Gray Television, Inc. (GTN)
Q3 2010 Earnings Call Transcript
November 8, 2010 11:00 am ET
Bob Prather – President and COO
Jim Ryan – SVP and CFO
Bishop Cheen – Wells Fargo
Marci Ryvicker – Wells Fargo
John Kornreich – Sandler Capital
Barry Lucas – Gabelli and Company
Larry Schumacher – Oppenheimer
Charles Abry – Oppenheimer
Aaron Watts – Deutsche Bank
Good day, everyone, and welcome to the Gray Television’s third quarter 2010 earnings release conference call. Today’s call is being recorded.
For opening remarks and introductions, I would like to turn the call over to Mr. Bob Prather. Please go ahead.
Previous Statements by GTN
» Gray Television, Inc. Q2 2010 Earnings Call Transcript
» Gray Television, Inc. Q1 2010 Earnings Call Transcript
» Gray Television, Inc. Q3 2009 Earnings Call Transcript
I’m very pleased with our third quarter and our year-to-date. It’s been a great year I think for virtually everybody in the TV business, large strong revenue than I think anybody anticipated both from a local and national advertising, and from political. Our political by the way came in at an all time record $57.5 million breaking our old record of $53 million I think back in 2004 in presidential year.
So, very pleased with the political that came in late, a lot of it, but it’s better late than never, as I always say, but great year for us politically and so again, the strength of our number one stations in most of markets really I think ones again will have the highest political revenue as a percentage of overall revenue of any group in the business.
Our numbers look real good. Jim will go in detail, but I think we are here again right at the top of the industry in revenue growth, and NOP growth, our margins are strong. We feel very good about the rest of the year. I think it’s going to be a strong fourth quarter for us, and we look forward to starting off next year on a positive note.
This year, as you know, we refinanced our debt early in the year, we got paid down a big chunk of our preferred stock, we got some covenants; it allow us to really operate the business much more effectively going forward. Since then we’ve paid down $30 million of our debt, hope to make another pay down totally in the year which I’m sure we will.
But as we told you earlier, that’s one of our primary goals just to get our debt down, and we’re going to continue to work toward that this year, next year and the following years to get our debt to cash flow ratio at a much lower rate than it is now.
But it’s, as I said, we’re very pleased overall with local and national growth. Even though we had a lot of displacement in October and November obviously from political, overall the core business remains very strong, autos come back extremely well for us and probably helping the business which is good for all of us, but we think that’s going to continue to be strong in the fourth quarter and hopefully going in the next year.
I have been seeing for a quite a while and I felt that there were three key elements to next year being a strong year, one was a change in the political climate, which I think we had last week is it by recognizes; number two, I think it’s important to psychologically for the economy to keep Bush tax cuts going forward for everybody and third, I think a good Christmas and I think nobody yet knows what Christmas is going to look like.
But I think that we’ll have a strong Christmas season, people will feel good and merchants and consumers going into 2011 which obviously is going to be a real critical year for us and everybody in the business to see how we bounce back after with no political and no Olympics, more normal off year going forward, but very pleased overall results.
We’ve held our expenses in check extremely well and we continue to do that and we continue to do that for 2011. We are holding our budget process open right until the end of the year just so we can get more visibility going into next.
So I think there is something we started doing the last two-three years and is paying off and we are able to keep track of our budgets, and budget much better by being closer to instead of trying to get the budgets down earlier in the year and then sitting on a static budget. So we are looking forward to 2011. We want to finish up this year strong which I think we will and we’ll be trying to get going on a very positive note for next year.
At this point, I would turn it over to Jim Ryan, our Chief Financial Officer and let Jim go through some more detailed numbers, and then we’ll open it up for questions. Jim?
Thanks, Bob and good morning, everybody. As Bob mentioned, we’re very pleased with the third quarter results. Very strong with political revenue at $16 million and quick end perspective 2008 political and Q3 was 13.1, and going back to 2006 it was 10.6.