TEGNA Inc. Q1 2023 Earnings Call
[music].
Please standby.
Uh huh.
Welcome to the techno Investor Conference call. As a reminder, today's conference is being recorded now I'll turn it over to Julie has good senior Vice President Financial planning. Please go ahead ma'am.
Thank you good morning, and welcome to our Investor Conference call and webcast today, our president and CEO , Dave Lucci, and our CFO , Victoria Harker will review <unk> financial performance and results and discuss <unk> Standalone outlook. After that we'll open the call for questions.
Hopefully you had the opportunity to review our form 8-K filed this morning with the Securities and Exchange Commission as well as our first quarter earnings results, which we announced may 10th if you have not yet seen a copy of the release it is available at techno Dot com.
Before we get started I'd like to remind you that this conference call and webcast includes forward looking statements and our actual results may differ factors that may cause them to differ are outlined in our SEC filings.
This presentation also includes certain non-GAAP financial measures, we have provided reconciliations of those measures to the most directly comparable GAAP measures in the press release with that let me turn the call over to Dave.
Thank you Julian and good morning, everyone. It's good to talk to you again, it's been a while as you know China is not held a quarterly earnings call. Since November of 2021, given the merger agreement we entered into with standard General in February of last year.
Earlier this week, we announced the termination of the merger agreement after a protracted regulatory review.
Armed with the knowledge of this possible outcome in recent months, our board of directors and senior management have been very focused on our Standalone plan. So we would hit the ground running post termination of the agreement.
Outlook protector is strong we are uniquely positioned within the sector with an industry leading balance sheet. We currently have the lowest leverage level. Since we became a pure play broadcasting company and expect to remain comfortably in the mid twos to the balance of the year, even after returning excess capital to shareholders, including the first steps we announced this week.
$300 million accelerated share repurchase program, and a 20% increase to the quarterly dividend.
With our assets and strong balance sheet, we're confident that <unk> is very well positioned to generate strong shareholder value in a variety of economic scenarios, we have a leading portfolio of high quality local station and digital brands that fill a critical role in key large markets across the country diversified by both geographic regions and network affiliate.
<unk> the differentiated non substitutable programming, we provide including live local news live local national sports in first run highly popular network content remains some of the most popular and highly viewed content available.
And Furthermore, in 2022, I want to compliment our team as they continue to execute extremely well during dynamic macroeconomic.
Macroeconomic time excuse me achieving records in total company revenue subscription revenue net income and adjusted EBITDA.
Next I'd like to provide you with the context for some of the highlights on our recent results and Victoria will cover these topics in more detail.
Total company revenue for the first quarter was down 4% year over year, largely due to the cyclical even your events of political revenue the loss of that the absence of Winter Olympics and the Super Bowl airing in the Super Bowl airing on the Fox stations compared with NBC last year as well as the macroeconomic headwinds relative to that.
Or Ams revenue.
Tagged as subscription revenue continues to provide stable and predictable cash flows supported by contractual rate increases this quarter subscription revenue was an all time record and grew 6% year over year in the first quarter, we did lap a temporary disruption with a single distributor last year, which added roughly two points to that number.
Also last year we.
We successfully repriced approximately 30% of our subscribers improving multiyear visibility for a significant portion of our subscription revenue.
We have an additional 30% of our traditional subscribers up for new all at the end of this year.
As I indicated Ams revenue comparisons this quarter, taking into account several variables, including the absence of the Winter Olympics and the Super Bowl airing on the NBC stations last year and a decrease in premium due to the loss the loss of a single national accounts as well as macroeconomic headwinds the continued impact advertising demand.
But that said Ams was down 13% year over year, Victoria will unpack that in more detail in a moment, but the bottomline is this when you factor out the noise of the Olympics Super Bowl and the reduction of that single National account at premium on underlying advertising trends were down mid single digit digits for Turner on a year over year basis.
And up low single digits on a two year basis.
