Gray Announces Third Quarter Financial Results, Additional Cost Containment Initiatives, and Approximately $500 Million of Full-Year 2024 Political Ad Revenue and Projected $500 Million Full-Year 2024 Net Debt Reduction
Gray Television (GTN) reported strong Q3 2024 financial results with total revenue of $950 million, up 18% year-over-year. Key highlights include political advertising revenue of $173 million (565% increase), core advertising revenue of $365 million (1% increase), and retransmission consent revenue of $369 million (2% decrease). The company projects full-year 2024 political advertising revenue of $500 million and Net Debt reduction of $500 million. Gray implemented cost containment initiatives expected to reduce operating expenses by $60 million annually. Through September 2024, the company reduced debt principal by $241 million and maintains $674 million in borrowing availability.
Gray Television (GTN) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con un fatturato totale di 950 milioni di dollari, in aumento del 18% rispetto all'anno precedente. Tra i punti salienti, il fatturato pubblicitario politico ha raggiunto i 173 milioni di dollari (aumento del 565%), il fatturato pubblicitario core è stato di 365 milioni di dollari (aumento dell'1%) e il fatturato per il consenso alla ritrasmissione è stato di 369 milioni di dollari (diminuzione del 2%). L'azienda prevede un fatturato per la pubblicità politica per tutto il 2024 di 500 milioni di dollari e una riduzione del debito netto di 500 milioni di dollari. Gray ha implementato iniziative di contenimento dei costi, con l'obiettivo di ridurre le spese operative di 60 milioni di dollari all'anno. Fino a settembre 2024, l'azienda ha ridotto il capitale debitorio di 241 milioni di dollari e mantiene una disponibilità di prestiti di 674 milioni di dollari.
Gray Television (GTN) informó sobre resultados financieros sólidos para el tercer trimestre de 2024, con ingresos totales de 950 millones de dólares, un aumento del 18% en comparación con el año anterior. Entre los aspectos destacados se incluyen los ingresos por publicidad política de 173 millones de dólares (aumento del 565%), ingresos por publicidad principal de 365 millones de dólares (aumento del 1%) e ingresos por consentimiento de retransmisión de 369 millones de dólares (disminución del 2%). La compañía proyecta ingresos por publicidad política para todo el 2024 de 500 millones de dólares y una reducción de deuda neta de 500 millones de dólares. Gray implementó iniciativas de contención de costos, que se espera reduzcan los gastos operativos en 60 millones de dólares anualmente. Hasta septiembre de 2024, la compañía redujo el capital de deuda en 241 millones de dólares y mantiene una disponibilidad de préstamo de 674 millones de dólares.
그레이 텔레비전(GTN)은 2024년 3분기 재무 결과를 발표하며 총 수익이 9억 5천만 달러로 전년 대비 18% 증가했다고 보고했습니다. 주요 주요 사항으로는 정치 광고 수익이 1억 7천3백만 달러(565% 증가), 핵심 광고 수익이 3억 6천5백만 달러(1% 증가), 재전송 동의 수익이 3억 6천9백만 달러(2% 감소)인 것으로 나타났습니다. 이 회사는 2024년 전체 정치 광고 수익이 5억 달러가 될 것으로 예상하고 순 부채 감소도 5억 달러로 전망했습니다. 그레이는 연간 운영 비용을 6천만 달러 줄이기 위해 비용 절감 조치를 시행했습니다. 2024년 9월까지 회사는 부채 원금을 2억 4천1백만 달러 줄였으며, 6억 7천4백만 달러의 대출 가능성을 유지하고 있습니다.
Gray Television (GTN) a connu de solides résultats financiers pour le troisième trimestre 2024, avec un chiffre d'affaires total de 950 millions de dollars, en hausse de 18 % par rapport à l'année précédente. Les points forts incluent des revenus publicitaires politiques de 173 millions de dollars (augmentation de 565 %), des revenus publicitaires principaux de 365 millions de dollars (augmentation de 1 %) et des revenus de consentement de retransmission de 369 millions de dollars (baisse de 2 %). L'entreprise prévoit des revenus publicitaires politiques pour l'année entière 2024 de 500 millions de dollars et une réduction de la dette nette de 500 millions de dollars. Gray a mis en place des initiatives de maîtrise des coûts qui devraient réduire les dépenses d'exploitation de 60 millions de dollars par an. Jusqu'en septembre 2024, l'entreprise a réduit son principal de dette de 241 millions de dollars et maintient une disponibilité d'emprunt de 674 millions de dollars.
