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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported) August 8, 2024 (August 8, 2024)
 
Gray Television, Inc.
(Exact Name of Registrant as Specified in Its Charter)
 
Georgia
(State or Other Jurisdiction of Incorporation)
 
001-13796
 
58-0285030
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
4370 Peachtree Road, NE, Atlanta, Georgia
 
30319
(Address of Principal Executive Offices)
 
(Zip Code)
 
404-504-9828
(Registrant’s Telephone Number, Including Area Code)
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the act:
 
Title of each Class
Trading Symbol(s)
Name of each exchange on which registered
Class A common stock (no par value)
GTN.A
New York Stock Exchange
common stock (no par value)
GTN
New York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
 
Item 2.02 - Results of Operations and Financial Condition.
 
On August 8, 2024, Gray Television, Inc. issued a press release reporting its financial results for the three and six-month periods ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.
 
The information set forth under this Item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
Item 9.01 Financial Statements and Exhibits.
 
(d)
Exhibits
 
99.1
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Gray Television, Inc.
 
     
August 8, 2024
By:  
/s/ Jeffrey R. Gignac
 
   
Name:  
Jeffrey R. Gignac
 
   
Title:  
Executive Vice President and
Chief Financial Officer
 
 
 

Exhibit 99.1

 

presslogo.jpg

 

NEWS RELEASE

 

Gray Announces Operating Results for the Second Quarter

 

Atlanta, Georgia August 8, 2024. . . Gray Television, Inc. (Gray Media, Gray, we, us or our) (NYSE: GTN) today announced financial results for the second quarter ended June 30, 2024, including total revenue of $826 million and total operating expenses (before depreciation, amortization and loss on disposal of assets) of $607 million. While we are overall pleased with our results in the second quarter, macro-economic and other factors largely beyond our control appear likely to result in somewhat lower revenues for the year than we previously anticipated.

 

Our core advertising revenue in the second quarter was $373 million, which was slightly below the low end of our guidance range. For the quarter ending September 30, 2024, we expect core advertising revenue will be flat to up low single digit percentages compared to the third quarter of 2023, driven primarily by the Olympic Games. In light of results to date and political advertising revenues arriving later in the year than originally anticipated, we currently anticipate core Advertising Revenues of approximately $1.525 billion for full-year 2024, down from our earlier guidance of $1.6 billion.

 

Political advertising revenue in the second quarter was $47 million, which significantly surpassed the $29 million of political advertising revenue during the second quarter of 2020 recorded by our current television station portfolio. We continue to anticipate strong political advertising revenues for the remainder of the year, including such revenues in a range of $180 million to $200 million in the third quarter, which would be essentially comparable to such revenues from our current television station portfolio in the third quarter of 2020.

 

Our retransmission consent revenue in the second quarter was $371 million, which was within our guidance range. With half of the year now complete, we have determined that our current pay-television subscriber numbers have largely extended the trends from last year rather than improving somewhat as we anticipated at the start of this year. As a result, we currently expect retransmission consent revenues in the range of $365 million to $370 million for the third quarter and a total of approximately $1.475 billion for full-year 2024.

 

Earlier this year, we reduced our broadcast operating expense guide for full-year 2024 by $50 million from the previous guide of $2.4 billion. Today, we lower our guidance for broadcast operating expense and corporate and administrative expenses for the full-year by a further $15 million and $5 million, respectively. Further, we are reducing our capital expense range by approximately $20 million and our estimated range for cash income taxes by approximately $23 million. In addition, for the second quarter, our station expenses were $8 million below the low end of our expense guidance range as well as $17 million less than station expenses in the first quarter of 2024. While we have made good progress managing costs and expenses this year, our management team is redoubling its efforts to improve the efficiency of our stations and other businesses by both increasing revenues and by further managing operating costs, capital expenses and investment opportunities for the remainder of the year and beyond.