I want to highlight the strength, we're seeing in the automotive category, which as you can imagine is something we're very pleased to see as you may recall at auto is our largest advertising category and was challenged for several quarters due to the supply chain issues related to the pandemic. However, I'm pleased to report the category is steadily recovered.
And is generating strong year over year growth for the third consecutive quarter and pacing very strong in the second quarter.
Premiums are first to market and industry, leading OTT advertising platform continues to deliver differentiated solutions to both lacked local and national advertisers premium ended 2022 with record revenue and is poised for ongoing growth in the years ahead back by the breadth of Technet as well as Gray's local sales forces and footprint of local.
<unk> I'm happy to share that we've just extended our multiyear reseller agreement with grey combined combined with great premium reaches more than 78% of U S households, with local sales representatives.
During the quarter total premium revenue declined modestly year over year, driven again by the reduction of that single National account, but notably local revenue was up significantly and local is the strategic focus and the thesis of premium and is also higher margin revenue than national for premium investment in premium has continued with the recent focus on enhancing.
The platforms attribution capabilities to demonstrate the value and effectiveness of campaigns on premium relative to other advertising platforms premiums innovative results in tools for advertisers are well recognized within the industry. Having received numerous recent awards, including Synopsys as best of the Best Award for the Best AD Tech solution.
As we approach next year presidential election cycle, we will benefit once again from strong political advertising revenue segments stations continue to play a critical role in political marketing strategies as the preferred medium to reach voters.
Thoughtful acquisitions over the years <unk> has built a strategic position in key battleground states and large markets.
The fact that the 2024 presidential cycle will break previous records first quarter fund raising was very strong and thats expected to continue with a very well funded GOP presidential primary that is already active as you surely know.
Add to that the razor thin margins in both Chambers of Congress Congress and Theres a lot at stake in the 2020 for elections for both parties.
Now turning to capital allocation.
As a reminder, <unk>.
This business mix is weighted towards high margin durable subscription and political revenues, which generates strong free cash flows.
Now, let me begin by discussing the $136 million termination fee owed to <unk> by standard General we have entered into an agreement with standard general to accept techno common shares equivalent to the fee at market based pricing a transaction, which will be completed properly.
Furthermore, as announced in Monday's press release taken will be entering into a $300 million.
All our accelerated share repurchase program shortly commonly known as an ASR program, which we expect to complete near the end of the third quarter. Combined. These two actions will result in us retiring nearly $444 million of our shares in short order.
Beyond these actions tagged as board of directors and management team are actively reviewing the return of additional excess capital that accumulated during the pending merger.
<unk> has also increased its regularly quarterly dividend by 20% on top of the 36% increase to the dividend announced in March of 2021, demonstrating the strong conviction. We have in the long term cash flow of <unk> operations just to be clear Technip will pay the previously declared regular quarterly dividend of nine five.
<unk> per share on July <unk> of this year to stockholders of record as of the close of business on June 19th the increased quarterly dividend will be paid in the following quarter.
Strong operating performance and disciplined use of free cash flow positions us with an industry, leading balance sheet, even after our $300 million ASR program. We expect to end the year with net leverage of mid two times a strategic advantage as we examine next steps for capital allocation and shareholder value creation.
<unk> over the coming weeks, we look forward to re engaging with investors to incorporate their views as the board and management make further refinements to <unk> capital allocation priorities, including actively reviewing and reviewing the return of additional excess capital to shareholders.
Now I want to update you since it's been awhile on several strategic initiatives underway at <unk>.
Since it's developed in 2015, our stations verify reporting has bought misinformation and disinformation more important now than ever helping viewers and users distinguish between true and false information verified continues to see strong momentum and ended the quarter with 420000 followers across its various dedicated channels.
Including its daily newsletter ticked up both of which were named Webby Award on or is amongst some of the most notable brands online and during the quarter unique visitors to verify this dot com grew 77% year over year looking ahead to the upcoming election cycle in 2024 verify will play a critical role in insurers.
