Townsquare Media, Inc.
Q2 2020 Earnings Call Transcript

Published: 11 Aug 2020

[Operator:]

Good morning and welcome to Townsquare’s Second Quarter Conference Call. As a reminder, today’s call is being recorded and your participation implies consent to such recording. [Operator Instructions] With that, I would like to introduce the first speaker of today’s call, Claire Yenicay, Executive Vice President.

[Claire Yenicay:]

Thank you, operator, and good morning to everyone. Thank you for joining us today for Townsquare’s second quarter financial update. With me on the call today are Bill Wilson, our CEO; and Stuart Rosenstein, our CFO and Executive Vice President. Please note that during this call, we may make statements that provide information other than historical information, including statements relating to the company’s future expectations, plans and prospects. These statements are considered forward-looking statements under the safe harbor provision of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These statements reflect the company’s beliefs based on current conditions but are subject to certain risks and uncertainties, including those that are detailed in the company’s annual report on Form 10-K for the year ended December 31, 2019, filed with the SEC. We may also discuss certain non-GAAP financial measures, including adjusted EBITDA and adjusted operating income, and make certain pro forma adjustments. Such non-GAAP financial measures should be used in conjunction with all the information contained in this quarterly, year end and current reports available on our website. At this time, I would like to turn the call over to Bill Wilson.

[Bill Wilson:]

Thank you, Claire and thank you all for joining us this morning. I’d like to start this call as I did our last one by sharing that our thoughts and prayers go out to all who have been affected around our country and the world in this unprecedented and challenging time that we are all living in. Our commitment and our obligation has never been greater to do our job, to do our best and to fulfill our responsibility to super serve our listeners, our clients and our local communities. The Townsquare team continues to impress me each and every day with their passion for what they do and their dedication to their local communities and our company as well as their adaptability as we work in a modified settings due to the unique challenges presented by the pandemic. Our offices are open across the country, and our first and foremost concern continues to be the safety and well-being of our employees and their families, and we have implemented numerous and prudent safety precautions in each of our offices to ensure this. Any team member returning to their office is doing so 100% voluntarily as it is at the employee’s option to return to the office, and any team member who is not comfortable doing so is working remotely. Our teams have seamlessly transitioned to our virtual workplace over the past 5 months. And with the use of visual conference calls, such as Microsoft Teams, our employees are working just as efficiently from home as they would in the office. Market by market, our goal has been to find the intersection of safety and productivity, and we believe we have achieved it. For example, our 500-plus person Townsquare Interactive office in Charlotte, North Carolina still continues to work remotely, and they have not missed a beat with TSI revenue profit and subscribers growing throughout the pandemic, as I will detail momentarily. At the same time, the majority of our content teams have been regularly coming into the office and their studios, and all of whom have been working relentlessly to keep our audience informed and entertained during this pandemic, both on air and online. Over the past 5 months, we have seen a surge of consumers coming to our digital properties

[Stuart Rosenstein:]

