Greetings and welcome to the Salem Media Group First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the conference over to your host Evan Masyr, Executive Vice President and Chief Financial Officer. Thank you. You may begin..

Welcome and thank you for joining us today for Salem Media Group's first quarter 2021 earnings call. As a reminder if you get disconnected at any time, you can dial back in or listen from our website at www.salemmedia.com.

Joining me on the call today are Edward Atsinger, Chief Executive Officer; David Santrella, President of Broadcast Media; and David Evans, President of Interactive and Publishing.

We'll begin in just a moment with our prepared remarks and once we are done, the conference call operator will come back on the line to instruct you on how to submit questions.

Please be advised that statements made on this call that relate to future plans, events, financial results, prospects, or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on currently available information.

Actual results may differ materially from those anticipated and reported results should not be considered an indication of future performance.

We do not intend and undertake no obligation to update our forward-looking statements including forecasts of future performance, the potential for growth of existing markets, the opening of new markets, or the potential growth from future acquisitions.

This conference call also contains non-GAAP financial measures within the meaning of Regulation G, specifically station operating income, or SOI, EBITDA, adjusted EBITDA, and adjusted free cash flow.

In conformity with Regulation G, information required to accompany the disclosure of non-GAAP financial measures is available on the Investor Relations portion of the company's website at salemmedia.com. With that I will now turn the conference call over to Edward Atsinger.

Ed?.

Thank you, Evan, and thanks to all of you for being on today's call. I'm pleased to say that Salem's business continues to recover and the first quarter of 2021 was the best-performing quarter we've seen since the start of the pandemic.

In my prepared remarks, I'll focus on our Q1 financial results, our continued growth in digital, and an update on M&A. I'll then turn the call back to Evan who will provide more detail on Q1 financial performance and we will this year give guidance for Q2 and Evan will do that in his closing remarks.

So, then for the first quarter of 2021, our total revenue increased by 1.9%. Expenses decreased by 6.2% resulting in a 131.1% increase in adjusted EBITDA. Now, I recognize the financial performance in the first quarter of last year included the impact of the beginning of the COVID-19 pandemic.

Specifically beginning on March 16, 2020, we started to see significant cancellations of ad revenue as businesses began to shut down. So, you could dismiss the 131% growth in adjusted EBITDA simply a comparison to a very low adjusted EBITDA in 2020 and there's some truth to that.

However, what makes the 2021 adjusted EBITDA of $7.9 million a bit more noteworthy is the fact that it's actually 4% higher than the first quarter of 2019's adjusted EBITDA. It's also worth mentioning that included in first quarter expenses as an expense item of approximately $700,000 which represents a one-time bonus we paid to our employees.

We decided to give back 25% of what our employees lost last year from the pay cuts that were made to deal with the COVID crisis.

While neither the economy nor our businesses are back to where we'd like them to be, we've made enough progress that we felt it was appropriate to show our appreciation to our employees for the tremendous work they've done in helping us to navigate through the COVID-19 crisis.

One area that has continued to drive our success is the growth in our digital revenue. On our last call, I discussed the recent launch of Salem Podcast Network that was launched with one podcast featured Dinesh D'Souza. Since then, we've added podcast feature in Charlie Kirk and Todd Starnes.

And of course, for many years, we had the podcast product from all of our syndicated -- nationally syndicated hosts and some of our local hosts as well. Podcast revenue is ramping up nicely and we expect to continue to see revenue growth as we add more high-profile personalities. Our overall digital revenue increased 24.6% to 16.7% in Q1.

In total, digital revenue represented 28.1% of Salem's total revenue in Q1 2021. Included in Q1 digital revenue is Salem Podcast Network, Salem Surround, Salem Now are over-the-top streaming movie business that was launched in the second quarter of 2020 and of course our national digital division.

Let's take a look at results by division to give you a little more perspective. For the first quarter of 2021, broadcast revenue decreased by 2.5% when compared to the first quarter of 2020. Remember that last year through two and a half months of the first quarter, there was a no COVID impact.

This year, the economy continues to remain partially closed particularly in states like California which is one of the Salem's biggest radio markets. And you can see the impact on looking at broadcast revenue by month.

January broadcast revenue was down 8.1% compared to prior year; February broadcast revenue was down 5.9%; while March broadcast revenue was actually up 6.3%.

