10-Q 1 gtn20220930_10q.htm FORM 10-Q gtn20220930_10q.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

(Mark one)

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2022 or

 

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from _________ to _________ .

 

Commission file number 1-13796

 

Gray Television, Inc.

(Exact name of registrant as specified in its charter)

 

Georgia

 

58-0285030

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)

   

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, former address and former fiscal year, if changed since last report.)

 

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filerAccelerated filer ☐ 
Non-accelerated filer ☐Smaller reporting company  
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.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  No ☑

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock (No Par Value)

 

Class A Common Stock (No Par Value)

85,521,216 shares outstanding as of October 28, 2022

 

7,573,222 shares outstanding as of October 28, 2022

 

 

 

 

 

INDEX

 

GRAY TELEVISION, INC.

 

 

         
         

PART I.

 

FINANCIAL INFORMATION

 

PAGE

         

Item 1.

 

Financial Statements

   
         
   

Condensed consolidated balance sheets (Unaudited) - September 30, 2022 and December 31, 2021

 

3

         
   

Condensed consolidated statements of operations (Unaudited) - three-months and nine-months ended September 30, 2022 and 2021

 

5

         
   

Condensed consolidated statements of stockholders' equity (Unaudited) – three-month periods ended March 31, June 30, and September 30, 2022 and 2021

 

6

         
   

Condensed consolidated statements of cash flows (Unaudited) - nine-months ended September 30, 2022 and 2021

 

8

         
   

Notes to condensed consolidated financial statements (Unaudited)

 

9

         

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

22

         

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

29

         

Item 4.

 

Controls and Procedures

 

29

         

PART II.

 

OTHER INFORMATION

   
         

Item 1A.

 

Risk Factors

 

29

         

Item 6.

 

Exhibits

 

30

         

SIGNATURES

     

31

 

2

 

 

PART I.   FINANCIAL INFORMATION

 

Item 1.    Financial Statements

 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions)

 

  

September 30,

  

December 31,

 
  

2022

  

2021

 

Assets:

        

Current assets:

        

Cash

 $144  $189 

Accounts receivable, less allowance for credit losses of $12 and $16, respectively

  615   624 

Current portion of program broadcast rights, net

  38   35 

Income tax refund receivable

  22   21 

Prepaid income taxes

  61   40 

Prepaid and other current assets

  54   54 

Total current assets

  934   963 
         

Property and equipment, net

  1,366   1,165 

Operating leases right of use asset

  73   70 

Broadcast licenses

  5,326   5,303 

Goodwill

  2,657   2,649 

Other intangible assets, net

  687   825 

Investments in broadcasting, production and technology companies

  125   117 

Other

  15   16 

Total assets

 $11,183  $11,108 

 

See notes to condensed consolidated financial statements.

 

3

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions, except for share data)

 

  

September 30,

  

December 31,

 
  

2022

  

2021

 

Liabilities and stockholders equity:

        

Current liabilities:

        

Accounts payable

 $40  $59 

Employee compensation and benefits

  90   97 

Accrued interest

  86   52 

Accrued network programming fees

  39   34 

Other accrued expenses

  40   44 

Federal and state income taxes

  8   10 

Current portion of program broadcast obligations

  40   37 

Deferred revenue

  64   14 

Dividends payable

  14   13 

Current portion of operating lease liabilities

  10   9 

Current portion of long-term debt

  15   15 

Total current liabilities

  446   384 
         

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

  6,590   6,740 

Program broadcast obligations, less current portion

  2   5 

Deferred income taxes

  1,468   1,471 

Accrued pension costs

  16   24 

Operating lease liabilities, less current portion

  65   63 

Other

  14   14 

Total liabilities

  8,601   8,701 
         

Commitments and contingencies (Note 10)

          
         

Series A Perpetual Preferred Stock, no par value; cumulative; redeemable; designated 1,500,000 shares, issued and outstanding 650,000 shares, at each date and $650 aggregate liquidation value, at each date

  650   650 
         

Stockholders’ equity:

        

Common stock, no par value; authorized 200,000,000 shares, issued 105,104,057 shares and 104,286,324 shares, respectively outstanding 85,521,216 shares and 87,539,056 shares, respectively

  1,146   1,127 

Class A common stock, no par value; authorized 25,000,000 shares, issued 9,675,139 shares and 9,424,691 shares, respectively outstanding 7,573,222 shares and 7,426,512 shares, respectively

  44   39 

Retained earnings

  1,076   869 

Accumulated other comprehensive loss, net of income tax benefit

  (27)  (27)
   2,239   2,008 

Treasury stock at cost, common stock, 19,582,841 shares and 16,747,268 shares, respectively

  (277)  (223)

Treasury stock at cost, class A common stock, 2,101,917 shares and 1,998,179 shares, respectively

  (30)  (28)

Total stockholders’ equity

  1,932   1,757 

Total liabilities and stockholders’ equity

 $11,183  $11,108 

 

See notes to condensed consolidated financial statements.