Gray Television (GTN) berichtete von starken Finanzzahlen für das dritte Quartal 2024 mit einem Gesamtumsatz von 950 Millionen Dollar, was einem Anstieg von 18% im Jahresvergleich entspricht. Zu den wichtigsten Highlights gehören die Politikwerbeeinnahmen von 173 Millionen Dollar (565% Anstieg), Kernwerbeeinnahmen von 365 Millionen Dollar (1% Anstieg) und Einnahmen aus der Wiederübertragungszustimmung von 369 Millionen Dollar (2% Rückgang). Das Unternehmen prognostiziert für das gesamte Jahr 2024 Politikwerbeeinnahmen von 500 Millionen Dollar und eine Reduzierung der Nettoverschuldung um 500 Millionen Dollar. Gray hat Kostensenkungsmaßnahmen implementiert, die voraussichtlich die Betriebskosten um 60 Millionen Dollar jährlich senken werden. Bis September 2024 hat das Unternehmen die Schuldenhauptforderung um 241 Millionen Dollar reduziert und verfügt über eine Kreditlinie von 674 Millionen Dollar.
- Total revenue increased 18% YoY to $950 million
- Political advertising revenue surged 565% to $173 million
- Adjusted EBITDA increased 61% to $338 million
- Net income improved to $83 million from a $53 million loss YoY
- Cost reduction initiatives expected to save $60 million annually
- Debt principal reduced by $241 million in 2024
- Retransmission consent revenue decreased 2% YoY
- Core advertising revenue expected to decline 11% in Q4 2024
- Full-year 2024 core advertising guidance reduced by 3% to $1.475-1.488 billion
- Hurricane impacts affecting advertising revenues in Southeastern markets
Insights
Gray Television delivered a strong Q3 2024 with revenue reaching
The company's debt reduction strategy is progressing well, with
However, Q4 guidance suggests some headwinds, with core advertising expected to decline
ATLANTA, Nov. 08, 2024 (GLOBE NEWSWIRE) -- Gray Television, Inc. (“Gray,” “Gray Media,” “we,” “us” or “our”) (NYSE: GTN) today announced a strong third quarter ended September 30, 2024. Gray also projected full-year 2024 political advertising revenue of
SUMMARY OF THIRD QUARTER RESULTS
OPERATING HIGHLIGHTS:
- Total revenue in the third quarter of 2024 was
$950 million , an increase of18% from the third quarter of 2023. - Core advertising revenue in the third quarter of 2024 was
$365 million , an increase of1% from the third quarter of 2023. - Retransmission consent revenue in the third quarter of 2024 was
$369 million , a decrease of2% from the third quarter of 2023. - Political advertising revenue in the third quarter of 2024 was
$173 million , an increase of565% from the third quarter of 2023. - Total operating expenses (before depreciation, amortization and loss on disposal of assets) in the third quarter of 2024 was
$617 million , which was2% below the low end of our previously announced guidance for the quarter. - Net income attributable to common stockholders was
$83 million in the third quarter of 2024, compared to a net loss attributable to common stockholders of$53 million in the third quarter of 2023. - Adjusted EBITDA was
$338 million in the third quarter of 2024, an increase of61% from the third quarter of 2023, due primarily to the cyclical increase in political advertising revenue.
OTHER KEY METRICS:
- Through September 30, 2024, we reduced the principal amount of our debt by
$241 million in 2024 and expect full-year 2024 Net Debt reduction of approximately$500 million . - As of September 30, 2024, calculated as set forth in our Senior Credit Agreement, our First Lien Leverage Ratio and Leverage Ratio, which are net of
$69 million of cash, were 3.00 to 1.00 and 5.67 to 1.00, respectively. - Currently, we have
$674 million of borrowing availability under our undrawn Revolving Credit Facility. - Non-cash stock-based compensation was
$5 million during each of the third quarters ended September 30, 2024 and 2023.
