1-888-556-3470 and the confirmation code is 898476, until September 6, 2024.
Gray Contacts
Web site: www.graymedia.com
Hilton H. Howell, Jr., Executive Chairman and Chief Executive Officer, (404) 266-5513
Pat LaPlatney, President and Co-Chief Executive Officer, (334) 206-1400
Jeff Gignac, Executive Vice President and Chief Financial Officer, (404) 504-9828
Kevin P. Latek, Executive Vice President, Chief Legal and Development Officer, (404) 266-8333
| Non-GAAP Terms |
In addition to results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this earnings release discusses “Adjusted EBITDA” a non-GAAP performance measure that management uses to evaluate the performance of the business. Adjusted EBITDA is calculated as net income (loss), adjusted for income tax expense (benefit), interest expense, loss on extinguishment of debt, non-cash stock-based compensation costs, non-cash 401(k) expense, depreciation, amortization of intangible assets, impairment of goodwill and other intangible assets, impairment of investments, loss (gain) on asset disposals and certain other miscellaneous items. We consider Adjusted EBITDA to be an indicator of our operating performance.
In addition to results prepared in accordance with GAAP, “Leverage Ratio Denominator” is a metric that management uses to calculate our compliance with our financial covenants in our indebtedness agreements. This metric is calculated as specified in our Senior Credit Agreement and is a significant measure that represents the denominator of a formula used to calculate compliance with material financial covenants within the Senior Credit Agreement that govern our ability to incur indebtedness, incur liens, make investments and make restricted payments, among other limitations usual and customary for credit agreements of this type. Accordingly, management believes this metric is a very material metric to our debt and equity investors. Leverage Ratio Denominator gives effect to the revenue and broadcast expenses of all completed acquisitions and divestitures as if they had been acquired or divested, respectively, on July 1, 2022. It also gives effect to certain operating synergies expected from the acquisitions and related financings and adds back professional fees incurred in completing the acquisitions. Certain of the financial information related to the acquisitions, if applicable, has been derived from, and adjusted based on, unaudited, un-reviewed financial information prepared by other entities, which Gray cannot independently verify. We cannot assure you that such financial information would not be materially different if such information were audited or reviewed and no assurances can be provided as to the accuracy of such information, or that our actual results would not differ materially from this financial information if the acquisitions had been completed on the stated date. In addition, the presentation of Leverage Ratio Denominator as determined in the Senior Credit Agreement and the adjustments to such information, including expected synergies, if applicable, resulting from such transactions, may not comply with GAAP or the requirements for pro forma financial information under Regulation S-X under the Securities Act of 1933. Leverage Ratio Denominator, as determined in the Senior Credit Agreement, represents an average amount for the preceding eight quarters then ended.
We define Transaction Related Expenses as incremental expenses incurred specific to acquisitions and divestitures, including but not limited to legal and professional fees, severance and incentive compensation, and contract termination fees. We present certain line items from our selected operating data, net of Transaction Related Expenses, in order to present a more meaningful comparison between periods of our operating expenses and our results of operations.
Our “Adjusted Total Indebtedness”, “First Lien Adjusted Total Indebtedness” and “Secured Adjusted Total Indebtedness” in each case net of all cash, represents the amount of outstanding principal of our long-term debt, plus certain other obligations as defined in our Senior Credit Agreement for the applicable amount of indebtedness.
These non-GAAP terms are not defined in GAAP and our definitions may differ from, and therefore may not be comparable to, similarly titled measures used by other companies, thereby limiting their usefulness. Such terms are used by management in addition to, and in conjunction with, results presented in accordance with GAAP and should be considered as supplements to, and not as substitutes for, net income and cash flows reported in accordance with GAAP.