It's also worth noting that the 2.5% decline in broadcast revenue compares quite favorably to the overall broadcast market which was down 13.6% in markets where we operate according to Miller Kaplan.

The strongest performing segment within our Broadcast division was Broadcast Local Digital revenue which includes the new digital initiatives Salem Surround, Salem Now, and Salem Podcast Network, all of which are continuing to make substantial progress with a 64.7% increase in first quarter local digital revenue.

Additionally, our national network revenue had another solid quarter with revenue up 11%. This growth was driven by the addition of the Charlie Kirk Show which was launched in October 2020 by increased affiliates to America First Sebastian Gorka and a growing affiliate list for Charlie Kirk.

Spot advertising revenue in total was down 18% with a 21.7% decline in local advertising revenue and a 7.5% decline in national advertising revenue.

This again can be explained by the fact that the economy was still completely open in January, February, and the first half of March last year, but it is still not fully opened -- I think it was still not fully opened up in Q1 2021.

You can see it in the monthly numbers with total spot revenue down 26.3% in January, 28% in February, but up 1.2% in March. National Block Programming was down 4.8% in the first quarter of 2021 as compared to first quarter of last year.

When the pandemic started a little over a year ago, we did have a small number of cancellations, primarily from organizations that are dependent upon live in-person events to make up a significant portion of both their activities and their budget.

Expenses in the Broadcast division were down 10.7% due to reduced bad debt expense and lower employee-related costs, due to lower sales commissions from reduced sales, salary sales -- salary savings from the layoffs that we made last year, a lot of reduced travel and entertainment costs and some reduced health care plannings.

At our National Digital division revenue was up 5.7% driven by increases at Eagle Financial Publications, primarily in response to increased spending for marketing.

There were also increases in revenue at Church products, which has seen an increase in demand for its videos with church closures and virtual services, and also with the timing of Easter affecting it a bit and the increases in town hall VIP.

These increases in revenue were partially offset by declines in page views of town hall media, which came off of a high-traffic fourth quarter 2020 that included the Presidential election.

Expenses in the National Digital division were up 4.2% due to the increased paid marketing at Eagle Financial, partially offset by layoffs and other cost savings instituted last year. Finally, revenue at our Publishing division increased 43.4%.

This growth was largely the result of increased book sales at Regnery due to a stronger book release schedule in the first quarter of this year as compared to last year. In particular, we had robust sales from The Enemy Within by David Horowitz, Fish Out of Water by Eric Metaxas, and Fault Lines by Voddie Baucham.

The second quarter should have a strong financial performance as well as we just released entered Josh Hawley's book, The Tyranny of Big Tech, two days ago. Despite the large growth in revenue, Publishing expenses were up only 2.8%, again due to cost savings measures that we implemented earlier last year.

Before I wrap up my prepared remarks, with a brief discussion on M&A, I want to mention that we applied for and received $11.2 million in loans under the federal government's Paycheck Protection Program. We will be using all of the funds for prescribed expenses in order that we can get the loans forgiven.

With respect to M&A, we've made a few interesting acquisitions to report. On February 9, we entered into an agreement to acquire two AM radio stations in the San Francisco market for $600,000.

In our history, it's been a rare opportunity for us to acquire radio stations that are already in our strategic formats and that we don't have to reformat with existing cash flow. One of the AMs is in our Foundational Christian teaching and talk format, and the other one is in an urban gospel format.

This opportunistic acquisition will be immediately delevering. We expect to close this transaction during the second quarter. Also, on April 28, we acquired the Centerline New Media domain and digital assets for $1.3 million in cash. The digital content library will be operated within our Church Products division.

With respect to sales, on March 18, we closed on the sale of WKAT (AM) in Miami for $3.5 million. With this disposition, we've exited the Miami market. Additionally, on April 20, we entered into an agreement to sell Singing News Magazine and the Network Singing News Radio for $127,000 plus the deferred subscription liability of approximately $400,000.

We expect this to close later this month. Finally, on April 10, we entered into an agreement to sell approximately 34 acres of land in the Dallas metro area for $12.1 million. We will retain enough of the property in the Southwest corner to -- of the site to operate our stations there.

And following there will be a due diligence period and the satisfaction of several contingencies, but we fully expect to close this transaction in the early part of the third quarter. I'd mentioned are exploring other opportunities in prior calls.

