Gray Media, Inc. (GTN) Q4 2021 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Meredith fiscal 2021 Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mike Lovell, Meredith’s Investor Relations.

Good morning, everyone, and thanks for joining the call. I hope you’ve had the opportunity to access the press release and presentation posted to Meredith’s website. We’ll use the presentation to structure our remarks this morning. We will begin with comments from Chairman and Chief Executive Officer, Tom Harty, followed by Chief Financial Officer, Jason Frierott. Certain financial measures that we are discussing on this call are expressed on a non-GAAP basis and have been adjusted to exclude the impact of special items. Reconciliations of these non-GAAP measures are included in our slide presentation which is available in the Investor Relations section of Meredith.com. I also want to remind you that we will be discussing forward-looking information today and of our Safe Harbor disclaimer on Slide 2. Also as noted on Slide 3, we will be filing relevant materials with the Securities and Exchange Commission, including a proxy statement in connection with the announced sale of our Local Media Group to Gray Television. We encourage you to read these materials because they will contain important information about the company and proposed transaction. Finally, please note all figures refer to fiscal 2021 fourth quarter or full year and the comparable prior year period unless otherwise noted. And now, I’ll turn the call over to Tom, who will begin our prepared remarks starting on Slide 4.

Thank you, Mike and good morning. Since last reporting quarterly results on April 29, we are pleased to deliver strong progress on the strategy we’ve described in recent calls: net debt reduction, growth in digital advertising, and advancement of our consumer-focused capabilities, including performance marketing and paid products. First, as it relates to net debt reduction, we announced the sale of our Local Media Group to Gray Television in May and accepted an offer of $2.825 billion in June. We believe that the sale will unlock meaningful shareholder value and accelerates all of our top financial priorities, including materially reducing our debt. This will free up capital to invest in future high potential digital opportunities while also enabling capital returns to shareholders. Second, as it relates to advancing our digital advertising and consumer focus capabilities, digital advertising revenues were a fourth quarter record and surpassed magazine advertising for the third consecutive quarter. On the consumer side, licensing and digital consumer revenues continued to deliver record results, and the newsstand channel grew as well. In total, our business remains well balanced with half our revenues based on advertising and half from consumers. With that introduction, let’s dive deeper into the fourth quarter highlights, starting with digital advertising. Our team delivered strong performance, driven in part by strong pricing, partially offset by slight declines in traffic. We’re seeing market and consumer trends beginning to normalize, particularly compared to the year-ago period, which was heavily impacted by the onset of the COVID-19 pandemic. Our licensing and digital consumer-driven revenues also delivered double-digit growth and record fourth quarter results. Driving our digital performance is our trusted brands and large audience reach to 150 million consumers who visit our sites each month, our strong commercial partnerships, and our proprietary technology platform. As we’ve discussed on prior calls, our platform brings together all of our content, our unique taxonomy, and first-party data. It provides a comprehensive view of the consumer and how they interact with our branded content and products, providing valuable insights and predictive trends. This holistic view and our analytic capabilities provide us with deep insights into user behavior we use to drive advertising and performance marketing dollars, as well as our own content and product development strategy. For example, our performance marketing teams drove a nearly threefold increase in partner retail sales for the week during Amazon’s June Prime Day through solid execution of custom content and promotion across our sites. We performed similarly for Walmart and Target, who also hosted digital sales events during our fiscal fourth quarter. The combination of our influential brands focused on women, audience reach, commercial partnerships, and proprietary platforms are differentiators in the market, which drive our growing and diversified digital revenue. Our magazine business is another differentiating factor. It’s the largest in the United States and drives strong awareness for our brands across platforms. People and All Recipes are the industry’s number one and number two brands and Better Homes & Gardens is number six. On average, we sell one magazine via subscription and one via newsstand every second. While advertising performance remains soft as the uncertain economic environment caused clients to be focused on bottom of the funnel spending, we continue to see strong consumer engagement and demand for our magazines as evidenced by 7% growth in circulation revenues, driven primarily by newsstand performance. Obviously, we have an easier comp as newsstand was impacted by the pandemic. However, I also want to highlight key points that make our newsstand specials, particularly attractive to consumers. We react quickly to provide relevant, in-depth coverage of topics and trends that