 

We continue to focus on improving our balance sheet. In the first half of 2024, we undertook significant steps to reduce our debt and extend the maturities of those debt obligations that were scheduled to mature within the next two years. As a result, our next material debt maturity will not occur until 2027, following the 2024 and 2026 political cycles, and our weighted average cost of debt has increased to 7.7% from 6.8%. In particular, since the end of 2023, we:

 

Amended our Senior Credit Facility to:

 

o

Increase lender commitments under our Revolving Credit Facility to $680 million, increased the number of participating banks and extend the maturity date to December 31, 2027;

 

o

Fully prepay the $1.15 billion 2019 Term Loan that was scheduled to mature on January 2, 2026;

 

o

Issue a $500 million 2024 Term loan that will mature on June 4, 2029;

 

4370 Peachtree Road, NE, Atlanta, GA 30319 | P 404.504.9828 F 404.261.9607 | www.gray.tv

 

 

Pre-paid through a tender offer, $690 million of the $700 million in outstanding 2026 Notes, scheduled to mature on July 15, 2026;

Issued $1.25 billion of our 2029 Notes, that are secured pari passu with our Senior Credit Facility and that will mature on July 15, 2029;

Used available liquidity to repurchase and retire approximately $50 million of our outstanding 2027 Notes on the open market at an average price of approximately 90.5% of their par value;

So far in the third quarter of 2024, we have used our available liquidity to retire an additional $29 million of our outstanding 2027 Notes on the open market at an average price of approximately 92.1% of their par value. Currently, the remaining par value of our 2027 Notes has been reduced to $671 million; and

In order to complete the above transactions, we have used $200 million drawn under our Revolving Credit Facility. Due to strong operating cash flows since then, currently we have repaid $75 million of that borrowing and continue to prioritize repayment of our debt.

 

Currently, we have remaining availability of approximately $178 million under our previously announced Board authorization to utilize available liquidity to repurchase additional debt in the open market. The extent of such repurchases, including the amount and timing of any repurchases, will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. This repurchase program does not require us to repurchase a minimum amount of debt, and it may be modified, suspended or terminated at any time without prior notice.

 

Summary of Second Quarter Operating Results

 

Operating Highlights (the respective 2024 periods reflect the “on-year” of the two-year political advertising cycle):

 

Total revenue in the second quarter of 2024 was $826 million, an increase of 2% from the second quarter of 2023.

Core Advertising Revenue in the second quarter of 2024 was $373 million, a decrease of $6 million or 2% from the second quarter of 2023.

Political advertising revenue in the second quarter of 2024 was $47 million, an increase of 292% from the second quarter of 2023.

Net income was $22 million in the second quarter of 2024, compared to $4 million in the second quarter of 2023.

Adjusted EBITDA was $225 million in the second quarter of 2024, essentially unchanged from the second quarter of 2023.

 

Other Key Metrics

 

As of June 30, 2024, calculated as set forth in our Senior Credit Agreement, our First Lien Leverage Ratio and Leverage Ratio, each net of all cash, was 3.21 to 1.00 and 5.92 to 1.00, respectively.

Non-cash stock compensation was $6 million during the second quarter of 2024, and $7 million in the second quarter of 2023.

 

Taxes

 

During the six-months ended June 30, 2024 and 2023, we made income tax payments, net of refunds, of $85 million and $24 million, respectively. During the remainder of 2024, based on our current forecasts, we anticipate making income tax payments, net of refunds, within a range of $92 million to $102 million.

As of June 30, 2024, we have an aggregate of $282 million of various state operating loss carryforwards, of which we expect that approximately $201 million will not be utilized.

 

Gray Television, Inc.

Earnings Release for the three and six-month periods ended June 30, 2024

Page 2 of 10
 

 

Guidance for the Three-Months Ending September 30, 2024

 

Based on our current forecasts for the quarter ending September 30, 2024, we anticipate the following key financial results, as outlined below in approximate ranges and as compared to the quarter ending September 30, 2023, as well as certain currently anticipated full-year financial results. As always, guidance may change in the future based on several factors and therefore may not reflect actual results:

 

                           

Year Ending

 
   

Quarter Ending

   

December 31, 2024

 
           

September 30, 2024

   

Estimates

 
   

September 30, 2023

   

(Guidance)

   

As of Aug 8, 2024

 
   

(Actual)

   

Low

   

High

   

(Guidance)

 
   

(in millions)

 