Thank you, Bill, and good morning, everyone. As a reminder, for 2019, we sold our Bridal Exposition live events. Our year-to-date 2019 results and year-to-date 2020 growth rates are presented pro forma for the sale of these events, unless otherwise stated. Please refer to the tables included in our earnings release, which provide GAAP results and pro forma results as well as our non-GAAP performance measures. Our second quarter financial results were in line with our expectations, with net revenues decreasing 34.5% over the prior period to $71.1 million and adjusted EBITDA of $2.1 million. As reported on our first quarter conference call, April and May net revenue declined 36% and 37%, respectively, as compared to the prior period. June finished at negative 31% versus the prior year, marking a significant improvement as we began to benefit from businesses reopening across the country. Second quarter Advertising net revenue declined 37.5% as compared to the prior year. April was our worst month in terms of advertising cancellations, and we saw a sequential improvement throughout the quarter. In April, May and June, Advertising net revenue declined 42%, 41% and 30%, respectively, compared to the same months of 2019. Our digital advertising solutions fared better than our broadcasting advertising solutions during the second quarter and continued to do so in the third quarter. Our Townsquare Ignite’s advertising solution was one of our best-performing advertising product in the second quarter and year-to-date period, and net revenue from Ignite advertising actually increased in the year-to-date period by approximately 6%. Townsquare Interactive continued to demonstrate its resilience, with second quarter net revenue increasing 10.5% year-over-year as our subscriber base grew by approximately 900 net subscribers in the quarter, outpacing prior quarters. Because of the pandemic, we canceled or postponed our second quarter live events, resulting in net revenue declining nearly 100% versus the prior year. Fortunately, our Live Events cost basis is largely variable. And if we do not host the event, we do not incur any of these expenses. Therefore, while second quarter net revenue for Live Events decreased nearly 100% versus the prior year period, direct operating expenses decreased approximately 98% versus the prior year period and were approximately breakeven for the quarter with a loss of approximately $60,000. In the year-to-date period, Live Events net revenue declined 78%, and Live Events direct operating expenses declined 76%, resulting in a positive adjusted operating income of $0.5 million. In total, second quarter direct operating expenses decreased by 14.8% compared to the second quarter of the prior year. This was driven by the Live Events expense decrease as well as a 13.3% decrease in advertising direct operating expenses, partially offset by an increase in Townsquare Interactive direct operating expenses of 14.3%. The declines in advertising direct operating expense were driven by cost reduction efforts we announced on our last earnings call and that Bill discussed earlier, including employee headcount reductions, temporary hiring freezes, the reduction of variable expenses, such as sales commissions and music license fees, and various other measures. These reductions were partially offset by increases in medical expenses related to our self-insurance plan, bad debt expense and music license fees. Due to bad debt reductions as well as declining interest rates, interest expense for the second quarter declined approximately 7% or $634,000 as compared to the prior year period, and 6% or $1.1 million in the year-to-date period. During the second quarter of 2020, as a result of the COVID-19 pandemic, the assumptions that we used to evaluate our FCC licenses for impairment were negatively impacted. Specifically, the discount rate we use increased because of COVID impact on market and economic conditions. This translated to a higher risk premium and, therefore, a higher weighted average cost of capital. As a result, we took a non-cash impairment charge for our FCC licenses of $28.7 million in the second quarter. In total, and primarily as a result of COVID-19 pandemic, we have recorded approximately $107 million of non-cash impairment charges to intangible assets in the first 6 months of 2020. I would like to telegraph that we expect the value of our FCC licenses to continue to be reduced over the coming years. This is a result of the fact that we no longer include 100% of our revenue streams when supporting the value of these FCC intangible assets. We no longer include the revenue and profit of Townsquare Interactive or Townsquare Ignite, our largest digital revenue stream. As these digital revenue streams continue to outpace our radio spot sales, this formulaic trend will continue. This write-down of decade-old purchase price cancellation has no bearing on our cash position, operating revenue, operating expenses, profitability or our company’s future prospects. They are nothing more than a non-cash accounting charge affecting only the purchase price allocation that we made when we bought our radio station back in 2010 through 2013. For the second quarter, net loss from continuing operations was $26.8 million or a net loss of $1.46 per diluted share as compared to net income from continuing operations of $9.9 million or $0.34 per diluted share in the second quarter of 2019. The decrease was primarily due to the decline in net revenue driven by the COVID-19 pandemic and the previously discussed non-cash impairment charge. We would like to remind you that the provision for income taxes included on the face of the income statement is for GAAP financial statement purposes only. We maintained significant tax attributes, including $191 million of federal NOL carry-forwards and other substantial tax yields related to the tax amortization of our intangible assets. We continue to believe that will not be a material cash taxpayer until approximately the year 2026. Turning to our balance sheet, as of June 30, our total debt balance was $545.8 million, and our total cash balance was $70 million, implying a net leverage as of June 30 of 6.7x based on our trailing 12 months adjusted EBITDA of $70.7 million. During the second quarter, we generated positive cash flow from continuing operations of approximately $2.3 million and $14.7 million prior to interest payments, demonstrating our assets’ strong cash flow generation ability. Also during the second quarter, we repaid the entire outstanding amount on our revolver, which we had drawn down at the end of Q1 as a precautionary measure as the pandemic first began to hit our markets, and we repaid $9.9 million of our term loan balance due to our 2019 excess cash flow payment requirement. I also want to highlight that we repurchased $4.7 million of our 6.5% April 2023 unsecured notes at a 25% discount to face value and retired them. We also paid $2.1 million of dividend payments during the second quarter. As a reminder, going forward, our Board has elected not to continue our quarterly dividend. In the second quarter, we also limited capital expenditures with total spend declining by $1.2 million or 30% year-over-year. In 2020, we expect an approximately 15% reduction to our capital expenditures or savings of approximately $3 million as compared to 2019. In addition, we are experiencing cash savings by deferring payroll taxes until 2021 and 2022 under the CARES Act. In total, our cash balance declined by only $15 million in the first 6 months of 2020 despite reducing long-term debt by $14.7 million, making $4.2 million of dividend payments and paying $15.7 million of interest payments. These data points demonstrate the strength of our cash flow from operations. In the near term, we anticipate holding cash on the balance sheet in order to preserve flexibility during this pandemic. However, our long-term goal remains the same