matter to our customers. We use high-quality paper and we limit advertising pages. As a result, we are able to charge a premium price typically in excess of $10 per copy. In addition, consumer response rates to our subscription offers continue to be strong and we have been investing in channels that drive high lifetime value to capitalize on the opportunity. For example, we’ve more than doubled our direct mail offers in the fourth quarter and saw new subscription orders more than double as well. In total, our renewals were up 4% in the fourth quarter across all retention channels. Looking more closely at our broadcasting portfolio, we delivered 50% growth in non-political spot advertising revenues compared to the prior year period, driven by the professional services, automotive and gaming categories. We also benefited from continued growth in retransmission revenues. Finally, from a consolidated company standpoint, we delivered margin expansion. This was driven by top line growth, particularly from our digital and television businesses, which had relatively higher fixed costs and thus drove positive cost leverage. Consistent with our financial priorities, we continue to make progress reducing net debt and our net leverage ratio and grew our cash position sequentially from the third quarter. With that fourth quarter summary, I want to step back and share some thoughts on our full year performance on Slide 5. It was equally remarkable and challenging beginning under deep pressure due to COVID-19 and ending with the second highest adjusted EBITDA in Meredith’s history, approximately $20 million shy of our all-time high. It was also a transformational year shaped by several significant strategic events. First, we crossed an important milestone with digital advertising revenue surpassing magazines for the first time in Meredith’s history. Second, the agreement to sell our Local Media Group, as I mentioned earlier, for $2.825 billion, representing a 10 times valuation. The combination of these two events sets the stage for post-transaction Meredith to be positioned as a digital-first media company with low leverage and the capacity to invest in future organic and inorganic growth. We delivered many operational milestones during the year as well. Our digital businesses delivered record revenues across the board, driven by our launch of the Meredith Data Studio, which brings together our valuable first-party data and predictive insights to help customers improve returns on their advertising investments. Both the Meredith Data Studio and our new digital platform have been key factors in large client expansion with Walmart and Kroger, amongst others, strong performance from our licensing relationships with Apple News Plus and Walmart, and we retained our position as the world’s second largest licensor for the sixth straight year, according to Licensing Global. Additionally, I’m pleased to announce that our multi-year partnership with Clorox, which includes our deep data and insights, has recently been expanded to licensing with the launch of the Real Simple home cleaning collection available at The Container Store. Expanding performance marketing activities in fiscal 2021, in particular, our relationship with Amazon, along with key retail partners with Walmart, Target and Nike, in total our performance marketing efforts drove $1 billion in retail sales for our partners during the year. While our magazine business endured COVID-19 all year, we gained more than four percentage points of magazine advertising market share, bringing our total to 36%. In addition, we sold nearly 20 million copies of our newsstand specials, one million more copies than the prior year. This is a substantial accomplishment considering many newsstand were closed or operated at reduced capacity due to COVID-19. Our Local Media Group also delivered record results delivered by record political advertising revenues and continued growth in retransmission consent revenues. Finally, we delivered record free cash flow in fiscal 2021. That performance along with year-over-year growth in adjusted EBITDA enabled a greater than one turn reduction in our net debt ratio during the year to 3.7 times at June 30, 2021. In addition to the many performance metrics highlighted this morning, I’m pleased to share several recent social and environmental accomplishments. For example, we made sustainability accounting standards for disclosures available publicly for the first time and completed the carbon disclosure projects, Forest and Climate Questionnaire for the second year. We earned Gender Fair certification for achieving standards in leadership and opportunity, employee policies, advertising communications, diversity reporting, and social impact related to women empowerment. We’ve been recognized by the 50 on 50 Women on Boards as having a gender balanced board. We created a business diversity and social responsibility program to facilitate alignment with suppliers that share our values. We launched our good impressions program that brings Meredith’s media and marketing consultation services to bear for minority-owned small businesses in the communities we serve. In summary, fiscal 2021 set the stage for a bright future. We have a large audience deeply engaged with our trusted brands, our digital businesses are delivering record performance, and the pending Local Media Group transaction will enhance our ability to invest in future growth and return capital to shareholders. We are tremendously excited about the opportunities that lie ahead. With that, I’ll turn it over to Jason.

