Spanish Broadcasting System, In (SBSAA) research, news, and more from GeoInvesting

Company description

Thu, 22 Jul 2021 13:13:39 GMT

Spanish Broadcasting System Inc is a Spanish language media and entertainment company with radio and television stations in the United States Hispanic markets, including Puerto Rico. The company produces and distributes Spanish language content, including radio programs, television shows, music and live entertainment through its multi-media platforms. It operates in two reportable segments namely Radio and Television. The company owns and operates radio stations located in Los Angeles, New York, Puerto Rico, Chicago, Miami and San Francisco. Its television stations and related affiliates operate under MegaTV. In addition, it also provides multiple Spanish and bilingual websites that provide content related to Latin music, entertainment, news, and culture.

Research

Tue, 16 Nov 2021 18:05:39 GMT

Spanish Broadcasting Systems (OTC:SBSAA) ($5.05; $33.2M market cap) reported Q3 2021 results:

Sales of $38.9 million vs $29.9 million in the prior year
EPS of $0.11 vs loss of $0.61 in the prior year

“Our third quarter results evidenced continued solid financial performance as we again delivered double digit growth in both net revenue and Adjusted OIBDA, driven by the strong performance of our core radio business,” commented Raúl Alarcón, Chairman and Chief Executive Officer of SBS. “Radio revenue and Adjusted OIBDA again exceeded 2019 pre-pandemic levels for the second consecutive quarter, a validation of the ability of our teams to effectively monetize the popularity of our branded content and the engagement we have established with the nationwide Latino consumer.”

“We continue to project positive momentum for the Company going forward.”

For more color on the company’s recent restructuring efforts, see GeoContributor Robert Mulcahy article from July, when the stock was trading at around $3.00.

Research

Thu, 02 Sep 2021 19:55:46 GMT

Spanish Broadcasting Systems (OTC:SBSAA) ($3.11; $20.4M market cap) - Yesterday shares got a lift from the Q2 2021 conference call where management shared bullish views for Q3 2021 and beyond. The company just reported strong top line growth for its Q2 2021. A full breakdown of the quarter can be found here.

The main InfoArb from the call arrived when management stated that Q3 radio sales have already surpassed the level of Q3 2019 radio sales, and the company is only 2 months into Q3. Here is the exchange from the Q&A:

Unknown Analyst [2]

Nice job to see the strength in the second quarter. I was wondering if we could kind of dig a little bit deeper into the third quarter. Do you think we can get back to the levels of revenue and EBITDA. I think you did about $36 million of revenue in 3Q '19. Do you think we can get back to those levels in the quarter of '21?

Albert Rodriguez, Spanish Broadcasting System, Inc. - President & COO

We're already there.

Jose I. Molina, Spanish Broadcasting System, Inc. - Chief Financial Officer

We're -- on the radio side, it's looking good, on the revenue side of things. On the EBITDA side of things, we're working through some investments that we're investing in to capitalize on 2022, but it looks very, very...

Albert Rodriguez, Spanish Broadcasting System, Inc. - President & COO

Very promising, where the revenue side is incredible on what your question is. The national, the revenue is through the roof. The network side, the revenue is through the roof. We're seeing a lot of momentum on the local side with respect to the revenues. So it's beyond what we had forecasted. So you're going to see very, very impressive results on the third quarter on the revenue side.

Closing remarks by the President & COO Albert Rodriguez were also very intriguing:

“I look forward to getting back on for the third quarter because I'm so excited to share what we're going to do for the third quarter. I'm very excited what we have in store for you guys for the third quarter, some outstanding, outstanding results for the third quarter. “

Research

Tue, 31 Aug 2021 18:56:37 GMT

Spanish Broadcasting Systems (OTC:SBSAA) ($2.75; $18.1M market cap) - Yesterday the company reported its Q2 2021 results. We issued the following alert yesterday morning and wanted to correct the EPS as upon further review, the EPS included PPP forgiveness which was not itemized in the financial table in the press release:

So, SBSAA uses OIBDA (Operating Income Before Depreciation and Amortization) instead of EBITDA which is more common. Q2 2021 results:

Sales of $36.1 million vs $15.5 in the prior year and up sequentially from $24.6 million in Q1
OIBDA of $12.2 million vs $1.6 million in the prior year and up sequentially from $1.4 million in Q1
Reported EPS of $0.58 vs loss of $1.38

It looks like the financial results benefitted from PPP loan forgivenesses. The press release or related financial filing did not include a detailed financial table breaking this impact out, but did include some verbiage surrounding the forgivenesses.

Adjusting for the gain of it’s first $6.5 million PPP loan and the possible $2 million in the second PPP loan would equate to loss per share of $0.32 if only accounting for the $6.5m loan or a loss of $0.61 if including both the $6.5m and $2m loans, vs. a loss of $1.38 in the prior year and loss of $1.26 in Q1. We are also taking a closer look at the company’s OBIDA calculation.

It's important to note that the strong revenue growth, reduced adjusted loss and bullish comments regarding the second half of 2021 should not be ignored…

“Looking ahead, we are committed to driving accelerated growth in the second half of 2021 as we continue to build upon nearly four
decades of success serving the nationwide Latino community and the growing advertiser base it has engendered.”

... however, the quarter was not as strong as we initially thought based on the bottom line confusion. We are continuing to break the numbers down and plan to listen to the call tomorrow to see if management offers more clarity on the actual operating loss/gain for the quarter adjusting for loan forgiveness. It is scheduled for 11:00 a.m. Eastern Time. The live webcast can be found on the Company’s website at http://www.spanishbroadcasting.com/webcasts-presentations.

We’d like to thank member Dennis Bottjen for pointing the PPP issue out to us and for his awareness of the non-standard structure of the release, something that we rarely see, but in retrospect, are not surprised it happened.

While the news resulted in higher than average volume in yesterday’s trading session, we’d like to point out that shares are difficult to trade in most brokerage accounts due to its status as a dark company, a situation which now places more stringent requirements on companies to be able to display bids/asks on the platforms. You can see a discussion on that here.