[Bill Wilson:]

Thank you, Stu, and thank you to everyone who dialed in this morning. I was recently asked what I was most proud of at Townsquare. Number one by far is my pride in our Townsquare team. Having invested the time to visit each of our 67 markets and our office locations a minimum of once a year over the past 10 years, I have had the privilege of spending a lot of time with our local teams over the past decade. Thus, I knew prior to this pandemic how strong and talented our team was. But what struck a chord with me during this time is their passion for what they do each day and their commitment to their communities and their commitment to our company. It is unparalleled, it is inspiring, and as a result, it is a true honor to serve as their leader, and I let the team know that often and repeatedly. Number two, I am also extremely proud of our diversified and differentiated product offering, with 48% of our Q2 2020 revenue coming from digital products and solutions, which has allowed us to weather this downturn more efficiently and effectively than if we did not have a diversified revenue foundation. One of the things our teams noted with great pride is that even with all of the challenges and unknowns during this pandemic, we, at Townsquare, have not had to alter our core strategy, but rather the pandemic placed a spotlight on the need to double down on executing our existing long-term strategy. Number three is pride in our cash flow generation ability and our liquidity position that Stu and I outlined in detail on this call. We want to ensure all of our stakeholders that we are carefully managing through the crisis, first and foremost, by considering the health and well-being of our employees and our local communities above all; and secondly, by taking well-thought-out cost reductions to our business that will help mitigate the near-term pain that we expect in 2020. As I stated earlier, our goal is to balance cost reductions with our opportunity for long-term growth. We want to be positioned to emerge from this downturn more quickly and more efficiently than our competitors, and we believe that this strategy, together with our diversified and differentiated product offering, ensures that we will be. As always, please do not hesitate to call us as I look forward to speaking with our investors at every opportunity. Be well, and as we say internally, stay Townsquare strong. And with that, operator, please open the call for questions.

[Operator:]

Thank you. [Operator Instructions] Your first question comes from the line of Michael Kupinski with NOBLE Capital Markets. Please proceed with your question.

[Michael Kupinski:]

Thank you and thanks for taking the questions and thanks for all of the details on, by the way, as well. I know that you gave the digital revenue progress in the quarter. Did you give Townsquare’s Interactive, specifically for them on the sequential month-to-month improvement in the quarter?

[Bill Wilson:]

Hey, Michael, it’s Bill. Good morning. I hope you well Yes. What we noted on the call was, as in Q2, it was growth of 10.5%, and obviously, 900 net adds, which is up from our trailing quarterly average of 850. And we also noted that in July, we saw that increased to 13%. So we didn’t give a specific month-over-month in the quarter, but we did highlight that July has improved from the Q2 growth of 10.5% to 13% and expect that growth rate to continue in Q3.

[Michael Kupinski:]

Okay, got it. In terms of the expenses, I know that you talked about some of those being permanent. Is there a percentage in terms of what you are anticipating to be permanent expense reductions?

[Bill Wilson:]

So we noted, as you know, $1.7 million monthly, a little over $1 million of that was tied to our workforce reduction that we did, I believe, it was on April 1. So I would say probably in the $1 million to $1.3 million would be more permanent. And then things like the 401(k) company match and other things that are tied to revenue would be more temporary. So I would say roughly $1.2 million a month would be permanent.

[Michael Kupinski:]

And I know that your Live Events is virtually 0, probably likely to be virtually 0 in the third quarter. But are you planning any Live Event revenue in the fourth quarter at this point?

[Bill Wilson:]

Currently not. In terms of our planning, I am expecting no Live Event revenue or any materiality for the rest of this year, and we are currently plotting and looking at what that will look at, at the beginning of next year. But in terms of modeling and planning, we are expecting no material Live Event revenue in Q3 or Q4.