Thanks Tom. Starting on Slide 6, looking at fourth quarter ’21 consolidated performance, revenues were $718 million, up 17%. Advertising-related revenues were $338 million, up 30%. As Tom said, digital advertising was our strongest growth platform, followed by non-political spot advertising. While magazine advertising revenues declined 6%, that performance represented a sequential improvement compared to the third quarter. Consumer-related revenues were $355 million, up 7%. Growth was driven by newsstand, licensing, local media retransmission revenues, and digital consumer which includes performance marketing, ecommerce, and lead generation. These gains were partially offset by declines in affinity marketing revenues. Other revenue was $25 million, up 24%, which was primarily the result of gains related to custom polishing relationships partially offset by project-related declines. On a consolidated level, adjusted EBITDA grew 55% to $124 million. Stronger adjusted EBITDA performance reflects growing digital, non-political advertising and consumer revenues, partially offset by lower magazine advertising revenues. Fiscal ’21 fourth quarter free cash flow was $51 million. Our prior year period comparison was a tough one because collections significantly outpaced revenue in the COVID period. That said, our current quarter performance represents strong cash conversion driven by EBITDA improvement. Looking to full year fiscal ’21 consolidated performance, advertising-related revenues grew 9% driven by strong digital and political demand partially offset by magazine advertising. Adjusting for magazine portfolio changes announced early last year, total advertising revenues would have been up 11%. Consumer-related revenues grew 2% as retransmission, licensing and digital consumer driven revenues increased. This growth was partially offset by magazine subscription results that were impacted by portfolio changes and our ongoing strategy to shift from agent sources towards more profitable direct-to-publisher subscribers. Adjusting for magazine portfolio changes announced over the last year, total consumer revenues would have been up 3%. Other revenue was $81 million, down 20%. This was primarily the result of sunsetting service agreements for sold brands and non-repeating project work. On a consolidated level, adjusted EBITDA grew 25% to $683 million. Stronger adjusted EBITDA performance reflects growing digital, non-political spot advertising and consumer revenues along with positive cost leverage, partially offset by lower magazine advertising revenues. When I use the term positive cost leverage, I mean that revenues grew faster than expenses. Fiscal ’21 full year free cash flow was a record $363 million, $112 million higher than the prior year period and in line with revenue and adjusted EBITDA growth. Turning to Page 7, national media group revenues were $515 million, up 16%. Advertising related revenues were $236 million, up 26%. Digital advertising grew 80% or $55 million, surpassing magazine advertising for the third straight quarter. Magazine advertising revenue performance, while down 6%, represents a sequential improvement from the third quarter. As Tom mentioned, we saw stronger fourth quarter spending in the prescription drug, travel, and retail categories. National media group consumer related revenues grew 8%. Subscription revenues were approximately even from the prior year period and we maintained a stable subscription base of 36 million. Newsstand revenues grew 53%. Growth was driven by Meredith’s Premium Publishing, which published an incremental nine issues in the fourth quarter and sold 2 million more units, reflecting stronger consumer demand along with greater newsstand availability. Our licensing and digital consumer-driven revenues, which include performance marketing activities such as ecommerce, lead generation, and affiliate commerce, continued to deliver strong growth, up 19% in the quarter. Other revenues were $47 million, up 2% as the growth in project work was partially offset by affinity marketing declines due in part to COVID-related disruptions across retail. Adjusted EBITDA was $93 million, up 95%, reflecting growing digital and consumer revenues along with positive cash leverage, partially offset by lower magazine advertising revenues. Let me walk you through our regular digital KPIs on the right side of the page. Digital sessions declined 4% as we began lapping the strong consumer numbers we saw last year at the start of COVID-19. This was particularly true of our food