FINANCIAL RESULTS AND EXPECTATIONS
Our results in the third quarter were largely in line with our guidance, with the exception of political advertising revenues, which, while strong, were slightly below our expectations. Our broadcast and corporate operating expenses were much lower than expectations.
Our total revenue and our Core advertising revenue were within our guidance range at
For the fourth quarter of 2024, we currently expect that Core advertising revenue will be down approximately
Our political advertising revenue in the third quarter of 2024 was
Our retransmission consent revenue in the third quarter of 2024 was
For the third quarter of 2024, our broadcasting operating expenses and corporate operating expenses were
COST CONTAINMENT INITIATIVES
Starting in August 2024, we began identifying and implementing various measures throughout the company that we expect will further reduce our operating expense run-rate by approximately
We have taken several steps to reduce personnel expenses in 2025. These steps include streamlining workflows at our television stations and other business units, closing certain unfilled positions for which we were recruiting, eliminating certain positions that will not be filled following normal attrition throughout the second half of this year, and, for the first time in many years, eliminating certain positions in a handful of television stations and certain business units. Importantly, despite these staffing changes, we will continue to produce local newscasts with local journalists and local meteorologists in all of our existing local news markets, including small markets.
In terms of non-operating expenses, we anticipate a significant amount of interest savings due to lower debt balances resulting from open market debt repurchases and debt paydowns that have already occurred, and we anticipate will continue on an ongoing basis. We also anticipate that our cash income tax payments, net of refunds, for full-year 2024 will be approximately
DEBT REPURCHASES AND REPAYMENTS
We continue to focus on improving our balance sheet. From January 1, 2024 through September 30, 2024, we have reduced our principal amount of debt outstanding by
- Repurchased and retired
$29 million of our outstanding 2027 Notes on the open market at an average price of approximately92.1% of par value, thereby reducing the remaining par value of our 2027 Notes to$671 million ; - Repaid all amounts outstanding under our Revolving Credit Facility; and
- Repurchased and retired approximately
$16 million of our outstanding 2021 Term Loan on the open market at an average price of approximately90.8% of par value.
In addition to the amounts above, we have previously entered into agreements to further reduce our 2021 Term Loan by an additional
We project, including actions taken to date, reduction of our Net Debt (also referred to herein as Adjusted Total Indebtedness) during full-year 2024 of
On November 7, 2024, our Board of Directors approved an increase in our debt repurchase authorization to repurchase additional debt in the open market, which replenished the previous authorization, bringing the total current authorization to
TAXES
- During the nine-months ended September 30, 2024 and 2023, we made income tax payments, net of refunds, of
$130 million and$43 million , respectively. During the fourth quarter of 2024, based on our current forecasts, we anticipate making income tax payments, net of refunds, of approximately$3 million . - As of September 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 AND TWELVE MONTHS ENDING DECEMBER 31, 2024
