Q1 2020 Earnings Call

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Ladies and gentlemen, thank you for standing by and welcome to the script first quarter 2020 earnings call.

At this time all participants are in to listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time.

If you should require assistance during the call. Please press Star then zero as a reminder, this conference is being recorded.

Now, let's turn the conference over to our health care and Carolyn Michel <unk> head of Investor Relations. Please go ahead.

Thank you great. Good morning, everyone and thank you for joining us for a discussion of the E.W. Scripps Companys financial results you can visit script dot com for more information and a link to the replay of this call.

A reminder, that our conference call and webcast include forward looking statements and actual results may differ factors that may cause them to defer are outlined in our SEC filings.

The cobot 19 pandemic enhances the uncertainty of forward looking statements, we make about our operations and financial condition because of this rapidly changing economic climate, we're not issuing second quarter 2020 guidance and we also are rescinding most of our previously issued guidance with a few exceptions will discuss today.

We do not intend to update any forward looking statements we make today.

We'll hear first this morning from script, President and CEO, Adam Symson, and then CFO at least the knutson.

Also on the call our local media President, Brian Lawlor National Media Executive Vice President Lora, Tomlin, and controller and treasurer deadline.

Now here is Adam.

Thanks, Carolyn good morning, everybody and thanks for joining us.

Well those of you have been with US for some time know that 2020 was supposed to be a watershed for our company financially and the year certainly started out that way.

Despite the impact of the Corona virus outbreak on advertising for the last two weeks of March we are reporting attempt straight quarter in which scripts had delivered better than expected results on nearly every measure.

While our full year results will be unlikely to meet the high expectations I had coming into the year I'm heartened to tell you that the plan we have been working over the last two plus years has made us stronger and better performing.

For the first quarter the local media margin is up over Q1 2019 on both the adjusted combined and as reported basis.

National Media segment profit was double last year's Q1.

And the $49 million in total company segment profit for Q1 is the highest profit number for the first quarter that we have seen since we spun off Scripps networks interactive in 2008.

The bigger and better performing portfolio, we have will pay off during the upcoming political advertising cycle. This presidential year and through the upside we're capturing in retransmission revenue.

Even before the impact of the outbreak on advertising those two revenue lines political and Retrans. We are projected to account for more than half of our local media revenue in 2020, and we expect them to hold up well during the crisis.

The changes we've made to the company to make it leaner and more efficient and the significant M&A. We did that doubled the scale of our local media portfolio has also made us more durable and better able to withstand the crisis like the one where all living through now.

Today, we are in the midst of a business disruption due to stay at home orders shuttered businesses and the soft advertising market.

But the fundamentals of the broadcast industry generally and scripts is local and national businesses, specifically remain sound.

On behalf of the scripts management and board I'd like to thank our shareholders, who have been supported us during this challenging time.

Many of you have been with us for years and some since before the last financial crisis today as always we appreciate your understanding of scripts is near and long term growth strategies and the value. This company has created over the decades and we'll continue to create in the years to come.

Here's lucid discussed our financial picture and then I'll be back to cover a few more topics in detail Lisa.

Good morning, everyone. The first quarter got off to a strong start across the company and local media. We were on track to significantly exceed first quarter budget until mid March when the cobot 19 outbreak began to impact the economy, we reap the benefits of our acquisition of 27 television stations last year.

And although core advertising ended the quarter down on a same station basis. It started the year with the same momentum we saw in Q4.

We received significant early political advertising spending, finishing the quarter at $19 million and we captured retransmission revenue upside as we completed negotiations for about 20% of our subscriber households, with another 20% left to negotiate this year.

Retrans revenue was up 21% in Q1 on an adjusted combined basis.

The National Media Division thought even more positive Q1 dynamics by far our largest national businesses. The case network, which managed to deliver its best revenue growth since we acquired at 31%.

Newsy also finished up around 30% a testament to its ongoing appeal with young audiences and driven by programmatic AD growth on its over the top platform.

Overall, the National Division met and beat our first quarter guidance with $108 million in revenue and more than double its Q1 2019 segment profit at nearly $12 million.

Turning to expenses local media is Q1 expenses came in well below our guidance of up low teens add up 8% on an adjusted combined basis.

National Media as expenses came in at $96 million versus guidance of about $100 million.

Shared services and corporate expenses were nearly $19 million than the first quarter that is consistent with what we guided and much higher than what we'll see the rest of the year because it included annual compensation and benefit payments.

I'll talk more about our ongoing expense control in a moment.

The company's Q1 net loss was 15 cents per share, but that loss is only 10 cents per share. If you factor out the first quarter acquisition and integration cost of $3.7 million net of taxes.

So again, a very solid first quarter.

Now I'd like to spend a few minutes on our current financial picture.

Although we are temporarily suspending guidance, we do feel obligated to our shareholders to make a good faith attempt to provide insights that reflect the current state of affairs and our outlook.

Those issues include where we stand today operationally and financially how we're responding to the cobot night 19 by protecting the wellbeing of our workforce and how our operations and financial condition may change as global effort to fight Cobot 19 progress.

In addition to our comments today, you will find disclosures and risk factors related to the outbreak in our 10-Q of course, we can't know the full impact of the Cobot 19 crisis at this time.

Turning to the local media division, let's start by discussing the progression of core advertising revenue over the last two months.

Speaking sequentially from March to April of this year, we saw a 40% decline in core as our markets felt the impact of state government stay at home and business or shutdown orders.

Right now our AD pacing indicate core advertising improving from April to May and from May to June let me be clear we are discussing month to month performance in 2020, not our year over year performance. Many factors will come into play into our cute final.

Q2 results, including the pace of businesses reopening and consumer spending rebounding across our markets.

In comparison to core advertising political AD spending remains healthy Michael Bloomberg presidential Ryan provided helpful. Dollar at levels, we don't normally receive so early in the presidential campaign.

And now that Joe Biden at the present in Democratic nominee, we expect the full force that the Democratic fund raising effort to fall behind him setting up for robust political.

Ending.

Senate and governors races are also falling in line for US all in all we expect a strong political spending here and our outlook for political advertising in 2020 has not changed.

Our retransmission revenue outlook has actually improved from the started the year in January we began our new Comcast contract and in March we completed negotiations for about half of the 42% of fiber households that are up for renewal this year.

We are pleased with the outcome of those negotiations and believe our expanded station footprint helped us to realize greater value.

We have now begun negotiations on the rest of those households, another 20%.

Regarding the subscriber counts, we saw no substantial change from the third quarter to the fourth quarter of 2019, the most recent data available.

Our national media businesses also felt the effects of the soft advertising environment in April the month of April was down 19% from the previous month March.

And March was the best month of the first quarter. However, we now see stabilization in the national businesses for the remainder of the quarter.

Like local media. These businesses are managing the AD market challenges by employing stringent expense controls. In addition, we believe the national businesses are well equipped to withstand these challenging time.

At Kate the pillars of the networks businesses are very durable they bank on growth in over the air to TV viewing they benefit from stronger national advertising and they each reached nearly all U.S. household. These fundamentals will help Kate rebound as the economy improves.

At new disease, the stability of programmatic AD revenue on its over the top platforms has allowed it to manage through this unusual time.

While newsy has seen cancellations and softness in the second quarter. It's AD rates are holding steady along with viewership gains.

Deters business also faced challenges from the unfolding economic crisis, and advertiser uncertainty about usage as stay at home orders reduce commute times, but listening has bounced back in recent weeks to near normal levels with the news by mid day.

And the did your team has been actively managing its PML with two goals in mind to preserve and strengthen the long term value of the business and to mitigate risk through prudent expense management.

Ditch or continues to receive pitches from big celebrities and maintains key partnerships with others and is well positioned to emerge as an even stronger brand.

Now I'd like to discuss the proactive expense control measures we've executed across the company since mid March to help us manage the AD revenue declines.

Our initiatives have included a reduction in capital expenditures, a hiring freeze a freeze on the merit pay raises we were scheduled to implement on April 1st.

The rolling back of executive pay increases that were made earlier in the year. Then later pay cuts for executives and reductions in our board of directors fees and general expense reductions in items like travel entertainment and marketing.

We expect these initiatives to provide cash savings of more than $85 million for the year.

And now a few.

Key liquidity items to update you on our current forecasts for full year cash interest is $90 million versus our previous forecast of $100 million.

The savings reflects the significant decline decline in LIBOR over the last few months.

Our capital expenditures currently are estimated to come in between 25 and $30 million versus our previous estimate a $50 million.

And our cash taxes are currently estimated to be zero for the year in fact, rather than paying taxes were receiving a $14 million tax refund as a part of the cares Act I'll talk more about cares in a moment.

Many of you are with us as we weathered the great recession of 2009 that was a difficult time for this company and we were forced to impose furloughs pay cuts and suspension of many employee benefits.

We hope those measures won't be net earnings in this case.

Our expense reductions are certainly helping.

Another significant difference from that period comes from the benefits of the federal stimulus package to our company's liquidity.

The stimulus provisions that benefits scripts include the deferral of social security taxes and pension contributions the tax relief on the use of net operating losses and interest expense limitations.

These measures either bring in cash this year or help us to push out cash payments to 2021 and beyond the total impact to script is about $60 million. We appreciate the federal efforts to help businesses maintain continuity during this difficult periods.

We expect to be cash flow positive for the year and based on our current outlook.

We expect our cash flow from operations to be efficient.

To meet our operating needs over the next 12 month.

We have of course stress test our forecast with a number of downside scenarios and even in our most severe downside modeled our 2020 cash flow significantly exceeds 2019 cash flow.

And while we do not anticipate liquidity constraints, we do have other potential cost control levers as well as the ability to slow our working capital spend and generate cash in the event of a prolonged economic weakness.

Right now, we do not need to take these steps.

I'd like to conclude with the cash with cash and capital allocation.

Our cash balance at March 30, Onest was $180 million and net debt was $1.94 billion. Our net leverage at the end of first quarter was five dot four times, just a reminder, that our term loans and unsecured notes have no maintenance covenants.