Ensuring the viewers are able to fact check the news stories that matter them as they make their voting voting decisions.
<unk> stations owned and operating streaming apps for Roku and fire TV continue on a strong growth trajectory with 560 million minutes of streaming in just the first quarter, a nearly 70% increase year over year and the average visitors spent 10 hours in the apps during the month of March.
Locked on our leading local sports podcast that work with daily shows for all for professional sports leagues and made major college programs also continued strong growth during the quarter. The network finished the quarter with an impressive increase of nearly 60% and unique audience versus the first quarter of last year lockdowns expansion into video.
To be a major driver of network growth with video of using more 170% increase year over year, we continue to see Lockdowns focus on national and local sports as a national complement to our local station assets.
Moving now to our ESG efforts, we continue to make progress on our diversity equity and inclusion objectives and are continuing our progress on achieving our 2025 goals. Our stated goals to increase representation of black indigenous people of color at <unk> and our content teams content leadership and company leadership, we take seriously.
The important role that we have and ensuring our coverage and storytelling reflects all of the communities. We serve our innovative inclusive journalism program, which is entering its third year is designed to help us accomplish this through unconscious bias includes reporting and leadership training.
Since the inception of this program newsroom managers for nearly half of our newsrooms have taken part in this annual inclusive program. This four month program for newsroom managers helps to expand the tools and people leadership skills. The newsroom managers can use to engage their team to further inclusivity and storytelling.
Delivering news that matters and impactful investigations that make a difference in People's lives are the center of each and every one of our newsrooms were very proud of the termination and resilience of our engaged employees that enable us to fulfill our mission every day and we couldnt be more proud of the work they do and with that I'll now turn the call over to Victoria.
Thanks, Dave Good morning, everyone and thanks for joining us as Dave has already mentioned, our first quarter financial results and forward guidance reflect the resiliency of our business and our ongoing commitment to operational excellence and shareholder value creation.
Before I drill down on the drivers of our first quarter financial results I wanted to touch briefly on the strength and differentiation of our balance sheet and a little bit more detail.
As you've seen posted this morning, we are very well positioned with modest net leverage of two three times.
No bond maturities until 2026, all of which are fixed rate at five 2% on a weighted average basis.
As you've already seen we ended the quarter with total debt of $3 1 billion and cash of $683 million.
And as a reminder, our only debt related financial Covenant is a four five times leverage cap on our Undrawn $1 5 billion revolver, which doesn't expire until August of 2024.
Tremendous financial flexibility afforded us by our ongoing business execution, and our strong balance sheet enables us to generate both immediate and longer term shareholder value and a number of significant ways.
As Dave mentioned, the first step in returning a portion of the excess capital that accumulated while the merger agreement was pending include.
In agreement with standard general to accept taken our common shares equivalent to $136 million termination fee.
$300 million ASR program, which we expect will conclude near the end of the third quarter and a 20% increase in our regularly scheduled quarterly dividend.
We look forward to discussing business trends and ongoing capital allocation plans with you all in the coming weeks.
And we expect to have more information to share by our second quarter earnings call in August .
Now, let's take a look at the drivers of our first quarter financial performance.
As is always the case my comments today are primarily focused on <unk> performance on a consolidated non-GAAP basis to provide you with visibility into the financial drivers of our business trends as well as our operating results.
You can find all of our reported data and prior period comps in our May 10th earnings press release.
As Dave mentioned, our revenues in the first quarter faced tough year over year comparisons given the benefit of political advertising the Winter Olympics and Super Bowl across our NBC stations last year.
As a reminder, we are the largest NBC affiliate group.
For the first quarter total company revenue was down four.
4% year over year, primarily due to the cyclical even year events, including midterm elections and Winter Olympics in 2022.
