gtn20220331_10q.htm

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 March 31, 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 definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one).

Large accelerated filer ☒ Accelerated 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 Act). Yes ☐ No ☒

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

Common Stock (No Par Value)		Class A Common Stock (No Par Value)
88,117,327 shares outstanding as of April 29, 2022		7,573,222 shares outstanding as of April 29, 2022

INDEX

GRAY TELEVISION, INC.

PART I.	FINANCIAL INFORMATION	PAGE

Item 1.	Financial Statements

	Condensed consolidated balance sheets (Unaudited) – March 31, 2022 and December 31, 2021	3

	Condensed consolidated statements of operations (Unaudited) – three-months ended March 31, 2022 and 2021	5

	Condensed consolidated statement of stockholders' equity (Unaudited) – three-months ended March 31, 2022 and 2021	6

	Condensed consolidated statements of cash flows (Unaudited) – three-months ended March 31, 2022 and 2021	7

	Notes to condensed consolidated financial statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	27

PART II.	OTHER INFORMATION

Item 1A.	Risk Factors	28

Item 6.	Exhibits	28

SIGNATURES		29

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GRAY TELEVISION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions)

	March 31,		December 31,
	2022		2021
Assets:
Current assets:
Cash	$	247	$	189
Accounts receivable, less allowance for credit losses of $15 and $16, respectively		644		624
Current portion of program broadcast rights, net		24		35
Income tax refunds receivable		21		21
Prepaid income taxes		22		40
Prepaid and other current assets		60		54
Total current assets		1,018		963

Property and equipment, net		1,181		1,165
Operating leases right of use asset		72		70
Broadcast licenses		5,309		5,303
Goodwill		2,649		2,649
Other intangible assets, net		773		825
Investment in broadcasting and technology companies		117		117
Other		15		16
Total assets	$	11,134	$	11,108

See notes to condensed consolidated financial statements.

GRAY TELEVISION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions except for share data)

	March 31,			December 31,
	2022			2021
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	23		$	59
Employee compensation and benefits		82			97
Accrued interest		82			52
Accrued network programming fees		41			34
Other accrued expenses		39			44
Federal and state income taxes		14			10
Current portion of program broadcast obligations		25			37
Deferred revenue		20			14
Dividends payable		13			13
Current portion of operating lease liabilities		9			9
Current portion of long-term debt		15			15
Total current liabilities		363			384

Long-term debt, less current portion and deferred financing costs		6,740			6,740
Program broadcast obligations, less current portion		4			5
Deferred income taxes		1,471			1,471
Accrued pension costs		23			24
Operating lease liabilities, less current portion		64			63
Other		15			14
Total liabilities		8,680			8,701

Commitments and contingencies (Note 9)

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 105,036,512 shares and 104,286,324 shares, respectively, and outstanding 88,117,327 shares and 87,539,056 shares, respectively		1,137			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, and outstanding 7,573,222 shares and 7,426,512 shares, respectively		41			39
Retained earnings		910			869
Accumulated other comprehensive loss, net of income tax benefit		(27	)		(27	)
		2,061			2,008
Treasury stock at cost, common stock, 16,919,185 shares and 16,747,268 shares, respectively		(227	)		(223	)
Treasury stock at cost, Class A common stock, 2,101,917 shares and 1,998,179 shares, respectively		(30	)		(28	)
Total stockholders’ equity		1,804			1,757
Total liabilities and stockholders’ equity	$	11,134		$	11,108

See notes to condensed consolidated financial statements.

GRAY TELEVISION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in millions, except for per share data)

	Three Months Ended
	March 31,
	2022			2021

Revenue (less agency commissions)
Broadcasting	$	804		$	530
Production companies		23			14
Total revenue (less agency commissions)		827			544
Operating expenses before depreciation, amortization and gain on disposal of assets, net:
Broadcasting		530			361
Production companies		26			17
Corporate and administrative		28			18
Depreciation		32			25
Amortization of intangible assets		52			26
Gain on disposal of assets, net		(5	)		(4	)
Operating expenses		663			443
Operating income		164			101
Other income (expense):
Miscellaneous (expense) income, net		(2	)		1
Interest expense		(79	)		(48	)
Income before income taxes		83			54
Income tax expense		21			15
Net income		62			39
Preferred stock dividends		13			13
Net income attributable to common stockholders	$	49		$	26

Basic per common share information:
Net income	$	0.53		$	0.28
Weighted average common shares outstanding		93			94

Diluted per common share information:
Net income	$	0.52		$	0.27
Weighted average common shares outstanding		94			95

Dividends declared per common share	$	0.08		$	0.08

See notes to condensed consolidated financial statements.

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENT 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		6

SEC Form 10-Q filed by Gray Television Inc.