and home-oriented sites. We delivered strong year-over-year growth across our entertainment, travel and fashion sites. People.com delivered the strongest year-over-year traffic growth as it continues to benefit from strong interest in celebrity and human interest stories. For context, fourth quarter sessions results were 15% higher in the fourth quarter of fiscal 2019. From a revenue mix standpoint, the majority of digital advertising continues to be sold through equity by our sales team. We view this as a key differentiator highlighting advertiser demand for the full suite of our offerings, including our powerful brands, premium content, and first party data along with the flexibility that our digital platform offers. Looking at the bottom right of the page, our licensing and digital consumer revenue activities continued to gain traction, led by relationships including those with Apple, Wal-Mart, and Amazon. To summarize the national media performance, our digital platforms continued to perform strongly and, combined with consumer related performance, drove adjusted EBITDA growth both for the fourth quarter and the year. Turning to Slide 8 and Local Media Group results, Local Media Group revenues were $204 million, up 22%. Revenue growth was led by non-political spot advertising and retransmission revenues, which were up 50% and 5% respectively. Looking more closely at non-political spot advertising performance, we delivered revenue growth in all 25 non-political spot categories we track. Of particular note, in the fourth quarter we saw the strongest growth in the professional services, automotive and gaming categories which were up 57% collectively. Digital, third party and other revenues, which includes MNI Targeted Media, grew 57% driven by development of new categories, including vaccine awareness and higher education. Adjusted EBITDA grew 44% to $55 million, primarily driven by higher non-political spot advertising. Finally, as it relates to the announced sale of our Local Media Group to Gray Television, we made good progress towards obtaining regulatory approvals. This includes Gray announcing the sale of its Flint, Michigan station last month. This is the only market overlap with Meredith’s portfolio. Additionally, while not related to our Local Media Group sale, Gray announced last week it completed the acquisition of Quincy Media. We remain on track to close our transaction in the fourth quarter of calendar 2021, as expected. Turning to Slide 9, fourth quarter ’21 free cash flow was $51 million, reflecting earnings growth partially offset by professional fees incurred related to the Local Media Group transaction. We continue to make progress improving our net debt leverage ratio, which was 3.7 times as of June 30, 2021 compared to 5.3 times last year. Our revolving credit facility balance was zero at June 30, the fifth straight quarter it has remained unused. We ended fiscal 2021 with $240 million of cash, an increase from March 31, 2021. These results include positive free cash flow generation. Additionally, during the quarter we redeemed $67 million of warrants issued to our former preferred equity partners in conjunction with the Time Inc. acquisition. We also incurred professional fees related to our proposed Local Media Group transaction. Turning to Slide 10, when we announced the Local Media Group sale on May 3, we also discussed our intention to expand the financial reporting to three segments starting in the first quarter of fiscal ’22, consistent with the way we began managing our business on July 1 of this year. These segments are digital, magazine, and the Local Media Group. The bar chart on the slide shows revenue for fiscal ’21 as reported with two segments and on a pro forma basis with these new segments, with magazine accounting for approximately 67% of national media group revenues and digital accounting for approximately 35%. Looking at adjusted EBITDA directionally in fiscal ’21, digital delivered roughly two-thirds of the national media group’s $392 million of adjusted EBITDA. The table at the bottom right gives direction where revenue line items will be included. Our effort has focused on isolating our magazine business while grouping our faster growing digital, licensing and performance marketing businesses into our new digital segment. We’re excited about our future digital growth, the differentiated position we continue to develop, and Meredith’s continued transformation to a digital first company. Now I’ll turn it back to Tom for closing thoughts on Slide 11.

