Q2 2022 Spanish Broadcasting System Inc Earnings Call

in terms of audience and billing, Tampa and Orlando are close to like 19 and 20. So, but Tampa and Orlando are gonna be close to Miami, I believe. Right. So as far as the spendings are concerned, what's the timing? Why do you think that will be complete? Because this quarter looks like they're...

You know the inflation and the investment in the stations, where the formatting is more like in two to three million, I would guess. What's the total?

and when that will be done.

We'll do that in the reformatting.

Patrick, there's always when there's a new, when you acquire a new station, there's always introductory period, which is several months, few months, in terms of an action plan, in terms of your marketing for a few months. And then after, as you grow, your audience, Sharon, your audience and those respective DMAs are aware that there is new stations, content.

Hispanic influencers, then you go into more of a maintenance program.

But look, we're very pleased in just a matter of weeks.

the Orlando stations close to a four share.

So that's incredible in terms of getting to a number like that in such a short period of time.

Right. So what are you saying to what takes two quarters to...

kind of a job.

It's going to take a few quarters.

Right, okay.

What's going on with special events? This quarter is really disappointing compared to last quarter.

and almost zero. So what's happening there?

Look, we did our event in New York, and because of a lot of artist commitments, we changed the dates and they are going to be within the next 8 months. But we'll be doing events in third quarter. We're doing a ton of events in fourth quarter. And we're doing our Cali Bash in January in Los Angeles and Vegas. So we have a very busy schedule. We have about 13, 14 nights.

that we are planning for right now. So we have a very busy schedule in the next several months. Patrick, but just to be clear, first quarter is always the biggest quarter from an event standpoint. Second quarter, we had a good amount of Co-Pro events, so the way that we recognize the revenue is a little bit differently. We just recognize the profit. And we did quite well on the events that we did. As Albert mentioned, we did one in New York, and we did one in Orlando as well.

We did well. You're not seeing the revenue, the tickets booked, right, because it's a co-pro. But we did have some good events and we did make money.

Okay. So projection for the year in terms of events.

We do get back to formula level.

We have 14 nights. That is the goal.

That is the goal right now, 14 nights across the country in several markets.

So that should be over 2019 levels, right?

It should be right in line. It's a very busy...

Very busy season for us for the Olympics.

Do you anticipate in self-funding for the station costs reformatting?

Because your cash levels dipped to 8 million and you still have the revolver, but do you see any funding need for that?

in the next few quarters.

Look, it's available if need. We do, it's.

It's important to mention that we do have a

a refund from the IRS that's due to about $4.4 million,

we're hoping to get in the very near term, which should help out from a liquidity standpoint. But yeah, look, the revolver's there for that reason, if we need to tap in. Clearly we would hate to tap into it, but if we have to, just to fuel the launch of these stations and to continue to move the company forward from a long-term standpoint, we will.

Okay, I saw on the press release there's a $4 million cash taxes.

I thought you had a significant amount of NOL on the books. I need to talk about the refund. Is that the same thing as the 4 million that you paid and you're going to get it back?

Well, it's an ERTC credit, which we amended our payroll tax. This is a government plan. We amended our returns. The government actually reimbursed us about $300,000. So there's six checks that are due. We got one, it's $300,000. So now what's left is $4.4. As to what we've paid so far from a cash flow standpoint, the $4 million, that's just cash taxes paid, which that should be give or take.

for the year, I would say roughly between 5 and 6 million.

But you have $260 million NOL on the books, you shouldn't be paying any cash taxes, right?

Can you repeat that question?

Last time I checked you have net operating losses carried forward of $260 million.

So why would you be paying cash taxes?

if you have that to offset income.

Well, there will be income in the third and fourth quarter. As for the NOLs, they have been limited with the Section 382 limitation. So the NOLs don't exactly work that way. I mean, we'll go through the tax accounts. We'll have some NOLs that can shield some income in Puerto Rico, but in the U.S. we have approximately like 5 million.

So there are five million, but then you net that out. So it'll save us some money, but we'll have a tax bill at the end of the year.

Right.

Okay.

Okay and what just as a kind of a historical information what's the historical midterm revenue you guys get from midterm election advertising?

Typically around 4 million, 4-5 million.

Okay.

All right, great.

Thank you guys.

Thank you Patrick.

Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

I wanted to say thank you for everyone who participated today on our second quarter 2022 earnings call, and I look forward to speaking to everyone, to all of our colleagues, for the third quarter of 2022. And have a great day. Thank you. Bye-bye. And thank you. Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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