There are other real estate transactions under consideration that looked promising, and I will certainly update you on all on future calls and anything that develops in that area. So, let me conclude my prepared remarks with some final thoughts. 2020 was a very challenging year due to COVID-19.

As a result, Salem has taken in significant financial hit that caused our leverage to increase from just over six immediately prior to COVID to a high of almost nine.

But as a result of our unique features of our Block Programming business model and the significant growth of Salem's Digital business, our losses were much less than most of if not all of our radio peers.

With the rollout of the vaccines and the reopening of the economy our financial results are bouncing back with terrific financial results in Q1 2021, and as you will hear from Evan, in just a moment, encouraging guidance for Q2.

Add to this, the $11.2 million in PPP loans and the Dallas land sale plus other land sales we're working on, we're on a clear path of getting our leverage significantly improved in very short order. And with that, I'll turn the call back to Evan for additional details on the quarter's performance and to give you guidance for Q2.

Evan?.

Thank you, Ed. For the first quarter, total revenue increased 1.9% to $59.4 million. Operating expenses on a recurring basis decreased 6.2% to $51.4 million, which resulted in a 131.1% increase in adjusted EBITDA to $7.9 million.

Net broadcast revenue decreased 2.5% to $44 million and broadcast operating expenses decreased 10.7% to $33.3 million, resulting in station operating income of $10.7 million, an increase of 36.3%. On a same-station basis, net broadcast revenue decreased 1.9% to $43.9 million and SOI increased 32.1% to $10.9 million.

These same-station results include broadcast revenue from 95 of our 98 radio stations in our network operations and represents 99.7% of our net broadcast revenue. I'll now briefly review our performance based on strategic formats. 37 of our radio stations are programmed in what we call our foundational Christian teaching and talk format.

These stations contributed 38% of total broadcast revenue and decreased 8.4% for the quarter. Our 32 news talk stations had a decrease of 11.6% in revenue for the quarter. Overall, these stations contributed 17% of total broadcast revenue.

Revenue from our 12 contemporary Christian music stations contributed 16% of total broadcast revenue and decreased 10.1% for the quarter. Our network revenue increased 11.0% for the quarter and represents 11% of our total broadcast revenue. Revenue from our National Media division increased 5.7% to $9.6 million and represents 16% of total revenue.

Our publishing revenue increased 43.4% to $5.7 million and represents 10% of our total revenue. As of March 31, we had $216.3 million in bonds outstanding and nothing drawn on the revolver. We have recorded that Paycheck Protection Program or PPP loans of $11.2 million as debt on the balance sheet and we'll continue to do so until forgiven by the SBA.

We also had $23.3 million in cash. Our leverage ratio as defined by our credit agreements was 7.30. If however we net the cash, we have on hand at March 31, and assume the SBA will forgive the PPP loans, our leverage ratio would be 6.19.

And now that the economy appears to have stabilized a bit more, we feel comfortable resuming our practice of providing guidance. For the second quarter of 2021, we are projecting total revenue to increase between 13% and 15% from second quarter 2020 total revenue of $52.9 million.

We are also projecting operating expenses before gains or losses on the sale of disposal of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration impairments, depreciation expense and amortization expense to increase between 6% and 9%, compared to second quarter 2020 non-GAAP operating expenses of $50.1 million.

This now concludes our prepared remarks and we would like to answer any questions. So I'll turn it back over to the operator. .

Thank you. And ladies and gentlemen, at this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Lisa Springer with Singular Research. Please state your question..

Thank you. My question concerns to a kind of a general question about the broadcast portfolio.

Are you – I'm wondering if there are certain geographic areas, where you would like to add more stations? What's driving your decisions to acquire stations again?.

Well, with regard to the modest investment-grade to San Francisco station, that's in format, it does the same thing that we do with our CapEx. We're much more dominant there. The owner wanted to exit, wanted to retire.

There may have been some health issues and it was – we were able to pick it up on a very, very attractive basis, so that it's immediately delevering. And we can roll it. We can tuck it into our San Francisco operation. We have two other stations – or three other stations there already. So we'll add those to that cluster and it's an easy tuck-in.

Very little expense. We'll maintain the revenue. So we're not really – there's not really a big expansion program. That was just opportunistic. You can tuck it in. And if you can recover your investment in a very short order maybe a 1 year, 1.5 year to get enough profit, the way we will run it that covers the whole investment there.