Based on our current forecasts for the quarter ending December 31, 2024, we anticipate the following key financial results, as outlined below in approximate ranges and as compared to the quarter ended December 31, 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:
Quarter Ending | Year Ending | ||||||||||||||||
December 31, 2023 | December 31, 2024 | December 31, 2024 | |||||||||||||||
(Guidance) | (Guidance) | ||||||||||||||||
(Actual) | Low | High | Low | High | |||||||||||||
(in millions) | |||||||||||||||||
Revenue (less agency commissions): | |||||||||||||||||
Core advertising | $ | 415 | $ | 365 | $ | 378 | $ | 1,475 | $ | 1,488 | |||||||
Political | 33 | 248 | 253 | 495 | 500 | ||||||||||||
Retransmission consent | 365 | 355 | 360 | 1,476 | 1,481 | ||||||||||||
Production companies | 32 | 38 | 39 | 106 | 107 | ||||||||||||
Other | 19 | 16 | 17 | 69 | 70 | ||||||||||||
Total revenue | $ | 864 | $ | 1,022 | $ | 1,047 | $ | 3,621 | $ | 3,646 | |||||||
Operating expenses (excluding depreciation, amortization and loss on disposal of assets): | |||||||||||||||||
Broadcasting: | |||||||||||||||||
Station expenses | $ | 371 | $ | 374 | $ | 382 | $ | 1,388 | $ | 1,396 | |||||||
Network affiliation fees | 232 | 230 | 231 | 931 | 932 | ||||||||||||
Non-cash stock-based compensation | 1 | 1 | 2 | 5 | 6 | ||||||||||||
Total broadcasting expense | $ | 604 | $ | 605 | $ | 615 | $ | 2,324 | $ | 2,334 | |||||||
Production companies | $ | 27 | $ | 29 | $ | 30 | $ | 86 | $ | 87 | |||||||
Corporate and administrative: | |||||||||||||||||
Corporate expenses | $ | 28 | $ | 26 | $ | 30 | $ | 93 | $ | 97 | |||||||
Non-cash stock-based compensation | 5 | 4 | 5 | 17 | 18 | ||||||||||||
Total corporate and administrative expense | $ | 33 | $ | 30 | $ | 35 | $ | 110 | $ | 115 | |||||||
Year Ending | |||||||||||||||||
December 31, | |||||||||||||||||
2024 | |||||||||||||||||
Estimated supplemental information (in millions): | (Guidance) | ||||||||||||||||
Interest expense, excluding amortization of deferred financing costs | |||||||||||||||||
Amortization of deferred financing costs | |||||||||||||||||
Preferred stock dividends | |||||||||||||||||
Common stock dividends | |||||||||||||||||
Total capital expenditures, excluding Assembly Atlanta | |||||||||||||||||
Capital expenditures for Assembly Atlanta, net of anticipated reimbursements | |||||||||||||||||
Income tax payments, net of refunds |
Selected Operating Data (Unaudited) | |||||||||||||||
Three Months Ended September 30, | |||||||||||||||
% Change | % Change | ||||||||||||||
2024 to | 2024 to | ||||||||||||||
2024 | 2023 | 2023 | 2022 | 2022 | |||||||||||
(dollars in millions) | |||||||||||||||
Revenue (less agency commissions): | |||||||||||||||
Core advertising | $ | 365 | $ | 363 | 1 | % | $ | 359 | 2 | % | |||||
Political | 173 | 26 | 565 | % | 144 | 20 | % | ||||||||
Retransmission consent | 369 | 378 | (2 | )% | 368 | 0 | % | ||||||||
Other | 17 | 16 | 6 | % | 18 | (6 | )% | ||||||||
Total broadcasting revenue | 924 | 783 | 18 | % | 889 | 4 | % | ||||||||
Production companies | 26 | 20 | 30 | % | 20 | 30 | % | ||||||||
Total revenue | $ | 950 | $ | 803 | 18 | % | $ | 909 | 5 | % | |||||
Operating expenses (1): | |||||||||||||||
Broadcasting: | |||||||||||||||
Station expenses | $ | 336 | $ | 322 | 4 | % | $ | 309 | 9 | % | |||||
Retransmission expense | 234 | 234 | 0 | % | 226 | 4 | % | ||||||||
Transaction Related Expenses | - | - | 0 | % | 1 | (100 | )% | ||||||||
Non-cash stock-based compensation | 1 | 1 | 0 | % | 1 | 0 | % | ||||||||
Total broadcasting expense | $ | 571 | $ | 557 | 3 | % | $ | 537 | 6 | % | |||||