We have no maturities until Q4 of 2024.

Our revolving credit agreement had the maintenance covenant only when when drawn its maximum leverage is 4.5 times on first lien debt on an adjusted pro forma two year blended EBITDA as defined defined by our current credit agreement.

At March 31st we were at 2.9 times on this threshold.

Finally, our team has been focused on navigating the economic fallout from the pandemic with a sense of urgency our number one priority right now is managing our cash and liquidity through the duration of the downturn.

However, we haven't lost sight of the fact that outside of this crisis. Our overarching priority is to pay down debt. This is why weve temporarily suspended share buybacks last quarter.

Nevertheless, we thought it was important to maintain our $4 million a quarter dividend and now here's Adam.

Thank you Lisa.

I shared with you at the outset of the call how the plan we have been working over the last two years that scripts, which was designed to make us a stronger and more durable company and why that work has better positioned us to navigate this moment.

Then after sharing the results of our strong start to the year, Lisa detailed our plan to whether the current storm.

Now I'd like to discuss how we believe the work we're doing today will better position our company for the Don ahead, when we know the Sun will inevitably rise again on commerce fees.

As the Corona virus came crisis came upon us this spring.

We identified three key priorities to guide our actual.

Number one to protect the health and wellbeing of our 6000 employees number two to energetically serve our audiences and communities with the objective news and information they need to stay safe and the entertainment they seek to lift theres spirits and number three to maintain business continuity in strong financial stewards.

Of the company.

These three priorities have guided our decisions thus far and they are the reason we believe we will be better position after the crisis.

It all started with planning because several weeks ahead of the Pandemics rise to the top of the American consciousness, we were already putting the pieces in place to safeguard our employees execute the mission and maintain business continuity.

We let our industry in transitioning many of our employees to working from home across both our television station footprint and our national businesses I'm proud of the creativity and ingenuity demonstrated across our teams to overcome any challenge and I want to thank our employees for their dedication to their audiences.

True commitment to our mission and their loyalty the scripts.

Without missing a beat anchors meteorologist and our field reporters transition to covering our communities with minimal risk exposure. Many lives from sets in their homes.

I'd cast are being produced recorded and edited remotely software engineering and development continues without interruption and video conferencing has helped shore up our sales efforts across the company.

At case for instance, the upfront season has already started with about 100 pitches being made over video calls with the same Polish as an in person pitch.

Across our company our sales teams are staying in close contact with clients agencies and brands as we navigate this together.

I'll coded 19 is a global pandemic you'd is inherently a local experience and therefore, a local news story.

We believe we have moved into a new era for the journalism industry, one in which news, especially local news is again a must have for most Americans.

This era begins at a time when local broadcast news rooms are uniquely positioned to cover our communities and meet audience demand.

Ratings in audience impressions that are local stations have been aren't up on average between 10, and 50% and that seem data shows that scripts brands are taking a greater share of the increased attention.

Our coverage focuses on the facts, we are delivering information with authenticity with humility over authority and with a willingness to recognize that we don't always have the answers.

This is because of our newsrooms dedication to a differentiated content strategy.

Calls on us to deliver the stories and information our audiences need with context and objectivity.

At Newsy the spike in demand from our audience has been just is profound.

Spread out across the nation Newsys journalists continue to report about the pandemic along with all of the other news that keeps the world spending.

Newsys audience has been up 40% on cable and more than 65% on OTSG record setting viewing numbers and the significant opportunity that is introduced newsy to a bigger and broader audience seeking out our commitment to nonpartisan objective journalism.

The five keeps networks are seeing boost in viewership from the increase in people watching television. This is especially true for mistry laugh and grid. The three networks that specialize in escapism and not surprisingly daytime is the new prime time as people turn on their Tvs, while spending more time at home.

Total viewership on these networks during the day is up between 20 and 40% over the same period last year.

At Stitcher more than 300 agency in brand professionals joined our power of podcast Webinars in early April to learn how even in this environment podcast will connect their messages with their target consumers.

Some advertisers have increased spending with us and new advertisers continued to enter the podcast marketplace.

The residents of podcasting during this chaotic time illustrates how deeply ingrained it is in our lives today.

All of this elevated consumer demand for our news and Entertainment makes me optimistic about what lies ahead.

Branding and marketing experts know that consumers habits shift after life changing events.

I believe we are collectively all experiencing a moment like this now.

People are recognizing that social media posts and Internet Influencers may not be reliable sources of legitimate information to keep them safe.

Our trustworthy and enduring brands will be here for them during and well beyond this crisis.

I believe all of this outstanding audience growth well financially benefit our company even in the near term as we head toward what we expect to be a very robust political revenue cycle.

At moments like this the scripts commitment to mission and service extends beyond how we inform our audiences it reaches to the role we play within our local communities for good and how we support the economy with the power of our media.

Our efforts on this front include launching read news in advertising campaigns to support citizens and businesses across our footprint. We are open takeout Tuesday and the rebound.

These initiatives and campaigns connect us closely to our audiences and advertisers and reinforce the central role our media brands play in our communities.

And they are integral to our mission.

As the fourth largest independent television broadcast or one of the largest podcasting companies and the largest and most powerful portfolio over the year multi cast networks.

Grips is contributing to moving America forward.

This is what we do because it's what's right, but we also believe doing this work gives us an advantage that we will pay off for our business and for our shareholders down the road.

As our company mission States, we do well by doing good.

Today advertising, maybe down but audiences are way up.

I'm confident that is stay at home orders are lifted we'll see the start of a recovery auto dealers will need to sell their cars air conditioning systems will once again need to be replaced and eventually travel and leisure spending will resume.

As businesses return, we will be there to help them reach their customers and I expect our actions today will benefit us tomorrow.

Ahead of this pandemic scripts had repositioned itself to thrive by prudently deploying capital to grow our scale and the economic opportunity with a commitment to delivering strong financial results.

Along with the rest of the global economy, we are certainly being significantly impacted by the disruption to business.

But we're also using this time to become a stronger and more powerful company.

Scripts in its 142 yester year history has survives wars depressions and even other Pandemics. Our company is strong our media is enduring and our people are resilient.

While it's inevitable that some comedy these have to hunker down and play defense through this period, we will be on offerings, because we know that how we ask now during this crisis will have everything to do with how we succeed as we emerged from it.

And now operator, we're ready for questions.

Thank you, ladies and gentlemen, if you wish to ask a question. Please press one and then zero on your telephone keypad.

You may withdraw your question at any time by repeating the one zero command.

If you are using speakerphone, please pick up the handset before pressing the numbers.

Once again, if you ever question you May press, one and then zero at this time.

Maybe just one moment for our first question.

And we are what are the line of John Janedis with Wolfe Research. Please go ahead.

Hi, good morning, Thanks for all the color and happier process out in a couple questions first as markets reopened what are you hearing from yourselves team how quickly our advertisers prepared to move given stressed on local businesses and when you look at your top categories like services and auto do you think they lead or lag coming out and then.

Just on on Kate's.

You talked a bit but is the advertising Mitch there with more de are just making it simpler more resilient.

I'm just curious in terms of what the mix is there and if thats with health and thanks.

Good morning, John and it's great to hear you on these calls again I mean as Brian to cover those two.

Hi, Good morning, John It's Brian.

You know how fast are opening honestly, it's just early I mean, we're just in the last week, Kentucky, Texas started opening up.

Montana.

Which had very few cases.

And started opening up a bit now we're beginning to see some of the other states.

Starting to take from incremental steps I think we'll know better in the next couple of weeks I mean, this past week was.

Very reassuring, so quite a bit of business that had been canceled a four or five weeks ago reinstate their buys.

But I think it's really going to be on a market by market basis and theres. Some categories. The medical category is one of the first.

To start to Britain money back into the ecosystem as non elective surgeries and so forth or one of the first things that are opening backup. So I think thats a category that we started agency services actually has held up okay. I mean, everything's down but has held up okay sorry.

So I think with a lot of people home. It was a good time to start to get some soft fixed so I pick in the next couple of weeks, we'll know more but I expect it to be a kind of a market by market.

Situation.

You know relative to Kate.

And your question John about the first quarter performance or just how they are holding up now.

Welcome to I mean, there's been talk in the market around direct response being just a much better category broadly and I'm I'm curious, what that's going to benefit case going forward as opposed to looking backwards.

Yeah, I think so I mean, you know DDR was not immune to the challenges that general market had there was some de our that pulled back but there's enough in that ecosystem to backfill cpms are down a little bit and so we do have.

Switching of of advertisers, but even then the last two weeks and talking to folks a case.

They've actually raised their estimates what they are only thinking where Q2 would be because the cpms are actually starting to grow awful where they had said in at the end of March so.

I do think Q2.

DDR will fare okay.

Probably not back to Q1 levels, but we are seeing momentum in growth CPM Sir.

Thanks, John.

Thank you and next we'll go to the line of Kyle Evans with Stephens. Please go ahead.

Hi, Thanks.

Lisa or Brian I know, you have 20% of Retrans renewing and the balance of the or can you talk about how those phase across the quarters that I've got some follow ups as well.

Hey, Kyle we're in the middle and negotiating those now I think.

At money will phase in over Q2, Q3 in Q4, a fairly evenly.

I'm, a little bit heavier from the back half the some of that money will come up and into Q2.

No those negated negotiations are complex, but they are going well I'm even in this period, we continued to have.

Ongoing conversations with them week to week in advancing.

The negotiation so we would expect sooner than later, we'll be in a position to announce successful completion those deals.

Great.

Q 20 political ads.

Any sense.

Did you give on how does comp on a same store basis to the 16 and 18 cycles.

Hello, Brian again, we did 18.7 million in Q1 of 20, we did 3.4 million.

Of political in Q1 of 18 and I don't have the.

Number 416 in front on the but we can work on getting that for you, but obviously it was good the on Bloomberg was about a little over 40% of our spending but beyond that we had I don't know 15 states that had primaries.

Definitely saw crowd out of effect that affected our core.