The Super Bowl was also a factor as the 2023 event air on the Fox stations compared to last year on a strong portfolio of NBC stations.
Pruning political revenue and the incremental revenue from the two NBC sporting events total revenue was down less than 1% compared to the first quarter of 2022.
As you've heard from our peers.
These declines have been driven by macroeconomic headwinds. This was partially offset by ongoing subscription revenue growth, which increased 6% year over year.
Subscription revenue growth in the quarter was the result of subscriber rate increases contractual rate escalators and favorable comparisons against the partial quarter interruption experienced with a single distributor last year.
This was partially offset by mid single digit subscriber declines.
As Dave previously mentioned, we successfully repriced approximately 30% of our subscribers at the end of 2022, and we have an additional 25% of subscribers up for renewal by the end of this year.
We successfully negotiated multi year network affiliation agreements with CBS and Fox in 2022.
We also look to renew our agreements with NBC and ABC, which collectively account for approximately 60% of our big four subscribers near the end of this year.
Take this high margin subscription revenues, coupled with our political revenues produce annuity like EBITDA and free cash flow and continue to comprise more than 50% of our total revenues on a two year basis.
Next I'll unpack the drivers of our Ams performance in the first quarter.
As <unk> seen Ams revenue finished the quarter down 13% compared to the first quarter of last year due to several unique factors, including the impact from Winter Olympics in last year's Super Bowl on our strong NBC stations as well as a reduction in a single premium national account as well as broader macroeconomic headwinds.
Yes.
Outside of these unique what year over year factors underlying advertising trends in the first quarter were down mid single digits year over year and up low single digits compared to 2021.
Automotive as Dave mentioned, our largest advertising category has steadily recovered and is generating strong year over year growth for the third consecutive quarter.
Other categories growing year over year include home improvement services Entertainment and travel and tourism.
Category is facing headwinds in the current macroeconomic environment include health care packaged goods retail media telecom and restaurants.
Now turning to expenses for the quarter.
For the quarter non-GAAP operating expenses were $564 million up 2% compared to the first quarter last year driven by higher programming fees.
Excluding programming fees non-GAAP operating expenses for the quarter were down 2% when compared to last year due to prudent expense management and lower stock based compensation.
Our first quarter adjusted EBITDA of $205 million was down 18% year over year, driven by reduced high margin advertising revenue from political and Super Bowl on NBC stations last year as well as the absence of NBC Winter Olympics revenue.
Adjusted EBITDA margin was 28% this quarter.
We continue to generate strong free cash flow of $133 million during the quarter, driven primarily by our high margin durable subscription and political revenues and our ongoing careful and thoughtful management of the balance sheet.
As you saw in today's form 8-K filing we provided guidance on key financial metrics for the quarter ahead second quarter and for the full year 2023.
To help model, our near term expectations, let's walk through a few second quarter financial guidance metrics.
But the second quarter, we expect total company revenue to be down mid to high single digit percent year over year, primarily driven by the loss of political revenue and partially offset by higher subscription revenue.
Yeah.
We forecast operating expenses in the second quarter to increase in the low single digits compared to second quarter 2022, driven by increased programming expenses associated with higher subscription revenue.
Excluding programming costs, we project second quarter operating expenses to be flat to slightly down.
Now turning to our full year 2023 guidance elements. As a reminder, you can also find our 2022 actuals for these same metrics on our investor presentation on our website.
For the full year 2023, we expect corporate expense to be in the range of $40 million to $45 million.
Depreciation is projected to be in the range of 60% to $65 million.
Amortization is projected to be in the range of $53 million to $54 million.
Interest expense is expected to be in the range of $170 million to $175 million.
We expect capital expenditures to be in the range of $55 million to $60 million.
We forecast an effective tax rate in the range of 23, 5% to 24, 5%.
And as we've already mentioned, we expect to end 2023 with net leverage in the mid two times, including the impact of the $300 million planned share repurchase.
