Salem(US:SALM)2022-08-07 02:07Financial Data and Key Metrics Changes - Total revenue for Q2 2022 increased by 7.7% to $68.7 million compared to Q2 2021 [27] - Operating expenses increased by 10.7% to $60.9 million, while adjusted EBITDA rose by 33.6% to $11.7 million, including $3.9 million from the film "2000 Mules" [27][7] - Compared to Q2 2019, total revenue increased by 6.2% and adjusted EBITDA increased by 15.1% [28] Business Line Data and Key Metrics Changes - Broadcast division revenue increased by 12.1% to $52.5 million, with digital revenue within this division growing by 27.9% to $9.9 million [28][11] - National Digital Media division revenue increased by 4.5% to $10.8 million, while publishing revenue decreased by 18.5% to $5.4 million [32][15] - Political revenue for the quarter was $1.5 million, significantly up from $400,000 in Q2 2021 [13][54] Market Data and Key Metrics Changes - Local advertising revenue increased by 6.9%, while national advertising revenue rose by 17.4% [12] - The church products business saw an 18.2% growth due to acquisitions made last year [14] Company Strategy and Development Direction - The company is focusing on digital revenue growth, which now represents over 30% of total revenue, and expects it to be the fastest-growing segment [10] - Salem Media Group is exploring further investment opportunities in films that align with its audience, following the success of "2000 Mules" [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the political environment is particularly intense, which is expected to drive revenue growth in Q3 [40] - The company anticipates total revenue growth of 6% to 8% for Q3 2022 compared to Q3 2021 [33] Other Important Information - The leverage ratio improved to 3.97%, the lowest in over 20 years, allowing the board to consider resuming dividend payments [22][24] - The company repurchased $13 million of bonds during the quarter, contributing to a stronger balance sheet [22] Q&A Session Summary Question: Can you provide insights on the components of expected Q3 revenue growth? - Management highlighted political advertising, strong book releases, and digital revenue as key drivers for Q3 growth [37][39] Question: What is the performance of the network business and national advertising? - The network business is performing well, driven by integrated media deals, and political content is a significant contributor to national advertising growth [39][54] Question: What are the factors behind the expense growth for Q3? - Increased expenses are attributed to the reinstatement of the 401(k) match, investments in the Salem News Channel, and higher travel and marketing costs [41][43] Question: What is the total benefit received from "2000 Mules"? - The total benefit from "2000 Mules" is approximately $4.8 million, in addition to the return of the initial investment of $4.5 million [58]