Production companies | $ | 22 | $ | 18 | 22 | % | $ | 16 | 38 | % | |||||
Corporate and administrative: | |||||||||||||||
Corporate expenses | $ | 20 | $ | 19 | 5 | % | $ | 22 | (9 | )% | |||||
Non-cash stock-based compensation | 4 | 4 | 0 | % | 5 | (20 | )% | ||||||||
Total corporate and administrative expense | $ | 24 | $ | 23 | 4 | % | $ | 27 | (11 | )% | |||||
Net income (loss) | $ | 96 | $ | (40 | ) | 340 | % | $ | 108 | (11 | )% | ||||
Adjusted EBITDA | $ | 338 | $ | 210 | 61 | % | $ | 335 | 1 | % | |||||
Nine Months Ended September 30, | |||||||||||||||
% Change | % Change | ||||||||||||||
2024 to | 2024 to | ||||||||||||||
2024 | 2023 | 2023 | 2022 | 2022 | |||||||||||
(dollars in millions) | |||||||||||||||
Revenue (less agency commissions): | |||||||||||||||
Core advertising | $ | 1,110 | $ | 1,099 | 1 | % | $ | 1,090 | 2 | % | |||||
Political | 247 | 46 | 437 | % | 260 | (5 | )% | ||||||||
Retransmission consent | 1,121 | 1,167 | (4 | )% | 1,143 | (2 | )% | ||||||||
Other | 53 | 51 | 4 | % | 55 | (4 | )% | ||||||||
Total broadcasting revenue | 2,531 | 2,363 | 7 | % | 2,548 | (1 | )% | ||||||||
Production companies | 68 | 54 | 26 | % | 56 | 21 | % | ||||||||
Total revenue | $ | 2,599 | $ | 2,417 | 8 | % | $ | 2,604 | 0 | % | |||||
Operating expenses (1): | |||||||||||||||
Broadcasting | |||||||||||||||
Station expenses | $ | 1,014 | $ | 955 | 6 | % | $ | 909 | 12 | % | |||||
Retransmission expense | 701 | 705 | (1 | )% | 678 | 3 | % | ||||||||
Transaction Related Expenses | - | - | 0 | % | 5 | (100 | )% | ||||||||
Non-cash stock-based compensation | 4 | 4 | 0 | % | 3 | 33 | % | ||||||||
Total broadcasting expense | $ | 1,719 | $ | 1,664 | 3 | % | $ | 1,595 | 8 | % | |||||
Production companies | $ | 57 | $ | 88 | (35 | )% | $ | 56 | 2 | % | |||||
Corporate and administrative: | |||||||||||||||
Corporate expenses | $ | 67 | $ | 68 | (1 | )% | $ | 65 | 3 | % | |||||
Transaction Related Expenses | - | - | 0 | % | 1 | (100 | )% | ||||||||
Non-cash stock-based compensation | 13 | 11 | 18 | % | 14 | (7 | )% | ||||||||
Total corporate and administrative expense | $ | 80 | $ | 79 | 1 | % | $ | 80 | 0 | % | |||||
Net income (loss) | $ | 206 | $ | (67 | ) | 407 | % | $ | 269 | (23 | )% | ||||
Adjusted EBITDA | $ | 760 | $ | 600 | 27 | % | $ | 890 | (15 | )% | |||||
(1) Excludes depreciation, amortization, impairment and (gain) loss on disposal of assets.
Detail Table of Operating Results (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
(in millions, except for per share information) | |||||||||||||||
Revenue (less agency commissions): | |||||||||||||||
Broadcasting | $ | 924 | $ | 783 | $ | 2,531 | $ | 2,363 | |||||||
Production companies | 26 | 20 | 68 | 54 | |||||||||||
Total revenue (less agency commissions) | 950 | 803 | 2,599 | 2,417 | |||||||||||
Operating expenses before depreciation, amortization, impairment and (gain) loss on disposal of assets, net: | |||||||||||||||
Broadcasting | 571 | 557 | 1,719 | 1,664 | |||||||||||
Production companies | 22 | 18 | 57 | 88 | |||||||||||
Corporate and administrative | 24 | 23 | 80 | 79 | |||||||||||
Depreciation | 36 | 36 | 108 | 106 | |||||||||||
Amortization of intangible assets | 31 | 48 | 94 | 147 | |||||||||||
Impairment of goodwill and other intangible assets | - | 43 | - | 43 | |||||||||||
Loss (gain) on disposal of assets, net | 16 | (6 | ) | 15 | 20 | ||||||||||
Operating expenses | 700 | 719 | 2,073 | 2,147 | |||||||||||
Operating income | 250 | 84 | 526 | 270 | |||||||||||
Other income (expense): | |||||||||||||||
Miscellaneous income (expense), net | 2 | (10 | ) | 114 | (13 | ) | |||||||||