Thanks Jason. Our consumers today continue to focus on celebrity and entertainment news, house and home, food, style, health, fitness and parenting, as well as news and information about their local communities. These fundamental lifestyle categories are Meredith’s cornerstone and are even more relevant in today’s market. In closing, I want to leave you with four key thoughts. First, our digital advertising and consumer related activities continue to deliver revenue growth driven by our trusted and powerful brands focused on women, proprietary technology platform, strong commercial partnerships, and our large audience reach. These assets are unique in the marketplace and form the basis for our differentiation. Second, consumer demand for our magazines in the fourth quarter was stable even as advertising performance is uncertain. In addition to showcasing our beautiful photography and long form storytelling, the magazine platform plays an important consumer awareness and marketing role for our powerful brands, including People, All Recipes, Better Homes and Gardens, and Southern Living. Consider our presence in the home with 36 million active subscriptions and our position at retail with 2 million newsstand pockets nationwide. While advertising demand is variable and uncertain, our connection to the individual consumer remains stable and durable. Third, we are on track to close the Local Media Group transaction in the fourth quarter of calendar 2021, as expected. We believe the sale will accelerate all of our top financial priorities, including materially reducing debt and freeing capital to invest in future high potential digital opportunities while also enabling capital returns to shareholders. Fourth, from an expense standpoint, we’ve seen evidence of inflation over the last six months consistent with others in our industry and across the broader economy, particularly paper, postage and employee-related expenses. Additionally, we anticipate incremental spending on strategic investments focus on fueling continued digital and consumer growth initiatives. As you know, we have a well established track record of careful expense management and we will bring that discipline to bear to the extent possible. As we look into our fiscal 2022 first quarter compared to the prior year period, assuming no changes in trajectory due to COVID or other macro factors, we expect digital advertising revenues up in the 20% range, magazine advertising revenues down in the mid-teens, and Local Media Group non-political spot advertising revenues to be up in the mid-teens. As I said in my opening comments, fiscal 2021 was remarkable and challenging. I’m proud of the way we responded to the challenges and capitalized on opportunities to deliver the second highest adjusted EBITDA in the company’s history. Our progress in fiscal 2021 sets the stage for a bright future. We possess a large and deeply engaged audience across multiple media platforms. Our proprietary digital and data analytic capabilities are delivering record performance and our pending Local Media Group transaction will enhance our ability to invest in future growth and return capital to shareholders. In closing, I want to take a moment to sincerely thank our talented and creative employees who made our fiscal 2021 results possible. This includes our sales and marketing professionals, support groups and editorial teams who earned more than 200 accolades and awards in fiscal 2021, including Parents and Food and Wine were named National Magazine Award Finalists by the American Society of Magazine Editors. People, All Recipes and In Style were named to the AdWeek’s hot list, and our stations in Kansas City, St. Louis and Atlanta earned prestigious Edward R. Murrow award with WGCL winning an overall excellence award. With that, we’ll open up the remaining time to your questions. Operator, please begin with our first question.