As I mentioned earlier, we look forward to a re engaging with you all in the weeks ahead and thank you for your ongoing support.
With that I will now turn to Q&A to take your questions.
Thank you very much ladies and gentlemen, if you would like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment and we will take our first question from Stephen Cahill from Wells Fargo. Please go ahead.
Okay.
Okay, great great. Good morning, and good to chat with you all again, David Victoria, It's been a while.
Hi, David as a result of.
I've got a few.
Maybe to start.
Victoria just on the on the Retrans side, I guess, the simple math would be that with 60% of your affiliations renewing this year and you did some last year that seems like a bigger percentage than the mvpds renewals that youre doing over a similar period. So should we expect net.
<unk> to grow this year or is your timing sequence such that that's going to be pretty tough to achieve in the current environment.
Steve I'll go ahead, and take that one youre right on the numbers as far as what the renewals are no I Wouldnt conclude I wouldn't agree to what your conclusion is at the end there.
There is a lot to be negotiated and I think there'll be some different dynamics than in the past on the network negotiations.
Got it and then.
Maybe just next on capital allocation. So you talked about the two five times leverage and then you also said I think that you are actively reviewing some return of excess capital.
So do we just kind of think about two five times is like the north star in our model and any cash left after that goes back to shareholders or is it a bit more kind of strategic in how youre thinking about when and how you might look to deploy capital over the next couple of years.
Yeah, I think the as I said in my comments, Stephen I think they obviously will be spending. The next couple of weeks, obviously talking with the board talking with shareholders gathering some input in terms of the business needs frankly, we havent done a lot of investment over the last 14 months. So we will be back to you in August with more comments and color on that but I think it's fair to say.
The two five times is a very very fair and comparable leverage for the rest of this year.
Yeah.
Great and then maybe just lastly, Dave I mean.
And from some reports it looks like you had a lot of interaction with the FCC over this last year with all the issues around the merger in your view is the FCC open for business as it relates to broadcast consolidation or I'd love to get your view on.
Why maybe you think that the merger was consummated in if it closes the door to lots of things in the future or if you still think that the door is open for other opportunities. Thank you.
Yeah.
Thanks Steven.
I don't have a lot to add on that other than to say I did not have a lot of interaction with the FCC, nor frankly as I think Dave indicated in order to standard general have a lot of interaction as much as they would have liked.
I am not.
I think.
I think nobody really knows what the FCC was thinking I think I would point you to the NAV statement by the NAV.
Curtis Legit, which really references that topic. The fact that it was sense of we're hearing designation order really with very little interaction with the parties.
Is.
The conundrum and I think for the entire industry and people don't really know what to make of it because of what was a frankly unprecedented process would be to comment I would say so I really don't have a view.
On what their future view will be of deals I would just I would point out just for the record this wasn't actually.
The agreement that terminated was not.
A consolidation deal because some stations, we're going to be spun off to another company that <unk> was actually getting smaller so it.
It really wasn't consolidation.
Okay, great. Thank you.
Thank you.
Thank you and our next question comes from Dan Kronos from the Benchmark Company. Please go ahead.
Great. Thanks, Hi, Dan Great to speak with you as well thank you again.
So a couple of things let me, let me start off with go back to Retrans just for a second Dave you've obviously had the funding of listening to everybody else gets to talk about how long this whole virtual dynamics.
Issue.
You have been going through the process. So maybe I'll give you a platform for a second if you wanted to talk about how you're expecting the impact of the much higher growth rate of virtual subs in the deals that were signed.
Impacting or going to.
In fact your forward look on both the gross and net going forward here.
Yeah.
Yes.
Hearing you speak your microphone, but I think I understood the question Dan.
So yes. So we are we certainly prefer the economics on the traditional subs although.
The virtual subs are certainly profitable for us as well too we simply believe as you've heard from others. We should be negotiating those ourselves we actually think frankly, the networks would benefit from us doing that as well so that's a high priority.