The back half of March, Michigan, Montana of Missouri, Arizona, Florida, Ohio, All had prime is where we have multiple stations and so we definitely saw an impact on our core there, but you know who it was a good first quarter and beyond just Bloomberg you know Sanders buys.

Worn Buddha Judge Kubicek, everyone was active in those primaries moved us through the quarter.

I'm staring at a very expensive Bloomberg terminal so you're welcome for the for that [laughter] or accretion of [laughter]. The sub counts threeq to Fourq, you not not been materially.

Encouraging.

If anything could you give us on your view for 2020 given.

The 30 million of unemployed and.

Yeah, the lack of alternatives for people.

In their houses.

Yeah look I think you're asking a good question, we get our quarterly numbers in a reorders and.

Down less than 1% down less than half a percent over the last three months. What we have reported so that was quite frankly, one of the best results we've had in several quarters.

It'll be a while before we know.

The impact of this period I'm.

Certainly heard both arguments that you don't people need local TV, and maybe TV more than ever and so those subscriptions really valuable I also understand the pressure on people who are having our time paying their bills and is that a disposable expense. So you know I don't really know how that's going to play out I think we'll be watching just like you will be watching to see but you know so we will.

Look at the momentum we had coming into this quarter. It was actually very positive.

Great one last one.

Could you please check down kind of what the pacings are for the national business segments.

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Hey, Kyle it's Laura we <unk>, how you doing at we come off of you know an excellent quarter Alley delivered a highest profit you know it sounds guys mentioned earlier for the division, yet and a real healthy growth rate of 23% even.

Let the impact of cover 19, you know hitting us at the end of March we do see stabilization as a quarter is progressing a and we continue to believe and the underlying granted trades.

Too early to tell sort of how the growth rates will shake out for the remainder of the air.

Okay. Thank you.

Thank you and exportable items, Dan Kurnos with the benchmark company. Please go ahead.

Thanks. Good morning, just first on Retrans, you actually came in a little bit higher in Q1. So it just I know Adam or Brian you've been pretty proud of the ability to scale, you've gotten to get rate and we see some pretty good numbers just want to make sure theres not any.

True ups in there that we're missing.

And then Brian just sort of on core in general you guys, obviously have a pretty good footprint relative to less restricted you know shelter in place type markets as well as pretty good EBC exposure. So you think that's giving you an advantage you think your pacing ahead of kind of where.

There are the broader industry is facing from corporate Becca.

Hey, Dan a nice to talk to I'll take the first question.

No no unusual true ups in those numbers I think it's an after what you're seeing is an affirmation of the strategy, we've been working adding through M&A to our portfolio last year ago physician position US best for this year, we've been for a long time talking about how important 2020 was because of the Comcast step ups and also be.

Because of the opportunity to renegotiate 40% of our subs that is underway and we're very pleased with the results Brian.

Hey, Dan.

You know I'm not sure that you know as we look across we feel like we had less markets affected by the sheltered home every one of our markets had a shelter at home order to some degree.

As a result of that every one of our markets had some business cancellations as a result of the environment I don't think that there was any state that just you know was open for business exclusively so I can't speak to the other groups, but we definitely felt like we were impacted across our entire portfolio.

As it relates to Abbvie you know we've been really pleased with the health of the APC brand. Good morning America World News.

Has seen significant growth.

Over the last couple of years and I think in this time has done a nice job and then a very credible brands I'm, sorry, I think all association with that has been good you know they do have a couple of primetime shows like American idol that they'd be able to continue to stay on with live performances I think that's helped us.

But I think you know time will tell whether you know the heavy HBC will be an advantage over the others through this.

And maybe just one more either for I guess, Adam or Lora, just on maybe high level thoughts around.

Kind of the mix shift towards towards streaming and out of home you know relative as it relates to newsy and Stitcher and just you know is there anyway that you guys can sort of try to handicap. What you think the stickiness is in terms of the you know uplift in a usage inactive accounts and relative.

To kind of what you think that how that impacts sort of the way you either view, let's say state your valuation Adams and Thats done on conversation piece or Newsy is kind of growth trajectory over the next call. It 12 24 month.

Yeah, I mean look I think we're experiencing certainly increased attention at newsy as a result of two things first more people are spending more time looking for.

The brand of news and information that we provide a right now and they're doing it on new platforms like Oh GT. We've also seen audience growth on the cable side, a with newsy and I think that will definitely benefit us over the long term. It's been good to see that programmatic AD rates have hung in there through this and that's benefited news.

For sure obviously, there's still you know at this moment more supply than there is demand, but the rates or are hanging in there on the programmatic side and so I expect that the work we're doing through this period at Newsy as we continued to maintain our commitment to.

To the kind of reporting we do through this crisis will in order to this company's benefit to newsys benefit over the long haul as People's preferences are set.

On the podcasting side I think as Laura mentioned in the in the prepared remarks, there was a little hit two podcasts listening overall as an ecosystem as the morning commute disappeared. It certainly wasn't as profound as I think what you're seeing from radio groups with respect to terrestrial radio.

That's bounced back to basically normal levels as people have begun listening to podcasting now on their daily walks as are walking around the neighborhood and I expect as people returns are commuting I expect those people who have for the first time been introduced to all the different opportunities that podcast provides from a programming perspective, we'll.

We'll continue to to help them. So when we look at a you know what this what this crisis has done.

Look I I'm I'm I'm, let me be clear there are no silver linings with respect to the crisis that this world is going through right now, but I do think when I when I look at our company relative to other industries. We are serving an audience that is hungry for the product we produce.

Yes, we are temporarily being negatively impacted by business disruption, but I expect once business gets back to normal we will be in a better position to capitalize on the strength of this company than we might have even been before and I'm I'm, absolutely looking forward to that moment.

Got it thanks for all the color guys appreciate it.

Thank you and next or whatever the line of Davis Hebert with Wells Fargo. Please go ahead.

Good morning, everyone. Thanks for taking questions well.

I just one question.

So give us the last quarters.

On the basis and how that translates to leverage thank you.

Yeah, and David and I.

Our current leverage as of March 30, Onest was 5.4 times and at the end and at the end of the on the left.

12 quarters, when we look back on an EBITDA basis. It was 363.

On the lagging.

[music].

And actually is making US one follow up you gave some color on April may and June in sequential.

He haldeman year over year accidents.

I know, it's a difficult with M&A, but maybe you know.

Okay.

Hey, Dave This is Brian.

You know I think that's the key thing you know lesa mentioned in her prepared remarks was that we are seeing sequential growth. She talked about the fact that March which was our strongest kupol strongest month of first quarter, we saw a decline of about 40% into April.

But from that you know Mays bookings were better than April junior bookings are better than may, but you know compared to last year, you know each month's going to be down each quarter category is gonna be down there's still a lot of moving parts and the states are changing their rules everyday so it's very does.

I would call at this point to do any sort of solid Q2 guidance and that's why we focus more on sequential growth.

Thank you.

Thank you and next we'll go to the line of Michael Kupinski with normal capital markets. Please go ahead.

Thank you, Brian just a follow up on that what is the normal.

Sequential month to month performance for the.

Let's say the broadcast group.

From March to April.

I mean us up to now would be right.

There is typically April would be flat or even down a little bit from March made bounces off to be one of our best month to the year one of our talked to a strongest month from here and then June would typically a drop back from that so the fact that.

It's not unusual we'll see may grow over April, but it would be unusual and we do expect June now to grow over me.

Gotcha and then in terms of just looking at the retrench, just going back to that for a second I'm just trying to get a sense because I understand that you had some new renegotiations that kind of kicked in in March you already had to step up beginning January onest from the Comcast subs.

It's kinda give us a sense of the progression in retrans lumped them up.

Yes.

Mike It's Brian we're looking in here each other's someone who is going to take this relative to a month to month. You know you saw a step up in Q2 as a result of the deal that we got done that we've now announced the was done early in the quarter.

You will see another big step up.

As we complete Q2 and that will carry through Q3 in Q4, and then we have another deal up at the end than the first half of year that will benefit third and fourth quarter.

I understand them I'm, referring to the first quarter in terms of you know the retrans came a little bit better than.

Many of US. We're looking for was just wondering you know that I know that you had a renegotiation and that kind of kicked in in March I believe and I was just wondering to kinda give us just some thoughts in terms of the trend line for retrans in that quarter.

I I make its Adam I would say we did benefit in March from the completion.

Oh, they retrans agreements.

Okay and I.

Just just going back going back to my comments before.

I guess I would say.

Again, it's an affirmation of the plan we've been working to negotiate those are those agreements with a larger portfolio.

And in terms of that agreement is or any additional color that you could say in terms of the variance that would have accounted for that agreement in the quarter I mean kind of give us a sense of the true.

I mean, not I mean, not really I mean, the reason we have been reticent to guide.

Two retrans is because we're in the mix of these negotiations and we expect that it's our responsibility on behalf of the company and our shareholders in order.

To to monetize the distribution of our signal to the best of our ability. So when we outperformed your expectations I guess I'd say, that's an affirmation of the job we're doing [laughter], there and a fair enough.

Wondering if you go going petcoke as they get I was wondering Brian if you could go back to.

Your comments about the how the performance were among.

Disparities about TV stations, but I was wondering if there were regional disparities in terms of performance in your television segment small markets versus larger markets or are they pretty much down to similar across the board.

Yeah, there was some regionality too Mike really depending on what was happening in the state I mean, obviously you know you think of markets like New York rule in New York City in Buffalo, a where you know there were especially hard hit.

The Midwest, Michigan, Ohio, Wisconsin, they're very aggressive and in many of their stay at home orders to and so those have been restrictive if there were other states general, Texas fared a little better we're in.

Purpose in Waco, Montana fared a little better also once you get to smaller market you have a little less national advertising and so in markets like those where there were less stay at home and local is what drives. This nation, we were able to hang onto more the business. So it really depends on sort of market market size and so.

Eight to state versus just a general regional comment.

So it's nice to have a diverse portfolio last question. The company historically its managed with much more modest debt levels and the initial thought was that the company would increase leverage with a very visible way to lower it and certainly you're going to get that cash influx from Comcast the political to pare down debt no.