 

4

 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except for per share data)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

 
   

2022

   

2021

   

2022

   

2021

 
                                 

Revenue (less agency commissions):

                               

Broadcasting

  $ 889     $ 581     $ 2,548     $ 1,648  

Production companies

    20       20       56       44  

Total revenue (less agency commissions)

    909       601       2,604       1,692  

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

                               

Broadcasting

    537       384       1,595       1,099  

Production companies

    16       13       56       39  

Corporate and administrative

    27       32       80       75  

Depreciation

    33       26       96       76  

Amortization of intangible assets

    52       28       156       81  

(Gain) loss on disposal of assets, net

    (1 )     51       (6 )     46  

Operating expenses

    664       534       1,977       1,416  

Operating income

    245       67       627       276  

Other expense:

                               

Miscellaneous expense, net

    (1 )     (1 )     (3 )     (7 )

Interest expense

    (94 )     (48 )     (254 )     (143 )

Income before income taxes

    150       18       370       126  

Income tax expense

    42       35       101       65  

Net income (loss)

    108       (17 )     269       61  

Preferred stock dividends

    13       13       39       39  

Net income (loss) attributable to common stockholders

  $ 95     $ (30 )   $ 230     $ 22  
                                 

Basic per share information:

                               

Net income (loss) attributable to common stockholders

  $ 1.04     $ (0.32 )   $ 2.47     $ 0.23  

Weighted-average shares outstanding

    91       95       93       94  
                                 

Diluted per share information:

                               

Net income (loss) attributable to common stockholders

  $ 1.03     $ (0.32 )   $ 2.47     $ 0.23  

Weighted-average shares outstanding

    92       95       93       95  
                      .          

Dividends declared per common share

  $ 0.08     $ 0.08     $ 0.24     $ 0.24  

 

See notes to condensed consolidated financial statements.

 

5

 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

(in millions, except for number of shares)

 

                                      

Accumulated

     
  

Class A

              

Class A

  

Common

  

Other

     
  

Common Stock

  

Common Stock

  

Retained

  

Treasury Stock

  

Treasury Stock

  

Comprehensive

     
  

Shares

  

Amount

  

Shares

  

Amount

  

Earnings

  

Shares

  

Amount

  

Shares

  

Amount

  

Loss

  

Total

 
                                             

Balance at December 31, 2020

  8,935,773  $34   103,100,856  $1,110  $862   (1,887,767) $(26)  (14,960,597) $(188) $(39) $1,753 
                                             

Net income

  -   -   -   -   39   -   -   -   -   -   39 
                                             

Preferred stock dividends

  -   -   -   -   (13)  -   -   -   -   -   (13)
                                             

Common stock dividends

  -   -   -   -   (8)  -   -   -   -   -   (8)
                                             

Issuance of common stock:

                                            

401(k) Plan

  -   -   390,389   7   -   -   -   -   -   -   7 

2017 Equity and Incentive Compensation Plan:

                                            

Restricted stock awards

  233,425   -   296,042   -   -   (110,412)  (2)  (239,597)  (4)  -   (6)

Restricted stock unit awards

  -   -   60,050   -   -   -   -   (18,275)  (1)  -   (1)
                                             

Stock-based compensation

  -   1   -   2   -   -   -   -   -   -   3 
                                             

Balance at March 31, 2021

  9,169,198  $35   103,847,337  $1,119  $880   (1,998,179) $(28)  (15,218,469) $(193) $(39) $1,774 
                                             

Net income

  -   -   -   -   39   -   -   -   -   -   39 
                                             

Preferred stock dividends

  -   -   -   -   (13)  -   -   -   -   -   (13)
                                             

Common stock dividends

  -   -   -   -   (7)  -   -   -   -   -   (7)
                                             

Issuance of common stock:

                                            

401(k) Plan

  -   -   3,655   -   -   -   -   -   -   -   - 

2017 Equity and Incentive Compensation Plan:

                                            