And that will be an ongoing I think discussion and one that potentially regulators may take an interest in but.
But theres certainly but.
Virtual is growing which certainly off that helps offset the loss of traditional subs, but it is.
I think theres more to be written on that as to how that those deals those deals get negotiated in the years to come.
And to follow up on your hopefully this is better for you but to follow up with my audio but to follow up on your commentary around net growth I mean, we continue to hear that potentially programming is actually getting cheaper in some ways is obviously the networks need to monetize more so to the extent that obviously both of those deals that you're doing I think.
Still relatively percentage based rather than fixed fee I don't know if thats changed at all.
Is there kind of a view are you in line with kind of the peer group and your view that.
Reverse is going to continue to either slowing its growth or potentially inflect and come down is that what you're kind of intimating with your commentary.
That is what I'm intimated.
Okay.
And then just.
On the local national kind of.
Outlook here as we look to Q2 I know you guys don't break out core in particular, we've heard some commentary from others that larger markets are starting to behave a little bit more like national markets. I don't know if you have any commentary on that or just kind of your view on how sort of broader core should try.
And over the balance of the year.
Well I think I understood. Your question larger markets have a higher percentage of national revenue writ large and thats always been always been the case.
If youre asking me about how national is performing better compared to local nationals, comparing a little bit worse than local.
You have to get into definitions here too.
It's really the large holding companies the largest holding company part of national some of which is in our local numbers in our case.
That are the most stressed and I guess, what I'd by macroeconomic commentary on that would be local businesses are doing fine people are spending I think at the very national holding company levels. They are worried about the same types of things that large investors are just about you know the.
Next week's that show down a potential recession et cetera. So their spending is a little bit more based on macro and economic concerns, whereas local is more money in money out, but there is not that big a gap for us.
Frankly, and an end.
And what I would say is.
We don't break out core like you said, but the trends are improving right the second quarter.
The underlying trends are better.
Then they are in the first quarter. Our total net revenue as Victoria said is we're up against.
$50 million in political in the second quarter last year, but.
The underlying advertising in the second quarter has improved I think in June .
There is a little bit of shake a little bit of Shakiness in pausing on the national side literally I think a lot of it's got to do with next week.
Got it Okay Super helpful and great to hear from you guys again, thanks for taking my questions. Thank you too.
Thank you and we'll take our next question from Craig Huber from Huber Research Partners. Please go ahead.
Good morning, Thank you.
Talk to you guys again.
On the capital return side of things you guys.
The interesting thing here $300 million share buyback over the next four months accelerated program here and still have a lot of people thought maybe you were going to announce a $1 billion plus share buyback program was the thought process here to give yourself the opportunity in four months from now to assess the U S economy, and if it looks reasonably okay view at that point, maybe re up.
Another mass of large share buyback at that point, rather commit to something right right now on this unknown economic backdrop here.
Well it can make a couple of comments on hi, Craig.
We didn't know that a lot of people thought we would do.
So that is news to us.
I would also point out and remind you with my announcement today that we're letting standard general pay their fee through shares. That's another that's that's additive to the buyback right, so which we sort of knew would probably be what the outcome. We would choose so think of the buyback is $436 million versus $300 million.
Overall question, though look we're just coming out of the chute back as a standalone we need to.
We've been spending time looking at our Standalone plans, but we're back we needed.
Doing strategic thinking following what the economy does and we need to we're taking this in steps and being.
Both methodical and thoughtful but I think we've clearly indicated at these steps show as well as the dividend that we are very focused on shareholder return and Craig just one more technical point and you're correct in that the ASR program will take through that period of time to complete but mechanically speaking both the standard general.
Equity shares as well as the launch of the ASR program will be in the next coming days not weeks.
So youll get those shares to Senate general here over the next few weeks.
Correct days not weeks, but the bulk of them yes.