Why not? We would do that. But typically right now we're being very prudent. We're concerned about leverage. We want to continue to improve the balance sheet. And we're not going – our policy right now is to focus on any acquisition that we might consider would have to be delevering or have to have some extraordinary strategic importance.

So I'm not really – we're not really moving towards an expansion of our footprint..

Okay. Thanks very much..

Our next question comes from Michael Kupinski with Noble Capital Markets. Please state your question..

Thank you, Ed. Congratulations on your quarter you guys. So I know business models emerge. And I know – and I was wondering about your expansion plans. And I know I asked this on the last call about Salem Now.

But as well as it's doing I was just wondering how you could expand maybe the original content, acquire content? And just maybe how you envision the service going in the future? And then secondly, regarding your Q2 guidance, I was wondering if you could give a little bit more color on your Broadcast division? Whether or not you're anticipating political advertising in there? Particularly, because of maybe the California recall.

I know you have some stations that might benefit from that as well.

Just kind of give us your thoughts on political maybe for going forward too?.

So Michael with regards to Salem Now, yes, we continue to look for good solid content for Salem Now. Salem Now really consists of two categories of content. Some is free. And then other is TVOD, transactional video-on-demand content.

And so the free content things like the video version of the Dinesh D'Souza podcast, soon-to-come the video version of the Charlie Kirk podcast and a whole lot of other free titles are there really to both provide impact and entertainment and information for our listeners but also then to attract people to the paid content that we have.

And so we're spending a lot of time looking for the right content there. It got to be the either Christian or conservative in nature. That's what Salem Now is. And that's just kind of a driving task that we have every day now for that platform.

With regards to revenue, political revenue, I don't know that that's really driving our guidance as the Gavin Newson recall and the potential election advertising there. I don't think that's really a part of our guidance right now..

Do you have any thoughts on political....

Michael, do you want to say that again?.

Yes. I'm sorry, I didn't mean to overtalk.

I was just wondering if you had thoughts on political and whether or not you think that you might see a benefit for – from the recall maybe in the fourth quarter or so?.

I think so. I think so. But I don't think they're going to – they haven't scheduled the recall election date and the consensus is that it'll probably be in November. So it's – it won't probably won't impact Q2. But Q3 and Q4 yes, I think we'll see some impact..

Got you. And then in terms of your publishing side of the business. As you look towards the balance of the year, do you anticipate that – can you just kind of give us a flavor of the titles? I'm sorry, if this question was already asked. I kind of got on a little late.

But in terms of the number of titles coming into the fourth quarter, I know we're going to be heading into a political year.

I just wanted to see if the pace of titles are going to pick up as we go into another election year?.

No. So this year is a non-election year. So it's just – the Publishing business is always smaller in non-election years than election years. So I can already say, looking at the kind of book schedule, looking ahead, that 2022 is going to be stronger than 2021. I think in '22, we'll probably see titles from David Limbaugh, from Dinesh D'Souza.

2021, I look ahead I think our two biggest titles this year will be the Senator Josh Hawley book that we released a couple of days ago; The Tyranny of Big Tech, that debuted top 10 on the Amazon top 100 list, so got off to a great start.

And then later in the year, I think our biggest title in the second half of the year will be Dennis Prager's, Deuteronomy Bible commentary, which is the third in its series. Genesis and Exodus both performed extremely well. So, I think that will be our strongest title in the second half of the year..

Thank you. And then last question. I know that there was some thought about the prospect of maybe some of your talent picking up some of the spots that Rush Limbaugh may have had.

And I was just wondering, have you seen some success and pickup in some of your conservative talent radio hosts and so forth?.

We have so far, Michael. We've seen the Charlie Kirk Show in particular, pick up a couple of strong handfuls of new affiliates. Most notably, WABC in New York, which picked up the Charlie Kirk Show at least one hour of it, and that was really the debut radio station for Rush Limbaugh. So we see that as a kind of a great opportunity for us.

So we have seen some affiliate growth since....

We expect to see more, Michael. We've got two programs in that daypart. We got the Dennis Prager Show and the Charlie Kirk Show. And we launched Charlie Kirk in that daypart because we saw it was likely that Rush would step down as his health deteriorated and fortunately that happens. So, we've got -- we offer two programs in that daypart.