Revenue (less agency commissions):

                               

Core advertising

  $ 363     $ 365     $ 375     $ 1,525  

Political advertising

    26       180       200          

Retransmission consent

    378       365       370       1,475  

Production companies

    20       23       25       105  

Other

    16       15       16       70  

Total revenue

  $ 803     $ 948     $ 986          
                                 

Operating expenses (excluding depreciation, amortization and loss on disposal of assets):

         

Broadcasting:

                               

Station expenses

  $ 322     $ 351     $ 356     $ 1,395  

Network affiliation fees

    234       233       233       935  

Non-cash stock-based compensation

    1       1       1       5  

Total broadcasting expense

  $ 557     $ 585     $ 590     $ 2,335  
                                 

Production companies

  $ 18     $ 20     $ 22     $ 85  
                                 

Corporate and administrative:

                               

Corporate expenses

  $ 19     $ 22     $ 25     $ 101  

Non-cash stock-based compensation

    4       5       5       19  

Total corporate and administrative expense

  $ 23     $ 27     $ 30     $ 120  
                                 

Annual 2024 estimated supplemental information:

                               

Interest expense

                          $ 475  

Amortization of deferred financing costs

                          $ 14  

Preferred stock dividends

                          $ 52  

Common stock dividends

                          $ 32  

Total capital expenditures, excluding Assembly Atlanta

                   

 

$90 - $100  

Capital expenditures for Assembly Atlanta, net of anticipated reimbursements

            $ 18  

Income tax payments, net of refunds

                         

 

$177 - $187  

 

Gray Television, Inc.

Earnings Release for the three and six-month periods ended June 30, 2024

Page 3 of 10
 

Selected Operating Data (Unaudited)

 

   

Three Months Ended June 30,

 
                   

% Change

           

% Change

 
                   

2024 to

           

2024 to

 
   

2024

   

2023

   

2023

   

2022

   

2022

 
   

(dollars in millions)

 

Revenue (less agency commissions):

                                       

Core advertising

  $ 373     $ 379       (2 )%   $ 366       2 %

Political advertising

    47       12       292 %     90       (48 )%

Retransmission consent

    371       394       (6 )%     382       (3 )%

Other

    17       16       6 %     17       0 %

Total broadcasting revenue

  $ 808     $ 801       1 %   $ 855       (5 )%

Production companies

    18       12       50 %     13       38 %

Total revenue

  $ 826     $ 813       2 %   $ 868       (5 )%
                                         

Operating expenses (1):

                                       

Broadcasting

                                       

Station expenses

  $ 331     $ 314       5 %   $ 300       10 %

Network affiliation fees

    233       235       (1 )%     225       4 %

Transaction Related Expenses

    -       1       (100 )%     2       (100 )%

Non-cash stock-based compensation

    1       2       (50 )%     1       0 %

Total broadcasting expense

  $ 565     $ 552       2 %   $ 528       7 %
                                         

Production companies

  $ 14     $ 11       27 %   $ 14       0 %
                                         

Corporate and administrative:

                                       

Corporate expenses

  $ 23     $ 25       (8 )%   $ 20       15 %

Non-cash stock-based compensation

    5       5       0 %     5       0 %

Total corporate and administrative expense

  $ 28     $ 30       (7 )%   $ 25       12 %
                                         

Net income

  $ 22     $ 4       450 %   $ 99       (78 )%
                                         

Adjusted EBITDA

  $ 225     $ 227       (1 )%   $ 307       (27 )%

 

   

Six Months Ended June 30,

 
                   

% Change

           

% Change

 
                   

2024 to

           

2024 to

 
   

2024

   

2023

   

2023

   

2022

   

2022

 
   

(dollars in millions)

 

Revenue (less agency commissions):

                                       

Core advertising

  $ 745     $ 736       1 %   $ 731       2 %

Political advertising

    74       20       270 %     116       (36 )%

Retransmission consent

    752       789       (5 )%     775       (3 )%

Other

    36       35       3 %     37       (3 )%

Total broadcasting revenue

    1,607       1,580       2 %     1,659       (3 )%

Production companies

    42       34       24 %     36       17 %

Total revenue

  $ 1,649     $ 1,614       2 %   $ 1,695       (3 )%
                                         

Operating expenses (1):