I'm, sorry, I'm, sorry might be the ASR.
Standard General shares also a mono shares to cover the fee will be days not weeks.
Okay, and then maybe talk a little bit further.
You guys will quantify this which is unfortunate but your AD revenue pacing for the quarter for your TV stations are you trying to say, it's tracking better than a number.
First quarter adjusted for the Super Bowl and the Olympics in the first quarter. What are you trying to suggest there. Please.
That's what I meant to say that directly Craig that's correct.
That's exactly right.
The underlying trends.
Okay and then.
Sorry, I got several questions, we haven't talked to you guys in a while.
A lot of companies that go through a long long process like you see with <unk>.
Deal was terminated.
I take them off the ball of toy distracted by the deal and stuff do you feel that.
Management as well as all your workers I was taken off the ball given the unknown is what's going to happen here with the state of General deal puts you guys behind in terms of the strategic outlook for your company preserved through internal investments spending where you kind of go on with this company.
We think the obviously in terms of investment spending we were on pause studio. So that speaks for itself relative to terms of a merger agreement because we work. So there's no doubt about that but I think our 2022 results so to speak for themselves relative to the performance of the management team and keeping the eye on the ball obvious.
In terms of long term strategic planning that that certainly was on pause until very recently.
That obviously.
Under the merger agreement, we were not going to be the owners of the company, but I mean, that's the best way I can answer the question and Craig you've seen obviously the merger agreement and the details of it that's not to say we haven't invested in regular way ongoing maintenance of the business exactly so we and we did last year in 'twenty. Two it's really it was more from a merger agreement standpoint to capture ability to invest in new <unk>.
Are things, our expanded strategies or things like that but please don't take it that we didn't invest in the baseline, but I also I also don't want to imply that we're now.
Coming out of the shoot and ready to go buy a bunch of things, Okay, obviously, given the environment and capital allocation issues and.
The macroeconomic environment, wherein we understand the concern of our shareholders relative to.
This is this is a time, we like having a conservative balance sheet position and so.
Note that we we feel we've come out of the other side of this merger agreement in the right place and therefore, our projected leverage at the two five times was obviously reading right down that alley.
And my last question if I could just go through this one more time that the timing of your Retrans subs.
Renewables.
This year and also for next year, if you could please.
Well I don't give exact time zone, there, but most of them are all but toward the end of the each year.
So we had we've got.
30% of our traditional subs up in the back half of this year.
And next year that number was at TBA it depends on how long deals we do this year Craig.
Okay, great. Thanks.
Thank you and as a reminder, ladies and gentlemen, it is star one to ask a question. We will go next to Jim Goss from Barrington Research. Please go ahead.
Hi, Jim Hi.
Hi, how are you to Bulgaria.
One.
Follow up to what Craig with can you hear me.
Yes, we can hear you yes.
Sorry.
Craig was just asking.
With the with the pause in the business with the merger going on.
We are there.
The purchase was.
Were there any.
Key positions that you.
You might have lost you.
May have had to rebuild or does this give you an opportunity to reposition to the executive team and the post deal environment.
I imagine the uncertainty probably did.
Cause some people to rethink their future.
No actually we really did not lose key executives during the time, Jim obviously.
People were interested what their future was going to be under any kind of new ownership, but.
As a matter of normal course, we will always be looking at and obviously we will resume.
The look at succession planning across the organization as we've always done as part of good governance in the past just as the board will look at board refreshment like it has a track record of doing in the past, but no. It did not cost us key folks clearly it certainly at the local the local level.
Recruiting harder right because of the uncertainty of what was going to happen.
But that standard and any kind of merger agreement when your when you were a seller, but thats over with now so and we are back as a standalone company and back on the offense.
In Brazil, where the deal related spinoffs stations.
With that I'm done or does it take place already.
No no no no no that was all tied to the whole agreement so that will not happen. We stay the same company with the same stations. We had before I appreciate that question because I know there's been some confusion around that.