| Reconciliation of Adjusted EBITDA (Unaudited): | |||||||||
| Three Months Ended | |||||||||
| June 30, | |||||||||
| 2024 | 2023 | 2022 | |||||||
| (in millions) | |||||||||
| Net income | $ | 22 | $ | 4 | $ | 99 | |||
| Adjustments to reconcile from net income to Adjusted EBITDA | |||||||||
| Depreciation | 36 | 35 | 31 | ||||||
| Amortization of intangible assets | 32 | 50 | 52 | ||||||
| Non-cash stock-based compensation | 6 | 7 | 6 | ||||||
| (Gain) loss on disposal of assets, net | (1 | ) | 16 | - | |||||
| Miscellaneous (income) expense, net | (2 | ) | 1 | - | |||||
| Interest expense | 118 | 109 | 81 | ||||||
| Loss from early extinguishment of debt | 7 | - | - | ||||||
| Income tax expense | 7 | 5 | 38 | ||||||
| Adjusted EBITDA | $ | 225 | $ | 227 | $ | 307 | |||
| Supplemental Information: | |||||||||
| Amortization of deferred loan costs | 4 | 3 | 4 | ||||||
| Preferred stock dividends | 13 | 13 | 13 | ||||||
| Common stock dividends | 8 | 7 | 8 | ||||||
| Purchases of property and equipment (1) | 22 | 26 | 50 | ||||||
| Reimbursements of property and equipment purchases (2) | - | - | - | ||||||
| Income taxes paid, net of refunds | 83 | 24 | 119 | ||||||
| (1) Excludes | |||||||||
| (2) Excludes | |||||||||
| Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2024 | 2023 | 2022 | |||||||||
| (in millions) | |||||||||||
| Net income (loss) | $ | 110 | $ | (27 | ) | $ | 161 | ||||
| Adjustments to reconcile from net income (loss) to Adjusted EBITDA | |||||||||||
| Depreciation | 72 | 70 | 63 | ||||||||
| Amortization of intangible assets | 63 | 99 | 104 | ||||||||
| Non-cash stock-based compensation | 12 | 9 | 11 | ||||||||
| Non-cash 401(k) expense | - | - | - | ||||||||
| (Gain) loss on disposal of assets, net | (1 | ) | 26 | (5 | ) | ||||||
| Miscellaneous (income) expense, net | (112 | ) | 3 | 2 | |||||||
| Interest expense | 233 | 213 | 160 | ||||||||
| Loss from early extinguishment of debt | 7 | 3 | - | ||||||||
| Income tax expense (benefit) | 38 | (6 | ) | 59 | |||||||
| Adjusted EBITDA | $ | 422 | $ | 390 | $ | 555 | |||||
| Supplemental Information: | |||||||||||
| Amortization of deferred loan costs | 7 | 7 | 8 | ||||||||
| Preferred stock dividends | 26 | 26 | 26 | ||||||||
| Common stock dividends | 16 | 14 | 16 | ||||||||
| Purchases of property and equipment (3) | 41 | 45 | 67 | ||||||||
| Reimbursements of property and equipment purchases (4) | - | - | (5 | ) | |||||||
| Income taxes paid, net of refunds | 85 | 24 | 119 | ||||||||
| (3) Excludes | |||||||||||
| (4) Excludes | |||||||||||
| Calculation of Leverage Ratio, First Lien Leverage Ratio and Secured Leverage Ratio, as each is defined in our Senior Credit Agreement (Unaudited): | |||
| Eight Quarters | |||
| Ended | |||
| June 30, 2024 | |||
| (dollars in millions) | |||
| Net income | $ | 328 | |
| Adjustments to reconcile from net income to Leverage Ratio | |||
| Denominator as defined in our Senior Credit Agreement: | |||
| Depreciation | 284 | ||
| Amortization of intangible assets | 360 | ||
| Non-cash stock-based compensation | 42 | ||
| Common stock contributed to 401(k) plan | 19 | ||
| Loss on disposal of assets, net | 24 | ||
| Gain on disposal of investment, not in the ordinary course | (110) | ||
| Interest expense | 866 | ||
| Loss on early extinguishment of debt | 10 | ||
| Income tax expense | 132 | ||
| Amortization of program broadcast rights | 74 | ||
| Impairment of investment | 90 | ||
| Payments for program broadcast rights | (76) | ||
| Pension benefit | (5) | ||
| Contributions to pension plans | (7) | ||
| Adjustments for unrestricted subsidiaries | 39 | ||
| Adjustments for stations acquired or divested, financings and expected | |||
| synergies during the eight quarter period | (1) | ||
| Transaction Related Expenses | 5 | ||
| Other | 1 | ||
| Total eight quarters ended June 30, 2024 | $ | 2,075 | |
| Leverage Ratio Denominator(total eight quarters ended | |||
| June 30, 2024, divided by 2) | $ | 1,038 | |
| June 30, 2024 | |||
| (dollars in millions) | |||
| Total outstanding principal, including current portion | $ | 6,215 | |
| Letters of credit outstanding | 6 | ||
| Cash | (75) | ||
| Adjusted Total Indebtedness | $ | 6,146 | |
| Leverage Ratio(maximum permitted incurrence is 7.00 to 1.00) | 5.92 | ||
| Total outstanding principal secured by a first lien | $ | 3,405 | |
| Cash | (75) | ||
| First Lien Adjusted Total Indebtedness | $ | 3,330 | |
| First Lien Leverage Ratio(maximum permitted incurrence is 4.00 to 1.00) (1) | 3.21 | ||
| Total outstanding principal secured by a lien | $ | 3,405 | |
| Cash | (75) | ||
| Secured Adjusted Total Indebtedness | $ | 3,330 | |
| Secured Leverage Ratio(maximum permitted incurrence is 5.50 to 1.00) | 3.21 | ||
| (1) At any time any amounts are outstanding under our revolving credit facility, our maximum First Lien Leverage Ratio cannot exceed 4.25 to 1.00. | |||
FAQ
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