Premier, which indicates the Limbaugh show, is still carrying the best of Limbaugh and they haven't decided yet on where they're going to go. I think when they decide where they're going to go more and more affiliates will then decide what they want to do. But we've got a lot of interest and I will -- we've already seen a number of new affiliates.

I expect, we'll see more in the -- over the next quarter or two..

Great. Thanks. That’s all I had. Thank you..

Thank you. [Operator Instructions] Our next question comes from Steven Pfeiffer with Wells Capital Management. Please state your question..

Hello and thanks for taking the time to answer the question for me. I have a couple of quick questions about the debt structure. I just want to make sure that I understand this new debt that you have on the $11.2 million here that the Paycheck Protection Loan. How do we ever -- the timing on this.

When do we discover if this is something that you have to repay? And when would you have to repay it? And the interest that's on there is, I think I saw and read there was a 1% debt on there.

When do we discover the resolution of this debt?.

So first of all, the loans themselves are five-year loans with 1% interest. We will -- after the -- there's a 24-week period from the time that you get the loan to spend the money in prescribed manner, which is generally for the most part payroll, some utilities and other things. But we're going to be spending it on payroll.

Then, probably in the third quarter, we will be submitting paperwork to the SBA to get the loans forgiven. And I would expect by the fourth quarter -- sometime in the fourth quarter, we would have a better indication that the loans are forgiven or if they want more paperwork, it might take a little longer than that.

But that's kind of the time frame, we're expecting at this point..

Is there any decision in the process on whether it will be forgiven or not, if they decide that they -- the money was spent properly or not properly, or they can change their mind inside? No we don't feel like it we now give us the money back..

I'm not sure they can say whether you spent it accordingly or not. I mean, we're going to -- we'll have records to show that every dime went to payroll. So, I don't think that's going to be an issue.

So our expectation at this point is that the loans will be forgiven and we're doing everything in the manner to make sure that we are able to get those forgiven..

Okay. That's great.

The next question is, now that you have a significantly higher amount of cash than you normally do offer there, what's the time frame for figuring out what to do with the extra cash?.

Part of it's going to be when these loans are forgiven because, we want to make sure that we do again everything in accordance with the law to make sure that we spend money in the right manner. I think when the loans are forgiven, we could look at two things such as potentially retiring more debt, but we're going to be cautious until that time..

Okay. So maybe third quarter or fourth quarter will be the rough time frame for deciding on when to use the cash.

Is that an accurate time frame?.

That's correct..

Okay. Great. And then the last thing is, I'm up here in San Francisco and I just -- I'm wondering about the competition there. You just picked up a couple of new stations in the area in the AM market.

And just coincidentally happened to notice on the radio that at the exact same time frame as you picked up the AM station a brand-new competitor to you appeared in the FM stations on there.

Does this have any impact on you in competition wise or different business expenses on those lines?.

It won't be significant. I'm familiar with the FM. It's a Class A. And the programming that's on the station we picked up has been stable. It's been audit for 20 -- almost 20-plus years. We don't really expect to see much change there.

The organization that bought that station, I think they're out of Milwaukee and they kind of have a different lineup and a different approach..

Okay. Okay. That’s it all the questions from me. Thank you, very much..

Thank you..

Thank you. And our next question comes from Dorsey Gardner with Kelso Management. Please state your question..

Hi, thanks for taking my question. I see you retained was Riley for a shelf registration? And given the price of your stock, is that a good thing to do at this point in time? I guess that's my first question. Second question is that, if you could talk about towers a little bit.

Is there sort of a group of assets here that you could either borrow against or use the locations for cell towers or whatever? And I guess, if I could sneak in number -- third question.

That's 40% of the people who vote in America seem to be unhappy with the Main Street media and you appear to be sort of catering to a different group of people, obviously, some overlap. But -- and if anybody went to business there are people that -- we're all taught that don't look at transportation.

You're not in the railroad business, you're in the transportation business and looking at things more broadly. And I see let's say Town Square has broken out more into the digital media business and seems to have good growth projects there.

But is there some way you could scope out something that's a little bit different from what you're doing? Anyway sorry for all the questions. But thanks..

With regard to the ATM filing that's just out of the abundance of caution. We wouldn't take advantage of it with the current stock price. We think the stock is way undervalued and -- but it's there.