[Operator instructions] Your first question comes from the line of John Janedis with Wolfe Research.

Thanks. Good morning, Tom.

Good morning.

You talked about the funnel, so can you give more color on the magazine business? It’s going up against easy, or easier comps, and it looks like you’re expecting some weakness still here, so what are you hearing from advertisers in key verticals? Is there any line of sight for that advertising bucket to improve to flattish or even possibly grow at some point? Or does the growth really come from the mix shift to digital? And then maybe big picture, when you talk about M&A and digital opportunities, can you give us more color on the types of things you find interesting and do they need to be accretive in the short-term?

Yes. Great, John. Good morning. What we’re - obviously, there’s always a lot of things that go into performance, but what we’re hearing from clients on the print side, print is a great format for branding and longer-term brand building. And with the uncertainty of the pandemic and looking for quicker results, there’s been a shift, a significant shift to digital, which is more bottom of the funnel, transactional in nature, and that’s why you’re seeing a lot of growth in our performance marketing and it’s happening across the industry. So we’re cautiously optimistic that print is going to be recovering. We are seeing in certain categories, in our travel, in our luxury, we’re seeing signs of growth year-over-year coming up, but there are other areas where we hear – we still hear supply chain issues, commodity price increases from some of our bigger packaged good clients. So it is a little slower than we expected on the recovery, but we do expect a print recovery, because we’re down so far. But the digital performance has been outstanding. We continue to believe and are bullish on our portfolio of digital brands and the growth that we see there. I think what we’re looking is, on the digital side, I’m going to ask Catherine to make some comments. When we look at acquisitions and growth, we are really focused - laser-focused on the consumer side of our digital business and looking to grow consumer revenue in our digital space. So I think that we’re kind of focused on both internally and looking for acquisitions in that area. Catherine, you might make some comments on that.

Hi. Yes, Tom said it, so a balance of our revenue streams on the digital side of the business, so that would be anything that has consumer revenue associated with it, that could be subscription-based, it could be performance marketing-based, so in that area. Video, we’re growing our video nicely right now, but we could accelerate that through acquisitions in that area. And the third area may be around different categories or audiences, so those are really the three areas that we look at. And from that perspective, anything that we would add that’s around audiences would fit right into our strategic flywheel.

Great. All right. Thank you very much.

Thanks, John.

Your next question comes from the line of Dan Kurnos with The Benchmark Company.

Great. Thanks. Good morning. Let me press a little bit on the digital side here. Your September guide actually relative to the backdrop and what we’ve heard from other digital publishers is actually pretty impressive. A lot of other guys, including one of our favorites that we like to talk to you about, guided down sequentially from the June to the September quarter, given obviously increased mobility and a change in some of the trends. So can you just talk about, obviously, People had a tremendous quarter, continues to be strong. Can you just talk about what you’re seeing and how we should think about digital relative to some of the COVID tailwinds starting to come out? Do you feel comfortable that this is a good base, even as we see increased mobility from here?

Yes, I’m going to ask Catherine to dig a little deeper. But, Dan, to your point, I think, obviously, our fourth quarter performance in digital, 80% growth was off a lower base related to COVID. But when you start looking at our Q1, we were up last year. I think we were in the high 20s last year and now we’re predicting again, so strong year-over-year growth. Catherine, you want to make some comments?

Yes, it’s a combination of our brands and a flight to quality from that perspective, pricing. So we are still seeing significant increase in pricing year-over-year across the board between all of our products. And then of course our data and platform is really driving a lot of significant scale and results right now. So we’re able with our diverse ad product portfolio to deliver a variety of different solutions for advertisers.

And while we look at our guide on advertising, while print is a little softer, the strength of digital, we will be up in overall advertising year-over-year.

Great. And then maybe just one for Jason, or Tom if you want to pitch in too, just on the margin loss here, some of the cost inflation commentary, obviously, some of the COVID costs coming back in as well. You had a really good June quarter, 18% in NMG. I want to focus on NMG, obviously. Directionally, how do we think about kind of margins over the balance of this year relative to kind of how you finished off 2021, understanding obviously that there is going to be seasonality in there, too?

Yes. I think, Dan, as you said, there’s some lumpiness in there in terms of some of the cost comments that Tom made. I’d say that we have investments in kind of strategic digital investments, it’ll probably most likely sit there in terms of roughly half the cost. In terms of print inflation, obviously, the U.S. Postal Service, inflation rates, those types of things, but we’re working to kind of offset that, so I wouldn’t expect that to have a material change in terms of rate. And then broadly across everybody, this past year, we had specific cost actions that we took that were temporary, that both were in the magazine business and the digital business, so I’d say that would kind of hit both businesses. But again, with top line growth in the advertising side, we shouldn’t be able to kind of hold that up. So we’re not giving guidance in terms of margin rates on the go-forward, but those would be the comments that I’d share.

Yes, I think, Dan, as you look at the -- we’re excited to come out when we report our first quarter with our new segments. And to Jason’s commentary in the script, around our - the digital side of the business now approximately representing two-thirds of the National Media Group EBITDA for the prior year, you can start thinking about the margins related to that. So you’re kind of thinking in the range of television margins related to our new digital segment as you go forward.