                                       

Broadcasting

                                       

Station expenses

  $ 678     $ 634       7 %   $ 600       13 %

Network affiliation fees

    467       470       (1 )%     452       3 %

Transaction Related Expenses

    -       1       (100 )%     4       (100 )%

Non-cash stock-based compensation

    3       2       50 %     2       50 %

Total broadcasting expense

  $ 1,148     $ 1,107       4 %   $ 1,058       9 %
                                         

Production companies

  $ 35     $ 70       (50 )%   $ 40       (13 )%
                                         

Corporate and administrative:

                                       

Corporate expenses

  $ 47     $ 49       (4 )%   $ 43       9 %

Transaction Related Expenses

    -       -       0 %     1       (100 )%

Non-cash stock-based compensation

    9       7       29 %     9       0 %

Total corporate and administrative expense

  $ 56     $ 56       0 %   $ 53       6 %
                                         

Net income (loss)

  $ 110     $ (27 )     (507 )%   $ 161       (32 )%
                                         

Adjusted EBITDA

  $ 422     $ 390       8 %   $ 555       (24 )%

 

(1)

Excludes depreciation, amortization and loss (gain) on disposal of assets.

 

Gray Television, Inc.

Earnings Release for the three and six-month periods ended June 30, 2024

Page 4 of 10
 

 

Detail Table of Operating Results (Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

June 30,

 
   

2024

   

2023

   

2024

   

2023

 
   

(in millions, except for per share information)

 

Revenue (less agency commissions):

                               

Broadcasting

  $ 808     $ 801     $ 1,607     $ 1,580  

Production companies

    18       12       42       34  

Total revenue (less agency commissions)

    826       813       1,649       1,614  

Operating expenses before depreciation, amortization and gain on disposal of assets, net:

                               

Broadcasting

    565       552       1,148       1,107  

Production companies

    14       11       35       70  

Corporate and administrative

    28       30       56       56  

Depreciation

    36       35       72       70  

Amortization of intangible assets

    32       50       63       99  

Loss (gain) on disposal of assets, net

    (1 )     16       (1 )     26  

Operating expenses

    674       694       1,373       1,428  

Operating income

    152       119       276       186  

Other income (expense):

                               

Miscellaneous income (expense), net

    2       (1 )     112       (3 )

Interest expense

    (118 )     (109 )     (233 )     (213 )

Loss from early extinguishment of debt

    (7 )     -       (7 )     (3 )

Income (loss) before income taxes

    29       9       148       (33 )

Income tax expense (benefit)

    7       5       38       (6 )

Net income (loss)

    22       4       110       (27 )

Preferred stock dividends

    13       13       26       26  

Net income (loss) attributable to common stockholders

  $ 9     $ (9 )   $ 84     $ (53 )
                                 

Basic per share information:

                               

Net income (loss) attributable to common stockholders

  $ 0.09     $ (0.10 )   $ 0.89     $ (0.58 )

Weighted-average shares outstanding

    95       93       94       92  
                                 

Diluted per share information:

                               

Net income (loss) attributable to common stockholders

  $ 0.09     $ (0.10 )   $ 0.88     $ (0.58 )

Weighted-average shares outstanding

    96       93       95       92  

 

Gray Television, Inc.

Earnings Release for the three and six-month periods ended June 30, 2024

Page 5 of 10
 

 

Other Financial Data (Unaudited)

 

   

Six Months Ended June 30,

 
   

2024

   

2023

 
   

(in millions)

 
                 

Net cash provided by operating activities

  $ 86     $ 459  

Net cash provided by (used in) investing activities

    50       (187 )

Net cash used in financing activities

    (82 )     (297 )

Net increase (decrease) in cash

  $ 54     $ (25 )

 

   

As of

 
   

June 30, 2024

   

December 31, 2023

 
   

(in millions)

 
                 

Cash

  $ 75     $ 21  

Long-term debt, including current portion, less deferred financing costs

  $ 6,138     $ 6,160  

Series A Perpetual Preferred Stock

  $ 650     $ 650  

Borrowing availability under Revolving Credit Facility

  $ 474     $ 494  

 

The Company

 

We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets serving 113 television markets that collectively reach approximately 36 percent of US television households. The portfolio includes 77 markets with the top-rated television station and 100 markets with the first and/or second highest rated television station, as well as the largest Telemundo Affiliate group with 43 markets totaling nearly 1.5 million Hispanic TV Households. We also own Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios. Gray owns a majority interest in Swirl Films.