Prospect doesn't look as as a promising give at least you're going to get that but the given the other portions of the business.

With that prospect in doubt in terms of the debt leverage pare down can you talk about the product prospect of more aggressively Loring dad would you consider monitory monetizing assets or their non strategic assets markets that could help reinforce your balance sheet any thoughts on that.

Hey, Mike its out I mean, right now obviously, we're very focused on navigating through the crisis or looking at.

The cash that we're generating a and using that obviously for the long haul as we've said for now the last.

Several quarters, our focus will be paying down debt, reducing our our company's leverage.

I think we've got to you know sort of ticket quarter at a time I'm gratified actually to see that we were able to flex our balance sheet last year in order to.

In order to double the scale of our our local media portfolio, because I actually think that it's really helped us to.

To be better positioned to withstand a crisis like this the cash flow generation to the company is significantly enhance.

Now as a result and that helps us looking out our fixed costs I would say you know moving through the crisis, we will continue to execute with a strategy in order to make sure that we we maintained a healthy balance sheet and continue to pay down debt.

You have any thoughts in terms of where the debt leverage might be by year end.

Hey, Mike its Lisa you know given the uncertainty of the impact of cobot, where we're not guiding our forecasting two and you're in leverage at the time.

Fair enough okay. Thank you.

Thanks, Mike.

Thank you in next door to liner Craig Huber with Huber Research partners. Please go ahead.

Thank you Hi, guys Hope you all safe.

A few questions I'll just maybe just go one by one if I could Brian on the Retrans subs.

What was the year over year percent changes don't like save a 4%.

Earlier this quarter there.

Uh huh.

Over the last year, our assumptions declined about 5%.

Yes.

Right.

Correct.

And that's a 2019 just clarifying through through the end of 2019 yeah.

So I like your latest quarter I guess this interaction between the fourth quarter down roughly 5% year over year.

No.

I'm, saying for the full year over 12 month period.

We have declined about 5% total subs.

Brian will have you here.

Your thoughts you only on the NFL contract renewals outdoor just broadly that you can speak to here I mean do you think things are getting pushed out in terms of.

The aggressiveness here to get it gets the contracts signed during the coming quarters. Given this this virus situation going on here those to be curious to hear what your thought is how you into contract make it broken up.

The Sunday afternoon games, I think you'll see status quo or the oral four players participate which really just thoughts on the contract. Thanks. Yeah. You know I don't have any insight as to where those negotiations are at other than I know they're going on.

And so I don't have any visibility as to if this current environment has slowed mills I'm guessing it didnt.

But online actively involved in those you know as I've said in the past I I'm not sure that this next deal has to look like the last deals I think that there could be an opportunity for everybody to have a piece of the action.

I could see and again I don't have visibility into how these negotiations are going solutions might just my own personal opinion, but I can see an environment where.

You know every all four of the major networks or have a piece of the NFL package I'm not sure. The NFL package has to be is clean we cut as.

Prior ones with one company getting AMC there another one getting NFC somebody in Sundays I think that's you know I think there's a lot of regional games that are of high interest and.

It would be great if markets could have the opportunity to see them. So like you know I think of a market like Cincinnati, where I'm sitting and oftentimes, we'll get the Bengals game, which is great. But then you know we had within 100 miles of here you got the Colts a little over that you've got the grounds.

Steelers I'm, a big interest here and so the idea of somebody being able to have bangles, but also another station or to also at the same time being able to broadcast from other schemes of regional interest I think.

It would be of high appeal and so I think there's an opportunity for every one of the play.

Smarter people in the new we'll figure out how that could all work, but you know the fact that we have a books big footprint with all four networks I wouldn't be hopeful that everybody has a piece of the action.

The back on the core advertising front on television.

<unk> comments about.

Down 40% of I think.

I guess like many question here is it was that a comment like a sequentially. So it also some basing first down 40% year over year for the month of people for core TV advertising as a fair statement, but without a rate of decline is getting better in may and June is that what you're trying to say.

Yes, so what I'm, saying is that April revenue was down core revenue was down 40% from March.

So we're looking at you know March was kind of our high water Mark in first quarter April dropped obviously, you know come the third week of March we took millions of dollars and cancellations, but now we see may do we have more money booked and a better percentage year to year end made them.

And then April and we have more money booked in June and we had in May and an improved percentage never as well.

But then just to be clear a year over year pace, you inferring not year over year. Let me just let me just Claire not more money book year over year and worry about money booked in the but at a greater percentage month over month.

Okay, that's likely to 40, but how about just April year over year pro forma set down roughly 40%.

Yeah, we're not sharing magritte Craig.

Yeah, I know I mean, Craig I really appreciate where you're trying to get out there's just so many moving parts right now we're just not.

Issuing any guidance or right now.

I mean last if I appreciate that and then my last question I guess, Brian on the cost side within television can you give us any sense of the non programming costs. How much you think that might be down sequentially with compensation costs et cetera.

Just we have something to go off of here to think about for models.

I think when you take out all of our programming costs.

Which would be all of our network fees paid to the networks are syndication to all of that programming stuff.

Everything else is running flat to up low single digit so all of our employee costs our.

Legal fees earned repairs towers music license travel and entertainment for and I'm speaking to Q1, not Q2 on the Q2 totally different as you know we frozen so many expenses. There's obviously a travel we've cut back on capital things like that but in Q1 all of those other categories nothing was up.

More than 2% and so everything was in that kind of flat or just maybe up a little bit range. So most of our costs. Our expense increases came in the programming line.

Can you help us quantify what you think the second quarter, we'll do versus that up 1% to 3% number.

How much materially better if you could get a tool.

Yeah, well, we'd make we're thinking Hey go ahead on Hey, Craig It's out Im I mean, we've obviously tighten the belt very very significantly I think very consistent with lease those comments and we can't give you a much more beyond that.

Okay very good thank you.

Thanks, Greg.

Thank you and exportable I know John Corn Rootworm JK media. Please go ahead.

I I may have missed it said.

What's the size of your revolver.

And the maximum pressures the second quarter because of political won't be all that great and in the third quarter. It picks up in the fourth quarter to explode.

So.

Are you comfortable in your best case modeling that you won't have to tap.

The revolver isn't the Knicks.

234 months.

Hey, John you know based on our for current forecasts.

I had indicated you know we are cash from operations provide sufficient liquidity to sustain operations for the next 12 months and we would not expect to exceed our first lien secured leverage.

Covenant over the next 12 months sale.

And that a revolver size is 210 million.

None of its drilling.

Yeah, we did we didn't draw the revolver really out of an abundance of caution as right I've missed but yes, absolutely yes.

Well at all.

No we did not dropped off.

Can you give me an idea would you do.

Well I 75, okay.

Okay.

I want to say that Brian I want to throw up a concept out at you'll get your reaction every.

Call with every broadcaster.

Politico estimate unchanged after all people more people at home and will remain home and they won't be any it won't be much in the way of campaign rallies and so on makes sense. They the campaigns will want us will want to spend more.

What I'm concerned about is the raising the money side.

Our wealthy donors in such a great mood. This year that they were willing to give huge amounts of money to the candidates I mean I can speak for myself I will say I went into this year ready to donate X to a candidate.

I'm still gonna donate halfbacks.

You know I'm wondering if it's just like everybody else.

So I'm more worried about the raising the money side than the wanting to spend side, what do you think of that.

Well look Jonathan gets a legitimate question, that's probably a legitimate concern so to this point the fund raising levels have been significant and <unk> and significantly higher than what we've seen in the past and so the campaigns at this point or well fund.

I expect they will continue to be well funded I think your comments about maybe people will not give.

The same amount that they were going to maybe valid time will tell on that but I do think that there will be enough money an ecosystem that TV comes first.

And as a result of that I think that you know if there's less money it could impact maybe some other mediums, but I think local TV is typically where.

They go first for spending and.

Look we look at our footprint very strong in the presidential States are Senate were in six of the top 10 considered a competitive races.

The house who's going to be very competitive 53 races consider toss up certainly in and we're in almost half of them. We think we're really well situated that even if there's a little less money and ecosystem. We believe local television is going to come first and we'll be fine okay.

Finally, I heard a rumor that Brian Lawlor is privately working out with Joe borrow is that right.

I can't comment on that Okay, we'll have thats my age it [laughter]. Thanks for the help.

Thanks, Doug.

Thank you and next we'll go to the line of Jamie's Zimmerman with light speed partners. Please go ahead.

Hi, guys you guys have like in terms of employees per station you know you've always had like a number that way exceeds everybody else's I just thought that this opportunity would allow you to sort of you know to get to take that number down and actually you know let go a bunch of employees who <unk>.

Caps were redundant and not necessary and I'm curious why staffing levels haven't come down during this crisis.

Hi, Jamie it's Adam Oh Wow.

I guess I would tell you I don't see this in any way as an opportunity.

And right now we're very focused on the health and welfare of employees I don't necessarily think it's also an accurate statement that we have more.

Employees across our stations then a other groups. So at this moment, we don't feel a need to execute.

Furloughs pay cuts.

Thanks.

All right.

Thanks for the question, though.

Great. They are there any other questions in the Q.

We do have John Kornreich back in the queue from JK media. Thank you.

Retrans growth.

Ah pro forma turns out to be this year and I'm not asking or what it will be is it safe to say the net.

Retrans growth.

We'll be less.

Let let then let Linda lessening the gross lessen the gross retrans growth whatever that turns out to be.

The other words margin margin will be down a little bit <unk>.

We really haven't discussed any guidance on retrans for the year that Hey, John I, you know, we haven't disclosed our net retrans profit on and based on obviously the large amount of subs that are resetting in 2020, and we do expect nice growth. This year, but we haven't said really because of those negotiations okay fair enough. Thank you Ken.

Thank you and I have no further questions in queue at this time.

Great. Thank you very much everyone for joining us today.

Ladies and gentleman that does conclude your conference for today. Thank you for your participation everything 18, <unk> Executive Teleconference Survey you may now disconnect.

We're sorry your conference is ending now please hang up.

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Yeah.