Awesome. Thanks for all the color, guys, this quarter. Way to finish the year strong.

Thanks.

[Operator Instructions] Your next question comes from the line of Jason Bazinet with Citi.

Thanks, good morning. I just have one question. At least relative to our estimates, the ads were about in line but it was really the consumer side on the national segment that really did very well. Do you think that stimulus played a role in the quarterly strength in terms of some of that healthy licensing and newsstand, and some of the other things that you highlighted, that will be difficult to replicate, or is your sense that stimulus was really a non-event?

You know, I’m sure stimulus obviously is helping the broader economy, but I think this has been a long-term strategy of ours to build up specifically our performance marketing and ecommerce activities on our digital side of the business. I think our comments kind of speak for themselves when you start thinking that we generated a billion dollars in retail sales from our activity associated with that, and now getting a piece of that action. We’re bullish on that side of the house, and then even on the magazine side, we’ve talked about in the prior year, the strength of the consumer demand for magazines. In our premium publishing area for the year, we were up 10% in revenue in our premium publishing, what we sell on the newsstand and sell close to 20 million copies, up a million copies. That was strong performance in the fourth quarter. Then when you start thinking about we’re looking to get more direct-to-publisher. We’ve been investing--you know, lifetime value of subscriptions on the magazine side, the highest value is our direct-to-publisher, where we have the direct relationship. When we look at our fourth quarter, direct-to-publisher renewals were up about 5%, and then direct-to-publisher new was up about 47%, so that really bodes well for magazine subscriptions longer term. The issues we’ve been having is related to advertising, but the consumer demand both on our digital side and on our magazine side are really kind of outstanding.

Okay, that’s great. Thank you.

Your next question comes from the line of Kyle Evans with Stephens.

Hi, thanks. Congrats on a very strong digital ad quarter. I think we’re all sitting here trying to figure out where it’s going to settle out with the 80% quarter going to a 20% guide, and Catherine, I know I’m not going to be able to trick you into guiding us, but maybe if you could just talk at a high level about where you think sessions will go over the next 12 months, where pricing will go over the next 12 months, where ad mix will go over the next 12 months, and then I’ve got a follow-up question. Thanks.

Sure. I think sessions will hover around a likelihood in that flat to slightly up range - could be slightly down a little, but I sort of focus on the flat because we had such a strong quarter or year last year. Pricing is up significantly for us, and that’s across the board in all of our ad businesses, so that goes from our direct business to our premium programmatic business to our open programmatic business, and that is again because of a lot of the investments we made over the years in data and our proprietary platform that’s able to deliver real specific audiences against real context with trusted content. I think there’s pricing opportunities. I also think our performance marketing business has got a lot of growth left in it. We’re making investments this year that return quite quickly for us, so I’d say those two big areas are the ones that I would look at. Finally, it’s our direct relationships with our clients that allow for a more multi-year, multi-million dollar, really integrated partnerships with large, large clients, from the ones that Tom has mentioned on the phone today to others that are utilizing these new integrated products that we have. Hope that’s helpful.

It is, thank you. I guess you’re not going to get a whole lot of TV questions going forward, but I think I’ll sneak one more in before it goes away. Just a quick update on your retrans sub count, please. Thank you.

Great. Patrick?

Yes, we’re seeing the sub counts continue. We lose more cable and satellite and pick up more OTT on a regular basis, and I think Jason, for the year, what were we at for subs - flat to down one?

Yes, I think it was down one, is the right ballpark.

Yes, and as a reminder, on our cadence, we have two major deals coming up at the end of the year.

While I’ve got you, do you have an OTT contribution for overall return subs?

I don’t have that breakout in front of me, but we can get that to you in the follow-ups.

Great, thank you.

Sure.

There are no further questions at this time.

Great. Again, I want to thank everyone for your time today and your continued support. We look forward to talking to everyone again soon next quarter. Thank you.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.