 

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act

 

This press release contains certain forward-looking statements that are based largely on our current expectations and reflect various estimates and assumptions by us. These statements are statements other than those of historical fact and may be identified by words such as “estimates,” “expect,” “anticipate,” “will,” “implied,” “assume” and similar expressions. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond our control, include: estimates of future revenue, future expenses and other future events. We are subject to additional risks and uncertainties described in our quarterly and annual reports filed with the Securities and Exchange Commission from time to time, including in the “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained therein, which reports are made publicly available via our website, www.graymedia.com. Any forward-looking statements in this press release should be evaluated in light of these important risk factors. This press release reflects management’s views as of the date hereof. Except to the extent required by applicable law, Gray undertakes no obligation to update or revise any information contained in this press release beyond the published date, whether as a result of new information, future events or otherwise. Information about certain potential factors that could affect our business and financial results and cause actual results to differ materially from those expressed or implied in any forward-looking statements are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2023, and may be contained in reports subsequently filed with the U.S. Securities and Exchange Commission and available at www.sec.gov.

 

Gray Television, Inc.

Earnings Release for the three and six-month periods ended June 30, 2024

Page 6 of 10
 

 

Conference Call Information

 

We will host a conference call to discuss our second quarter operating results on August 8, 2024. The call will begin at 11:00 AM Eastern Time. The live dial-in number is 1-800-285-6670. The call will be webcast live and available for replay at www.graymedia.com. The taped replay of the conference call will be available at 1-888-556-3470 and the confirmation code is 898476, until September 6, 2024.

 

Gray Contacts

 

Web site: www.graymedia.com

 

 

Hilton H. Howell, Jr., Executive Chairman and Chief Executive Officer, (404) 266-5513

 

Pat LaPlatney, President and Co-Chief Executive Officer, (334) 206-1400

 

Jeff Gignac, Executive Vice President and Chief Financial Officer, (404) 504-9828

 

Kevin P. Latek, Executive Vice President, Chief Legal and Development Officer, (404) 266-8333

 

Gray Television, Inc.

Earnings Release for the three and six-month periods ended June 30, 2024

Page 7 of 10
 

 

 

Non-GAAP Terms

 

In addition to results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this earnings release discusses “Adjusted EBITDA” a non-GAAP performance measure that management uses to evaluate the performance of the business. Adjusted EBITDA is calculated as net income (loss), adjusted for income tax expense (benefit), interest expense, loss on extinguishment of debt, non-cash stock-based compensation costs, non-cash 401(k) expense, depreciation, amortization of intangible assets, impairment of goodwill and other intangible assets, impairment of investments, loss (gain) on asset disposals and certain other miscellaneous items. We consider Adjusted EBITDA to be an indicator of our operating performance.

 

In addition to results prepared in accordance with GAAP, “Leverage Ratio Denominator” is a metric that management uses to calculate our compliance with our financial covenants in our indebtedness agreements. This metric is calculated as specified in our Senior Credit Agreement and is a significant measure that represents the denominator of a formula used to calculate compliance with material financial covenants within the Senior Credit Agreement that govern our ability to incur indebtedness, incur liens, make investments and make restricted payments, among other limitations usual and customary for credit agreements of this type. Accordingly, management believes this metric is a very material metric to our debt and equity investors. Leverage Ratio Denominator gives effect to the revenue and broadcast expenses of all completed acquisitions and divestitures as if they had been acquired or divested, respectively, on July 1, 2022. It also gives effect to certain operating synergies expected from the acquisitions and related financings and adds back professional fees incurred in completing the acquisitions. Certain of the financial information related to the acquisitions, if applicable, has been derived from, and adjusted based on, unaudited, un-reviewed financial information prepared by other entities, which Gray cannot independently verify. We cannot assure you that such financial information would not be materially different if such information were audited or reviewed and no assurances can be provided as to the accuracy of such information, or that our actual results would not differ materially from this financial information if the acquisitions had been completed on the stated date. In addition, the presentation of Leverage Ratio Denominator as determined in the Senior Credit Agreement and the adjustments to such information, including expected synergies, if applicable, resulting from such transactions, may not comply with GAAP or the requirements for pro forma financial information under Regulation S-X under the Securities Act of 1933. Leverage Ratio Denominator, as determined in the Senior Credit Agreement, represents an average amount for the preceding eight quarters then ended.