Okay.
Pre pre the whole issue.
And given that there were a number of parties who seem to have an interest in right now.
Your attitude was always that you were somewhat indifferent to remaining a standalone.
Versus.
Potentially selling the company if it benefited shareholder value and I'm wondering if in the wake of all of this happened if you have a heightened determination to.
Just had a standalone company.
The charge forward with.
That ambition.
I think we have an obligation to absolutely focus on our standalone efforts in less there ever becomes an opportunity.
That the board determines as an incentive to do like like it chose to do.
A year and a half ago are our laser focus is on running this as a stand alone company, which is what we should be doing and management to produce the best results.
Okay.
Okay last question political positioning geographically are there any highlights.
Our attention to.
Given how things are developing especially on the Republican Senate.
I think I would just say on the.
Presidential side, the states that were.
They were added to our either through.
Acquisitions, we did a couple of years ago or the changing dynamics like in Georgia, and Arizona. We just have a number of states that are going to be competitive now and I'm doing off the top of my head, Jim but you can take them from the past of Florida, Arizona, Georgia, and North Carolina.
Michigan.
On and on and on.
<unk>.
In Pennsylvania.
Minnesota So it's.
They'll always be some change depending on who the candidates are sometimes those change, but fundamentally we have.
Given what our portfolio is from a presidential standpoint, we have a disproportionately good.
Footprint.
And I think.
We will start one in Texas.
Cruise is up for it.
Election, and that certainly has some challengers I don't know if that that creates.
For full disclosure techno is not a big producer of political for US never has been because it's such a it remains a red state.
At one point that was turning more purple, but changes in voter laws I think successfully kept that in the Republican columns. So we don't expect to see <unk> be a pleasant surprise I would say if we saw some big primary some big dollars out of Texas.
Alright, Thanks, a lot Dave.
Hey, Thanks, Jim Good to talk to you again.
Thank you and we'll go to our last question from Doug Arthur from Huber Research.
Yeah.
Yeah, Victoria, just a clarification of a premium on you talked about the loss I don't know whether it was a one quarter.
Blip in a national account or a loss of that account how is that going to flow through.
2023, we're going to continue to hear about that as a tough comp or do you does the growth rate start to reflect what youre seeing in local more as the year rolls on.
Yeah, it's the single account that its reallocating some of its business. So we will have a recurring impacts over time I don't know what's going to happen next year were subsequently, but obviously, we continue to do very well in the rest of the business. So there will be the offsetting benefits of growth in other areas.
So the growth outlook in 2023 is a little muddled because you don't quite know how this account is going to reallocate through the year, but exactly.
How would you sort of frame.
The.
On a more sustainable growth rate of the business at this point ex that.
I wouldn't put a number on it but locals, but local is very strong Doug.
And so it will be dependent on how much of that account is not gone, but it's it's quite reduce so that'll have some impact but like I said in my comments over time. This is a local business. That's that's there's a lot of national players.
We just we're fortunate when we came out of the shoot with the business. We've got a lot of national business, which we didn't really even expect.
So it's unfortunate moment in time thing, but it is by the way we look at it. This is a digital startup that's on a rocket ship upward and this is just a kind of a volatile moment given the size of that one account, but the underlying.
The underlying.
Organic metrics of premium are good.
Got it okay. Thank you very much.
Thank you and I'd like to turn the call back over to Dave for any final or closing remarks.
Well, thanks for taking the time to join US all today and it's good to talk to you. All again finally, we are very well positioned for the future as I said before with advantaged station assets in our industry, leading balance sheet. We look forward to re engaging with investors in the coming weeks and months to update you on our progress in delivering our long term value to our shareholders.
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367, $4 seven thank you all again and everyone have a great long holiday weekend as well. Thank you everyone.
Thank you, ladies and gentlemen that does conclude today's conference. We appreciate your participation and have a wonderful day.
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