[music].

Ladies and gentlemen, thank you first.

Welcome to the scripts first quarter 2020 earnings color.

This time all participants.

Later, we well conducted a question.

<unk>.

Instructions will be given at that time.

Require assistance during the called please press start then zero.

As a reminder, it's just kind of friends is being recorded.

I would not like you turn the conference over to our health care and Carolyn Shelley out of Investor Relations. Please go ahead.

Thank you great. Good morning, everyone and thank you for joining us very discussion of the E.W. scripts companies financial results you can visit scripts dot com for more information and the links to the replay of the call.

A reminder, that our conference call and web cast include forward looking statements and actual results may differ factors that may cause them to defer are outlined in R.S.T.C. filings.

The covert 19 pandemic enhances the uncertainty of forward looking statements, we make about our operations and financial condition because of this rapidly changing economic climate. We are not issuing second quarter 2020 guidance and we also are we sending most of our previously issued guidance with a few exceptions, we'll discuss today.

We did not intend to update any forward looking statements, we we make today.

We'll hear first this morning from scripts presidents and C.E.O. Adam's Simpson and then C.F.L. at least the coots and.

Also on the call our local media President, Brian Lawler National Media Executive Vice President, Laura Tomlin, and controller and treasure deadline.

Now here's Adam [noise].

Thanks, Carolyn good morning, everybody and thanks for joining us well those of you have been with US for some time, though that 2020 was supposed to be a watershed for our company financially and a year certainly started out that way.

Despite the impact of the Corona virus outbreak on advertising for the last two weeks of March we are reporting attempt straight quarter in which scripts had delivered better than expected results on nearly every measure.

While our full year results will be unlikely to meet the high expectations I had coming into the year I'm hardened to tell you that the plan we have been working over the last two plus years has made us stronger and better performing.

For the first quarter the local media margin is up over Q1 2019 on both the adjusted combined and as recorded basis.

National Media segment profit was double last year's Q1.

And the $49 billion in total companies segment profit for Q1 is the highest profit number for the first quarter that we have seen since we spun off scripts networks interactive in 2008.

The bigger and better performing portfolio, we have will pay off during the upcoming political advertising cycle. This presidential year and through the upside we're capturing it'd be transmission revenue.

Even before the impact of the outbreak on advertising those two revenue lines political and read trends were projected to account for more than half of our local media revenue in 2020, and we expect them to hold up well during the crisis.

The changes we've made to the company, so naked leaner and more efficient and the significant m. in a we did that doubled the scale of our local media portfolio has also made us more durable and better able to withstand the crisis like the one where all living through now.

Today, where in the midst of a business disruption due to stay at home orders shuttered businesses and this off the advertising market, but the fundamentals of the broadcast industry generally and scripts is local and national businesses, specifically remain sound.

On behalf of the scripts management inboard I'd like to thank our shareholders, who had been supported us during this challenging time.

Many of you have been with us for years and some since before the last financial crisis. Today is always we appreciate your understanding of scripts is near and long term growth strategies and the value. This company has created over the decades and will continue to create in the years to come here.

He said to discuss our financial picture and then I'll be back to cover a few more topics in detail Lisa.

Good morning, everyone. The first quarter got up to a strong started across the company and local media. We we're on track to significantly exceed first quarter budget until mid March one to cope with 19 outbreak began to end had the economy, we reap the benefits of our acquisitions of 27 television stations last year.

And although poor advertising ended the quarter down on that same station basis. It had started the year with the same momentum we saw and few for.

We were saved significant early political advertising spending, finishing the quarter at $19 million and we captured retransmission rubbing it upside as we completed negotiations for about 20% of our subscriber household with another 20 per cent left to negotiate this year.

Retrans revenue was up 21 per cent and Q1 on adjusted combine basis.

The National Media Division thought even more positive Q1 dynamics by far our largest national business is the case networks, which managed to deliver it's best revenue growth since we acquired at 31%.

Newsy also finished up around 30 per cent a testament to it's ongoing appeal with young audiences and driven by programmatic add grows on it's over the top platforms.

Overall, the National Division met and beat our first quarter guidance with $108 million in revenue and more than double its Q1 2019 segment profit at nearly $12 million.

Turning to expenses local media is Q1 expenses came in well below our guidance of up low teens add up 8% on and adjust to combine basis.

National Media as expenses came in at $96 million versus guidance of about $100 million.

Shared services and corporate expenses were nearly $19 million in the first quarter that is consistent with what we guided and much higher than what we'll see the rest of the year because it included annual compensation and benefit payments.

I'll talk more about our ongoing expense control in a moment.

The company's Q1 net loss with 15 cents per share, but that losses, only 10 cents per share. If you factor out the first quarter acquisition in integration cost of $3.7 million net if taxes.

So again, a very solid first quarter.

[noise] now I'd like to spend a few minutes on our current financial picture.

Well, we are temporarily suspended guidance, we do feel obligated to our shareholders to make a good faith attempts to provide insights that reflect the current state of affairs and our outlook.

Those issues include where we stand today operationally and financially how we're responding to the covert night 19 by protecting the wellbeing up our workforce and how our operations and financial condition may change as global effort to fight club in 19 progress.

In addition to our comments today, you will find disclosures at risk factors related to the outbreak and our 10 Q. of course, we can't know the <unk>. The coping 19 crisis at this time.

Turning to the local media division, let's start by discussing the progression of core advertising revenue over the last two months.

Speaking sequentially from March to April this year, we saw a 40% decline in core as our markets felt the impact of state government stay at home and business or shut down orders.

Right now our AD pacing indicate core advertising improving from April to May and from May to June let me be clear we are discussing month to month performance in 2020, not our year over year performance.

Many factors will come into play into our cute final Q2 results, including the pace of businesses reopening and consumer spending rebounding across our markets.

In comparison to court advertising political AD spending remains healthy Michael Bloomberg presidential run provided helpful dollars at levels, we don't normally receive so early in the presidential campaign.

And now that Joe Biden, it up or something Democratic nominee, we expect a full force at the Democratic fund raising effort to fall behind him setting up for robust for the local.

Ending.

He sent it in governors races are also falling in line for US all in all we expect a strong political spending year and our outlook for political advertising and 2020 has not changed.

Our retransmission revenue outlook has actually improved from the start of the year in January we began our new Comcast contract and in March we completed negotiations for about half of the 42% of the Briber households that are up for renewal this year.

We are pleased with the outcome of those negotiations and believe our expanded station footprint helped us to realize greater value.

We have now begun negotiations on the rest of those households, another 20%.

Guardian subscriber counts, we thought no substantial change from the third quarter to the fourth quarter of 2000 in 19, the most recent data available.

[noise], our national media businesses also felt the effects of the soft advertising environment in April the month of April was down 19% from the previous month March.

And March was the best month of the first quarter.

However, we now see stabilization in the national businesses for the remainder of the quarter.

Like local media. These businesses are managing the AD market challenges by employing stringent expense controls. In addition, we believe the national businesses are well equipped to withstand these challenging times.

At Kate the pillars of the networks businesses are very durable they bank on growth in over the air <unk> T.V. viewing they benefit from stronger national advertising and they each reached nearly all U.S. household. These fundamental will help kate's rebound as the economy improves.

At new disease, the stability of Programatic AD revenue on it over the top platforms has allowed it to manage through this unusual time.

Well news he has seen cancellations and softness in the second quarter. It's AD rates are holding steady along with viewership gains.

Pitchers business also faced challenges from from the unfolding economic crisis, and advertiser uncertainty about usage as stay at home orders <unk>.

Listening has bounced back in recent weeks to near normal levels with a news by mid day.

And the Stitcher team has been actively managing its P.N.L. with two goals and mine to preserve and strengthen the long term value of the business and to mitigate risk through prudent expense management.

Ditch or continues to receive pitches from big celebrities and maintains key partnerships with others and as well positioned to emerge as an even stronger brand.

Now I'd like to discuss the proactive expense control measures we've executed across the company's since mid March to help us manage the AD revenue declines.

Our initiatives have included a reduction in capital expenditures, a hiring freeze a freeze on their merit pay raises we were scheduled to implement on April 1st.

The rolling back of executive pay increases that were made earlier in the year. Then later pay cuts for executives and reductions in our board of directors fees and general expense reductions in items like travel entertainment and marketing.

We expect these initiatives to provide cash savings of more than $85 million for the year.

And now if you look key liquidity items to update you on our current forecasts for full year cash interest is $90 million versus our previous forecast of $100 million.

Savings reflects the significance of kind decline and <unk> over the last few months.

Our capital expenditures currently are estimated to come in between 25 and $30 million versus our previous estimate of $50 million.

And our cash taxes are currently estimated to be zero for the year in fact, rather than paying taxes were receiving a 14 million dollar tax refund as a part of the cares Act I'll talk more about cares in a moment.

Many of you are with us as we whether the great recession of 2009 that was a difficult time for this company and we were forced to impose furloughs pay cuts and suspension of many employee benefit we hope those measures won't be necessary in this case.

Are expense reductions are certainly helping.

Another significant difference from that period comes from the benefits of the federal stimulus package to our company's liquidity <unk>.

The stimulus provisions that benefits grips included the deferral of social security taxes and pension contributions the tax relief on they use the net operating losses and interest expense limitations.

These measures either bring in cash this year or help us to push out cash payments to 2021 and beyond.

The total impacted scripts is about $60 million. We appreciate the federal efforts to help businesses maintain continuity during this difficult.

<unk>.

We expect to be cash flow positive for the year and based on our current outlook.

We expect our cash flow from operations to be <unk>.

To meet our operating needs over the next 12 month.

We have of course stress test our forecast with a number of downside scenarios and even in our most severe downside mottled are 2020 cash flow significantly exceeds 2019 cash flow.

And while we do not anticipate liquidity constraints, we do have other potential cost control levers as well as the ability to slow are working capital spend and generate cash in the event of a prolonged economic weakness.

Right now, we do not need to take these steps.

I'd like to conclude with the cash with cash in capital allocation.