Interest expense | (130 | ) | (111 | ) | (363 | ) | (324 | ) | |||||||
Gain (loss) from early extinguishment of debt | 6 | - | (1 | ) | (3 | ) | |||||||||
Income (loss) before income taxes | 128 | (37 | ) | 276 | (70 | ) | |||||||||
Income tax expense (benefit) | 32 | 3 | 70 | (3 | ) | ||||||||||
Net income (loss) | 96 | (40 | ) | 206 | (67 | ) | |||||||||
Preferred stock dividends | 13 | 13 | 39 | 39 | |||||||||||
Net income (loss) attributable to common stockholders | $ | 83 | $ | (53 | ) | $ | 167 | $ | (106 | ) | |||||
Basic per share information: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | 0.87 | $ | (0.57 | ) | $ | 1.76 | $ | (1.15 | ) | |||||
Weighted-average shares outstanding | 95 | 93 | 95 | 92 | |||||||||||
Diluted per share information: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | 0.86 | $ | (0.57 | ) | $ | 1.74 | $ | (1.15 | ) | |||||
Weighted-average shares outstanding | 97 | 93 | 96 | 92 | |||||||||||
Other Financial Data (Unaudited) | |||||||
Nine Months Ended September 30, | |||||||
2024 | 2023 | ||||||
(in millions) | |||||||
Net cash provided by operating activities | $ | 383 | $ | 565 | |||
Net cash provided by (used in) investing activities | 10 | (259) | |||||
Net cash used in financing activities | (345) | (346) | |||||
Net increase (decrease) in cash | $ | 48 | $ | (40) | |||
As of | |||||||
September 30, 2024 | December 31, 2023 | ||||||
(in millions) | |||||||
Cash | $ | 69 | $ | 21 | |||
Long-term debt, including current portion, less deferred financing costs | $ | 5,893 | $ | 6,160 | |||
Series A Perpetual Preferred Stock | $ | 650 | $ | 650 | |||
Borrowing availability under Revolving Credit Facility | $ | 674 | $ | 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 also 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, future capital expenditures, future income tax payments, future workforce reductions 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 third quarter operating results on November 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, Confirmation Code: 898476# until December 8, 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
Jeffrey R. 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 October 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” or "Net Debt", “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 | |||||||||||
September 30, | |||||||||||
2024 | 2023 | 2022 | |||||||||
(in millions) | |||||||||||
Net income (loss) | $ | 96 | $ | (40 | ) | $ | 108 | ||||
Adjustments to reconcile from net income (loss) to Adjusted EBITDA | |||||||||||
Depreciation | 36 | 36 | 33 | ||||||||
Amortization of intangible assets | 31 | 48 | 52 | ||||||||
Non-cash stock-based compensation | 5 | 5 | 6 | ||||||||
Loss (gain) on disposal of assets, net | 16 | (6 | ) | (1 | ) | ||||||
Miscellaneous (income) expense, net | (2 | ) | 10 | 1 | |||||||
Impairment of goodwill and other intangible assets | - | 43 | - | ||||||||
Interest expense | 130 | 111 | 94 | ||||||||
Gain from early extinguishment of debt | (6 | ) | - | - | |||||||
Income tax expense | 32 | 3 | 42 | ||||||||
Adjusted EBITDA | $ | 338 | $ | 210 | $ | 335 | |||||
Supplemental Information: | |||||||||||
Contributions to pension plan | $ | - | $ | 4 | $ | 4 | |||||
Amortization of deferred loan costs | 4 | 3 | 4 | ||||||||
Preferred stock dividends | 13 | 13 | 13 | ||||||||
Common stock dividends | 8 | 8 | 7 | ||||||||
Purchases of property and equipment (1) | 23 | 33 | 52 | ||||||||
Reimbursements of property and equipment purchases | - | - | 2 | ||||||||