 

We define Transaction Related Expenses as incremental expenses incurred specific to acquisitions and divestitures, including but not limited to legal and professional fees, severance and incentive compensation, and contract termination fees. We present certain line items from our selected operating data, net of Transaction Related Expenses, in order to present a more meaningful comparison between periods of our operating expenses and our results of operations.

 

Our “Adjusted Total Indebtedness”, “First Lien Adjusted Total Indebtedness” and “Secured Adjusted Total Indebtedness” in each case net of all cash, represents the amount of outstanding principal of our long-term debt, plus certain other obligations as defined in our Senior Credit Agreement for the applicable amount of indebtedness.

 

These non-GAAP terms are not defined in GAAP and our definitions may differ from, and therefore may not be comparable to, similarly titled measures used by other companies, thereby limiting their usefulness. Such terms are used by management in addition to, and in conjunction with, results presented in accordance with GAAP and should be considered as supplements to, and not as substitutes for, net income and cash flows reported in accordance with GAAP.

 

Gray Television, Inc.

Earnings Release for the three and six-month periods ended June 30, 2024

Page 8 of 10
 

 

 

Reconciliation of Adjusted EBITDA (Unaudited):

 

   

Three Months Ended

 
   

June 30,

 
   

2024

   

2023

   

2022

 
   

(in millions)

 

Net income

  $ 22     $ 4     $ 99  

Adjustments to reconcile from net income to Adjusted EBITDA

                       

Depreciation

    36       35       31  

Amortization of intangible assets

    32       50       52  

Non-cash stock-based compensation

    6       7       6  

(Gain) loss on disposal of assets, net

    (1 )     16       -  

Miscellaneous (income) expense, net

    (2 )     1       -  

Interest expense

    118       109       81  

Loss from early extinguishment of debt

    7       -       -  

Income tax expense 

    7       5       38  

Adjusted EBITDA

  $ 225     $ 227     $ 307  
                         

Supplemental Information:

                       

Amortization of deferred loan costs

    4       3       4  

Preferred stock dividends

    13       13       13  

Common stock dividends

    8       7       8  

Purchases of property and equipment (1)

    22       26       50  

Reimbursements of property and equipment purchases (2)

    -       -       -  

Income taxes paid, net of refunds

    83       24       119  

 

(1)

Excludes $7 million, $77 million and $62 million related to the Assembly Atlanta project in 2024, 2023 and 2022, respectively.

(2)

Excludes $1 million and $12 million related to the Assembly Atlanta project in 2024 and 2023, respectively.

 

   

Six Months Ended

 
   

June 30,

 
   

2024

   

2023

   

2022

 
   

(in millions)

 

Net income (loss)

  $ 110     $ (27 )   $ 161  

Adjustments to reconcile from net income (loss) to Adjusted EBITDA

                       

Depreciation

    72       70       63  

Amortization of intangible assets

    63       99       104  

Non-cash stock-based compensation

    12       9       11  

(Gain) loss on disposal of assets, net

    (1 )     26       (5 )

Miscellaneous (income) expense, net

    (112 )     3       2  

Interest expense

    233       213       160  

Loss from early extinguishment of debt

    7       3       -  

Income tax expense (benefit)

    38       (6 )     59  

Adjusted EBITDA

  $ 422     $ 390     $ 555  
                         

Supplemental Information:

                       

Amortization of deferred loan costs

    7       7       8  

Preferred stock dividends

    26       26       26  

Common stock dividends

    16       14       16  

Purchases of property and equipment (3)

    41       45       67  

Reimbursements of property and equipment purchases (4)

    -       -       (5 )

Income taxes paid, net of refunds

    85       24       119  

 

(3)

Excludes $22 million, $168 million and $92 million related to the Assembly Atlanta project in 2024, 2023 and 2022, respectively.