Our cash balance at March 31st with $180 million and net debt was $1.94 billion. Our net leverage at the end of first quarter was five dot four times.

To remind her that are term loans and unsecured notes have no maintenance covenants.

We have no maturities until Q4 of 2024.

A revolving credit agreement has a maintenance covenant only when it when drawn it's maximum leverage is 4.5 times on first lane dead on and adjusted pro forma two year blended <unk> as <unk> defined by our current credit agreement.

March 31st we were at 2.9 times on this threshold.

Finally, our team has been focused on navigating the economic fallout from the pandemic with a sense of urgency our number one priority right now is managing our cash in liquidity through the duration of the downturn.

However, we haven't lost sight of the fact that outside of this crisis are over arching priority is to pay down dead. This is why we've temporarily suspended share buybacks last quarter.

Over the last we thought it was important to maintain our $4 million a quarter dividend and now here's Adam.

Yeah.

Thank you Lisa.

I shared with you at the outset of the call how the plan we have been working over the last two years that scripts, which was designed to make us a stronger and more durable company and why that work has better position does to navigate this moment.

Then after sharing the results of our strong start to the year, Lisa detail dark plans or whether the current storm.

Now I'd like to discuss how we believe the work we are doing today will better position our company for the Dawn ahead, when we know the Sun will inevitably rise again on <unk>.

As the Corona virus came graces came upon us this spring.

We identified three key priorities to guide our actions.

Number one to protect the health and wellbeing of our 6000 employees number two two energetically serve our audiences and communities with be objective news and information they need to stay safe and the entertainment they seek to lift their spirits and number three to maintain business continuity and strong financial stewards.

Chip of the company.

These three priorities have guided our decisions thus far and they are the reason we believe we will be better positioned after the crisis.

It all started with planning because several weeks ahead of the Pandemics rise to the top of the American consciousness, we were already putting the pieces in place to safeguard our employees execute the mission and maintain business continuity.

We let our industry in transitioning many of our employees to working from home across both our television station footprint and our national businesses I'm proud of the creativity and ingenuity demonstrated across our teams to overcome any challenge and I want to think our employees for their dedication to their audiences.

True commitment to our mission and their loyalty to scripts.

Without missing the beep anchors meteorologist and Arfield reporters transition to covering our communities with minimal risk exposure many life from sets in their homes.

Outcasts are being produced recorded an edited remotely software engineering and development continues without interruption and video conferencing has helped shore up our sales efforts across the company.

Keeps for instance, the up front season has already started with about 100 pitchers being made over video calls with the same polished as in in person pitch.

Across our company are still teams are staying in close contact with clients agencies and brands as we navigate this together.

Coded 19 is a global pandemic it is inherently a local experience and therefore, a local news story.

We believe we have moved into a new era for the journalism industry, one in which news, especially local news is again a must have for most Americans.

This era begins at a time when local broadcast news rooms are uniquely positioned to cover our communities and meet audience demand.

Ratings and audience impressions that are local stations have been on up on average between 10 and 50 per cent.

And that same data shows the scripts brands are taking a greater share of the increased attention.

Our coverage focuses on the facts, we're delivering information with authenticity with humility over authority and with a willingness to recognize that we don't always have the answers.

This is because of our newsrooms dedication to differentiated constant strategy.

The calls on us to deliver the stories and information our audiences need with context and objectivity.

Newsy the spiked in demand from our audience has been just as profound.

Spread out across the nation Newsys journalist continue to report about the pandemic along with all of the other news that keeps the world spinning.

News. These audience has been up 40 per cent on cable and more than 65% on O.T.T. record setting viewing numbers and a significant opportunity that is introduced newsy to a bigger and broader audience seeking out our commitment to non partisan objective journalism.

The five keeps networks are seeing booth viewership from the increase in people watching television. This is especially true for mystery laugh and grit. The three networks that specialize in escapism and not surprisingly daytime is the new prime time as people turned on their T.V.'s, while spending more time at home.

Total viewership on these networks during the day is up between 20 and 40% over the same period last year.

That's that's or more than 300 agency and brand professionals joined our power of podcast web in R. in early April to learn how even in this environment podcast will connect their messages with their target consumers.

Some advertisers have increased spending with us a new advertisers continue to enter the podcasts marketplace.

The residents of podcasting during this chaotic time illustrates how deeply ingrained it is in our lives today.

All of this elevated consumer demand for our news and Entertainment makes me optimistic about what lies ahead.

Branding and marketing experts no the consumers habits shift after life changing events.

I believe we are collectively all experiencing a moment like this now.

People are recognizing that social media post and Internet Influencers may not be reliable sources of legitimate information to keep them safe.

Are trustworthy and enduring brands will be here for them during and well beyond this crisis.

I believe all of this outstanding audience growth will financially benefit our company even in the near term as we head toward what we expect to be very robust political revenue cycle.

At moments like this the scripts commitment to mission in service extends beyond how we inform our audiences it reaches to the role we play within our local communities for good and how we support the economy with the power of our media.

Our efforts on this front include launching read news in advertising campaigns to support citizens and businesses across our corporate.

We're open take out Tuesday, and the rebound.

These initiatives in campaigns connect us closely to our audiences and advertisers and reinforce the central role our media brands play in our communities.

And they are integral to our mission.

As the fourth largest independent television broadcast or one of the largest podcasting companies and the largest in most powerful portfolio of over the or multicast networks scripts is contributing to moving America forward.

This is what we do because it's what's right, but we also believe doing this work gives us an advantage that will pay off for our business and for our shareholders down the road.

How's our company mission States, we do well by doing good.

Today advertising, maybe down but audiences are way up.

I'm confident that as stay at home orders are lifted we'll see the start of a recovery auto dealers will need to sell their cars air conditioning systems will once again needs to be replaced and eventually travel and leisure spending will resume.

As businesses return, we will be there to help them reach their customers and I expect our actions today will benefit us tomorrow.

Ahead of this pandemic scripts had repositioned itself to thrive by prudently deploying capital to grow our scale and the economic opportunity with a commitment to delivering strong financial results.

Along with the rest of the global economy, we are certainly being significantly impacted by the disruption to business.

But we're also using this time to become a stronger and more powerful company.

Scripts and it's 142 <unk>. Your history has survived wars depressions and even other Pandemics our company a strong our media is enduring and our people are resilient.

While it's inevitable that some comedies have to hunker down and play decent through this period, we will be on often.

Because we know that how we ask now during this crisis will have everything to do with how we succeed as we emerge from it.

And now operator, we're ready for questions.

Thank you, ladies and gentlemen, if you wish to ask a question. Please press one and then zero on your telephone keypad.

May withdraw your question at any time by repeating the one to zero command.

If you are using a speaker phone please pick up the handset before pressing the numbers.

Once again, if you have a question you may pressed one and then zero at this time.

It'd be just one moment for our first question.

Well what are the line of John Janice with Wolf Research. Please go ahead.

Hi, Thanks for all the color and happier all says a couple of questions first as markets reopened what are you hearing from yourself team how quickly our advertisers prepared to move given stress on local businesses and when you look at your top categories like services and auto you'd think they'd lead or lag coming out.

Just on on page.

You talk to the but but is the advertising. That's there was more D.R. just making it so much more resilient I'm just curious in terms of what the mix is there and if that's what's healthy thanks.

Good morning, John and it's great to hear you on these calls again, I mean as Brian to cover those too.

Hey, Good morning, John is Brian you know how fast they're opening honestly. It's just early I mean, you know we're just in the last week, Kentucky, Texas started opening up a Montana.

Which had very few cases and started you know opening up a bit no. We're beginning see some of the other states starting to take from incremental steps I think we'll know better in the next couple of weeks I mean, this past week was very reassuring, so quite a bit of business that had been cancelled.

Four or five weeks ago reinstate their buys.

But I think it's really going to be on a market by market basis, and you know there's some categories. The medical category is one of the first to start to bring money back into the ecosystem you know as a non elective surgeries and so forth or or one of the first things that are opening backup.

So I think that's a category that we're starting to see services actually has held up okay. I mean, everything's down but has held up okay. During this I think with a lotta people home. It was a good time to start to get some softex. So I think in the next couple of weeks, we'll know more but I expected to be a kind of a market.

By market situation.

Relative to Kate What's your question John about the first quarter performance, we're just how they're holding up now.

Now I mean, there's been talk in the market around direct response being just a much better category broadly and I'm curious, what that's going to benefit.

Going forward as opposed to looking backward.

Yeah, I think so I mean, you know D.R. was not immune to the challenges that general market had there was from D.R. the pulled back, but there's enough and that ecosystem to backfield Bill C.P.R.M.'s are down a little bit and so we do have you know a switch of of of advertisers, but even then the last.

Two weeks and talking to the folks a cage, they've actually raised their estimates and thoroughly thinking of where two two would be because the C.P.M. So we're actually starting to grow awful where they had sat in at the end of March So I do think you to.

D.R. well fair Okay.

Yeah, probably not back to Q1 levels, but we are seeing momentum didn't grow up in the C.P.M. Sir.

Thanks, John.

Thank you in next we'll go to the line of Kyle Evans with the Stephens. Please go ahead.

Hi, Thanks.

Lisa or Brian 20% return.

You talk about how those phase.

<unk>, the corners, and I've got some problems as well.

[noise], Hey, Kyle we're in the middle and negotiating those now I think.

That money will phase in over 2223 young queue for a fairly evenly a little bit heavier from the back half the some of that money will come up in insecure too.

Not those <unk> negotiations are complex, but they're going well even in this period, we continue to have ongoing conversations with them we to weaken advancing the negotiation. So I would expect sooner than later, we'll be in a position to announce successful completion those deals.

Right.

Q 20 political ads.

Any sense.

Oh.

And how those comments on the same store basis to the 16 and 18 cycles.

College, Brian again, we did 18.7 million and Q1 of 20, we did 3.4 million.

Political in Q1, or the 18 and I don't have the.

Number 416 in front on me, but we can work on getting it for you, but obviously it was good you know Bloomberg was about a little over 40% of our spending.