Income taxes paid, net of refunds | 45 | 19 | 9 | ||||||||
(1) Excludes |
Reconciliation of Adjusted EBITDA (Unaudited): | |||||||||||
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2024 | 2023 | 2022 | |||||||||
(in millions) | |||||||||||
Net income (loss) | $ | 206 | $ | (67 | ) | $ | 269 | ||||
Adjustments to reconcile from net income (loss) to Adjusted EBITDA | |||||||||||
Depreciation | 108 | 106 | 96 | ||||||||
Amortization of intangible assets | 94 | 147 | 156 | ||||||||
Non-cash stock-based compensation | 17 | 14 | 17 | ||||||||
Loss (gain) on disposal of assets, net | 15 | 20 | (6 | ) | |||||||
Miscellaneous (income) expense, net | (114 | ) | 13 | 3 | |||||||
Impairment of goodwill and other intangible assets | - | 43 | - | ||||||||
Interest expense | 363 | 324 | 254 | ||||||||
Loss from early extinguishment of debt | 1 | 3 | - | ||||||||
Income tax expense (benefit) | 70 | (3 | ) | 101 | |||||||
Adjusted EBITDA | $ | 760 | $ | 600 | $ | 890 | |||||
Supplemental Information: | |||||||||||
Pension benefit | $ | - | $ | 1 | $ | 2 | |||||
Contribution to pension plan | - | 4 | 4 | ||||||||
Amortization of deferred loan costs | 11 | 10 | 12 | ||||||||
Preferred stock dividends | 39 | 39 | 39 | ||||||||
Common stock dividends | 24 | 22 | 23 | ||||||||
Purchases of property and equipment (2) | 64 | 78 | 119 | ||||||||
Reimbursements of property and equipment purchases (3) | - | - | 7 | ||||||||
Income taxes paid, net of refunds | 130 | 43 | 128 | ||||||||
(2) Excludes | |||||||||||
(3) 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 | |||
September 30, 2024 | |||
(in millions) | |||
Net income | $ | 316 | |
Adjustments to reconcile from net income to Leverage Ratio | |||
Denominator as defined in our Senior Credit Agreement: | |||
Depreciation | 287 | ||
Amortization of intangible assets | 339 | ||
Non-cash stock-based compensation | 42 | ||
Common stock contributed to 401(k) plan | 19 | ||
Loss on disposal of assets, net | 39 | ||
Gain on disposal of investment, not in the ordinary course | (110 | ) | |
Interest expense | 903 | ||
Loss on early extinguishment of debt | 4 | ||
Income tax expense | 122 | ||
Impairment of investment | 90 | ||
Amortization of program broadcast rights | 69 | ||
Payments for program broadcast rights | (71 | ) | |
Pension benefit | (5 | ) | |
Contributions to pension plans | (4 | ) | |
Adjustments for unrestricted subsidiaries | 37 | ||
Adjustments for stations acquired or divested, financings and expected synergies during the eight quarter period | (1 | ) | |
Transaction Related Expenses | 3 | ||
Other | 3 | ||
Total eight quarters ended September 30, 2024 | $ | 2,082 | |
Leverage Ratio Denominator (total eight quarters ended | |||
September 30, 2024, divided by 2) | $ | 1,041 | |
September 30, 2024 | |||
(dollars in millions) | |||
Total outstanding principal, including current portion | $ | 5,969 | |
Letters of credit outstanding | 6 | ||
Cash | (69 | ) | |
Adjusted Total Indebtedness | $ | 5,906 | |
Leverage Ratio (maximum permitted incurrence is 7.00 to 1.00) | 5.67 | ||
Total outstanding principal secured by a first lien | $ | 3,188 | |
Cash | (69 | ) | |
First Lien Adjusted Total Indebtedness | $ | 3,119 | |
First Lien Leverage Ratio (maximum permitted incurrence is 3.5 to 1.00) (1) | 3.00 | ||
Total outstanding principal secured by a lien | $ | 3,188 | |
Cash | (69 | ) | |
Secured Adjusted Total Indebtedness | $ | 3,119 | |
Secured Leverage Ratio (maximum permitted incurrence is 5.50 to 1.00) | 3.00 | ||
(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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