[Michael Kupinski:]

And if I’m looking at this right corporate expenses, where it showed sequential quarterly uptick in the second quarter, I was just wondering what the run rate – or what should we look for in terms of corporate expenses in Q3 and going forward.

[Bill Wilson:]

Sure. I think that was mostly tied to our audit, but I’ll turn that over to Stu.

[Stuart Rosenstein:]

Hi, Mike. Yes, so we had a big increase in legal costs, audit and professional fees when we changed the auditors. Going forward, we expect it to come back down and being a little bit less than last year.

[Michael Kupinski:]

Got it. And I guess this is kind of a nebulous question, but – and kind of hard to address. But if you look at just generally this pandemic and how things affected you, was there something that you have learned from this pandemic that – maybe some misgivings that you had before or opportunities that you may have seen now that present themselves that maybe you may have not looked at before and maybe a past recession or something like that? I am just wondering if there is something different about this pandemic that may have shown a light on opportunities or misgivings at the company that you would like – that you’re addressing.

[Bill Wilson:]

Yes. I appreciate that, Michael. I would say, as I noted on the prepared remarks that, based on our strategy of revenue diversification with really a focus on, first and foremost, starting 10 years ago when the company has formed building a digital audience and our success in doing that. And as I noted on the last couple of calls, the fact that newspapers and television stations in our size markets, in particular, but potentially across America, but definitely in our size markets outside the top 50, have really been cut back severely. The – when we started in 2010, the majority of newspapers were published 7 days a week in all of our markets. And now there’s many markets who actually don’t have a physical newspaper. Local news coverage has been cut back. So we’ve come in and filled that void from a digital audience perspective. And as I noted, it was, I would say, a nice compliment that Google provided us a $260,000 grant to start two news operations in – one in Tuscaloosa, Alabama and one in Portsmouth, New Hampshire. And then obviously, as we noted, obviously, our digital revenue based on our increase in audience and impressions has held up quite nicely and is expected to be positive in Q3 on our owned and operated networks. And then obviously, Ignite and Townsquare Interactive are really recovering much more strongly. What I would say is, I’d say, throughout the company, in terms of particularly the sales force, the pandemic has, I would say, shone or shined a light on the breadth of our solutions. And we noted it just in a sentence, but it’s actually really transformed, I would say, some of our go-to-market strategy in that we, during this pandemic, actually had the highest amount of new business that we’ve ever had, meaning clients who hadn’t placed orders with us in the last 13 months. And why that is, is because, obviously, as we noted on our last call, we experienced a tremendous amount of cancellations. We gave all the data on the last call in April, and then we started to rebound sequentially each month. But as our sales force experience that, they then were able to prospect and do client needs assessment with categories that they traditionally may not have called on. And I think that’s why we are recovering as nicely as we are, even though we’re still down, as we noted, and expect to be down in Q3 in the low 20%. It’s really, from an account executive perspective, I’d say, reopen their eyes to the opportunity that we have solutions for every type of business. And that’s been, I’d say, an eye-opener for us and really changed the way we were doing training as well. So I don’t know if that’s exactly what you were looking at, but that’s really – it’s something like we’re doing completely differently. It’s more the things we were doing, I think, shined brighter, particularly in our sales teams’ eyes.

[Michael Kupinski:]

And Bill, can you just explain the Google opportunity? Is this a onetime event or is it – and then if you can also talk a little bit about how it came about and whether or not there’s a bigger opportunity there?

[Bill Wilson:]

Yes. Thank you, Michael. So it came about because they actually have seen what we have done in places like St. Cloud, Minnesota, which is about an hour and 20 minutes North Minneapolis. We have WJON, which is a news talk station. We have the same type of situation with K2 Radio in Casper, and then, obviously, our premier station, New Jersey 101.5. They’ve seen that we’ve, in essence, filled this void that I described. And really, if you go to any one of those brands, either on the web or on an app, it will look to most to consumers like a newspaper. And they’ve noted that, and they have asked us to do this in these 2 markets that I described, Tuscaloosa and Portsmouth. But part of the grant is our commitment to then share best practices and, in essence, a playbook for the rest of the broadcast industry. That was what they’re asking us. What you have done so well over the past decade and really during this last few years with newspapers cutting back as dramatically as they have, will you share some of your learning’s and how others, particularly in markets we don’t compete in, can do that. And that’s how the grant came about. We have an amazing digital team from a content perspective as well as an engineering perspective. And Google took note of that and provided us $260,000. It could be future funds, but we’re not counting on that because we believe, just like our core business, they’ll be profitable in a short amount of time. But they – that doesn’t mean there won’t be future grants. But this is a onetime grant, but they have expressed interest in us continuing to really not only help the communities we’re in, but help the industry overall.