And that we had I don't know 15 states that had primaries would definitely saw crowd out of the fact that affected our core you know the background from March or Michigan, Montana, Missouri, Arizona, Florida, Ohio, All had [noise] primaries, where we have multiple stations and.

So we definitely saw an impact on our core there but.

It was a good first quarter and beyond just Bloomberg you know Sanders by more on Buddha Judge Gorbachev <unk>, everyone was active in most primaries moved us through the corridor.

I'm staring at a very expensive.

You're welcome to the.

We are appreciative [laughter] that the sub counts three Q4, q. not not been materially.

<unk>.

What if anything could you give us on your view for 2020 given.

Yeah.

Unemployed and you know lack of alternatives for people when they're locked in their houses.

Yeah, looking I think you're asking a good question you know, we get our quarterly numbers in reruns and down less than 1% down in less than half a percent over the last three months and what we have reported so you know that was quite frankly, one of the best results we've had in in several quarter.

You know it'll be a while before we know the impact of this period you know certainly heard both arguments that you know people need local T.D.N.A.D.T.V. more than ever and so those subscriptions really valuable I also understand the pressure of people who are having a hard time paying their bills in is that.

To spend the bull expense. So you know I don't really know how that's gonna play all I think we'll be watching just like you'll be watching to see but you know so we look at the momentum we had coming into the scooter is actually very positive.

Right one last one.

Could you please check down kind of what the pacing.

National is the second it's like.

[noise], Hey College, Laura <unk>, how you doing we come off of you know an excellent quarter Alley delivered a highest profit you know and those guys mentioned earlier for the division yet.

Healthy growth rate of 23%, even with the impact as cover 19, you know hitting us at the end of March.

Do you see stabilization as a quarter is progressing.

And we can tend to believe in the underlying granted trains.

Oh really to tell sort of how to graduates will shake out for the remainder there.

Okay. Thank you.

Thank you in next door to line up Dan kernels with the benchmark company. Please go ahead.

Nice good morning, just a first [noise] honor Retrans, you actually came in a little bit higher in in Q1. So it just know Adam or Brian you been pretty proud of the ability with the scale you've gotten to get rate and we see some pretty good numbers just want to make sure there's not any so corrupt.

There that we're missing and then Brian just sort of on core in general you guys. Obviously have a pretty good put current relative to less restricted you know shelter and placed type market as well as pretty good A.B.C. exposure. So you think that giving you an advantage.

You think you're pacing head of kind of where the broader industry is pacing <unk>.

Hey, Dan Nice to talk to I'll take the first question no no unusual true ups in those numbers I think it's in Africa, what you're seeing as an affirmation that the strategy. We've been working adding you know through emanate to our portfolio last year position position as best for this year, we've been for a long time.

Talking about how important 2020 was because of the Comcast stuff ups and also because of the opportunity to renegotiate 40% of our subs that is underway and we're very pleased with the results Brian.

Yeah, Hey, Hey, Dan.

No I'm not sure that you know as we look across we feel like you know we had less markets affected by the sheltered home every one of our markets had a shelter at home order to some degree.

As a result of that every one of our markets had some distance cancellations as a result of the environment I don't think that there was any state that just you know was open for business exclusively. So you know I can't speak to the other groups, but we definitely felt like you know we were impact in across our entire portfolio you know as.

Relates to N.B.C. you know we've been really pleased with the health of the A.B.C. brand Good morning America and World News.

Has seen significant growth over the last couple of years and I think in this time is done a nice job and then a very credible Brenda I'm sorry to cut association with that has been good.

You know they do have a couple of you know primetime shows like American idol that they'd be able to continue to stay on with life performances. I think that's helped us but I think you know time will tell whether you know the heavy A.B.C. will be an advantage over the other stuff through this.

Maybe just one more either for I guess, Adam or Laura just on maybe high level thoughts around.

The the mix shift towards towards streaming and out of home you know as it relates to newsy and Stitcher and just you know is there any way that you guys can sort of try to handicap. What you think the sticky notes is in terms of the you know uplift in a usage inactive accounts and relative.

Kind of what you think that you know how that impacts sort of the way you either view, let's say stick your evaluation Adams, that's been on conversation piece or new these kind of growth trajectory over the next you know call at 12 24 months.

Yeah, I mean look I think we're experiencing certainly increased attention newsy as a result of two things first more people are spending more time looking for the brand of news and information that we provide right now and they're doing it on new platforms like Oh Gee, we've also seen.

Against both on the cable side with Newsy, and I think that will definitely benefit us over the long term I. It's been good to see that Programatic AD rates have hung in there through this and that's benefited newsy per shore. Obviously, there's still you know at this moment more supplied than there is demand, but the rates are are hanging in there.

We're on on the Programatic side, and so I expect that the work we're doing through this period at Newsy as we continue to maintain our commitment to the kind of reporting we do through this crisis will endure to this company's benefit to news he's benefit over the long haul as People's preferences are set.

On the podcasting side, you know I think is Laura mentioned in the in the prepared remarks, there was a little hit two podcast listening overall as an ecosystem as the morning commute disappeared. It certainly wasn't as profound as I think what you're seeing from radio groups with respect to terrestrial radio that's bounced back.

To basically normal levels as people have begun listening to podcasting now on their daily walks as or walking around the neighborhood and I expect as people returns a commuting expect those people who have for the first time bin introduced to all the different opportunities that podcast provides from a programming perspective will will continue.

To to help them. So when we look at you know what this what this crisis has done you know look I I'm I'm, let me be clear there are no silver linings with respect to the crisis that this world is going through right now, but I do think when I when I look at our company realm.

To other industries, we are serving an audience that is hungry for the product. We produce yes, we are temporarily being negatively impacted by business disruption, but I expect once business gets back to normal we will be in a better position to capitalize on the strength of this.

<unk>, then we might have even been before and I'm I'm, absolutely looking forward to that moment.

God things for all the color guys appreciate it.

Yeah.

Thank you and next door to the line of Davis Hubert with Wells Fargo. Please go ahead.

Good morning, everyone.

<unk> well I just wouldn't question.

Hmm, let's see borders but.

And now that translates to leverage thank you.

Yeah and gave us i.

Our current leverage as of March 31st was 5.4 times at the at the end to the the last 12 quarters. When we look back on that basis it with 363.

<unk> yeah.

Actually looking at school and follow up and gave <unk> <unk>.

<unk>.

Mmm.

I notice.

But maybe.

Mm.

[noise], Hey, Davis's Brian.

You know I think that the key thing you know Lisa mentioned in her prepared remarks was that we are seeing sequential growth. She talked about the fact that March which ones are strongest cool off strongest month. The first quarter. You know we saw a decline of about 40% into April but from that you know maze bookings.

Better than April June.

These are better than may, but you know compared to last year, you know each one's going to be down each according to that category is gonna be down there still a lot of moving parts and the states are changing you know their rules everyday so it's very difficult at this point to do any sort of solid two two guidance and that's why we.

Focus more on sequential growth.

Thank you.

Thank you in next door to the line of Michael Kopinski with normal capital markets. Please go ahead.

<unk> braid just to follow up on that what is the normal.

Sequential bugs to mug performance for the.

Let's say the broadcast group for March or April.

I mean as to to now would be right.

There is typically April would be flat or even down a little bit from March made bounces off to be one of our best months or the year one of our top two oh strongest once a year and then June would typically dropped back from that so the fact that you know it's not unusual to see may grow over April but it would be unusual.

And we do expect June now to grow over me.

Gotcha.

<unk> in terms of just looking at the Retrenched, just going back to that for a second I'm just trying to get a sense because I understand that you had some new renegotiations that kind of kicked in in March you already had to step up you know beginning January 1st from the Comcast subs cute kind of give us a sense of.

The progression and retrain month to month [noise].

Yeah.

Yeah.

Mike It's Brian we're all looking in here each other so who's going to take this relative to a month to month. You know you saw a a step up and Q. too as a result of the deal that we got done that we've now announced was done early in the quarter.

We'll see another big step up as we complete cute too and that will carry through Q3 and Q4 and then we have another deal up at the end of the first half a year that will benefit third and fourth quarter.

I understand but I'm I'm, referring to the first quarter in terms of you know the the nutrients k. middle a little bit better than what many of US were looking for was just wondering you know that I know that you had it renegotiation that kind of kicked in March I believe and I was just wanting to kind of give us just some thoughts in terms of the trend line for re trends in.

That core.

I I I.A. make its Adam I would say we did benefit in March from the completion of of a Retrans agreement.

Okay.

Just just going back going back to my comments before I guess I would say.

Huh.

[noise] again, it's an affirmation of the plan we've been working to negotiate those those agreements with a larger portfolio.

And in terms of that agreement is or any additional color that you could say in terms of the the variance that would have accounted for that agreement in the quarter I mean kind of give us a sense of you know the trends.

I mean, not I mean, not really I mean, the reason we have been reticent to guide.

Two retrans is because we're in the midst of these negotiations and we expect that it's our responsibility on behalf of the company and our shareholders in order to to to monetize the distribution of our signal to the best of our ability. So when we outperform your expectations I guess I'd say, that's an affirmation of the job.

We're doing.

Fair enough I was wondering <unk>. Okay. Thank you I was warning Friday, if you could go back to your comments about the how the performance were among disparities about T.V. stations, but I was wondering if there were regional disparities in terms of performance in your television set segment, you know small markets versus the larger markets.

Are they pretty much down to civil or across the board.

Yeah, there was some regionality to Mike really depending on what was happening in the state I mean, obviously you know you'd think of no markets like New York were in New York City in Buffalo, where you know they were especially hard hit you know the Midwest, Michigan, Ohio.

Wisconsin.

<unk> in many of their stay at home orders to and and so [noise] those have been restrict if there were other states you know, Texas fared a little better we're in corpus in Waco, Montana fair to a little better also when she gets a smaller market you have a little less national advertising and.

So.

Markets like those where there were less stay at home and local is what drives. This nation, we were able to hang on to more of the business. So it really depends on sort of market market size and state to state versus just a general you know regional comment.

So it's nice to have a diverse portfolio.