And if the stock price improves and if there was some need that arose, some situation where we needed to raise capital or leverage or whatever purpose it's there. It's very inexpensive to set it up. And I don't really anticipate, we have no plans to use it at this point. But why not. It's easy. It's inexpensive and it's there.

And if things improve dramatically and your stock price goes up to a point where you might want to raise some equity capital well it's there. But we have no plans to use it at this point. And then with regard -- I'm trying to remember your second question..

Towers..

Well, the towers. You have a population of towers there that might be something you can either borrow against it at a low rate, or that you could use the locations. The permitting takes so long to get a tower for say the cell business in particular. But could you stick up a cell tower? This is probably really stupid idea.

But maybe if you could talk about that?.

No, it's not a stupid idea. In fact we've done it in a few places. We've done it in Philadelphia and we explored it and I think have the option to do it in a site in Miami that we've retained after we sold the property there but we retained the right to participate in a cell location. You're right.

It's easy to put a -- it's very difficult to get permits to put towers up. But if you're already in an established site it's easier. And so that is an area that we're looking at and have looked at. And I think there probably will be opportunities where we can take advantage of that opportunity.

As I think I've mentioned in other calls, we've reviewed all of the real estate holdings that we've had. And where we have a real estate holding that can be -- that can have a dual-purpose or where we can relocate it to a less expensive piece of property and monetize that property at a higher level we've looked at that.

In fact that's what we're doing currently in Dallas that we talked about and we're exploring that across the whole landscape of properties that we have. We've got them all over the country. So no it's not a stupid question at all. And then finally, you said a lot of voters are disillusion.

I think you said with the current news you don't have much confidence in it. And I think that's true. I think the audience -- we syndicate a lot of news. We have SRN News and we have townhall.com -- townhallnews.com. And we got nearly 2,000 affiliates I think to take that content daily.

I think that our listeners have a lot -- high degree of confidence in our credibility. We're very careful and -- but -- so it is an opportunity..

Another question. Can you -- there's digital radio where you can split off. I guess, you can ride a different station on the -- was it the FM stations I guess. So you split off a different station from that.

Can you take advantage of that, or is that relevant to your business?.

And we do -- that's HD Radio and that's the ability to have multichannel. So you can have as an example 971 A, B, and C, and we do that in some markets in markets where we are broadcasting in HD. Typically we'll put our AM radio stations on the FM band by putting them on the HD sub-channels..

Okay.

I mean does that have a meaningful opportunity for the business?.

Right now not so much. HD penetration is I think around 15% or 16% at this point in time. And so it's good to have them, because you're putting an AM station on the FM band and that's good, but it does have somewhat limited reach at this point..

Okay. I noticed that CarsNow have digital radio bands in them, and which I would expect would increase your audience perhaps, but that seems to be not -- it doesn't seem to be meaningful for the automobile companies. It would probably not for you. I don't know.

But any comment on that?.

That's where the HD radio listening is taking place in cars. That's 95% of it is in cars. And the most of the -- and the penetration increases every year. You get a little -- more new cars come out more have that capability..

I see. Okay. Well, great. Wonderful answers. Thank you very much..

Thank you..

Thank You..

Thank you. And now we have another question from Steven Pfeiffer with Wells Capital Management. Please state your question..

Thank you. Sorry to bother you with one more question out here. But I just wanted to get a little clarity please on your guidance you put out here. Your revenue is pretty easy to get the 13% to 15% in the base revenue you projected off of. But the expenses you're trying to have as a guide off here.

Last year your second quarter your expenses were $53 million -- almost $54 million. But I think it was supposed to not project the growth off of that number but instead a different number.

I'm trying to figure out what exact expense number I'm supposed to be using here for projections please?.

Well, the guidance we gave was a 6% to 9% increase on 2020's expenses..

Isn’t 2020 second quarter expenses $53,000,759?.

I'm not sure what you're looking at. We are at $50.07 million. You may have depreciation and amortization in there I'm excluding that..

So minus D&A. So D&A does not count. Okay. That is where I'm getting confused. Perfect. Thank you very much..

You're welcome..

Thank you. And there are no further questions at this time. I'll turn the call back over to Mr. Atsinger for closing remarks. Thank you..

All right. Again thanks to all of you for joining us. We look forward to visiting with you again when we report Q2 earnings..

Thank you. This concludes today's conference. All parties may disconnect. Have a good evening..