[Michael Kupinski:]

Got it. Thank you so much. Appreciate it.

[Bill Wilson:]

Well, be safe, Michael.

[Michael Kupinski:]

You too.

[Operator:]

[Operator Instructions] Your next question comes from the line of Jim Goss with Barrington Research. Please proceed with your question.

[Jim Goss:]

Hi, good morning. One thing I was interested in what you were talking about was the – how you were helping some of the small businesses who are clients of TSI to create new business opportunities. One example you used was helping restaurants adapt websites for online ordering. This was an intriguing sort of set of opportunities. Now I wonder if that is helping you in the process of gaining additional clients for the services. And what is the process you’re using to attract attention and get new business by publicizing the things you can do for them?

[Bill Wilson:]

Great question, Jim. Hope you are well and safe. Excellent so, to your point, we have been quite, quite pleased for some time, but particularly during this pandemic, with Townsquare Interactive and really super serving small and midsize businesses and being able to pivot the fact that we do all of our technology in-house, not only for Townsquare Interactive, but things like Townsquare Ignite is a competitive advantage for us and allows us to build these type of solutions as well as append existing solutions pretty quickly. And that was the case during this pandemic. So it broadened the opportunity in terms of who we could address clearly. I think the pandemic, for everyone, if you look at just the space for digital marketing services, in general, has done quite well through the quarter, if you look at other public companies who focus on that just specifically. And we have seen the same thing where, clearly, your online presence being found in search engines but also importantly being able to communicate one by one to your customer base and not rely on social media where you may post something but it may not be seen by all your customers is of critical importance. And therefore, that’s why we highlighted to get to our first 10,000 customers was 57 months, to get to our 20,000 customers was 44 months, and we believe we’ll get to 30,000 in under 35 months, and that’s partially because the types of businesses and the universe is really – I think I detailed that probably a year ago on this earnings call, untapped for us. There’s literally – we’ve identified 8 million SMBs in markets with a population of less than 1.5 million, with less than 25 employees, with less than $5 million in annual revenue as the addressable market for us, and yet we’re sitting here at just under 21,000. So there’s a lot of runway, and we couldn’t be more excited about the opportunity for Townsquare Interactive. And as you have noted before, operating at roughly a 30% profit margin with a long runway to go, we are confident that we’ll be at $100 million in two to four years and probably more closely to three years.

[Jim Goss:]

Okay. And then the radio side, I am sure it’s been more of a challenge given the unevenness of the recovery, the sort of fits and starts of states coming forward and maybe backing up a little bit. I am wondering if you could talk about how that has played into what you’re just discussing with the – a large number of maybe new categories coming up and the – how – if there’s a consistency or a variance between the core radio side of the business and what Ignite has been focused on in terms of those categories.

[Bill Wilson:]