(4)

Excludes $6 million and $38 million related to the Assembly Atlanta project in 2024 and 2023, respectively.

 

Gray Television, Inc.

Earnings Release for the three and six-month periods ended June 30, 2024

Page 9 of 10
 

 

Calculation of Leverage Ratio, First Lien Leverage Ratio and Secured Leverage Ratio, as each is defined in our Senior Credit Agreement (Unaudited):

 

   

Eight Quarters

 
   

Ended

 
   

June 30, 2024

 
   

(dollars in millions)

 
         

Net income

  $ 328  

Adjustments to reconcile from net income to Leverage Ratio Denominator as defined in our Senior Credit Agreement:

       

Depreciation

    284  

Amortization of intangible assets

    360  

Non-cash stock-based compensation

    42  

Common stock contributed to 401(k) plan

    19  

Loss on disposal of assets, net

    24  

Gain on disposal of investment, not in the ordinary course

    (110 )

Interest expense

    866  

Loss on early extinguishment of debt

    10  

Income tax expense

    132  

Amortization of program broadcast rights

    74  

Impairment of investment

    90  

Payments for program broadcast rights

    (76 )

Pension benefit

    (5 )

Contributions to pension plans

    (7 )

Adjustments for unrestricted subsidiaries

    39  

Adjustments for stations acquired or divested, financings and expected synergies during the eight quarter period

    (1 )

Transaction Related Expenses

    5  

Other

    1  

Total eight quarters ended June 30, 2024

  $ 2,075  

Leverage Ratio Denominator (total eight quarters ended June 30, 2024, divided by 2)

  $ 1,038  

 

   

June 30, 2024

 
   

(dollars in millions)

 
         

Total outstanding principal, including current portion

  $ 6,215  

Letters of credit outstanding

    6  

Cash

    (75 )

Adjusted Total Indebtedness

  $ 6,146  

Leverage Ratio (maximum permitted incurrence is 7.00 to 1.00)

    5.92  
         

Total outstanding principal secured by a first lien

  $ 3,405  

Cash

    (75 )

First Lien Adjusted Total Indebtedness

  $ 3,330  

First Lien Leverage Ratio (maximum permitted incurrence is 4.00 to 1.00) (1)

    3.21  
         

Total outstanding principal secured by a lien

  $ 3,405  

Cash

    (75 )

Secured Adjusted Total Indebtedness

  $ 3,330  

Secured Leverage Ratio (maximum permitted incurrence is 5.50 to 1.00)

    3.21  

 

(1)

At any time any amounts are outstanding under our revolving credit facility, our maximum First Lien Leverage Ratio cannot exceed 4.25 to 1.00.

 

Gray Television, Inc.

Earnings Release for the three and six-month periods ended June 30, 2024

Page 10 of 10
 
v3.24.2.u1
Document And Entity Information
Aug. 08, 2024
Document Information [Line Items]  
Entity, Registrant Name Gray Television, Inc.
Document, Type 8-K
Document, Period End Date Aug. 08, 2024
Entity, Incorporation, State or Country Code GA
Entity, File Number 001-13796
Entity, Tax Identification Number 58-0285030
Entity, Address, Address Line One 4370 Peachtree Road, NE
Entity, Address, City or Town Atlanta
Entity, Address, State or Province GA
Entity, Address, Postal Zip Code 30319
City Area Code 404
Local Phone Number 504-9828
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity, Emerging Growth Company false
Amendment Flag false
Entity, Central Index Key 0000043196
ClassACommonStock Custom [Member]  
Document Information [Line Items]  
Title of 12(b) Security Class A common stock
Trading Symbol GTN.A
Security Exchange Name NYSE
CommonStock Custom [Member]  
Document Information [Line Items]  
Title of 12(b) Security common stock
Trading Symbol GTN
Security Exchange Name NYSE

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