Salem(SALM)2023-11-14 00:09Financial Data and Key Metrics Changes - Total revenue for the third quarter decreased by 5.0% to 3.8 million [4] - Free cash flow is improving as a result of cost cuts implemented in previous quarters [4] Business Line Data and Key Metrics Changes - Network revenue declined by 10.1%, with digital revenue growth stalling due to the advertising recession, resulting in a 4.5% decrease in the quarter [5] - Revenue from book publishing decreased by 17.5% due to a light publishing schedule, while expenses in the publishing business decreased by 9.2% [6] - On a same station basis, net broadcast revenue decreased by 4.9% to 7.3 million [9] Market Data and Key Metrics Changes - The advertising recession has significantly impacted the industry, with S&P indicating a persistent ad recession [4] - National spot advertising revenue was down 17.9%, and local spot revenue decreased by 6.6%, contributing to an overall decline in total spot advertising revenue of 9.6% [16] Company Strategy and Development Direction - The company is focused on operating efficiencies and has outlined cost-cutting measures in previous calls [4] - Salem Media Group is actively pursuing asset sales to improve liquidity and reduce debt, with several agreements already in place [7][18] - The company is evaluating its portfolio to identify additional assets for potential sale [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the economy and elevated interest rates, which are affecting revenue [4] - For the fourth quarter of 2023, the company projects total revenue to decline between 6% and 8% compared to the same period in the previous year [10] - The leverage ratio as of September 30 was reported at 11.0, indicating a need for further debt reduction [21] Other Important Information - The company has entered into agreements to sell various assets, including radio stations and land, with expected proceeds to be used for debt repayment [7][39] - The company is currently in default on its asset-based loan (ABL) and is working with lenders to refinance [41] Q&A Session Summary Question: Can you quantify the revenue and EBITDA contribution of the assets agreed to be sold? - Management indicated that the land sales do not contribute revenue, and the EBITDA impact from the sales is estimated to be between 3 million [23][24] Question: What is the status of the land sale and the rezoning process? - Management expressed confidence in the rezoning process, stating they are working with experts and expect a favorable resolution [25][26][31] Question: Are there any indications of interest in the recently acquired Miami properties? - Management confirmed they are evaluating all properties for potential sale if reasonable offers are made [27] Question: What is the current status of the credit facility and forbearance agreements? - Management explained that they are in forbearance with Wells Fargo and are working towards refinancing the facility, with the current forbearance set to expire on November 27 [28][41]