Yes, definitely. Great question, Jim. So as we highlighted on the call, but just as a reminder, in terms of just straight broadcast, so just audio commercial over our AM/FM broadcast, in April, we were down 52% for broadcast. That slightly improved in May to 49%, but really took a nice step forward, still a long way to go, but June was negative 35%. So we’re seeing that improvement. We also noted, even in places like Texas, which you’ve seen some rollbacks and a lot of coverage in terms of where they’re at, we were negative 45% in May. May for Texas was the low point versus April because they got hit a little bit later than the Northeast. But we have seen that recover to roughly negative 22% in August and not going backwards but still staying stable and growing. So broadcast is behaving that way, and we expect as we go through Q3, we will see continued sequential improvement from that negative 35% in June, because in July, we were in the high 20s, and I think we are pacing to the mid-20s now. Whereas our digital advertising in Q2 was down only 18%, so much, much less. And in July, we’re actually – was down negative 10%. So this is digital advertising. Putting aside our digital marketing subscription business, this is our advertising for our owned and operated properties that I described earlier, which had record traffic as well as Ignite. Ignite in Q3 – Q2, I’m sorry, was down 11.6%. We’re actually paced positive in July. And as I noted on the call in Q3, I believe, we will be up mid- to high single digits, so anywhere from 6% to 8% for Ignite, and we reaffirmed that we’ll be at $100 million in 2 to 4 years, with Ignite just like Townsquare Interactive. So broadcast is definitely coming back, but it’s coming back more slowly. And that’s why I think it’s still important that we have a diversified revenue base with almost half of our revenue now at digital. That’s clearly a differentiator for us as we go to market, but also provides us this financial stability and to be able to be EBITDA-positive in a quarter that was down 35% overall as well as cash flow-positive and be able to reaffirm that we’ve got liquidity for up to three years is really based on our digital advertising differentiation. And particularly, we’ve outlined – we didn’t talk about a lot today, but we’ve outlined in the past that in our size markets, we are the premier digital offering. And when we do run-up against competition, it’s usually somebody who has a third party as a solution versus our own in-house, and that’s why we’re so aggressive and optimistic about our future growth opportunities as things return to normal in the future.

[Jim Goss:]

In terms of the ad categories that are – you’re working with on the Ignite stage versus core radio, is there a difference in those?

[Bill Wilson:]

Yes. So – I wouldn’t say, but there is a slight difference, like auto in particular go as really hit hard from a broadcasting perspective as well as entertainment and fast food and retail. At the same time, from an Ignite perspective, we have seen a lot of new clients coming in from auto for specifically Ignite. We’ve also seen, in general, a lot of categories that weren’t necessarily big spenders with us come through during this pandemic, things like grocery stores, homebuilders, home repair as well as state governments. So definitely seeing categories that we weren’t necessarily either getting a lot of business on or focused on, providing some of this new business growth that I alluded to on the call, which was, quite honestly, had a record level of new business, which, I think, again, proves the tenacity and perseverance of our sales team in the midst of this recovery.

[Jim Goss:]

Okay. Maybe one last thing, I know you are very proud of your live and local heritage and the people. But I wonder if there is a greater challenge in these cost-constrained times in terms of what you can do live and local. Is there any greater use of simulcasting or anything like that in certain of your markets to just moderate the cost structure?

[Bill Wilson:]

There is clearly a lever that’s available to us, but it is not a lever that I am planning on utilizing at this time or any time in the near future, even as we were down 35% in Q2. The 6% reduction in workforce that we did on April 1 was not tied to live and local, but as I’ve shared before, was more corporate and support functions because we honestly believe it’s a differentiator for our company in many levels. It also matters so much to our communities. But from a business perspective, they’re not only providing the local on-air content. Our on-air DJs or, in essence, as I have talked about in the past, original social influencers, and they’re providing all of the local content for our local radio station websites that is driving all of this traffic so when we look at the assets and the talent that we have locally, we look at it holistically, and we don’t only look at the broadcast side. But as I noted also, our digital O&O advertising is actually trending positive in Q3, and we believe it will be greater than last year. That ties directly and 100% correlated to our on-air staff. So I – we could do reductions and syndicate more, but we believe that lies in the face of our local first strategy, and we believe it’s a real differentiator. That said, there’s been some press reports that we’re looking at non-personnel-type expenses that would allow us to take some expenses out. You may have seen Nielsen just exited 9 smaller markets, and we were in 8 of those markets. So we realized that was cost savings starting in the fall. And we also expect that there’ll be other Nielsen markets that we will not be in that we’ve previously been in. So those are moves that I’d make before touching our most – I believe, one of our most impressive assets, which is our on-air talent and our team.

[Jim Goss:]

Alright. Thank you very much. Appreciate it.

[Bill Wilson:]

You got it Jim. Thank you. Be well, be safe.

[Operator:]

Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back to Mr. Bill Wilson for closing remarks.

[Bill Wilson:]

Thank you, operator, and thank you, everybody, for dialing in this morning. Hopefully, we provided really in-depth information and updates, and we appreciate you taking the time to learn more about how we are navigating this pandemic. And hopefully, you see that we are confident in our recovery, particularly with almost half of our revenue in digital and our cash flow generation. And just want to say thank you. Be safe, be well and until next time. Thank you, operator.

[Operator:]

This concludes today’s conference. You may now disconnect. Thank you for your participation.