Last question the company historically, it's managed with much more modest debt levels and the initial thought was that the company would increase leverage with a very visible way to lower it and certainly you're going to get that cash in flux from Comcast and the political to care no doubt no that prospect doesn't look as as the promise.

And give it at least you're gonna get that but given the other portions of the business.

Without prospect in doubt in terms of the debt leverage appeared to okay talk about the product prospect of more aggressively Varney dad would you consider my electric <unk> further nods strategic outfits markets that could help reinforce your balance sheet any thoughts on that.

Hey, Mike It's out I mean, right now obviously were very focused on navigating through the crisis looking at you know the cash that we're generating a and using that obviously for the long haul as we've said for now the last.

Several quarters, our focus will be paying down debt, reducing our our company's leverage I think we've got you know sort of ticket a quarter at a time I'm gratified actually to see that we were able to flex our balance sheet last year in order to.

In order to double the scale of our our local media portfolio, because I actually think that it's really helped us to be better positioned to withstand a crisis like this the the cash flow generation of the company is significantly enhanced now as a result and that helps us looking.

Outdoor are fixed costs I would say you know moving through the crisis, we will continue to execute with a strategy in order to make sure that we we maintain a healthy balance sheet and continues to pay down debt.

Do you have any thoughts in terms of where the debt leverage might be by the area.

Hey, My gets Lisa you know given the uncertainty of the impact of code that we're we're not guiding our forecasting to an ear and leverage at this time.

Fair enough okay. Thank you.

Thanks, Mike.

Thank you and next door to line of Craig humor with Huber Research partners. Please go ahead.

Thank you hi, guys hope you're all safe.

A few questions. We'll just maybe just go one by one if I could Brian on the Retrans subs.

What was the year over year per cent changes don't like say about 4%.

Really just corridor.

Over the last year, our substance declined about 5%.

Oh, Yeah, Oh T.T. right.

Correct.

And that's it 2019, just clarifying through through the end of 2019 yeah.

What's that like the religious corner I guess this interaction between the fourth quarter down roughly 5% you over here.

I'm, saying for the full year over 12 month period, we declined about 5% total sounds.

Okay, Brian will help you hear what's your thoughts you're on the N.F.L. contract renewal south or just ball do that you can speak to here I mean do you think things are getting pushed out in terms of <unk>. If the contract signed her like in the coming quarters. Given this this virus situation going on here and also be curious to hear what your thought is how you.

The contract make it broken up towards the Sunday afternoon games do you think you'll see status quo or.

<unk>.

Four players participate which relates thoughts on the car truck. Thanks, Yeah.

I don't have any insight as to where those negotiations alright, Although then I know they're going on.

And so I don't have any visibility as to if this current environment has slowed knows I'm guessing it didn't.

But I I'm not actively involved in those those have said in the past I I I'm not sure that this next deal has to look like the last meal I think that there could be an opportunity for everybody to have a piece of the action.

I could see and again I don't have that's going to have these negotiations are going to us as much as my own personal opinion, but I can see an environment, where you know every all four of the major networks have a piece of the NFL package I'm not sure. The NFL package has to be as clean as.

Prior ones with one company getting the F.C.B. and another one getting enough seen somebody getting some days I think that.

I think there's a lot of regional games that are a pie interests and it would be great. If markets can have the opportunity to sue though so like you know I think of a market like Cincinnati, where I'm sitting and oftentimes, we'll get the Bengals game, which is great. But then you know we're within 100 miles up here you got the the code.

A little over that you've got the grounds.

The Steelers I've been interest here and so the idea of somebody being able to have a bangles, but also another station or two also at the same time being able to broadcast from other games original interest I think would be a pie appeal and so I think there's an opportunity for every one of the play you know smarter people.

Maybe we'll figure out how that kind of homework, but you know the fact that we have a books big footprints in all four networks I wouldn't be hopeful that everybody has a piece of the action.

The back on the core advertising fronts on television.

Comments about.

40% I think.

I guess like main question here is without a comment like a sequentially. So it also has some basing first down 40% you over your for the month of people for court T.V. advertising is that fair statement with without rated decline is getting better in may and June is that when you're trying to say.

So yeah. So what I'm, saying is that April revenue was that core revenue was down 40% from March.

So we're looking at you know March was kind of our high water Mark and first quarter April dropped obviously, you know come the third week of March we took millions of dollars in cancellations, but now we see may we have more money booked and better percentage your to your in made them we had.

April and we have more money booked in June and we had in May and an improved percentage never small.

But there just to be clear.

Reader base, you inferring <unk> not year over year, Let me just let me just Claire not more money book to your every year and worry about money books and the bit at a greater percentage month over a month.

Because I'm starting to 40, but how about just April you over your pull former sat down roughly 40%.

Yeah, we're not sharing that <unk> go ahead.

Yeah, I know I mean, Craig I really appreciate where you're trying to get at there's just so many moving parts right now we're just not issuing a any guidance right now.

I mean <unk> appreciate that and then my last question.

Brian on the costs side within television can give us any sense of the non programming cost. So much you think that might be down sequentially like the compensation costs et cetera.

Just we have something to go off of here just to think about for a models.

Yeah, I think when you take out all of our programming costs.

You know, which would be all of our network fees paid to the networks are syndication to all of that programming stuff everything else is running you know flat to up low single digits. So all of our employee costs Ah Argh Ah you know legal fees are repairs towers use.

Licensed traveling entertainment for and I'm speaking too cute one not too too I think you to look totally different as you know we frozen so many expenses and there's obviously a travel we've cut back on Capitol things like that but in Q1 all of those other categories nothing was up more than 2% and so everything was in that kind of flat.

Just maybe up a little bit range. So most of our costs are expense increases came in the program in line.

And you help us quantify what you think the second quarter, we'll do versus that up one to three per cent number.

Much but shot that anything could get it too.

Well we've made we've.

Hey go ahead, I'm, Hey, Craig gets out I mean, we've obviously tightened the belt very very significantly I think very consistent with Lisa's comments and we can't give you a much more beyond that.

Okay. Thank you.

Thanks.

Thank you in next door to line or John Carter Rich with J.K. media. Please go yeah, I I I may have missed this.

What's the size of your revolver.

And the maximum pressure is the second quarter because of political won't be all that great and then the third quarter picks up in the fourth quarter to explodes.

So.

Are you comfortable in your best case modeling.

That you won't have to tap.

The revolver isn't next.

234 months.

Hey, John you know based on our current current for cash I had indicated you know we are cash from operations provide sufficient liquidity to sustain operations for the next 12 nights and we would not expect to exceed our first lane secured leverage covenant over the next 12, my so and that revolver size.

210 million.

None of its drawing.

Yeah, we did we didn't draw the revolver really other than abundance of cost. Okay. That's right yeah, absolutely yes.

Yeah.

No we did not draw it off.

Can you give me an idea what did you do.

175, okay.

Okay.

I want to <unk>, Brian I want to throw a concept out at you and get your reaction every call with every broadcast.

Political estimate unchanged afterall people more people at home and will remain home.

And they won't be any we won't be much in the way of campaign rallies and so on.

Makes sense they the campaigns will want to <unk> want to spend more.

I'm concerned about is the releasing the money side.

A wealthy donors in such a great mood. This year that they were willing to give huge amounts of money to the candidates I mean I can speak for myself I will I went into this year ready to donate x.

Two a candidate.

I'm still going to donate half back at you know I'm more nervous just like everybody else.

So I'm more worried about the raising the money side than the wanting to spend side, what do you think of that.

Well look Jonathan gets a legitimate question, it's probably a legitimate concern so to this point the fund raising levels had been significant <unk> and significantly higher than what we've seen in the past and so the campaigns at this point or well fun I expect they will continue to.

Well funded I think your comments about maybe people will not give.

The same amount that they were going to maybe valid time will tell on that but I do think that there will be enough money in ecosystem that T.V. comes first.

And as a result of that I think that you know if there's less money it could impact maybe some other mediums, but I think local T.V. is typically where they go first for spending and.

Look we look at our footprint very strong in the presidential States, our Senate wherein six of the top 10 considered competitive races. The house who's going to be very competitive 53 races considered toss ups or <unk> you know almost half of them. We think we're really.

Well situated that even if there's a little less money and ecosystem. We believe local television is going to come first and we'll be fine okay.

Finally, I heard a room is at Brian <unk> privately working out with Joe Borough is that right.

I can't comment on that Okay, you'll have to ask my agent [laughter]. Thanks for the help.

<unk>.

Thank you in next door to the line of Janie.

Light speed partners. Please go ahead.

Hi, guys you guys have like in terms of employees per station you know you've always had like a number that way exceeds everybody else's I just thought that this opportunity would allow you to sort of you know to get to take that number down and actually you know let go a bunch of employees who <unk>.

<unk>, where redundant and not necessary and I'm curious why staffing levels have had come down during this crisis.

Hi, Jane me, it's out Wow.

I guess I would tell Ya I don't see this in any way as an opportunity and right now we're very focused on the health and welfare of employees I don't necessarily think it's also an accurate statement that we have more.

Employees across our stations than other groups. So at this moment, we don't feel the need to execute furloughs pay cuts and layoffs.

Alright.

Thanks for the question, though.

Great. The there any other questions in the queue.

We do have John courage back in the queue from taking media. Thank you.

We've trends gross.

Pro forma turns out to be this year not asking what it will be is it safe to say the net retrans growth.

Will be less.

<unk> less than less and less <unk> less than the grocery transcripts whatever that turns out to be.

Otherwise margin margin will be down a little bit.

We we really haven't discussed any guidance on retrans for the Hey, John I'm. You know, we we haven't disclosed are not retrans profit on and based on obviously the large amount of stuff that are resetting in 2020, and we do expect nice gross this year, but we haven't sad really because of those negotiations okay.

Enough. Thank you again.

Thank you and I have no further questions and Q. at this time.

Great. Thank you very much everyone for joining us today.

Ladies and gentleman that does include your conference for today. Thank you for your participation them for using 18 T. Executive Teleconference Survey.

Disconnect.

[laughter].