Restricted stock awards

  -   -   47,360   -   -   -   -   (16,991)  -   -   - 
                                             

Stock-based compensation

  -   1   -   3   -   -   -   -   -   -   4 
                                             

Balance at June 30, 2021

  9,169,198  $36   103,898,352  $1,122  $899   (1,998,179) $(28)  (15,235,460) $(193) $(39) $1,797 
                                             

Net loss

  -   -   -   -   (17)  -   -   -   -   -   (17)
                                             

Preferred stock dividends

  -   -   -   -   (13)  -   -   -   -   -   (13)
                                             

Common stock dividends

  -   -   -   -   (8)  -   -   -   -   -   (8)
                                             

Issuance of common stock:

                                            

2017 Equity and Incentive Compensation Plan:

                                            

Restricted stock awards

  -   -   -   -   -   -   -   (10,720)  -   -   - 
                                             

Stock-based compensation

  -   1   -   2   -   -   -   -   -   -   3 
                                             

Balance at September 30, 2021

  9,169,198  $37   103,898,352  $1,124  $861   (1,998,179) $(28)  (15,246,180) $(193) $(39) $1,762 

 

See notes to condensed consolidated financial statements.

 

6

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

(in millions, except for number of shares)

 

                                                                           

Accumulated

         
   

Class A

                           

Class A

   

Common

   

Other

         
   

Common Stock

   

Common Stock

   

Retained

   

Treasury Stock

   

Treasury Stock

   

Comprehensive

         
   

Shares

   

Amount

   

Shares

   

Amount

   

Earnings

   

Shares

   

Amount

   

Shares

   

Amount

   

Loss

   

Total

 
                                                                                         

Balance at December 31, 2021

    9,424,691     $ 39       104,286,324     $ 1,127     $ 869       (1,998,179 )   $ (28 )     (16,747,268 )   $ (223 )   $ (27 )   $ 1,757  
                                                                                         

Net income

    -       -       -       -       62       -       -       -       -       -       62  
                                                                                         

Preferred stock dividends

    -       -       -       -       (13 )     -       -       -       -       -       (13 )
                                                                                         

Common stock dividends

    -       -       -       -       (8 )     -       -       -       -       -       (8 )
                                                                                         

Issuance of common stock:

                                                                                       

401(k) Plan

    -       -       307,885       7       -       -       -       -       -       -       7  

2017 Equity and Incentive Compensation Plan:

                                                                                       

Restricted stock awards

    250,448       -       333,382       -       -       (103,738 )     (2 )     (138,959 )     (3 )     -       (5 )

Restricted stock unit awards

    -       -       108,921       -       -       -       -       (32,958 )     (1 )     -       (1 )
                                                                                         

Stock-based compensation

    -       2       -       3       -       -       -       -       -       -       5  
                                                                                         

Balance at March 31, 2022

    9,675,139     $ 41       105,036,512     $ 1,137     $ 910       (2,101,917 )   $ (30 )     (16,919,185 )   $ (227 )   $ (27 )   $ 1,804  
                                                                                         

Net income

    -       -       -       -       99       -       -       -       -       -       99  
                                                                                         

Preferred stock dividends

    -       -       -       -       (13 )     -       -       -       -       -       (13 )
                                                                                         

Common stock dividends

    -       -       -       -       (8 )     -       -       -       -       -       (8 )
                                                                                         

Issuance of common stock:

                                                                                       

2017 Equity and Incentive Compensation Plan:

                                                                                       

Restricted stock awards

    -       -       67,545       -       -       -       -       (17,463 )     -       -       -  
                                                                                         

Repurchase of common stock

    -       -       -       -       -       -       -       (2,646,193 )     (50 )     -       (50 )
                                                                                         

Stock-based compensation

    -       2       -       4       -       -       -       -       -       -       6  
                                                                                         

Balance at June 30, 2022

    9,675,139     $ 43       105,104,057     $ 1,141     $ 988       (2,101,917 )   $ (30 )     (19,582,841 )   $ (277 )   $ (27 )   $ 1,838  
                                                                                         

Net income

    -       -       -       -       108       -       -       -       -       -       108  
                                                                                         

Preferred stock dividends

    -       -       -       -       (13 )     -       -       -       -       -       (13 )
                                                                                         

Common stock dividends

    -       -       -       -       (7 )     -       -       -       -       -       (7 )